FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Nine Months Ended September 30, 1997 Commission File Number 0-19047
INCORPORATED IN FLORIDA IRS IDENTIFICATION NO. 59-2618503
FOOD TECHNOLOGY SERVICE, INC.
502 Prairie Mine Road, Mulberry, FL 33860
(941) 425-0039
"Indicate by check mark whether the registrant has filed all annual, quarterly
and other reports required to be filed with the Commission within the past 90
days and in addition has filed the most recent annual report required to be
filed. Yes [X] . No [ ]"
"Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date."
Outstanding as of September 30,
Class 1996 1997
- ----- ------ ------
Common Stock, $.01 Par Value 5,306,194 Shares 6,777,215 Shares
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
BALANCE SHEET
SEPT. 30, DECEMBER 31,
1997 1996
(unaudited) *
------------ -----------
ASSETS
Current Assets:
Cash $ 4,551 $ 26,104
Accounts Receivable 35,726 30,331
Advance Payments 10,000 10,000
--------- ----------
Total Current Assets 50,277 66,435
Property and Equipment:
Cobalt 1,310,272 1,310,272
Furniture and Equipment 1,654,463 1,650,242
Building 2,883,675 2,883,675
Less Accumulated Depreciation (1,872,109) (1,657,420)
----------- ----------
Total Property and Equipment 3,976,301 4,186,769
Land 171,654 171,654
Other Assets:
Investments 44,528 44,528
Deposits 5,000 5,000
---------- ---------
49,528 49,528
TOTAL ASSETS $4,247,760 $ 4,474,386
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 45,195 $ 100,720
Payroll Taxes 5,199 527
---------- ---------
Total Current Liabilities 50,395 101,247
Financing Agreement and Debenture Payable 3,142,229 3,362,229
Stockholders' Equity:
Common Stock $.01 par value,
20,000,000 shares authorized
6,777,215 shares 1997 67,772
5,750,284 shares 1996 57,503
Paid in Capital 8,336,089 7,541,312
Deficit Accumulated During Development (7,348,724) (6,587,905)
----------- -----------
1,055,136 1,010,910
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,247,760 $ 4,474,386
* Condensed from audited financial statements
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30,
December 11, 1985
(Inception) Through
September 30, 1997 1997 1996
(unaudited) (unaudited) (unaudited)
---------------- ---------- ---------
Net Sales $1,158,526 $49,260 $ 46,687
Operating Expenses: 1,677,745 58,541 60,836
--------- -------- --------
Loss from Operations (519,219) ( 9,281) (14,149)
General Administrative and Development 3,913,634 138,760 55,604
Depreciation 1,877,682 70,874 76,843
Interest Expense 1,512,612 77,003 88,595
--------- ------- -------
Net Loss Before Income Taxes (7,823,147) (295,918) (235,190)
Other Income (Expense):
Foreign Exchange Gain 331,087
Interest Income 188,897 1 1
Other (45,562) 0
---------- --------- --------
Loss Before Income Taxes (7,348,725) (295,917) (235,189)
Income Taxes 0 0 0
---------- --------- --------
Net Loss $ (7,348,725) $(295,917) $ (235,189)
Net Loss per Common Share $ (1.08) $ (.04) $ (.04)
NOTE 1: BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normally recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim period.
The results of operations for the three month periods ended September 30, 1997
are not necessarily indicative of the results to be expected for the full year.
<PAGE>
<TABLE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30,
<CAPTION>
December 11, 1985
(Inception) Through
September 30, 1997 1997 1996
(unaudited) (unaudited) (unaudited)
---------------- ---------- ---------
<S> <C> <C> <C>
Net Sales $ 1,158,526 $ 139,458 $ 146,646
Operating Expenses: 1,677,745 162,507 212,202
--------- -------- --------
Loss from Operations (519,219) (23,049) (65,556)
General Administrative and Development 3,913,634 280,821 157,000
Depreciation 1,877,682 214,688 235,014
Interest Expense 1,512,612 242,264 260,648
--------- ------- -------
Net Loss Before Income Taxes (7,823,147) (760,822) (718,218)
Other Income (Expense):
Foreign Exchange Gain 331,087
Interest Income 188,897 3 4
Other (45,562) (0)
---------- --------- --------
Loss Before Income Taxes (7,348,725) (760,819) (718,213)
Income Taxes 0 0 0
Net Loss $ (7,348,725) $(760,819) $ (718,213)
Net Loss per Common Share $ (1.08) $ (.11) $ (.14)
<FN>
NOTE 1: BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normally recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim period.
The results of operations for the nine month periods ended September 30, 1997
are not necessarily indicative of the results to be expected for the full year.
