-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QWG8cxbb6/xD2WP9W2EYFCSLyQxjDWWidiHu+M7CNBqbmv4QCVN30r84fLpJc7K9 yPODWVWJ+WxLmrxyrqs3Vw== 0000950147-01-500288.txt : 20010223 0000950147-01-500288.hdr.sgml : 20010223 ACCESSION NUMBER: 0000950147-01-500288 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VITRIX INC /NV/ CENTRAL INDEX KEY: 0000836937 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 133465289 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-10320 FILM NUMBER: 1542538 BUSINESS ADDRESS: STREET 1: 20 EAST UNIVERSITY STREET 2: SUITE 304 CITY: TEMPE STATE: AZ ZIP: 85281 BUSINESS PHONE: 6029675800 MAIL ADDRESS: STREET 1: 20 EAST UNIVERSITY STREET 2: SUITE 304 CITY: TEMPE STATE: AZ ZIP: 85281 FORMER COMPANY: FORMER CONFORMED NAME: FBR CAPITAL CORP /NV/ DATE OF NAME CHANGE: 19960930 FORMER COMPANY: FORMER CONFORMED NAME: BARRIE RICHARD FRAGRANCES INC DATE OF NAME CHANGE: 19920703 10QSB 1 e-6282.txt QUARTERLY REPORT FOR QTR ENDING 12-31-00 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2000 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ Commission File number 33-58694 VITRIX, INC. (Exact name of small business issuer as specified in its charter) Nevada 13-3465289 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) 51 West Third Street, Suite 310, Tempe, Arizona 85281 ----------------------------------------------------- (Address of principal executive offices) (480) 967-5800 --------------------------- (Issuer's telephone number) ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 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 [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: At November 10, 2000, the issuer had outstanding 30,605,290 shares of Common Stock, par value $.005 per share. Transitional Small Business Disclosure Format: Yes [ ] No [X] PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS VITRIX, INC. BALANCE SHEETS DECEMBER 31, JUNE 30, 2000 2000 ----------- ----------- (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 118,692 $ 620,765 Accounts receivable - trade, net 462,573 229,717 Inventory 68,340 91,204 Prepaid expenses and other current assets 29,769 38,182 ----------- ----------- TOTAL CURRENT ASSETS 679,374 979,868 PROPERTY AND EQUIPMENT, NET 139,568 168,779 ----------- ----------- TOTAL ASSETS $ 818,942 $ 1,148,647 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 45,343 $ 46,303 Accounts payable 299,496 88,953 Accrued liabilities 141,786 145,143 Deferred revenue 167,752 152,307 ----------- ----------- TOTAL CURRENT LIABILITIES 654,377 432,706 LONG-TERM DEBT, LESS CURRENT PORTION 22,147 34,231 ----------- ----------- TOTAL LIABILITIES 676,524 466,937 ----------- ----------- COMMITMENTS: -- -- STOCKHOLDERS' EQUITY (DEFICIT): Common stock, $.005 par value, 50,000,000 shares authorized, 31,479,140 and 30,508,218 shares issued and outstanding 157,395 152,541 Contributed capital 2,635,094 2,498,005 Accumulated deficit (2,650,071) (1,968,836) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 142,418 681,710 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 818,942 $ 1,148,647 =========== =========== The Accompanying Notes are an Integral Part of the Financial Statements 2 VITRIX, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, ------------------------------ ------------------------------ 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Revenues: Product sales $ 338,697 $ 332,094 $ 585,689 $ 531,385 Services revenue 167,661 29,112 280,851 32,490 ------------ ------------ ------------ ------------ TOTAL REVENUES 506,358 361,206 866,540 563,875 COST OF REVENUES Product 193,856 142,122 298,731 207,684 Services 42,194 -- 97,048 -- ------------ ------------ ------------ ------------ Total Cost of Revenues 236,050 142,122 395,779 207,684 ------------ ------------ ------------ ------------ GROSS PROFIT 270,308 219,084 470,761 356,191 ------------ ------------ ------------ ------------ COSTS AND EXPENSES: Sales and marketing 243,926 188,480 490,063 285,522 Research and development 145,301 105,621 363,381 207,505 General and administrative 175,581 156,331 302,621 282,803 ------------ ------------ ------------ ------------ TOTAL COSTS AND EXPENSES 564,808 450,432 1,156,065 775,830 ------------ ------------ ------------ ------------ NET LOSS FROM OPERATIONS (294,500) (231,348) (685,304) (419,639) ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSE): Interest expense (3,000) (2,018) (6,145) (4,126) Interest income 2,604 5,745 10,214 8,965 ------------ ------------ ------------ ------------ (396) 3,727 4,069 4,839 ------------ ------------ ------------ ------------ NET LOSS $ (294,896) $ (227,621) $ (681,235) $ (414,800) ============ ============ ============ ============ BASIC LOSS PER SHARE $ (0.01) $ (0.01) $ (0.02) $ (0.02) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 31,176,229 25,312,770 30,846,177 24,329,074 ============ ============ ============ ============
The Accompanying Notes are an Integral Part of the Financial Statements 3 VITRIX, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEAR ENDED JUNE 30, 2000 AND THE SIX MONTH PERIOD ENDED DECEMBER 31, 2000 (Unaudited)
