SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1996
Central Index Key # 856572
Commission File Number: 33-31566
ULTRA SHIELD PRODUCTS INTERNATIONAL, INC.
(formerly Aerial Acquisitions Inc.)
Exact Name of Registrant as Specified in its Charter
Delaware 77-0219055
State or Other Jurisdiction of IRS Employer Iden-
Incorporation or Organization tification Number
10096 Sixth Street, Units M-P
Rancho Cucamonga, California 91730
Address of Principal Executive Offices Zip Code
(909) 466-0081
Registrant's Telephone Number,
Including Area Code
N/A
Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report
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 requirements for the past 90 days.Yes X No
As of September 30, 1996, 10,002,739 shares of Common Stock; 8,138,813 Class A
and 8,138,813 Class B common stock purchase warrants were outstanding, taking
into account the fact that, in May, 1996, the Registrant prevailed on a legal
action that resulted in 511,656 shares of its common stock being required to
be returned to its treasury.
Transitional Small Business Disclosure Format: Yes No X
Item 1. Financial Statements.
See attached.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Since inception in 1989, the Registrant has relied principally on the
proceeds from one public and several private offerings of its securiities to
fund operations. The Registrant has used the proceeds from these offerings
and the limited revenues it has received from sales of the Registrant's
products to fund research and development activities and to cover its
recurring operating deficits. From inception in March, 1989 to September 30,
1996, a total of $8,846,776 (net) has been received from these financing
activities. At September 30, 1996, the Registrant had cash and cash
equivalents totaling $185,631 available to cover recurring operating deficits
and research and development expenses.
The Registrant incurs considerable expense in demonstrating and testing
its products. Government approvals for each of the products and adaptations
thereto must be obtained before its products may be marketed. The Registrant
is also incurring substantial expenses in demonstrating its products to
prospective customers, both civilian and governmental. During 1995, the
Registrant's Board of Directors determined that the results of its marketing
efforts in conjunction with its recently developed blend center warranted
concentrating marketing efforts on the distribution of blend centers with
particular concentration on regional and national restaurant chain
franchisees. As a result, it changed its marketing strategy to one whereby it
is currently attempting to establish relationships with owners of regional and
national restaurant chain franchises, while also pursuing relationships with
other potential high volume consumers in both the civilian and governmental
sectors in an effort to broaden its distribution and gain market acceptance.
A significant number of such relationships have been established to date.
Management believes that this approach will result in substantially higher
revenues from product sales and thereby significantly improve the Registrant's
liquidity.
The Registrant's long term viability is dependent upon improving
liquidity through increased product sales. In the interim, Management
believes that the current cash in its account and cash from ongoing operations
should be adequate to meet its research and development, marketing,
administrative expenses and cash commitments through fiscal 1996 or until the
Registrant reaches consistent profitability from ongoing internal operations
if that is later. The Registrant may continue to offer its securities on a
public or private basis as a means of supplementing it liquidity from ongoing
operations.
Other than continuing development expenses related to new products,
estimated to be 3% of the Registrant's net revenues on an annual basis,
commitments under facilities' leases totaling $202,000 through August, 1999,
the Registrant has no other known commitments for its capital resources as of
September 30, 1996. Management believes that cash available from ongoing
operations and, if necessary, from additional financing, will cover these
commitments.
The Registrant's total assets increased from $262,744 at September 30,
1995 and $243,967 at December 31, 1995 to $1,159,393 at September 30, 1996,
total increases of $896,649 (341.3%) and $915,426 (375.2%), respectively.
These respective increases were due primarily to increased cash from
operations and sales of securities, increased sales related accounts
receivables, and, increases in inventories and equipment.
The Registrant's total liabilities increased from $1,784,685 at September
30, 1995 and $1,340,368 at December 31, 1995 to $2,373,571 at September 30,
1996, total increases of $588,846 (33.0%) and $1,033,163 (77.1%),
respectively. These respective increases were due primarily to increases
notes payable, net decreases in accrued expenses and accounts payable.
