<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
EXCHANGE ACT
For the transition period from to
Commission file number: 000-28112
MOTORVAC TECHNOLOGIES, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
STATE OF DELAWARE 33-0522018
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1431 S. VILLAGE WAY
SANTA ANA, CALIFORNIA 92705
(Address of Principal Executive Offices)
(714) 558-4822
(Issuer's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Title Date Outstanding
Common Stock, $.01 par value June 30, 1996 4,514,918
Transitional Small Business Disclosure Format (check one);
Yes No /X/
<PAGE> 2
MOTORVAC TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------ ------------------------
June 30 June 30 June 30 June 30
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
NET SALES 1,823,311 1,009,915 3,170,840 2,043,795
COST OF SALES 1,092,121 627,871 1,824,426 1,223,007
---------- ---------- ---------- ----------
GROSS PROFIT 731,190 382,044 1,346,414 820,788
OPERATION EXPENSES
Selling, General and Administrative Expenses 981,993 794,723 1,929,217 1,946,867
Research and Development Expenses 30,704 94,577 44,836 230,946
---------- ---------- ---------- ----------
1,012,697 889,300 1,974,053 2,177,813
---------- ---------- ---------- ----------
LOSS FROM OPERATIONS (281,507) (507,256) (627,639) (1,357,025)
INTEREST EXPENSE-RELATED PARTIES 35,900 128,693 181,765 241,001
---------- ---------- ---------- ----------
LOSS BEFORE PROVISION FOR INCOME TAXES (317,407) (635,949) (809,404) (1,598,026)
PROVISION FOR INCOME TAXES 0 0 0 0
---------- ---------- ---------- ----------
NET LOSS (317,407) (635,949) (809,404) (1,598,026)
========== ========== ========== ==========
SUPPLEMENTAL DATA (NOTE 3)
Historical Loss (317,407) (809,404)
Proforma reduction in interest expense 26,153 132,416
---------- ----------
PRO FORMA NET LOSS (291,254) (676,988)
---------- ----------
PROFORMA NET LOSS PER COMMON SHARE (0.07) (0.18)
========== ==========
PRO FORMA WEIGHTED AVERAGE OUTSTANDING
COMMON AND COMMON EQUIVALENT SHARES 4,137,806 3,743,565
========== ==========
</TABLE>
<PAGE> 3
MOTORVAC TECHNOLOGIES, INC
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30
1995 1996
------------ -------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 5,008 $ 4,140,414
Accounts receivable, net of allowance for doubtful accounts of $186,599
(December 31,1995) and $61,903 (June 30, 1996) 773,329 $ 1,023,706
Inventories, net 1,109,250 1,008,609
Other Current Assets 166,778 124,628
------------ ------------
Total Current Assets 2,054,365 6,297,357
PROPERTY AND EQUIPMENT, net 288,527 266,636
INTANGIBLE ASSETS, (net of accumulated amortization of $152,095
(December 31, 1995) and $334,538 (June 30, 1996) 1,672,348 1,489,904
OTHER ASSETS 25,000 25,000
------------ ------------
$ 4,040,240 $ 8,078,897
============ ============
LIABILITIES AND STOCKHOLDERS (DEFICIENCY) EQUITY
CURRENT LIABILITIES
Accounts payable and other accrued liabilities $ 1,364,490 $ 1,237,062
Accrued interest-related parties 649,901 26,665
Amounts payable to ex-licensor 219,250 199,250
------------ ------------
Total current liabilities 2,233,641 1,462,977
AMOUNTS PAYABLE TO EX-LICENSOR 219,295 125,538
NOTES PAYABLE TO RELATED PARTIES 5,273,872 1,420,000
COMMITMENTS AND OTHER CONTINGENCIES
STOCKHOLDERS' (DEFICIENCY) EQUITY
Cumulative Series A preferred stock ($.01 par); 95,295 shares
authorized and outstanding. (liquidation preference $4,764,750) at 953 0
December 31, 1995, 0 outstanding at June 30, 1996
Cumulative Series B preferred stock ($.01 par); 55,000 shares
authorized 54,300 shares outstanding (liquidation preferance
$2,715,000) at December 31, 1995, 0 outstanding at June 30, 1996 543 0
Common Stock, $.01 par value; 10,000,000 shares authorized;
948,000 shares issued and outstanding at December 31, 1995
4,514,918 shares issued and outstanding at June 30, 1996 9,480 45,149
Additional paid in capital 6,995,448 16,527,629
Accumulated deficit (10,692,992) (11,502,396)
------------ ------------
Total Shareholders' (deficiency) equity (3,686,568) 5,070,382
------------ ------------
$ 4,040,240 $ 8,078,897
============ ============
</TABLE>
<PAGE> 4
MOTORVAC TECHNOLOGIES, INC
