<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Amendment No. 1 to
FORM 10-QSB
(X) Amended quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended
JUNE 30, 1999
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1939 for the transition period ____ to______
COMMISSION FILE NUMBER 000-25973
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ADVANCED REFRIGERATION TECHNOLOGIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 68-0406331
- ---------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3197 Boeing Road, Cameron Park, Ca. 95682 530 677 3233
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices, including Registrant's zip code
and telephone number)
NONE
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Former name, former address and former fiscal year, if changed
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 post 90 days. Yes X No
--- ---
The number of shares of the registrant's common stock issued as of June 30,
1999: 2,032,850 shares.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
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TABLE OF CONTENTS PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheet 3
(b) Statement of Operations 4
(c) Statement of Changes in Financial Position 5
(d) Statement of Shareholders' Equity 6
(e) Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 8
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6
(a) Exhibits
(b) Reports on Form 8K
SIGNATURES 9
FINANCIAL DATA SCHEDULE 10
2
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<TABLE>
ADVANCED REFRIGERATION TECHNOLOGIES, INC.
(a development stage company)
BALANCE SHEET
AS OF JUNE 30, 1999 AND DECEMBER 31, 1998
(unaudited)
<CAPTION>
June 30, 1999 December 31, 1998
----------------- -----------------
ASSETS
Current assets
<S> <C> <C>
Cash $ 5,651 $ 360
Inventory 3,678 3,584
Accounts receivable 402 -
----------------- -----------------
Total current assets $ 9,731 $ 3,944
Equipment & furniture 25,542 25,542
----------------- -----------------
Total assets $ 35,273 $ 29,486
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 13,984 $ 17,166
Accruals 2,235 772
Loans from shareholders 12,670 2,560
----------------- -----------------
Total current liabilities $ 28,889 $ 20,498
Note payable-non current - 55,000
Shareholders' equity
Common stock (no par value) 20,000,000 shares
authorized; June 30, 1999-2,032,850 issued; December 31,
1998-1,497,200 issued $ 153,548 $ 61,623
Deficit accumulated during development stage (147,164) (107,635)
----------------- -----------------
Total shareholders' equity $ 6,384 $ (46,012)
Total liabilities and shareholders' equity $ 35,273 $ 29,486
================= =================
</TABLE>
3
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<TABLE>
ADVANCED REFRIGERATION TECHNOLOGIES, INC.
(a development stage company)
STATEMENT OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999
AND THE THREE MONTHS ENDED JUNE 30, 1998
AND FOR THE PERIOD FROM INCEPTION MARCH 5 TO JUNE 30, 1998
(unaudited)
<CAPTION>
Three months Three months Six months From inception
ended June ended June ended March 5 to
30, 1999 30, 1998 June 30, 1999 June 30, 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales - - $ 775 -
Cost of sales - - 500 -
-------------- -------------- -------------- --------------
Gross profit - - $ 275 -
Expenses
Payroll $ 8,396 $ 8,596 $ 20,327 $ 10,111
Patent 470 - 470 -
Research 280 353 538 1,363
Marketing 267 1,416 368 1,577
Travel 1,225 1,601 2,699 2,621
Office 681 508 2,168 652
Postage 204 420 232 1,267
Utilities 258 624 313 874
Telephone 844 899 1,584 923
Rent 2,903 2,100 5,388 2,360
Professional fees - 5,510 1,560 6,190
Taxes 810 - 810 -
Grant - (5,279) - (5,279)
Public offering expense 795 1,694 2,468 1,694
-------------- -------------- -------------- --------------
Total expenses $ 17,133 $ 18,442 $ 38,925 $ 24,353
Loss from operations (17,133) (18,442) (38,650) (24,353)
Interest expense 468 3 879 3
-------------- -------------- -------------- --------------
Net loss $ (17,601) $ (18,445) $ (39,529) $ (24,356)
============== ============== ============== ==============
</TABLE>
4
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<TABLE>
ADVANCED REFRIGERATION TECHNOLOGIES, INC.