The Registrant's accrued expenses decreased from $983,370 at September
30, 1995 and $574,616 at December 31, 1995 to $455,669 at September 30, 1996,
total decreases of $527,701 (53.6%) and $118,947 (20.7%), respectively. These
respective decreases were due primarily to the accrual of certain services in
the amount of $336,000 provided to the Registrant as of September 30, 1995,
which were converted to common stock or common stock subscribed as of December
31, 1995, and, a decrease in the accrual of other operating expenses for the
current period due to the Registrant's ability to use increased cash proceeds
from operations and securities sales to reduce outstanding debt.
The Registrant's notes payable increased from $535,104 at September 30,
1995 and $489,604 at December 31, 1995 to $1,706,718 at September 30, 1996,
total increases of $1,171,614 (218.9%) and $1,217,114 (248.6%), respectively.
These increases were attributable to net amounts of convertible promissory
notes issued versus the conversion of outstanding promissory notes to common
stock or common stock subscribed.
The Registrant's accrued interest increased from $83,786 at September 30,
1995 and $96,553 at December 31, 1995 to $122,066 at September 30, 1996,
increases of $38,280 (45.7%) and $25,513 (26.4%), respectively. These
increases were due to increases in notes payable.
The Registrant's accumulated deficit increased from $6,920,849 at
September 30, 1995 and $7,386,446 at December 31, 1995 to $8,354,196 at
September 30, 1996, (20.7%) and (13.1%), respectively, as a result of
increased net losses from operations. The Registrant's shareholders' common
stock and paid in capital, which was $5,398,908 at September 30, 1995 and
$6,290,045 at December 31, 1995, increased (32.2%) and (13.5%), respectively,
to $7,140,058 at September 30, 1996, principally as a result of equity
offerings and the conversion of convertible promissory notes to equity
securities. The Registrant has improved its cash position through the use of
private placements of its securities.
Since inception, the Registrant has experienced significant losses from
operations in each successive period. For the nine months ended September 30,
1996, as compared to the nine months ended September 30, 1995, net loss from
operations increased $294,384 (38.1%) to $1,067,750 from $773,366; gross sales
of products increased $43,711 (61.8%) to $114,398 from $70,687; cost of
product sales increased $14,026 (27.8%) to $64,515 from $50,489; selling,
general and administrative expenses increased $275,977 (36.4%) to $1,035,053
from $759,076; and, interest expense increased $48,092 (139.4%) to $82,580
from $34,488. The Registrant achieved a gross profit percentage of
approximately 56.0% for the nine month period ended September 30, 1996 as
compared to 71.0% for the nine month period ended September 30, 1995.
Management expects to be able to maintain or improve gross profit margins
into the future. Currently, the Registrant sells most of its products by the
gallon in various sized containers and prices its products based on container
size. The Registrant has experienced no price pressure and structures its
prices to be competitive with other products sold in similar markets.
Since inception, the Registrant has primarily used equity financing
transactions and borrowings convertible to equity securities to improve its
liquidity while operations have been unable, until at least early 1996, to
generate adequate working capital. Net cash used in operating activities was
$1,296,622 for the nine months ended September 30, 1996.
As a result of what Management perceives to be an ever-increasing
societal emphasis on the utilization of environmentally responsible products
in a responsible and efficient manner, Management believes that the
Registrant's products, which are principally aqueous based, non-toxic and
biodegradable, have significant future market potential, especially when
considered in conjunction with the Registrant's blend center method of product
distribution, although the extent of that potential can not be determined at
this time.
During the fiscal year ended December 31, 1995, the Registrant Management
determined it would focus on marketing the Registrant's blend centers to
owners of regional and national restaurant chain franchises, while also
pursuing relationships with other potential high volume consumers in both the
civilian and governmental sectors in an effort to broaden its distribution and
gain market acceptance. As a result of this change in focus, the Registrant
has achieved what Management believes to be a significantly enhanced
opportunity to obtain operations sustaining revenues from product sales alone.
A large portion of the developmental expenses experienced by the
Registrant products has resulted from the development of the Registrant's
blend centers and from testing necessary to acquire product credentials,
which, in some cases, must be performed by independent testing laboratories.
