<PAGE> 1
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, 1999.
[ ] 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 No X
---
The Company had 14,941,455 shares of common stock outstanding as of
November 30, 1999.
<PAGE> 2
ITEM 1. FINANCIAL STATEMENTS
The condensed financial statements for the periods ended November 30, 1999
included herein have been prepared by Maritime Transport & Technology, Inc.,
(the "Company") without audit, pursuant 11 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 ,1999, and the results
of operations and cash flows for the six and three month periods ended November
30, 1998 and 1999.
The Company's results of operations during the six and 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 year ended May 31, 1999.
<PAGE> 3
MARITIME TRANSPORT & TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
NOVEMBER 30, 1999 AND MAY 31, 1999
<TABLE>
<CAPTION>
November May
ASSETS 30, 1999 31, 1999
------ ----------- ------------
(Unaudited) (See Note 1)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 214,773 $ 122,161
Accounts receivable, net 242,438 397,467
Inventories 691,346 508,017
Prepaid expenses and other current assets 1,600 10,525
---------- ----------
Total current assets 1,150,157 1,038,170
Equipment and improvements, net 70,739 35,702
Other assets 20,310 31,295
---------- ----------
Totals $1,241,206 $1,105,167
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 10,497 $ 7,268
Accounts payable and accrued expenses 258,209 245,622
Customer deposits payable 38,155 70,123
Advances from principal stockholder 229,573 174,527
Private placement funds in dispute 42,000 38,400
---------- ----------
Total current liabilities 578,434 535,940
Long-term debt, net of current portion 8,620 8,274
---------- ----------
Total liabilities 587,054 544,214
---------- ----------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value; 80,000,000 shares
authorized; 14,941,455 and 14,787,955 shares outstanding 149,415 147,880
Additional paid-in capital 490,074 313,201
Retained earnings 14,663 99,872
---------- ----------
Total stockholders' equity 654,152 560,953
---------- ----------
Totals $1,241,206 $1,105,167
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE> 4
MARITIME TRANSPORT & TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX AND THREE MONTHS ENDED NOVEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
November 30, November 30,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ 945,907 $ 828,925 $ 549,302 $ 471,314
Cost of goods sold 622,420 372,207 420,297 250,906
------------ ------------ ------------ ------------
Gross profit 323,487 456,718 129,005 220,408
Selling, general and administrative expenses 410,384 374,244 265,525 157,529
------------ ------------ ------------ ------------
Income (loss) from operations (86,897) 82,474 (136,520) 62,879
------------ ------------ ------------ ------------
Other income (expense):
Gain on sale of assets 19,000
Interest income 2,890 239 1,048 156
Interest expense (1,202) (4,744) (499) (2,568)
------------ ------------ ------------ ------------
Totals 1,688 14,495 549 (2,412)
------------ ------------ ------------ ------------
Income (loss) before income taxes (85,209) 96,969 (135,971) 60,467
Provision for income taxes 6,535 6,535
------------ ------------ ------------ ------------
Net income (loss) $ (85,209) $ 90,434 $ (135,971) $ 53,932
============ ============ ============ ============
Basic income (loss) per common share $ (.01) $ .01 $ (.01) $ --
============ ============ ============ ============
Basic weighted average number of common shares outstanding 14,884,713 15,130,705 14,934,607 15,130,705
============ ============ ============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE> 5
MARITIME TRANSPORT & TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
SIX MONTHS ENDED NOVEMBER 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Retained
Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance, June 1, 1999 14,787,955 $ 147,880 $ 313,201 $ 99,872 $ 560,953
Proceeds from sale of common stock at
$1 per share, net of expenses 53,500 535 49,773 50,308
Issuance of common stock for consulting fees 100,000 1,000 127,100 128,100
Net loss (85,209) (85,209)
---------- ---------- ---------- ---------- ----------
Balance, November 30, 1999 14,941,455 $ 149,415 $ 490,074 $ 14,663 $ 654,152
========== ========== ========== ========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE> 6
MARITIME TRANSPORT & TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED NOVEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Operating activities:
Net income (loss) $ (85,209) $ 90,434
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 7,680 22,000
Issuance of common stock for services 128,100
Provision for doubtful accounts 71,960
Changes in operating assets and liabilities:
Accounts receivable 155,029 (49,360)
Inventories (183,329) (67,888)
Prepaid expenses and other current assets 8,925 6,155
Accounts payable, accrued expenses and other
current liabilities 12,587 (76,723)
Customer deposits payable (31,968) 19,804
