SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 1999
Commission File No. 0-27175
ADVANCE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Nevada 95-475536
State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
304 South Elm Drive, Penthouse
Beverly Hills, CA 90212
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 553-6776
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class
Common Name of Each exchange on which registered
National Association of Securities Dealers
Securities registered pursuant to Section 12(g) of the Act:
_________________________________
Indicate by check mark whether the
Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the
past 90 days.
Yes X No
Indicate by check mark if disclosure of
delinquent filers pursuant to item 405 of Regulation
S-K is not contained herein, and will not be
contained, to the best of registrants's knowledge, in
definitive proxy or information statements
Advance Technoligies, Inc. 10-K page 1
incorporated by reference in part III of this Form
10-K or any amendment to this Form 10-K. [X]
The aggregate market value of voting stock
held by non-affiliates of the Registrant as of September 30,
1999 was approximately $1,286,461.
On July 1, 1999, approximately 2,572,923
shares of the Registrant's Common Stock, $0.001 par
value, were outstanding.
Documents Incorporated by Reference
(1) Financial Statements for September,
1999 and 1998
(2) Except for the historical information
presented, the matters discussed in this Form 10-K
include forward-looking statements that involve
risks and uncertainties. The Company's actual
results could differ materially from those discussed
herein. Factors that could cause or contribute to
such differences include, but are not limited to,
those discussed under the caption "Factors That
May Affect Future Results" under "Management's
Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's 1999
Financial Statements, which is incorporated by
reference in this Form 10-K.
Page
PART I
Item 1. BUSINESS ........................................... 3
Item 2. PROPERTIES ......................................... 6
Item 3. LEGAL PROCEEDINGS ................................. 6
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .. 6
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS ....................................... 6
Item 6. SELECTED FINANCIAL DATA ........................... 6
Advance Technologies, Inc. 10-K page 2
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ...................... 7
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ....... 7
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE ...................... 7
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT... 7
Item 11. EXECUTIVE COMPENSATION ............................ 8
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT ............................................ 9
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .. 9
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K .............. Included After Signatures - page 10
SIGNATURES ................................................. 10
PART I
Item 1. Business
Introduction
Advance Technologies, Inc. ("the Company") The
Company was organized under the laws of the State of
Delaware under the name PWB Industries, Inc., the
articles of incorporation were issued June 16, 1969. The
name was changed to Sun Energy, Inc. ("The
Company"), which merged with Sto Med, Inc. on
February 22, 1996 changing its name to Sto Med, Inc.
("The Company") and domicile to the State of Nevada.
On February 23, 1996, Sto Med, Inc., a privately held
California corporation, was acquired by Sto Med, Inc.
("The Company") the California Corporation acquisition
was rescinded on August 23rd 1997. Sto Med Inc. ("The
Company") the Nevada corporation changed its name to
Advance Technologies, Inc., ("The Company") on August
23rd 1997. On September 27, 1999 the "Company"
acquired Seacrest Industries of Nevada, also known as
Infrared Systems International.
Advance Technologies, Inc. page 3
The Company
The Registrant through its wholly owned subsidiary
SEACREST INDUSTRIES, INC., and through its
president and director Mr. Gary Ball was granted an
exclusive world-wide license agreement for the use of US
patent number 5,534,694 by Hughes Aircraft Company,
for a key optical element of the Infrared Aircraft
Landing System. Gary Ball founder and CEO of
Infrared Systems International (ISI) a/k/a Seacrest
Industries International, Inc. in 1992 formed the
company for the singular purpose of providing
manufacturing and sales support for the unique Infrared
System called Enhanced Vision System (EVS). While
employed by Electro-Optical Systems, a segment of
Hughes Aircraft Company, as senior Program Manager
and engineer, he led the research and development team
responsible for the development of the Enhanced Vision
System (EVS). This technology was designed to allow
aircraft pilots to actually "see" the airport environment
through cloud ceiling or surface fog. The factor of
enhanced safety, alone, is generating an enormous
demand for this type of system, which, in the future,
could become part of the Minimum Equipment List
(MEL) required for commercial aircraft carrying more
than a designated number of passengers (FAA Part-91, -
121, & -135 markets). Millions of dollars have been
expended in the development of this technology by many
major Corporations.