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------- ----------------------
JUNE 30 JUNE 30 JUNE 30 JUNE 30
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATION ACTIVITIES:
Net Loss (317,407) (635,949) (809,404) (1,598,026)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 116,523 45,389 231,719 102,664
Loss on disposal of long term assets 0 0 0 0
Net change in operation assets and liabilities:
Accounts receivable 258,249 (56,564) (250,377) 155,721
Inventories 11,201 (83,994) 100,641 (47,901)
Other current assets, intangibles and other assets 293,249 34,367 42,150 (79,315)
Interest payable to related parties (769,139) 128,743 (623,236) 254,514
Accounts payable and other current liabilities (282,997) (4,272) (127,428) (299,265)
---------- ---------- ---------- ----------
net cash used in operating activities (690,321) (572,280) (1,435,935) (1,511,608)
---------- ---------- ---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of equipment (15,074) (35,736) (27,384) (47,171)
CASH FLOW FROM FINANCING ACTIVITIES
Net proceeds from issuance of 1,210,000 common stock 5,156,054 0 5,156,054 0
proceeds from issuance of notes payable to related parties 0 806,199 680,000 1,546,463
(Increase) decrease in receivable from licensor 0 1,215 0 168,547
Payments to ex-licensor (89,701) 0 (113,757) 0
Repayment of notes to related parties (223,572) 0 (123,572) 0
---------- ---------- ---------- ----------
net cash provided by financing activities 4,842,781 807,414 5,598,725 1,715,010
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH 4,137,386 199,398 4,135,406 156,231
CASH, Beginning of period 3,028 17,196 5,008 60,363
---------- ---------- ---------- ----------
CASH, End of period 4,140,414 216,594 4,140,414 216,594
========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Interest paid 836,423 0 836,423 0
========== ========== ========== ==========
Income taxes paid 0 0 0 0
========== ========== ========== ==========
Conversion of Preferred Series A Stock to Common Stock (net) 4,659,499 0 4,659,499 0
========== ========== ========== ==========
Conversion of Preferred Series B Stock to Common Stock (net) 2,170,425 0 2,170,425 0
========== ========== ========== ==========
Conversion of Notes Payable to related parties to Common Stock 4,410,300 0 4,410,300 0
========== ========== ========== ==========
</TABLE>
<PAGE> 5
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Notes to Unaudited Financial Statements:
1. Basis of Presentation
The information set forth in these financial statements as of June 30,
1996 is unaudited and may be subject to normal year-end adjustments. In
the opinion of management, the unaudited financial statements reflect
all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of MotorVac
Technologies, Inc. (the "Company" or "MTI") for the period indicated.
Results of operations for the interim period ended June 30, 1996 are
not necessarily indicative of the results of operations for the full
fiscal year.
Certain amounts in the prior years' Consolidated Financial Statements
have been reclassified to conform to the current fiscal year's
presentation.
Certain information normally included in footnote disclosures to the
financial statements has been condensed or omitted in accordance with
the rules and regulations of the Securities and Exchange Commission.
2. Initial Public Offering
On May 1, 1996, the Company completed an initial public offering of
1,100,000 shares of its common stock at $5.375 per share, netting
proceeds to the Company, after underwriter's discounts and expenses, of
approximately $5,143,875. On June 13, 1996, the Company completed the
sale to the underwriter upon exercise of the underwriter's
overallotment option of an additional 110,000 shares at $5.375 per
share, netting to the Company, after underwriter's discounts and
expenses, an additional amount of approximately $514,388. Proceeds to
the Company were used to repay approximately $836,000 of accrued
interest and approximately $124,000 of offering expense reimbursement
to the Company's major shareholder. The remaining proceeds are
anticipated to be used to expand the Company's advertising and
marketing efforts, acquire related products or product lines, and for
working capital.
