SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: September 30, 2001
Commission File Number: 0-11419
Armitec, Inc.
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(Exact Name of Registrant as specified in its charter
Delaware 22-2435595
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
2965 B-2 Cobb Parkway, Atlanta, Georgia 30339
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Address of Principal executive offices of Incorporation Zip Code
or organization
770-980-9806
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Registrants telephone number, including area code
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 and Exchange Act of 1934
during the preceding 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 last 90 days.
YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as to the latest practical date.
CLASS No. of shares Outstanding on September 30, 2001
Common Stock 20,413,629
Par Value $.00167
Per share
1
ARMITEC, INC.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
Part I Financial Information Page
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
September 30, 2001 (unaudited) and December 31, 2000 ........... 3
Consolidated Condensed Statements of Operations for the
three and nine months ended September 30, 2001 (unaudited),
and cumulative from commencement of development stage
(July 24, 2000), through September 30, 2001 (unaudited) ......... 4
Consolidated Condensed Statements of Cash Flows for the
nine months ended September 30, 2001 (Unaudited), and
cumulative from commencement of development stage
(July 24, 2000), to September 30, 2001 (unaudited) ............. 5
Consolidated Statements of Changes in Stockholders' equity
for the period from inception (July 24, 2000), to
September 30, 2001 (unaudited) ................................. 6
Notes to Financial Statements (unaudited)....................... 7
Item 2. Plan of operation............................................... 8
2
ARMITEC, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 31,
2001 2000
------------ ------------
(unaudited)
ASSETS
------
CURRENT ASSETS
Cash $ -- $ 100
Inventory 44,200 --
------------ ------------
Total current assets 44,200 100
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Leasehold Improvements 18,085
Furniture, fixtures and equipment 105,120
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Total fixed assets 123,205
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OTHER ASSETS
Deferred offering costs -- 21,251
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Total other assets -- 21,251
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$ 167,405 $ 21,351
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 161,129 $ 51,250
Bank overdraft 19,528 --
Related party obligations 389,056 173,687
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Total Current Liabilities 569,713 224,937
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.0016; 50,000,000
shares authorized; 20,413,629 and 10,808,632, outstanding 32,662 30,094
Paid-in capital 134,358 24,033
(Deficit) accumulated during the development stage (569,328) (257,713)
------------ ------------
Total Stockholders' Equity (Deficit) (402,308) (203,586)
------------ ------------
$ 167,405 $ 21,351
============ ============
The accompanying notes are an integral part of these financial statements
3
ARMITEC, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Cummulative
from
(commencement
of
Three Months Ended Nine Monthe Ended development
September 30, September 30, stage)
----------------------------- ---------------------------- to
2001 2000 2001 2000 June 30, 2001
------------ ------------ ------------ ------------ -------------
REVENUES $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
EXPENSES
General and administrative 139,318 -- 308,271 -- 529,069
Interest 248 -- 3,344 -- 5,292
------------ ------------ ------------ ------------ ------------
Total expenses 139,566 -- 311,615 -- 534,361
------------ ------------ ------------ ------------ ------------
NET (LOSS) $ (139,666) $ -- $ (311,615) $ -- $ (534,361)
============ ============ ============ ============ ============
NET (LOSS) PER SHARE $ (0.01) n/a $ (0.02) n/a
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 20,413,629 18,808,632 19,343,623 18,808,632
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements
4
ARMITEC, INC.
