SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB/A
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For Quarter Ended: March 31, 1996 Commission file number: 0-24930
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
(Exact name of registrant as specified in its charter)
Florida 59-3029743
(State or other jurisdiction IRS Employer Identification No.
of incorporation or organization)
3713 S.W. 42nd Avenue, Suite 3, Gainesville, Florida, 32608-2531
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 904-375-6822
Former name, former address and former fiscal year, if changed since
last report: N/A.
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
As of March 31, 1996, the Company had outstanding ***1,100,100*** shares
of its common stock.
PART I: Financial Information
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
QUARTERLY STATEMENTS FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1995
<PAGE>
CONTENTS PAGE
BALANCE SHEET 1-2
STATEMENTS OF OPERATIONS 3
STATEMENTS OF CASH FLOWS 4-5
NOTES TO FINANCIAL STATEMENTS 6-10
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
BALANCE SHEET
(Unaudited)
<TABLE>
ASSETS
<CAPTION>
March
31, 1996
<S> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 8,449
Accounts Receivable 10,300
Inventory 76,469
Deposits and Prepaid Expenses 8,991
Note Receivable - Employee, Current Portion 4,326
________
TOTAL CURRENT ASSETS 108,535
________
PROPERTY AND EQUIPMENT
Furniture and Equipment 48,528
Leasehold Improvements 24,800
________
73,328
Less: Accumulated Depreciation 28,722
________
TOTAL PROPERTY AND EQUIPMENT 44,606
________
OTHER ASSETS
Note Receivable - Employee, Less Current Portion 4,639
Deposits and Other 12,317
Advances to and Investment in Joint Venture 37,008
License Fee 34,966
Deferred Offering Costs 5,000
________
TOTAL OTHER ASSETS 93,930
________
TOTAL ASSETS $247,071
========
</TABLE>
(CONTINUED)
-1-
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
BALANCE SHEET
(Unaudited)
(CONCLUDED)
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
March
31, 1996
<S> <C>
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 28,619
Note Payable on Line-of-Credit 5,000
Payable to Former Stockholder 6,421
___________
TOTAL CURRENT LIABILITIES 40,040
COMMON STOCK SUBJECT TO REPURCHASE
Common Stock, Par Value $.0001 Per Share,
100,000 Shares Authorized, 25,000 Shares
Issued and Outstanding, 6,250
___________
STOCKHOLDERS' EQUITY
Common Stock, Par Value $.0001 Per Share, 5,000,000
Shares Authorized, 993,700 Shares Issued and
Outstanding, 81,400 Shares Subscribed 108
Additional Paid-In Capital 1,586,940
Common Stock Issued for Future Services (22,813)
Accumulated Deficit (1,363,454)
___________
TOTAL STOCKHOLDERS' EQUITY 200,781
___________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 247,071
===========
</TABLE>
See Accompanying Notes to Financial Statements.
-2-
<PAGE>
<TABLE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months
Ended March 31,
1996 1995
<S> <C> <C>
Product Sales $ 30,776 $ 135,128
Cost of Products Sold 4,526 21,617
_________ _________
GROSS PROFIT 26,250 113,511
_________ _________
OPERATING EXPENSES
Advertising 3,523 2,723
Depreciation and Amortization 22,002 3,557
Consulting Fees 4,660 7,875
Office Expenses 7,379 14,869
Professional Fees 18,651 41,585
Travel and Entertainment 4,002 2,916
Rent 5,373 5,478
Research and Development Costs 1,950 --
Salaries and Benefits 28,495 31,759
Taxes and Licenses 4,571 4,804
_________ _________
TOTAL OPERATING EXPENSES 100,606 115,566
_________ _________
LOSS FROM OPERATIONS (74,356) (2,055)
_________ _________
OTHER INCOME (EXPENSE)
Investment and Other Income 606 3,389
Equity in Loss from
Unconsolidated Subsidiary (5,487) --
Interest Expense (257) --
_________ _________
TOTAL OTHER INCOME (EXPENSE) (5,138) 3,389
_________ _________
NET (LOSS) INCOME $ (79,494) $ 1,334
========= =========
(LOSS) PER COMMON SHARE $ (.07) $ --
========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,099,027 1,018,700
========= =========
</TABLE>
See Accompanying Notes to Financial Statements.
