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ADVANCE TECHNOLOGIES INC
Filing Type: 10-QSBA
Amendment: Number 1
Description: N/A
Filing Date: 12/31/02
Ticker: AVTX
CUSIP: 00750Y
State: CA
Country: US
Primary SIC: 3812
Primary Exchange: OTH
Billing Cross Reference:
Date Printed: 01/28/03
TABLE OF CONTENTS
CREATED BY DISCLOSURE
Filing Sections
TO JUMP TO SECTION, CLICK ON HYPERTEXT PAGE NUMBER
Document.....................................................................1
Base.........................................................................1
Cover Page...................................................................1
Financial Statement Item.....................................................2
Financial Statements.........................................................2
Balance Sheet................................................................3
Income Statement.............................................................4
Cash Flow Statement..........................................................5
Financial Footnotes..........................................................6
Management Discussion........................................................7
Signatures...................................................................8
FORM 10 QSB/A
Amendment No. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
{X} Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 2002
Or
{ } Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period____________to_______________
Commission file number 0-27175
ADVANCE TECHNOLOGIES, INC.
(Exact name or registrant as specified in its charter)
Nevada 95-4755369
(State or other jurisdiction (I.R.S. Employer
Incorporation or organization) Identification No.)
716 Yarmouth Rd Suite 215
Palos Verdes Estates, CA 90274
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 265-7776
Indicate by check mark whether the registrant (1) has filed all reports Required
to be filed by Section 13 or 15(d) of the Securities Exchange Act Of 1934 during
the preceding 12 months (or for such that the registrant was Required to file
such reports), and (2) has shorter period been subject to Such filing
requirements for the past 90 days.
Yes {X} No { }
APPLICABLE ONLY TO ISSUES INVOLVED IN BANKRUPTCY.
Indicate by check whether the registrant has filed all documents And report
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities Under a plan confirmed by a
court.
Yes { } No { }
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of December 31, 2001, approximately 17,218,967 shares of the Registrant's
Common Stock, $0.001 par value were outstanding.
As of December 31, 2001, approximately 38,858,057 shares of the Registrant's
Class A Preferred Non-voting Stock par value $0.001 were outstanding.
1
ITEM 1. FINANCIAL STATEMENTS
ADVANCE TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
December 31, 2002
Chisholm & Associates, CPA
PO Box 540216
North Salt Lake, UT 84054
Tel: (801) 292-8756
2
ADVANCE TECHNOLOGIES, INC.
(a Development Stage Company)
Consolidated Balance Sheets
ASSETS
December 31, September 30,
2002 2002
---------------- ----------------
(Unaudited)
Current Assets
Cash $ 3,262 $ 1,719
---------------- ----------------
Total Current Assets 3,262 1,719
---------------- ----------------
Property & Equipment, Net 20,403 22,367
---------------- ----------------
Total Assets $ 23,665 $ 24,086
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accrued Interest $ 25,832 $ 23,267
Note Payable - Officer 25,000 25,000
Advance Royalties 36,300 36,300
---------------- ----------------
Total Current Liabilities 87,132 84,567
---------------- ----------------
Long Term Liabilities
Line of Credit 90,000 85,500
---------------- ----------------
Total Long Term Liabilities 90,000 85,500
---------------- ----------------
Total Liabilities 177,132 170,067
---------------- ----------------
Stockholders' Equity
Common Stock, Authorized 100,000,000 Shares of
$.001 Par Value, Issued and Outstanding
17,218,967 shares 17,219 17,219
Preferred Stock, Series A Authorized 100,000,000
Shares of $.001 Par Value, Issued and Outstanding
38,858,057 Shares 38,858 38,858
Additional Paid in Capital 446,446 446,446
Deficit Accumulated During the Development Stage (655,990) (648,504)
---------------- ----------------
Total Stockholders' Equity (153,467) (145,981)
---------------- ----------------
Total Liabilities and Stockholders' Equity $ 23,665 $ 24,086
================ ================
3
ADVANCE TECHNOLOGIES, INC.
(a Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
For the three For the three From inception on
months ended months ended October 1, 1985
December 31, December 31, thru December 31,
2002 2001 2002
----------------- ------------------ ----------------------
Revenues $ 1,648 $ 17,447 $ 61,672
Operating Expenses
Depreciation & Amortization 1,964 - 31,483.00
Oranization Costs - - 11,331.00
Research & Development - - 72,750
General & Administrative 4,605 14,795 613,567
----------------- ------------------ ----------------------
Total Operating Expenses 6,569 14,795 729,131
----------------- ------------------ ----------------------
Operating Income (Loss) (4,921) 2,652 (667,459)
----------------- ------------------ ----------------------
Other Income (Expense)
Miscellaneous Income - - 98,000
Interest Expense (2,565) (10,565) (25,832)
----------------- ------------------ ----------------------
Total Other Income (Expense) (2,565) (10,565) 72,168
----------------- ------------------ ----------------------
Net Income (Loss) $ (7,486) $ (7,913) $ (595,291)
================= ================== ======================
Net Income (Loss) Per Share $ (0.00) $ (0.00) $ (0.46)
================= ================== ======================
Weighted Average Shares Outstanding 17,218,967 2,572,923 1,294,131
================= ================== ======================
4
ADVANCE TECHNOLOGIES, INC.