Travel and travel related expenses (such as convention attendance), are also
major expenses in the promotion of the Registrant's products to potential
customers. The largest items of selling, general and administrative expense
are salaries, rent, telephone, legal, consulting, accounting, travel, trade
shows, product samples and related marketing expenses. The Registrant also
incurred, during the periods ending December 31, 1995 and 1994, significant
legal and accounting expenses related to its financing and compliance updating
activities. Management does not expect a significant increase in selling,
general and administrative expense as a percentage of overall revenues as its
sales increase.
The Registrant has not experienced, and does not anticipate, any material
effect on its financial condition or results of operations stemming from
seasonal influences.
With respect to the three months ended September 30, 1996 as compared to
the three months ended September 30, 1995: loss from operations increased
$270,391 (124.3%) to $487,971 from $217,580; gross sales of products increased
$24,906 (122.5%) to $44,238 from $20,332; cost of product sales increased
$14,105 (102.7%) to $27,832 from $13,727; selling, general and administrative
expenses increased $257,119 (122.3%) to $467,274 from $210,155; and, interest
expense increased $24,073 (171.6%) to $38,103 from $14,030.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
During the period covered by this Report, the nine months ended September
30, 1996, the Registrant was involved in the following legal proceedings.
On June 22, 1995, Charles Jamgotchian commenced a legal action against the
Registrant, J.W. Rutherford, George A. Money, Key Kavoussi, Harold P.
Kavoussi, Greater Pacific H.M.O. (an entity with respect to which Harold P.
Kavoussi is affiliated), Innovative Technologies, Inc. and Money Manufacturing
(entities with respect to which Mr. Money is affiliated) and Robert Tierney.
The lawsuit was filed in San Bernardino Superior Court at the Rancho
Cucamonga, California branch. In the amended complaint, Mr. Jamgotchian
alleges that he made a $100,000.00 loan to Ultra Shield Products
International, Inc. a California corporation that is a subsidiary of the
Registrant. He also alleges that he was defrauded in that he did not receive
promised security for the loan consisting of certain securities certificates
or a security interest in certain real property. The complaint further
alleges that Messrs. Tierney and Rutherford breached certain guarantee
agreements. The Registrant has denied that it was a party to the loan
agreement. It has also denied the allegation that the other defendants acted
as its agents and that it has any liability to Mr. Jamgotchian. The
Registrant has filed a cross-complaint against Mr. Jamgotchian and seeks to
cancel certain securities issued in connection with the loan and to have the
transaction declared by the court as not binding upon the Registrant and as a
usurious loan transaction. The Registrant is also seeking to impose liability
against Mr. Jamgotchian for his failure to perform certain duties owing the
Registrant in connection with his agreement to supervise the Registrant's
marketing efforts. The court has issued a temporary protective order against
the Registrant preventing it from selling its assets outside the normal course
of business. The defendants contend that they do not have any liability to
Mr. Jamgotchian and in the case of the Registrant, it contends that its claim
for damages exceeds the claim for damages asserted by Mr. Jamgotchian. The
case is scheduled to commence trial on February 28, 1997.
On November 17, 1994, the Registrant commenced a lawsuit against American
Venture Group, Inc., Charles Mugrdechian, Jr., John K. Freeland, Ararat
International Administrators, Inc. and Consolidated Equity Partners, Inc. in
San Bernardino County Superior Court at the Rancho Cucamonga branch. The
corporate defendants filed a cross-complaint against the Registrant seeking,
among other things, repayment of a $60,000.00 loan on which the Registrant
made payments at a usurious rate of interest. The court issued a judgment in
favor of the Registrant on May 14, 1996 awarding the Registrant $16,500.00
representing the difference between the $60,000.00 loan and treble the
usurious interest payments made by the Registrant. The court also canceled
511,656 shares (and related Class A and B warrants) in connection with the
usurious loan made to the Registrant. The Registrant was also awarded more
than $80,000.00 in costs and attorney's fees. Two of the five defendants
and cross-complainants have filed an appeal of the decision. Management
expects the Court of Appeal to affirm the lower court's rulings in the
Registrant's favor.