-3-
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(72,494) $ 1,334
________ _________
Adjustments to Reconcile Net Income (Loss)
to Net Cash Used for Operating Activities:
Depreciation and Amortization 22,002 3,557
Deferred Compensation Earned 1,437 --
Equity in Loss of Unconsolidated
Joint Venture 5,487 --
Stock Issued for Services 7,000 1,875
Decrease (Increase) in Accounts
Receivable 26,185 (66,885)
Decrease in Inventory 1,812 7,917
Decrease (Increase) in Deposits
and Prepaid Expenses 150 (1,304)
(Decrease) Increase in Accounts Payable
and Accrued Expenses (17,001) 10,675
________ _________
Total Adjustments 47,072 (44,165)
________ _________
NET CASH USED FOR OPERATING ACTIVITIES (32,422) (42,831)
________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Advances to Joint Venture (10,000) --
Repayment of Employee Loan 1,203 --
Purchase of Equipment and Leasehold
Improvements (130) (10,652)
Cash Paid for License -- (38,742)
Cash Loan to Employee -- (13,000)
________ _________
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (8,927) (62,394)
________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds From Issuance of Common Stock,
Net of Offering Costs 3,025 --
________ _________
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,025 --
________ _________
</TABLE>
(CONTINUED)
-4-
<PAGE>
<TABLE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
(CONCLUDED)
<CAPTION>
Three Months
Ended March 31,
1996 1995
<S> <C> <C>
NET DECREASE IN CASH AND CASH EQUIVALENTS (38,324) (105,225)
CASH AND CASH EQUIVALENTS, Beginning of Period 46,773 390,396
________ _________
CASH AND CASH EQUIVALENTS, End of Period $ 8,449 $ 285,171
======== =========
SUPPLEMENTALAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash Paid During the Year For:
Interest $ 257 $ --
</TABLE>
See Accompanying Notes to Financial Statements.
-5-
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The information presented herein as of March 31, 1996, and for the
three months ended March 31, 1996 and 1995, is unaudited.
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Rule 10-01 of
Regulations S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal required adjustments)
considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 1996, are
not necessarily indicative of the results that may be expected for the
year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Company's
annual report on Form 10-KSB for the year ended December 31, 1995.
NOTE 2 - COMMITMENTS
Effective January 1, 1995, the Company obtained an exclusive right to
market a dietary supplement in the United States for three years. The
Company agreed to approximately $60,000 for this right. The agreement
allows the Company to recover this fee through discounts on inventory
purchased through December 31, 1997. Prior to December 31, 1995, the
amortization of this license fee was recognized as discounts were
received. However, after consultation with the Securities and Exchange
Commission, the license fee is now being amortized on a straight-line
basis over the three year period of the contract. The total
accumulated amortization expense under the straight line method since
the inception of the contract is $25,000. Since $7,200 has been
recorded as of December 31, 1995, the remaining $17,800 has been
recognized as amortization expense in the first quarter of 1996.
On August 1, 1994, the Company entered into a five year consulting
agreement (renewable annually by mutual agreement) with Yellen
Associates (Yellen), an unrelated company. Yellen agreed to provide
ideas for new products in the nutritional, geriatric, and related
health fields; to find companies and/or products suitable for
acquisition; to find products suitable for manufacture and/or
-6-
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONTINUED)
NOTE 2 - COMMITMENTS (concluded)
distribution; and to secure customers for Company products. All
products offered by Yellen and accepted by the Company will belong
exclusively to the Company with all related rights. In return, the
Company agreed to pay Yellen $2,000 per month for nine months. In May
1995, the Company discontinued its monthly payment to Yellen in
accordance with the agreement. Additionally, the Company will pay
Yellen royalties of up to 5% of sales for products acquired through
Yellen, or Cyclodextrin sales made by Yellen for three to five years.
The Company also agreed to sell to Yellen over a period of three years
from August 1, 1994, up to 30,000 shares of Company stock at a
discount of 50% of the market price quoted at the time of purchase,
with the option remaining (exercisable) of 20,000 shares within the
next two years, reducing to 10,000 shares in the third year. Consulting
expense will be recognized during the period in which Yellen elects to
acquire shares of the Company's common stock based on the difference
between the market price and the sales price of the Company's common
stock. As of March 31, 1996, no options have yet been exercised.
On July 7, 1994, the Company entered into a five year noncancelable
operating lease for office space, commencing October 1994. The Company
has an option to rent additional space and a purchase option in which
ten percent of the lease payments may be applied to the purchase price.
Rent expense under the foregoing lease and all other operating leases
was $5,373 and $5,478 for March 31, 1996 and 1995, respectively.
On January 1, 1996, the Company resolved to issued 48,000 shares of its
common stock to various unrelated parties for services performed in
connection with the Company's anticipated self-underwritten stock
offering as noted below. Furthermore, two of these parties acknowledge
that in the event the gross proceeds of the offering are less than
$500,000, then one-half of their shares (20,000) shall be returned to
the Company. The shares issued will bear a restrictive legend. The Company
valued the 48,000 shares at $12,000 which is approximately 50% less than the
bid price at the date of issuance. The quoted market price was not used to
value the stock since the stock does not trade freely in an established
market. These shares had not been issued as of March 31, 1996, and are
reflected as common stock subscribed in the accompanying financial
statements.
Effective February 5, 1996, the Company filed Form SB-2 Registration
Statements with the Securities and Exchange Commission for a proposed
securities offering of 250,000 shares of common stock and 125,000 common
stock purchase warrants purchase with a combined proposed maximum
aggregate offering price of $1,250,000.
-7-
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONTINUED)
NOTE 3 - COMMON STOCK TRANSACTIONS
During 1994, the Company adopted a non-qualified employee stock plan and
in December 1994 issued 25,000 shares to employees for future services.
The shares are nontransferable by the employees for five years. During
years three through five, the employee may request the Company to
purchase all or part of the shares at 50% of the current market price
of the stock at that date.
