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, 1999 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 1998 1999
----- ---- ----
Common Stock $.01 Par Value 10,075,549 Shares 10,243,401 Shares
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.)
(A Development Stage Company)
BALANCE SHEET
MARCH 31, DECEMBER 31,
1999 1998
---- ----
(unaudited) *
ASSETS
------
Current Assets:
Cash $ 127,953 $ 6,046
Accounts Receivable 28,473 22,824
Inventory 5,858 8,452
---------- ----------
Total Current Assets 162,284 37,322
Property and Equipment:
Cobalt 1,310,272 1,310,272
Furniture and Equipment 1,659,149 1,659,149
Building 2,883,675 2,883,675
Less Accumulated Depreciation (2,283,913) (2,216,725)
---------- ----------
3,569,183 3,636,371
Land 171,654 171,654
Other Assets:
Deposits 5,000 5,000
---------- ----------
5,000 5,000
Total Assets $ 3,908,121 $ 3,850,347
=========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY
-----------------------------------
Current Liabilities:
Accounts Payable $ 22,970 $ 57,625
Payroll Taxes 3,304 0
Revolving Credit Line 75,000 75,000
---------- ----------
Total Current Liabilities 101,274 132,625
Financing Agreement and Debenture Payable 868,962 850,201
Stockholders' Equity:
Common Stock $.01 par value,
200,000,000 shares authorized
10,243,401 shares 1999 102,434
10,090,001 shares 1998 100,900
Paid in Capital 11,276,904 10,982,963
Deficit Accumulated During Development (8,441,453) (8,216,342)
---------- ----------
2,937,885 2,867,521
Total Liabilities and Stockholders' Equity $ 3,908,121 $ 3,850,347
========== ==========
* 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, 1999 1999 1998
---------------- ---- ----
(unaudited) (unaudited) (unaudited)
Net Sales $ 1,845,259 $ 72,348 $ 60,896
Processing Costs: 2,139,428 58,675 68,867
--------- --------- ---------
Profit (Loss) from Operations (294,169) 13,673 (7,971)
General Administrative and Development 4,757,046 148,941 79,628
Depreciation 2,289,487 67,188 69,480
Interest Expense 1,659,676 22,655 12,012
--------- --------- ---------
Profit (Loss) (9,000,378) (225,111) (169,091)
Other Income (Expense):
Foreign Exchange Gain 460,117 0 0
Interest Income 188,897 0 0
Other (90,089) 0 0
--------- --------- ---------
Loss Before Income Taxes (8,441,453) (225,111) (169,091)
Income Taxes 0 0 0
--------- --------- ---------
Net Loss $ (8,441,453) $ (225,111) $ (169,091)
========= ========= =========
Net Loss per Common Share $ (0.82) $ (0.02) $ (0.02)
========= ========= =========
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, 1999
are not necessarily indicative of the results to be expected for the full
year.
