# **SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D. C.**

 

 

 

# **FORM 10-Q**

 

 

 

**QUARTERLY REPORT UNDER SECTION 13 OR 15(D)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

 

 

 

**FOR QUARTER ENDED:  SEPTEMBER 30, 2001                       COMMISSIONFILE NO. 0-4076**

 

 

 

# **EXOTECHINCORPORATED**

 (Exact name of Registrant as Specified inCharter)

 

 

 

| State or Jurisdiction ofIncorporation  or Organization: |   | **DELAWARE**                 |
|---------------------------------------------------------|--------|------------------------------|
|                                                    |   |                         |
| IRS Identification No:                                  |   | **54-0700888**               |
|                                                    |   |                         |
| Address of Principal Office:                            |   | **8502  Dakota Drive**       |
|                                                    |   | **Gaithersburg,  MD. 20877** |
|                                                    |   |                         |
| Registrant's Telephone  Number:                         |   | **(301)  948-3060**          |

 

 

Indicate by checkmark whether the Registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the Registrant was required to file such reports), and (2) has beensubject to such filing requirement for the past 90 days. Yes ý         No o

 

Indicate the number of sharesoutstanding of each of the issuer's classes of common stock, as of the close ofthe period covered by this Report.

 
| **CLASS:**                               |   | **COMMON STOCK, PAR VALUE  $0.10** |               |
|------------------------------------------|--------|------------------------------------|--------------------|
|                                     |   |                               |               |
| **OUTSTANDING AT****SEPTEMBER 30, 2001** |   | **942,387**                        |    ** ** |

 

 

EXOTECHINCORPORATED

 

INDEX

 
| PART I  | FINANCIAL INFORMATION                                                                             |   |
|---------|---------------------------------------------------------------------------------------------------|--------|
|    |                                                                                              |   |
|    | CONSOLIDATED CONDENSED  BALANCE SHEET SEPTEMBER 30, 2001 AND JUNE 30, 2001                        |   |
|    |                                                                                              |   |
|    | CONSOLIDATED  CONDENSED STATEMENT OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2001 AND  2000 |   |
|    |                                                                                              |   |
|    | STATEMENT  OF CASH FLOWS FOR THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000                       |   |
|    |                                                                                              |   |
|    | NOTES  TO CONSOLIDATED CONDENSED  FINANCIAL STATEMENTS                                       |   |
|    |                                                                                              |   |
|    | MANAGEMENT'S  DISCUSSION AND ANALYSIS OF CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS           |   |
|    |                                                                                              |   |
|    |                                                                                              |   |
| PART II | OTHER INFORMATION                                                                                 |   |
|    |                                                                                              |   |
|    | OTHER FINANCIAL  INFORMATION                                                                      |   |
|    |                                                                                              |   |
|    | SIGNATURES                                                                                        |   |

 

 

