================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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 0-20701
COMPOSITECH LTD.
(Exact Name of Registrant as specified in its charter)
Delaware 11-2710467
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
120 Ricefield Lane, Hauppauge, New York 11788
(Address of principal executive offices)
Registrant's telephone number, including area code: (516) 436-5200
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 requirement for the past 90 days. Yes |X| No |_|
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of May 12, 1999:
Common Stock $.01 par value 15,648,694
---------------------------
Class Number of shares
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<PAGE>
COMPOSITECH LTD.
Index
Part I - Financial Information Page
- ------------------------------ ----
Item 1. Financial Statements
Balance Sheets as of March 31, 1999 (unaudited) and
December 31, 1998...................................................2
Statements of Operations (unaudited) for the three months
ended March 31, 1999 and 1998.......................................3
Statements of Cash Flows (unaudited) for the three months
ended March 31, 1999 and 1998.......................................4
Notes to Financial Statements (unaudited).............................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...............................7
Part II - Other Information
- ---------------------------
Item 2. Changes in Securities................................................11
Item 4. Submission of Matters to a Vote of Security Holders..................12
Item 6. Exhibits and Reports on Form 8-K.....................................12
Signature.....................................................................13
<PAGE>
COMPOSITECH LTD.
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31 December 31
1999 1998
------------ ------------
<S> <C> <C>
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $520,592 $102,286
Accounts receivable trade - net 23,058 27,273
Accounts receivable from joint venture 47,360 103,696
Inventories 247,630 254,784
Prepaid expenses and other 252,299 165,827
------------ ------------
Total current assets 1,090,939 653,866
Property and equipment at cost - net 5,572,717 5,721,215
Investment in joint ventures - net of accumulated amortization
of $26,250 (1999) and $8,200 (1998) 5,652,654 5,562,090
Advance payments on construction-in-progress 16,753 16,753
Deferred debt expense - net of accumulated amortization of $35,247 (1999) 149,711 133,728
Other assets and other deferred charges, net of accumulated amortization
of $60,840 (1999) and $19,256 (1998) 356,511 151,110
------------ ------------
Total assets $12,839,285 $12,238,762
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $515,969 $637,861
Deferred salaries - $853,159 (1999) to officers 1,038,958 194,739
Accrued interest - $293,563 (1999) and all (1998) to stockholders 295,341 5,880
Other accrued liabilities 420,158 413,982
Deferred licensing income 65,892 64,248
Loans and notes payable 956,417 438,917
Notes payable to directors/stockholders 1,595,000
------------ ------------
Total current liabilities 4,887,735 1,755,627
Non-current liabilities:
Notes payable to directors/stockholders 1,595,000
Deferred salaries - officers 814,481
Accrued interest - directors/stockholders 248,948
Capital lease obligations 1,387 9,235
Deferred licensing income 647,933 713,001
Advances received on sale of common stock 500,000 500,000
------------ ------------
Total non-current liabilities 1,149,320 3,880,665
7% Series B convertible preferred stock, par value $0.01 ; stated value $10,000 per share;
authorized shares - 220, issued and outstanding shares - 25 (1999) and 220 (1998) 250,000 2,200,000
Commitments
Stockholders' equity :
Undesignated preferred stock; authorized 3,999,780 shares, none issued and outstanding
Series A convertible preferred stock, par value $3.00 per share; authorized shares - 714,161,
issued and outstanding shares - 487,661 (1999) and 550,995 (1998) 1,462,983 1,652,985
Common stock, par value $.01 per share; authorized shares - 50,000,000,
issued and outstanding shares - 15,643,694 (1999) and 13,150,128 (1998) 156,437 131,502
Additional paid-in capital 41,276,449 37,436,677
Cumulative foreign currency translation adjustment (451,462) (552,039)
Deficit (35,592,177) (33,954,155)
------------ ------------
6,852,230 4,714,970
Less notes receivable received for issuance of common stock (300,000) (312,500)
------------ ------------
Total stockholders' equity 6,552,230 4,402,470
------------ ------------
Total liabilities and stockholders' equity $12,839,285 $12,238,762
============ ============
</TABLE>
See accompanying notes.