PREFERRED STOCK COMMON STOCK -------------------------- ----------------------- CONTRIBUTED ACCUMULATED SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT TOTAL ----------- ----------- ---------- ---------- ---------- ----------- ----------- Balance at July 1, 1999 10,000,000 $ 100,000 13,241,031 $ 66,205 $ 956,468 $ (870,617) $ 252,056 Issuance of stock options for services -- -- -- -- 12,000 -- 12,000 Exercise of stock options -- -- 70,000 352 6,375 -- 26,725 Exercise of warrants -- -- 264,687 1,323 4,500 -- 5,823 Sale of common stock and warrants, net of costs -- -- 6,732,500 33,663 1,409,662 -- 1,443,325 Issuance of common stock for services -- -- 200,000 1,000 39,000 -- 40,000 Preferred stock conversion (10,000,000) (100,000) 10,000,000 50,000 50,000 -- -- Net loss -- -- -- -- -- (1,098,219) (1,098,219) ----------- ----------- ---------- ---------- ---------- ----------- ----------- Balance at June 30, 2000 -- -- 30,508,218 152,541 2,498,005 (1,968,836) 681,710 Exercise of stock options -- -- 97,072 484 10,193 -- 10,677 Exercise of warrants -- -- 873,850 4,370 117,896 -- 122,266 Issuance of warramts for services -- -- -- -- 9,000 -- 9,000 Net loss -- -- -- -- -- (681,235) (681,235) ----------- ----------- ---------- ---------- ---------- ----------- ----------- Balance at December 31, 2000 -- $ -- 31,479,140 $ 157,395 $2,635,094 $(2,650,071) $ 142,418 =========== =========== ========== ========== ========== =========== ===========
The Accompanying Notes are an Integral Part of the Financial Statements 4 VITRIX, INC. STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED DECEMBER 31, ----------------------- 2000 1999 --------- --------- Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Net Loss $(681,235) $(414,800) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 32,732 17,321 Stocks options and warrants issued for services 9,000 52,000 Changes in Assets and Liabilities: Accounts receivable-trade (232,856) (47,334) Inventory 22,864 (76,111) Prepaid expenses and other current assets 8,413 (68,238) Accounts payable 210,543 (5,598) Accrued liabilities (3,357) 29,520 Deferred revenue 15,445 27,602 --------- --------- NET CASH USED BY OPERATING ACTIVITIES (618,451) (485,638) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Cash received from sale of fixed assets 2,411 -- Purchase of property and equipment (5,932) (30,737) --------- --------- NET CASH USED BY INVESTING ACTIVITIES (3,521) (30,737) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of capital leases (13,044) (4,796) Proceeds from exercise of stock options and warrants 132,943 -- Proceeds from issuance of stock -- 496,825 --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 119,899 492,029 --------- --------- Net change in cash and cash equivalents (502,073) (24,346) Cash and cash equivalents at beginning of period 620,765 376,365 --------- --------- Cash and cash equivalents at end of period $ 118,692 $ 352,019 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 6,145 $ 2,663 ========= ========= Income taxes paid $ -- $ -- ========= ========= NONCASH INVESTING AND FINANCING ACTIVITIES: Issuance of stock options and warrants for services $ -- $ 52,000 ========= ========= Assets acquired by entering into capital leases $ -- $ 32,769 ========= ========= The Accompanying Notes are an Integral Part of the Financial Statements 5 VITRIX, INC. NOTE TO FINANCIAL STATEMENTS (UNAUDITED) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND INTERIM FINANCIAL STATEMENTS The accompanying financial statements of Vitrix, Inc. ("Vitrix" or the "Company") have been prepared in accordance with generally accepted accounting principles ("GAAP"), pursuant to the rules and regulations of the Securities and Exchange Commission, and are unaudited. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the six month period ended December 31, 2000 may not be indicative of the results for the entire year. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000. LOSS PER SHARE: Basic loss per share of common stock was computed by dividing the net loss by the weighted average number of shares outstanding of common and preferred stock. Diluted earnings per share are computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are options and warrants that are freely exercisable into common stock at less than the prevailing market price. Dilutive securities are not included in the weighted average number of shares when inclusion would increase the earnings per share or decrease the loss per share. SUBSEQUENT EVENTS: In January 2001, the Company secured a $225,000 working capital loan from certain third parties, including members of the Company's Board of Directors. The Company is obligated to make principal payments on this indebtedness based on accounts receivable collections and is collateralized by all assets of the Company. The note bears an effective interest rate of 3% per month and is due in full on April 30, 2001. In February 2001, the Company entered into a letter of intent to acquire all of the outstanding capital stock of Time America, Inc., a private Arizona-based Time and Attendance software development company. The acquisition will be structured as an all stock transaction and will be subject to, among other things, board approval, the satisfactory completion of due diligence and the execution of mutually agreeable definitive agreements. The Company anticipates closing the transaction by April 30, 2001. