FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: March 31, 1997
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Commission File Number: 0-17264
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ALFA International Corp.
(Exact name of registrant as specified in its charter)
New Jersey 22-2216835
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
50 South Buckhout Street, Irvington, New York
(Address of principal executive offices)
10533
(Zip Code)
(914) 591-1994
Registrant's telephone number, including area code
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
Indicate by check mark whether the registrant 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.
[x] Yes [ ] No
As of March 31, 1997, the registrant had outstanding 3,543,898
shares of Common Stock, par value $.01 per share.
ALFA INTERNATIONAL CORP.
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
BALANCE SHEETS
DECEMBER 31, 1996
MARCH 31, 1997
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996
THREE MONTHS ENDED MARCH 31, 1997
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996
THREE MONTHS ENDED MARCH 31, 1997
NOTES TO FINANCIAL STATEMENTS
ITEM 2: MANAGEMENT'S PLAN OF OPERATION
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORT ON FORM 8-K
ALFA INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS March 31, December 31,
1997 1996
CURRENT ASSETS: (Unaudited) Note 1
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Cash and equivalents $ 3,295 $ 57
Accounts receivable-trade 985 0
Inventory 23,619 0
Prepaid expenses and other
current assets 12,051 0
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Total Current Assets 39,950 0
PROPERTY AND EQUIPMENT:
Office & Computer Equipment 14,014 0
Furniture & Fixtures 11,459 0
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25,473 0
Less: Accumulated depreciation (10,783) 0
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14,690 0
Other Assets:
Due From Affiliate 0 49,511
Deferred Offering Cost 12,500 12,500
Investment in API 60,000 0
Goodwill 256,799 0
Deposits 4,128 0
Total Assets $ 388,067 $ 62,068
LIABILITIES AND STOCKHOLDERS' EQUITY (Note 2)
CURRENT LIABILITIES:
Accounts payable - trade: $ 145,661 $ 4,286
Note Payable 133,828 100,000
Current Portion - Long Term Debt 40,897 0
Accrued expenses and other current
liabilities 39,139 0
Total Current Liabilities 359,525 104,286
STOCKHOLDERS EQUITY:
Common Stock - $ .01 par value
Authorized - 15,000,000 shares
Issued - 3,543,898 shares at 3/31/97
and 2,559,488 shares at 12/31/96 35,439 25,595
Undesignated preferred stock:
Authorized - 978,400 shares
Issued and outstanding - none - -
Capital in excess of par value 3,223,099 3,053,721
Retained earnings (deficit) (3,168,927) (3,121,534)
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Total Stockholders' Equity
(Deficiency) (89,611) (42,218)
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Total Liabilities & Equity $ 388,067 $ 62,068
ALFA INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31
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1997 1996
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REVENUES:
Net sales $ 2,679 $ 0
Interest Income 0 0
Other income - -
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2,679 0
COST AND EXPENSES:
Cost of sales 250 0
Selling,general and administrative 47,147 485
Interest expense 2,675 -
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50,072 485
LOSS FROM BEFORE INCOME TAXES (47,393) (485)
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INCOME TAXES (CREDITS):
Federal - -
State - -
NET LOSS $(47,393) $ (485)
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WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,543,898 1,085,313
NET INCOME (LOSS) PER SHARE $ (.01) $ ( - )
<TABLE>
ALFA INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>
Preferred Stock Common Stock Capital in Retained
Stated Par Excess of Earnings
Shares Value Shares Value Par Value (Deficit)
------ ------- ------ ----- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT
DECEMBER 31, 1996 - - 2,559,488 $25,595 $3,053,721 $(3,121,534)
Issuance of Common
Stock for Merger 984,410 $ 9,844 $ 169,378
Net (loss) for
the Three
Months ended
March 31, 1997 - - - - - (47,393)
------ ------- --------- ------- ---------- ------------
BALANCE AT
March 31, 1997 - - 3,543,898 $35,439 $3,223,099 $(3,168,927)
</TABLE>
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION:
The balance sheet at the end of the preceding fiscal year has
been derived from the audited balance sheet and notes thereto
contained in the Company's annual report on Form 10-KSB for the
fiscal year ended December 31, 1996 and is presented herein for
comparative purposes. All other financial statements are unaudited.
In the opinion of management, with the exception of adjustments
necessary to reflect the acquisition on January 23, 1997 of
Ty-Breakers (NY) Corp. ("Ty-Breakers") by the Company, all
adjustments which include only normal recurring adjustments
necessary to present fairly the financial position, results of
operations and changes in financial position for all periods
presented have been made. The results of operations for interim
periods are not necessarily indicative of operating results for
the full year. Alfa presently has one wholly-owned subsidiary -
Ty-Breakers - through which it conducts all operations. All
intercompany transactions have been eliminated in its consolidation
with Alfa.
Footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been omitted in accordance with the published rules
and regulations of the Securities and Exchange Commission. These
financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's
annual report on Form 10-KSB for the fiscal year ended December
31, 1996.
ALFA INTERNATIONAL CORP.("Alfa") AND SUBSIDIARIES
ITEM 2 - Management's Plan of Operation
On August 12, 1996 the Court issued its "Final Decree" discharging
the Company from bankruptcy proceedings and releasing the Company
from the supervision of the Court. (See: "Legal Proceedings").
Subsequent to that date the Company took several actions to effect
its previously reported plan of (1) raising equity capital, and
(2) consummating a merger or acquisition with a company or
companies seeking to become publicly held, thereby providing Alfa
with an operating business or businesses.
On November 13, 1996 Old Dominion Growth Fund Limited ("Old
Dominion") loaned the Company $100,000 for use by the Company for,
among other things, funding the ongoing operations of Ty-Breakers
(NY) Corp.("TYNY") which Old Dominion wished the Company to
acquire. Such loan is evidenced by a promissory note ("Note") dated
November 13, 1996. The Company's president, Frank J. Drohan, has
pledged 605,201 shares of Common Stock owned by him as collateral
for the payment in full by the Company of all amounts owing under
the Note. The Note is payable on the earlier of (a) ten business
days after the consummation of the initial sale or sales of
securities of Alfa for cash next following January 23, 1997, of
which sale the net proceeds to Alfa are in at least the amount then
due and owing under the Note, or (b) on November 13, 1997.
On December 6, 1996 the Company, Frank J. Drohan and Auto-Pilot,
Inc., a Delaware corporation ("API"), entered into an investment
banking agreement ("I.B. Agreement") with Old Dominion. The I.B.
Agreement contemplated, among other things, an offering by the
Company of up to $1,500,000 of its securities ("Offering") with
Old Dominion acting as placement manager for such Offering.
Additionally on December 6, 1996 the Company and Old Dominion
entered into a stock redemption agreement ("Redemption Agreement")
requiring Old Dominion, depending upon the amount of proceeds the
Company receives in the Offering, to contribute all, some or none
of the 1,250,000 shares of Common Stock owned by it to the Company.
In accordance with the provisions of the I.B. Agreement, Old
Dominion was required to deliver a minimum of $500,000 in proceeds
from the Offering to the Company within sixty (60) days after
January 23, 1997 (the "Merger Date"). As of the date hereof Old
Dominion has failed to deliver such $500,000 to the Company and as
a direct result of this, the Company is in a precarious financial
position. The I.B. Agreement expired on March 24, 1997.
Since the I.B. Agreement has expired and the Offering has not yet
occurred, Old Dominion is obligated, in accordance with the terms
of the Redemption Agreement, to return to the Company for
cancellation the 1,250,000 shares of Common Stock owned by it. The
Company has not yet enforced the Redemption Agreement and is
presently in negotiations with Old Dominion regarding an extension
of the I.B. Agreement, thereby extending both the time within which
the Offering may be made and the date the 1,250,000 shares must be
returned to the Company.
All of the Company's operations are conducted through its wholly
owned subsidiary, Ty-Breakers, which the Company acquired on
January 23, 1997. Ty-Breakers is engaged in the business of
manufacturing and marketing apparel, mostly jackets, made from
Tyvek(R) and Kensel. Tyvek is a registered trademark of the DuPont
Company. Kensel is a trademark of Ty-Breakers used to identify
Ty-Breakers' patented fabric material. The financial statements
contained herein as of March 31, 1997 include the balance sheet
data and results of operations for Ty-Breakers for the period
January 23, 1997 (the Merger Date) through and including March 31,
1997.
It was managements' intention to conduct the Offering and use the
proceeds to implement Ty-Breakers' sales and marketing plan for its
Tyvek(R) and Kensel jackets. Should the ongoing negotiations with
Old Dominion be successful, management intends to carry out that
plan. Should the ongoing negotiations with Old Dominion be
unsuccessful, management intends to seek alternate sources of
financing to carry out that plan. The Company, through its wholly
owned subsidiary Ty-Breakers, markets jackets and other apparel
made from DuPont's Tyvek material and from Ty-Breakers' patented
Kensel material. The expanded marketing plan is targeted at retail
stores and catalog companies. Ty-Breakers presently markets its
products almost exclusively to the premium and incentive market.
Although preliminary discussions with respect to its acquisition
by Alfa have been held with Auto-Pilot,Inc. ("API"), a Delaware
corporation involved in the development of micro-computer products,
no assurance can be given at this time that such an acquisition
can or will be consummated. Any such acquisition by the Company is
contingent upon many factors, including the provision by Old
Dominion (or an alternate source of financing) of at least $500,000
of financing for the Company (in addition to that described above
and in the I.B. Agreement) specifically for the use by API in
carrying out its business plan. API is controlled by the Company's
president and members of his family.