2
<PAGE>
COMPOSITECH LTD.
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Revenues:
Sales $ 95,980 $ 86,401
Licensing 12,590 12,916
------------ ------------
Total revenues 108,570 99,317
Costs and expenses:
Manufacturing 1,202,842 960,562
Selling, general and administrative 369,579 292,252
Research and development 67,386 40,613
------------ ------------
Total operating expenses 1,639,807 1,293,427
------------ ------------
(Loss) from operations (1,531,237) (1,194,110)
Other income (expenses):
Interest income 11,652 16,782
Interest expense, net of interest capitalized (65,590) (95,479)
Amortization of debt discount and expenses (42,834) (308,132)
Loss on disposal of property and equipment (8,274)
Other income (expense) (4,500) 50,346
------------ ------------
(101,272) (344,757)
------------ ------------
(Loss) from operations before equity in operations of joint venture (1,632,509) (1,538,867)
Equity in operations of joint venture (5,513) 40,879
------------ ------------
Net (loss) (1,638,022) (1,497,988)
Preferred stock dividends 11,851
------------ ------------
(Loss) attributable to common stockholders ($1,649,873) ($1,497,988)
============ ============
(Loss) per common share - basic and diluted ($0.11) ($0.16)
============ ============
Shares used in computing (loss) per common share 14,627,528 9,176,650
============ ============
</TABLE>
See accompanying notes.
3
<PAGE>
COMPOSITECH LTD.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities
Net (loss) ($1,638,022) ($1,497,988)
Adjustments to reconcile net (loss) to net cash and
cash equivalents used in operating activities:
Depreciation and amortization, including capital leases 268,638 176,495
Loss on disposal of property and equipment 8,274
Amortization of debt discount and expenses 48,604 308,132
Equity in net income of joint venture 5,513 (40,879)
Changes in operating assets and liabilities:
Accounts receivable trade - net 4,215 (13,440)
Accounts receivable from joint venture (57,232) 82,259
Inventories 7,154 24,001
Prepaid expenses and other 27,096 (83,739)
Other assets and other deferred charges 16,500
Accounts payable (121,892) (271,421)
Deferred salaries 29,738 112,691
Accrued interest 40,513 26,544
Deferred licensing income (63,424) 917,084
Other accrued liabilities 83,701 2,175
----------- -----------
Net cash and cash equivalents (used) in operating activities (1,348,898) (249,812)
Cash Flows from Investing Activities
Purchase of property and equipment - net (81,644) (178,159)
Patent costs deferred (10,113)
----------- -----------
Net cash and cash equivalents (used in) investing activities (91,757) (178,159)
Cash Flows from Financing Activities
Net proceeds from issuance of common stock 1,406,308 952,500
Net proceeds from loans and notes payable 460,501
Payment of capital lease obligations (7,848) (10,954)
----------- -----------
Net cash and cash equivalents provided by financing activities 1,858,961 941,546
----------- -----------
(Decrease) in cash and cash equivalents 418,306 513,575
Cash and cash equivalents at beginning of period 102,286 624,254
----------- -----------
Cash and cash equivalents at end of period $520,592 $1,137,829
=========== ===========
Supplemental disclosures of cash flow information
Noncash financing activities:
Preferred Stock dividends on 7% Series B convertible preferred stock $11,851
===========
Issuance of common stock as compensation for bridge financing $12,500
===========
Cash paid for:
Interest $26,232 $68,934
=========== ===========
</TABLE>
See accompanying notes.
4
<PAGE>
COMPOSITECH LTD.
Notes to Financial Statements
(Unaudited)
March 31, 1999
Note 1 - Basis of Presentation and Significant Accounting Policies
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB 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. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Annual Report on
Form 10-KSB for the year ended December 31, 1998 of Compositech Ltd. (the
"Company"). In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three-month period ended March 31, 1999 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1999.
Reclassifications
Certain reclassifications have been made to the financial statements for
the three months ended March 31, 1998 to conform to presentations for the three
months ended March 31, 1999.
