SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(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, 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 33-26789-NY
EFTEK CORPORATION
(Name of small business issuer in its charter)
Nevada 93-0996501
- -------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
324 New Brooklyn Road
Berlin, New Jersey 08009
- ----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(609)753-4344
- ----------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ----------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) 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 report), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X
Applicable only to corporate issuers:
The number of shares outstanding of each of the issuer's classes of
common stock, as of March 31, 1999 was 11,699,772 shares.
Transitional small business disclosure format (check one):
Yes No X
FORM 10-QSB
EFTEK CORPORATION
INDEX
Page(s)
-------
PART I. Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheet - March 31, 1999
(Unaudited) 3
Consolidated Statements of Operations
(Unaudited) - Three Months Ended March 31, 1999
and 1998 4
Consolidated Statements of Cash Flows
(Unaudited) - Three Months Ended March 31, 1999
and 1998 5
Notes to Consolidated Financial Statements
(Unaudited) 6 - 7
Item 2. Management's Discussion and Analysis 8
PART II. Other Information 9
Signature Page 10
FORM 10-QSB PART I - FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------
EFTEK CORPORATION
CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
(Unaudited)
Assets
------
Current Assets
- --------------
Cash $ 41,433
Receivables 71,647
Prepaid expenses 31,184
---------
Total Current Assets 144,264
-------------------- ---------
Property and Equipment, Net (Note 2) 4,250,744
- --------------------------- ---------
Other Assets
- ------------
Intangible assets, net (Note 2) 209,146
---------
Total Other Assets 209,146
------------------ ---------
Total Assets 4,604,154
------------ =========
Liabilities and Shareholders' Equity
------------------------------------
Current Liabilities
- -------------------
Current portion of long term debt 219,835
Current portion of obligations under
capital leases 177,353
Accounts payable and accrued
liabilities 1,678,676
Income taxes payable 1,650
---------
Total Current Liabilities 2,077,514
-------------------------
Long Term Debt, Less Current Portion 274,958
- ------------------------------------
Obligations Under Capital Leases
(Less Current Portion) 250,566
- --------------------------------- ---------
Total Liabilities 2,603,038
----------------- ---------
Stockholders' Equity
- --------------------
Common stock, $.001 par; authorized
25,000,000 shares; issued and
outstanding 11,699,772 shares 11,700
Additional paid in capital 6,958,008
Deficit (4,968,346)
---------
2,001,362
Common stock held in treasury
(14,434 shares), at cost 246
---------
Total Stockholders' Equity 2,001,116
-------------------------- ---------
Total Liabilities and Stockholders'
Equity $ 4,604,154
----------------------------------- ==========
See accompanying notes to financial statements.
EFTEK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
Three Months Ended
March 31,
1999 1998
---- ----
Revenues (Note 1) $ 342,259 $ 383,003
- -------- ------- -------
Cost and Expenses
- -----------------
Costs of revenues 282,522 286,609
Depreciation and amortization 128,479 128,994
Selling, general and administrative 145,874 391,864
------- -------
Total Costs and Expenses 556,875 807,467
- ------------------------ ------- -------
Loss From Operations (214,616) (424,464)
- -------------------- ------- -------
Other Income (Expenses)
- -----------------------
Miscellaneous income 5,000
Interest expense ( 27,837) ( 15,284)
Miscellaneous expense ( 3,434)
------- --------
Total Other Income (Expenses) ( 31,271) ( 10,284)
----------------------------- ------- -------
Net Loss $(245,887) $(434,748)
- -------- ======= =======
Net Loss Per Common and Common
Equivalent Share $( .02) $( .04)
- ------------------------------ ======= =======
Weighted Average
Common Shares
Outstanding 11,699,772 11,281,980
- ----------------- ========== ==========
See accompanying notes to financial statements.
EFTEK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
------------------------------------------
(Unaudited)
1999 1998
---- ----
Cash Flows From Operating Activities
- ------------------------------------
Net loss for the period $(245,887) $(434,748)
Adjustments to Reconcile Net Loss To
Net Cash Used In Operating Activities
- --------------------------------------
Depreciation and amortization 128,479 128,994
Changes In Operating Assets
and Liabilities
- ---------------------------
(Increase) decrease in receivables 89,956 ( 29,108)
Decrease (increase) in prepaid expenses ( 300) 1,678
Increase in intangible assets ( 2,575) ( 1,314)
Increase in accounts payable and
accrued liabilities 112,105 187,160
Increase in income taxes payable 750 150
------- -------
Net Cash Used In Operating Activities 82,528 (147,188)
- ------------------------------------- ------- -------
Cash Flows Used In Investing Activities
- ---------------------------------------
Purchases of property and equipment ( 43,191)
------- -------
Cash Flows From Financing Activities
- ------------------------------------
Reduction of long term debt ( 41,191) ( 16,704)
Proceeds from issuances of common stock 227,868
------- -------
Net Cash Provided By Financing Activities ( 41,191) 211,164
- ----------------------------------------- ------- -------
Net Increase In Cash 41,337 20,785
- --------------------
Beginning Cash 96 32,002
- -------------- ------- -------
Ending Cash $ 41,433 $ 52,787
- ----------- ======= =======
See accompanying notes to financial statements.
