U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X...Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended July 31, 1997.
....Transition report under section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required] for the transition period from _________
to _________.
Commission File No: 0-25868
CONTROLLED ENVIRONMENT
AQUACULTURE TECHNOLOGY, INC.
(Name of small business in its charter)
Colorado 84-1293167
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
CEA TECH USA, Inc.
7 Waterfront Plaza, Suite 400
500 Ala Moana Blvd.
Honolulu, HI 96813
(Address of Principal Office) Zip Code
Issuer's telephone number: (808) 521-1801
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act 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 issuers involved in bankruptcy proceedings during the
past five years
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes ____
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: 2,257,000 shares of
common stock outstanding as of July 31, 1997.
Transitional Small Business Disclosure
Format (Check one):
Yes ____ No X <PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONTROLLED ENVIRONMENTAL AQUACULTURE
TECHNOLOGY, INC.
(a development stage company)
and subsidiaries
Quarter Ended July 31, 1997<PAGE>
CONTROLLED ENVIRONMENTAL AQUACULTURE
TECHNOLOGY, INC.
(a development stage company)
and subsidiaries
Index to Consolidated Condensed Financial Statements
Consolidated Condensed Balance Sheet
Consolidated Condensed Statement of Operations
and Accumulated Deficit
Consolidated Condensed Statement of Cash Flows
Notes to Consolidated Condensed Financial Statements<PAGE>
CONTROLLED ENVIRONMENTAL AQUACULTURE
TECHNOLOGY, INC.
(a development stage company)
and subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
July 31, January 31,
1997 1997
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 471,222 581,000
Prepaid expenses 52,123
Inventory 243,135
Total current assets 766,480 581,000
FIXED ASSETS:
Fixed assets, cost 441,936 19,512
Accumulated depreciation (20,742)
Total fixed assets 421,194 19,512
OTHER ASSETS 94,661 11,189
Total assets 1,282,335 611,701
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 54,667 30,858
Notes Payable to Shareholder 80,000
Advances from stockholder 70,278
Accrued liabilities 47,107
Total current liabilities 101,774 181,136
STOCKHOLDERS' EQUITY
Preferred Stock - authorized,
10,000,000 shares issued and
outstanding 5,000 shares at
stated value of $100 per share 500,000 495,800
Common Stock, authorized,
100,000,000 shares without par
value, issued and outstanding,
2,257,000 shares at stated
value of $.005 per share 11,285 9,585
Additional paid-in capital 1,034,409 75
Accumulated deficit during
development stage (365,133) (74,895)
Total stockholders' equity 1,180,561 430,565
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 1,282,335 611,701
</TABLE>
<PAGE>
CONTROLLED ENVIRONMENTAL AQUACULTURE TECHNOLOGY, INC.
(a development stage company)
and subsidiaries
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS AND
ACCUMULATED DEFICIT FOR THE SIX MONTHS ENDED July 31, 1997
AND 1996
(unaudited)
<TABLE>
<CAPTION>
Period from
Jan 19, 1995
For the For the (inception)
period ended period ended through July
1997 1996 31, 1997
<S> <C> <C> <C>
REVENUES 23,617 23,617
COST AND EXPENSES
Cost of Sales 19,420 19,420
General and
administrative
expenses 294,435 1,664 369,330
Total expenses 313,855 1,664 388,750
NET LOSS 290,238 1,664 365,133
Accumulated deficit
Beginning of period 74,895 11,675 0
End of period 365,133 13,339 365,133
Loss per common
share 0.14 nil 0.19
Weighted number of
shares outstanding 2,027,666 1,697,395 1,936,363
/TABLE
<PAGE>
CONTROLLED ENVIRONMENTAL AQUACULTURE TECHNOLOGY, INC.
(a development stage company)
and subsidiaries
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS FOR THE
SIX MONTHS ENDED July 31, 1997 AND 1996
<TABLE>
<CAPTION>
Period from
Jan 19, 1995
For the For the (inception)
period ended period ended through
1997 1996 July 31, 1997
<S> <C> <C> <C>
Increase (decrease) in cash:
Cash flows from operating activities:
Net Loss (290,238) (1,664) (365,133)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
CEA TECH
Prepaid expenses (52,123) (52,123)
Accounts Payable 23,809 54,667
Amortization 25 204
Rent 150 1,075
Accrued liabilities 38,124 1,479 38,124
Stock issued for
services 1,238
ACQUIRED SUBSIDIARY (FROM MARCH 16, 1997)
Depreciation 12,222 12,222
Prepaid expenses 6,166 6,166
Inventory (83,351) (83,351)
Accounts payable (3,820) (3,820)
Accrued liabilities 8,983 8,983
Net cash used in
operating activities (340,228) (10) (381,748)
Cash flows from investing activities:
Purchase of
equipment (70,736) (90,248)
Organizational
costs (83,473) (94,366)
Net cash used in
investing activities (154,209) (184,614)
Cash flows from financing activities:
Proceeds from issuance of
preferred stock 4,200 500,000
Proceeds from issuance of
common stock 600,000 606,847
Proceeds from notes payable
to stockholders (80,000)
Conversion of Note Payable
to equity 80,000 80,000
Payment on advances to
stockholders (70,278)
Advances to subsidiary
prior to merger (151,112) (151,112)
Net cash used in
financing activities 382,810 1,035,735
Net increase (decrease)
in cash and cash
equivalents (111,627) (10) 469,373
Cash and cash equivalents,
beginning of period 582,849 438 1,849
Cash and cash equivalents,
end of period 471,222 428 471,222
</TABLE>
Supplemental Disclosure:
Effective, after the close of business on March 15, 1997, the Company
issued 100,000 shares of common stock (valued at approximately $3.56
per share) in exchange for all of the outstanding shares of Sunkiss
Shrimp Co., Ltd. The acquisition was accounted for under the purchase
basis method. Based on an expert's opinion, the current value of
broodstock inventory was increased by $96,034, and fixed assets was
increased by $213,036, which approximates the current replacement
cost. <PAGE>
CONTROLLED ENVIRONMENTAL AQUACULTURE
TECHNOLOGY, INC.