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. COMPARISON OF THE SIX MONTHS ENDED DECEMBER 31, 2000 AND DECEMBER 31, 1999 REVENUES. Revenue for six month period ended December 31, 2000 (the "reporting period"), rose 54% to $866,540, compared to revenue of $563,875 for the six month period ended December 31, 1999 (the "comparable period"). This growth was principally the result of an increase in sales volume for the Company's bundled software and hardware solutions. GROSS PROFIT. Gross profit as a percentage of revenues decreased to 54% in the reporting period, compared to 63% in the comparable period. The decrease in gross profit as a percentage of revenues was primarily attributable to an increase in the proportion of bundled software and hardware solutions sales to software-only solutions sales. The average gross profit per unit sold on software and hardware units is lower than the average gross profit margin on software-only solutions. Due to the Company's increased service revenue volume, the Company hired additional service support personnel resulting in an increase in cost of services. EXPENSES. Sales and marketing expenses were $490,063, or 57% of revenues, in the reporting period, compared to $285,522, or 51% of revenues, in the comparable period. The increase in sales and marketing expense is attributable to increased labor costs resulting from the hiring of additional sales and marketing personnel and increased advertising and promotional expense. Research and development expenses were $363,381, or 42% of revenues, in the reporting period, compared to $207,505, or 37% of revenues, in the comparable period. The increase in research and development expense is primarily attributable to increased labor costs. General and administrative expenses were $302,621, or 35% of revenues, in the reporting period, compared to $282,803, or 50% of revenues, in the comparable period. The decrease in general and administrative expenses as a percentage of revenue is primarily attributable to maintaining relatively the same level of expenses while increasing revenue. COMPARISON OF THE THREE MONTHS ENDED DECEMBER 31, 2000 AND DECEMBER 31, 1999 REVENUES. Revenue for three month period ended December 31, 2000 (the "reporting period"), rose 40% to $506,358, compared to revenue of $361,206 for the three month period ended December 31, 1999 (the "comparable period"). This growth was principally the result of an increase in sales volume for the Company's bundled software and hardware solutions. GROSS PROFIT. Gross profit as a percentage of revenues decreased to 53% in the reporting period, compared to 61% in the comparable period. The decrease in gross profit as a percentage of revenues was primarily attributable to an increase in the proportion of bundled software and hardware solutions sales to software-only solutions sales. Due to the Company's increased service revenue volume, the Company hired additional service support personnel resulting in an increase in cost of services. EXPENSES. Sales and marketing expenses were $243,926, or 48% of revenues, in the reporting period, compared to $188,480, or 52% of revenues, in the comparable period. The increase in sales and marketing expense is attributable to increased labor costs resulting from the hiring of additional sales and marketing personnel. 7 Research and development expenses were $145,301, or 29% of revenues, in the reporting period, compared to $105,621, or 29% of revenues, in the comparable period. The increase in research and development expense is attributable to increased labor costs. General and administrative expenses were $175,581, or 35% of revenues, in the reporting period, compared to $156,331, or 43% of revenues, in the comparable period. The decrease in general and administrative expenses as a percentage of revenue is primarily attributable to maintaining the same level of expenses while increasing revenue. LIQUIDITY AND CAPITAL RESOURCES Working capital at December 31, 2000 was $24,997, compared to $313,333 at December 31, 1999. Cash and cash equivalents at those dates amounted to $118,692 and $352,019, respectively. OPERATIONS. Net cash used by operations increased to $618,451 in the reporting period, compared to net cash used by operations of $485,638 in the comparable period. The increase was primarily attributable to increases in the net loss and accounts receivable. INVESTMENT ACTIVITIES. For the reporting period, the Company used $5,932 to purchase property and equipment, compared to $30,737 of property and equipment purchases in the comparable period. FINANCING ACTIVITIES. Net cash provided by financing activities decreased to $119,899 in the reporting period, compared to $492,029 in the comparable period. The decrease was primarily due to the Company raising $496,825 through a private placement in the comparable period. As of January 31, 