SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-QSB/A
AMENDMENT NO. 2 TO FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
---------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ______________
Commission file number 0-20496
RT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 65-0309477
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1875 E. Lake Mary Boulevard, Sanford, Florida 32773
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (407) 322-8000
----------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: As of January 30, 1997,
there were 8,322,782 shares outstanding of the Registrant's common stock, $.001
par value per share.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying financial statements and information are submitted as
required by Form 10-QSB. The financial information does not include
all disclosures that are required by generally accepted accounting
principles.
In the opinion of management, all adjustments that are necessary to
present fairly, the financial position of RT Industries, Inc.
(the "Company") for the periods included, have been made.
It is suggested that these Consolidated Financial Statements be read
in conjunction with the Consolidated Financial Statements and notes
thereto included in the Registrant's Annual Report on Form 10-KSB for
the year ended December 31, 1995.
2
<PAGE>
RT INDUSTRIES, INC.
Consolidated Balance Sheet
September 30, 1996
(Unaudited)
ASSETS
Current Assets
Cash $ 21,741
Accounts Receivable (net of allowance for doubtful $ 855,454
accounts of $823,058)
Inventory - Note 2 $3,599,313
Prepaid expense, principally income taxes $ 244,787
----------
$4,721,295
Total Current Assets
Fixed Assets (net of accumulated $3,403,683
depreciation of $3,041,409)
Other Assets $ 505
----------
TOTAL ASSETS $8,125,483
==========
The accompanying notes are an integral part of
these consolidated financial statements.
3
<PAGE>
RT INDUSTRIES, INC.
Consolidated Balance Sheet
September 30, 1996
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 1,556,105
Accounts payable & accrued expenses $ 833,060
Related party payable $ 45,000
------------
Total Current Liabilities $ 2,434,165
Long-Term Liabilities:
Notes payable $ 264,364
Related party payables $ 163,000
------------
Total Liabilities $ 2,861,529
Stockholder's Equity:
Common stock, $.001 Par Value $ 7,045
Additional paid-in capital $ 12,577,195
Retained earnings ($ 7,320,286)
------------
Total stockholders' equity $ 5,263,954
------------
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY $ 8,125,483
============
The accompanying notes are an integral part of
these consolidated financial statements
4
<PAGE>
RT INDUSTRIES, INC.
Consolidated Statement of Operations
For the Nine Months Ended September 30, 1996
(unaudited)
Nine Months Ended September 30,
1996 1995
---- ----
Net Sales $ 3,194,619 $ 7,253,234
Cost of Goods Sold $ 3,590,617 $ 6,445,521
----------- -----------
Gross Profit ($ 395,998) $ 807,713
----------- -----------
Operating Expenses:
Selling and delivery $ 463,920 $ 683,405
General and administrative $ 1,212,050 $ 2,101,132
Interest $ 210,251 $ 364,531
Provision for doubtful accounts $ 1,720 $ 214,110
----------- -----------
Total Operating Expense $ 1,887,941 $ 3,363,178
Loss before Income Tax benefit
and extraordinary item ($ 2,283,939) ($ 2,555,465)
Income Tax benefit $ 0 ($ 540,000)
----------- -----------
Loss before extra ordinary item ($2,283,939) ($2,015,465)
Extraordinary item $ 26,863 $ 1,002,465
----------- -----------
Net (Loss) ($ 2,257,076) ($ 1,013,000)
=========== ===========
Net (Loss) per share of Common Stock before
extraordinary item (0.36) (0.81)
Net Earnings (Loss) per share of common stock (0.36) (0.41)
The accompanying notes are an integral part of
these consolidated financial statements
5
<PAGE>
RT INDUSTRIES, INC.