In June of 1992, Gary E Ball was employed as the
Program Manager of EVS at Hughes Aircraft Company
where he developed the technology, including the
principal patent, licensed to the Company. In October of
1995, in connection with certain strategic business
decisions being made by Hughes Aircraft, Hughes
Aircraft offered Mr. Gary E. Ball a license of the EVS
technology. The license included the patent submitted by
Mr. Gary E. Ball and others, together with proprietary
data related to the technology, proprietary business
agreements, and unrestricted use of the licensed
information and EVS knowledge acquired while Mr.
Gary Ball was at Hughes Aircraft.
The license agreement with Hughes required prepayment
($25,000) and a royalty on each licensed product sold.
The license is exclusive and limited to the use of the
technology relating to commercial aircraft licensed to
operate by the United States Federal Aviation
Administration or equivalent regulatory agency
Advance Technologies, Inc. 10-K page 4
elsewhere. This agreement requires the consent of
Hughes Aircraft to sublicense the technology, which
consent will not be unreasonably withheld.
In July of 1997, ISI entered into a license agreement with
Kollsman, Inc. which contemplates the payment of a
royalty to ISI based upon the number of licensed
products sold by Kollsman and requires the personal
consulting services of Mr. Gary E. Ball for which the
Company will receive compensation. This agreement
entitles ISI to an advanced royalty of $5,000 per month
plus time and expenses for consulting service as well as
an initial $20,000 advance payment. The royalty based
upon sales increases, as the number of systems sold
increases.
Kollsman, Inc. is a commercial avionics and electronics
company that designs, develops and manufactures flight
instruments. It is a leading developer of Forward
Looking Infrared Systems. These systems have
primarily been utilized in military applications. The
system designed by Kollsman that utilizes the Company's
technology is based upon an infrared sensor unit placed
in the nose of the aircraft. Output from the sensor unit is
transmitted through a video interface and onto a heads-
up-display located in the aircraft's flight deck. The
image displays the approach on a high quality black and
white television image projected on to a combining glass
in front of the Captain. The result is that night vision is
enhanced and a pilot has the ability to see through fog,
smoke, haze, rain and snow. In addition to improved
situational awareness of the airport, traffic and
surrounding terrain, the takeoff and landing "Minima"
results in fewer diversions, cancellations and delays.
In October of 1997, Gulfstream, the leading
manufacturer of large business aircraft, and Kollsman
announced the signing of a memorandum of
understanding to utilize the Company's technology on
Gulfstream IV-SP and Gulfstream V aircraft.
Gulfstream announced it is preparing for pre-prototype
flight tests whose goal is to utilize the technology where
the visual ceiling is no more than 50 feet and the runway
visual range is no more than 700 feet.
While the Company's primary efforts are directed
toward supporting the Kollsman license, the Company is
pursuing other areas of development for the Enhanced
Vision System (EVS) Technology. Not only can the
technology be used in a variety of cameras to reveal
images through clouds or smoke but also to reveal
Advance Technologies, Inc. 10-K page 5
critical characteristics that would otherwise not be seen
in paintings and livestock. There are a multitude of
medical applications, applications for preventive
maintenance, uses in underwater imaging systems and
emergency vehicle warning systems, ground
transportation (commercial and recreational), fire
fighting, vehicle, airborne and man-portable, and all
types of maritime transportation.
Item 2. Properties
The Company's executive offices are
located in Beverly Hills, California.
Item 3. Legal Proceedings
There are no legal proceedings known or pending against
the Registrant or its subsidiary
Item 4. Submission of Matters to a Vote of
Security Holders
The following matters were submitted to a
vote of the Company's security holders during the
fourth quarter of its fiscal year ended September 30, 1999:
1. To ratify the Acquisition of Seacrest Industries, Inc.
For 50,204,102 shares of preferred stock.