Note 2 - Common Stock Issuances and Stock Options
During January 1999, pursuant to Compositech's Amended and Restated Stock
Award Plan (the "Award Plan"), the Company granted to a new employee options to
purchase 10,000 shares of common stock at $1.406 per share, the market value on
the date of the grant.
During January 1999, pursuant to the Award Plan, the Company issued stock
awards of 17,395 shares of its common stock to its non-employee directors,
vesting on a quarterly basis, as payment of the annual $10,000 per year, per
director, retainer approved by the Board of Directors on January 22, 1999. The
number of shares was determined using a price of $2.875, the market price on the
date approved by the Board of Directors.
During March 1999, pursuant to the Award Plan, the Company granted to
selected officers and employees options to purchase 97,189 shares of common
stock at $2.50 per share, the market price on the date of the grant, in
recognition of the continued deferral of certain deferred salaries.
5
<PAGE>
In the three months ended March 31, 1999, 63,334 shares of the Series A
convertible preferred stock were converted at the existing conversion rate into
31,667 shares of common stock, resulting in a decrease in stockholders' equity
relating to Series A convertible preferred stock of $190,002, an increase in
stockholders' equity relating to common stock of $317 and an increase in
additional paid-in capital of $189,685.
During the three months ended March 31, 1999, the Company issued 1,387,331
shares of common stock upon the conversion of 195 shares of the Company's 7%
Series B convertible preferred stock ($1,950,000 face amount), resulting in an
increase in stockholders' equity relating to common stock of $13,873 and an
increase in additional paid-in capital of $1,936,127. The shares issued included
an accrued 7% dividend, paid in shares of common stock.
During the three months ended March 31, 1999, the Company sold 1,074,568
shares of its common stock, including 600,000 shares of its common stock issued
as a result of the exercise of a stock purchase option, in a private placement,
realizing approximately $1.4 million, net of expenses. In connection with this
private placement, the Company issued warrants to purchase 505,928 shares of
common stock at prices ranging from $1.125 to $2.125 per share.
Note 3 - Loan and Note Payable
In January 1999, the Company borrowed an additional $17,500, bringing the
total amount borrowed to $456,417, under the credit facility through Credit
Bancorp, which is collateralized by approximately 1.7 million shares of the
Company's common stock loaned to the Company by two of the Company's officers.
The loan is due on December 29, 1999 and bears interest at the rate of one
percent above the LIBOR rate (currently 6.25%), payable quarterly.
A default would occur if the Company fails to supplement the collateral or
partially repay the loan in the event the collateral falls in value by 25% or
more from the value as of the loan date. The Company has agreed with the two
officers to issue replacement shares to them in the event of any liquidation of
the collateral by the lender and provide them with registration rights, where
necessary.
In March 1999, the Company closed on the first tranche of $500,000 of a
$1.5 million term note series, due on September 12, 1999, payable at maturity in
cash or common stock at the Company's option, collateralized by certain
equipment. In connection with this closing, the Company issued warrants to
purchase 125,000 shares of common stock at $2.372 per share, 110% of the closing
bid price of the stock on the date of the closing. The warrants are exercisable
until March 16, 2004. The fair market value of the warrants has been estimated
at $73,267 which is being amortized over the term of the note.
Note 4 - Subsequent Events
In April 1999, the Company closed on the second tranche of $430,000 of the
$1.5 million term note series, due on October 18, 1999, payable at maturity in
cash or common stock at the Company's option, collateralized by certain
equipment. In connection with this closing, the Company issued warrants to
purchase 107,500 shares of common stock at $2.647 per share, 110% of the closing
bid price of the stock on the date of the closing. The warrants are exercisable
until April 21, 2004. The fair market value of the warrants has been estimated
at $88,688 which is being amortized over the term of the note.
6
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-QSB contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Actual results could differ materially
from those projected in the forward-looking statements as a result of a number
of important factors. For a discussion of important factors that could affect
the Company's results, in addition to the discussions below, please refer to the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1998 and
the risk factors listed therein.