On June 22, 1993, the Registrant's majority owned subsidiary, Ultra Shield
(California) and the two principal officers and directors of the Registrant
and Ultra Shield (California) at the time (J.W. Rutherford and George A.
Money), commenced a legal action in San Bernardino County Superior Court at
the Rancho Cucamonga branch against the Registrant's and Ultra Shield
(California's) former director, president and chief executive officer, Robert
Tierney and his wife, Martha Tierney. The complaint seeks money damages and
injunctive relief based on alleged breaches by Mr. Tierney's of his duties of
fiduciary responsibility, confidentiality as well as alleged conversion of
corporate assets and constructive fraud. The parties in this matter are
currently engaged in settlement discussions focusing on the cancellation of a
substantial portion of the Registrant's securities presently held by Mr.
Tierney and his wife.
On June 27, 1991, Starbound Management, Inc. filed a lawsuit in the 20th
Judicial District Chancery Court in the State of Tennessee against the
Registrant's California corporate subsidiary and obtained a default judgment
against it in the amount of $286,895.65. A sister-state judgment was entered
against the California corporate subsidiary in California. The plaintiff
recently attempted to discover the bank records from the Registrant which
filed a motion to quash the subpoena served upon it on the grounds, among
other things, that the court did not have jurisdiction over it because it was
not a party to the Tennessee or sister-state proceedings. The court agreed
and issued an order quashing service of the subpoena and also issued a
protective order against the discovery of the Registrant's bank records.
Management does not believe that the sister-state judgment applies to the
Registrant.
On June 22, 1993, the Registrant's majority owned subsidiary, Ultra
Shield (California) and the two principal officers and directors of the
Registrant and Ultra Shield (California) at the time (J.W. Rutherford and
George A. Money), commenced a legal action in San Bernardino Superior Court,
Rancho Cucamonga Calif branch, against the Registrant's and Ultra Shield
(California's) former director, president and chief executive officer, Robert
Tierney and his wife, Martha Tierney. The complaint seeks money damages and
injunctive relief based on alleged breaches by Mr. Tierney's of his duties of
fiduciary responsibility, confidentiality as well as alleged conversion of
corporate assets and constructive fraud. The parties in this matter are
currently engaged in settlement discussions focusing on the cancellation of a
substantial portion of the Registrant's securities presently held by Mr.
Tierney and his wife.
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.
The Registrant was formed on March 21, 1989, to evaluate, structure and
complete a merger with, or acquisition of, other entities. The Registrant
initially conducted organizational matters followed by the sale of 32,000,000
shares of common stock, to insiders, for a total of $3,200; and, the sale of
37,275,000 Units in a public offering, completed August 6, 1990, which raised
$372,750 in gross proceeds. Each Unit consisted of one share of the
Registrant's no par value common stock, one (1) Class A common stock purchase
warrant and one (1) Class B common stock purchase warrant. Originally, each
A Warrant entitled the holder to purchase, at a price of $.04, one share of
the Registrant's common stock during the two year period commencing February
6, 1990; and, each B Warrant entitled the holder to purchase one share of the
Registrant's common stock, at a price of $.07 per share, during the three year
period commencing February 6, 1990. The Class A and Class B Warrants have
been extended to February 6, 1997 and 1998, respectively; and, due to a one
for one hundred (1:100) reverse split of the Registrant's outstanding
securities effected March 25, 1994, the exercise prices of the Class A and
Class B Warrants have been adjusted to $4.00 and $7.00, respectively. The
Registrant has the right to redeem the A and B Warrants upon 30 days written
notice at a price of $.01 per Warrant.
On August 24, 1990, the Registrant entered into an agreement to acquire
an approximately ninety-five percent (94.9%) ownership interest in Ultra
Shield Products International, Inc., a California corporation, of Rancho
Cucamonga, California ("USPIC"). The acquisition was effected through an
exchange of 132,397,000 (65.2%) of the Registrant's authorized, but unissued,
shares of common stock for 47,453,256 (94.9)% shares of the common stock of
USPIC, which shares were then owned by the individuals serving as the officers
and directors of USPIC at that time. In accordance with the Registrant's
acquisition of USPIC, the Registrant subsequently changed its name to Ultra
Shield Products International, Inc., a Delaware corporation.