2. To elect and ratify the board of directors.
Date and Type of Meeting
September 27, 1999
Special Stockholders Meeting
The matters were voted on during the fourth quarter of the Company's
fiscal year.
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters
The Company is currently trading, OTC, on
the Nationals Association of Securities Dealers "Pink
Sheets" with the high bid at $0.50 per share and the low bid
of $0.25 per share during the last quarter. Additional
information required by this item may be found in
the Company's 1999 Financial Statements and is
Advance Technologies, Inc. page 6
incorporated herein by reference.
Item 6. Selected Financial Data
The information required by this item is set
forth in the Company's 1999 Financial Statements
and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis
of Financial Condition and Reports of
Operation
The information required by this item is set
forth in the Company's 1999 Financial Statements
and is incorporated herein by reference.
Item 8. Financial Statements and Supplemental
Data
The financial statements
required by this item are included in the Company's
1999 Financial Statements and are incorporated by
reference. With the exception of the
aforementioned information and the information
incorporated in Items 5, 6 and 7, the Company's
1999 Financial Statements is not to be deemed filed
as part of this Form 10-K Annual Report. The
report of the Company's Independent Auditors on
the Company's consolidated financial statements is
included in the Company's 1999 Financial
Statements and is incorporated by reference. The
report of the Company's Independent Auditors on
the financial statement schedule required by this
item is included herein.
Item 9. Changes in and Disagreements with
Accountants on Accounting Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the
Registrant
GARY E. BALL Age 62, residing in Beverly Hills,
California is married. He attended California State
University at Long Beach graduating in 1967 BSEE and
MSEE, went on to perform Graduate Studies at
University of Southern California. He has specialized in
product design, development, and management for North
American Aviation, Autonetics Division. Technical
Manager in charge of the Pave Track program for Ford
Advance Technologies, Inc. page 7
Aerospace. Program Manager for Northrop Electro-
Mechanical in charge of business development on several
classified DOD programs, including the AMRAAM
effort. Program Manager for Hughes Aircraft where he
developed the Infrared Enhanced Vision System,
reporting to the President of EDSG as directed by
General Motors and directed all non-core business. He is
a member of NATO NIAG study group on Aircraft
Integration. He has authored several articles for trade
publications, the last 4 years he has provided consulting
services to 10 U.S. and foreign corporations in the field of
IR technology.
GARY L. BANE Age 62, residing in Santa Barbara,
California is married. He attended University of
Southern California attaining BS Mechanical and
Aeronautical (1960) MS Control Systems and
Instrumentation (1966) MS Systems Management (1968).
University of California, Los Angeles studying Deep
Submergence Vehicle, Oceanography and Offshore
Systems Engineering. Stanford University Executive
Institute of Management of High Technology Companies.
Mr. Bane is a specialist in the development and
management of Deep Ocean and offshore technology
projects. He recently retired from Rockwell after 30
years as director of Ocean Systems. While at Rockwell
he successfully managed significant technical solutions
and advanced state-of-the-art programs for a number of
classified programs. He was General Manager of
Interstate Electronics; Oceanic Division where he was
responsible for profit and loss and R and D for offshore
oil drilling and recovery projects.
WENDY BALL Age 53, residing in Beverly Hills,
California is married. She graduated from University of
Southern California, BS cum Laude. Her career has
been focused on retail merchandising, where she has
demonstrated exceptional skills in management, team
building and communications. She was a key employee
at Neiman Marcus Beverly Hills where she increased
sales 400% in the Christian Lacroix Boutique and was a
key buyer in New York. She was an account executive
for Carolee Jewelry for Southern California, Arizona
and Utah increasing sales 84%. She was co-owner Brava
Specialty Clothing Store in Redondo Beach, California.
Item 11. Executive Compensation
Other than information provided in the
Company's 1999 Financial Statements incorporated
herein, executive officers and directors have
Advance Technologies, Inc. 10-K page 8
received no other compensation.