3. Pro Forma Data
Pro Forma Net Loss
Pro forma net loss represents the results of operations adjusted to
reflect the impact of the elimination of interest expense related to
the $4,410,300 in debt due Erin Mills International Investment
Corporation ("EMIIC"), a related party, and The WH & NC Eighteen
Corporation ("WH & NC"), an affiliate of EMIIC, which was exchanged for
common stock immediately prior to the consummation of the initial
public offering.
<PAGE> 6
Pro Forma Net Loss Per Share
Historical net income per common share is not presented because it is
not indicative of the ongoing entity. Pro forma net loss per share has
been computed by dividing pro forma net loss by the weighted average
number of shares of common stock outstanding during the period.
4. Inventories
Inventories, which include materials, supplies, labor and manufacturing
overhead, are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1995 June 30, 1996
----------------- -------------
<S> <C> <C>
Materials and supplies 617,741 782,344
Work in process 100,750 100,751
Finished product 390,759 125,514
--------- ---------
1,109,250 1,008,609
========= =========
</TABLE>
5. Restatement of Results
During the 1996 year-end, the Company discovered a cost of sales
adjustment that affected the quarterly results for the quarters ended
March 31, 1996 and June 30, 1996, as previously filed on Form10-QSB.
The results, as previously reported and as restated for the quarter
ended June 30, 1996, and the six months ended June 30, 1996, are as
follows:
<TABLE>
<CAPTION>
3 Months Ended 6/30/96 6 Months Ended 6/30/96
---------------------- ----------------------
As Previously As As Previously As
Statement of Operations Reported Restated Reported Restated
----------------------- ------------- -------- ------------- ---------
<S> <C> <C> <C> <C>
Sales 1,823,311 1,823,311 3,170,840 3,170,840
Cost of sales 1,029,357 1,092,121 1,567,108 1,824,426
Gross profit 793,954 731,190 1,603,732 1,346,414
Loss from operations (218,743) (281,507) (370,321) (627,639)
Net loss (254,643) (317,407) (552,086) (809,404)
Balance Sheet
Inventory 1,265,927 1,008,609
Total current assets 6,554,675 6,297,357
Total assets 8,336,215 8,078,897
Accumulated deficit (11,245,078) (11,502,396)
Total Stockholders'
(Deficiency) Equity 5,327,700 5,070,382
Total Liabilities and
Stockholders' (Deficiency) Equity 8,336,215 8,078,897
</TABLE>
<PAGE> 7
MOTORVAC TECHNOLOGIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
MotorVac Technologies, Inc. (the "Company") designs, develops,
assembles, markets and sells the MotorVac CarbonClean System for the diagnosis,
maintenance and repair of internal combustion engine fuel systems primarily for
the automotive after-market repair and service industry. The Company markets and
sells its fuel system cleaning machines and detergents through various
distribution channels, both in the United States and Canada ("Domestic") under
the trade name MotorVac, and outside the United States and Canada
("International") under the trade name CarbonClean.
The following discussion and analysis addresses the results of the
Company's operations for the six months ended June 30, 1996, and for the three
months ended June 30, 1996, as compared to the Company's results of operations
for the six months ended June 30, 1995, and for the three months ended June 30,
1995. On May 1, 1996, the Company consummated an initial public offering (the
"IPO") of 1,100,000 shares of its common stock, resulting in gross proceeds of
approximately $5,912,500. On June 13, 1996, the Company completed the sale of an
additional 110,000 shares of its Common Stock upon exercise of the underwriter's
overallotment option (the "Overallotment"), resulting in gross proceeds to the
Company of approximately $591,250.
This Quarterly Report on Form 10-QSB contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), and the
Company intends that such forward-looking statements be subject to the safe
harbors created thereby. The Company may experience significant fluctuations in
future operating results due to a number of factors, including, among other
things, the size and timing of customer orders, new or increased competition,
delays in new product enhancements and new product introductions, quality
control difficulties, changes in market demand, market acceptance of new
products, product returns, seasonality in product purchases by distributors and
end users, and pricing trends in the automotive after-market industry in
general, and in the specific markets in which the Company is active. Any of
these factors could cause operating results to vary significantly from prior
periods. Significant variability in orders during any period may have a material
adverse impact on the Company's cash flow or work flow, and any significant
decrease in orders could have a material adverse impact on the Company's results
of operations and financial condition. As a result, the Company believes that
period-to-period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as any indication of future
performance. Fluctuations in the Company's operating results could cause the
price of the Company's Common Stock to fluctuate substantially.
