U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended: FEBRUARY 28, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from______________to_____________
Commission File No._____________________________
PHOENIX INTERNATIONAL INDUSTRIES, INC.
Exact name of small business issuer as specified in its charter
FLORIDA 59-2564162
State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
501 SOUTH DIXIE HIGHWAY, WEST PALM BEACH, FLORIDA 33401
(Address of Principal Executive Offices)
(561) 832-5208
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: as of March 10, 1998 there were
8,310,028 shares of the issuer's Common Stock, $.001 par value, outstanding.
Transitional Small Business Disclosure Format:
Yes [ ] No [ ]
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC.
( Development Stage Company )
INDEX TO 10-QSB
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
BALANCE SHEETS as of
February 28, 1997 and May 31, 1996 2
STATEMENTS OF OPERATIONS
For the three months ended February 28, 1997 and
February 28, 1996 and the nine months ended
February 28, 1997 and February 28, 1996 3
STATEMENTS OF CASH FLOWS
For the nine months ended
February 28, 1997 and February 28, 1996 4
Notes to Financial Statements 5
ITEM 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 6
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 7
ITEM 6. Exhibits and Reports on Form 8-K 7
SIGNATURES 8
<PAGE>
PART I. FINANCIAL STATEMENTS
PHOENIX INTERNATIONAL INDUSTRIES, INC.
( Development Stage Company )
BALANCE SHEETS
UNAUDITED
( 000's omitted )
<TABLE>
<CAPTION>
ASSETS February 28, 1997 May 31, 1996
- ------
<S> <C> <C>
Current Assets: $ $
Cash and cash equivalents 3 0
Notes Receivable 50 30
--------- ---------
Total current assets 53 30
Net Deferred Tax Asset 995 922
Property & Equipment, net 11 0
Patents and trademarks 1 1
--------- ---------
$ 1,060 $ 953
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 45 $ 42
Accrued wages 270 83
Notes payable 0 250
--------- ---------
Total liabilities 315 375
--------- ---------
Commitments and contingencies 0 0
--------- ---------
Stockholders' Equity
Common stock, $.01 par value, 20,000 authorized
888 issued and outstanding (888 in 1996 ) 5 133
Paid in capital 3,693) 3,160
Less: Stock subscriptions receivable (23) 0
Accumulated deficit (2,930) (2,715)
--------- ---------
Total stockholders' equity 745 578
--------- ---------
$ 1,060 $ 953
========= =========
</TABLE>
See accompanying notes to financial statements
Page 2
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC.
( Development Stage Company )
STATEMENTS OF OPERATIONS
UNAUDITED
( 000's omitted, except per share amounts)
<TABLE>
<CAPTION>
Three months ended Nine months ended
February 28, February 28,
1997 1996 1997 1996
Revenues:
<S> <C> <C> <C> <C>
Revenue $ 0 $ 0 $ 0 $ 0
-------- -------- -------- --------
Expenses
General and administrative 0 0 0 0
-------- -------- -------- --------
Income (loss) before income taxes 0 0 0 0
Income Tax Benefit (Provision) 0 0 0 0
-------- -------- -------- --------
Net Income(Loss) continuing operations 0 0 0 0
Discontinued Operations:
Income(Loss) form discontinued operations (128) (22) (288) (153)
Income Tax Benefit (Provision) 32 6 73 39
-------- -------- -------- --------
Net Income (loss) $ (96) $ (16) $ (215) $ (114)
======== ======== ======== ========
Income(Loss) per share from:
Continuing Operations 0.00 0.00 0.00 0.00
Discontinued Operations (0.03) (0.01) (0.07) (0.05)
-------- -------- -------- --------
$ (0.03) $ (0.01) $ (0.07) $ (0.05)
======== ======== ======== ========
Weighted average number of shares 2,908 3,017 2,908 3,017
</TABLE>
See accompanying notes to financial statements
Page 3
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC.
