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 November 30, 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.)
Employerincorporation or organization)
1535 Memphis Junction Road
Bowling Green, KY 42101
(Address of principal executive offices)
(800) 726-0337
(Registrant's telephone number, including area code)
108 Main St. Stamford, NY, 12167-1137
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
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the periods ended November 30, 1998
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 November 30, 1998, and the results
of operations and cash flows for the three month periods ended November 30, 1997
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
November 30,
May 31, 1998
1998 Unaudited
Assets
Current assets
<S> <C> <C>
Cash and cash equivalents $145,079 $63,920
Accounts receivable 310,086 327,458
Inventory 170,795 238,683
Note receivable 13,200
Corporate income taxes receivable 8,925 8,925
Prepaid expenses 1,200
----- ---------------
Current assets 649,285 638,986
Capital assets-net 44,043 -0-
Other assets
Loans receivable - non affiliated 27,499 72,883
Loans receivable-shareholder 91,351
Security deposit 805 805
---- ---
Total other assets 119,655 73,688
-------- ------
Total assets $812,983 $712,674
======== ========
Liabilities and
Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $235,913 $159,190
Customer deposits 61,406 81,210
Corporate income tax payable 1,580 6,535
Investor loans payable 131,500 139,500
Notes payable-bank 109,338 22,618
Loan payable-affiliate 12,323
---------- ------
Total current liabilities 539,737 421,376
Long term liabilities
Note payable - bank 13,855
------
Total liabilities 553592
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) (354,518)
--------- ---------
Total stockholders' equity 259,391 291,298
-------- -------
Total liabilities and stockholders' equity $812,983 $712,674
======== ========
See accompanying notes to financial statements.
F1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30,
1997 1998
Unaudited Unaudited
<S> <C> <C>
Revenue $-0- $471,314
Costs of goods sold -0- 250,906
Gross profit -0- 220,408
Operations:
General and administrative 43 146,529
Depreciation and amortization 48,539
------
Total expense 43 195,068
Income before corporate taxes (43) 25,340
Corporate income taxes 2,612
Other income and expenses
Interest Income 156
Interest expense (2,568)
-------
Total other income and expenses (2,412)
Corporate income taxes on other income 3,923
Net income (loss) $(43) $16,393
===== =======
Net income (loss) per share -basic $(0.00) $0.00
======== =====
Number of shares outstanding-basic 15,130,705 15,130,705
=========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30,
November 30, November 30,
1998 1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $(43) $31,907
Depreciation -0- 48,539
Account receivables (17,372)
Inventory (67,888)
Note receivable 13,200
Federal taxes receivable
Prepaid expenses 1,200
Accounts payable and accrued expenses (76,723)
Customer deposits payable 19,804
Corporate taxes payable 4,955
----- -----
TOTAL CASH FLOWS FROM OPERATIONS (43) (42,378)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital assets (4,496)
Note receivable-affiliate 91,351
Note receivable- non affiliate (45,384)
--------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES 41,471
CASH FLOWS FROM FINANCING ACTIVITIES
Loan payable- affiliate 12,323
Loan payable- investors 8,000
Note payable-bank (100,575)
---------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES (80,252)
NET INCREASE (DECREASE) IN CASH (43) (81,159)
CASH BALANCE BEGINNING OF PERIOD 53 145,079
--- -------
CASH BALANCE END OF PERIOD $10 $63,920
=== =======
</TABLE>
See accompanying notes to financial statements
<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
November 30, 1998 Net profit 31,907 31,907
---------- ------------ ----------- ------- ------
November 30, 1998 15,130,705 $151,308 $494,508 $(354,518) $291,298
========== ========= ========= ========== ========
(1) Reflects a 10 to 1 reverse split.
(2) Reflects the issuance of shares for acquisitions valued at $.02 per share.
</TABLE>
See accompanying notes to financial statements
<PAGE>
MARITIME TRANSPORT & TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 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 six months For the six months
months ended months ended
November 30, November 30,
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 six
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 May 31, 1998
and November 30, 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 November 30, 1998:
<TABLE>
Estimated
Gross Gross Fair
Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Cash $ 63,920 $-0- $ -0- $ 63,920
------- ---- ------ -------
Total cash and cash
equivalents $ 63,920 $-0- $ -0- $ 63,920
</TABLE>
<PAGE>
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 Six months ended November 30, 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 six months ended November 30, 1998 as
compared to the six months ended November 30, 1997.
- - ----------------------------------------------------------------------------
Revenues were $828,925 for the six months ended November 30, 1998 as
compared to $-0- for the six months ended November 30, 1997. Costs of goods sold
and related expenses for the six months ended November 30, 1998, were $372,207
as compared to $0 for the six months ended November 30, 1997 representing a cost
of goods sold and related expenses of 44.9% for the six months ended November
30, 1998 as compared to 0% for the six months ended November 30, 1997.
General and administrative costs for the six months ended November 30, 1998
were $432,771, an increase of 100.0% over expenses of $43 for the six months
ended November 30, 1997.
Liquidity and capital resources as of the end of the six months ended November
30, 1998.
- - --------------------------------------------------------------------------
The Company's cash balance was $63,920 and working capital was a $217,610
as at November 30, 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 November 30, 1998, the Company has a pretax profit of
$38,442. 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 Clar
------------------
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 six month period ended November 30, 1998 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000027850
<NAME> MARITIME TRANSPORT & TECHNOLOGY, INC.
<MULTIPLIER> 1
<CURRENCY> $
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> May-31-1998
<PERIOD-END> Nov-30-1998
<EXCHANGE-RATE> 1
<CASH> 63,920
<SECURITIES> 0
<RECEIVABLES> 327,458
<ALLOWANCES> 0
<INVENTORY> 238,683
<CURRENT-ASSETS> 638,986
<PP&E> 307,865
<DEPRECIATION> (307,865)
<TOTAL-ASSETS> 712,674
<CURRENT-LIABILITIES> 421,376
<BONDS> 0
0
0
<COMMON> 151,308
<OTHER-SE> 139,990
<TOTAL-LIABILITY-AND-EQUITY> 712,674
<SALES> 828,925
<TOTAL-REVENUES> 828,925
<CGS> 372,207
<TOTAL-COSTS> 432,771
<OTHER-EXPENSES> 14,495
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,744
<INCOME-PRETAX> 38,442
<INCOME-TAX> 0
<INCOME-CONTINUING> 21,335
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,907
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
