SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(b)
of the Securities Exchange Act of 1934
For Quarter Ended: June 30, 2000
Commission File Number: O-13670
Teletrak Environmental Systems, Inc. 13-3187778
Delaware IRS Employer
State or other jurisdiction of Ident. No.
Incorporation or organization
2 SUTTON RD
WEBSTER, MA 01570
Tel: (508) 949-2430
Fax: (508) 949-2473
Indicates by check mark whether the registrants(1) has filed
all reports required to be filed by section 13 of 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 ____
At June 30, 2000, there were 7,713,182 shares of the Company's
common stock outstanding.
Page 1 of 11
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[TEXT]
[S] [C]
PART 1 INDEX
FINANCIAL INFORMATION
Item 1.
Consolidated Financial Statements
Consolidated Balance Sheet as of
March 31, 2000 & June 30, 2000 3
Consolidated Financial Statements
Consolidated Balance Sheet as of
December 31, 1999 & June 30, 2000 4
Unaudited Consolidated Statement of Operations
For the Three Months Ended
June 30, 2000 and June 30, 1999 5
Unaudited Consolidated Statements of Cash Flows
for the Three Months Ended
June 30, 2000 and June 20, 1999 6
Unaudited Consolidated Statements of Operations
for the Six Months Ended
June 30, 1999, and June 30, 1998 7
Unaudited Consolidated Statements of Cash Flows
for the Six Months Ended
June 30, 2000 and June 30, 1999 8
Notes to Consolidated Financial Statements 9
Item 2.
Management's Discussion and
Analysis of Financial Condition and
Results of Operations 10
Page 2 of 11
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[CAPTION]
TELETRAK
ENVIRONMENTAL SYSTEMS INC & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
1ST QRT TO 2ND QRT
2000
<TABLE> <S> <C> <C>
<C> <C>
UNAUDITED UNAUDITED
ASSETS 03/31/00 06/30/00
CURRENT ASSETS:
CASH 39,863 159,508
ACCOUNTS RECEIVABLE 534,696 471,445
ALLOWANCE FOR DOUBTFUL ACCOUNTS (50,000) (50,000)
INVENTORY 465,590 430,149
OTHER CURRENT ASSETS 16,189 40,383
_____________ ______________
TOTAL CURRENT ASSETS 1,006,338 1,051,485
PROPERTY AND EQUIPMENT 337,150 324,510
LESS: ACCUM. DEPRECIATION (139,695) (150,228)
_____________ ______________
NET 197,455 174,282
OTHER ASSETS 374,654 368,653
_____________ ______________
TOTAL ASSETS 1,578,447 1,594,420
LIABILITIES AND STOCKHOLDERS EQUITY
NOTES PAYABLE 599,220 599,221
LONG TERM DEBT 102,161 95,884
A/P & ACCRUED EXPENSES 434,529 398,034
DUE TO RELATED PARTIES 149,819 150,000
_____________ ______________
TOTAL LIABILITIES 1,285,729 1,243,139
STOCKHOLDERS' EQUITY
PREFERRED STOCK - $001 PAR VALUE,
5,000,000 SHARES AUTHORIZED, NONE
ISSUED
COMMON STOCK - $.001 PAR VALUE
25,000,000 SHARES AUTHORIZED 7,694 7,694
7,713,182 AT 12/31/99, 7,713,182 AT
6/30/00 SHARES ISSUED AND OUTSTANDING
ADDITIONAL PAID IN CAPITAL 1,516,434 1,516,434
RETAINED EARNINGS -1,308,905 -1,308,929
CURRENT YEAR EARNINGS(LOSS) 77,494 136,082
_____________ ______________
TOTAL STOCKHOLDERS EQUITY 292,717 351,281
_____________ ______________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 1,578,446 1,594,420
_____________ ______________
PAGE 3 OF 11
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<CAPTION>
TELETRAK
ENVIRONMENTAL SYSTEMS, INC & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SIX MONTHS ENDED JUNE 30,2000
</TABLE>
<TABLE> <S> <C> <C>
<S> <C> <C>
UNAUDITED UNAUDITED
ASSETS: 06/30/00 12/31/99
CURRENT ASSETS:
CASH 159,508 22,919