( Development Stage Company )
STATEMENTS OF CASH FLOWS
UNAUDITED
( 000's omitted, except per share amounts)
Nine Months Ended
February 28,
1997 1996
Cash flows from operating activities
Net income(loss) $ 0 $ 0
Adjustment to reconcile net income(loss)
to net cash(used by)provided by
operating activities:
Depreciation an amortization 0 0
Changes in assets and liabilities
(Increase)Decrease in notes receivable (20) 0
(Increase)Decrease in net deferred tax asset (73) (33)
Increase(Decrease) in accounts payable 3 29
Increase(Decrease) in accounts wages 187 0
Increase(Decrease) in notes payable (250) 0
-------- --------
Net cash (used by) provided by operating activities: (153) (4)
-------- --------
Cash flows from investing activities:
Acquisitions of Property and equipment (11) 0
Income(loss) Discontinued Operations (215) (99)
-------- --------
Net cash (used by) provided by investing activities (266) (99)
-------- --------
Cash flows from financing activities:
Issuance of common stock 405 0
Less: Stock subscriptions receivable (23) 0
-------- --------
Net cash (used by) provided by financing activities 382 0
-------- --------
Net (decrease)increase in cash and cash equivalents 3 (103)
Cash and Cash equivalents beginning of period 0 104
-------- --------
Cash and Cash equivalents end of period $ 3 $ 1
======== ========
See accompanying notes to financial statements
Page 4
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC.
( Development Stage Company )
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
( 000's omitted, except per share amounts)
1. THE COMPANY
BUSINESS
The Company is engaged, through its wholly-owned subsidiaries, in
computer and software development, consulting and other related services.
Previously the Company was involved in various types of products and systems for
use in the environmental clean-up industry. From January 1, 1996 through May 31,
1997, the Company wound down and closed its environmental clean-up business and
sought the acquisitions of computer consulting companies.
ORGANIZATION
The Company was incorporated on July 22, 1985, pursuant to the laws of
the state of Florida under the name Hydrobac, Inc. On July 7, 1986, the
Company's name was changed to Probac, Inc. and on October 5, 1994, its name was
changed to Trident Environmental Systems, Inc. During those periods the
Company's primary business was in various types of products and systems for use
in the environmental clean-up industry. The Company closed its original clean-up
business by May 31, 1997 and therefore, treats all matters relating to the
environmental clean-up business as discontinued operations.
2. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and pursuant to the instructions to form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
of normal recurring accrual adjustments, considered necessary for a fair
presentation have been included. Operating results for the three month and nine
month periods ended February 28, 1997, are not necessarily indicative of the
results that may be expected for the year ended May 31, 1997.
These financial statements and notes should be read in conjunction with
the Company's audited financial statements and notes thereto included in the
Company's Annual Report of Form 10-K for the year ended May 31, 1996.
Page 5
<PAGE>
PART I
ITEM 2 MANAGEMENT'S DISCUSSION OF DISCONTINUED OPERATIONS
On August 4, 1994, the Board of Directors approved a 1 for 10 reverse
split of the outstanding shares of Common Stock of ProBac International
Corporation. The reverse split was completed on September 11, 1994. The Board of
Directors increased the Company's authorized capital to 50,000,000 shares of
Common Stock and up to 5,000 shares of Preferred Stock for use as needed.
On the February 28, 1995 Balance Sheet, the Company had $5,316,403
worth of assets. Upon new management taking over in 1996, it was determined that
$5,189,263 of these assets were valueless and the Company wrote-off said assets
(See attached Notes to the Financial Statements). After the write-off, the
Company was left with $211,000 of liabilities without the assets to adequately
offset them. Subsequently, as of the date of this report, the Company has
settled those liabilities.
With regard to the Statements of Operations for the three and nine months
ending February 28, 1997, the Company had zero revenue and $80,000 of expenses
for the three months and $215,000 of expenses for the nine months with respect
to the discontinued operations.
On October 2, 1996, shareholders approved Amendments to the Articles of
Incorporation, changing the name of the Company to Phoenix International
Industries, Inc.; changing the authorized capital to 20,000,000 shares of Common
Stock, par value $.001 per share; and up to 5,000 shares of Preferred Stock for
use as needed. The Company's Common Stock was reverse split 1 for 15 at this
time.
