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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2000
Commission File No.: 0-10854
ORS AUTOMATION, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-27956-75
(State or other jurisdiction of (I.R.S Employer identification No.)
incorporation or organization)
402 Wall Street, Princeton, New Jersey 08540
(Address of principal executive offices) (Zip Code)
(609) 924-1667
(Issuer's telephone number, including area code)
Check whether the issuer (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. Yes___X__ No_____
Check whether the issuer has filed all documents and reports required to
be filed by Section 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___X__ No_____
As of October 31, 2000, 8,758,443 shares of the registrants Common Stock
and 12,000,000 shares of Class A Common Stock were outstanding.
Transitional Small Business Format. Yes____ No__X__
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ORS AUTOMATION, Inc.
INDEX TO FORM 10-QSB
September 30, 2000
Page
Part I - Financial Information
Item 1. Financial Statements:
Unaudited Balance Sheet - September 30, 2000 3
Unaudited Statements of Operations and Accumulated
Deficit for the Three and Nine Months
Ending September 30, 2000 and 1999. 4
Unaudited Statements of Cash Flows for the Nine
Months Ending September 30, 2000 and 1999. 5
Notes to Financial Statements. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 7,8
Part II - Other Information 9
Signatures 9
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PART I FINANCIAL STATEMENTS
ORS AUTOMATION, INC.
UNAUDITED BALANCE SHEET
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash $ 511,074
Accounts receivable 309,077
Inventory, net 222,565
Prepaid expenses 286
-------------
Total Current Assets 1,043,002
Property and Equipment, net 8,777
--------------
TOTAL ASSETS $ 1,051,779
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 93,881
--------------
Total Current Liabilities 93,881
Priority tax claims payable - interest 16,538
Priority tax claims payable - principal 12,650
Note Payable - related party 166,102
Accrued interest payable - related party 303,961
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Total Liabilities 593,132
Stockholders' Deficit:
Preferred stock 10,000
Common stock 122,824
Capital in excess of par value 24,914,163
Accumulated deficit (24,588,340)
---------------
Total Stockholders' Equity 458,647
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TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $ 1,051,779
==============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
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ORS AUTOMATION, INC.
UNAUDITED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDING SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Sales $312,932 $381,153 $1,039,949 $ 990,377
Cost of Goods Sold 193,638 238,865 603,588 616,161
-------- -------- ---------- ----------
Gross Profit 119,294 142,288 436,361 374,216
Administrative, Marketing
and General Expenses 139,778 81,888 335,066 257,145
-------- -------- ---------- ----------
Income (Loss) From
Operations (20,484) 60,400 101,295 117,071
Other (Income) Expense:
Interest income (6,778) (1,739) 16,087) (4,949)
Interest expense 5,270 5,270 15,810 16,535
Deprecation and
amortization 1,619 2,513 4,857 7,262
-------- -------- ---------- ----------
Total Other (Income)
Expenses, net 111 6,044 4,580 18,848
-------- -------- ---------- ----------
Income (Loss) Before Provision
for Income Taxes (20,595) 54,356 96,715 98,223
Provision for (Benefit From)
Income Taxes (2,824) 4,500 9,024 9,000
--------- -------- ---------- ----------
Net Income (Loss) $(17,771) $ 49,856 $ 87,691 $ 89,223
========= ======== ========== ==========
Basic Earnings (Loss) Per
Common Share $ (.00) $ .00 $ .00 $ .00
========= ======== ========== ==========
Common Shares Used in Computing
Basic Earnings (loss) Per
Common Share 20,082,443 20,082,443 20,082,443 20,082,443
========== ========== ========== ==========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
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ORS AUTOMATION, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------ ------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 87,691 $ 89,223
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Depreciation and amortization 4,857 7,262
Cash provided by (used in) changes in:
Accounts receivable, net 228,388 (115,274)
Inventory, net (51,148) (46,316)
Prepaid expenses 1,388 1,242
Accounts payable and accrued expenses 69,370 50,493
Accrued interest payable - related party 14,949 14,949
Priority tax claims payable - interest 861 (68,212)
Priority tax claims payable - principal -- (166,927)
Income taxes payable (2,000) (23,500)
----------- -----------
Net Cash Provided By (Used In)
Operating Activities 354,356 (257,060)
Cash Flows From Investing Activities:
Purchase of property and equipment -- (3,613)
Proceeds from sale of short-term investments -- 81,434
----------- -----------
Net Cash Provided By (Used In)
Investing Activities -- 77,821
----------- -----------
Net Increase (Decrease) in Cash 354,356 (179,239)
Cash at Beginning of the Period 156,718 396,599
----------- -----------
Cash at End of the Period $ 511,074 $ 217,360
========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ -- $ 725
Income taxes $ 10,801 $ 32,018
</TABLE>
The Notes to Financial Statements are an integral part of these statements
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ORS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The unaudited financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The unaudited
interim financial statements as of September 30, 2000 and 1999 reflect
all adjustments (consisting of normal recurring accruals) which, in the
opinion of management, are considered necessary for a fair presentation
of the results for the periods covered.