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
December 11, 1985 Three Months Three Months
(Inception) Through Ended Ended
March 31, 1999 March 31, 1999 March 31, 1998
------------------ -------------- --------------
(unaudited) (unaudited) (unaudited)
Cash Flows from Operations:
Sales Income Received $ 1,815,513 $ 70,593 $ 53,002
Interest Received 188,897 0 0
Interest Paid ( 21,287) ( 3,894) 0
Cash Paid for Operating
Expenses (6,543,119) (240,267) (215,024)
========== ========== ==========
(4,559,996) (173,568) (162,022)
Cash Flows from Investing:
Property & Equipment Purchase (6,043,702) 0 0
Deposits (5,000) 0 0
Collection of Notes Receivable 489,300 0 0
Sale of Equipment 10,500 0 0
---------- ---------- ----------
(5,548,902) 0 0
Cash Flows from Financing Activities:
Proceeds from Sale of Common
Stock 6,283,610 295,475 30,000
Offering Cost (483,959) 0 0
Short Term Loan (52,450) 0 0
Financing Agreement 4,509,650 0 125,000
Purchase of Common Stock (20,000) 0 0
---------- ---------- ----------
10,236,851 295,475 155,000
Net Increase (Decrease) in Cash 127,953 121,907 ( 7,022)
Cash at Beginning of Period 0 6,045 12,231
---------- ---------- ----------
Cash at End of Period $ 127,953 $ 127,953 $ 5,209
========== ========== ==========
_______________________________________________________________________________
Reconciliation of Net Loss to Net Cash
Net Loss $(8,441,453) $ (225,111) $ (169,091)
Adjustments to Reconcile Net Loss to
Cash Used:
Imputed Interest on Finance
Agreement 432,199 0 10,430
Depreciation 2,289,487 67,188 69,479
Foreign Exchange (Gain) Loss (460,117) 0 0
(Increase) Decrease in
Receivables (28,473) (5,649) (7,894)
Increase (Decrease) in Payables 147,546 (31,351) (64,946)
Equity in Net (Gain) Loss of
Affiliate 104,489 0 0
Value of Stock Issued for
Services & Int. 1,399,306 18,761 0
(Gain) Loss on Sale of
Equipment 2,877 0 0
(Increase) Decrease in
Inventory (5,858) 2,594 0
---------- ---------- ----------
Net Cash Used by Operating
Activities $(4,559,996) $ (173,568) $ (162,022)
========== ========== ==========
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED MARCH 31,
Common Stock Paid-In Capital Deficit
------------ --------------- -------
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
Offering Cost to Sell Stock 0 0 0
Net Loss for Period 0 0 (169,091)
---------- ----------- -----------
Balance, March 31, 1998 $ 100,755 $10,953,106 $(7,763,977)
========== ========== ==========
___________________________________________________________________
1999(unaudited)
----
Balance, January 1, 1999 $ 100,900 $10,982,963 $(8,216,342)
Sale of 153,400 Shares of Stock
for $295,475 1,534 293,941 0
Net Loss for Period 0 0 (225,111)
---------- ---------- ----------
Balance, March 31, 1999 $ 102,434 $11,276,904 $(8,441,453)
========== ========== ==========
(a) Earnings per common share, assuming no dilution, are based on the
number of shares outstanding on March 31 of each year: 10,075,549 (1998)
and 10,243,401 (1999).
(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 $72,348 vs. $60,896, an increase of $11,452 while losses for the period
were $225,111 compared to $169,091 for the first quarter last year an increase
of $56,020. A large portion of these increased expenses are a result of
marketing efforts related to consumer education in Polk County. Florida
Department of Health in conjunction with Food Technology Service, Inc. ran
consumer ads, radio commercials and billboards to determine the consumer
acceptance of irradiated foods.
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 1999.
During the quarter we signed an agreement with Colorado Boxed Beef Company
located in Auburndale, Florida to sell and market irradiated ground beef as
well poultry products. Our objective in this relationship is to be the first
company in the marketplace with irradiated food products.
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 this
opportunity in the marketplace.
The poultry category continues to show good growth, $5,954 vs. $1,478 a year
ago, due to two "new" distributors selling irradiated poultry.
Liquidity and Capital Resources
As of March 31, 1999, the Company has cash on hand of $127,953 and accounts
receivable of $28,473 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: April 30, 1999 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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 127,953
<SECURITIES> 0
<RECEIVABLES> 28,473
<ALLOWANCES> 0
<INVENTORY> 5,858
<CURRENT-ASSETS> 162,283
<PP&E> 5,853,096
<DEPRECIATION> 2,283,913
<TOTAL-ASSETS> 6,192,034
<CURRENT-LIABILITIES> 101,274
<BONDS> 868,962
0
0
<COMMON> 102,434
<OTHER-SE> 2,937,885
<TOTAL-LIABILITY-AND-EQUITY> 3,908,121
<SALES> 72,348
<TOTAL-REVENUES> 72,348
<CGS> 0
<TOTAL-COSTS> 58,675
<OTHER-EXPENSES> 148,941
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,655
<INCOME-PRETAX> (225,111)
<INCOME-TAX> 0
<INCOME-CONTINUING> (225,111)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (225,111)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