Following the exchange of shares described above, it was the Registrant's
intent that it prepare a Form S-4 Registration Statement under the Securities
Act of 1933, as amended, for the purpose of attempting to complete the
Registrant's acquisition of all of the outstanding shares (100%) of USPIC in
exchange for an overall total of approximately 81% percent of the Registant's
equity securities.
On November 4, 1996, the Registrant's independent accountants, Corbin &
Wertz, resigned. The principal accountant's report on the consolidated
financial statements for the past two fiscal years contained a modification as
to the uncertainty of the Registrant's ability to continue as a going concern
and a modification as to various other uncertainties.
Pursuant to action of the Registrant's Board of Directors, the Registrant
is in the process of retaining a new independent accounting firm.
Item 6. Exhibits and Reports on Form 8-K.
None.
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.
Date: December 4, 1996 ULTRA SHIELD PRODUCTS INTERNATIONAL, INC.
(formerly Aerial Acquisitions, Inc.)
By /s/ J.W. Rutherford
J.W. Rutherford, President
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
BALANCE SHEETS
September 30, 1996 December 31, 1995
ASSETS
Current Assets
Cash and cash equivalents $ 185,631 $ 5,785
Accounts receivable 20,440 5,765
Receivable due from officers
and stockholders 75,000 -
Inventories 275,995 193,234
Prepaid expenses and other
current assets 98,460 850
_______________ _______________
Total Current Assets 655,526 205,634
Property and Equipment
Property and equipment, at cost 345,838 206,311
Less accumulated depreciation 192,821 167,978
_______________ _______________
Total Property and Equipment 153,017 38,333
Other Assets
Deposits 850 -
Bonds - U.S. Treasury and Municipal 350,000 -
_______________ _______________
Total Other Assets 350,850 -
_______________ _______________
$ 1,159,393 $ 243,967
_______________ _______________
_______________ _______________
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 82,026 $ 134,961
Notes payable to stockholders 1,706,718 489,604
Note payable - 10,000
Accrued interest 122,066 96,553
Accrued payroll taxes 7,052 34,634
Accrued expenses 455,669 574,616
_______________ _______________
Total Current Liabilities 2,373,531 1,340,368
Stockholders' Deficit
Preferred stock, $.0001 par value,
10,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.0001 par value,
6,000,000 shares authorized,
10,514,395 and 7,628,516 shares
issued and outstanding at
September 30, 1996 and
December 31, 1995, respectively 1,052 764
Common stock subscribed, $.0001
par value, 30,000 and 1,017,447
shares to be issued at
September 30, 1996 and
December 31, 1995, respectively 3 101
Additional paid in capital 7,139,003 6,289,180
Accumulated deficit (8,354,196) (7,386,446)
_______________ _______________
Total Stockholders' deficit (1,214,138) (1,096,401)
_______________ _______________
$ 1,159,393 $ 243,967
_______________ _______________
_______________ _______________
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1996 and 1995
1996 1995
Revenues
Product sales $ 114,398 $ 70,687
_______________ _______________
Costs and expenses
Cost of product sales 64,515 50,489
Selling, general and
administrative (Note 1) 1,035,053 759,076
_______________ _______________
Total costs and expenses 1,099,568 809,565
Other expense
Interest expense 82,580 34,488
_______________ _______________
Net loss $ (1,067,750) $ (773,366)
_______________ _______________
_______________ _______________
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 1996 and 1995
1996 1995
Revenues
Product sales $ 45,238 $ 20,332
_______________ _______________
Costs and expenses
Cost of product sales 27,832 13,727
Selling, general and
administrative (Note 1) 467,274 210,155
_______________ _______________
Total costs and expenses 495,106 223,882
Other expense
Interest expense 38,103 14,030
_______________ _______________
Net loss $ (487,971) $ (217,580)
_______________ _______________
_______________ _______________
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
For the Nine Months Ended September 30, 1996
Common
Common Stock Stock Subscribed
Shares Amount Shares Amount
