U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended August 31, 1998.
[ ] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the transition period from To
Commission File Number: 0-8880
MARITIME TRANSPORT & TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
New York 11-2196303
(State of jurisdiction of (I.R.S. Identification No.)
incorporation or organization)
1535 Memphis Junction Road, Bowling Green, Kentucky, 42101.
(Address of principal executive offices)
(502) 781 - 8453
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark, whether the registrant:: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the 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
The Company had 15,130,705 shares of common stock outstanding
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the periods ended August 31, 1997
included herein have been prepared by Maritime Transport & Technology, Inc.,
(the "Company") without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the Commission"). In the opinion of
management, the statements include all adjustments necessary to present fairly
the financial position of the Company as of August 31, 1998, and the results of
operations and cash flows for the three month periods ended August 31, 1996 and
1998.
The Company's results of operations during the three months of the
Company's fiscal year are not necessarily indicative of the results to be
expected for the full fiscal year.
The financial statements included in this report should be read in
conjunction with the financial statements and notes thereto in the Company's
Annual Report on Form 10-K for the fiscal years ended May 31, 1997 and 1998.
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED PROFORMA BALANCE SHEET
August 31,
May 31, 1998
1998 Unaudited
Assets
Current assets
<S> <C> <C>
Cash and cash equivalents $145,079 $65,599
Accounts receivable 310,086 504,442
Inventory 170,795 183,962
Note receivable 13,200
Corporate income taxes receivable 8,925 8,925
Prepaid expenses 1,200 7,400
Current assets 649,285 770,328
Capital assets-net 44,043 44,617
Other assets
Loans receivable - non affiliated 27,499 60,819
Loans receivable-shareholder 91,351
Security deposit 805 805
Total other assets 119,655 61,624
Total assets $812,983 $876,569
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $235,913 $246,009
Customer deposits 61,406 88,815
Corporate income tax payable 1,580 1,580
Investor loans payable 131,500 131,500
Notes payable-bank 109,338 112,770
Loan payable-affiliate 8,485
Total current liabilities 539,737 589,159
Long term liabilities
Note payable - bank 13,855 12,505
Total liabilities 552,012 601,664
Capital stock
Common stock-authorized 80,000,000 common shares, par value $.01 each, at May 151,308 151,308
31, 1998 the shares outstanding was 15,130,705
Additional paid in capital 494,508 494,508
Retained earnings (386,425) (370,911)
Total stockholders' equity 259,391 274,905
Total liabilities and stockholders' equity $812,983 $876,569
</TABLE>
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<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
August 31, August 31,
1997 1998
Unaudited Unaudited
<S> <C> <C>
Revenue $-0- $357,611
Costs of goods sold -0- 121,301
Gross profit -0- 236,310
Operations:
General and administrative 43 237,703
Depreciation and amortization
Total expense 43 237,703
Income before corporate taxes (43) (1,393)
Corporate income taxes
Other income and expenses
Gain on sale of assets 19,000
Interest Income 83
Interest expense (2,176)
Total other income and expenses 16,907
Net income (loss) $(43) $15,514
Net income (loss) per share -basic $(0.00) $0.00
Number of shares outstanding-basic 15,130,705 15,130,705
</TABLE>
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<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
May 31, August 31,
1998 1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $(99,860) $15,514
Depreciation 45,938
Account receivables (127,907) (194,356)
Inventory (9,404) (13,167)
Note receivable 13,200
Federal taxes receivable 618
Prepaid expenses (1,200) (6,200)
Accounts payable and accrued expenses 84,612 10,096
Customer deposits payable 12,853 27,409
Corporate taxes payable (24,960)
TOTAL CASH FLOWS FROM OPERATIONS (119,310) (147,505)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital assets (39,682) (575)
Note receivable-affiliate (16,055) 99,876
Note receivable- non affiliate (4,423) (33,320)
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (60,160) 65,973
CASH FLOWS FROM FINANCING ACTIVITIES
Loan payable- investors 131,500
Note payable-bank 122,368 2,082
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 253,868 2,082
NET INCREASE (DECREASE) IN CASH 74,398 (79,480)
CASH BALANCE BEGINNING OF PERIOD 70,681 145,079
CASH BALANCE END OF PERIOD $145,079 $65,599
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
PROFORMA CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
Additional Accumulated
Common Stock Common paid in deficit during
Stock capital development stage Total
<S> <C> <C> <C> <C> <C> <C>
June 1, 1994 38,484,549 384,845 $-0- $(384,845) $-0-
May 31, 1995 Net profit 1,579 1,579
May 31, 1995 38,484,549 $384,845 $-0- $(383,266) $1,579
May 31, 1996 Net profit 1,866 1,866
May 31, 1996 38,484,549 384,845 $-0- (381,400) 3,445
May 31, 1997 Net loss (4,952) (4,952)
May 31, 1997 38,484,549 384,845 $-0- $(386,372) $(1,527)
April 14, 1998(1) 3,848,455 38,485 346,360 (386,372) (1,527)
April 15, 1998(2) 11,282,250 112,823 148,148 228,981
May 31, 1998 Net loss (53) (53)
May 31, 1998 15,130,705 $151,308 494,508 $(386,425) 259,391
Unaudited
August 31, 1998 Net profit 15,514 15,514
August 31, 1998 15,130,705 $151,308 $462,518 $(370,911) $274,905
(1) Reflects a 10 to 1 reverse split.
