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, 2000 Commission File Number 0-19047
INCORPORATED IN FLORIDA IRS IDENTIFICATION NO. 59-2618503
FOOD TECHNOLOGY SERVICE, INC.
502 Prairie Mine Road, Mulberry, FL 33860
(863) 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 1999 2000
----- ------ ------
Common Stock, $.01 Par Value 10,271,601 Shares 10,333,201 Shares
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
(Formerly Vindicator, Inc.
(A Development Stage Company)
PART I
FINANCIAL INFORMATION
BALANCE SHEET
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------ -----------
(unaudited) *
ASSETS
------
Current Assets:
Cash $ 74,424 $ 20,937
Accounts Receivable 106,811 51,125
Due from Employees 23,375 66,175
Inventory 0 3,886
---------- ----------
Total Current Assets 204,610 142,123
Property and Equipment:
Cobalt 1,310,272 1,310,272
Furniture and Equipment 1,686,631 1,659,854
Building 2,883,675 2,883,675
Less Accumulated Depreciation (2,678,883) (2,482,167)
---------- ----------
Total Property and Equipment 3,201,695 3,371,634
Land 171,654 171,654
Other Assets:
Deposits 5,000 5,000
---------- ----------
TOTAL ASSETS $3,582,959 $ 3,690,411
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts Payable $ 84,121 $ 48,513
Revolving Credit Line 200,000 250,000
---------- ----------
Total Current Liabilities 284,121 298,513
Financing Agreement and Debenture Payable 1,027,958 954,476
Stockholders' Equity:
Common Stock $.01 par value,
200,000,000 shares authorized
10,333,201 shares 2000 103,332
10,316,201 shares 1999 103,162
Paid in Capital 11,469,671 11,438,631
Deficit Accumulated During Development (9,302,123) (9,104,371)
---------- ----------
Total Equity: 2,270,880 2,437,422
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,582,959 $ 3,690,411
========== ===========
* 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, 2000 2000 1999
(unaudited) (unaudited) (unaudited)
---------------- ---------- ---------
Net Sales $ 3,344,899 $ 379,854 $ 113,899
Processing Costs: 2,762,925 112,954 100,474
----------- --------- ---------
Profit (Loss) from Operations 581,974 266,900 13,425
General Administrative and Development 5,870,311 250,948 123,126
Depreciation 2,750,188 65,373 66,091
Interest Expense 1,858,745 33,360 25,474
----------- --------- ---------
Profit (Loss) (9,897,270) (82,781) (201,266)
Other Income (Expense):
Foreign Exchange Gain 434,719 0 0
Interest Income 188,897 0 0
Other (90,089) 0 0
----------- --------- ---------
Loss Before Income Taxes ($9,363,743) ($82,781) (201,266)
Income Taxes 0 0 0
---------- --------- ---------
Net Loss ($9,363,743) ($82,781) ($201,266)
=========== ========= =========
Net Loss per Common Share ($0.91) ($0.008) ($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 September 30, 2000
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, 2000 2000 1999
(unaudited) (unaudited) (unaudited)
------------------ --------- ---------
<S> <C> <C> <C>
Net Sales $3,344,899 $ 948,156 $ 129,761
Processing Costs: 2,792,925 306,205 125,223
--------- -------- --------
Income (Loss) from Operations 581,974 641,951 4,538
General Administrative and Development 5,870,311 546,737 277,540
Depreciation 2,750,188 196,717 133,801
Interest Expense 1,858,745 96,658 44,021
--------- -------- --------
Profit (Loss) (9,897,270) (198,161) (450,824)
Other Income (Expense):
Foreign Exchange Gain 434,719 0 0
Interest Income 188,897 0 0
Other (90,089) 0 0
---------- -------- --------
Loss Before Income Taxes (9,363,743) (198,161) (450,824)
Income Taxes 0 0 0
Net Loss ($9,363,743) ($198,161) ($450,824)
========== ========= ========
Net Loss per Common Share ($0.91) ($0.019) ($.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, 2000
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 Nine Months
(Inception) Through Ended Ended
September 30, September 30 September 30
(unaudited) (unaudited) (unaudited)
------------------ ------------ ------------
Cash Flows from Operations:
