Delaware
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22-1896032
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(State
or Other Jurisdiction
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(I.R.S.
Employer
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of
Incorporation or organization)
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Identification
Number)
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Large accelerated filer o
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Accelerated filer o
|
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Non-accelerated filer o (Do not check if
a smaller reporting company)
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Smaller reporting company x
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Page Number
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PART I. FINANCIAL INFORMATION | |||
ITEM 1.
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CONSOLIDATED FINANCIAL
STATEMENTS:
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Condensed Consolidated Balance
Sheets – September 30, 2008
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|||
(unaudited) and March 31,
2008
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3
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Condensed Consolidated Statements
of Operations - For
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|||
the three and six months ended
September 30, 2008 and 2007 (unaudited)
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4
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Condensed Consolidated Statements
of Cash Flows - For
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|||
the six months ended
September 30, 2008 and 2007 (unaudited)
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5
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Notes to Condensed Consolidated
Financial Statements
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|||
(unaudited)
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6
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ITEM 2.
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MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF
OPERATIONS
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12
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ITEM 3.
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QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
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14
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ITEM 4T. | CONTROLS AND PROCEDURES |
15
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PART II. OTHER
INFORMATION
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ITEM 1.
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LEGAL
PROCEEDINGS
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16
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ITEM 1A. | RISK FACTORS |
16
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ITEM 2.
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UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
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16
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ITEM 3.
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DEFAULTS UPON SENIOR
SECURITIES
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16
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ITEM 4.
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SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
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16
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ITEM 5.
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OTHER
INFORMATION
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16
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ITEM 6.
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EXHIBITS
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17
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PART I. FINANCIAL
INFORMATION
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||||||||
ITEM 1. CONSOLIDATED FINANCIAL
STATEMENTS
|
||||||||
ADM TRONICS UNLIMITED, INC. AND
SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED BALANCE
SHEETS
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||||||||
SEPTEMBER 30,
2008
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MARCH 31,
2008
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
Current
assets:
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||||||||
Cash and cash
equivalents
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$ | 1,518,042 | $ | 2,072,325 | ||||
Accounts receivable, net of
allowance for doubtful
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||||||||
accounts of
$1,088 and $1,088, respectively
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83,747 | 101,270 | ||||||
Inventories
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365,745 | 469,403 | ||||||
Prepaid expenses and other current
assets
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8,592 | 83,731 | ||||||
Restricted
cash
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225,000 | - | ||||||
Total current
assets
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2,201,126 | 2,726,729 | ||||||
Property and equipment, net of
accumulated depreciation
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||||||||
of $21,576 and $17,873,
respectively
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66,473 | 55,288 | ||||||
Inventory - long term
portion
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84,543 | 78,416 | ||||||
Investment in
Ivivi
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1,560,000 | 2,154,517 | ||||||
Advances to related
parties
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65,655 | 74,299 | ||||||
Other
assets
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236,144 | 28,486 | ||||||
Total
assets
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$ | 4,213,941 | $ | 5,117,735 | ||||
LIABILITIES AND STOCKHOLDERS'
EQUITY
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||||||||
Current
liabilities:
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||||||||
Accounts
payable
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$ | 139,349 | $ | 237,331 | ||||
Note payable –
Bank
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200,000 | -- | ||||||
Accrued expenses and other current
liabilities
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48,165 | 87,439 | ||||||
Customer deposits –
Ivivi
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108,697 | 241,828 | ||||||
Total current
liabilities
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496,211 | 566,598 | ||||||
Stockholders'
equity:
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||||||||
Preferred stock, $.01 par value;
5,000,000 shares authorized,
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||||||||
no shares issued and
outstanding
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-- | -- | ||||||
Common stock, $.0005 par value;
150,000,000 shares
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||||||||
authorized, 53,939,537 shares
issued and outstanding at
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||||||||
September 30, 2008 and March 31,
2008
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26,970 | 26,970 | ||||||
Additional paid-in
capital
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32,153,597 | 32,153,597 | ||||||
Accumulated
deficit
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(28,462,838 | ) | (27,629,430 | ) | ||||
Total stockholders'
equity
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3,717,730 | 4,551,137 | ||||||
Total liabilities and
stockholders' equity
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$ | 4,213,941 | $ | 5,117,735 | ||||
The accompanying notes are an
integral part of these unaudited
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||||||||
condensed consolidated financial
statements.