Item 12. Security Ownership of Certain
Beneficial Owners and Management
Title of Class (1)Name and Address of (2)Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Common Gary E. Ball 9,240,000 Issued Shares 0.184
304 South Elm Drive
Penthouse
Beverly Hills, CA 90212
Common Gary L. Bane 364,000 Issued Shares 0.01
2015 Edgewater
Santa Barbara, CA 93109
Common Wendy Ball 9,240,000 Issued Shares 0.184
304 South Elm Drive
Penthouse
Beverly Hills, CA 90212
Item 13. Certain Relationships and Related Transactions
Gary E. Ball and Wendy Ball are married.
The consideration exchanged under the Plan was
negotiated between the directors and executive officers of
the Registrant, the Board of Directors of SEACREST
INDUSTRIES, INC. (the board of directors of the
Registrant, are the same board of directors as that of
SEACREST INDUSTRIES, INC.) and the SEACREST
INDUSTRIES, INC. Stockholders, and the Board of
Directors of the Registrant used criteria used in similar
proposals involving the Registrant in the past, including
the relative value of the assets of the Registrant; its
present and past business operations; future potential of
SEACREST INDUSTRIES, INC.; its management; and
the potential benefit to the stockholders of the Registrant.
The members of the Board of Directors determined in
their good faith that the consideration for the exchange
was reasonable, under these circumstances.
Advance Technologies, Inc. page 9
PART IV
Item 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K
The following documents are filed as part of this
Form 10-K Annual Report:
1) Financial Statements
SIGNATURES
Pursuant to the requirements of Section
13 or 15(d) of the Securities and Exchange Act
of 1934, the Company has duly caused this
report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Advance Technologies, Inc.
By: /s/ Gary E. Ball
President, Director
Advance Technologies, Inc. 10-K page 10
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Financial Statements
September 30, 1999
C O N T E N T S
Independent Auditor's Report 2
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to the Consolidated Financial Statements 7
Advance Technologies, Inc. 10-K page 1
(Consolidated Financial Statements)
<PAGE>
[LETTERHEAD CROUCH, BIERWOLF & CHISHOLM]
___________________________
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Advance Technologies, Inc.
We have audited the accompanying consolidated balance sheet of Advance
Technologies, Inc. (a Development Stage Company) as of September 30, 1999
and the related statements of operations, stockholders' equity and cash flows
for the years ended September 30, 1999 and 1998 and from inception on October
1, 1985 though September 30, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits. The financial
statements for the period October 1, 1985 through September 30, 1995 were
audited by other accountants, who expressed and unqualified opinion on their
report dated February 12, 1996.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonalbe basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Advance
Technologies, Inc. (a Development Stage Company) as of September 30, 1999 and
the results of its operations and cash flows for the years ended September
30, 1999 and 1998 and from inception on October 1, 1985 through September
30, 1999 in conformity with generally accepted accounting principles.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
January 12, 2000
Advance Technologies, Inc. 10-k page 2
(Consolidated Financial Statements)
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Balance Sheets
Assets
September 30,
1999
------------
Current assets
Cash $ 555
Prepaid License (Note 4) 25,000
Prepaid Auto Lease 2,180
----------
Total Assets $ 27,735
----------
Liabilities and Stockholders? Equity
Current Liabilities
Accounts Payable $ 1,218
Accounts Payable - Officer 4,846
Note Payable-Officer (Note 7) 48,000
Advance Royalties (Note 5) 25,000
----------
Total Current Liabilities 79,064
----------
Stockholders? Equity
Common Stock, authorized
100,000,000 shares of $.001 par value,
issued and outstanding 2,572,923 shares 2,573
Preferred Stock, Series A authorized
100,000,000 shares of $.001 par value,
issued and outstanding 50,204,102 shares 50,204
Additional Paid in Capital 446,496
Deficit Accumulated During the
Development Stage (550,602)
---------
Total Stockholders? Equity (51,329)
---------
Total Liabilities and Stockholders' Equity $ 27,735
-----------
The accompanying notes are an integral part of these financial statements
Advance Technologies, Inc. 10-k page 3
(Consolidated Financial Statements)
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Statements of Operations
Cumulative
For the Total since
years ended inception of
September 30, development
