-----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, UmSRjuoI72ezqAnp38rAOxSRnhLRLCkFcZjcCmGYKCrOEutguqFLTFOZ3R4kLzCX CWAJmPQIuaWsrQRAubSI1g== 0000868267-08-000007.txt : 20080811 0000868267-08-000007.hdr.sgml : 20080811 20080811110558 ACCESSION NUMBER: 0000868267-08-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080630 FILED AS OF DATE: 20080811 DATE AS OF CHANGE: 20080811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOOD TECHNOLOGY SERVICE INC CENTRAL INDEX KEY: 0000868267 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 592618503 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19047 FILM NUMBER: 081004723 BUSINESS ADDRESS: STREET 1: 502 PRARIE MINE RD CITY: MULBERRY STATE: FL ZIP: 33860 BUSINESS PHONE: 8634250039 MAIL ADDRESS: STREET 1: 502 PRARIE MINE RD CITY: MULBERRY STATE: FL ZIP: 33860 FORMER COMPANY: FORMER CONFORMED NAME: VINDICATOR INC /FL/ DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: VINDICATOR OF FLORIDA INC /FL/ DATE OF NAME CHANGE: 19600201 10-Q 1 form10qsb.txt FORM 10Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended June 30, 2008 Commission File Number 0-19047 ------- FOOD TECHNOLOGY SERVICE, INC. (Exact Name of Registrant as Specified in its charter) FLORIDA 59-2618503 (State of Incorporation or Organization) (Employer Identification Number) 502 Prairie Mine Road, Mulberry, FL 33860 (Address of Principal Executive offices)(Zip code) Registrants telephone number, including area code (863) 425-0039 Indicate by check mark whether the Registrant: (1) has filed all by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes [X ] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "accelerated filer", "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated Filer [ ] Accelerated Filer [ ] Non-Accelerated Filer [ ] Smaller Reporting Company [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes [ ] No [X ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Class June 30, 2008 ----- --------------- Common Stock $.01 Par Value 2,756,458 shares PART I - FINANCIAL INFORMATION Item 1. Financial Statements FOOD TECHNOLOGY SERVICE, INC. BALANCE SHEETS JUNE 30, DECEMBER 31, 2008 2007 ASSETS ---- ---- ------ (unaudited) * Current Assets: Cash $ 181,710 $ 257,286 Accounts Receivable Less Allowance For Doubtful Accounts of $2,500 in 2008 and 2007 255,676 337,414 Prepaid Expenses 73,033 28,269 ---------- ---------- Total Current Assets 510,419 622,969 ---------- ---------- Property and Equipment: Cobalt 4,372,318 3,900,496 Furniture and Equipment 1,892,156 1,799,621 Building 3,282,029 3,282,029 Less Accumulated Depreciation (5,416,311) (5,236,601) ---------- ---------- Total 4,130,192 3,745,545 Land 171,654 171,654 ---------- ---------- Total Property and Equipment 4,301,846 3,917,199 --------- --------- Other Assets: Deposits 5,000 5,000 Loan Costs 8,000 9,143 Deferred Income Tax 650,000 650,000 ---------- ---------- Total Other Assets 663,000 664,143 ---------- ---------- Total Assets $ 5,475,265 $ 5,204,311 =========== ========== FOOD TECHNOLOGY SERVICE, INC. BALANCE SHEETS JUNE 30, DECEMBER 31, 2008 2007 LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------- ------ ------ (unaudited) * Current Liabilities: Current Portion of Note Payable $ 9,033 $ 9,033 Accounts Payable and Accrued Liabilities 92,037 68,334 Financing Agreement and Debenture Payable 806,347 777,726 ---------- ---------- Total Current Liabilities 907,417 885,093 ---------- -------- Note Payable After One Year 231,111 235,681 ---------- -------- Total Liabilities 1,138,528 1,090,774 ---------- ---------- Stockholders' Equity: Common Stock $.01 par value, 5,000,000 shares authorized, 2,756,458 shares issued and outstanding 27,564 27,564 Paid in Capital 12,131,223 12,114,350 Deficit (7,803,559) (8,009,886) Treasury Stock, 5,155 shares at cost (18,491) (18,491) ---------- ---------- Total Stockholders' Equity 4,336,737 4,113,537 ---------- ---------- Total Liabilities and Stockholders' Equity $ 5,475,265 $ 5,204,311 ========== ========== * Condensed from audited financial statements FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2008 AND 2007 2008 2007 ---- ---- (unaudited) (unaudited) Net Sales $ 623,061 $ 537,643 Processing Costs 136,131 