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, 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 September 30,
Class 1998 1999
- ----- ------ ------
Common Stock, $.01 Par Value 10,075,549 Shares 10,271,601 Shares
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
BALANCE SHEET
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------ -----------
(unaudited) *
ASSETS
------
Current Assets:
Cash $ 23,522 $ 6,046
Accounts Receivable 40,108 22,824
Inventory 5,318 8,452
---------- ----------
Total Current Assets 68,948 37,322
Property and Equipment:
Cobalt 1,310,272 1,310,272
Furniture and Equipment 1,659,856 1,659,149
Building 2,883,675 2,883,675
Less Accumulated Depreciation (2,416,616) (2,216,725)
---------- ----------
Total Property and Equipment 3,437,186 3,636,371
Land 171,654 171,654
Other Assets:
Deposits 5,000 5,000
---------- ----------
TOTAL ASSETS $3,682,788 $ 3,850,347
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts Payable $ 44,339 $ 57,625
Payroll Taxes 65 0
Revolving Credit Line 175,000 75,000
---------- ----------
Total Current Liabilities 219,404 132,625
Financing Agreement and Debenture Payable 909,949 850,201
Stockholders' Equity:
Common Stock $.01 par value,
20,000,000 shares authorized
10,271,601 shares 1999 102,716
10,075,549 shares 1998 100,900
Paid in Capital 11,319,172 10,982,963
Deficit Accumulated During Development (8,868,454) (8,216,342)
---------- ----------
2,553,434 2,867,521
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,682,788 $ 3,850,347
========== ===========
* Condensed from audited financial statements
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
December 11, 1985 For the Quarter
(Inception) Through Ended September 30,
September 30, 1999 1999 1998
(unaudited) (unaudited) (unaudited)
---------------- ---------- ---------
Net Sales $ 2,016,601 $ 113,899 $ 191,753
Operating Expenses: 2,327,658 100,474 101,829
--------- --------- --------
Income (Loss) from Operations (311,057) 13,425 89,924
General Administrative and Development 4,987,564 123,126 138,038
Depreciation 2,422,190 66,091 68,317
Interest Expense 1,706,517 25,474 20,151
--------- ------- -------
Net Loss Before Income Taxes (9,427,328) (201,266) (136,582)
Other Income (Expense):
Foreign Exchange Gain 460,117
Interest Income 188,898
Other (90,089)
---------- --------- --------
Loss Before Income Taxes (8,868,402) (201,266) (136,582)
Income Taxes
---------- --------- --------
Net Loss $(8,868,402) $(201,266) $(136,582)
Net Loss per Common Share $ (.86) $ (.02) $ (.01)
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, 1999
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
<CAPTION>
For the Nine Month
December 11, 1985 Period Ended
(Inception) Through September 30,
September 30, 1999 1999 1998
(unaudited) (unaudited) (unaudited)
---------------- ---------- ---------
<S> <C> <C> <C>
Net Sales $ 2,016,601 $ 243,690 $ 438,637
Operating Expenses: 2,327,658 246,905 228,730
--------- -------- --------
Income (Loss) from Operations (311,057) (3,215) 209,907
General Administrative and Development 4,987,564 379,459 366,777
Depreciation 2,422,190 199,891 206,748
Interest Expense 1,706,517 69,496 50,664
--------- -------- --------
Net Loss Before Income Taxes (9,427,328) (652,061) (414,282)
Other Income (Expense):
Foreign Exchange Gain 460,117
Interest Income 188,898
Other (90,089)
---------- --------- --------
Loss Before Income Taxes (8,868,402) (652,061) (414,282)
Income Taxes
Net Loss $ (8,868,402) $(652,061) $ (414,282)
Net Loss per Common Share $ (.86) $ (.06) $ (.04)
<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, 1999
are not necessarily indicative of the results to be expected for the full year.