EXOTECHINCORPORATED

CONSOLIDATED BALANCE SHEET

 
| ASSETS                                                                                                  |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                    |   |   |   |   |   |   |   |
|                                                                                                    |   | **SEPTEMBER 30, 2001** |   |   |   | **JUNE 30,****2001** |   |
|                                                                                                    |   | **(Unaudited)** |   |   |   |   |   |
| **CURRENT ASSETS**                                                                                      |   |   |   |   |   |   |   |
|                                                                                                    |   |   |   |   |   |   |   |
| Accts. Receivable, Net                                                                                  |   | $ | 5,885 |   |   |   | $ | 13,615 |   |
| Inventories                                                                                             |   |   |   |   |   |   |   |
| Work in Process                                                                                         |   | 189,857 |   |   |   | 196,857 |   |
| Raw Materials                                                                                           |   | 32,625 |   |   |   | 32,625 |   |
| Finished Goods                                                                                          |   | 14,000 |   |   |   | 14,000 |   |
| Cash and Other Current  Assets                                                                          |   | 131 |   |   |   | 1,078 |   |
|                                                                                                    |   |   |   |   |   |   |   |
| Total Current Assets                                                                                    |   | $ | 242,498 |   |   |   | $ | 258,175 |   |
|                                                                                                    |   |   |   |   |   |   |   |
| PROPERTY, PLANT AND  EQUIPMENTNET                                                                       |   | 1,554 |   |   |      | 1,696 |   |
| OTHER NON CURRENT ASSETS                                                                                |   | 3,880 |   |   |   | 3,880 |   |
| TOTAL ASSETS                                                                                            |   | $ | 247,932 |   |   |   | $ | 263,751 |   |
|                                                                                                    |   |   |   |   |   |   |   |
| LIABILITIES  AND SHAREHOLDERS' EQUITY                                                                   |
|                                                                                                    |
| **CURRENT LIABILITIES**                                                                                 |   |   |   |   |   |   |   |
|                                                                                                    |   |   |   |   |   |   |   |
| Accts. Payable &  Other Accrued Expenses                                                            |   | $ | 11,920 |   |   |   | $ | 10,391 |   |
| Other Current Liabilities                                                                               |   | 407,985 |   |   |   | 400,612 |   |
| Notes Payable                                                                                           |   | 410,536 |   |   |   | 411,126 |   |
| Total Current Liabilities                                                                               |   | $ | 830,441 |   |   |   | $ | 822,129 |   |
|                                                                                                    |   |   |   |   |   |   |   |
| SHAREHOLDERS EQUITY                                                                                     |   |   |   |   |   |   |   |
| Common Stock, Par Value  $.10 per share;1,500,000 shares authorized; 970,135issued; 942,387 outstanding |   | 97,014 |   |   |   | 97,014 |   |
|                                                                                                    |   |   |   |   |   |   |   |
| Paid-in-Surplus                                                                                         |   | 1,169,645 |   |   |   | 1,169,645 |   |
| Deficit                                                                                                 |   | (1,736,748 | ) |   |   | (1,712,617 | ) |
| Treasury Stock (27,748  shares)                                                                         |   | (112,420 | ) |   |   | (112,420 | ) |
| Total Shareholders'  Equity                                                                             |   | (582,162 | ) |   |   | (558,378 | ) |
| TOTAL LIABILITIES &  SHAREHOLDERS'EQUITY                                                            |   | **$ 247,932** | ** ** |   |   | **$****263,751** |   |
|                                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

See accompanying Notes to Consolidated CondensedFinancial Statements.

 

EXOTECHINCORPORATED

##### **CONSOLIDATED CONDENSED STATEMENT OFOPERATIONS**

 
|                                                 |   | **2001**                                  |           | **2000**                                  |               |
|------------------------------------------------------|--------|-------------------------------------------|----------------|-------------------------------------------|--------------------|
|                                                 |   | **THREE MONTHS****ENDED****SEPTEMBER 30** |           | **THREE MONTHS****ENDED****SEPTEMBER 30** |          |
| **REVENUES**                                         |   |                                      |           |                                      |               |
|                                                 |   |                                      |           |                                      |               |
| Contract Sales                                       |   | $                                         | 7,670          |                                      | $                  | 66,117 |   |
|                                                 |   |                                      |           |                                      |               |
| **EXPENSES**                                         |   |                                      |           |                                      |               |
|                                                 |   |                                      |           |                                      |               |
| Direct Labor                                         |   | 132                                       |           | 1,843                                     |               |
| Overhead                                             |   | 8,990                                     |           | 7,132                                     |               |
| Materials                                            |   | 10                                        |           | -0-                                       |               |
| Other Direct                                         |   | -0-                                       |           | 1,483                                     |               |
| General &  Administrative                        |   | 7,307                                     |           | 2,019                                     |               |
| Inventory Costs                                      |   | 7,000                                     |           | 30,219                                    |               |
|                                                 |   |                                      |           |                                      |               |
| Cost of Contract Sales                               |   | 23,439                                    |           | 42,696                                    |               |
|                                                 |   |                                      |           |                                      |               |
| Operating Income (Loss)                              |   | (15,769                                   | )              | 23,421                                    |               |
|                                                 |   |                                      |           |                                      |               |
| Other Revenue (Expenses):                            |   | -0-                                       |           | 2                                         |               |
|                                                 |   |                                      |           |                                      |               |
| Interest & Other                                 |   | (8,364                                    | )              | (7,870                                    | )                  |
|                                                 |   |                                      |           |                                      |               |
| **NET INCOME BEFORE TAXES**                          |   | **(24,133**                               | **)**          | **15,553**                                | ** **         |
|                                                 |   |                                      |           |                                      |               |
| State Income Tax                                     |   | -0-                                       |           | -0-                                       |               |
| NET INCOME (LOSS)                                    |   | **(24,133**                               | **)**          | **15,553**                                | ** **         |
|                                                 |   |                                      |           |                                      |               |
| Weighted Average Number  ofCommon  Stock Outstanding |   | 942,387                                   |      | 942,387                                   |          |
|                                                 |   |                                      |           |                                      |               |
| **EARNINGS (LOSS) PER****COMMON SHARE**              |   | **(.03**                                  | **)**          | **.02**                                   |    ** ** |
| **DIVIDENDS PER COMMON SHARE**                       |   | NONE                                      |           | NONE                                      |               |
|                                                      |        |                                           |                |                                           |                    |  |  |

 

 

See accompanying Notes to Consolidated CondensedFinancial Statements.