(a Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
From inception
For the three months ended inception on
December 31, October 1, 1985
------------------------------ thru
December 31,
2002 2001 2002
------------ ------------- ----------------
Cash Flows from Operating Activities
Net Income (Loss) $ (7,486) $ (7,913) $ (595,291)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operations:
Depreciation & Amortization 1,964 1,833 31,483
Stock Issued for Services - - 403,025
Organization Costs - - 11,331
Decrease in Prepaids - - 14,680
Change in Assets and Liabilities
Increase in Deferred Income - - -
Increase (Decrease) in Accounts Payable and Accrued Expenses 2,565 2,565 25,834
------------ ------------- ----------------
Net Cash Provided(Used) by Operating Activities (2,957) (3,515) (108,938)
------------ ------------- ----------------
Cash Flows from Investing Activities
Investment in Subsidiary - - 286
Purchase of Equipment - - (39,386)
------------ ------------- ----------------
Net Cash Provided (Used) by Investing Activities - - (39,100)
------------ ------------- ----------------
Cash Flows from Financing Activities
Payments for Officer Loan - - (41,200)
Proceeds from Officer Loan - - 77,500
Proceeds from Line of Credit 4,500 - 90,000
Proceeds from Issuance of Stock - - 25,000
------------ ------------- ----------------
Net Cash Provided(Used) by Financing Activities 4,500 - 151,300
------------ ------------- ----------------
Increase (Decrease) in Cash 1,543 (3,515) 3,262
------------ ------------- ----------------
Cash and Cash Equivalents at Beginning of Period 1,719 3,515 -
------------ ------------- ----------------
Cash and Cash Equivalents at End of Period $ 3,262 $ - $ 3,262
============ ============= ================
Cash Paid For:
Interest $ - $ 8,000 $ -
============ ============= ================
Income Taxes $ - $ - $ -
============ ============= ================
5
Notes to the Consolidated Financial Statements
December 31, 2002
GENERAL
Advance Technologies, Inc.(the Company) has elected to omit substantially all
footnotes to the financial statements for the three months ended December 31,
2002 since there have been no material changes (other than indicated in other
footnotes) to the information previously reported by the Company in their Annual
Report filed on Form 10-KSB for the fiscal year ended September 30, 2002.
UNAUDITED INFORMATION
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments which
are, in the opinion of management, necessary to properly reflect the results of
the interim period presented. The information presented is not necessarily
indicative of the results from operations expected for the full fiscal year.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS
Advance Technologies Inc. ("AVTX") is a developer of infrared (IR) Enhanced
Vision technology for commercial solutions and applications. The Company engages
in advance development activities and through strategic business arrangements
AVTX utilizes OEM suppliers and major system corporations to form strategic
business associations. This unique business model combines the strength of our
organization with the prior capital investment of the OEMs and the in place
established marketing and sales organization of the System Integrator. Our
ability to bridge advance IR technology into application-specific markets
shortens the development-to-market cycle and associated high investment risks of
this enterprise.
Advance Technologies has entered into a licensing agreement with Kollsman, Inc.,
which has incorporated the Company's technology into an Enhanced Vision System
("EVS") for use with Gulfstream Aerospace(R) aircraft.
Business Over-view
The tragic events of September 11, 2001 has produced economic and
bureaucratic shock waves that has had a direct effected on AVTX and our
strategic plans. The effect has been most notable in the decline of the price of
our common stock in recent months reflecting the general slow down that has
effected our markets.
The aftermath of 9-11 has effected Corporations such as Advance
Technologies Inc. through our significant involvement in Infrared Technology,
which is a controlled and regulated technology by the US Government. Since AVTX
is exclusively involved in commercial applications, and all of the technologies
we employ are considered "dual use technology" (military and commercial), the
governments restrictions have had little effect on the scope and direction of
our strategic plans. Thus, our plans for future products has not materially
changed. But, the government has imposed new requirements on Corporation like
AVTX to prove our system applications meet the commodity juristition regulations
(commercial non-military end-use) to the Department of State through compliance
to the International Traffic in Arms Regulation (ITAR).
ATI entered into an agreement with an off-shore OEM strategic partner
Telesis Electronics September of 2000, a Taiwanese privately held corporation.
Under the terms of this agreement ATI is developing IR systems in conjunction
with Telesis for sale in the USA as well as other foreign markets. Export
licenses are required to provide critical components for this work. Approval for
these licenses are taking more than a year to obtain. In October 2002, We were
notified our second export license for 35 systems was approved. Telesis has been
notified, and we are waiting for instruction from Telesis on the business
mechanics of payment, scheduling, and compliance information.