</TABLE>
<PAGE>
<TABLE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<CAPTION>
December 11, 1985 9 Months 9 Months
(Inception) Through Ended Ended
9/30/97 9/30/97 9/30/96
(unaudited) (unaudited) (unaudited)
---------------- ---------- ---------
<S> <C> <C> <C>
Cash Flows from Operations:
Sales Income Received $1,119,052 $ 134,064 $ 141,644
Interest Received 188,897 3 3
Cash Paid for Operating Expenses (5,186,045) (385,399) (449,217)
----------- --------- ---------
(3,878,096) (251,332) (307,570)
Cash Flows from Investing:
Property & Equipment Purchase (3,628,133) (4,221) 0
Deposits (5,000) 0 0
Collection of Notes Receivable 489,300 0 0
----------- -------- -------
(3,143,833) 0 0
Cash Flows from Financing Activities:
Proceeds from Sale of Common Stock 5,924,354 234,000 331,025
Offering Cost (483,959) 0 0
Short Term Loan (52,450) 0 0
Financing Agreement 1,658,535 0 0
Purchase of Common Stock (20,000) 0 0
---------- -------- -------
7,026,480 234,000 331,025
Net Increase (Decrease) in Cash 4,551 (21,553) 23,455
Cash at Beginning of Period 26,104 8,291
Cash at End of Period $ 4,551 $ 4,551 $ 31,747
--------- --------- ---------
___________________________________________________
Reconciliation of Net Loss to Net Cash
Net Loss $ (7,348,725) $(760,819) $ (718,213)
Adjustments to Reconcile Net Loss to Cash Used:
Imputed Interest on Finance Agreement 432,199 0 0
Depreciation 1,877,682 214,688 235,014
Foreign Exchange Gain (331,087)
(Increase) Decrease in Receivables (45,725) (5,394) (5,002)
Increase (Decrease) in Payables 50,395 (50,853) (73,601)
Equity in Net Loss of Affiliate 59,962
Value of Stock Issued for Services & Int. 1,424,326 351,046 254,232
Loss on Sale of Equipment 2,877 0
----------- --------- ---------
Cash Used by Operating Activities $(3,878,096) $(251,332) $ (307,570)
</TABLE>
<PAGE>
<TABLE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30,
<CAPTION>
Common Stock Paid-In Capital Deficit
------------ --------------- -------
<S> <C> <C> <C>
1996 (unaudited)
Balance, January 1, 1996 $ 43,996 $6,474,289 $(5,517,506)
Sale of 906,571 (1) Shares of Stock
for $725,258 9,066 716,192
Offering Cost to Sell Stock 0
Net Loss for Period (718,213)
Balance, September 30, 1997 $ 53,062 $7,190,481 $(6,235,719)
______________________________________________________________________________
1997 (unaudited)
Balance, January 1, 1997 $ 57,503 $7,541,312 $(6,587,906)
Sale of 1,026,931 (2) Shares of Stock
for $805,046 10,269 794,777
Offering Cost to Sell Stock 0
Net Loss for Period (760,819)
Balance, September 30, 1997 $ 67,772 $8,336,089 $(7,348,725)
<FN>
(1) 274,521 shares issued in exchange for a reduction in debt.
(2) 275,000 shares issued in exchange for a reduction in debt.
(a) Earnings per common share, assuming no dilution, are based on the number
of shares outstanding on September 30 of each year: 5,306,194 (1996) and
6,777,215 (1997).
(b) The foregoing information is unaudited, but, in the opinion of Management,
includes all adjustments, consisting of normal accruals, necessary for a fair
presentation of the results for the period reported.
</TABLE>
<PAGE>
[TEXT]
FOOD TECHNOLOGY SERVICE, INC.
Management's Analysis of Quarterly Income Statements
Operations
The Company's success still depends upon approvals for meat and shellfish and
the approval of the standard polystyrene foam tray for poultry. During the past
quarter there has been considerable publicity surrounding the issue of Food
Safety, and the fight against food-borne illness. Representative Greg Ganske,
(R)Iowa, took up the issue on the floor of the House of Representatives by
introducing legislation to force the FDA to respond to the petition that was
submitted over three years ago. Management will continue to work with
producers, packers in retail and food service arena to permit Americans to
enjoy safe food products, free of pathogens that cause food-borne illness. Once
these clearances are granted, and marketing opportunities are expanded in the
marketplace, we expect to become a fully operational company with new
facilities in other areas of the United States.
Liquidity and Capital Resources
As of September 30, 1997, the Company had cash on hand of $4,551 and accounts
receivable of $45,726. During the third quarter, Nordion converted the accrued
interest in the amount due of $77,003 and $100,000 of long term debt was also
converted to shares of restricted common stock. Also during the third quarter
Nordion purchased for cash additional shares of restricted common stock in the
amount of $100,000 to enable the Company to meet its obligations in a timely
manner. The alliance that the Company has with Nordion should guarantee the
Company's survival as a going entity until government agencies permit the
Company to irradiate meat and shellfish, and approve the standard yellow tray
for poultry so it can be offered in major retail outlets. However, if Nordion,
for any reason, should cease advancing funds to the Company or demand payment
of its accrued interest, the Company would be forced to curtail some or all of
its operations.
OTHER INFORMATION
None applicable to this report and are, therefore, omitted.
SIGNATURES
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 there unto duly authorized.
Date: November 14, 1997 FOOD TECHNOLOGY SERVICE, INC.
E. W. (Pete) Ellis
------------------------------------
President and Chief Executive Officer
Dana S. Carpenter
-------------------------------------
Asst. Corporate Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,551
<SECURITIES> 0
<RECEIVABLES> 45,726
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 50,277
<PP&E> 5,848,410
<DEPRECIATION> 1,872,109
<TOTAL-ASSETS> 4,247,760
<CURRENT-LIABILITIES> 50,395
<BONDS> 3,142,229
0
0
<COMMON> 67,772
<OTHER-SE> 987,364
<TOTAL-LIABILITY-AND-EQUITY> 4,247,760
<SALES> 139,458
<TOTAL-REVENUES> 139,461
<CGS> 0
<TOTAL-COSTS> 443,328
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 242,264
<INCOME-PRETAX> (760,822)
<INCOME-TAX> 0
<INCOME-CONTINUING> (760,822)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (760,822)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