(a development stage company)
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND THE PERIOD FROM INCEPTION MARCH 5 TO JUNE 30, 1998
(unaudited)
<CAPTION>
Six months From inception
ended March 5 to
June 30, 1999 June 30, 1998
-------------- --------------
<S> <C> <C>
Funds provided from (used for) operations
Net (loss) during development stage $ (39,529) $ (24,356)
Funds provided by (used for) working capital
Inventory (94) (1,684)
Accounts receivable (402) -
Accounts payable (3,182) 1,949
Accruals 1,463 548
Loans 10,110 -
Funds provided by (used for) equipment purchase (2,653)
Funds provided from (used for) financing activities
Decrease in long term debt (55,000) (16,173)
Proceeds from sale of stock 91,925 43,122
-------------- --------------
Net funds provided from (used for) all activities $ 5,291 $ 753
Cash balance at beginning of period 360 4,851
Cash balance at end of period $ 5,651 $ 5,604
============== ==============
</TABLE>
5
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<TABLE>
ADVANCED REFRIGERATION TECHNOLOGIES, INC.
(a development stage company)
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(unaudited)
<CAPTION>
Common stock
------------------------------------------
Number of Amount Deficiency
shares
------------------------------------------
<S> <C> <C> <C>
Balance December 31, 1998 1,497,200 $ 61,623 $ (107,635)
Common stock issued after acquisition (1) 149,900
Common stock issued under 504 public
offering 1/1/99-3/31/99 (2) 363,500 66,000
Common stock issued under 504 public
offering 4/1/99-4/6/99 (2) 2,500 5,000
Common stock issued under 506 public
offering 4/7/99-6/30/99 (2) 19,750 20,925
Net (loss) during development stage (39,529)
------------------------------------------
Balance June 30, 1999 2,032,850 $ 153,548 $ (147,164)
==========================================
</TABLE>
(1) During 1998 the Board of Directors of ART authorized the issuance
of 1,235,000 restricted shares of stock to the founders and key
people. 1,085,100 of these shares were issued during 1998 (these
shares are included in the 12/31/98 balance); at the request of
the authorized recipient, David J. Kimber, Vice President
Marketing, his remaining 149,900 shares were not issued to him
until January 1999.
(2) From 1/1/99 through 3/31/99 the number of shares issued in
compliance with Reg. D, Rule 504 was 363,500. From 4/1/99 through
4/6/99, 2,500 additional shares were issued in compliance with
Reg. D, Rule 504 (unrestricted shares). From 4/7/99 through
6/30/99, 19,750 shares were issued in compliance with Reg. D,
Rule 506 (restricted shares). The total number of all these
shares issued between 1/1/99 and 6/30/99 is 385,750.
6
<PAGE>
ADVANCED REFRIGERATION TECHNOLOGIES, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(unaudited)
1. GENERAL
The financial statements have been prepared by management without audit and
should be read in conjunction with the financial statements and notes
thereto for the year 1998. The Company is still in the development stage
and the results of interim periods are not indicative of the results for
the year. The accompanying financial statements reflect, in the opinion of
management, all adjustments necessary for the fair presentation of the
interim financial statements. In the opinion of management all such
adjustments are of a normal and recurring nature.
The Company has been in the development stage since it acquired the deficit
accumulated by Nevada Energy Control Systems, Inc., in developing an
evaporator fan control system. The Company's activities have consisted of
obtaining financing and capital and initiating marketing of the product. On
June 5, 1998 the Company commenced selling stock in compliance with an
exemption from registration under the Federal securities laws provided by
Regulation D, Rule 504 of the Securities and Exchange Commission. From
April 6, 1999 through June 30, this stock was sold in compliance with
Regulation D, Rule 506 (restricted shares.)