Any potential business combination with API is conditional upon,
among other things, the successful conclusion of the aforementioned
financing efforts for the Company.
If the Company and Old Dominion are able to successfully conclude
the Offering described in the I.B. Agreement (or if similar
alternate financing is secured by the Company), management believes
that the Company will have sufficient cash to meet its requirements
for the next twelve months. If the Company and Old Dominion are
not able to successfully conclude the Offering described in the
I.B. Agreement (or if similar alternate financing is not secured),
management does not believe the Company will have sufficient cash
to meet its requirements for the next twelve months or to continue
as a going concern. The Company has been continually assured by Old
Dominion that immediately after a price for the Company's Common
Stock is entered on the OTC Electronic Bulletin Board by any market
maker, that Old Dominion will conduct an offering of $500,000 of
the Company's securities. The Company is attempting to have several
market makers sponsor its Common Stock on the OTC Bulletin Board
and, as of the date hereof, has been assured that one such market
maker has filed the necessary forms and will make a market in the
Company's Common Stock as soon as it gets clearance to do so from
the NASD. If the Company is successful in its efforts to get its
Common Stock quoted on the OTC Bulletin Board and Old Dominion
still fails to conduct the Offering of the Company's securities as
generally described in the I.B. Agreement (or if similar alternate
financing is not secured), management does not believe the Company
will have sufficient cash to meet its requirements for the next
twelve months or to continue as a going concern. The Company is
unable to predict the outcome of the uncertainty surrounding the
Offering at this time nor is the Company able to predict with any
certainty how much longer it can continue operations absent the
Offering (or some other financing).
The Company presently has no employees. Absent a successful
conclusion to its ongoing financing efforts, the Company does not
intend to hire any employees.
RESULTS OF OPERATIONS:
THREE MONTHS ENDED MARCH 31,1997 vs.
THREE MONTHS ENDED MARCH 31,1996
Net sales revenue was $2,679 during the first quarter of 1997
versus zero for the first quarter of 1996. Alfa incurred a net loss
of $47,393 in the first quarter of 1997 as compared to a net loss
of $ 485 for the comparable period in 1996. The first quarter of
1997 includes the results of Ty-Breakers operations from January
23, 1997 and represents the first quarterly period since 1993 that
the Company had operations. The results of operations were
negatively impacted by the inability of the Company to execute its
sales and marketing plan due to the failure of Old Dominion to
deliver the anticipated $500,000 in capital to the Company
subsequent to the Merger.
LIQUIDITY AND CAPITAL RESOURCES:
The Company had a working capital deficit of ($319,575) at March
31, 1997 as compared to a deficit of ($104,286) at December 31,
1996. This represents an increase of ($215,289) and is
attributable to Alfa's consolidated operating loss for the period,
the acquisition of Ty-Breakers and the failure of the Offering to
occur as scheduled. A successful completion of the Offering or
alternate financing for the Company to carry out Ty-Breakers' sales
and marketing plan is necessary to allow continued operations.
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings
The Company's wholly owned subsidiary Ty-Breakers was acquired on
January 23, 1997. Ty-Breakers presently has certain past due
accounts payable, including past due rental payments on its office
and warehouse space, and is a party to two settlement stipulations
regarding certain of those accounts payable. Should the Company be
successful in its financing efforts and thereby be in a position
to fund its subsidiary's operations these matters will be of no
consequence. Should the Company be unsuccessful in its financing
efforts these matters will be significant, possibly sufficient to
cause the Company and/or Ty-Breakers to cease operations
temporarily or permanently.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE - As previously reported on the Company's Report on Form
10-KSB for the year ended December 31, 1996, Mr. Frank
J. Drohan and Mr. Charles P. Kuczynski continue as the only
members of the Company's Board of Directors.
ITEM 5: OTHER INFORMATION
On January 23, 1997, the Company acquired Ty-Breakers (NY) Corp.
("TYNY") through the merger of TYNY with and into Alfa Acquisition
Corp. ("AAC"), a New York corporation and wholly owned subsidiary
of the Company. Subsequent to the merger AAC changed its corporate
name to Ty-Breakers Corp. ("Ty-Breakers"). Ty-Breakers is now a
wholly owned subsidiary of the Company.
ITEM 6: EXHIBITS AND REPORT ON FORM 8-K
(B) Reports on Form 8 - K
Report on Form 8-K dated January 27, 1997 disclosing
the acquisition of Ty-Breakers (NY) Corp. by the
Company.
SIGNATURES
Pursuant to the requirements 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.
DATED: May 14, 1997 ALFA INTERNATIONAL CORP.
(Registrant)
By: /s/Frank J. Drohan
Frank J. Drohan
Chief Executive Officer
and Chief Financial Officer