Overview
The Company manufactures copper-clad fiberglass epoxy laminates used to
manufacture printed circuit boards required by the electronics industry. During
1997 and 1998, the Company produced and sold its laminates in limited quantities
through a highly focused sales effort to gain production experience and product
performance data. However, this highly focused sales effort left the Company
vulnerable to order volatility. Throughout 1997 and 1998, and continuing through
the first quarter of 1999, the Company worked on adjusting and enhancing its
production equipment and its manufacturing processes. Production ramp up issues,
coupled with order volatility, led to a slower than expected expansion in
production capacity. The Company continues to work on and is making progress on
solving issues with process enhancements and contamination which affect finished
goods' yields and production efficiencies.
Results of Operations
Sales of laminates increased to $95,980 for the three months ended March
31, 1999 from $86,401 for the three months ended March 31,1998. Sales for the
first quarter of 1999 were below the Company's expectations due primarily to a
delay in the completion of a long term supply agreement.
Research and development expenses increased to $67,386 for the three months
ended March 31, 1999 from $40,613 for the three months ended March 31, 1998,
reflecting the company's increased development efforts on improving
manufacturing methods.
Manufacturing expenses increased to $1,202,842 for the three month period
ended March 31, 1999 from $960,562 for the three months ended March 31, 1998,
reflecting the higher levels of direct expenditures related to process
enhancements and improvements to process reliability as well as the addition of
manufacturing management personnel and related expenses, as compared to the
first quarter of the previous year.
Selling, general and administrative expenses increased to $369,579 for the
three months ended March 31, 1999 from $292,252 for the three months ended March
31, 1998. Increases in payroll related costs in connection with the hiring of a
new chief executive officer and technical director were partially offset by a
decrease in recruitment costs which was related to the search for a new chief
executive officer. Other increases were experienced in travel and sales
promotion costs, including the costs of an industry trade show in March of 1999.
Professional fees and
7
<PAGE>
investor relations expense increased by approximately $52,000, due primarily to
higher financial public relations costs, which included the amortization of
approximately $31,000 of the estimated fair market value of warrants given to a
consulting firm in exchange for public relations services for the calendar year
1999. During the first quarter of 1998 and 1999, approximately $112,000 of
selling, general and administrative expenses were charged to the Canadian joint
venture, in accordance with the joint venture agreements.
Interest expense decreased to $65,590 for the three months ended March 31,
1999 from $95,479 for the three months ended March 31, 1998. The decrease is
related to the borrowing cost of the 5% convertible debentures, which were fully
converted by April 1998, which was not present in the first quarter of 1999.
Amortization of debt discount and expenses decreased to $42,834 for the three
months ended March 31, 1999 from $308,132 for the three months ended March 31,
1998. The 1998 period reflected the high amortization of costs associated with
the 5% convertible debentures, including accelerated amortization of $263,257 as
a result of debenture conversions during the three months ended March 31, 1998.
Other expense increased to $4,500 for the three months ended March 31, 1999
from ($50,346) for the three months ended March 31, 1998. The first quarter of
1998 included a property tax refund applicable to prior fiscal periods as well
as adjustments of prior period professional fee charges, both of which were not
present in the 1999 period.
The equity in the operations of the Canadian joint venture decreased to a
loss of $5,513, for the three months ended March 31, 1999, from a profit of
$40,879 for the three months ended March 31, 1998. These amounts represent the
Company's 50% share of the net profit or loss of the joint venture. The first
quarter 1998 profit resulted from a cumulative adjustment of interest income
recorded by the joint venture on its short term investments in excess of
administrative and marketing costs incurred.
The foregoing resulted in the Company having a net loss of $1,638,022 for
the three months ended March 31, 1999 compared with $1,497,988 for the three
months ended March 31, 1998. The increased loss was attributable primarily to
the lower than expected sales revenues and the increase in manufacturing and
process development expenses, offset partially by a reduction in the
amortization of debt discount and expenses, a non-cash item.