102,788 --------- -------- Income from Operations 486,930 434,855 General Administrative and Development 251,321 257,419 Depreciation 88,923 95,116 Interest Expense 16,913 34,616 Loss on Currency Exchange - 29,985 --------- -------- Income Before Income Taxes 129,773 17,719 Income Taxes Current 49,314 5,316 --------- --------- Income (Loss)before Benefit of Tax Loss Carryovers 80,459 12,403 Benefit of Tax Loss Carryovers 49,314 5,316 --------- -------- Net Income $ 129,773 $ 17,719 ========= ======== Net Income per Common Share $0.047 $0.006 ========= ======== NOTE 1: BASIS OF PRESENTATION The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normally recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three month period ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year. FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007 2008 2007 ---- ---- (unaudited) (unaudited) Net Sales $1,181,930 $1,018,160 Processing Costs 272,118 216,388 --------- --------- Income from Operations 909,812 801,772 General Administrative and Development 485,196 449,398 Depreciation 179,710 183,114 Interest Expense 38,579 56,754 Loss on Currency Exchange - 29,985 --------- --------- Income Before Income Taxes 206,327 82,521 Income Taxes Current 78,404 24,756 --------- --------- Income (Loss) before Benefit of Tax Loss Carryovers 127,923 57,765 Benefit of Tax Loss Carryovers 78,404 24,756 --------- --------- Net Income $ 206,327 $ 82,521 ========= ======== Net Income per Common Share ** $0.075 $0.030 ========= ======== NOTE 1: BASIS OF PRESENTATION The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normally recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the six month period ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year. FOOD TECHNOLOGY SERVICE, INC. STATEMENTS OF CASH FLOWS Six Months Six Months Ended Ended June 30, June 30, 2008 2007 ------------- ------------ (unaudited) (unaudited) Cash Flows from Operations: Sales Income Received $ 1,263,668 $ 1,017,505 Interest Received 22 354 Interest Paid (9,958) (18,960) Cash Paid for Operating Expenses (760,381) (714,429) --------- --------- 493,351 284,470 Cash Flows from Investing: Property & Equipment Purchase (564,357) (636,927) ---------- --------- (564,357) (636,927) Cash Flows from Financing Activities: Repayment on Note Payable (4,570) - ---------- --------- (4,570) - ---------- --------- Net Increase (Decrease) in Cash (75,576) (352,457) Cash at Beginning of Period 257,286 425,110 ---------- ---------- Cash at End of Period $ 181,710 $ 72,653 ========== ========== _______________________________________________________________________________ Reconciliation of Net Income to Net Cash Provided by Operations Net Income $ 206,327 $ 82,521 Adjustments to Reconcile Net Income to Cash Provided by Operations: Depreciation 179,710 183,114 Amortization 1,143 1,143 Accrued Interest 28,621 37,794 Non-Cash Exchange Loss - 29,985 (Increase) Decrease in Receivables 81,738 (65,487) (Increase) Decrease in Prepaids (44,764) 5,986 Increase (Decrease)in Payables and Accruals 40,576 9,414 ---------- ---------- Net Cash Provided by Operating Activities $ 493,351 $ 284,470 ========== ========== Item 2. Management's Discussion and Analysis of Financial Condition and results of Operations Food Technology Service Inc. had record revenues of $623,061 during the second quarter of 2008 compared to revenues of $537,643 for the same period in 2007. This is an increase of 15.9 percent. The Company had net income during the second quarter of 2008 of $129,773 compared to net income of $17,719 during the second quarter of 2007. This is an increase of about 632 percent. For the first half of 2008, the Company had record revenues of $1,181,930 and net income of $206,327. Revenues during the first half of 2007 were $1,018,160 and the Company had net income of $82,521. Revenues increased by about 16 percent and net income increased by about 150 percent in the first half of 2008 compared to the same period in 2007. Management attributes increased revenue to a growing customer base that requires irradiation of products on a regular basis. Although revenue from irradiation of all product categories has increased, the majority of growth is