The Unaudited Statements of Operations for the three months and
nine months ended September 30, 2000 and 1999 are not necessarily
indicative of results for the full year.
While the Company believes that the disclosures presented are
adequate to make the information not misleading, these financial
statements should be read in conjunction with the financial statements
and accompanying notes included in the Company's Current Report on Form
10-KSB dated December 31, 1999.
Note 2 - Preferred and Common Stock
The preferred stock of the Company has a par value of $.01 per
share and 1,000,000 shares have been authorized to be issued. All are
outstanding at October 31, 2000.
The common stock of the Company has a par value of $.01 per share
and 10,000,000 shares have been authorized to be issued. As of October
31, 2000, 8,758,443 shares are outstanding.
The Company also has Class A common stock, which has a par value of
$.0035 per share and 12,000,000 shares have been authorized to be
issued. All are outstanding at October 31, 2000.
Note 3 - Income Per Share
Income per share has been computed based upon the weighted average
number of shares of the sum of both common stock and Class A common
stock outstanding during the period.
The unaudited financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The unaudited
interim financial statements as of September 30, 1999 and 1998 reflect
all adjustments (consisting of normal recurring accruals) which, in the
opinion of management, are considered necessary for a fair presentation
of the results for the periods covered.
The Notes to Financial Statements are an integral part of this statement
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ORS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Product development to incorporate more artificial intelligence in the
vision algorithm setups continued as ORS Automation, Inc. ("ORS")
applies the most current available technology to our product base. Using
expert system rules-based algorithms, a complete point and click setup
wizard allows optimized program settings without requiring vision system
expertise on the part of the end user. New and more powerful vision
algorithms for separating objects from each other in an image were, and
are continuing to be, developed and implemented using the latest high-
speed microprocessors. These faster microprocessors can now run complex
vision algorithms in software that previously would have to have been
implemented in dedicated hardware. These developments are designed to
make us more competitive with present products and potentially open new
markets.
The effort to broaden our customer and product base resulted in
engineering sales of approximately $59,000 to new customers in the first
nine months of 2000. Our goal is to realize product sales in future
quarters from these engineering services.
Product sales to a major customer were delayed in this quarter as sales
of machines incorporating our vision control system were less than
originally forecast.
RESULTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999
Sales for the three month period ended September 30, 2000 decreased 18%
to $312,932 compared to $381,153 for the three month period ended
September 30, 1999. This decrease was primarily due to a reduction in
sales to a major customer as machine sales for a new product line being
introduced did not fully materialize. Sales for the nine month period
ended September 30, 2000 increased 5% to $1,039,949, compared to
$990,377 for the nine month period ended September 30, 1999.
The gross profit percentage increased to 42% for the nine month period
ended September 30, 2000 as compared to 38% for the nine month period
ended September 30, 1999. The gross profit percentage for the three
months ended September 30, 2000 increased to 38% as compared to 37% for
the three months ended September 30, 1999.
