-----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, IsItFn21eaW8t6Y5OKDKjEpnF6x7Nw0e15g0fbKPg6xRc8BqmaZ+HHDErcdCiTXt az6hpzu9cT09dYTrNtwXaQ== 0000950147-01-501872.txt : 20020410 0000950147-01-501872.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950147-01-501872 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 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: 1934 Act SEC FILE NUMBER: 001-10320 FILM NUMBER: 1787618 BUSINESS ADDRESS: STREET 1: 51 WEST THIRD STREET STREET 2: SUITE 301 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: BARRIE RICHARD FRAGRANCES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FBR CAPITAL CORP /NV/ DATE OF NAME CHANGE: 19960930 10QSB 1 e-7732.txt QUARTERLY REPORT FOR THE QTR ENDED 9/30/01 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 September 30, 2001 [ ] 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, 2001, the issuer had outstanding 6,295,828 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. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, JUNE 30, 2001 2001 ----------- ----------- (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 188,817 $ 177,586 Accounts receivable - trade, net 517,455 506,989 Inventory 214,656 247,550 Prepaid expenses and other current assets 43,278 42,871 ----------- ----------- TOTAL CURRENT ASSETS 964,206 974,996 PROPERTY AND EQUIPMENT, NET 195,207 164,622 ----------- ----------- TOTAL ASSETS $ 1,159,413 $ 1,139,618 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Current portion of long-term debt $ 154,212 $ 340,577 Accounts payable 517,535 431,938 Accrued liabilities 210,891 201,403 Deferred revenue 158,777 157,249 ----------- ----------- TOTAL CURRENT LIABILITIES 1,041,415 1,131,167 LONG-TERM DEBT, LESS CURRENT PORTION 817,387 487,865 ----------- ----------- TOTAL LIABILITIES 1,858,802 1,619,032 ----------- ----------- COMMITMENTS: -- -- STOCKHOLDERS' EQUITY (DEFICIT): Common stock, $.005 par value, 50,000,000 shares authorized, 6,295,828 shares issued and outstanding 31,479 31,479 Contributed capital 5,503,970 5,503,970 Accumulated deficit (6,234,838) (6,014,863) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (699,389) (479,414) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 1,159,413 $ 1,139,618 =========== ===========
The Accompanying Notes are an Integral Part of the Financial Statements 2 VITRIX, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED SEPTEMBER 30, ----------------------------- 2001 2000 ----------- ----------- REVENUES: Product sales $ 678,058 $ 683,644 Services revenue 141,038 154,714 ----------- ----------- TOTAL REVENUES 819,096 838,358 ----------- ----------- COST OF REVENUES Product 287,057 310,314 Services 128,472 131,963 ----------- ----------- TOTAL COST OF REVENUES 415,529 442,277 ----------- ----------- GROSS PROFIT 403,567 396,081 ----------- ----------- COSTS AND EXPENSES: Sales and marketing 222,461 334,309 Research and development 184,521 383,981 General and administrative 190,805 238,769 ----------- ----------- TOTAL COSTS AND EXPENSES 597,787 957,059 ----------- ----------- NET LOSS FROM OPERATIONS (194,220) (560,978) ----------- ----------- OTHER INCOME (EXPENSE): Interest expense (27,469) (18,917) Other 333 6,417 Interest income 1,381 7,620 ----------- ----------- (25,755) (4,880) ----------- ----------- NET LOSS $ (219,975) $ (565,858) =========== =========== BASIC LOSS PER SHARE $ (0.03) $ (0.09) =========== =========== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 6,295,828 6,199,526 =========== =========== 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, 2001 AND THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2001 (Unaudited)
COMMON STOCK ----------------------- CONTRIBUTED ACCUMULATED SHARES AMOUNT CAPITAL DEFICIT TOTAL ----------- --------- ----------- ----------- ----------- Balance at June 30, 2000 33,656,132 $ 168,281 $ 4,518,145 $(4,449,353) $ 237,073 Exercise of stock options 97,072 484 10,193 -- 10,677 Exercise of warrants 873,850 4,370 117,896 -- 122,266 Issuance of warrants for services -- -- 21,000 -- 21,000 Contribution of debt from a related party -- -- 695,080 -- 695,080 1-for-10 reverse stock split (28,331,226) (141,656) 141,656 -- -- Net loss -- -- -- (1,565,510) (1,565,510) ----------- --------- ----------- ----------- ----------- Balance at June 30, 2001 6,295,828 31,479 5,503,970 (6,014,863) (479,414) Net loss -- -- -- (219,975) (219,975) ----------- --------- ----------- ----------- ----------- Balance at September 30, 2001 6,295,828 $ 31,479 $ 5,503,970 $(6,234,838) $ (699,389) =========== ========= =========== =========== ===========
The Accompanying Notes are an Integral Part of the Financial Statements 4 VITRIX, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED SEPTEMBER 30, -------------------------- 2001 2000 --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS: CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $(219,975) $(565,858) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 20,942 23,530 Changes in Assets and Liabilities: Accounts receivable-trade (10,466) (17,600) Inventory 32,894 20,893 Prepaid expenses and other current assets (407) 26,603 Accounts payable 85,597 92,500 Accounts payable - related party -- (131,483) Accrued liabilities 9,488 5,683 Deferred revenue 1,528 (13,950) --------- --------- NET CASH USED BY OPERATING ACTIVITIES (80,399) (559,682) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (26,711) (18,680) --------- --------- NET CASH USED BY INVESTING ACTIVITIES (26,711) (18,680) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt 500,000 135,000 Repayment of long-term debt (375,000) -- Repayment of capital leases (6,659) (6,450) Proceeds from exercise of stock options -- 10,677 --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 118,341 139,227 --------- --------- Net change in cash and cash equivalents 11,231 (439,135) Cash and cash equivalents at beginning of period 177,586 636,932 --------- --------- Cash and cash equivalents at end of period $ 188,817 $ 197,797 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 27,469 $ 18,917 ========= ========= Income taxes paid $ -- $ -- ========= ========= NONCASH INVESTING AND FINANCING ACTIVITIES: Assets aquired by entering into capital leases $ 24,816 $ 11,500 ========= ========= The Accompanying Notes are an Integral Part of the Financial Statements 5 VITRIX, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND INTERIM CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements of Vitrix, Inc. and subsidiary ("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 three month period ended September 30, 2001, 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, 2001. 