These statements have been prepared from the books ofaccount without audit.

 

 

 

 

EXOTECHINCORPORATED AND SUBSIDIARY

STATEMENTOF CASH FLOWS FOR

THREE MONTHS ENDED SEPTEMBER 30,

 

 
|                                                       |   | **2001** |    | **2000**   |   |
|------------------------------------------------------------|--------|----------|---------|------------|--------|
|                                                       |   |     |    |       |   |
| CASH  FLOWS FROM OPERATING TRANSACTIONS                    |   |     |    |       |   |
|                                                       |   |     |    |       |   |
| Net Income (Loss)                                          |   | $        | (24,133 | )          | $      | 15,553 |   |
| Add: Non cash Income  Determinants                         |   |     |    |       |   |
| Depreciation and  Amortization                             |   | 142      |    | 143        |   |
| Add (Deduct): Changes in  Current Assets & Liabilities |   |     |    |       |   |
| (Increase) Decrease in  Accounts Receivable                |   | 7,730    |    | (445       | )      |
| (Increase) Decrease in  Prepaid Expenses                   |   | 544      |    | 730        |   |
| (Increase) Decrease in  Inventory                          |   | 7,000    |    | (16,315    | )      |
| Increase (Decrease) in  Accts. Payable                     |   | 1,529    |    | (2,357     | )      |
| Increase (Decrease) in  Payroll/Emp. Benefits              |   | 1,195    |    | (4,793     | )      |
| Increase (Decrease) in  Accrued Interest                   |   | 8,344    |    | 7,784      |   |
| Increase (Decrease) in  Deferred Revenue                   |   | (2,165   | )       | -0-        |   |
|                                                       |   |     |    |       |   |
| Cash Provided By  or (Used For) Operating Transactions     |   | 186      |    | 300        |   |
|                                                       |   |     |    |       |   |
| CASH FLOWS FROM FINANCING  TRANSACTIONS:                   |   |     |    |       |   |
|                                                       |   |     |    |       |   |
| Proceeds from Notes                                        |   | 9,200    |    | 2,500      |   |
| Payment on Notes                                           |   | (9,790   | )       | (2,239     | )      |
| Cash Provided By  or (Used For) Financing Transactions     |   | (590     | )       | 261        |   |
| CASH FLOWS FROM INVESTING  TRANSACTIONS:                   |   |     |    |       |   |
|                                                       |   |     |    |       |   |
| Deposits                                                   |   | -0-      |    | -0-        |   |
| Purchase of Equipment                                      |   | -0-      |    | -0-        |   |
|                                                       |   |     |    |       |   |
| Cash Provided By  or (Used For) Investing Transactions     |   | -0-      |    | -0-        |   |
|                                                       |   |     |    |       |   |
| INCREASE  (DECREASE) IN CASH                               |   | (404     | )       | 561        |   |
|                                                       |   |     |    |       |   |
| CASH BALANCE - BEGINNING                                   |   | 1,329    |    | 1,921      |   |
| CASH BALANCE - ENDING                                      |   | **$**    | **925** | ** ** | **$**  | **2,482** | ** ** |

 

 

 

EXOTECHINCORPORATED

NOTESTO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

 

 

 

NOTE 1.

 

In the opinion of Management, the accompanying unauditedconsolidated condensed financial statements contain all adjustments (consistingof only normal recurring accruals) necessary to present fairly the financialposition as of September 30, 2001 and June 30, 2001 and the results ofoperations and changes in financial position for the three months endedSeptember 30, 2001 and 2000 of Exotech Incorporated and its inactivewholly-owned consolidated subsidiary, Exotech Research & Analysis, Inc.There are no significant intercompany transactions.

 

 

NOTE 2.

 

Per share computations have been based on the weightedaverage shares outstanding of 942,387 for the three months ended September 30,2001 and 2000.

 

 

NOTE 3.

 

Notes Payable at September 30, 2001 consist of fourdemand notes of $100,000, $8,000 and $47,000, payable with interest at 8.5% perannum to three of the Company's former directors. In addition, notes amountingto $255,536 are payable with interest at 8.5% per annum to oneofficer/employee.

