5
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31,
2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________to
___________________
Commission File Number: 000-28509
NATIONAL SORBENTS, INC.
(Exact name of Registrant as specified in its Charter)
Nevada 31-1291923
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or organization)
10139 Commerce Park Drive
Cincinnati, Ohio 45246
(Address of principal executive offices)
(513) 860-4144
(Registrant's telephone number)
(Former Name, Former Address and Former Fiscal Year, if changed
since last Report)
Check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the
past 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
As of March 31, 2000, 9,764,000 shares of the issuer's common
stock were outstanding.
Transitional Small Business Disclosure Format (check one): Yes
No X
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
National Sorbents, Inc.
BALANCE SHEET
(Unaudited)
As of March 31,
<TABLE>
<S>
<C> <C>
2000 1999
Assets
Cash and cash equivalents $33,482 $13,587
Accounts receivable 343,060 158,033
Inventory 210,772 136,724
Other current assets 14,154 7,980
601,468 316,324
Total current assets
Property and equipment, net 829,125 847,320
630 630
Other assets
$1,431,223 $1,164,273
Total assets
Liabilities and Shareholders'
Deficit
Accounts payable $1,128,163 $479,937
Accrued liabilities 164,521 392,583
Notes payable, current portion 14,100 20,605
Total current liabilities 1,306,774 903,694
Long term debt, less current 1,460,272 1,849,981
portion
Total liabilities 2,767,056 2,743,375
Common stock, $0.001 par value, 9,764 9,764
25,000,000 shares authorized,
9,764,000 issued and
outstanding
Additional paid-in capital 4,898,180 4,559,444
Accumulated deficit (6,243,777) (6,144,045)
Total shareholders' deficit (1,335,833) (1,579,102)
Total liabilities and $1,431,223 $1,164,273
shareholders' deficit
</TABLE>
National Sorbents, Inc.
Statements of Operations
(Unaudited)
For the three months ended March 31,
<TABLE>
<S> <C> <C>
2000 2000
Revenues $1,075,968 $739,15
1
Cost of revenues 894,573 584,659
Selling, general and 350,760 265,823
administrative expenses
Loss from operations (169,365) (111,331)
Other expense, net 12,675 8,654
Loss before provision for (182,040) (119,985)
income taxes
Provision for income taxes 0 0
Net loss ($182,040) ($119,985)
Net loss per common share ($0.02) ($0.02)
</TABLE>
National Sorbents, Inc.
Statement of Shareholders' Deficit
(Unaudited)
For the three months ended March 31, 2000
Shares Par value, $0.001
<TABLE>
<S>
<C> <C> <C> <C> <C>
Common stock Common stock Additional paid- Accumulated Total
in Capital Deficit
Balance December 9,764,000 $9,764 $4,898,180 ($6,061,737) (
31, 1999 $
1
,
1
5
3
,
7
9
3
)
Proceeds from sale - - - - -
Net loss (182,040) (182,040)
Balance March 31, 9,764,000 $9,764 $4,898,180 ($6,243,777) ($1,335,833)
2000
</TABLE>
National Sorbents, Inc.
Statements of Cash Flows
(Unaudited)
For the three months ended March 31,
<TABLE>
<S> <C> <C>
2000 1999
Net loss ($182,040) $119,985)
Adjustments to reconcile net
income to net cash
Used for operating activities:
Depreciation and amortization 7,999 6,925
Change in assets and liabilities:
Decrease in accounts receivable 80,019 186,779
(Increase)/decrease in inventories (5,701) 31,150
Decrease in prepaid expenses 3,990 -
(Decrease)/increase in accounts 49,827 (215,488)
payable
(Decrease)/increase in accrued 9,788 (53,314)
expenses
Decrease in other assets - 375
Net cash used in operations (31,907) (163,559)
Cash used for investing
activities:
Purchase of land & building - -
Purchase of property & equipment - -
Net cash used for investing - -
activities
Cash flows from financing
activities:
Repayment of debt (2,783) (5,218)
Borrowings 60,095 -
Common stock - 182,364
Net cash provided by financing 57,313 177,146
activities
Cash, beginning 12,287 0
Cash, ending 33,483 13,587
</TABLE>
National Sorbents, Inc.
NOTES TO FINANCIAL STATEMENTS
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form
10-QSB. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have
been included.
The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full
year. The accompanying financial statements should be read in
conjunction with the Company's Form 10-KSB which included audited
financial statements for the year ended December 31, 1999.
Income Taxes
During the periods presented the Company has not provided for
income taxes as a result of the losses during the periods and the
available operating loss carryforwards.
Basis of Presentation
The accompanying financial statements have been prepared on a
"going concern" basis which contemplates the realization of
assets and the liquidation of liabilities in the ordinary course
of business.
The Company has incurred operating losses aggregating $6,061,737
through the year ended December 31, 1999 and $182,040 for the
three months ended March 31, 2000. The Company had negative
working capital of $693,989 at March 31, 2000.
The Company has undertaken the raising of additional equity
capital. The Company's continued operations are dependent upon
its ability to raise adequate additional equity capital and the
increased marketing of its products and services.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
Revenues increased $336,817, or 46%, to $1,075,968 from $739,151
for the three months ended March 31, 2000 and 1999 respectively.
The increase was primarily the result of an increased volume of
products sold both domestically and internationally.
Cost of Revenues increased $153,368, or 26%, to $738,027 from
$584,659 for the three months ended March 31, 2000 and 1999
respectively. The increase was primarily the result of the
increased volume of revenues.
Operating Expenses
Selling, general and administrative expenses increased $84,936,
or 32%, to $350,760 from $265,823 for the three months ended
March 31, 2000 and 1999 respectively. The increase was primarily
the result of an increase in professional fees related to
preparation and filing of required documents, an increase in
investor relations activity, and an increase in sales activities.
Liquidity and Capital Resources
The Company has historically financed its operations through the
sale of common stock and borrowings from individuals and a bank.
The Company does not have any significant material commitments
for capital expenditures.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
Revenues increased $336,817, or 46%, to $1,075,968 from $739,151
for the three months ended March 31, 2000 and 1999 respectively.
The increase was primarily the result of an increased volume of
products sold both domestically and internationally.
Cost of Revenues increased $153,368, or 26%, to $738,027 from
$584,659 for the three months ended March 31, 2000 and 1999
respectively. The increase was primarily the result of the
increased volume of revenues.
Operating Expenses
Selling, general and administrative expenses increased $84,936,
or 32%, to $350,760 from $265,823 for the three months ended
March 31, 2000 and 1999 respectively. The increase was primarily
the result of an increase in professional fees related to
preparation and filing of required documents, an increase in
investor relations activity, and an increase in sales activities.
Liquidity and Capital Resources
The Company has historically financed its operations through the
sale of common stock and borrowings from individuals and a bank.
The Company does not have any significant material commitments
for capital expenditures.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Not applicable.
(b) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated May 10, 2000
NATIONAL SORBENTS, INC.
By: /s/ Daniel B. Jones
Daniel B. Jones
President and Chief Executive Officer
By: /s/ Jerome J. Cain
Jerome J. Cain
Chief Financial Officer