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 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. LONG-TERM DEBT: On September 4, 2001 the Company received $500,000 through a promissory note with a significant shareholder. The promissory note calls for sixty (60) payments of principal and interest in the amount of $6,600 commencing October 1, 2001 followed by a balloon payment of $313,396 due October 2006. The promissory note is collateralized by all assets of the Company. The Company used $375,000 of the proceeds of the promissory note to pay off the outstanding balance of the 18% promissory notes to certain third parties. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000 REVENUES. Revenue for the three month period ended September 30, 2001 (the "reporting period"), decreased 2% to $819,096, compared to revenue of $838,358 for the three month period ended September 30, 2000 (the "comparable period"). GROSS PROFIT. Gross profit as a percentage of revenues increased to 49% in the reporting period, compared to 47% in the comparable period. The increase in gross profit percentage was primarily attributable to a change in the mix of product sold. The Company's product revenue in the reporting period was derived from sales of systems in which software, which typically generates higher gross profit, represented a higher proportion of product revenues than in the comparable period. Gross profit on service revenues was 16% in the reporting period and comparable period. EXPENSES. Sales and marketing expenses were $222,461, or 27% of revenues, in the reporting period, compared to $334,309, or 40% of revenues, in the comparable period. The decrease in sales and marketing expense in the current period is primarily due to decreased labor and overhead costs. As a result of the merger with Time America, Inc. on March 28, 2001 the Company was able to eliminate redundant expenses. Research and development expenses were $184,521, or 23% of revenues, in the reporting period, compared to $383,981, or 46% of revenues, in the comparable period. The decrease in research and development expense in the current period is primarily due to decreased labor and overhead costs. As a result of the merger with Time America, Inc. on March 28, 2001 the Company was able to eliminate redundant expenses. General and administrative expenses were $190,805, or 23% of revenues, in the reporting period, compared to $238,769, or 28% of revenues, in the comparable period. The decrease in general and administrative expense in the current period is primarily due to decreased labor and overhead costs. As a result of the merger with Time America, Inc. on March 28, 2001 the Company was able to eliminate redundant expenses. LIQUIDITY AND CAPITAL RESOURCES At September 30, 2001 the Company had a working capital deficit of $77,209, compared to $640,405 at September 30, 2000. Cash and cash equivalents at those dates amounted to $188,817 and $197,797, respectively. OPERATIONS. Net cash used by operations decreased to $80,399 in the reporting period, compared to net cash used by operations of $559,682 in the comparable period. The decrease in net cash used was primarily attributable to decreases in the net loss and inventory and an increase in accounts payable. INVESTMENT ACTIVITIES. For the reporting period, the Company used $26,711 to purchase property and equipment, compared to $18,680 of property and equipment purchases in the comparable period. FINANCING ACTIVITIES. Net cash provided by financing activities decreased to $118,341 in the reporting period, compared to $139,227 in the comparable period. 7 As of October 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 four months. In the absence of achieving profitable operations in future periods, 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, 2001. 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. RECENT ACCOUNTING PRONOUNCEMENTS SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, was issued in August 2001 and is effective for fiscal years beginning after December 15, 2001. SFAS 144 provides a single, comprehensive accounting model for impairment and disposal of long-lived assets and discontinued operations. SFAS 144 will be adopted on its effective date, and the adoption is not expected to result in any material effects on the Corporation's financial statements. FORWARD-LOOKING INFORMATION The statements contained in this Quarterly Report on Form 10-QSB that are not historical fact are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) 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 are based on current expectations that involve a number of risks and uncertainties. These statements 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 8 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 6. EXHIBITS AND REPORTS ON FORM 8-K (a) No exhibits are filed herewith pursuant to Regulation SB. (b) Reports on Form 8-K No reports were filed on Form 8-K during the quarter ended September 30, 2001. 9 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: November 14, 2001 By /s/ Craig J. Smith ------------------------------------ Craig J. Smith Chief Financial Officer 10 -----END PRIVACY-ENHANCED MESSAGE-----