U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the period ended September 30, 2001.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE Act of 1934 for the transition period from ___ to ___.
Commission file number: 0-25791
AIRTRAX, INC.
(Name of Small Business Issuer in its charter)
New Jersey 22-3506376
(State of (I.R.S. Employer
Incorporation) I.D. Number)
870B Central Avenue, Hammonton, New Jersey 08037
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 609-567-7800.
(Former address and former telephone number, if changed from last report)
Securities registered under Section 12 (b) of the Act:
Title of each class Name of exchange on which
to be registered each class is to be registered
None None
Securities registered under Section 12(g) of the Act:
Common Stock
(Title of Class)
Check whether issuer (1) filed all reports to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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.
(1). Yes: X No:
(2). Yes: X No:
The number of shares issued and outstanding of issuer's common stock, no par value, as of September 30, 2001 was 5,348,849.
Transitional Small Business Issuer Format (Check One):
Yes: No: X
INDEX
Page
Balance Sheets
3
Statements of Operations and Deficit–Three months ended
September 30, 200 and 2001 4
Statements of Operations and Deficit–Nine months ended
September 30, 200 and 2001 5
Statements of Changes in Stockholder's Equity
6
Statements of Cash Flows
7
Notes to Financial Statements
8
Item 2. Management's Discussion and Analysis. 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. 11
Item 2. Changes in Securities. 11
Item 3. Defaults upon Senior Securities. 11
Item 4. Submission of Matters to Vote of Securityholders. 11
Item 5. Other Information. 11
Item 6. Exhibits and Reports on Form 8-K. 11
Signatures 11
#
PART I - FINANCIAL STATEMENTS
Item 1. Financial Statements.
AIRTRAX, INC.
(A Development Stage Company)
BALANCE SHEETS
September 30, 2001 December 31, 2000
ASSETS
Current Assets
Cash
$ 3,235
$ 23,663
Accounts receivable
17,595
34,382
Miscellaneous receivable
73,359
-
Inventory
740,420
764,875
Prepaid expenses
6,938
6,938
Deferred tax asset
25,868
61,285
Total current assets
867,415
891,143
Fixed Assets
Office furniture and equipment
45,598
35,303
Automotive equipment
16,915
16,915
Shop equipment
20,660
20,660
Casts and tooling
90,698
76,687
173,871
149,565
Less, accumulated depreciation
104,352
82,346
Net fixed assets
69,519
67,219
Other Assets
Patents – net
42,452
45,331
Utility deposits
65
65
Total other assets
42,517
45,396
TOTAL ASSETS
$ 979,451
$ 1,003,758
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable
$ 740,497
$ 763,210
Accrued liabilities
49,489
35,630
Stockholder note payable
25,414
23,314
Total current liabilities
815,400
822,154
Stockholders’ Equity
Common stock – authorized, 10,000,000 shares without
par value; 5,348,849 and 5,040,621, respectively,
issued and outstanding
2,774,617
2,408,549
Preferred stock – authorized, 500,000 shares without
par value; 275,000 issued and outstanding
12,950
12,950
Deficit accumulated during the development stage
(2,416,564)
(2,032,943)
Deficit prior to development stage
(206,952)
(206,952)
Total stockholders’ equity
164,051
181,604
TOTAL LIABILITIES AND
STOCKHOLDER’S EQUITY
$ 979,451
$ 1,003,758
These statements should be read in conjunction with the year end financial statements.
