SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: SEPTEMBER 30, 1996 COMMISSION FILE NO. 0-4076
------------------- ------
EXOTECH INCORPORATED
(Exact name of Registrant as Specified in Charter)
State or Jurisdiction of
Incorporation or Organization: DELAWARE
IRS Identification No: 54-0700888
Address of Principal Office: 8502 Dakota Drive
Gaithersburg, MD. 20877
Registrant's Telephone Number: (301) 948-3060
Indicate by checkmark 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
requirement for the past 90 days. Yes [x] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this Report.
CLASS: COMMON STOCK, PAR VALUE $0.10
OUTSTANDING AT
SEPTEMBER 30, 1996 942,387
-------
<PAGE>
EXOTECH INCORPORATED
INDEX
PART I FINANCIAL INFORMATION PAGE NO.
CONSOLIDATED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1996 AND JUNE 30, 1996................. 2
CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS - THREE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995........................... 3
STATEMENT OF CASH FLOWS FOR THREE
MONTHS ENDED SEPTEMBER 30, 1996 AND 1995.............. 4
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS.................................. 5
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED CONDENSED STATEMENT
OF OPERATIONS......................................... 6
PART II OTHER INFORMATION
OTHER FINANCIAL INFORMATION........................... 7/8
SIGNATURES .................................... 9
<PAGE>
EXOTECH INCORPORATED
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, June 30,
1996 1996
(Unaudited)
<S><C>
CURRENT ASSETS
Accts. Receivable, Net $ 18,560 $ 11,073
Inventories
Work in Process 533,417 505,062
Raw Materials 32,625 32,625
Finished Goods 14,000 14,000
Cash and Other Current Assets 837 449
-------- --------
Total Current Assets $599,439 $563,209
PROPERTY, PLANT AND EQUIPMENT
NET 368 411
OTHER NON CURRENT ASSETS 6,689 6,921
-------- --------
TOTAL ASSETS $606,496 $570,541
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accts. Payable & Other Accrued Expenses $122,612 $105,664
Other Current Liabilities 343,631 347,994
Notes Payable 392,294 372,294
-------- --------
Total Current Liabilities $858,537 $825,952
SHAREHOLDERS EQUITY
Common Stock, Par Value $.10 per share;
1,500,000 shares authorized; 970,135
issued; 942,387 outstanding 97,014 97,014
Paid-in-Surplus 1,169,645 1,169,645
Deficit (1,406,280) (1,409,650)
Treasury Stock (27,748 shares) (112,420) (112,420)
--------- ---------
Total Shareholders' Equity (252,041) (255,411)
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $606,496 $570,541
======== ========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
2
<PAGE>
EXOTECH INCORPORATED
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
1996 1995
THREE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------- --------------
REVENUES
Contract Sales $110,796 $ 55,517
EXPENSES
Direct Labor 654 766
Overhead 786 5,862
Materials - 142
General & Administrative 144 853
Inventory Costs 98,712 45,050
-------- --------
Cost of Contract Sales 100,296 52,531
Operating Income (Loss) 10,500 2,986
Other Revenue (Expenses): - -
Interest & Other (7,130) (6,601)
NET INCOME BEFORE TAXES 3,370 (3,615)
State Income Tax - -
NET INCOME (LOSS) 3,370 (3,615)
Weighted Average Number of
Common Stock Outstanding 942,387 942,387
EARNINGS (LOSS) PER
COMMON SHARE .004 (.004)
DIVIDENDS PER COMMON SHARE NONE NONE
See accompanying Notes to Consolidated Condensed Financial Statements.
These statements have been prepared from the books of account without audit.
3
<PAGE>
EXOTECH INCORPORATED AND SUBSIDIARY
STATEMENT OF CASH FLOWS FOR
THREE MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1996 1995
---- ----
<S><C>
CASH FLOWS FROM OPERATING TRANSACTIONS
Net Income (Loss) $ 3,370 $ (3,615)
Add: Non cash Income Determinants
Depreciation and Amortization 275 289
Add (Deduct): Changes in Current Assets & Liabilities
(Increase) Decrease in Accounts Receivable (7,487) 5,495
(Increase) Decrease in Prepaid Expenses 6 564
(Increase) Decrease in Inventory (28,355) (79,339)
Increase (Decrease) in Accts. Payable 16,948 21,982
Increase (Decrease) in Payroll/Emp. Benefits (11,493) 14,744
Increase (Decrease) in Accrued Interest 7,130 6,582
-------- --------
Cash Provided By or (Used) For Operating Transactions (19,606) (33,298)
----------- ----------
CASH FLOWS FROM FINANCING TRANSACTIONS:
Proceeds from Notes 30,000 33,219
Payment on Notes 10,000
-------- --------
Cash Provided By or (Used For) Financing Transactions 20,000 33,219
----------- ----------
CASH FLOWS FROM INVESTING TRANSACTIONS:
Deposits - 128
-------- --------
Cash Provided By or (Used For) Investing Transactions -0- 128
----------- ----------
INCREASE (DECREASE) IN CASH 394 49
CASH BALANCE - BEGINNING 105 32
-------- --------
CASH BALANCE - ENDING $ 499 $ 81
</TABLE>
4
<PAGE>
EXOTECH INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1.