ACCOUNTS RECEIVABLE 471,445 447,477
ALLOWANCE FOR DOUBTFUL ACCOUNTS (50,000) (50,000)
INVENTORY 430,149 443,991
OTHER CURRENT ASSETS 40,383 16,021
_____________ ______________
TOTAL CURRENT ASSETS 1,051,485 880,408
PROPERTY AND EQUIPMENT 324,510 347,782
LESS: ACCUM. DEPRECIATION - 150,228 -129,164
_____________ ______________
NET 174,282 218,618
OTHER ASSETS 368,653 380,646
_____________ ______________
TOTAL ASSETS 1,594,420 1,479,672
LIABILITIES AND STOCKHOLDERS EQUITY
NOTES PAYABLE 599,221 550,000
LONG TERM DEBTS 95,884 98,621
A/P AND ACCRUED EXPENSES 398,034 414,266
DUE TO RELATED PARTIES 150,000 201,562
____________ ______________
TOTAL LIABILITIES 1,243,139 1,264,449
STOCKHOLDERS' EQUITY
PREFERRED STOCK-$.001 PAR VALUE
5,000,000 SHARES AUTHORIZED,
NONE ISSUED
COMMON STOCK -$.001 PAR VALUE, 7,694 7,694
25,000,000 SHARES AUTHORIZED,
7,713,182 AT 12/31/99 7,713,182
AT 6/30/00 SHARES ISSUED AND
OUTSTANDING
ADDITIONAL PAID IN CAPITAL 1,516,434 1,516,434
RETAINED EARNINGS (1,308,929) ( 637,867)
CURRENT YEAR EARNINGS(lOSS) 136,082 ( 671,038)
_____________ ______________
TOTAL STOCKHOLDERS' EQUITY 351,281 215,223
_____________ ______________
TOTAL LIABILITIES AND
STOCKHOLDERS'S EQUITY 1,594,420 1,479,672
</TABLE>
PAGE 4 OF 11
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[CAPTION]
TELETRAK ENVIRONMENTAL SYSTEMS, INC & SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED
JUNE 30, 2000
<TABLE> <S> <C> <C>
<S> <C> <C>
UNAUDITED UNAUDITED
2000 1999
NET SALES 767,369 522,296
COST OF GOODS SOLD 462,880 342,408
_____________ ______________
GROSS PROFIT 304,489 179,888
OPERATING EXPENSES:
SELLING, G&A EXPENSES 214,868 248,485
ADVERTISING EXPENSES 7,117 16,838
BAD DEBT EXPENSES 0 0
_____________ ______________
TOTAL OPERATING EXPENSES 221,985 265,323
PROFIT(LOSS) FROM OPERATIONS 82,504 (85,435)
INTEREST EXPENSES 17,246 11,051
OTHER INCOME/EXPENSES 9,662 4,947
_____________ ______________
PROFIT(LOSS) BEFORE PROVISION
FOR INCOME TAXES 74,920 (91,539)
PROVISION FOR INCOME TAXES 0 (1,321)
_____________ ______________
NET PROFIT(LOSS) 74,920 (90,218)
NET GAIN(LOSS) PER SHARE 0.01 0.01
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 7,396,109 7,396,109
</TABLE>
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[CAPTION]
TELETRAK ENVIRONMENTAL SYSTEMS, INC & SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
THREE MONTHS ENDED JUNE 30, 2000
<TABLE> <S> <C> <C>
<S> <C> <C>
UNAUDITED
2000 1999
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME(LOSS) 58,588 ( 90,218)
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH USED IN OPERATING ACTIVITIES:
PROVISION FOR DOUBTFUL ACCOUNTS 0 0
DEPRECIATION & AMORTIZATION 13,657 12,854
WRITE OFF OF FIXED ASSETS 0 0
GAIN/LOSS ON WRITE-OFF OF INVESTMENT 0 0
CHANGES INC:
ACCOUNTS RECEIVABLE 63,251 (2,086)
INVENTORY 35,441 ( 28,293)
PREPAID EXPENSES & OTHER ASSETS (21,342) 9,708
A/P AND ACCRUED EXPENSES (36,495) ( 5,885)
DUE TO/FROM RELATED PARTY 181 2,772
_____________ _____________
NET CASH USED IN OPERATING
ACTIVITIES: 113,281 (101,148)
CASH FLOW FROM INVESTING ACTIVITIES:
ACQUISITIONS OF PROPERTY &
EQUIPMENT 12,640 1,434
CASH FLOW FROM FINANCING ACTIVITIES:
PROCEEDS FROM SALES OF COMMON STOCK 0 110,000
PRINCIPAL PAYMENTS ON NOTES &
LOANS PAYABLE (6,276) 25,823
_____________ _____________
NET CASH PROVIDED BY
FINANCING ACTIVITIES (6,276) 135,823
NET INCREASE(DECREASE) IN CASH 119,645 36,109