(2) Reflects the issuance of shares for acquisitions valued at $.02 per share.
</TABLE>
<PAGE>
MARITIME TRANSPORT & TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 31, 1998
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of Maritime Transport &
Technology, (the "Company"), reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results of the interim
periods presented. All such adjustments are of a normal recurring nature. The
financial statements should be read in conjunction with the notes to financial
statements contained in the Company's Annual Report on Form 10-Ksb for the year
ended May 31, 1998.
2. NET INCOME PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, EARNINGS PER SHARE ("Statement No.
128"). Statement No. 128 applies to entities with publicly held common stock or
potential common stock and is effective for financial statements issued for
periods ending after December 15, 1997. Statement No. 128 replaces APB Opinion
15, Earnings per Share ("EPS"). Statement No. 128 requires dual presentation of
basic and diluted earnings per share by entities with complex capital
structures. Basic EPS includes no dilution and is computed by dividing net
income by the total number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution of securities that could dilute the shares
in computing the earnings of the Company such as common stock which may be
issuable upon exercise of outstanding common stock options or the conversion of
debt into common stock. Pursuant to the requirements of the Securities and
Exchange Commission, the calculation of the shares used in computing basic and
diluted EPS include the shares of common stock issued for the acquisition of
B.G. Banking Equipment, Inc. and Financial Building Equipment Exchange, Inc.
Shares used in calculating basic and diluted net income per share were as
follows:
<TABLE>
For the three months For the three months
months ended months ended
August 31, August 31,
1997 1998
------------- --------------
<S> <C> <C>
Total number common
shares outstanding 3,848,455 15,130,705
========= ==========
</TABLE>
3. ACCOUNTING FOR INCOME TAXES
The Company follows Statement of Financial Accounting Standards ("SFAS")
No. 109, "Accounting for Income Taxes," which requires an asset and liability
approach of accounting for income taxes. Deferred tax assets and liabilities
are computed annually for differences between financial statement basis and tax
basis of assets, liabilities and available general business tax credit
carry-forwards. A valuation allowance is established when necessary to reduce
deferred tax assets to the amount expected to be realized.
4. MARKETABLE SECURITIES
The Company adopted Financial Accounting Standards Board ("FASB")
Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", which requires that investments in equity securities that have
readily determinable fair values and investments in debt securities be
classified in three categories: held-to-maturity, trading and
available-for-sale. Based on the nature of the assets held by the Company and
Management's investment strategy, the Company's investments have been classified
as available-for-sale. Management determines the appropriate classification of
debt securities at the time of purchase and reevaluates such designation as of
each balance sheet date. Securities classified as available-for-sale are carried
at estimated fair value, as determined by quoted market prices, with unrealized
gains and losses, net of tax, reported in a separate component of stockholders'
equity. At December 31, 1997 and August 31, 1998, the Company had no investments
that were classified as trading or held-to-maturity as defined by the Statement.