In the opinion of Management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
September 30, 1996 and June 30, 1996 and the results of operations and changes
in financial position for the three months ended September 30, 1996 and 1995 of
Exotech Incorporated and its inactive wholly-owned consolidated subsidiary,
Exotech Research & Analysis, Inc. There are no significant intercompany
transactions.
NOTE 2.
Per share computations have been based on the weighted average shares
outstanding of 942,387 for the three months ended September 30, 1996 and 1995.
NOTE 3.
Notes Payable at September 30, 1996 consist of four demand notes of $100,000,
$8,000 and $47,000, payable with interest at 8.5% per annum to three of the
Company's former directors. In addition, notes amounting to $217,294 are payable
with interest at 8.5% per annum to one officer/employee. Periodically, the
Company has obtained producer loans from Spiral Biotech, Inc. that are secured
by inventory instruments (bacteria colony counters). At September 30, 1996,
there was an outstanding Producer Loan of $20,000 with interest at 9% per annum.
This loan may be prepaid, in whole or in part, at any time, without penalty.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
The following is Management's discussion and analysis of certain significant
factors which have affected the Company's earnings during the periods included
in the accompanying consolidated condensed statement of operations.
A summary of the period to period changes in the principal items included in the
consolidated statement of operations is shown below:
<TABLE>
<CAPTION>
---------------------------------------- COMPARISON OF ---------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
Sept 30 June 30 Sept 30 Sept 30
1996 1996 1996 1995
------- ------- ------- -------
<S><C>
Net Sales $110,796 $106,244 $110,796 $55,517
Cost of Sales 1,440 5,164 1,440 6,628
General & Administrative
Expenses 144 295 144 853
Inventory Costs 98,712 103,170 98,712 45,050
Interest & Other 7,130 7,036 7,130 6,601
</TABLE>
6
<PAGE>
PART II. OTHER FINANCIAL INFORMATION
ITEM 5.
As in the past, a shortage of working capital continues to be a significant
problem, resulting in occasional slow payments to creditors, and hampering the
development of new business to the fullest extent possible. In the opinion of
Management, the Company should be in a position to sustain operations at least
until such time as the results of current contracts and negotiations for new
business is determinable. Ultimate realization of the carrying value of prepaid
expenses and advances, property and equipment, and miscellaneous other assets
shown in the accompanying balance sheet depends upon sustained operations as a
going concern.
The dollar amount of the backlog as of September 30, 1996 was $237,952, a
decrease of $41,048 from the backlog of the preceding quarter ended June 30,
1996.
ITEM 6 (B)
No reports on Form 8-K were filed in this quarter.
7
<PAGE>
I. CHANGE IN FINANCIAL POSITION IN THE THREE MONTHS ENDED
SEPTEMBER 30, 1996.
In the three months period ended September 30, 1996, an increase of
working capital of $3,645 resulted from a net profit from operations
of $3,370 and non-fund charges of $275.
II. INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND THE SAME
THREE MONTH PERIOD LAST YEAR.
Revenue for the quarter ended September 30, 1996, was higher by
$55,279 or 96% than the results one year earlier. Operating costs were
increased in the most recent quarter by $47,765 or 91% compared to the
prior year. The result was an operating profit of $10,500 and a net
gain of $3,370 compared to a net loss of $3,615 in the quarter ended
one year earlier.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Company has duly
caused this Report to be signed on its behalf by the undersigned thereunto duly
authorized.
EXOTECH INCORPORATED
REGISTRANT
DATE: November 19, 1996
/s/ Robert G. Lyle
- ---------------------------------------
ROBERT G. LYLE, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
9
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 837
<SECURITIES> 0
<RECEIVABLES> 18,560
<ALLOWANCES> 0
<INVENTORY> 580,042
<CURRENT-ASSETS> 599,439
<PP&E> 231,530
<DEPRECIATION> 231,162
<TOTAL-ASSETS> 606,496
<CURRENT-LIABILITIES> 858,537
<BONDS> 0
0
0
<COMMON> 97,014
<OTHER-SE> (349,055)
<TOTAL-LIABILITY-AND-EQUITY> 606,496
<SALES> 110,796
<TOTAL-REVENUES> 110,796
<CGS> 100,296
<TOTAL-COSTS> 100,296
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,130
<INCOME-PRETAX> 3,370
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,370
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,370
<EPS-PRIMARY> 0.004
<EPS-DILUTED> 0.004
</TABLE>