1999 1998 stage
------- ------ -------
Revenues: $ - $ - $ -
Expenses:
Organization Costs 11,331 - 11,331
General and administrative 78,795 449 478,570
------- ------ -------
Total Expenses 91,126 449 489,901
------- ------ -------
Net(Loss) $(90,126) $(449) (489,901)
-------- ------ ---------
Net Loss Per Share $ (0.068) $(0.000) (3.09)
-------- ------- ---------
Weighted average shares outstanding 1,322,924 72,923 158,407
--------- ------- ---------
The accompanying notes are an integral part of these financial statements
Advance Technologies, Inc. 10-k page 4
(Consolidated Financial Statements)
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Statement of Stockholders' Equity
Deficit
Accumulated
Additional During the
Common Stock paid-in Preferred Stock Development
Shares Amount capital Shares Amount Stage
------ ------ ------- ------ ------ -----
Balance
October 1, 1985
(beginning of the
development stage) 6,487 $ 7 $ 58,161 $ - $ - $(60,701)
Shares issued for
coal royalties
at $0.01 4,369 4 1,525 - - -
Shares issued for
services at $0.25 554 1 4,849 - - -
Shares issued for
services at $0.03 1,601 2 1,680 - - -
Shares issued for
services at $0.25 1,274 1 11,145 - - -
Shares issued for
services at $0.01 2,290 2 798 - - -
Shares issued for
services at$0.25 37,203 37 325,487 - - -
Preferred shares
issued for services - - - 10,048 1,004 -
Expiration of
preferred shares - - 1,004 (10,048) (1,004) -
Net loss since the
beginning of the
Development stage
at October 1, 1985 - - - - - (344,001)
------- ------- ------- -------- ----- ---------
Balance,
September 30, 1995 53,778 54 404,649 - - (404,702)
Shares issued for
services at$0.25 5,714 6 49,994 - - -
Fractional shares
adjustment (6) (1) - - - -
Net loss for the
year ended
September 30, 1996 - - - - - (50,000)
------- ----- ------- ------- ---- ---------
Balance
September 30, 1996 59,486 59 454,643 - - (454,702)
Shares issued for
services at $0.25 609 1 5,324 - - -
Net loss for the
year ended
September 30, 1997 - - - - - (5,325)
------- ------ ------- ------ ------ -------
Balance
September 30, 1997 60,095 60 459,967 - - (460,027)
Shares issued for
services at $0.001 12,828 13 436 - - -
Net loss for the
year ended
September 30, 1998 - - - - - (449)
------- ----- ------- ----- ------ ---------
Balance
September 30, 1998 72,923 73 460,403 - - (460,476)
Shares issued for
cash at $0.01 2,500,000 2,500 22,500 - - -
Shares issued for
common stock of
SeaCrest Industries
Corporation at $0.001 - - (36,407) 50,204,102 50,204 -
Net loss for the
year ended
September 30, 1999 - - - - - (90,126)
----------- ------ --------- ---------- ------- ---------
Balance
September
30, 1999 2,572,923 $2,573 $446,496 $50,204,102 $50,204 $(550,602)
The accompanying notes are an integral part of these financial statements
Advance Technologies, Inc. 10-k page 5
(Consolidated Financial Statements)
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Statement of Cash Flows
October 1,
(inception of
For the development
year ended stage) to
September 30, September 30,
1999 1998 1999
--------- --------- ---------
Cash Flows from Operating
Activities
Net loss $ (90,126) $ (449) $ (489,901)
Adjustments to reconcile
net loss to net cash
provided by operations:
Increase in Accounts Payable 6,064 - 6,064
Stock issued for services - 449 399,775
Organization Costs 11,331 - 11,331
--------- ------ ----------
Net cash flows provided
used) by operating activities (72,731) - (72,731)
--------- ------ ----------
Cash Flows from Investment
Activities:
Investment in Subsidiary 286 - 286
--------- ------ ----------
Cash Flows from Financing
Activities:
Cash paid on officer loan (12,000) - (12,000)
Proceeds from loan from officer 60,000 - 60,000
Net proceeds from issuance of stock 25,000 - 25,000
--------- ----- ----------
Net cash flows provided
(used) by operating activities 73,000 - 73,000
--------- ----- ----------
Net increase (decrease) in cash 555 - 555
Cash, beginning of year - - -
--------- ----- ----------
Cash, end of year $ 555 $ - $ 555
--------- ----- -----------
The accompanying notes are an integral part of these financial statements
Advance Technologies, Inc. 10-K page 6
(Consolidated Financials Statements)
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
The Company was organized under the laws of the state of Delaware on June
16, 1969 as PWB Industries, Inc. On November 10, 1975, the Company changed
its name to Sun Energy, Inc. At that time the Company began operations in
the oil and gas lease industry. By 1985 the Company discontinued its
operations and became dormant. On March 6, 1996 the Company attempted a
merger that eventually failed. On August 23, 1997 the Company changed its
name to Advance Technologies, Inc. and moved its state of domicile to the
state of Nevada.