CASH AT THE BEGINNING OF PERIOD 39,863 94,481
_____________ _____________
CASH AT THE END OF PERIOD 159,508 130,590
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
CASH PAID DURING THE QUARTER FOR:
INTEREST 17,246 11,051
TAXES 0 (1,321)
SUPPLEMENTAL DISCLOSURES OF NON-CASH
OPERATING AND FINANCING ACTIVITIES:
COMMON STOCK SUBSCRIPTIONS RECEIVABLE
INVENTORY
FIXED ASSETS
COMMON STOCK
</TABLE>
PAGE 6 OF 11
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[CAPTION]
TELETRAK ENVIRONMENTAL SYSTEMS, INC & SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
<TABLE> <S> <C> <C>
<S> <C> <C>
UNAUDITED UNAUDITED
2000 1999
NET SALES 1,378,195 1,037,622
COST OF GOODS SOLD 777,206 698,314
______________ ______________
GROSS PROFIT 600,989 339,308
OPERATING EXPENSES:
SELLING, G&A EXPENSES 425,708 432,285
ADVERTISING EXPENSES 7,117 28,308
BAD DEBT EXPENSES 0 0
______________ ______________
TOTAL OPERATING EXPENSES 432,825 460,593
PROFIT(LOSS) FROM OPERATIONS 168,164 (121,285)
INTEREST EXPENSE 32,082 18,562
OTHER INCOME/EXPENSES 0 4,947
______________ ______________
PROFIT(LOSS) BEFORE PROVISION
FOR INCOME TAXES 136,082 (134,900)
PROVISION FOR INCOME TAXES 0 (1,321)
______________ ______________
NET PROFIT(LOSS) 136,082 (133,579)
NET GAIN(LOSS) PER SHARE 0.02 (0.02)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 7,396,109 7,396,109
</TABLE>
PAGE 7 OF 11
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[CAPTION]
TELETRAK ENVIRONMENTAL SYSTEMS, INC & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
SIX MONTHS ENDED JUNE 30, 2000
<TABLE> <S> <C> <C>
<S> <C> <C>
UNAUDITED
2000 1999
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME(LOSS) 136,082 (133,579)
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH USED IN OPERATING ACTIVITIES:
PROVISION FOR DOUBTFUL ACCOUNTS 0 0
DEPRECIATION & AMORTIZATION 37,730 24,950
WRITE OFF OF FIXED ASSETS 0 0
GAIN/LOSS IN WRITE OFF OF INVESTMENT 0 0
CHANGES IN:
ACCOUNTS RECEIVABLE (23,968) (186,961)
INVENTORY 13,842 ( 29,813)
PREPAID EXPENSES &
OTHER ASSETS (29,035) 9,762
A/P AND ACCRUED EXPENSES (16,256) 93,863
DUE TO/FROM RELATED PARTY (51,562) 12,810
_____________ ______________
NET CASH USED IN OPERATING
ACTIVITIES: 66,833 (208,968)
CASH FLOWS FROM INVESTING ACTIVITIES:
ACQUISITIONS OF PROPERTY
& EQUIPMENT 23,272 (235,863)
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM SALES OF
COMMON STOCK 0 110,000
PRINCIPAL PAYMENTS ON NOTES
AND LOANS PAYABLE 46,484 168,712
_____________ ______________
NET CASH PROVIDED BY
FINANCING ACTIVITIES 46,484 278,712
_____________ ______________
NET INCREASE(DECREASE) IN CASH 136,589 (166,119)
CASH AT THE BEGINNING OF PERIOD 22,919 296,709
_____________ ______________
CASH AT THE END OF PERIOD 159,508 130,590
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
CASH PAID DURING THE QUARTER FOR:
INTEREST 32,082 18,562
TAXES 0 (1,321)
SUPPLEMENTAL DISCLOSURES OF NON-CASH
OPERATING AND FINANCING ACTIVITIES:
COMMON STOCK SUBSCRIPTIONS
RECEIVABLE 80,000
INVENTORY (80,000)
FIXED ASSETS (209,000)
COMMON STOCK 209,000
</TABLE>
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[TEXT]
(NOTE B)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
[1] Basic profit/loss per share of common sotck:
The company adopted Statement of Financial Account-
ing Standards No. 128 (SFAS No. 128). The basic
profit/loss per share of common stock is based on
weighted average number of shares outstanding.