Sales Income Received $ 2,996,045 $ 892,784 $ 226,355
Interest Received 188,897 0 0
Interest Paid (54,095) (23,176) (9,748)
Cash Paid for Operating Expenses (7,945,625) (770,554) (636,450)
----------- --------- ---------
(4,814,778) 99,054 (419,843)
Cash Flows from Investing:
Property & Equipment Purchase (6,071,184) (26,777) (705)
Deposits (5,000) 0 0
Collection of Notes Receivable 489,300 0 0
Sale of Equipment 10,500 0 0
---------- -------- --------
(5,576,384) (26,777) (705)
Cash Flows from Financing Activities:
Proceeds from Sale of Common Stock 6,387,345 31,210 338,025
Offering Cost (483,959) 0 0
Short Term Loan 147,550 (50,000) 100,000
Proceeds from Borrowing 4,434,650 0 0
Purchase of Common Stock (20,000) 0 0
---------- -------- --------
10,465,586 (18,790) 438,025
Net Increase (Decrease) in Cash 74,424 53,487 17,477
Cash at Beginning of Period 0 20,937 6,045
---------- -------- --------
Cash at End of Period $ 74,424 $ 74,424 $ 23,522
========== ========= =========
___________________________________________________
Reconciliation of Net Loss to Net Cash
Net (Loss) Gain ($9,302,532) ($198,161) ($652,061)
Adjustments to Reconcile Net Loss to Cash Used:
Imputed Interest on Finance Agreement 432,199 0 0
Depreciation 2,684,458 196,717 199,891
Foreign Exchange (Gain) Loss (434,719) 0 0
(Increase) Decrease in Receivables (197,474) (12,572) (17,335)
Increase (Decrease) in Payables 235,360 35,702 (13,220)
Equity in Net (Gain) Loss of Affiliate 104,489 0 0
Value of Stock Issued for Services & Int. 1,556,659 73,482 59,748
(Gain) Loss on Sale of Equipment 2,877 0 0
(Increase) Decrease in Inventory (3,794) 3,886 3,134
---------- ------- --------
Net Cash (Used) Provided by
Operating Activities ($4,922,477) $99,054 ($419,843)
=========== ======= ========
<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>
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 0
Offering Cost to Sell Stock 0 0 0
Net Loss for Period 0 0 (652,060)
---------- ----------- ----------
Balance, September 30, 1999 $ 102,716 $11,319,172 $8,868,402)
========= =========== ==========
_______________________________________________
2000 (unaudited)
Balance, January 1, 2000 $ 103,162 $11,438,631 ($9,104,371)
Sale of 17,000 Shares of Stock
for $31,210 170 31,040 0
Net Lose for Period 0 0 (198,161)
--------- ----------- -----------
Balance, September 30, 2000 $ 103,332 $11,469,671 ($9,302,532)
========= =========== ===========
<FN>
(a) Earnings per common share, assuming no dilution, are based on the number
of shares outstanding on September 30 of each year: 10,271,601 (1999) and
10,333,201 (2000).
(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
Revenues for the third quarter are up over the same period last year, $379,854
vs. $113,899, as increase of $265,955. Total revenues for the nine months are
$948,156 vs. $129,761, an increase of $818,395. This is a record for the
Company for both time periods.
As the Company moves forward the rest of this fiscal year, the Company will
continue to profit from consumer acceptance and understanding of the benefits
that irradiation offers food products.
The latest information from our government, August 2000, a report from the
General Accounting Office title "Available Research Indicates that Benefits
Outweigh Risks" supports the Company's belief that a campaign to educate
consumers, supported by Public Health Officials, will result in broader
acceptance of irradiated products.
Liquidity and Capital Resources
The Company currently has negative working capital of $79,511. The special
alliance with MDS Nordion and the associated revolving credit line of $500,000
of which $200,000 has been used, should provide sufficient capital resources
for the Company to remain a going concern. 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 18, 1999 FOOD TECHNOLOGY SERVICE, INC.
E. W. (Pete) Ellis
------------------------------------
President and Chief Executive Officer
Dana S. Carpenter
-------------------------------------
Asst. Corporate Secretary