AIRTRAX, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS and DEFICIT
ACCUMULATED DURING DEVELOPMENT STAGE
For the Three Month Periods Ended September 30, 2001 and 2000
May 19, 1997
(Date of Inception)
2001 2000
to September 30, 2001
SALES
$ 41,479
$ 25,701
$ 430,694
COST OF GOODS SOLD
5,030
6,677
140,713
Gross Profit
36,449
19,024
289,981
OPERATING AND ADMINISTRATIVE EXPENSES
134,217
119,969
2,698,781
OPERATING LOSS
(97,768)
(100,945)
(2,408,800)
OTHER INCOME (EXPENSE)
Interest expense
(6,841)
(10,610)
(61,845)
Other income
50,000
24
63,186
NET LOSS BEFORE INCOME TAXES
( 54,609)
(111,531)
(2,407,459)
INCOME TAX BENEFIT (STATE):
Current
4,916
10,038
99,227
Prior years
-
-
122,288
Total Benefit
4,916
10,038 221,515
LOSS ACCUMULATED DURING
DEVELOPMENT STAGE
$ (49,693) $(101,493)
(2,185,944)
PREFERRED STOCK DIVIDENDS DURING
DEVELOPMENT STAGE
(230,620)
DEFICIT ACCUMULATED DURING DEVELOPMENT
STAGE
$(2,416,564)
NET LOSS PER SHARE – Basic and Diluted
$(.01)
$(.02)
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest was $6,141 and 10,610, respectively, during the 2001 and 2000 periods. There was no cash paid for income taxes during either of the three month periods.
These statements should be read in conjunction with the year end financial statement.
AIRTRAX, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS and DEFICIT
ACCUMULATED DURING DEVELOPMENT STAGE
For the Nine Month Periods Ended September 30, 2001 and 2000
May 19, 1997
(Date of Inception)
2001 2000
to September 30, 2001
SALES
$ 129,909
$ 58,090
$ 430,694
COST OF GOODS SOLD
6,253
16,371
140,713
Gross Profit
123,656
41,719
289,981
OPERATING AND ADMINISTRATIVE EXPENSES
573,149
468,845
2,698,781
OPERATING LOSS
(449,493)
(427,126)
(2,408,800)
OTHER INCOME (EXPENSE)
Interest expense
(22,995)
(14,613)
(61,845)
Other income
50,925
26
63,186
NET LOSS BEFORE INCOME TAXES
(421,563)
(441,713)
(2,407,459)
INCOME TAX BENEFIT (STATE):
Current
37,942
39,754
99,227
Prior years
-
-
122,288
Total Benefit
37,942
39,754 221,515
LOSS ACCUMULATED DURING
DEVELOPMENT STAGE
$(383,621) $(401,959)
(2,185,944)
PREFERRED STOCK DIVIDENDS DURING
DEVELOPMENT STAGE
(230,620)
DEFICIT ACCUMULATED DURING DEVELOPMENT
STAGE
$(2,416,564)
NET LOSS PER SHARE – Basic and Diluted
$(.08)
$(.10)
Supplemental Disclosure of Cash Flows information:
Cash paid for interest was $20,895 and 14,613, respectively, during the 2001 and 2000 periods. Cash paid for income taxes was $300 and $200, respectively.
These statements should be read in conjunction with the year end financial statements.
AIRTRAX, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Nine Month Period Ended September 30, 2001
COMMON
PREFERRED
DEFICIT ACCUMULATED
DEFICIT PRIOR
STOCK
STOCK
DURING
TO
Shares
Amount
Shares
Amount
DEVELOPMENT STAGE
DEVELOPMENT STAGE TOTAL
Balance, December 31, 2000
5,040,621
$2,408,549
275,000
$12,950
$(2,032,943)
$(206,952)
$ 181,604
Private placement sales of stock
228,199
342,301
342,301
Shares issued for services
12,757
18,767
18,767
Shares issued upon the
exercise of options
10,000
5,000
5,000
Stock issued for MAS merger
57,272
-
-
Net loss for the period
(383,621)
(383,621)
Balance, September 30, 2001
5,348,849
$2,774,617
275,000
$12,950
$(2,416,564)
$(206,952)
$ 164,051
These statements should be read in conjunction with the year end financial statements.