Assumptions relating to the foregoing involve judgments with respect
to, among other things, future economic, competitive and market conditions, all
of which are difficult or impossible to predict accurately, and many of which
are beyond the control of the Company. In addition, the business and operations
of the Company are subject to substantial risks which increase the uncertainty
inherent in the forward-looking statements. In light of the significant
uncertainties inherent in the forward-looking information included herein, the
inclusion of such information should not be regarded as a representation by the
Company or any other person that the objectives or plans of the Company will be
achieved.
<PAGE> 8
RESULTS OF OPERATIONS
Comparison of Three Months Ended June 30, 1996 and 1995
Net Sales. Net sales for the three months ended June 30, 1996 increased
$813,396 (approximately 80.5%) to $1,823,311 from $1,009,915 for the three
months ended June 30, 1995. This sales increase was due to increases in both
Domestic and International sales, with Domestic sales up 92.3% and International
sales up 52.5% over the same period last year. This was due to an increase in
both machine and detergent sales to a major customer in the U.S., and an
increase in machine and detergent sales to a number of customers in
International.
For the three months ended June 30, 1996, Domestic sales were
$1,368,218 and International sales were $455,093. For the three months ended
June 30, 1995, Domestic sales were $711,475, and International sales were
$298,441.
Cost of Sales. Cost of sales for the three months ended June 30, 1996
increased $464,250 (approximately 73.9%) to $1,092,121 from $627,871 for the
three months ended June 30, 1995. The primary reason for this increase was
the net sales increase of approximately 80.5% for the same period.
Gross Profit. Gross profit for the three months ended June 30, 1996
increased by $349,146 (approximately 91.3%) to $731,190 from $382,044 for the
three months ended June 30, 1995. The primary reason for the increase is the
increase in sales, but the Company also experienced a slightly higher margin, as
a percent of sales from 37.8% of sales for the three months ended June 30, 1995,
to 40.1% of sales for the three months ended June 30, 1996. This increase was
primarily due to shift in product mix to detergent (which has a higher gross
margin than machines) as a percent of total sales.
Operating Expenses. Operating expenses increased by $123,397
(approximately 13.9%) from $889,300 for the three months ended June 30, 1995, to
$1,012,697 for the three months ended June 30, 1996. The increase was primarily
attributable to increased legal expense and miscellaneous costs associated with
being a public company.
Loss From Operations. As a result of the above, the loss from
operations for the three months ended June 30, 1996 of $281,507 improved by
$225,749 (approximately 44.5%) from a loss of $507,256 for the three months
ended June 30, 1995.
Interest. Interest (net) expense for the three months ended June 30,
1996 of $35,900 improved by $92,793 (approximately 72.1%) from $128,693 for the
three months ended June 30, 1995. This improvement was a result of the
conversion of $4,410,300 of notes payable to EMIIC which were converted to
Common Stock at the IPO price on April 25, 1996, and interest income the Company
earned on the IPO proceeds.
Net Loss. The net loss for the three months ended June 30, 1996 of
$317,407 improved by $318,542 (approximately 50.1%) from a net loss of $635,949
for the three months ended June 30, 1995.
Comparison of Six Months Ended June 30, 1996 and 1995
Net Sales. Net sales for the six months ended June 30, 1996 increased
$1,127,045 (approximately 55.1%) to $3,170,840 from $2,043,795 for the six
months ended June 30, 1995. This is due to an increase in both machine and
detergent sales.
Domestic sales for the six months ended June 30, 1996 were $1,762,585,
and International sales for the same period were $1,408,255. For the six months
ended June 30, 1995, Domestic sales were $1,070,868, and International sales
were $972,928.
<PAGE> 9
Cost of Sales. Cost of sales for the six months ended June 30, 1996
increased $601,419 (approximately 49.2%) to $1,824,426 from $1,223,007 for the
six months ended June 30, 1995. The primary reason for the increase was the
sales increase of 55.1% for the same period.