</TABLE>
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
December 11, 1985 Nine Months Ended
(Inception) Through September 30,
September 30, 1999 1999 1998
(unaudited) (unaudited) (unaudited)
---------------- ---------- ---------
Cash Flows from Operations:
Sales Income Received $ 1,917,275 $ 226,355 $ 434,471
Interest Received 188,898 1
Interest Paid (27,141) (9,748)
Cash Paid for Operating Expenses (6,939,302) (636,450) (642,183)
----------- --------- ---------
(4,806,270) (419,843) (207,711)
Cash Flows from Investing:
Property & Equipment Purchase (6,044,408) (705) (4,270)
Deposits (5,000)
Collection of Notes Receivable 489,300
Sale of Equipment 10,500
----------- -------- -------
(5,549,607) (705) (4,270)
Cash Flows from Financing Activities:
Proceeds from Sale of Common Stock 6,326,159 338,025 30,000
Offering Cost (483,959)
Short Term Loan (52,450)
Proceeds from Borrowing 4,609,649 100,000 220,732
Purchase of Common Stock (20,000)
---------- -------- -------
10,379,399 438,025 250,732
Net Increase (Decrease) in Cash 23,522 17,477 38,751
Cash at Beginning of Period 6,045 12,231
--------- --------- ---------
Cash at End of Period $ 23,522 $ 23,522 $ 50,982
___________________________________________________
Reconciliation of Net Loss to Net Cash
Net Loss $(8,868,403) $(652,061) $(414,280)
Adjustments to Reconcile Net Loss to Cash Used:
Imputed Interest on Finance Agreement 432,199 48,947
Depreciation 2,422,190 199,891 206,748
Foreign Exchange Gain (460,117)
(Increase) Decrease in Receivables (40,108) (17,335) (4,166)
Increase (Decrease) in Payables 165,627 (13,220) (44,960)
Equity in Net Loss of Affiliate 104,489
Value of Stock Issued for Services & Int. 1,440,293 59,748
(Gain) Loss on Sale of Equipment 2,877
(Increase) Decrease in Inventory (5,317) (3,134)
----------- --------- ---------
Cash Used by Operating Activities $(4,806,270) $ (419,843) $(207,711)
<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>
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
Offering Cost to Sell Stock
Net Loss for Period (414,280)
--------- ---------- ----------
Balance, September 30, 1998 $ 100,755 $10,953,106 $(8,009,166)
_______________________________________________
1999 (unaudited)
Balance, January 1, 1999 $ 100,900 $10,982,963 $(8,216,342)
Sale of 181,600 Shares of Stock
for $338,025 1,816 336,209
Offering Cost to Sell Stock
Net Loss for Period (652,060)
--------- ---------- ----------
Balance, September 30, 1999 $ 102,716 $11,319,172 $(8,868,402)
<FN>
(a) Earnings per common share, assuming no dilution, are based on the number
of shares outstanding on September 30 of each year: 10,075,549 (1998) and
10,271,611 (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.
</TABLE>
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
Management's Analysis of Quarterly Income Statements
Operations
As the Company continues to wait for the USDA to publish their regulations
allowing the Company to begin processing red meats the Company is continuing
to increase its revenues from poultry and non-meat processing. The Company's
revenues in the third quarter were below those in the same quarter of last
year but have increased by almost 100% over the second quarter of this year
and the Company expects the last quarter to continue this increase.
The USDA continues to target the end of 1999 for the published regulation and
the Company has been working to have all packaging and labeling ready when the
regulation is finished.
The Company continues to work with the Florida Department of Health to design
and implement a consumer information program to inform the public about the
health benefits available from irradiated meat and seafood. The Company, with
the help of the Florida Health Department, has been working with the Florida
delegation in Washington to request that the Federal Government participate in
this consumer education program nationwide. The letter to the appropriate
agencies should go out in October of this year. Until the public has been shown
a reason to look for and demand irradiated products the Company anticipates
continued losses.
Revenues for the current nine months were down by $194,947 compared to last
year $438,637 vs. $243,690 due to one time revenues of $275,604 last year, but
were up for the third quarter by $56,487 over the second quarter of this year,
$113,899 vs. $57,412. Losses for the nine months increased by $237,781 over
last year, $652,061 vs. $414,280.
Liquidity and Capital Resources
The Company currently has negative working capital of $150,456. The special
alliance with MDS Nordion and the associated revolving credit line of $500,000
of which $175,000 has been used, should provide sufficient capital resources
for the Company to remain a going concern until government agencies permit the
Company to process the meats and seafood. The Company has developed the
capacity to treat and protect the public from many types of food-borne illness.
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: October 28, 1999 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-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 23,522
<SECURITIES> 0
<RECEIVABLES> 40,108
<ALLOWANCES> 0
<INVENTORY> 5,318
<CURRENT-ASSETS> 68,948
<PP&E> 5,853,802
<DEPRECIATION> 2,416,616
<TOTAL-ASSETS> 3,682,788
<CURRENT-LIABILITIES> 219,404
<BONDS> 909,949
0
0
<COMMON> 102,716
<OTHER-SE> 2,450,718
<TOTAL-LIABILITY-AND-EQUITY> 3,682,788
<SALES> 243,690
<TOTAL-REVENUES> 243,690
<CGS> 0
<TOTAL-COSTS> 246,905
<OTHER-EXPENSES> 379,459
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69,496
<INCOME-PRETAX> (652,061)
<INCOME-TAX> 0
<INCOME-CONTINUING> (652,061)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (652,061)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