AIRTRAX, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Nine Month Periods ended September 30, 2001 and 2000
May 19, 1997
(Date of Inception)
2001
2000 to September 30, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss
$(383,621)
$(401,959)
$(2,185,944)
Adjustments to reconcile net loss to net cash
consumed by operating activities:
Depreciation and amortization
24,885
25,536
129,507
Value of common stock issued for services
18,767
41,956
99,569
Accrual of deferred tax benefit
(37,942)
(39,754)
(99,227)
Changes in current assets and liabilities:
(Decrease) increase in accounts payable and
accrued liabilities
(8,854)
251,507 789,986
Decrease (Increase) in prepaid expense
-
-
(7,003)
Decrease (increase) in accounts receivable 16,787
61,281
(17,596)
Decrease (increase) in inventory
24,455 (297,128)
(740,420)
Net Cash Consumed By
Operating Activities
(345,523)
(358,561)
(2,031,128)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of equipment
(24,306)
(5,749)
(173,870)
Additions to patent cost
-
(25,346) (67,607)
Net Cash Consumed By
Investing Activities
(24,306)
(31,095)
(241,477)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds of common stock sales
347,301
370,243
2,290,979
Proceeds (repayment) of borrowing
-
(4,315)
12,950
Proceeds of stockholder loans
2,100 -
25,414
Preferred stock dividends paid in cash
-
-
(53,503)
Net Cash Provided By
Financing Activities
349,401 365,928
2,275,840
Net Increase (Decrease) In Cash
(20,428)
(23,728)
3,235
Balance at beginning of period
23,663
48,652
-
Balance at end of period
$ 3,235
$ 24,924
$ 3,235
These statements should be read in conjunction with the year end financial statements.
AIRTRAX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2001
1.
BASIS OF PRESENTATION
The unaudited interim financial statements of AirTrax, Inc. (the “Company”) as of September 30, 2001 and for the three month and nine month periods ended September 30, 2001 and 2000, respectively, have been prepared in accordance with generally accepted accounting principles. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. The results of operations for the quarters and nine month periods ended September 30, 2001 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2001.
Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2000.
Item 2. Management's Discussion and Analysis.
The following discusses the financial results and position of the accounts of the Company for the periods indicated.
Forward Looking Statements.
Forward Looking Statements
Certain of the statements contained in this Quarterly Report on Form 10-QSB include "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). See the Company's Annual Report on Form 10-KSB for the period ending December 31, 2000 (“Form 10-KSB”) for additional statements concerning operations and future capital requirements. Certain risks exist with respect to the Company and its business, which risks include the need for additional capital, lack of commercial product, lack of determined product prices and impact on profit margins, and limited operating history, among other factors. Readers are urged to refer to the section entitled “Cautionary Statements” in the Company’s Form 10-KSB for a broader discussion of such risks and uncertainties.
Results of Operations.
--------------------------
Nine Months Ended September 30, 2001 compared with Nine Months Ended September 30, 2000.
For the period ended September 30, 2001 and comparable period in 2000, the Company was a development stage company and the Company has not engaged in full-scale operations for these periods. The limited revenues for the periods have been derived from sales of a non omni-directional product, and from contracts with the United States Navy that relate to the research and potential application of omni-directional products for military use, and to a lesser extent the sale of omni-directional equipment to defense contractors. The period-to-period results presented and discussed below are not necessarily meaningful comparisons due to the Company’s development stage status, and are not indicative of future results.
Revenues for the nine months ended September 30, 2001six Juwere $129,909 compared with $58,090 in revenues for the same period in 2000. Revenues for the 2001 period consisted principally of contract revenues from the United States Navy. Of the total revenues for 2000, $18,000 were contract revenues with the United State Navy, $11,000 were omni-directional related from a defense contractor, and the balance were sales of a non omni-directional product.
Cost of goods sold for the 2001 and 2000 periods were $6,253 and $16,731, respectively, representing principally parts and manufacturing costs for the non omni-directional product.$280,050 which
General and administrative expenses which includes administrative salaries and overhead for thesix nine month periodJune in 2001 totaled $573,149 compared with $468,845 for the same period in 2000. The increase$340,220 of...
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