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 December 31, 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: (201) 767-6040
Check whether the Issuer (1) has 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 Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days:
YES X NO______
State the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date:
47,832,037 shares of Common Stock, $.0005 par value,
as of February 14, 2000
ADM TRONICS UNLIMITED, INC.
INDEX
Part I. Financial Information Page Number
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets - December 31, 1999 and
March 31, 1999 2
Consolidated Statements of Operations - For The Three
Months Ended December 31, 1999 and 1998 3
Consolidated Statements of Operations - For The Nine
Months Ended December 31, 1999 and 1998 3
Consolidated Statement of Changes in Stockholders'
Equity - For The Nine Months Ended December 31, 1999 4
Consolidated Statements of Cash Flows - For The Nine
Months Ended December 31, 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
Item 6. Exhibits and Reports on Form 8-K 9
1
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
1999 1999
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 299,658 $ 496,405
Accounts receivable--trade less
allowance for doubtful accounts of
$52,200 and $20,500, respectively 438,586 353,976
Inventories:
Raw materials and supplies 592,551 392,066
Finished goods 69,292 56,226
Other current assets 24,151 102,600
Total Current Assets 1,424,238 1,401,273
Property and Equipment 163,943 185,916
Equipment in use and under lease
agreements, net of accumulated
depreciation of $244,060 and
$60,164, respectively 659,921 736,566
Equipment held for sale 699,215 736,507
Loan receivable from officers, bearing
interest at 3% per annum 64,491 65,191
Other Assets 239,834 218,088
Total Assets $ 3,251,642 $ 3,343,541
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade $ 287,067 $ 273,483
Accrued expenses and other 32,144 59,385
Notes payable - current 345,403 145,091
Total Current Liabilities 664,614 477,959
Notes payable - non-current 0 0
Stockholders' Equity 2,587,028 2,865,582
Total liabilities and stockholders'
equity $ 3,251,642 $ 3,343,541
See accompanying notes to consolidated financial statements
2
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
1999 1998 1999 1998
Revenues $ 647,480 $ 631,405 $2,018,168 $1,632,508
Costs And Expenses:
Cost of sales 450,212 290,096 1,077,296 787,513
Selling, general and 419,387 450,988 1,270,732 1,214,133
administrative
Total costs and expenses 869,599 741,084 2,348,028 2,001,646
Operating income (Loss) ($ 222,119) ($ 109,679) ($ 329,860)($ 369,138)
Other Income:
Interest, net of expense 3,957 8,919 31,306 29,227
and other income
Net Income (loss) ($ 218,162) ($ 100,760) ($ 298,554)($ 339,911)
Net Income (loss) per (0.005) (0.002) (0.006) (0.007)
common share
See accompanying notes to consolidated financial statements.
3
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 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 20,000
Net income (loss)
nine months ended
December 31,1999 (298,554) (298,554)
Balance
December 31,1999 47,382,037 23,691 6,760,718 (4,197,381) 2,587,028
See accompanying notes to consolidated financial statements
4
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended December 31,
1999 1998
Cash Flows From Operating Activities:
Net income(loss) ($ 298,554) ($ 339,911)
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization 182,091 80,067
Loss on disposal of equipment 1,181 0
Stock issued for services 0 98,536
Changes in operating assets and liabilities:
Accounts receivable--trade (84,610) (122,029)
Inventories (193,195) (56,048)
Other current assets 78,449 70,869
Equipment in use or under lease (27,600) 22,070
Equipment held for sale 37,292 77,374
Net change in other assets (15,998) (1,248)
Accounts payable--trade 13,584 (146,323)
Accrued expenses and prepayments
from customers (27,241) 11,945
Net cash flows provided by (used in)
operating activities (334,601) (304,698)
Cash Flows From Investing Activities:
Purchase of property and equipment (14,339) (32,052)
Acquisition of SofPulse business 0 (178,000)
Cash consideration paid for company acquired (48,820) 0
Pepurchase of common stock 0 (40,000)
Loan to officer, net of repayments 700 (7,996)
Net cash flows provided by (used in)
investing activities (62,459) (258,048)
Cash Flows From Financing Activities:
Additional borrowings on demand
line of credit 304,831 2,052
Payment on notes payable (104,518) 0
Net cash flows provided by (used in)
financing activities 200,313 2,052
Net change in cash and cash equivalents (196,747) (560,694)
Cash and cash equivalents
-Beginning of year 496,405 1,127,847
Cash and cash equivalents
-End of period 299,658 567,153
See accompanying notes to consolidated financial statements
5
ADM TRONICS UNLIMITED, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Supplemental disclosure of cash flow activities:
Interest paid 14,315 7,384
Non-cash investing and financing activities:
Fair value of assets acquired relating to
Needleeater assets 68,820 0
Fair value of assets acquired relating to
SofPulse assets 0 1,605,135
Common stock options issued in connection
with acquisition of Needleeater assets 20,000 0
Common stock issued in connection with
acquisition of SofPulse assets 0 1,427,135
Common stock issued in connection with
consulting agreements 0 169,365
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 December 31, 1999 the Company had cash and equivalents of $299,658
as compared to $496,405 at March 31, 1999. This decrease was the result
of cash flows used in operating and investing activities offset by
cash provided by financing activities.