8
<PAGE>
Liquidity and Capital Resources
The Company has incurred significant losses and has substantial negative
cash flow since its inception. The Company's independent auditors have included
an explanatory paragraph in their report covering the December 31, 1998
financial statements, which expresses substantial doubt about the Company's
ability to continue as a going concern. The Company expects significant
operating losses to continue in 1999. As of March 31, 1999, the Company had
approximately $521,000 of available cash resources. In April 1999, the Company
closed on the second tranche of $430,000 of the $1.5 million term note series,
due on October 18, 1999, payable at maturity in cash or common stock at the
Company's option. There is an additional amount available on the term note
series of $570,000. However, the Company will require additional funding to
cover current operations and to fund additional production equipment purchases,
which will require at least $450,000 per month based on current levels of
production and sales, until revenues from operations are sufficient.
Current liabilities include approximately $853,000 in deferred salaries due
to officers, accrued interest of approximately $293,000 due to stockholders and
notes payable of $1,495,000 due to officers/directors, all of which are
currently due on or after January 2, 2000 and whose due dates have historically
been extended in the event the Company does not have the available cash
resources to repay on the scheduled due dates.
The Company is negotiating for additional funding. Such additional funding
may be raised through sources including license fees, sales of equipment in
connection with licensing operations, joint ventures or other collaborative
relationships, as well as equity or debt financing. No assurance can be given
that funding will be sufficient and available or, if it is available, that it
will be available on acceptable terms. If adequate funds are not available to
satisfy either short-term or long-term capital requirements, the Company may be
required to limit its operations significantly. No assurance can be given that
the Company will successfully complete expansion and enhancement of its
production equipment, achieve broad commercial acceptance of its product or
generate sufficient revenues to achieve profitable operations. No assurance can
be given that management has identified and made appropriate assumptions
regarding all factors that may affect the Company's business in the future.
Three Months Ended March 31, 1999 Compared with Three Months Ended March 31,
1998
Net cash and cash equivalents used in operating activities increased to
$1,348,898 for the three months ended March 31, 1999 from $249,812 for the three
months ended March 31, 1998. Licensing fees received in cash from the Taiwan
joint venture totaling $930,000, net of expenses, was the primary source of
funds provided by operating activities for the three months ended March 31,
1998, with $917,084 deferred to future periods for financial reporting purposes.
The increases in manufacturing and process development expenses, accounted for a
significant portion of the remainder of the increase in cash used in operating
activities. Increases in deferred salaries, accrued interest and expenses for
this same period were offset by a decrease in accounts payable and an increase
in accounts receivable due from the Canadian joint venture.
9
<PAGE>
Net cash and cash equivalents used in investing activity decreased to
$91,757 for the three months ended March 31, 1999, compared with $178,159 for
the three months ended March 31, 1998. Increases in deferred patent costs were
more than offset by a decrease in capital expenditures for property and
equipment, which included advance payments on construction-in-progress.
Cash flows from financing activities increased to $1,858,961 for the three
months ended March 31, 1999, from $941,546 for the three months ended March 31,
1998. The primary sources of the funds, net of expenses, provided by financing
activities in the first quarter of 1999 were the private placement of the
Company's common stock, totaling $1,406,308 and the closing of the first tranche
of the term notes series, totaling $430,000. The sale of stock to the Taiwanese
joint venture, net of expenses, accounted for $952,500 of funds provided by
financing activities in the first quarter of 1998, reduced by the payment of
capital lease obligations of $10,954.
10
<PAGE>
Part II - Other Information
Item 2. Changes in Securities
(c) Recent Sales of Unregistered Securities.
During the three months ended March 31, 1999, the Company sold 1,074,568
shares of its common stock and warrants to purchase 163,897 shares of common
stock at prices ranging from $1.125 per share to $2.125 per share, exercisable
until February 15, 2001, to certain accredited investors in a private placement,
for an aggregate offering of $1,535,934.
In connection with the private placement, Trautman & Company, Inc., a
placement agent, received cash commissions of $106,875 and warrants to purchase
338,361 shares of common stock at exercise prices ranging from $1.125 per share
to $2.125 per share, exercisable until February 15, 2001, and Sovereign Capital
Advisors, LLC, a placement agent, received cash commissions of $14,000 and
warrants to purchase 1,843 shares of common stock for $2.035 per share and
warrants to purchase 1,827 shares of common stock for $2.053 per share,
exercisable until February 15, 2001.