On September 27, 1999 pursuant to a plan of acquisition, the Company
exchanged 50,204,102 shares of its Series "A" preferred stock for SeaCrest
Industries Corporation's 50,204,102 shares of common stock. This acquisition
has been accounted for using the purchase method of a business combination.
b. Accounting Method
The Company recognizes income and expense on the accrual basis of
accounting.
c. Consolidation
The consolidated financial statements include the accounts of Advanced
Techologies, Inc. and SeaCrest Industries Corporation, a wholly owned
subsidiary. Intercompany transactions have been eliminated.
d. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
f. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating loss
carryforwards totaling approximately $(550,602) that will be offset against
future taxable income. These NOL carryforwards begin to expire in the year
2004 No tax benefit has been reported in the financial statements because the
Company believes there is a 50% or greater chance the carryforward will
expire unused.
Deferred tax assets and the valuation account is as follows:
September 30,
1999
-------------
Deferred tax asset:
NOL carrryforward $ 189,360
Valuation allowance (189,360)
-------------
Total $ -
-------------
Advance Technologies, Inc. 10-K page 7
(Consolidated Financial Statements)
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has few assets and
has had recurring operating losses and is dependent upon financing to
continue operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty. It is management's
plan to find an operating company to merge with, thus creating necessary
operating revenue.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and developing its
business operations in order to generate significant revenues.
NOTE 4 - Prepaid License Agreement
SeaCrest Industries Corporation, formerly Infrared Systems
International, Inc., entered into a licensing agreement with Hughes
Aircraft Company for an infrared landing aid system. Hughes Aircraft Company
was paid $25,000 on October 25, 1995 upon commencement of the agreement.
There is also a $1,000 royalty payment due to Hughes Aircraft Company for
each unit sold. The first twenty units sold, $20,000, will be deducted from
the original $25,000 deposit. This royalty agreement will be renegotiated on
October 25, 2000.
NOTE 5 - Advanced Royalties
SeaCrest Industries Corporation, formerly Infrared Systems International,
Inc., entered into a licensing agreement for marketing and distributing of
infrared aircraft landing systems. Seacrest received $25,000 in advances.
NOTE 6 - Stock Transactions
On December 2, 1998 and August 23, 1997, the Company's board of directors
authorized a reverse stock split, 1 share for 35 shares and 1 share for 10
shares, respectively. The financial statements have been retroactively
restated to show the effects of the reverse stock split.
Advance Technologies, Inc. 10-K page 8
(Consolidated Financial Statements)
<PAGE>
Advance Technologies, Inc.
(a Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 7 - Related Party Transactions
Since the Company does not have the necessary operating revenue to
sustain operations, stock has been issued for service. Some of the parties
receiving stock are related parties, including officers of the Company.
During 1999, an officer of the Company advanced $60,000 to cover
expenses. $12,000 was subsequently paid back leaving a note payable of
$48,000 at September 30, 1999. The note payable-officer is considered a
current liability with no provisions for interest.
During 1999, the officers of the Company paid their own travel expenses.
The amount payable to the officers at September 30, 1999 is $4,846.
Advance Technologies, Inc. 10-K page 9
(Consolidated Financial Statements)
