SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________to_________________
Commission file number 0-16450
ADVATEX ASSOCIATES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 13-3453420
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
605 West 48th Street, New York, N.Y. 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 921-0600
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 filing requirements
for the past 90 days. Yes X No ___
As of May 5, 2000 Registrant had 5,470,000 shares of its Common Stock, $.01 par
value, outstanding.
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ADVATEX ASSOCIATES, INC. AND SUBSIDIARIES
- INDEX -
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PAGE(S)
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PART I:
Item 1 - Consolidated Financial Information:
Condensed Balance Sheets - March 31, 2000 (unaudited) and December 31, 1999 3
Condensed Statements of Operations - Three-months Ended March 31, 2000
and 1999 (unaudited) 4
Condensed Statements of Cash Flows - Three-months Ended March 31,
2000 and 1999 (unaudited) 5
Notes to Interim Condensed Financial Statements 6
Review Report on Interim Condensed Financial Statements 7
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations 8
PART II Other Information 9
SIGNATURES 10
EXHIBITS:
Exhibit 27 - Financial Data Schedule
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ADVATEX ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
- ASSETS -
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<CAPTION>
MARCH December 31,
31, 2000 1999
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(UNAUDITED)
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CURRENT ASSETS:
Cash $ 850,506 $ 859,451
Accounts receivable - affiliate 161,019 161,019
Prepaid insurance 4,983 9,983
TOTAL CURRENT ASSETS 1,016,508 1,130,453
PROPERTY AND EQUIPMENT, NET 5,018 7,018
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TOTAL ASSETS $ 1,021,526 $ 1,037,471
============== =============
- LIABILITIES AND SHAREHOLDERS' DEFICIT -
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 30,000 $ 40,000
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TOTAL CURRENT LIABILITIES 30,000 40,000
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NOTE PAYABLE - AUTOMOBILE 7,102 7,102
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STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 20,000,000 shares authorized; 5,470,000 and 5,403,250
shares issued for 2000 and 1999, respectively 54,700 54,032
Additional paid-in capital 6,891,126 6,885,119
Accumulated deficit (5,878,632) (5,866,012)
Treasury stock, at cost, 6,226 shares (82,770) (82,770)
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TOTAL STOCKHOLDERS' EQUITY 984,424 990,369
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,021,526 $ 1,037,471
============== =============
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See accompanying notes to condensed consolidated financial statements.
Page 3.
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ADVATEX ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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<CAPTION>
For the Three Months
Ended March 31,
--------------------------------
2000 1999
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<S> <C> <C>
REVENUES $ - $ -
General and administrative expenses 20,120 4,000
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OPERATING LOSS (20,120) (4,000)
Interest income 7,500 14,000
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NET (LOSS) INCOME $ (12,620) $ 10,000
============ ==========
NET (LOSS) INCOME PER COMMON SHARE $ (0.00) $ (0.00)
============ ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,463,774 5,463,774
========= ==========
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See accompanying notes to condensed consolidated financial statements.
Page 4.
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ADVATEX ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<CAPTION>
For the Three Months
Ended March 31,
--------------------------------
2000 1999
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<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (12,620) $ 10,000
Adjustments to reconcile net income (loss) to net cash (used in) operating
activities:
Depreciation and amortization 2,000 -
Compensatory shares 6,675 -
Increase (decrease) in cash due to change in:
Prepaid insurance 5,000 4,000
Accounts payable and accrued expenses (10,000) (13,140)
Income taxes payable - (6,288)
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NET CASH (USED IN) OPERATING ACTIVITIES (8,945) (5,428)
Cash at beginning of period 859,451 883,581
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CASH AT END OF PERIOD $ 850,506 $ 878,153
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</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5.
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ADVATEX ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION:
The financial information for the three month periods ended
March 31, 2000 and 1999 included herein reflects all
adjustments (consisting solely of normal recurring adjustments)
which are, in the opinion of management, necessary for the fair
presentation of results for the interim periods. The financial
information for the three month period ended March 31, 2000 has
been reviewed by our auditors.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed consolidated financial
statements be read in conjunction with the consolidated
financial statements and related notes included in the
Company's December 31, 1999 annual report on Form 10-K.