occurring in medical sterilization. During the second quarter of 2008, processing costs as a percentage of sales were 21.8 percent. This compares to 19.1 percent in the second quarter of 2007. This increase was largely due to in-house costs associated with the installation of Cobalt in June. General administrative and development costs as a percentage of sales during the second quarter of 2008 were 40.3 percent compared to 48 percent in the second quarter of 2007. This results from the fact that such costs are relatively fixed in relation to increased sales. During the first half of 2008, processing costs as a percentage of sales were 23 percent compared to 21.3 percent in the first half of 2007. These costs increased due to the installation of Cobalt in June. Similarly, general, administrative and development costs as a percentage of sales were 40.8 percent during the first half of 2008 compared to 44.1 percent during the first half of 2007. This also results from the fact that such costs are relatively fixed in relation to increased sales. As previously mentioned, the Company installed additional Cobalt during the second quarter at a cost of approximately $530,000. The Company paid cash for this Cobalt. Management anticipates increased revenue during the remaining quarters of 2008 based on growing demand for irradiation services. Item 3. Quantitative and Qualitative Disclosure about Market Risks Not Applicable. Item 4. Controls and Procedures Evaluation of disclosure controls and procedures. An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure procedures. Based on management's evaluation at the end of the period covered by this report, our Chief Executive and Financial Officer has concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), were effective to ensure that the information required to the disclosed by us in the reports that we filed under the Exchange Act gathered, analyzed and disclosed with adequate timelines, accuracy and completeness and to ensure that such information is accumulated and communicated to our management, including our Chief Executive and Financial Officer, to allow timely decisions regarding required disclosure. Changes in internal controls. There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referred to above, nor were there any significant deficiencies or material weaknesses in our internal controls. Accordingly, no corrective actions were required or undertaken. PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company is not involved in any legal proceedings. Items 2.-5. Not Applicable Item 6. Exhibits: Exhibit 31 -- Certification of Principal Executive and Financial Officer Exhibit 32 -- Certification of Principal Executive and Financial Officer 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. Date: August 11, 2008 FOOD TECHNOLOGY SERVICE, INC. /S/ Richard Hunter --------------------------------- Richard Hunter, Ph.D., Chief Executive Officer and Chief Financial Officer EX-31 2 ex31.txt EXHIBIT 31 CERTIFICATION EXHIBIT 31 RULE 13a-14(a)/15d-14(a) CERTIFICATION I, Richard G. Hunter, Ph.D., Chief Executive Officer and Chief Financial Officer, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008 of Food Technology Service, Inc., (the "small business issuer"). 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15d-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f)-15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over inancial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: August 11, 2008 FOOD TECHNOLOGY SERVICE, INC. By: / s/ Richard G. Hunter ---------------------------- Richard G. Hunter, Ph.D. Chief Executive Officer and Chief Financial Officer EX-32 3 ex32.txt EXHIBIT 32 EXHIBIT 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Food Technology Service, Inc.(the "Company") on Form 10-Q for the period ending June 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Richard G. Hunter, Ph.D. as Chief Executive Officer and Chief Financial Officer, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. August 11, 2008 /S/ Richard Hunter - ------------------ Richard G. Hunter, Ph.D. Chief Executive Officer and Chief Financial Officer August 11, 2008 -----END PRIVACY-ENHANCED MESSAGE-----