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 September 30, 1999
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ______
Commission File No. 0-17629
ADM TRONICS UNLIMITED, INC.
(Exact name of small business issuer as specified in its Charter)
Delaware 22-1896032
(State or Other Jurisd- (I.R.S. Employer Identifi-
iction of Incorporation cation Number)
or organization)
224-S Pegasus Avenue, Northvale, New Jersey 07647
(Address of Principal Executive Offices)
Issuer's Telephone Number, including
Area Code: (201) 767-6040
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the Issuer was required to file such
reports), and (2) has been subject to the filing requirements for at
least 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:
47,382,037 shares of Common Stock, $.0005 par value,
as of November 9, 1999
Transitional Small Business disclosure format (check one):
YES _____ NO X
ADM TRONICS UNLIMITED, INC.
INDEX
Part I. Financial Information Page Number
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - September 30, 1999 and
March 31, 1999 2
Consolidated Statements of Operations - For The Three
Months Ended September 30, 1999 and 1999 and For The
Six Months Ended September 30, 1999 and 1998 3
Consolidated Statements of Changes in Stockholders'
Equity - For The Six Months Ended September 30, 1999 4
Consolidated Statements of Cash Flows - For The Six
Months Ended September 30, 1999 and 1998 5-6
Notes To Consolidated Financial Statements 7
Item 2. Management's Discussion And Analysis of Financial
Condition and Results of Operations 7-8
1
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED BALANCE SHEETS
September 30, March 31,
1999 1999
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 391,795 496,405
Accounts receivable--trade less allowance
for doubtful accounts of $52,200 and
$20,500 respectively 543,612 353,976
Inventories:
Raw materials and supplies 687,672 392,066
Finished goods 77,865 56,226
Other current assets 24,086 102,600
Total Current Assets 1,725,030 1,401,273
Property and Equipment 168,571 185,916
Equipment in use and under lease agreements,
net of accumulated depreciation of $209,311
and $60,164, respectively 633,119 736,566
Equipment held for sale 760,531 736,507
Loan receivable from officer, bearing
interest at 3% per annum 64,591 65,191
Other Assets 247,924 218,088
Total Assets $ 3,599,766 $3,343,541
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade 498,423 273,483
Accrued expenses and other 112,235 59,385
Notes payable - current 183,918 145,091
Total Current Liabilities 794,576 477,959
Notes payable - non-current -0- -0-
Stockholders' Equity 2,805,190 2,865,582
Total Liabilities & Stockholders' Equity $3,599,766 $3,343,541
See accompanying notes to consolidated financial statements
2
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
Revenues:
Net sales $ 794,215 $ 445,281 $1,370,688 $1,001,103
Costs And Expenses:
Cost of sales 499,513 221,547 627,084 497,417
Selling, general and 428,662 385,342 851,345 763,145
administrative
Total cost and expenses 928,175 606,889 1,478,429 1,260,562
Operating Income(loss) ($ 133,960) ($ 161,608) ($ 107,741) ($259,459)
Other Income 13,869 9,207 27,349 20,308
Net Income (loss) ($ 120,091) ($ 152,401) ($ 80,392) ($239,151)
Net income (loss) per
common share (0.003) (0.003) (0.002) (0.005)
See accompanying notes to consolidated financial statements.
3
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
(Unaudited)
Common Capital In
Stock Par Excess Of Accumulated
Shares Value Par Value Deficit Total
Balance,
March 31, 1999 47,382,037 23,691 6,740,718 (3,898,827) 2,865,582
Common stock
options issued 20,000
Net income (loss)
Six months ended
September 30, 1999 (80,392) (80,392)
Balance
September 30, 1999 47,382,037 23,691 6,760,718 (3,979,219) 2,805,190
See accompanying notes to consolidated financial statements
4
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended September 30,
1998 1998
Cash Flows From Operating Activities:
Net income(loss) ($ 80,392) ($ 239,151)
Adjustments to reconcile net income(loss)
to net cash flows from operating activities:
Depreciation and amortization 121,393 42,578
Stock issued for services -0- 83,953
Loss on disposal of equipment 1,181 -0-
Changes in operating assets and liabilities:
Accounts receivable--trade (189,636) (7,207)
Inventories (296,889) (2,940)
Other current assets 78,514 41,797
Equipment in use or under lease 33,951 5,015
Equipment held for sale or lease (24,024) (339)
Net change in other assets (9,849) (701)
Accounts payable--trade 224,940 (246,234)
Accrued expenses and prepayments
from customers 52,850 34,335
Net cash flows provided by (used in)
operating activities (87,961) (288,894)
Cash Flows From Investing Activities:
Purchases of property and equipment (7,256) (14,352)
Acquisition of SofPulse assets -0- (178,000)
Cash consideration paid for company acquired (48,820) -0-
Loan to officer net of repayments 600 (7,952)
Net cash flows provided by (used in)
investing activities (55,476) (200,304)
Cash Flows From Financing Activities:
Additional borrowings of notes payable 154,831 -0-
Payment on notes payable (116,004) (27,451)
Net cash flows provided by (used in)
financing activities 38,827 (27,451)
Net change in cash and cash equivalents (104,610) (516,649)
Cash and cash equivalents--
Beginning of period 496,405 1,127,847
Cash and cash equivalents--