--------- ---------
Net cash provided by (used in) operating
activities 83,775 (55,578)
--------- ---------
Investing activities:
Proceeds from notes receivable - affiliate 91,351
Notes receivable - nonaffiliate, net (60,975) (32,184)
Purchase of equipment and improvements (34,593) (4,496)
--------- ---------
Net cash provided by (used in) investing activities (95,568) 54,671
--------- ---------
Financing activities:
Advances from principal stockholder 55,046 12,323
Private placements funds in dispute 3,600 8,000
Repayments of long-term debt (4,549) (100,575)
Net proceeds from private placements 50,308
--------- ---------
Net cash provided by (used in) financing activities 104,405 (80,252)
--------- ---------
Net increase (decrease) in cash and cash equivalents 92,612 (81,159)
Cash and cash equivalents, beginning of period 122,161 145,079
--------- ---------
Cash and cash equivalents, end of period $ 214,773 $ 63,920
========= =========
Supplemental disclosure of cash flow information:
Interest paid $ 1,202 $ 4,744
========= =========
Supplemental disclosure of noncash investing and financing activities:
Equipment and improvements financed, in part, with debt $ 8,124
=========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE> 7
MARITIME TRANSPORT & TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - BASIS OF PRESENTATION:
In the opinion of management, the accompanying unaudited
condensed consolidated financial statements reflect all
adjustments, consisting of normal recurring accruals, necessary
to present fairly the financial position of Maritime Transport &
Technology, Inc. and Subsidiaries (the "Company") as of November
30, 1999, its results of operations for the six and three months
ended November 30, 1999 and 1998, its cash flows for the six
months ended November 30, 1999 and 1998 and its changes in
stockholders' equity for the six months ended November 30, 1999.
Information included in the condensed consolidated balance sheet
as of May 31, 1999 has been derived from the audited consolidated
balance sheet included in the Company's Form 10-K for the year
ended May 31, 1999 (the "10-K") previously filed with the
Securities and Exchange Commission (the "SEC"). Pursuant to rules
and regulations of the SEC, certain information and disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted from these consolidated financial statements unless
significant changes have taken place since the end of the most
recent fiscal year. Accordingly, these unaudited condensed
consolidated financial statements should be read in conjunction
with the consolidated financial statements, notes to consolidated
financial statements and other information in the 10-K.
The consolidated results of operations for the six and three
months ended November 30, 1999 are not necessarily indicative of
the results to be expected for the full year.
Note 2 - NET INCOME (LOSS) PER SHARE:
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share," requires dual presentation of basic and diluted
earnings per share by entities with complex capital structures.
Basic earnings per share includes no dilution and is computed by
dividing net income (loss) by the total number of common shares
outstanding for the period. Diluted earnings per share 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. As of
November 30, 1999 and 1998 and for the periods then ended, there
were no dilutive securities outstanding.
Note 3 - PRIVATE PLACEMENTS:
Two of the Company's directors, Andrew Seim and Alexander Brosda,
acting individually and as principals of Taurus Investments
International, Inc. (a Bermuda corporation) (collectively
"Taurus"), acting as Directors of B.G. Banking prior to its
acquisition by the Company and subsequent to the acquisition
becoming directors of the Company, offered and sold on behalf of
B.G. Banking what Taurus has admitted to being an aggregate of
304,500 shares of common stock of B.G. Banking for an aggregate
consideration of $304,500. Taurus has remitted to B.G. Banking
and the Company net proceeds of $109,673 and claims the
difference of $194,827 be retained by Taurus as payment for
expenses and commissions. Taurus has refused to disclose the
names and numbers of shares of common stock and refused to remit
to the Company the proceeds of the shares sold.
The Company intends to enter into a lawsuit with Taurus demanding
the balance of $194,827 that was improperly withheld be remitted
to the Company and that Taurus disclose the names of the persons
and the number of shares of common stock sold to these
individuals. As of November 30, 1999, Taurus has failed to turn
over the balance of money, provide the names of the stock
subscribers and the number of shares of common stock purchased.
<PAGE> 8
Note 3 - PRIVATE PLACEMENTS (CONCLUDED):
Based upon the accounting provided by Taurus to the Company, the
Company may be liable for the issuance of up to 329,500 shares of
common stock if and when Taurus substantiates its representation
as to the number of shares of common stock sold and the aggregate
consideration.