(A Development Stage Company)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cummulative
from
July 24,
2000
(commencement
of
Nine Monthe Ended development
September 30, stage)
-------------------------- to
2001 2000 Sep 30 2001
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net ( loss) $ (311,615) $ -- $ (534,361)
Adjustments to reconcile net loss to
net cash used by operating activities:
Common stock issued for services 1,152 -- 19,312
Changes in operating assets and liabilities:
Increase (decrease) in
Inventories (44,200) -- (44,200)
Accounts payable 109,879 -- 161,128
----------- ----------- -----------
Net Cash (Used) by Operating Activities (244,784) -- (398,121)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in leasehold improvements (18,085) -- (18,085)
Increase in deferred offering costs -- -- (21,251)
----------- ----------- -----------
Net Cash to financing activities (18,085) -- (39,336)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in paid-in capital 1,000
Proceeds from sale of common stock 132,992 132,992
Increase in related party obligations 110,249 -- 283,937
----------- ----------- -----------
Net Cash from financing activities 243,241 -- 417,929
----------- ----------- -----------
NET (DECREASE) IN CASH (19,628) -- (19,528)
CASH AT BEGINNING OF PERIOD, 100 -- --
----------- ----------- -----------
BANK OVERDRAFT AT END OF PERIOD $ (19,528) $ -- $ (19,528)
=========== =========== ===========
SUPPLEMENTAL INFORMATION
Interest paid $ 3,344 $ 5,292
=========== ===========
NON-CASH ACTIVITIES
Deferred offering costs applied to common
stock subscriptions received $ 21,251 $ 21,251
=========== ===========
Reduction in related party obligations due
to receipt of-- fixed assets $ 105,120 $ 105,120
=========== ===========
The accompanying notes are an integral part of these financial statements
5
ARMITEC, INC.
(A Development Stage Company)
CONSOLIDATED CONDENSED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY
(Deficit)
Accumulated
Common Stock Common Stock Subscribed During
---------------------- Paid-in ------------------------ Development
Shares Amount Capital Amount Receivable Stage Total
---------- ---------- ---------- ---------- ---------- ---------- ----------
(audited)
Balances, at inception 15,947,542 $ 25,516 $ -- -- -- $ (34,967) $ (9,451)
Shares issued for compensation
to employees @ $.01 1,027,100 1,643 8,628 -- -- -- 10,271
Shares issued to settle debt @ $.01 18,000 29 151 -- -- -- 180
Shares issued for outside
services @ $.01 1,815,990 2,906 15,254 -- -- -- 18,160
Net (loss) for the period -- -- -- -- -- (222,746) (222,746)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balances, December 31, 2000 18,808,632 $ 30,094 $ 24,033 -- -- $ (257,713) $ (203,586)
(unaudited)
Common stock subscribed, net
of stock offering costs of $21,251 -- -- -- 1,606,741 (1,500,000) -- 106,741
Cancellation of stock subscriptions -- -- 106,741 (1,606,741) 1,500,000 -- --
Issuance of common stock 849,997 1,360 (1,360) -- -- -- --
Issuance of common stock for service 720,000 1,152 -- -- -- -- 1,152
Proceeds from sale of common stock 35,000 56 4,944 -- -- -- 5,000
Net (loss) for the nine months
ended September 30, 2001 -- -- -- -- -- (311,615) (311,615)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balances, September 30, 2001, (unaudited) 20,413,629 32,662 134,358 -- -- (569,328) (402,308)
========== ========== ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements
6
Note 1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the Company's financial position as of September 30, 2001 and
the results of its operations and cash flows for the three and nine months ended
September 30, 2001 have been made. Operating results for the nine months ended
September 30, 2001 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2001.
Although the Company's inception was July 24, 2000, there were no operations
until after September 30, 2000.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Form 10-KSB
for the year ended December 31, 2000.
Note 2. SUBSEQUENT EVENTS
In October 2001, the Company entered into three agreements for the provision of
various consulting services designed to assist the Company in furthering its
business plan. These agreements provide for the issuance of a total of 3,000,000
shares of the Company's common stock and warrants to purchase 2,000,000 shares
of the Company's common stock at $.15 per share.
A Form S-8 has been filed with the Securities and Exchange Commission to provide
for the registration of these securities and disclosure of the agreements.
7
ITEM 2. PLAN OF OPERATION
The Company's operations since inception have been limited, due to its inability
to obtain financing on the net assets it was to liquidate of an established
local uniform company pursuant to a management contract previously entered into.
The Company is financially dependent on its principal shareholder, who has
financed the majority of its cash flows to date. Exercise of the warrants in
connection with any of the consulting agreements may provide the Company with
additional capital.
8
SIGNATURES
In accordance with Section 13 and 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Armitec, Inc.
By: /s/ Bruce R. Davis Dated: November 12, 2001
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Bruce R. Davis
President and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the date indicated.
By: /s/ Bruce R. Davis Dated: November 12, 2001
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Bruce R. Davis
President and Chief Executive Officer
9