The Company valued the 25,000 shares at $37,500, which is approximately
50% less than the bid price at the date of issuance. The quoted market
price was not used to value the stock since the stock does not trade
freely in an established market and, thus, a market price could not
accurately be established. The Company recorded the $37,500 as stock
issued for future services, which is classified as a reduction to
stockholders' equity in the accompanying financial statements. The
Company is amortizing this amount to expense over five years on the
straight-line basis, the estimated benefit period of the future
services. Any unamortized amount will be charged to expense if an
employee terminates their employment with the Company. The Company
expensed $1,437 and $1,875 under this plan for the three months ended
March 31, 1996 and 1995, respectively.
In June 1995, the Company purchased 10,000 shares of its own common
stock for $25,000 from a former employee, payable over the next twelve
months. This stock was held in treasury and reissued under the
employee stock plan as noted above. The Company recorded $6,250 as
stock issued for future services, which was approximately 50% less the
bid price at the date of issuance, which will be amortized over 5 years
on a straight line basis. Any unamortized amount will be charged to
expense if an employee terminates their employment with the Company.
The Company recognized $1,437 in compensation expense under this plan
for year ended March 31, 1995. There was no expense recorded for year
ended March 31, 1995.
Effective November 15, 1995, the Company adopted an employee stock
purchase plan. Under this plan, employees may purchase shares of
Company stock up to the amount of their gross pay for the period.
These shares will be restricted from sale for two years, therefore
they will be sold to employees at 50% of the most recent trading price
at the date of purchase. This plan will expire at the next
private/public offering of Company stock. As of March 31, 1996,
employees had purchased 33,400 shares for $9,953 under this plan.
These shares had not been issued as of March 31, 1996, and are
reflected as common stock subscribed in the accompanying financial
statements.
-8-
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONTINUED)
NOTE 4 - COMMON STOCK SUBJECT TO REPURCHASE
As detailed in Note 3 above, the Company established a nonqualified
employee stock plan in 1994, and issued shares under this plan in
December, 1994. Also, as noted above, the stock issued under this
Plan is redeemable by the Company at the option of the employee, at
50% of the then current market value. The employee can demand
redemption at any time beginning on the first day of the third year
after issuance ending five years after issuance.
The Company has reserved 100,000 of its common shares authorized of
5,000,000 to be used under this Plan.
The common stock subject to repurchase is reflected on the balance sheet
at 50% of the market value as of the balance sheet date.
<TABLE>
<CAPTION>
Year Ending Shares Amount
<S> <C> <C>
1996 -- $ --
1997 15,000 3,750
1998 10,000 2,500
______ ______
Total 25,000 $6,250
====== ======
</TABLE>
NOTE 5 - MAJOR CUSTOMERS
Sales to three customers for the three months ended March 31, 1996,
consisted of approximately 56% of total sales. Sales to these three
customers were 84% of total sales for the three months ended March 31,
1995.
NOTE 6- LINE OF CREDIT
The Company has a $75,000 line of credit with a bank. Interest is due
monthly at prime plus 2%. Any outstanding principal and interest is
due in June 1996. The line is collateralized by accounts receivable
and inventory.
-9-
<PAGE>
CYCLODEXTRIN TECHNOLOGIES DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(CONCLUDED)
NOTE 7 - JOINT VENTURE
Effective May 1, 1995, the Company entered into a joint venture
agreement with Ocumed, Inc. (Ocumed), an unrelated company. The joint
venture is organized as Ocudex, Inc. (Ocudex) with the Company and
Ocumed each owning 50% of Ocudex. The Company has committed to funding
Ocudex up to $120,000 over the next twelve months. The Company has
advanced Ocudex $44,000 as of March 31, 1996.
The Company accounts for its investment in the Ocudex joint venture
using the equity method of accounting whereby its investment is
carried at cost, including advances, adjusted for the Company's share
of earnings and losses. The Company experienced a realized loss
associated with this investment of $5,487 for the first quarter of 1996.
-10-
Exhibits
(27) Financial Data Schedule
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: June 10, 1996
C. E. RICK STRATTAN
President, Chief Executive Officer,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted
from Financial Statements for the three months ended March 31, 1996, and is
qualified in its entirety by reference to such form 10QSB/A for quarterly period
ended March 31, 1996.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-END> Mar-31-1996
<CASH> 8,449
<SECURITIES> 0
<RECEIVABLES> 10,300
<ALLOWANCES> 0
<INVENTORY> 76,469
<CURRENT-ASSETS> 108,535
<PP&E> 73,328
<DEPRECIATION> 28,722
<TOTAL-ASSETS> 247,071
<CURRENT-LIABILITIES> 40,040
<BONDS> 0
<COMMON> 108
0
0
<OTHER-SE> 1,586,940
<TOTAL-LIABILITY-AND-EQUITY> 247,071
<SALES> 30,776
<TOTAL-REVENUES> 30,776
<CGS> 4,526
<TOTAL-COSTS> 100,606
<OTHER-EXPENSES> 5,744
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (79,494)
<INCOME-TAX> 0
<INCOME-CONTINUING> (79,494)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (79,494)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