Consolidated Statements of Operations
For the Three Months Ended September 30, 1996
(Unaudited)
Three Months Ended September 30,
1996 1995
---- ----
Net Sales $ 821,786 $ 2,072,652
Cost of Goods Sold $ 789,580 $ 2,133,114
----------- -----------
Gross Profit (Loss) $ 32,206 ($ 60,462)
----------- -----------
Operating Expenses:
Selling and delivery $ 150,356 $ 249,111
General and administrative $ 449,551 $ 1,088,268
Interest $ 60,833 $ 114,748
Provision for doubtful accounts $ 0 $ 78,781
----------- -----------
Total Operating Expense $ 660,740 $ 1,530,908
Loss before Income Tax benefit
and extraordinary item ($ 628,534) ($ 1,591,370)
Income Tax benefit $ 0 ($ 184,000)
----------- -----------
Loss before extra ordinary item ($ 628,534) ($ 1,407,370)
Extraordinary item $ 0 $ 192,198
----------- -----------
Net (Loss) ($ 628,534) ($ 1,215,172)
=========== ===========
Net (Loss) per share of Common Stock before
extraordinary item (0.09) (0.41)
Net Earnings (Loss) per share of common stock (0.09) (0.35)
The accompanying notes are an integral part of
these consolidated financial statements
6
<PAGE>
RT INDUSTRIES, INC.
Consolidated Statements of Stockholders' Equity
For the Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
COMMON STOCK
Balance - January 1, 1996 5081
Issuance of 75,000 shares of stock pursuant to a
professional service agreements 75
Issuance of 1,594,000 shares pursuant to a private placement agreement 1594
Issuance of 800,000 shares pursuant to a private placement agreement 800
Issuance of 75,000 shares pursuant to a private placement agreement 75
------------
Balance September 30, 1996 7625
============
ADDITIONAL PAID-IN CAPITAL
Balance-January 1, 1996 $ 8,547,136
Issuance of 75,000 shares of stock pursuant to
professional service agreements $ 133,816
Issuance of 1,594,000 shares of stock pursuant to a
private placement agreement (Net of offering expenses $109,670) $ 1,882,330
Issuance of 800,000 shares of stock pursuant to a
private placement agreement (Net of offering expenses $65,588) $ 934,412
Issuance of 75,000 shares of stock pursuant to a
private placement agreement (Net of offering expenses $20,500) $ 54,500
Private placement of a cumulative convertible debenture (Net of
offering expense $125,000) $ 1,025,000
------------
Balance-September 30, 1996 $ 12,577,194
============
RETAINED EARNINGS (DEFICIT)
Balance-January 1, 1996 ($ 5,063,210)
Common stock, $001 Par Value $7,045
Net Income ($ 2,257,076)
------------
Balance September 30, 1996 ($ 7,313,241)
============
TOTAL STOCKHOLDER'S EQUITY $ 5,263,953
------------
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements
7
<PAGE>
RT INDUSTRIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1996 1995
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income(Loss) ($ 2,257,076) ($ 1,013,000)
Adjustments to reconcile net income (loss)
to net cash provided (used) by operating activities:
Depreciation $ 444,169 $ 441,266
Amortization $ 88,000 $ 257,733
Provision for doubtful accounts $ 1,720 $ 214,110
Write-off of deferred consulting agreement $ 658,473
Issuance of Common Stock as payment for
professional services $ 62,500
Extraordinary item-cancallation of debt ($ 26,863) ($ 1,002,465)
(Increase) Decrease In:
Accounts Receivable $ 22,418 $ 496,726
Inventory $ 222,614 $ 565,194
Prepaid Expenses $ 75,703 $ 113,102
Other Assets $ 78,523 $ 5,367
Increase (Decrease) In:
Accounts Payable and Accrued Liabilities ($ 656,236) ($ 1,375,097)
----------- -----------
Total Adjustments $ 312,548 $ 374,409
Net cash Flows from Operating Activities ($ 1,944,528) ($ 638,591)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property $ 771,962
(Purchase)/Sale of Fixed Assets ($ 167,305) ($ 94,406)
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements
8
<PAGE>
RT INDUSTRIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
- continued -
Nine Months Ended September 30,
1996 1995
---- ----
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds (reduction) from revolving credit
demand note ($ 1,646,970) ($ 818,827)
Net proceeds from issuance of common stock $ 3,967,559 $ 1,680,980
Notes payable-net ($ 1,080,394) ($ 304,723)
----------- -----------