The Company may also be forced to defend itself against actions
to be brought by unknown subscribers to shares of common stock of
B.G. Banking whose purchase price has never been disclosed or
delivered to the Company. The Company is aware of one alleged
purchaser who claims to have delivered funds to Taurus and whose
funds where apparently not turned over to the Company. In the
opinion of management, the Company has no liability to such
purchasers and intends to vigorously defend such actions, if and
when brought.
As of November 30, 1999, the Company has identified stockholders
representing an aggregate of 232,250 shares with an aggregate
consideration of $169,000 representing 126,500 shares of
certificates in B.G. Banking's name sold by Taurus and has
converted those shares into 189,750 shares of the Company's
common stock valued at $126,500 and issued 42,500 shares of the
Company's common stock in consideration for $42,500 valued at $1
per share.
Through November 30, 1999, the Company has received $42,000 from
Taurus relating to the purchase of shares by an unknown investor.
The Company is holding this money in escrow as an investor loan
payable pending disposition.
As of November 30, 1999, the Company has reserved 329,500 shares
of common stock pending possible issuance of shares in
satisfaction of outstanding subscription agreements.
The Company is offering 2,000,000 shares of common stock at $1
per share on a "best effort basis".
As of November 30, 1999, the Company has sold 53,500 shares of
common stock for aggregate consideration of $53,500, net of
$3,192 of expenses.
The Company has reserved 1,904,000 shares of common stock pending
the completion of the private placement.
<PAGE> 9
<PAGE> 10
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 NOVEMBER 30, 1999 AND 1998
Form 10-Q, other than historical financial information, may consist of
forward-looking statements that include risks and uncertainties, including, but
not limited to, statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Such statements are based upon
many assumptions and are subject to risks and uncertainties. Actual results
could differ materially from the results discussed in the forward-looking
statements due to a number of factors, including, but not limited to, those
identified in this document and the Company's other filings with the Securities
and Exchange Commission. The Company disclaims any intent or obligation to
update these forward-looking statements.
OVERVIEW
Maritime Transport & Technology (the "Company") was established in 1968. The
Company remained dormant for many years until the Company completed the
acquisition of B.G. Banking Equipment, Inc., ("B.G. Banking") and Financial
Building Equipment Exchange, Inc., ("FBEE"). The Company is now in the business
of buying, selling, trading and refurbishing new and used financial equipment
for banks and other financial institutions. The Company markets the products
throughout the United States primarily through direct sales to financial
institutions and other distributors, who are supported by the Company's direct
sales force, as well as soliciting new contacts through its presence on the
Internet.
The Company anticipates that its results of operations may fluctuate for the
foreseeable future due to several factors, including whether and when new
products at competitive prices are obtained and/or available at favorable
prices; market acceptance of current or new products, delays or inefficiencies
in fulfilling orders, seasonal customer demand, the timing of significant
orders, competitive pressures on average selling prices and changes in the mix
of products sold.
Operating results would also be adversely affected by a downturn in the market
for the Company's current and future products, order cancellations, or order
rescheduling or remanufacturing or delays. The Company purchases and resells new
merchandise and remanufactures and ships its other products shortly after
receipt of orders and has not developed a significant backlog for such products
and does not anticipate it will develop a material backlog for such products in
the future.
Because the Company plans to increase its operating expenses, primarily for
personnel and activities supporting newly-introduced products, new product
development and entering new markets, the Company's operating results would be
adversely affected if its sales did not correspondingly increase or if its
product development efforts are unsuccessful or are subject to delays. The
Company has incurred losses due to providing for some bad debts and the issuance
of shares of common stock in consideration for consulting expenses which were
charged to operations during the six months ended November 30, 1999.
The Company may not sustain revenue growth or return to profitability on a
quarterly or annual basis and its operating results may not be consistent with
predictions made by securities analysts.
RESULTS OF OPERATIONS
<PAGE> 11
The following table sets forth operating data as a percentage of net sales:
<TABLE>
<CAPTION>
Six Months Three Months
Ended November, Ended November,
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 65.8% 44.9% 76.5% 53.2%
------ ------ ------ ------
Gross profit 34.2% 55.1% 23.5% 46.8%
Expenses 43.4% 45.1% 48.3% 33.4%
------ ------ ------ ------
Income (loss) from operations (9.2%) 10.0% (24.8%) 13.4%
Other (net) .2% 0.9% .1% (1.9%)
------ ------ ------ ------
Net income (loss) (9.0%) 10.9% (24.7%) 11.5%
====== ====== ====== ======
</TABLE>
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED NOVEMBER 30, 1999 AS COMPARED TO
THE SIX MONTHS ENDED NOVEMBER 30, 1998.