The sales of the shares of common stock and warrants in the private
placement were made in reliance upon the exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act"), provided by Section
4(2) of the Securities Act and Rule 506 promulgated thereunder.
The following warrants were issued in reliance upon the exemption from
registration under the Securities Act provided in section 4(2) thereof as
transactions not involving a public offering :
(a) On January 13, 1999, the Company issued warrants to purchase 300,000
shares of its common stock for $1.25 per share, the market price the
date of the issuance, exercisable until January 13, 2004, to Boca
Investments, in exchange for financial public relations services to be
rendered to the Company over a twelve-month period commencing January
13, 1999. In connection with this transaction, Trautman and Company,
Inc. received warrants to purchase 100,000 shares, as a commission,
under the identical terms.
(b) On March 10, 1999, the Company issued warrants to purchase 25,483
shares of its common stock for $2.50 per share, exercisable until
March 10, 2004, to certain officers, directors and stockholders of the
Company who are holders of notes payable, in exchange for an extension
of the payment of the accrued interest, as of December 31, 1998, until
January 2, 2000.
(c) On March 16, 1999, in connection with the closing of the initial
tranche of a $1.5 million term note series, the Company issued
warrants to purchase:
(i) 100,000 shares of its Common Stock for $2.372 per share,
exercisable until March 16, 2004 as investor warrants to
SovCap Equity Partners, Ltd; and
(ii) 25,000 shares of its Common Stock for $2.372 per share,
exercisable until March 16, 2004 as compensation warrants to
Sovereign Capital Advisors, LLC, the placement agent.
11
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
At a special meeting of stockholders held on March 26, 1999, the
stockholders approved an amendment of the Company's Amended and Restated
Certificate of Incorporation, increasing the number of authorized shares of
common stock of the Company from 25,000,000, $0.01 par value, to 50,000,000
shares, $0.01 par value. Holders of record as of February 12, 1999 of the
Company's common stock and Series A Convertible Preferred Stock were entitled to
notice of, and to vote at, the meeting.
The results of the voting was as follows:
For 13,549,277
==========
Against 275,672
Abstain 31,500
Non-votes 1,213,254
----------
Total counted as Against 1,520,426
==========
Item 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K
None
All other items required in Part II have been filed previously or are not
applicable for the quarter ended March 31, 1999.
12
<PAGE>
Signature
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.
COMPOSITECH LTD.
Dated: May 14, 1999 /s/ Samuel S. Gross
--------------------------------
Executive Vice President and
Treasurer (Principal Accounting
Officer and officer duly authorized
to sign this report on behalf of
the registrant)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-QSB
for the quarter ended March 31, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 520,592
<SECURITIES> 0
<RECEIVABLES> 70,418
<ALLOWANCES> 0
<INVENTORY> 247,630
<CURRENT-ASSETS> 1,090,939
<PP&E> 7,984,777
<DEPRECIATION> 2,412,060
<TOTAL-ASSETS> 12,839,285 <F1>
<CURRENT-LIABILITIES> 4,887,735 <F2>
<BONDS> 0
250,000 <F3>
1,462,983
<COMMON> 156,437
<OTHER-SE> 40,824,987
<TOTAL-LIABILITY-AND-EQUITY> 12,839,285 <F1>
<SALES> 95,980
<TOTAL-REVENUES> 108,570
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,639,807
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 108,424 <F4>
<INCOME-PRETAX> (1,649,873) <F5>
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,649,873) <F5>
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
<FN>
<F1> Includes ($451,462) cumulative foreign currency translation adjustment,
applicable to the net assets of the Canadian joint venture [Tag # 18 & Tag
# 25]
<F2> Current liabilities include current maturities of long-term
debt-stockholders of which $1,495,000 due January 2, 2000, as amended, is
due to officers or directors [Tag # 19]
<F3> Represents balance of 7% Series B Convertible Preferred Stock [Tag # 21]
<F4> Interest expense includes $42,834 of amortization of debt discount and
expenses, a non-cash item [Tag # 32]
<F5> Represents loss available for common stockholders, after deducting $11,851
of Preferred Stock dividends [Tag #33 & Tag #39]
</FN>
</TABLE>