Net Cash Flow from Financing Activities $ 1,240,195 $ 557,430
NET DECREASE IN CASH ($ 99,676) ($ 175,567)
CASH-beginning of year $ 121,417 $ 186,837
----------- -----------
CASH-end of period $ 21,741 $ 11,270
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements
9
<PAGE>
RT INDUSTRIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1996 1995
---- ----
<S> <C> <C>
Cash paid for interest $207,751 $ 364,531
-------- ----------
Non-Cash Investing Activities
Professional services contracts exchanged
for notes payable $ 0 $ 477,158
Professional services contracts exchanged
for common stock $133,891 $ 325,000
Non-Cash Financing Activities
Notes payable-isssued in exchange for professional
services contracts $ 0 $ 477,158
Common stock issued as repayment for notes payable $1,150,000
Notes payable exchanged for common stock $ 0 ($1,150,000)
Common stock issued in exchange for professional
services contracts $133,891 $ 325,000
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements
10
<PAGE>
Notes to Consolidated Financial Statements
SEPTEMBER 30, 1996
(Unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Business Operations and Organization
The Company, which was formed on January 16, 1992 owns and operates the
following companies:
Ultra Brake Corporation
Ultratech of South Florida, Inc.
Roinco Manufacturing, Inc.
RT Friction, Inc.
As part of a general restructuring plan, Ultratech, RT Friction, and Ultra
Brake no longer conduct any business operations. These have been
consolidated and are performed by the Company or are contracted out to the
industry. The Company intends to undertake the necessary steps to dissolve
such subsidiaries under the applicable laws of each such subsidiary's place
of incorporation.
b. Unaudited Interim Statements
The financial statements as of Sept. 30, 1996 for the three month and nine
month periods ended September 30, 1996 and 1995 are unaudited. However, in
the opinion of management, all adjustments (consisting solely of normal
recurring adjustments) necessary to reflect a fair presentation of the
financial statements for these interim periods have been made. The results
for the interim periods ended September 30, 1996 and 1995 are not
necessarily indicative of the results to be obtained for a full fiscal
year.
NOTE 2: INVENTORY
Major inventory components as of September 30, 1996 were as follows:
Raw Materials $ 728,048
Work in Process $ 544,368
Finished Goods $ 2,470,455
Reserve ($ 143,558)
-----------
Total $ 3,599,313
===========
11
<PAGE>
RT INDUSTRIES, INC.
Notes to Consolidated Financial Statements
September 30, 1996
(Unaudited)
- continued -
NOTE 3: GENERAL AND ADMINISTRATIVE EXPENSES
During each of 1995 and 1996, the Company experienced high general and
administration expenses relative to the Company's sales for the comparable
periods as a result of: (i) declining sales caused by the Company's inability,
because of cash restraints, to purchase raw materials to manufacture inventory
and (ii) extraordinary expenses associated with the reorganization and
consolidation of the Company's production facilities in Missouri, New York and
Tennessee.
NOTE 4: LOSS PER SHARE
For the nine months ended Sept. 30, 1996 and Sept. 30, 1995, the number of
shares used in computing the per share earnings were 6,354,877 and
2,484,330, respectively.
On February 16, 1995, the Company effected a one for five reverse stock
split for shareholders of record on January 20, 1995. All references in the
financial statements to average number of shares outstanding and per share
amounts have been restated to reflect the reverse stock split.
NOTE 5: NOTES PAYABLE
The closing of the Company's manufacturing facility in Caruthersville,
Missouri (the "Missouri Plant") during the third quarter of 1994 resulted
in defaults with respect to certain equipment loans. As a result of these
defaults and the acceleration of the loan obligations (but taking into
account the Company's settlement of certain outstanding loans aggregating
$424,000), $258,000 has been classified as a current liability in the
Consolidated Balance Sheet. (See "Management's Discussion and Analysis or
Plan of Operation" in the Company's Form 10-KSB for the year ended 1995).