The following is a summary of cash, cash equivalents and available-for-sale
securities by balance sheet classification at May 31, 1998:
<TABLE>
Estimated
Gross Gross Fair
Unrealized Unrealized Market
Cost Gains Losses Value
----- -------- --------- -----
<S> <C> <C> <C> <C>
Cash $ 145,079 $-0- $ -0- $ 145,079
------- ------ ------- ---------
Total cash and cash
equivalents $ 145,079 $-0- $ -0- $ 145,079
</TABLE>
The following is a summary of cash, cash equivalents and available-for-sale
securities by balance sheet classification at August 31, 1998:
<TABLE>
<CAPTION>
Estimated
Gross Gross Fair
Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Cash $ 65,599 $-0- $ -0- $ 65,599
------- ---- ------ -------
Total cash and cash
equivalents $ 65,599 $-0- $ -0- $ 65,599
</TABLE>
Item 2. Management's Discussion and Analysis or Plan of Operation
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three months ended August 31, 1997 and 1998
------------------------------------------------
Except for the description of historical facts contained herein, this Form
10QSB contains certain forward looking statements that involve risks and
uncertainties as detailed herein and from time to time in the Company's filings
with the Securities and Exchange Commission and elsewhere. Such statements are
based on management's current expectations and are subject to a number of
factors and uncertainties which could cause actual results to differ materially
from those described in the forward-looking statements. These factors include,
among others, the Company's fluctuations in sales and operating results, risks
associated with international operations and regulatory, competitive and
contractual risks and product development.
Results of operations for the three months ended August 31, 1998 as
compared to the three months ended August 31, 1997.
-
- -----------------------------------------------------------------------------
Revenues were $357,611 for the three months ended August 31, 1998 as compared to
$-0- for the three months ended August 31, 1997. Costs of goods sold and related
expenses for the three months ended August 31, 1998, were $121,301 as compared
to $0 for the three months ended August 31, 1997 representing a cost of goods
sold and related expenses of 33.92% for the three months ended August 31, 1998
as compared to 0% for the three months ended August 31, 1997.
General and administrative costs for the three months ended August 31, 1998
were $237,703, an increase of 100.0% over expenses of $-0- for the three
months ended August 31, 1997.
Liquidity and capital resources as of the end of the three months ended
August 31, 1998. -
- --------------------------------------------------------------------------------
The Company's cash balance was $65,599 and working capital was a
$181,169 as at August 31, 1998.
The Company's primary short-term needs for capital, which are subject to
change, are for the fullfillment of orders, the search for the acquisition of
quality used equipment at the right price, pay continuing operating expenses.
Income tax: As of August 31, 1998, the Company has a taxable profit of
$15,514. The Company's ability to utilize its tax credit carry-forwards in
future years was subject to an annual limitation pursuant to the "Change in
Ownership Rules" under Section 382 of the Internal Revenue Code of 1986, as
amended. However, the use of the Company's ultilization of carry forward losses
was lost because of the change in ownership of the Company.
The Company expects its capital requirements to increase over the next
several years as it continues to develop its business and seek new company
related acquisitions, increases in sales and administration infrastructure and
embarks on developing in-house business capabilities and facilities. The
Company's future liquidity and capital funding requirements will depend on
numerous factors, including the extent to which the Company's present management
can fund the continued capital requirements, the timing of regulatory actions
regarding the Company's potential acquisitions, the costs and timing of
expansion of sales, marketing activities, facilities expansion needs, and
competition in the mortgage business entered into.
The Company believes that its available cash and cash from management
contributions will be sufficient to satisfy its funding needs for the day to day
mortgage banking activities for at least the next 12 months. Thereafter, if cash
generated from any newly acquired or developed business operations is
insufficient to satisfy the Company's working capital and capital expenditure
requirements, the Company may be required to sell additional equity or debt
securities or obtain additional credit facilities. There can be no assurance
that such financing, if required, will be available on satisfactory terms, if at
all.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
No legal proceedings were brought, are pending or are threatened during the
quarter.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Maritime Transport & Technology, Inc.
(Registrant)
By: /s/ Paul Clark
------------------
Paul Clark
PRESIDENT
Dated: November 17, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the three month period ended August 31, 1998 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> May-31-1998
<PERIOD-END> Aug-31-1998
<CASH> 65,599
<SECURITIES> 0
<RECEIVABLES> 504,442
<ALLOWANCES> 0
<INVENTORY> 183,962
<CURRENT-ASSETS> 770,328
<PP&E> 303,943
<DEPRECIATION> (259,326)
<TOTAL-ASSETS> 876,569
<CURRENT-LIABILITIES> 601,664
<BONDS> 0
0
0
<COMMON> 151,308
<OTHER-SE> 123,597
<TOTAL-LIABILITY-AND-EQUITY> 876,569
<SALES> 357,611
<TOTAL-REVENUES> 357,611
<CGS> 121,301
<TOTAL-COSTS> 237,703
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,176
<INCOME-PRETAX> 15,514
<INCOME-TAX> 0
<INCOME-CONTINUING> 15,514
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,514
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
