FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Three Months Ended March 31, 1998 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 March 31,
Class 1997 1998
----- ---- ----
Common Stock $.01 Par Value 6,194,709 Shares 10,075,549 Shares
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.)
(A Development Stage Company)
BALANCE SHEET
MARCH 31, DECEMBER 31,
1998 1997
---- ----
(unaudited) *
ASSETS
------
Current Assets:
Cash $ 5,210 $ 12,231
Accounts Receivable 42,039 34,745
Advance Payments 600 0
---------- ----------
Total Current Assets 47,849 46,976
Property and Equipment:
Cobalt 1,310,272 1,310,272
Furniture and Equipment 1,654,880 1,654,880
Building 2,883,675 2,883,675
Less Accumulated Depreciation (2,011,755) (1,942,276)
---------- ----------
3,837,072 3,906,551
Land 171,654 171,654
Other Assets:
Deposits 5,000 5,000
---------- ----------
5,000 5,000
Total Assets $ 4,061,575 $ 4,130,181
=========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY
-----------------------------------
Current Liabilities:
Accounts Payable $ 47,381 $ 115,611
Payroll Taxes 3,285 0
---------- ----------
Total Current Liabilities 50,666 115,611
Financing Agreement and Debenture Payable 721,024 585,595
Stockholders' Equity:
Common Stock $.01 par value,
200,000,000 shares authorized
10,075,549 shares 1998 100,755
10,052,216 shares 1997 100,522
Paid in Capital 10,953,106 10,923,339
Deficit Accumulated During Development (7,763,976) (7,594,886)
---------- ----------
3,289,885 3,428,975
Total Liabilities and Stockholders' Equity $ 4,061,575 $ 4,130,181
========== ==========
* Condensed from audited financial statements
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31,
December 11, 1985
(Inception) Through
March 31, 1998 1998 1997
---------------- ---- ----
(unaudited) (unaudited) (unaudited)
Net Sales $ 1,271,255 $ 60,896 $ 36,742
Processing Costs: 1,845,386 68,867 53,568
--------- --------- ---------
Profit (Loss) from Operations (574,131) ( 7,971) (16,826)
General Administrative and Development 4,128,628 79,628 67,969
Depreciation 2,017,330 69,480 72,711
Interest Expense 1,573,696 12,012 88,259
--------- --------- ---------
Profit (Loss) (8,293,785) (169,091) (245,765)
Other Income (Expense):
Foreign Exchange Gain 431,000 0 0
Interest Income 188,897 0 1
Other (90,089) 0 (30)
--------- --------- ---------
Loss Before Income Taxes (7,763,977) (169,091) (245,794)
Income Taxes 0 0 0
--------- --------- ---------
Net Loss $ (7,763,977) $ (169,091) $ (245,794)
========= ========= =========
Net Loss per Common Share $ (0.77) $ (0.02) $ (0.04)
========= ========= =========
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 March 31, 1998
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 CASH FLOWS
<CAPTION>
December 11, 1985 Three Months Three Months
(Inception) Through Ended Ended
March 31, 1998 March 31, 1998 March 31, 1997
------------------ -------------- --------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Cash Flows from Operations:
Sales Income Received $ 1,231,688 $ 53,002 $ 34,083
Interest Received 188,897 0 1
Interest Paid ( 16,629) 0 0
Cash Paid for Operating
Expenses (5,624,759) (215,024) (116,249)
========== ========== ==========
(4,220,803) (162,022) (82,165)
Cash Flows from Investing:
Property & Equipment Purchase (6,039,433) 0 ( 2,821)
Deposits (5,000) 0 0
Collection of Notes Receivable 489,300 0 0
Sale of Equipment 10,500 0 0
---------- ---------- ----------
(5,544,633) 0 ( 2,821)
Cash Flows from Financing Activities:
Proceeds from Sale of Common
Stock 5,988,135 30,000 73,500
Offering Cost (483,959) 0 0
Short Term Loan (52,450) 0 0
Financing Agreement 4,338,918 125,000 0
Purchase of Common Stock (20,000) 0 0
---------- ---------- ----------
9,770,644 155,000 73,500
Net Increase (Decrease) in Cash 5,209 ( 7,022) (11,486)
Cash at Beginning of Period 0 12,231 26,104
---------- ---------- ----------
Cash at End of Period $ 5,209 $ 5,209 $ 14,618
========== ========== ==========
___________________________________________________________________________________
Reconciliation of Net Loss to Net
Cash
Net Loss $ (7,763,977) $ (169,091) $ (245,794)
Adjustments to Reconcile Net Loss to
Cash Used:
Imputed Interest on Finance