Balance at
January 1, 1996 7,628,516 $ 764 1,017,447 $ 101
Shares issued or
subscribed for cash 185,500 18 30,500 3
Shares issued for payment
on notes payable 1,416,889 142 - -
Shares issued for common
stock subscribed 1,075,697 107 (1,075,697) (107)
Shares issued or subscribed
in lieu of interest 77,393 8 2,750 -
Shares subscribed for
payment on notes payable - - 55,000 6
Shares issued or subscribed
for services 30,400 3 - -
Shares issued for debt
relief 100,000 10
Net loss - - - -
_________ _________ _________ _________
Balance at
September 30, 1996 10,514,395 $ 1,052 30,000 $ 3
__________ _________ _________ _________
__________ _________ _________ _________
Total
Paid - in Accumulated Stockholders'
Capital (Deficit) (Deficit)
Balance at
January 1, 1996 $ 6,189,180 $ (7,286,446) $ (1,096,401)
Shares issued or subscribed
for cash 88,879 88,900
Shares issued for payment
on notes payable 717,339 717,481
Shares issued for common
stock subscribed -
Shares issued or subscribed
in lieu of interest 40,924 40,932
Shares subscribed for payment
on notes payable 27,494 27,500
Shares issued or subscribed
for services 25,197 25,200
Shares issued for debt relief 49,990 50,000
Net loss - (1,067,750) (1,067,750)
_____________ _____________ _____________
Balance at
September 30, 1996 $ 7,139,003 $ (8,354,196) $ (1,214,138)
_____________ _____________ _____________
_____________ _____________ _____________
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
STATEMENT OF CASH FLOW
For the Nine Months Ended September 30, 1996
Cash flow from operating activities:
Net loss $ (1,067,750)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 24,843
Consulting expense recorded upon issuance or
subscription of common stock 25,200
Interest expense accrued for issuance or
subscription of common stock 40,932
Change in operating assets and liabilities
Accounts receivable (14,675)
Inventories (82,761)
Prepaid expenses and other assets (98,460)
Accounts payable (52,935)
Accrued payroll taxes (27,582)
Accrued interest 25,513
Accrued expenses (68,947)
________________
Net cash used in operating activities (1,296,622)
________________
Cash flow from investing activities:
Cash paid for property and equipment additions (139,527)
Increase in notes receivable from officers and
stockholders (75,000)
Increase in U.S. Treasury and Municipal Bonds (350,000)
________________
Net cash provided by (used in) investing activities (564,527)
________________
Cash flow from financing activities:
Proceeds from notes payable to stockholders 1,966,600
Payments on notes payable (14,505)
Proceeds from sale of common stock 88,900
________________
Net cash provided by financing activities 2,040,995
________________
Net (decrease) increase in cash 179,846
Cash beginning of year 5,785
________________
Cash and cash equivalents end of period $ 185,631
________________
________________
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
STATEMENT OF CASH FLOW
For the Nine Months Ended September 30, 1996
Supplemental disclosure of cash flow information:
Interest expense totaling $82,580 recorded during the nine months ended
September 30, 1996 was comprised of cash payments in the amount of
$15,890, which includes $12,620 of cash payments on notes payable, and
interest accrued on notes payable in the amount of $66,690.
There was no cash paid during the nine months ended September 30, 1996
for income taxes.
Supplemental disclosure of noncash financing and investing activities:
The Company repaid $744,981 of notes payable through the issuance or
subscription of 1,471,889 shares of common stock during the nine
months ended September 30, 1996.
The Company repaid $50,000 of other debt through the issuance of 100,000
shares of common stock during the nine months ended September 30, 1996.
ULTRA SHIELD PRODUCT INTERNATIONAL, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1996
Note 1 - Selling, general and administrative expense
For the three months and the nine months ended September 30, 1996, selling,
general and administrative expenses include non-reoccurring expenditures
totaling $100,756 for legal and accounting fees related to SEC filings and
recovery of stock certificates.
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