Gross Profit. Gross profit for the six months ended June 30, 1996
increased $525,626 (approximately 64.0%) to $1,346,414 from $820,788 for the six
months ended June 30, 1995. The primary reason for this increase was an increase
in sales volume and a shift in sales mix to detergent (which has a higher gross
margin than machines) as a percent of total sales.
Operating Expenses. Operating expenses for the six months ended June
30, 1996 of $1,974,053 decreased by $203,760 (approximately 9.4%) from
$2,177,813 for the six months ended June 30, 1996. This decrease was due mostly
to savings in R & D costs (because of the R & D cycle being mostly completed by
1996), and some savings in other expense groupings.
Loss From Operations. As a result of the above, the loss from
operations for the six months ended June 30, 1996 improved by $729,386
(approximately 53.7%) to a loss of $627,639 from $1,357,025 for the six months
ended June 30, 1995.
Interest. Interest (net) expense for the six months ended June 30, 1996
improved by $59,236 (approximately 24.6%) to $181,765 from $241,001 for the six
months ended June 30, 1995. The primary reason for the improvement was the
conversion of $4,410,300 of EMIIC debt at the time of the IPO, and interest
revenue earned on cash on hand for the six months ended June 30, 1996.
Net Loss. The net loss for the six months ended June 30, 1996 improved
by $788,622 (approximately 49.3%) to $809,404 from a loss of $1,598,026 for the
six months ended June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company had working capital of $4,834,380. At
December 31, 1995, the Company had a working capital deficit of $179,276.
For the Three Months Ended June 30, 1996
Cash at April 1, 1996 was $17,196. Cash used in operating activities
during the three months ended June 30, 1996, which includes current assets and
current liabilities, was $690,321. Cash used in investing activities was
$15,074, which represented the purchase of fixed assets. Cash flow from
financing activities was $4,842,781 representing the net proceeds from the
issuance of 1,210,000 common shares in the IPO and the Overallotment of
$5,156,054, less repayment of notes payable to related parties of $223,572 and
payments to ex-licensor of $89,701. The net increase in cash for the three
months ended June 30, 1996 was $4,137,386, resulting in ending cash of
$4,140,414.
For the Six Months Ended June 30, 1996
Cash at January 1, 1996 was $5,008. Cash used in operating activities
for the six months ended June 30, 1996 was $1,435,935. Cash used in investing
activities was $27,384, which represents the purchase of fixed assets. Cash from
financing activities was $5,598,725 which consisted of $680,000 of proceeds from
the issuance of notes payable to related parties, and $5,156,054 of net proceeds
from the issuance of 1,210,000 of common stock at the IPO price of $5.375, less
commissions, expenses and fees, and repayment of notes payable to related
parties of $123,572 and payments to ex-licensor of $113,757. The net increase in
cash for the six months ended June 30, 1996 was $4,135,406.
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is hereby made to the discussion under the heading "Item 1.
Legal Proceedings" in the Company's Form 10-QSB for the quarter ended March 31,
1996 for information regarding the matter entitled DeCarbon Australia Pty. Ltd.
v. MotorVac Technologies, Inc. (Case No. 764248). The Company is in the process
of vigorously defending the allegations in the complaint, and is currently
reviewing taking actions against DeCarbon, including filing a cross-complaint.
Written discovery in this matter has commenced and is continuing.
Reference is hereby made to the discussion under the heading "Legal
Proceedings" contained on page 38 of the Company's Prospectus dated April 25,
1996 with regard to the action filed by the Company in the United States
District Court of the Northern District of Ohio, Eastern Division, against
Richard R. Green, individually and doing business as P&R Equipment Company,
Gregory M. Phillips, C.S.P. International, Inc. and certain other defendants,
and the counterclaim filed by certain of the defendants in connection with such
proceeding.