(a development stage company)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS - July 31, 1997
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Controlled Environment Aquaculture Technology, Inc. ("the
Company"), formerly known as Global Capital Access Corporation, was
incorporated under the laws of the State of Colorado on January 19,
1995.
1. DEVELOPMENT STAGE COMPANY. The Company is an
enterprise in the development stage as defined by Statement No. 7 of the
Financial Accounting Standards Board and has not engaged in any
business other than organizational efforts. The Company has made an
aggressive commitment to commercialize state of the art, second
generation technologies for intensive, sustainable growout production of
shrimp and finfish, utilizing high health genetically improved (HHGI)
specific pathogen free (SPF) broodstock, technologies and breeding
techniques developed and verified at commercial scales in the State of
Hawaii.
2. PRINCIPLES OF CONSOLIDATION. The consolidated
financial statements include the accounts of Controlled Environment
Aquaculture Technology, Inc. and its wholly-owned subsidiaries, C.E.A.
Tech HHGI Breeding Corp., CEA Tech Plantations, Inc., and Hawaii
High Health Seafood Corp. for the entire period, and its wholly-owned
subsidiary Sunkiss Shrimp Co., Ltd., for the period from March 16,
1997. Significant intercompany transactions and amounts have been
eliminated in consolidation.
3. USE OF ESTIMATES. In preparing the Company's consolidated
financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
4. INCOME TAXES. The Company files a consolidated federal
income tax return. The subsidiaries pay to or receive from the Parent
Company the amount of federal income taxes they would have paid or
received had the subsidiaries filed separate federal income tax returns.
Deferred tax assets and liabilities are reflected at currently enacted
income tax rates applicable to the period in which the deferred tax assets
or liabilities are expected to be realized or settled. As changes in tax
laws or rates are enacted, deferred tax assets and liabilities are adjusted
through the provision for income taxes.
5. STATEMENT OF CASH FLOWS. For the purposes of
presentation in the consolidated statements of cash flows, the Company
considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION.
GENERAL
During the three months ended July 31, 1997, significant
progress was made in implementing management plans to commence
shrimp aquaculture production on the island of Kauai. Our subsidiary
company, Sunkiss Shrimp Co., produced an operating break even from
shrimp sales. However, after general and administrative expense, the
consolidated Company showed a loss for the quarter. These results were
in line with management's expectations as operations are expanded to
support the Company's growth plans. Equipment was purchased during
the quarter for the Company's planned hatchery facility located on
Kauai. Construction of the facility is scheduled to begin in August and
be completed at the end of September or early October.
During the quarter, the Company's management initiated a
Private Placement Offering, pursuant to Regulation D, Rule 506, seeking
to raise additional capital through the sales of the Company's stock to
"Accredited Investors". At July 31, 1997, Six Hundred Thousand and
no/100 dollars ($600,000) had been received by the Company in
response to its Private Placement Memorandum. Since the close of the
quarter, an additional Five Hundred Thousand and no/100 dollars
($500,000) has been received. The Company is in receipt of verbal
commitments for substantial additional equity funds, expected to be
received during the third quarter. The Company's cash, working capital,
and net equity positions have improved substantially over previous
quarters.
The Company continues to pursue a loan guaranteed by the US
Department of Agriculture. Negotiations are being conducted with a
local Hawaiian bank to act as the funding and servicing agent for this
loan. Management anticipates a successful resolution to these
negotiations within the third quarter.
Negotiations continued during the period with the State of Hawaii
to finalize the lease of approximately 400 acres of land on the island of
Kauai. This land will be used by the Company to construct "grow-out"
ponds for the productions of shrimp in accordance with the Company's
business plan. The lease of these state lands is expected to be finalized
during the third quarter.
Part II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
July 31, 1997.
<PAGE>
Signatures
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.
CONTROLLED ENVIRONMENTAL AQUACULTURE
TECHNOLOGY, INC.
(Registrant)
/s/ ____________________________________________
J.A. Garcia, President September 3, 1997
(Name, Title) (Date)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-01-1998
<PERIOD-END> JUL-31-1997
<CASH> 471,222
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 243,135
<CURRENT-ASSETS> 766,480
<PP&E> 441,936
<DEPRECIATION> (11,806)
<TOTAL-ASSETS> 1,282,335
<CURRENT-LIABILITIES> 101,774
<BONDS> 0
0
500,000
<COMMON> 11,285
<OTHER-SE> 1,034,409
<TOTAL-LIABILITY-AND-EQUITY> 1,282,335
<SALES> 0
<TOTAL-REVENUES> 23,617
<CGS> 19,420
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 294,435
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (290,238)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (290,238)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> 0
</TABLE>