The Company is currently negotiating with the remaining lenders to settle
their loans on terms satisfactory to all parties.
Among other things, the aforementioned defaults and the composition of the
Trade Debt (see Note 5 to the Consolidated Financial Statements) has caused
the Company to be in default with respect to certain covenants contained in
its loan agreement with Congress Financial Corporation ("Congress").
Although aware of the defaults, Congress continues to fund the credit line.
Congress, however, has not waived the Company's defaults and, as such, can
cease funding the credit line and/or accelerate the loan and demand payment
in full of the outstanding balance. Accordingly, the Congress line of
credit has been classified in the Consolidated Balance Sheet at September
30, 1996 as a current liability.
12
<PAGE>
RT INDUSTRIES, INC.
Notes to Consolidated Financial Statements
September 30, 1996
(Unaudited)
- continued -
NOTE 6: THE COMPOSITION
In connection with the debt restructuring, a committee of the Company's
unsecured trade creditors (the "Trade Creditors") on March 7, 1995 declared
as effective an agreement (the "Composition Agreement") providing for
repayment by the Company of the unsecured trade debt (the "Trade Debt") of
the Company's Trade Creditors electing to participate in the Composition
Agreement, representing approximately $2,732,000 of the $3,032,000 Trade
Debt. (See Exhibit 10.35 previously submitted on Form S-18, as amended,
initially filed with the SEC on April 8, 1992; Note 5 to the Consolidated
Financial Statements in Form 10-QSB for the 1st Quarter, 1996 for a
discussion of the proposals, ratification process and funding of the same).
Trade Creditors, representing approximately $2,500,000 of the Trade Debt,
elected a lump sum payment of $0.35 for every $1.00 of the Trade Debt and
have been paid. Trade Creditors, representing $232,000 of the Trade Debt,
who elected periodic payments have received fifteen percent (15%) of the
periodic payments. The next distribution under the Composition Agreement,
payable in March 1997, is for an aggregrate payment of approximately
$25,000. Subsequent payments become payable in the third quarters of 1997,
as well as the first quarter of each of 1998 and 1999.
The Company has negotiated settlements with respect to the bulk of the
Trade Debt held by the nine percent (9%) of the Trade Creditors not
electing to participate in the Composition Agreement, representing
approximately $300,000 of the Trade Debt, and only $12,900 remains to be
paid to such Trade Debtors.
The Company has negotiated satisfactory settlement arrangements with the
balance of the non-electing Trade Debtors and, as of this date, the company
has satisfied it's obligation to such non-electing Trade Debtors in
accordance with such settlement arrangements.
13
<PAGE>
RT INDUSTRIES, INC.
Notes to Consolidated Financial Statements
September 30, 1996
(Unaudited)
-continued-
NOTE 7: SUBSEQUENT EVENTS
During the nine month period ending September 30, 1996, the Company
consumated two private placements (the "Placement") of its securities in
the form of 1,600,000 units and 800,000 units in order to raise additional
working capital and to pay down debts. Each unit in the Placements
consisted of one share of the Company's common stock and two redeemable
common stock purchase warrants (the "Warrants") at a price of $1.25 each.
The Warrants enable the holders to purchase one share of the Company's
common stock at a price of $4.20, subject to adjustment. The Warrants are
redeemable at the option of the Company at a redemption price of $.005 per
Warrant under certain conditions. None of the common stock offered pursuant
to the Placements is registered under the 1933 Securities Act, as amended
and may not be sold in the United States absent such registration or under
some applicable exemption from registration requirements. As of Sept. 30,
1996, the Company had received proceeds from the placements of
approximately $2,816,743 (net of expenses associated with the offering of
$175,258).
14
<PAGE>
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.
Dated: February 13, 1997
RT INDUSTRIES, INC.
(Registrant)
By: /s/ Alfred H. Paul
----------------------------------
Alfred H. Paul, CFO
and Chief Accounting Officer
-15-