ITEM 5. RESTATEMENT OF RESULTS
During the 1996 year-end, the Company discovered a cost of sales
adjustment that affected the quarterly results for the quarters ended March 31,
1996 and June 30, 1996, as previously filed on Form 10-QSB. The results, as
previously reported and as restated for the quarter ended June 30, 1996, and the
six months ended June 30, 1996, are as follows:
<TABLE>
<CAPTION>
3 Months Ended 6/30/96 6 Months Ended 6/30/96
---------------------- ----------------------
As Previously As As Previously As
Statement of Operations Reported Restated Reported Restated
----------------------- ------------- -------- ------------- ---------
<S> <C> <C> <C> <C>
Sales 1,823,311 1,823,311 3,170,840 3,170,840
Cost of sales 1,029,357 1,092,121 1,567,108 1,824,426
Gross profit 793,954 731,190 1,603,732 1,346,414
Loss from operations (218,743) (281,507) (370,321) (627,639)
Net loss (254,643) (317,407) (552,086) (809,404)
Balance Sheet
Inventory 1,265,927 1,008,609
Total current assets 6,554,675 6,297,357
Total assets 8,336,215 8,078,897
Accumulated deficit (11,245,078) (11,502,396)
Total Stockholders'
(Deficiency) Equity 5,327,700 5,070,382
Total Liabilities and
Stockholders' (Deficiency) Equity 8,336,215 8,078,897
</TABLE>
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 3.1 Amended and Restated Certificate of Incorporation (incorporated herein
by reference to Exhibit No. 3.1 to the Registrant's Registration Statement on
Form SB-2 filed with the Securities and Exchange Commission (the "SEC") on
February 29, 1996 (the "Form SB-2").
3.2 Third Amended and Restated Bylaws of Registrant (incorporated by
reference to Exhibit No. 3.2 to the Form SB-2).
3.3 Amendment to the Third Amended and Restated Bylaws of Registrant
(incorporated by reference to Exhibit No. 3.3 to Amendment No. 1 to the Form
SB-2 filed with the SEC on March 29, 1996) (the "Amendment No. 1 to Form SB-2").
4.1 Form of Underwriter's Warrant Agreement by and between the Registrant
and Meridian Capital Group, Inc. (incorporated by reference to Exhibit No. 4.1
to Amendment No. 2 to Form SB-2 filed with the SEC on April 25, 1996) (the
"Amendment No. 2 to Form SB-2").
4.2 Form of certificate evidencing shares of Registrant's common stock
(incorporated by reference to Exhibit No. 4.2 to Amendment No. 1 to Form SB-2).
10.1 Letter Agreement dated April 5, 1996 between the Registrant and Shrader
Packaging Co., Inc. amending the Exclusive Supply Agreement and granting a right
of first refusal to the Registrant (incorporated by reference to Exhibit 10.55
to Amendment No. 2 to Form SB-2).
10.2 Products Distribution Agreement dated May 1, 1996 by and between the
Registrant and Sun Electric De Mexico, S.A. De C.V., covering the territory of
Mexico (incorporated by reference to Exhibit 10.11 to Registrant's Form 10-QSB
for the quarter ended March 31, 1996).
10.3 Products Distribution Agreement dated March 28, 1996, by and between the
Registrant and Cameo (QLD) Pty. Ltd., covering the territory of Australia
(incorporated by reference to the Form 10-QSB for the period ended June 30,
1996, filed August 6, 1996).
11.1 Statement of Calculation of Pro Forma Net Loss Per Share and Net Loss
Per Share.
27.1 Financial Data Schedule in accordance with Article 5 of Regulation
SX.
(b) No reports on Form 8-K were filed during the quarter ended June 30, 1996.
<PAGE> 12
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MOTORVAC TECHNOLOGIES, INC.,
a Delaware corporation
By: s/ Lee W. Melody
--------------------------------------------------------
Lee W. Melody, President
Date: March 14, 1997
By: s/ Allan T. Maguire
--------------------------------------------------------
Allan T. Maguire, Vice President of Finance,
Chief Financial Officer, Treasurer and Secretary
Date: March 17, 1997
<PAGE> 13
MOTORVAC TECHNOLOGIES, INC.
EXHIBIT INDEX
3.1 Amended and Restated Certificate of Incorporation (incorporated
herein by reference to Exhibit No. 3.1 to the Registrant's Registration
Statement on Form SB-2 filed with the Securities and Exchange Commission (the
"SEC") on February 29, 1996 (the "Form SB-2").
3.2 Third Amended and Restated Bylaws of Registrant (incorporated by
reference to Exhibit No. 3.2 to the Form SB-2).
3.3 Amendment to the Third Amended and Restated Bylaws of Registrant
(incorporated by reference to Exhibit No. 3.3 to Amendment No. 1 to the Form
SB-2 filed with the SEC on March 29, 1996) (the "Amendment No. 1 to Form SB-2").