 

 

NOTE 4.

 

Inventory cost shown in the cost of sales represents thecost of production of goods sold that were incurred in the prior fiscal year.

 

 

NOTE 5.

 

The Company received cash deposits from its tenantamounting to $4,265 at June 30, 2001. The balance of this liability is reduced incrementally upon monthlybilling for rent.  At September 30, 2001the balance of this liability was $2,100.

MANAGEMENT'SDISCUSSION AND ANALYSIS

OF THE

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

 

 

The following is Management's discussion and analysis ofcertain significant factors which have affected the Company's earnings duringthe periods included in the accompanying consolidated condensed statement ofoperations.

 

A summary of the period to period changes in theprincipal items included in the consolidated statement of operations is shownbelow:

 

 

 
|   |   | **COMPARISON  OF**     |   |
|--------|--------|------------------------|--------|
|   |   | **THREE MONTHS ENDED** |   | **THREE MONTHS ENDED** |   |
|   |   |                   |   |   |   |   |   |   |   |
|   |   | **Sept 30 2001**       |   | **June 30 2001** |   | **Sept 30 2001** |   | **Sept 30****2000** | ** ** |  
 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

7,670

 

$

13,447

 

$

7,670

 

$

66,117

 

Direct Cost &  Overhead

 

9,132

 

5,342

 

9,132

 

10,458

 

General &  Administrative Expense

 

7,307

 

1,667

 

7,307

 

2,019

 

Inventory Cost

 

7,000

 

20,067

 

7,000

 

30,219

 

Cost of Sales

 

23,439

 

27,076

 

23,439

 

42,696

 

Interest & Other

 

(8,364

)

(67,737

)

(8,364

)

(7,870

)

 

I.               CHANGEIN FINANCIAL POSITION IN THE THREE MONTHS ENDED SEPTEMBER 30, 2001.

 

                  Inthe three months period ended September 30, 2001, an increase in the deficit ofworking capital of $23,989 resulted from a net loss from operations of $24,133and non-fund charges of $132. The liability for deferred revenue decreased to$2,100.

 

 

 

II.              INCOMEAND EXPENSE IN THE MOST RECENT QUARTER AND THE SAME THREE MONTH PERIOD LASTYEAR.

 

                  Revenuefor the quarter ended September 30, 2001, was $7,670 lower by $58,447 (88%)than the results one year earlier. Operating costs were lower in the mostrecent quarter by $19,257 or 45% compared to the prior year. The result was anoperating loss of $15,769 and a net loss of $24,133 compared to a net profit of$15,553 in the quarter ended one year earlier. The variations shown in the period-to-period comparison are principallyrelated to the phase out of the microbiological instruments productmanufacturing that characterizes the three month periods.  In the mostrecent quarter, manufacturing was limited to Model 100BX Radiometers. Thisactivity is reflected in the recent quarter by the decrease of about $23,219 ininventory costs.  Maintenance, repairand recalibration services yielded revenue of about $1,850.

 

                  Inthe opinion of Management, continued stringent control of costs will benecessary for continued operations while seeking new opportunities in thefollowing quarter.

 

 

                                                              PARTII. OTHER FINANCIAL INFORMATION

 

 

 

ITEM 5.

 

As in the past, a shortage of working capital continuesto be a significant problem, hampering the development of new business to thefullest extent possible.  The shortageis the result of debt in the form of notes and interest payable to a currentand three former directors of the Company. In the opinion of Management, the Company is in a position to sustainoperations at least until such time as the results of current  negotiations for new business aredeterminable. Ultimate realization of the carrying value of prepaid expenses andadvances, property and equipment, and miscellaneous other assets shown in theaccompanying balance sheet depends upon sustained operations as a goingconcern.

 

The dollar amount of the backlog as of September 30,2001 was $800, a decrease of $915 from the backlog of the preceding quarterended June 30, 2001.

 

 

ITEM 6 (B)

 

No reports on Form 8-K were filed in this quarter, endedSeptember 30, 2001.

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Act of1934, the Company has duly caused this amended Report to be signed on itsbehalf by the undersigned thereunto duly authorized.

 

 

 

 

EXOTECH INCORPORATED

 

 

 

REGISTRANT

 

 

 

 

 

 

 

 

DATE:

                November  9, 2001

 

 

 

 

 

 

 

 

 

 

 

/s/ Robert G. Lyle

 

ROBERT G. LYLE, PRESIDENT AND CHIEF

 

 EXECUTIVE  OFFICER

 

 

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