The Company filed a registration statement on Form 10SB12G with the
Securities and Exchange Commission on May 4, 1999 and became a reporting
company under Section 12(g) of the Securities and Exchange Act of 1934 as
of July 6, 1999.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORY
Inventory consists of finished evaporator fan controllers and parts for
assembling additional units at historical cost. The Company has yet to
determine the method of valuation of its inventories. Whatever method is
elected would have no effect on the financial statements.
INCOME TAXES
The Company has a loss tax carry-forward resulting from the acquisition of
Nevada Energy Control Systems, Inc. of approximately $42,000 and $64,800
from the year ended December 31, 1998. The Company has not recognized any
tax benefit of such carry-forwards in the financial statements.
GRANT
The U. S. Department of Energy made a grant of $98,279 to the Company, of
which the final $5,279 was included as a reduction of expenses in the
statement of operations in 1998. The $98,279 expended for research and
development is in addition to the funds expended by the Company, none of
which has been deferred.
3. OTHER MATTERS
NOTE PAYABLE - LONG TERM
During the period a note payable in the amount of $55,000 was converted to
stock.
7
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
THIS ANALYSIS CONTAINS FORWARD-LOOKING COMMENTS WHICH ARE BASED ON CURRENT
INFORMATION. ACTUAL RESULTS IN THE FUTURE MAY DIFFER MATERIALLY.
The Company is engaged in the business of designing, manufacturing and marketing
energy efficiency and conservation products. The Company's first product, which
is currently in production, is a patented evaporator fan controller for walk-in
refrigerators and freezers, which can save the consumer from 30-40% in
refrigeration energy costs. The Company is currently test marketing this product
and has contracts for delivery of the product in August, 1999.
The Company has been in the development stage since its inception March 5, 1998.
The comparison of the second quarter of 1999 with the second quarter of 1998
indicates that the Company is spending at about the same level. The comparison
of the first six months of 1999 with the period from inception to June 30, 1998
is not very meaningful. The Company continues to develop the ART Evaporator Fan
Controllers.
Year 2000 Compliance: With respect to Year 2000 compliance, the Company
manufactures a product which contains microprocessors. The source code for the
microprocessors has been written so that it is not dependent on dates, but,
instead, functions on a 24-hour internal timing routine. To this extent, all
products currently being manufactured by the Company are Year 2000 compliant.
The Company has performed an audit of all of its computer hardware, internal
accounting and software applications and found all to be Year 2000 compliant or
capable. As of this date, the Company has been given assurances from its banking
institution and transfer agent that they are working toward compliance or are in
compliance. Although no assurances can be offered with respect to third party
compliance, the Company believes there should be no significant effect on the
Company's business, financial condition or results of operation from the Year
2000 situation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings NONE
Item 2. Changes in Securities and Use of Proceeds NONE
Item 3. Defaults On Senior Securities NONE
Item 4. Submission of Items to a Vote NONE
Item 5. Other Information NONE
Item 6
(a) Exhibits NONE
(b) Reports on Form 8K NONE
8
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Advanced Refrigeration Technologies, Inc.
Dated: August 31, 1999 By: /s/ Charles E. McEwan
---------------------------
Charles E. McEwan, President
Dated: August 31, 1999 By: /s/ Clare C. Schrum
---------------------------
Clare C. Schrum, Chief
Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 5,651
<SECURITIES> 0
<RECEIVABLES> 402
<ALLOWANCES> 0
<INVENTORY> 3,678
<CURRENT-ASSETS> 9,731
<PP&E> 25,542
<DEPRECIATION> 0
<TOTAL-ASSETS> 35,273
<CURRENT-LIABILITIES> 28,889
<BONDS> 0
0
0
<COMMON> 153,548
<OTHER-SE> (147,164)
<TOTAL-LIABILITY-AND-EQUITY> 35,273
<SALES> 775
<TOTAL-REVENUES> 775
<CGS> 500
<TOTAL-COSTS> 39,425
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 879
<INCOME-PRETAX> (39,529)
<INCOME-TAX> 0
<INCOME-CONTINUING> (39,529)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (39,529)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