4.1 Form of Underwriter's Warrant Agreement by and between the
Registrant and Meridian Capital Group, Inc. (incorporated by reference to
Exhibit No. 4.1 to Amendment No. 2 to Form SB-2 filed with the SEC on April 25,
1996) (the "Amendment No. 2 to Form SB-2").
4.2 Form of certificate evidencing shares of Registrant's common stock
(incorporated by reference to Exhibit No. 4.2 to Amendment No. 1 to Form SB-2).
10.1 Letter Agreement dated April 5, 1996 between the Registrant and
Shrader Packaging Co., Inc. amending the Exclusive Supply Agreement and granting
a right of first refusal to the Registrant (incorporated by reference to Exhibit
10.55 to Amendment No. 2 to Form SB-2).
10.2 Products Distribution Agreement dated May 1, 1996 by and between
the Registrant and Sun Electric De Mexico, S.A. De C.V., covering the territory
of Mexico (incorporated by reference to Exhibit 10.11 to Registrant's Form
10-QSB for the quarter ended March 31, 1996).
10.3 Products Distribution Agreement dated March 28, 1996, by and
between the Registrant and Cameo (QLD) Pty. Ltd., covering the territory of
Australia (incorporated by reference to the Form 10-QSB for the period ended
June 30, 1996, filed August 6, 1996).
11.1 Statement of Calculation of Pro Forma Net Loss Per Share.
27.1 Financial Data Schedule in accordance with Article 5 of Regulation
SX.
<PAGE> 1
EXHIBIT 11.1
MOTORVAC TECHNOLOGIES,INC.
CALCULATION OF PROFORMA NET LOSS PER SHARE
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1996 JUNE 30, 1996
------------- -------------
<S> <C> <C>
Proforma Net Loss:
Net Loss (317,407) (809,404)
Proforma Reduction of Interest Expense 26,153 132,416
========== ==========
Proforma Net Loss (291,254) (676,988)
========== ==========
Proforma Weighted Average Outstanding Common and
Common Equivalent Shares:
Common Stock Outstanding, December 31, 1995 948,000 948,000
Common stock equivalents:
Conversion of Series A Preferred Stock 966,247 966,247
Conversion of Series B Preferred Stock 570,150 570,150
Common Shares Issued in Initial Public Offering 1,100,000 1,100,000
Weighting of initial public offering stock 809,890 404,945
Conversion of $4,410,300 of Notes Payable to Related party 820,521 820,521
Common stock issued in Overallotment on June 15,1995 110,000 110,000
Weighting of overallotment Stock (15 days) 18,132 9,066
---------- ----------
Common Stock Equivalents before below 4,132,940 3,718,929
Incremental Shares, assuming exercise of options granted
after June 30, 1996 11,624 4,294
Weighting of incremental shares from options (eliminated
if increases loss per share) 0 0
Incremental Shares Related to repayment of Interest 4,866 24,636
---------- ----------
Total Incremental Shares 4,866 24,636
---------- ----------
Proforma Weighted Average Outstanding Common and
Common Equivalent Shares 4,137,806 3,743,565
========== ==========
Proforma Net Loss per Common Share and Common
Share equivalent -0.0704 -0.1808
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF MOTORVAC TECHNOLOGIES, INC. AS OF AND FOR
THE PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,140,414
<SECURITIES> 0
<RECEIVABLES> 1,117,720
<ALLOWANCES> 86,903
<INVENTORY> 1,008,609
<CURRENT-ASSETS> 6,297,357
<PP&E> 502,660
<DEPRECIATION> 236,025
<TOTAL-ASSETS> 8,078,897
<CURRENT-LIABILITIES> 1,462,977
<BONDS> 0
0
0
<COMMON> 45,149
<OTHER-SE> 16,527,629
<TOTAL-LIABILITY-AND-EQUITY> 8,078,897
<SALES> 1,823,311
<TOTAL-REVENUES> 1,823,311
<CGS> 1,092,121
<TOTAL-COSTS> 1,092,121
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67,508
<INCOME-PRETAX> (317,407)
<INCOME-TAX> 0
<INCOME-CONTINUING> (317,407)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (317,407)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