Operating Activities
Net cash flows used increased $29,903 to ($334,601) for the nine months ended
December 31, 1999 as compared to ($304,698) for the nine months ended
December 31, 1998. This increase was primarily due to a net decrease in
operating assets and liabilities offset by higher depreciation.
Investing Activities
Investing activities consisted of cash used for the Needleeater acquisition of
$48,820, purchases of property and equipment of $14,339 and additional net
net borrowings by an officer of the Company of $700.
Financing Activities
The Company borrowed $304,831 of which $300,000 represents a new line of credit
with the Company's primary bank. The Company repaid $104,518 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 December 31, 1999
Revenues
Revenues were $647,480 in 1999 as compared to $631,405 in 1998 representing
an increase of $16,075 or 2.5%. Revenues from the Company's medical elec-
tronics activities increased $1,570 and chemical revenues increased $14,505
over revenues for 1998.
Gross Profit
Gross profit of $197,268 in 1999 was $144,041, or 42% below the gross
profit of $341,309 in 1998. Gross profit was 30.5% of revenues in 1999 as
compared with 54% of revenues in 1998. The reduction in gross profit margin
was due primarily to the product mix of sales with increased ssales of
products with a lower gross profit margin.
Operating Income (Loss)
Operating loss of $222,119 in 1999 was $112,440 above the operating loss of
$109,679 in 1998. Selling general and administrative expenses decreased by
$31,601.
Other Income
Other income of $3,957 in 1999 decreased by $4,962, or 55.6%, from $8,919 in
1998, principally due to a decrease in interest income from reduced amounts
invested.
Results of Operations
Nine Months Ended December 31, 1999
Revenues
Revenues were $2,018,168 in 1999 as compared to $1,632,508 in 1998 representing
an increase of $385,660 or 19.1%. Revenues from the Company's medical elec-
tronics activities increased $303,493 and chemical revenues increased $82,167.
Gross Profit
Gross profit of $940,872 in 1999 was $95,877 or 10.2% higher than the gross
profit of $844,995 in 1998. Gross profit was 47% of revenues in 1999 as
compared with 52% of revenues in 1998. The lower gross profit percentage was
due to the product mix of sales with higher sales volume of products with a
lower gross profit margin.
Operating Income (Loss)
Operating loss of $329,860 in 1999 was $39,278 lower than the operating loss
of $369,138 in 1998. Selling, general and administrative expenses increased
by $56,599, primarily due to an increase in payroll for sales personnel.
Other Income
Other income of $31,306 in 1999 increased $2,079 from $29,227 in 1998,
primarily due to the collection of rent from a sub-tenant offset by a
decrease in interest income from reduced amounts invested.
8
Item 6 Exhibits and reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Not applicable
9
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ADM Tronics Unlimited, Inc.
By:/s/ Dr. Alfonso DiMino
Dr. Alfonso DiMino
President
And By:/s/ Andre' DiMino
Andre' DiMino
Principal Financial Officer
Dated: Northvale, New Jersey
February 14, 2000
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