Enhanced Vision Activities
Enhance Vision System, our first project; has entered production. Advance
Technologies benefits through a license agreement with Kollsman Inc.
Kollsman has issued the quarterly report required under the License
Agreement to ATI stating eleven (11) EVS have been delivered to their
customer.
UNITS DELIVERED & SOLD VERSUS 2002 (QUARTERLY)
INITIAL DELIVERY UNITS SOLD TOTAL
1ST QT. 2002 2 0 0
2ND QT 2002 7 5 5
3RD QT. 2002 14 6 11
4TH QR. 2002 23 17 28
TOTAL 2002 45 28
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The delivery rates are increasing as Kollsman ramps up production. Kollsman
has released no information on their future production plans. Their end
user continues to expand the application to additional aircraft through
certification activity with the FAA. This will serve to increase the EVS
market.
Kollsman Instruments released a PRESS RELEASE in September 2002, titled,
KOLLMAN'S ENHANCED VISION SYSTEM PRODUCTLINE EXPAND. The Press Release
announced the introduction of a "new reduced performance EVS version"
called Night Window TM, a low cost derivative of the high performance
Kollsman's "All-weather Window" system. The expansion of Kollsman into the
higher volume, lower cost EVS market has been anticipated by Advance
Technologies. This market is larger and is more accessible from an FAA
certification standpoint.
Kollsman has not released any additional information with regard to
application, host platforms, or future sales. As this information become
available, or creditable projections are made by independent sources,
Advance Technologies will make appropriate announcements.
ATI and Telesis Technologies signed an EVS agreement, which designates
Telesis Technologies as our EVS representative for Far East opportunities.
This agreement gives Telesis the right to present limited information on
EVS and the benefit that EVS can provide to civil aviation. Discussions by
Telesis in the Far East has provided no specific opportunity to date.
Honeywell Technology License
Honeywell provided ATI initial terms for a "field application" and/or
"market use" of their Micro-bolometer technology. The terms and conditions
have been evaluation by ATI and our partner Telesis. It appears the terms
are reasonable based upon assumptions on the price and availability of a
low cost import from Taiwan. This product will not be available until first
quarter of 2003, therefore the need to finalize an agreement with Honeywell
has been delayed until first or second quarter of 2003.
NITEAGLETM
Telesis Technologies had provided two preproduction units for market
evaluation and product finalization. Tests have been completed and detailed
technical specifications of the production product completed. This process
included the review and incorporation of technical advancements that have
occurred in the last 18 months. The baseline configuration is up to date
with the latest advancements to ensure that our economic base is solid and
will not be obsolete with near term improvements. The rapid pace of these
improvements has been an impediment to finalizing the system and coming to
market.
Meetings in September were conducted with the ATI-Telesis team meeting with
our potential launch customer (OEM RV supplier) and a key IR supplier in
the USA. With the present ITAR restriction levied by the Department of
State, ATI & Telesis concluded the initial production of the restricted IR
technology should be performed in the USA, while the balance of the
unrestricted hardware would be imported from the Far East. The meetings
exceeded our expectations, and the product near term viability received a
strong boost. Our business model was validated and our cost model is
meeting our expectations. As always we retain back up and contingency plans
to cover the unknown to the extent the unknown can be anticipated.
8
The preliminary plan to launch the Niteagle project has been prepared and
submitted to Telesis Electronics Board of Directors for approval. ATI has
preciously approved the initial plan. We had expected approval prior to the
end of this year and to initiate the most next and most critical phase, a
broad agreement that includes ATI, Telesis, The exclusive launch customer,
and our USA IR supplier. Delays with our US supplier has delayed the
decision to proceed. It is unclear at this time, when we will be able to
resolve present business issues..
Spectrum 9000, Medical Equipment
ATI continues to provide export license support under a time & service
reimbursement agreement with Telesis Technologies. Telesis has not
announced a date for introduction of the Spectrum 9000 into the US market.
Additional discussions and meeting with medical equipment experts in the
USA. ATI believes that Telesis will become activity in the US market in
2003, and what role ATI will play in that activity has not been determined.
Development Projects
Advance Technologies Inc. continues development activities on new Infrared
systems for commercial markets. These projects cannot be forecast with any
degree of certainty and all strategic partnerships or business arrangements
remain confidential until such time as a formal announcement is appropriate
without compromising the development plan and/or the application market.
CAPITAL RESOURCES
No commitment for capital resources has been made during this reporting
period.
FINANCIAL ANALYSIS
The results on the operation represent projects of likely future events
that cannot be guaranteed. Therefore, the financial analysis does not
include projects, and no quantitative assessment has been provided based
upon the future discussion of potential events in section 3.
No material changes have been provided; therefore impact of unforeseeable
events cannot be assessed.
Present financial plans are adequate to meet our cash flow needs with our
current project schedule.
SIGNATURES
Pursuant to the requirement 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: February 25, 2002 Advance Technologies, Inc.
(Registrant)
By: /s/GARY E. BALL
----------------------------
Gary E. Ball
President and Director
9