The Company's administrative, marketing and general expenses increased
by 71% to $139,778 from $81,888 and by 30% to $335,066 from $257,145,
respectively, for the three and nine month periods ended September 30,
2000. This increase was primarily due to the temporary addition of
contract personnel in engineering development and marketing to help meet
company objectives.
The loss from operations for the three month period ended September 30, 2000
was $20,484 and income from operations for the nine month period ended
September 30, 2000 was $101,295, as compared to income from operations of
$60,400 and $117,0711, respectively, for the three and nine month periods
ended September 30, 1999. The loss was primarily due to the temporary
retaining of contract personnel to meet engineering and marketing objectives
as described above.
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The Company had interest income of $6,778 and $16,087, respectively, for the
three and nine months ended September 30, 2000 as compared to interest income
of $1,739 and $4,949 for the comparable periods in 1999.
As a result of the foregoing, ORS' loss before taxes for the three month
period ended September 30, 2000 was $20,595 and income before taxes for the
nine month period ended September 30, 2000 was $96,716, as compared to income
before taxes of $54,356 and $98,223, respectively, for the three and nine
month periods ended September 30, 1999. The Company had a benefit from taxes
of $2,824 for the three months ended September 30, 2000 and a provision for
taxes of $9,024 for the nine months ended September 30, 2000. As a result of
the foregoing, net loss was $17,771, or $0.00 per share for the three months
ended September 30, 2000 and net income was $87,691 or $0.00 per share for the
nine months ended September 30, 2000, as compared to net income of $49,856, or
$0.00 per share, and $89,223, or $0.00 per share, respectively, for the
comparable periods in 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000, ORS has sufficient funds to meet its current
working capital requirements. In the event that additional funds are
needed to expand operations, and existing operations do not generate
funds sufficient to cover the increased cash expenditures, ORS will need
to obtain capital from other sources, such as financial institutions or
investors. There is no assurance that if financing is required, it will
be available to the Company, and, if it is available, the Company could
obtain reasonable terms for the financing.
Net cash provided by operating activities was $354,356 for the first
nine months of 2000 as compared to net cash used in operating activities
of $257,060 for the comparable period in 1999. The increase in net cash
provided in 2000 was primarily due to net income from operations as
adjusted for depreciation and amortization of $92,548, a decrease in
accounts receivable of $228,388, an increase in accounts payable and
accrued expenses of $69,370 and an increase in accrued interest payable
to a related party.
Statements on this Quarterly Report on Form 10-QSB which expresses that
the Company "believes", "anticipates", or "plans to ...", as well as
other statements that are not historical fact, are forward looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on assumptions that we
believe are reasonable, but a number of factors could cause our actual
results to differ materially from those expressed or implied by these
statements. The Company does not intend to update these forward looking
statements.
Net cash used in operating activities was $257,060 for the first nine months
of 1999 as compared to net cash provided by operating activities of $32,991
for the comparable period in 1998. The increase in net cash used in 1999 was
primarily due to the payment of $236,000 to the Internal Revenue Service as
described above, an increase in inventory of $46,316 and an increase in
accounts receivable of $115,274, less the net income from operations as
adjusted for depreciation and amortization of $96,485. The net cash used in
operating activities of $257,060 and the $3,613 used for equipment purchases
and the $81,434 proceeds resulting from converting short-term investments into
cash resulted in a cash balance of $217,360 at September 30, 1999.
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Statements on this Quarterly Report on Form 10-QSB Which expresses that the
Company "believes", "anticipates", or "plans to ...", as well as other
statements that are not historical fact, are forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Actual
events may differ materially as a result of risks and uncertainties.
PART II - OTHER INFORMATION
NONE
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
ORS AUTOMATION, INC.
(Registrant)
Date: November 13, 2000 /s/ Edward Kornstein
Edward Kornstein
President
(Treasurer)
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