End of period 391,795 611,198
See accompanying notes to consolidated financial statements
5
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED SEPTEMBER 30,
1999 1998
Supplemental disclosure of
Cash flow activities:
Interest paid 7,265 4,900
Non-cash investing and financing activities:
Fair value of assets acquired relating to
SofPulse assets 1,605,135
Fair value of assets acquired related to
Needleeater business 68,820
Common stock issued in connection with
acquisition of SofPulse assets 1,427,135
Common stock issued in connection with
consulting agreement 138,115
Common stock options issued in connection
with acquisition of Needleeater business 20,000
See accompanying notes to consolidated financial statements
6
ADM TRONICS UNLIMITED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation:
The consolidated balance sheet at the end of the preceding fiscal year has
been derived from the audited consolidated balance sheet contained in the
Company's annual report on Form 10-KSB for the fiscal year ended March 31,
1999 (the "Form 10-KSB") and is presented for comparative purposes. All
other financial statements are unaudited. In the opinion of management, all
adjustments which include only normal recurring adjustments necessary to
present fairly the financial position, results of operations and changes in
financial positions for all periods presented have been made. The results of
operations for interim periods are not necessarily indicative of the
operating results for the full year.
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 consolidated financial statements should be read
in conjunction with the financial statements and notes thereto included in
the Form 10-KSB.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At September 30, 1999 the Company had cash and equivalents of $391,795
as compared to $496,405 at March 31, 1999. This decrease was the result
of net cash flows used in operating activities and investing activities
offset by net cash flows provided by financing activities.
Operating Activities
Net cash flows used decreased $200,933 to ($87,961) for the six months
ended September 30, 1999 as compared to net cash flows of ($288,894) for six
months ended September 30, 1998. This decrease was primarily the result of
a significant increase in accounts receivable and inventories offset by a
the operating loss and depreciation and increased accounts payable for the
period ended September 30, 1999.
Investing Activities
Capital expenditures consisted of $7,256 for the purchase of equipment and
furniture.
Financing Activities
The Company borrowed $154,831 of which $150,000 a portion of a new line
of credit with the Company's primary bank. The Company repaid $116,004 in
notes payable, primarily paying-off the old line of credit.
The Company does not have any material external sources of liquidity or
unused sources of funds.
7
Results of Operations
Quarter Ended September 30, 1999
Revenues
Revenues were $794,215 in 1999 as compared to $445,281 in 1998 representing an
increase of $348,934 or 78%. Revenues from the Company's medical electronics
activities increased $295,189 and chemical revenues increased $53,745 over
revenues for 1998.
Gross Profit
Gross profit of $294,702 in 1999 as compared to $223,734 in 1998 was
$70,968, or 32%, above the gross profit in 1998. Gross profit was 37% of
revenues in 1999 as compared with 50% of revenues in 1998. The reduction in
gross profit margin was due primarily to the product mix of sales with
increased sales of products with a lower gross margin.
Operating Income(Loss)
Operating loss in 1999 was ($133,960) compared to ($161,608) in 1998. Selling
general and administrative expenses increased by $43,320 primarily due to
an increase in payroll for sales personnel.
Other Income
Other income in 1999 was $13,869 as compared to $9,207. The increase was
primarily due to the collection of rental income from a sub-tenant offset
by a decrease in interest income from reduced amounts invested.
Results of Operations
Six Months Ended September 30, 1999
Revenues
Revenues were $1,370,688 in 1999 as compared to $1,001,103 in 1998 representing
an increase of $369,585 or 37%. Revenues from the Company's medical elec-
tronics activities increased $301,923 and chemical revenues increase $67,662.
Gross Profit
Gross profit of $743,604 in 1999 as compared to $503,686 in 1998 was $239,918,
or 48% above the gross profit in 1998. Gross profit was 54% of revenues in
1999 and 50% 1998. The increase in gross profit is due to the mix in
product sales with higher sales of products with a higher gross margin.
Operating Income(Loss)
Operating loss was ($107,741) in 1999 compared to ($259,459) in 1998. Selling,
general and administrative expenses increased by $88,200 due to an increase
in payroll for sales personnel.
Other Income
Other income of $27,349 in 1999 increased $7,041 from $20,308 in 1998,
primarily due to the collection of rent income from a sub-tenant offset by
a decrease in interest income from reduced amounts invested.
8
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Issuer has duly
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ADM Tronics Unlimited, Inc.
By:\s\Alfonso DiMino
Dr. Alfonso DiMino
President and
Chief Executive Officer
And By:\s\Andre' DiMino
Andre' DiMino
Principal Financial Officer
Dated: Northvale, New Jersey
November 9, 1999