LIQUIDITY AND CAPITAL RESOURCES
At February 28, 1997, the Company had $53,000 in current assets as opposed to
$315,000 in current liabilities, which results in a working capital deficit of
$262,000. This compares to $30,000 in current assets and $375,000 in current
liabilities for a working capital deficit of $345,000 at May 31, 1996.
Page 6
<PAGE>
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. None
Item 6 Exhibits.
INDEX
(2) PLAN OF ACQUISITIONS, REORGANIZATION, ARRANGEMENT. LIQUIDATION, OR
SUCCESSION.
Not applicable
(3) ARTICLES OF INCORPORATION AND BY-LAWS.
The Articles of Incorporation and Articles of Amendment to Articles of
Incorporation and By-Laws of the Registrant were filed as Exhibits 3.1,
3.2, and 3.3, respectively, to the Registrant's Form 10-KSB as of May
31, 1995 under the Securities and Exchange Act of 1934, filed April 1,
1998 with the Securities and Exchange Commission and incorporated
herein by reference.
(4) INSTRUMENTS DEFININIG THE RIGHTS OF SECURITY HOLDERS.
Not applicable
(9) VOTING TRUST AGREEMENT.
Not applicable
(10) MATERIAL CONTRACTS.
The Material Contracts of the Registrant's were filed as Exhibits 10.1,
10.2, 10.3, 10.4, and 10.5, respectively, to the Registrant's Form
10-KSB as of May 31, 1995 under the Securities and Exchange Act of
1934, filed April 1, 1998 with the Securities and Exchange Commission
and incorporated herein by reference.
(11) STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS.
Not applicable
(12) STATEMENT REGARDING COMPUTATION OF RATIONS.
Not applicable
(13) ANNUAL REPORT TO SECURITY HOLDERS, FORM 10-Q OR QUARTERLY REPORT TO
SECURITY HOLDERS.
Not applicable
(16) LETTER RE: CHANGE IN CERTIFYING ACCOUNTANTS.
Not applicabl
(17) LETTER RE: DIRECTOR RESIGNATION.
Not applicable
(18) LETTER RE: CHANGE IN ACCOUNTING PRINCIPALS.
Not applicable
(19) PREVIOUSLY UNFILED DOCUMENTS.
Not applicable
(21) SUBSIDIARIES OF THE REGISTRANT.
Not applicable
(22) PUBLISHED REPORT REGARDING MATTERS SUBMITTED TO VOTE OF SECURITY
HOLDERS.
Not applicable
(23) CONSENT OF EXPERTS AND COUNSEL.
Not applicable
(24) POWER OF ATTORNEY.
Not applicable
(27) FINANCIAL DATA SCHEDULE.
(99) ADDITIONAL EXHIBITS.
Not applicable
Page 7
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, int he City of West Palm Beach,
Florida on March 31, 1998.
PHOENIX INTERNATIONAL INDUSTRIES, INC.
By: /s/ Gerard Haryman
---------------------------------
Gerard Haryman, President and CEO
In accordance with the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
<TABLE>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Gerard Haryman President, CEO and March 31, 1998
- ---------------------------- Chairman of the Board
Gerard Haryman
/s/ Tom Donaldson Vice President, Secretary March 31, 1998
- ---------------------------- and Director
Tom Donaldson
/s/ Harvey Birnholz Treasurer, CFO and March 31, 1998
- ----------------------------- Director
Harvey Birnholz
</TABLE>
Page 8
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 3,000
<SECURITIES> 0
<RECEIVABLES> 50,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53,000
<PP&E> 12,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,060,000
<CURRENT-LIABILITIES> 315,000
<BONDS> 0
0
0
<COMMON> 5,000
<OTHER-SE> 3,693,000
<TOTAL-LIABILITY-AND-EQUITY> 1,060,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 107,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (107,000)
<INCOME-TAX> 27,000
<INCOME-CONTINUING> 0
<DISCONTINUED> (80,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (80,000)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
