UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to __________.
Commission file number 0-27240
ECOTYRE TECHNOLOGIES, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 11-3234026
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
895 Waverly Avenue, Holtsville, New York 11742
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(Address of principal executive offices)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 of 15 (d) of the 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
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As of February 23, 1998, 3,148,311 shares of $.001 par value Common Stock
of the registrant were outstanding.
Index schedule found on Page No. 2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ECOTYRE TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
As of As of
December 31, 1997 March 31, 1997
(Unaudited)
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<S> <C> <C>
ASSETS
Current:
Cash $ 25,191 $ 127,392
Account receivable net of allowance for
doubtful accounts of $25,000 and $17,000 709,403 958,798
Inventories (Note 2) 478,916 431,561
Prepaid expenses 446,281 241,087
Other current assets 166,436 120,999
-------------- --------------
Total current assets 1,826,227 1,879,837
Property, plant and equipment, less accum depr. 2,384,269 2,295,089
Security deposits 232,420 244,815
Other assets 250,000 396,003
-------------- --------------
Total Assets $ 4,692,916 $ 4,815,744
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ - $ 115,000
Notes payable 141,550 -
Accounts payable 870,439 1,003,386
Accrued expenses 196,364 149,687
Preferred stock dividends payable - 120,277
Current maturities of capitalized leases 3,896 7,979
Current maturities of machinery loan 336,144 150,011
-------------- ---------------
Total current liabilities 1,548,393 1,546,340
Long-term debt, less current maturities 150,000 150,000
Capitalized leases, less current maturities - 16,711
Machinery loan, less current maturities 534,993 849,989
Deferred rent credits 319,799 313,169
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Total liabilities 2,553,185 2,876,209
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Class A Redeemable Convertible Preferred -
2,000,000 shares authorized;
issued and outstanding - 1,202,775
(redemption amount of $1,202,775) - 1,193,090
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Stockholders' equity (Note 4):
Serial Preferred Stock, $.001 par value,
1,325,000 shares authorized; none issued - -
Class A Preferred Stock, $.001 par value,
2,000,000 authorized; 252,114 issued and
outstanding (liquidation value of $252,114) 252,114 -
Class B Preferred, $.001 par value, 675,000
shares authorized; 450,000 issued and outstanding
(liquidation value $450,000) 450,000 -
Common Stock, $.001 par value 30,000,000 shares
authorized; issued and outstanding -
3,121,134 and 908,143 3,121 908
Paid in capital 11,886,121 7,852,407
Deficit (10,451,625) (7,106,870)
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$ 2,139,731 $ 746,445
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Total stockholder's equity $ 4,692,916 $ 4,815,744
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<FN>
See accompanying notes to financial statements
</FN>
</TABLE>
<PAGE>
Operating/Other Expenses. The Company incurred selling, shipping, general
and administrative expenses of $444,999, and net interest expense of $26,669 in
the three months ended December 31, 1997 as compared to $479,183 of selling,
shipping, general and administrative expenses and $5,766 of net interest expense
in the three months ended December 31, 1996. The decrease in selling, shipping,
general and administrative expenses were attributable primarily to the decrease
in costs related to the decrease in sales during the three months ended December
31, 1997. The increase in interest expenses is primarily due to the Company's
higher outstanding borrowing principally related to the machinery loan.
Net Loss. The Company sustained a net loss of ($1,600,126) in the three
months ended December 31, 1997 as compared to a net loss of ($1,121,974) in the
three months ended December 31, 1996, an increased loss of $478,152. The net
loss attributable to common stockholders increased from ($1,183,583) or ($1.68)
per share (adjusted for reverse split) to ($1,817,451) or ($.58) per share.
Liquidity and Capital Resources
At December 31, 1997, the Company had cash and cash equivalents of $25,191
and working capital of $277,834. As further discussed in Note 4, through
December 31, 1997, the Company raised approximately $2,100,750 from the private
placement of common stock and has effectuated an amendment to its Class A
Convertible Preferred stock removing the requirement to pay approximately
$1,325,000 on January 15, 1998. The Company will be required to raise additional
working capital to meet its continuing obligations. If the Company is
unsuccessful in generating additional working capital, the Company's business
will be materially and adversely affected.
As indicated in the Company's annual report on Form 10-KSB, the Company's
financial statements have been prepared assuming that the Company will continue
operating as a going concern. The Company has sustained losses since inception
and requires additional working capital. These factors raise substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
The Company used cash in operating activities in the amount of $2,269,439
for the nine months ended December 31, 1997 and $3,054,692 for the nine months
ended December 31, 1996 which was primarily related to the loss from operations.
The Company purchased machinery and equipment in the amounts of $251,622 and
$571,801 for the nine months ending December 31, 1997 and 1996, respectively.
Financing provided to fund operating activities and fixed asset purchases for
the nine months ended December 31, 1997 was provided by the proceeds from a
private placement of common stock of $2,100,750 and proceeds from the sale of
marketable securities of $356,217. Operating and investing activities for the
nine months ended December 31, 1996 were funded from a bank line of credit of
$396,333.
Accounts Receivable - At December 31, 1997, the net account receivable
balance was $709,403, a decrease of $249,395. The decrease is due to the reduced
sales realized during the three month period ended December 31, 1997. Payment
terms range from cash payment to various net terms in accordance with industry
practice. During the current fiscal year, the Company has not incurred any
significant write-offs.
On March 21, 1997, the Company acquired certain assets of Butler
Retreading, Inc. The aggregate purchase price was approximately $939,000
consisting of $750,000 in cash provided by long term financing and 42,857 shares
of common stock of the Company valued at $189,000, or $4.41 per share, the
quoted market price of the Company's shares as of March 21, 1997. During
September, 1997, the Company received and installed substantially all equipment
purchased from Butler.
<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 24, 1998 ECOTYRE TECHNOLOGIES, INC.
(Registrant)
By: /s/ Lawrence Dobroff
-------------------------
Lawrence Dobroff,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted
from the financial statements for the nine months ended
December 31, 1997 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 25,191
<SECURITIES> 0
<RECEIVABLES> 734,403
<ALLOWANCES> 25,000
<INVENTORY> 478,916
<CURRENT-ASSETS> 1,826,227
<PP&E> 2,384,269
<DEPRECIATION> 162,442
<TOTAL-ASSETS> 4,692,916
<CURRENT-LIABILITIES> 1,548,393
<BONDS> 0
252,114
0
<COMMON> 3,121
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,692,916
<SALES> 2,452,934
<TOTAL-REVENUES> 2,452,934
<CGS> 3,657,006
<TOTAL-COSTS> 3,657,006
<OTHER-EXPENSES> 188,529
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 94,746
<INCOME-PRETAX> (2,780,800)
<INCOME-TAX> 10,355
<INCOME-CONTINUING> (2,791,155)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,344,755)
<EPS-PRIMARY> (1.57)
<EPS-DILUTED> (1.57)
</TABLE>