Agreement 442,629 10,430 0
Depreciation 2,017,329 69,479 72,711
Foreign Exchange (Gain) Loss (431,000) 0 0
(Increase) Decrease in
Receivables (42,639) (7,894) (2,659)
Increase (Decrease) in Payables 98,944 (64,946) (68,463)
Equity in Net (Gain) Loss of
Affiliate 104,489 0 0
Value of Stock Issued for
Services & Int. 1,350,545 0 162,040
(Gain) Loss on Sale of
Equipment 2,877 0 0
---------- ---------- ----------
Net Cash Used by Operating
Activities $ (4,220,803) $ (162,022) $ (82,165)
========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED MARCH 31,
<CAPTION>
Common Stock Paid-In Capital Deficit
------------ --------------- -------
<S> <C> <C> <C>
1997 (unaudited)
----
Balance, January 1, 1997 $ 57,503 $ 7,541,312 $(6,587,906)
Sale of 444,425 Shares of Stock
for $355,540 4,444 351,096 0
Offering Cost to Sell Stock 0 0 0
Net Loss for Period 0 0 (245,793)
---------- ----------- -----------
Balance, March 31, 1997 $ 61,947 $ 7,892,408 $(6,833,699)
========== ========== ===========
___________________________________________________________________
1998(unaudited)
----
Balance, January 1, 1998 $ 100,522 $10,923,339 $(7,594,886)
Sale of 23,333 Shares of Stock
for $30,000 233 29,767 0
Net Loss for Period 0 0 (169,091)
---------- ---------- -----------
Balance, March 31, 1998 $ 100,755 $10,953,106 $(7,763,977)
========== =========== ===========
</TABLE>
(a) Earnings per common share, assuming no dilution, are based on the
number of shares outstanding on March 31 of each year: 6,194,709 (1997)
and 10,075,549 (1998).
(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.
<PAGE>
Management's Analysis of Quarterly Income Statements
Operations
- ----------
Results for the first quarter were up over the same period last year; sales
of $60,896 vs. $36,742, an increase of $24,154 while losses for the period
were reduced to $169,091 compared to $245,794 for the first quarter last year.
Management expects this trend line of increased sales to continue the remainder
of fiscal year 1998.
Management believes that while the Company awaits final action by the USDA to
publish regulations for the inspection and operation of an irradiator for the
Red Meat industry, the Food Industry continues to experience safety issues that
can be resolved by wise use of gamma irradiation. Management expects the USDA
to complete these regulations by late 1998.
Once the USDA regulations are published for Red Meat, Management will continue
to work with the Food Industry, Public Health Officials and Government to
educate the consumer about the benefits of irradiated food products. The
Government and the food industry has realized that food safety is an issue that
needs improvement and we fully expect to participate and capitalize on the
opportunity in the market place
Liquidity and Capital Resources
As the March 31, 1998, the Company has cash on hand of $5,210 and accounts
receivable of $42,039. During the first quarter the companies cash requirements
were met by advances from MDS Nordion. The special alliance that the Company
has with Nordion should guarantee the Company's survival as a going entity
until government agencies permit us to irradiate meat, poultry and shellfish.
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 thereunto duly authorized.
Date: May 7, 1998 FOOD TECHNOLOGY SERVICE, INC.
/S/ E. W. (Pete) Ellis
---------------------------------
E.W. (Pete) Ellis, President and
Chief Executive Officer
/S/ Dana S. Carpenter
------------------------------------------
Dana S. Carpenter, Asst. Corporate Secretary
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 5,210
<SECURITIES> 0
<RECEIVABLES> 38,223
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 43,433
<PP&E> 5,848,827
<DEPRECIATION> 2,011,755
<TOTAL-ASSETS> 6,073,330
<CURRENT-LIABILITIES> 50,665
<BONDS> 721,024
0
0
<COMMON> 100,755
<OTHER-SE> 3,189,130
<TOTAL-LIABILITY-AND-EQUITY> 4,061,575
<SALES> 60,896
<TOTAL-REVENUES> 60,896
<CGS> 0
<TOTAL-COSTS> 68,867
<OTHER-EXPENSES> 161,119
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,012
<INCOME-PRETAX> (169,091)
<INCOME-TAX> 0
<INCOME-CONTINUING> (169,091)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (169,091)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