<PAGE>
FORM 10-QSB
EFTEK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
-----------------------
EFTEK Corporation (the Company), incorporated in the state of Nevada,
is engaged in processing mixed cullet (broken glass) into a recycled,
uncontaminated product (GlassFlour) for use in fiberglass manufacturing
industries.
2. Summary of Significant Accounting Policies
------------------------------------------
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the period. Actual results could differ from those
estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
Basis of Presentation
The financial statements for the three months ended March 31, 1999 have
been prepared without audit and, in the opinion of management, reflect
all adjustments necessary (consisting only of normal recurring
adjustments) to present fairly the Company's financial position at
March 31, 1999 and the results of its operations and its cash flows
from the interim and cumulative periods presented. Such financial
statements do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial
statements. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1998.
Operating results for the three months ended March 31, 1999 are not
necessarily indicative of the results for the year ending December 31,
1999.
<PAGE>
FORM 10-QSB
Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided
using the straight line method over the estimated useful lives of the
assets. Expenditures for maintenance and repairs are charged against
income as incurred. When assets are sold or retired, the cost and
accumulated depreciation are removed from the accounts and any gain or
loss is included in income.
Property and equipment consisted of the following at March 31, 1999:
Land $ 338,073
Building 317,081
Building improvements 896,079
Equipment 3,464,415
Furniture and fixtures 22,108
---------
5,037,756
Less accumulated depreciation ( 787,012)
---------
Net property and equipment $ 4,250,744
=========
Intangible Assets
Certain intangible assets have been capitalized and are amortized over
the estimated useful lives of the assets using the straight-line
method. Patent costs are amortized over a period of 17 years.
Organization costs are amortized over a period of 5 years.
Net Loss Per Common and Common Equivalent Share
Net loss per common and common equivalent share is based upon the
weighted average number of common and common equivalent shares (stock
options and warrants) outstanding in each period. The computation of
diluted net loss per common and common equivalent share was
antidilutive in each of the periods presented.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information set forth and discussed below for the three
months ended March 31, 1999 is derived from the Consolidated
Financial Statements included elsewhere herein. The financial
information set forth and discussed below is unaudited but, in
the opinion of management, reflects all adjustments (consisting
of normal recurring accruals) necessary for a fair presentation
of such information. The Company's results of operations for a
particular quarter may not be indicative of results expected
during the other quarters or for the entire year.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS
ENDED MARCH 31, 1998
Revenue for the three months ended March 31, 1999 decreased 11%
to $342,259 as compared to $383,003 in the three month period
ended March 31, 1998. The decrease in revenues is attributable
to the reduction of sales of the Company's wholly owned
subsidiary, CFC, Inc.
Cost of revenues for the three months ended March 31, 1999
decreased 1% to $282,522 as compared to $286,609 in the three
month period ended March 31, 1998. The decrease in cost of
revenues is attributable to the reduction of sales of the
Company's wholly owned subsidiary, CFC, Inc.
Depreciation and amortization costs for the three months ended
March 31, 1999 and March 31, 1998 were relatively unchanged.
Selling, general and administrative costs for the three months
ended March 31, 1999 decreased 63% to $145,874 as compared to
$391,864 in the three month period ended March 31, 1998. The
decrease in selling, general and administrative costs is
attributable primarily to a reduction in maintenance costs and
professional fees.
Other income (expenses) for the three months ended March 31, 1999
was an expense of $31,271 as compared to an expense of $10,284 in
the three month period ended March 31, 1998. The increase in
other income (expenses) is attributable to interest expense of
$27,837.
Net loss for the three months ended March 31, 1999 decreased 43%
to $245,887 as compared to $434,748 in the three month period
ended March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Please see same section in Management Discussion and Analysis in
form 10-K for period ended December 31, 1999 and filed with the
Securities and Exchange Commission on November 16, 1999.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal actions proceeding or litigation
pending or threatened to the knowledge of the Company.
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 and Reports on Forms 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
FORM 10-QSB
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
EFTEK Corporation has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
EFTEK CORPORATION
Dated: November 16, 1999 By:/S/Frank Whitmore
FRANK WHITMORE
President, Chief Executive
Officer, and Chairman of the
Board of Directors
Dated: November 16, 1999 By:/S/Gerard T. Wisla
GERALD T. WISLA
Chief Financial Officer, Secretary,
Treasurer, and Member of the
Board of Directors
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000846476
<NAME> EFTEK Corp.
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1999
<PERIOD-END> Mar-31-1999
<PERIOD-TYPE> 3-MOS
<CASH> 41,433
<SECURITIES> 0
<RECEIVABLES> 71,647
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 144,264
<PP&E> 4,250,744
<DEPRECIATION> 787,012
<TOTAL-ASSETS> 4,604,154
<CURRENT-LIABILITIES> 2,077,514
<BONDS> 0
0
0
<COMMON> 11,700
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,604,154
<SALES> 342,259
<TOTAL-REVENUES> 342,259
<CGS> 282,522
<TOTAL-COSTS> 556,875
<OTHER-EXPENSES> (31,271)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (27,837)
<INCOME-PRETAX> (245,887)
<INCOME-TAX> 0
<INCOME-CONTINUING> (245,887)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (245,887)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