2001, the Company believes that its current working capital and funds generated from operations are sufficient to fund the Company's operations for the next three months. In the absence of obtaining additional capital through asset sales, securing a revolving credit facility, debt or equity offerings, or a combination of the foregoing, the Company will be unable to fund its operations and will experience defaults under certain of its contractual agreements, including its lease agreements for its corporate headquarters. These agreements are subject to termination in the event of default. Certain of the parties to these agreements could take legal action against the Company to collect amounts owed to them. Accordingly, the Company's financial condition could require that the Company seek the protection of applicable reorganization laws in order to avoid or delay actions by third parties, which could materially adversely affect, interrupt or cause the cessation of the Company's operations. The Company's independent certified public accountants have issued a going concern opinion on the financial statements of the Company for the fiscal year ended June 30, 2000. The Company has on-going discussions with various financial sources in an effort to raise additional capital. While the Company believes that it will succeed in attracting additional capital, there can be no assurance that the Company's efforts will be successful. 8 FORWARD-LOOKING INFORMATION This Quarterly Report on Form 10-QSB contains certain forward-looking statements and information which the Company believes are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward - looking statements contained herein can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates," or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The Company wishes to caution the reader that these forward-looking statements that are not historical facts, are only predictions. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these projections and other forward-looking statements are based upon a variety of assumptions relating to the business of the Company, which, although considered reasonable by the Company, may not be realized. Because of the number and range of assumptions underlying the Company's projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. Therefore, the actual experience of the Company and the results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is from time to time involved in legal proceedings arising from the normal course of business. As of the date of this report, the Company is not currently involved in any legal proceedings. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. In October, 2000, the Company entered into a Warrant Exercise Agreement with certain of its warrant holders (the "Agreement") under which participating holders of the Company's $.35 per share and $.28 per share warrants could exercise their warrants for one-half of the exercise price set forth in such warrants. In addition to the reduction in exercise price, each holder who participated in the Agreement also received a new warrant agreement under the same terms as the warrant agreement just exercised. In connection with this Agreement, the Company received approximately $122,000 from the exercise of warrants to purchase 847,900 shares of common stock. The common stock and warrants issued in connection with the Agreement were issued in reliance on the exemption provided under Section 4(2) of the Securities Act of 1933, as amended, and Regulation D thereunder. 9 The proceeds from the private offerings are being used for general working capital needs. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company's Annual Meeting was held on November 21, 2000. Shareholders voted on the election of the Company's Board of Directors, amending the Company's 1999 Equity Compensation Plan to increase the number of shares authorized for issuance thereunder from 3,000,000 to 6,000,000 and to ratify the appointment of BDO Seidman, LLP as the independent certified public accountants of the Company for the fiscal year ending June 30, 2001.
Eligible Voted For Voted Against Abstentions -------- --------- ------------- ----------- 1 - Election of Directors: Michael A. Wolf 30,443,670 20,414,913 -- 12,367 Todd P. Belfer 30,443,670 20,414,913 -- 12,367 Lise Lambert 30,443,670 20,414,913 -- 12,367 William K. Swartz 30,443,670 20,414,913 -- 12,367 Thomas S. Bednarik 30,443,670 20,414,913 -- 12,367 Hamid Shojaee 30,443,670 20,414,913 -- 12,367 Bahan Sadegh 30,443,670 20,414,913 -- 12,367 2 - Amending of 1999 Equity Compensation Plan 30,443,670 13,571,167 3,088,262 11,706 3 - Appointment of auditors 30,443,670 20,394,000 24,117 8,457
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) No exhibits are filed herewith pursuant to Regulation S-B. (b) Reports on Form 8-K No reports were filed on Form 8-K during the quarter ended December 31, 2000. 10 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VITRIX, INC. Dated: February 14, 2001 By /s/ Craig J. Smith -------------------------------- Craig J. Smith Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----