<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-1665
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EXTECH CORPORATION
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(Exact name of small business issuer as specified in its charter)
Delaware 36-2476480
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(State or other jurisdiction (I.R.S Employer
of incorporation or organization) Identification No.)
90 Merrick Avenue, East Meadow, New York 11554
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(Address of principal executive offices) (Zip Code)
(516) 794-6300
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(Registrant's telephone number, including area code)
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(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 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 past 90 days. (X) YES ( ) NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. ( ) YES ( ) NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
2,391,367 shares as of April 17, 1996
INDEX
EXTECH CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet - March 31, 1996 (Unaudited)
Condensed Consolidated Statements of Operations - Three months ended
March 31, 1996 and 1995 (Unaudited)
Condensed Consolidated Statements of Cash Flows - Three months ended
March 31, 1996 and 1995 (Unaudited)
Notes to Condensed Consolidated Financial Statements - Three months
ended March 31, 1996 and 1995 (Unaudited)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
ITEM 2. Changes in Securities
ITEM 3. Defaults upon Senior Securities
ITEM 4. Submission of Matters to a Vote of Security Holders
ITEM 5. Other Information
ITEM 6. Exhibits and Reports on Form 8-K
SIGNATURES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31, 1996
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 683,877
Accounts receivable 39,732
Notes and other receivables 76,258
Inventories 8,056
Prepaid expenses 6,405
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Total current assets 814,328
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PROPERTY AND EQUIPMENT, NET 192,958
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OTHER ASSETS:
Operating equipment, net 11,388
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$ 1,018,674
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,779
Accrued expenses 135,219
Debentures payable 154,200
Accrued taxes payable 15,759
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310,957
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MINORITY INTEREST 560
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STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value;
authorized, 10,000,000 shares;
issued and outstanding,
2,391,367 shares 23,914
Capital in excess of par 4,496,950
Deficit (3,813,707)
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707,157
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$1,018,674
==========
See notes to condensed consolidated financial statements.
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
March 31,
1996 1995
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Revenues:
Rooms $ 301,611 $ 281,010
Other 6,663 6,684
Interest 6,187 3,384
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Total revenues 314,461 291,078
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Costs and expenses:
General, administrative
and sundry 101,069 96,832
Departmental 80,782 84,830
Depreciation and amortization 12,987 12,771
Energy costs 4,635 4,652
Lease rentals 62,185 54,956
Marketing 7,791 6,444
Property operation
and maintenance 4,565 4,746
Provision for bad debt 600 1,200
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274,614 266,431
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Net income $ 39,847 $ 24,647
========= =========
Income per common share:
Net income $ .02 $ .01
========= =========
Weighted average number of common
shares outstanding 2,391,367 2,391,367
========= =========
See notes to condensed consolidated financial statements.
EXTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three months ended
March 31,
1996 1995
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Cash flows from operating activities:
Net income $ 39,847 $ 24,647
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 12,987 12,771
Provision for bad debts 600 1,200
Decrease (increase) in assets:
Accounts receivable 12,089 2,996
Inventories (866) 1,746
Prepaid expenses 482 37,335
Notes receivable (37,078) -0-
Other assets 1,415 (1,926)
Increase (decrease) in liabilities:
Accounts payable 2,223 7,848
Accrued expenses (4,282) (24,866)
Accrued taxes payable 15,759 14,394
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Net cash provided by
operating activities 43,176 76,145
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Net cash (used in) investing activities:
Purchases of property and equipment (4,255) (515)
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Net cash (used in)
investing activities: (4,255) (515)
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Net increase in cash and cash
equivalents 38,921 75,630
Cash, beginning of period 644,956 482,359
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Cash, end of period $ 683,877 $ 557,989
========= =========
See notes to condensed consolidated financial statements.
EXTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (UNAUDITED)
1. The Condensed Consolidated Balance Sheet as of March 31, 1996, the
Condensed Consolidated Statements of Operations for the three months ended
March 31, 1996 and 1995 and the Condensed Consolidated Statements of Cash
Flows for the three months ended March 31, 1996 and 1995 have been prepared
by the Company without audit. In the opinion of the Company, the
accompanying unaudited condensed consolidated financial statements contain
all adjustments necessary to present fairly its financial position as of
March 31, 1996, results of operations for the three months ended March 31,
1996 and 1995 and cash flows for the three months ended March 31, 1996 and
1995. This report should be read in conjunction with the Company's annual
report on Form 10-KSB for the year ended December 31, 1995.
2. The results of operations and cash flows for the three months ended March
31, 1996 are not necessarily indicative of the results to be expected for
the full year.
EXTECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
RESULTS OF OPERATIONS:
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO 1995:
The Company's net income for the three months ended March 31, 1996 was $39,847
as compared to a net income of $24,647 for the three months ended March 31,
1995. Such increased income was primarily the result of increased room revenues
($301,611 during the first quarter of 1996 as compared to $281,010 during the
first quarter of 1995).
LIQUIDITY AND CAPITAL RESOURCES:
As of March 31, 1996, the Company had $683,877 in cash and cash equivalents. As
of such date, the Company had a working capital surplus of $503,371. The
Company did not have any material commitments for capital expenditures as of
March 31, 1996.
PROSPECTS:
On May 14, 1996 the Company and Phone America International, Inc. ("Phone
America") mutually agreed not to pursue a non-binding letter of intent whereby
the Company would have acquired Phone America. The Company is presently
exploring other business opportunities outside of the hotel industry. (See Item
5 "OTHER INFORMATION").
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
ITEM 5. OTHER INFORMATION
On May 14, 1996 the Company and Phone America, an interexchange
telecommunications carrier, mutually agreed not to pursue a non-
binding letter of intent pursuant to which the Company would have
acquired Phone America.
The Company's $50,000 loan to Phone America, which was made
contemporaneously with the execution of the letter of intent and which
is payable upon demand on or after August 26, 1996, will continue in
full force and effect according to its terms.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
3(a) Certificate of Incorporation, as amended 1
3(b) By-laws, as amended 2
27 Financial Data Schedule
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1 Denotes document filed as an exhibit to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1993 and incorporated herein
by reference.
2 Denotes document filed as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1989 and incorporated herein
by reference.
(b) REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EXTECH CORPORATION
Dated: May 15, 1996 By:/s/ Morton L. Certilman
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MORTON L. CERTILMAN
President (Chief
Operating Officer and Principal
Financial Officer)
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 683,877
<SECURITIES> 0
<RECEIVABLES> 115,990
<ALLOWANCES> 0
<INVENTORY> 8,056
<CURRENT-ASSETS> 814,328
<PP&E> 192,958
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,018,674
<CURRENT-LIABILITIES> 310,957
<BONDS> 0
23,914
0
<COMMON> 0
<OTHER-SE> 683,243
<TOTAL-LIABILITY-AND-EQUITY> 1,018,674
<SALES> 301,611
<TOTAL-REVENUES> 314,461
<CGS> 0
<TOTAL-COSTS> 274,614
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 39,847
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,847
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
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