The result of operations for the three month period ended March
31, 2000 is not necessarily indicative of the results to be
expected for the full year.
NOTE 2 - FASB STATEMENT NO. 128 "EARNINGS PER SHARE"
In February 1997, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards
No.128, "Earnings Per Share" (Statement 128) which is effective
for financial statement periods ending after December 15, 1997.
Statement 128 supersedes APB Opinion No.15, "Earnings Per
Share", and specifies the computation, presentation, and
disclosure requirements for earnings per share (EPS) for
entities with publicly held common stock or potential common
stock. Statement 128 replaces primary EPS and fully diluted EPS
with basic EPS and diluted EPS, respectively. Statement 128
also requires dual presentation of basic and diluted EPS on the
face of the income statement for entities with complex capital
structures and a reconciliation of the information utilized to
calculate basic EPS to that used to calculate diluted EPS.
Page 6.
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REVIEW REPORT ON INTERIM CONDENSED FINANCIAL STATEMENTS
To the Shareholders
Advatex Associates, Inc.
We have reviewed the accompanying balance sheet, statement of operations and
statement of cash flows of Advatex Associates, Inc. as of March 31, 2000, and
for the three-month period then ended. These financial statements are the
responsibility of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
\s\ LAZAR LEVINE & FELIX LLP
-----------------------------
LAZAR LEVINE & FELIX LLP
New York, New York
May 9, 2000
Page 7.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
The Company has not conducted any active operations in the
past two fiscal years, except for its efforts to locate
suitable acquisition transactions. No revenues have been
generated by the Company during such two-year period. It is
unlikely the Company will have any revenues unless it is able
to effect an acquisition of or merger with an operating
company, of which there can be no assurance.
QUARTER TO QUARTER RESULTS:
General and administrative expenses were $20,120 for the
three months ended March 31, 2000 as compared to $4,000 for
the same period in 1999.
Interest income was $7,500 for the three months ended March
31, 2000 as compared to $14,000 interest income for the
same period in 1999.
LIQUIDITY AND CAPITAL RESOURCES:
At March 31, 2000, the Company's current ratio, that is, the
ratio of current assets to current liabilities, was 33.88 to 1
as compared to 25.76 to 1 at December 31, 1999. Cash used in
operating activities for the three months ended March 31, 2000
was $8,945 as compared to $5,428 for the same period in 1999.
The Company has experienced substantial operating losses over
the past several years. The Company has sought to minimize
general and administrative expenses, however, losses may
continue in future years which may require the Company to
obtain additional funds from its affiliates or other third
party sources. There can be no assurance as to the
availability and terms of such funding.
Page 8.
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PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
To management's knowledge, there are no pending legal proceedings
against the Company that could be reasonably expected to have a
material adverse effect on the Company's business or financial
position.
Item 2. - Changes in Securities
No changes in securities occurred during the quarter for which
this Form 10-Q quarterly report is filed.
Item 3. - Defaults Upon Senior Securities
N/A
Item 4. - Submission of Matters to a Vote of Security Holders
No matters have been submitted for a vote to security holders
during the quarter for which this Form 10-Q is filed.
Item 5. - Other Information
N/A
Item 6. - Exhibits and Reports on Form 8-K
(a) Except as set forth below, exhibits are incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for which
this Form 10-Q quarterly report is filed.
Page 9.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 11, 2000 Advatex Associates, Inc.
By: /s/ Joseph P. Donnolo
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Chairman, President and
Chief Executive Officer
By: /s/ Rohullah F. Lodin
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Chief Financial and
Chief Accounting Officer
Page 10.
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<LEGEND>
The schedule contains summary financial information extracted from the financial
statements for the three-month period ended March 31, 2000 and is qualified in
its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 850,506
<SECURITIES> 0
<RECEIVABLES> 161,019
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,016,508
<PP&E> 35,090
<DEPRECIATION> 30,072
<TOTAL-ASSETS> 1,021,526
<CURRENT-LIABILITIES> 30,000
<BONDS> 7,102
0
0
<COMMON> 54,700
<OTHER-SE> 929,724
<TOTAL-LIABILITY-AND-EQUITY> 1,021,526
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 20,120
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,620)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,620)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,620)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