Revenues were $945,907 for the six months ended November 30, 1999 as compared to
$ 828,925 for the six months ended November 30, 1998 reflecting an increase of
$116,982 or 14.1% over the same period last year. Cost of goods sold and related
expenses for the six months ended November 30, 1999 were $622,420 or 65.8% of
net sales as compared to $372,207 or 44.9% of net sales for the six months ended
November 30, 1998. The increase in sales is the direct result of getting the
Company's website up allowing customers to see the items that are available for
sale. Gross profit was dramatically reduced based upon the ratio of new products
sold to refurbished products sold and also increased labor costs. The sale of
refurbished or used items carries a much higher gross profit than the sale of
new items.
Selling, general and administrative expenses were $410,384 for the six months
ended November 30, 1999 as compared to $374,244 for the six months ended
November 30, 1998 reflecting an increase of $36,140 or 9.7% over the same period
last year. The increases in general and administrative expenses were
attributable to consulting fees and a provision for bad debts. However, $128,100
of these consulting fees was satisfied by the issuance of common stock and the
provision for bad debts for $71,960 are both non-cash charges.
As a result of the above, the company incurred a net loss of $85,209 or $.01 per
share for the six months ended November 30, 1999 as compared to a net income of
$90,434 or $.01 per share for the six months ended November 30, 1998.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 1999 AS COMPARED
TO THE THREE MONTHS ENDED NOVEMBER 30, 1998:
Revenue were $549,302 for the three months ended November 30, 1999 as compared
to $471,314 for the three months ended November 30, 1998 reflecting an increase
of $77,988 or 16.5% over the same period last year. Cost of goods sold and
related expenses for the three months ended November 30, 1999 were $420,297 or
76.5% of net sales as compared to $250,906 or 53.2% of net sales for the three
months ended November 30, 1998. Gross profit was dramatically reduced based upon
the ratio of new products sold to
<PAGE> 12
refurbished products sold and also increased labor costs. The sale of
refurbished or used items carries a much higher gross profit than the sale of
new items.
Selling, general and administrative expenses were $265,525 for the three months
ended November 30, 1999 as compared to $157,529 for the three months ended
November 30, 1998 reflecting an increase of $107,996 over the same period last
year. The increases in general and administrative expenses were attributable to
consulting fees and a provision for bad debts. However, $128,000 of these
expenses were satisfied through the issuance of common stock for services and
the provision for bad debts in the amount of $71,960 are both non-cash charges.
As a result of the above, the Company incurred a net loss of $135,971 or $.01
per share for the three months ended November 30, 1999 as compared to a net
income of $53,932 or less than $.01 per share for the three months ended
November 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically financed its operations through revenues from
operations, private and public placements of equity securities and debt
financing.
As of November 30, 1999, The Company had cash balances of $214,773 and working
capital of $571,723. The Company's cash balances increased by $92,612 during the
six months ended November 30, 1999. The Company's operations generated cash of
$83,775 primarily from operations adding back the non-cash charges described
above, decreases in accounts receivable of $155,029 and an offsetting increase
in inventories by $183,329. Other significant business activities affecting cash
included the purchase of equipment and improvements of $34,593 and an increase
in notes receivable non- affiliated party of $60,975, an increase of officer
loan payable of $55,046 and $50,308 proceeds received from private placements.
The Company believes that its available cash, cash from operations and funds
from existing credit arrangements will be sufficient to satisfy its funding
needs for at least the next 12 months. Thereafter, if cash generated from
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 additional capital, if needed, will be available on
satisfactory terms, if at all. Furthermore, any additional equity financing may
be dilutive to stockholders, and debt financing, if available, may include
restrictive covenants. The Company's future liquidity and capital funding
requirements will depend on numerous factors, including the extent to which the
Company's new products and products under consideration are successfully
developed, gain market acceptance and become and remain competitive, the timing
and results of regulatory actions in the banking industry, the costs and timing
of further expansion of sales, marketing and manufacturing activities,
facilities expansion needs. The failure by the Company to raise capital on
acceptable terms when needed could have a material adverse effect on the
Company's business, financial condition and results of operations.
<PAGE> 13
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
None
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.
<PAGE> 14
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: January 17, 2001
This schedule contains summary financial information extracted from
financial statements for the three-month period ended November 30, 1999 and is
qualified in its entirety by reference to such financial statements.