Stock options did not have an effect on the comp-
utation of the gain/loss per share. The adoption
of SFAS No. 128, which requires a retroactive adj-
ustment did not have a material effect on the
company's financial statements.
[2] Research and Engineering Costs:
All costs incurred in the research and engineering
of new and existing products are expensed in the
period incurred.
[3] Notes Payable:
At June 30, 2000 the company had a line of credit with
a financial institution in the amount of $400,000.
Available borrowings are based on a formula of eligible
accounts receivable and inventory. The line scheduled
to expire June 30,2000 was extended to December 31, 2000.
Outstanding borrowings under the line are payable on
demand and bear interest at 1.5% above bank's base rate.
On August 19, 1999 the Company entered into a promissory
note to borrow $150,000 from a stockholder who is a director
and officer of the Company. Under the note, the principal
sum and interest at the interest rate of 10% per annum on
a monthly basis is due August 20, 2000.
Part of the acquisition price of LTC Americas, Inc completed
in February, 1999 included an $80,000 promissory note bear-
ing an interest rate of 10% per annum, payable in 36 equal
monthly installments of which at June 30, 2000 $49,220 is
remaining.
[4] Due to related parties:
Due to related parties includes accrued rent and supplies
of $100,548 due to a stockholder, officer and director
of the company and $49,452 for supplies due to another
stockholder who is also a director of the company.
Page 9 of 11
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MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in
conjunction with the financial statements included in this
report and in conjunction with the description of the
company's form 10-KSB for the year ended December 31, 1999.
It is intended to assist the reader in understanding and
evaluating the financial position of the Company.
This discussion contains, in addition to historical inform-
ation, forward looking statements that involve risks and
uncertainties. the company's actual results could differ
materially from the results discussed in the forward looking
statements.
The financial statements included in these statements is
condensed and consolidated for Teletrak and Advanced Envir-
onmental. Also the statements are unaudited.
Financial Conditions
As of June 30, 2000 the company had $159,508 in cash.
Trade receivables, net of allowance for bad debts in the
amount of $50,000 are $421,445. The inventory was valued at
$430,149.
The total assets amount to $1,594.420.
For the quarter ended June 30, 2000, the company shows a
profit in the amount of $74,920 as compared to a loss of
$90,218 for the same period last year. This translates to
a profit per common share of $.01 as compared to a loss of
$.01 for the same period last year.
For the first six months of 2000, the company shows a profit
of $136,082, or $.02 profit per common share. For the same
period last year the company showed a loss of $133,579, or
$.02 loss per common share.
The company recognized sales in the amount of $767,369 for
the second quarter of 2000 as compared to $522,296 for the
same period last year. This increase of 47% can be attrib-
uted to the expanded distribution system.
For the six months ended June 30, 2000 the Company recognized
$1,378,195 in sales as compared to $1,037,622 for the same
six month period last year. The net increase in sales is
33% which is mainly attributable to the expanded distribution
system.
At this time, management is actively trying to expand its
sales force so as to assure effective penetration in the
various markets. It is estimated that it will take several
months before the sales department is brought to the ideal
structure.
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SIGNATURES
In accordance with the requirements of the Securities and
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Teletrak Environmental Systems, Inc.
[S] GERD REINIG
BY: Gerd Reinig, Chairman of the Board
[S] GERALD MCNAMARA
BY: Gerald McNamara, President
Dated: August 24, 2000
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