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ADM TRONICS UNLIMITED, INC. AND
SUBSIDIARIES
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||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
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||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
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||||||||||||||||
(Unaudited)
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||||||||||||||||
Three Months
Ended
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Six Months
Ended
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|||||||||||||||
September
30,
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September
30,
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|||||||||||||||
2008
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2007
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2008
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2007
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|||||||||||||
Revenues
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$ | 389,589 | $ | 399,847 | $ | 990,530 | $ | 692,933 | ||||||||
Costs and
expenses:
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||||||||||||||||
Cost of
sales
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258,269 | 249,170 | 657,480 | 419,229 | ||||||||||||
Research and
development
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- | 1,057 | - | 3,550 | ||||||||||||
Selling, general and
administrative
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311,913 | 245,798 | 600,581 | 494,517 | ||||||||||||
Total operating
expenses
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570,182 | 496,025 | 1,258,061 | 917,296 | ||||||||||||
Operating
loss
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(180,593 | ) | (96,178 | ) | (267,531 | ) | (224,363 | ) | ||||||||
Interest income,
net
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13,307 | 25,647 | 28,641 | 50,790 | ||||||||||||
Change in fair value of
investment
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||||||||||||||||
in Ivivi
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(4,517,500 | ) | -- | (9,815,000 | ) | -- | ||||||||||
Equity in net loss of
Ivivi
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-- | (610,817 | ) | -- | (1,080,424 | ) | ||||||||||
Net loss before income taxes
(credit)
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(4,684,786 | ) | (681,348 | ) | (10,053,890 | ) | (1,253,997 | ) | ||||||||
Income taxes
(credit)
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(277,612 | ) | -- | (2,425,188 | ) | -- | ||||||||||
Net loss
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$ | (4,407,174 | ) | $ | (681,348 | ) | $ | (7,628,702 | ) | (1,253,997 | ) | |||||
Net loss per share, basic and
diluted
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$ | (0.08 | ) | $ | (0.01 | ) | $ | (0.14 | ) | $ | (0.02 | ) | ||||
Weighted average shares
outstanding,
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||||||||||||||||
basic and
diluted
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53,939,537 | 53,882,037 | 53,939,537 | 53,882,037 | ||||||||||||
The accompanying notes are an
integral part of these unaudited
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||||||||||||||||
condensed consolidated financial
statements.
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ADM TRONICS UNLIMITED, INC. AND
SUBSIDIARIES
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|||||||||
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
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|||||||||
FOR THE SIX MONTHS ENDED SEPTEMBER
30, 2008 AND 2007
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|||||||||
(Unaudited)
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|||||||||
2008
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2007
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||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES:
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|||||||||
Net loss
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$ | (7,628,702 | ) | $ | (1,253,997 | ) | |||
Adjustments to reconcile net loss
to net cash
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|||||||||
used by
operating activities:
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|||||||||
Depreciation
and amortization
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8,535 | 8,726 | |||||||
Deferred income
tax benefit
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(2,425,188 | ) | -- | ||||||
Loss from
equity investment
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-- | 1,080,424 | |||||||
Bad
debts
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-- | (4,059 | ) | ||||||
Change in fair
value of investment in Ivivi
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9,815,000 | -- | |||||||
Changes in operating assets and
liabilities:
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|||||||||
(Increase)
decrease in:
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|||||||||
Accounts
receivable
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17,523 | 16,692 | |||||||
Inventory
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97,531 | (127,878 | ) | ||||||
Prepaid
expenses and other current assets
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75,139 | (62,885 | ) | ||||||
Other
assets
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-- | (6,022 | ) | ||||||
Increase
(decrease) in:
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|||||||||
Accounts
payable and accrued expenses
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(137,255 | ) | 19,552 | ||||||
Customer
deposit – Ivivi
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(133,131 | ) | 123,892 | ||||||
Net cash used by operating
activities
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(310,548 | ) | (205,555 | ) | |||||
CASH FLOWS FROM INVESTING
ACTIVITIES:
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|||||||||
Purchases of property and
equipment
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(14,888 | ) | (12,719 | ) | |||||
Collections of advances to related
parties
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8,644 | -- | |||||||
Acquired intangible
assets
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(212,491 | ) | -- | ||||||
Deposit – restricted
cash
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(225,000 | ) | -- | ||||||
Receivable from Ivivi | -- | 11,736 | |||||||
Net cash used by investing
activities
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(443,735 | ) | (983 | ) | |||||
CASH FLOWS FROM FINANCING
ACTIVITIES:
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|||||||||
Proceeds from note payable –
Bank
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200,000 | -- | |||||||
Net decrease in
cash
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(554,283 | ) | (206,538 | ) | |||||
Cash and cash equivalents,
beginning of period
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2,072,325 | 2,498,276 | |||||||
Cash and cash equivalents, end of
period
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$ | 1,518,042 | $ | 2,291,738 | |||||
Cash paid
for:
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|||||||||
Interest
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$ | 667 | $ | -- | |||||
Income
taxes
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$ | -- | $ | -- | |||||
NONCASH FINANCING AND INVESTING
ACTIVITIES:
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During the six months ended
September 30, 2007, Ivivi recorded an increase
in
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additional paid-in capital as a
result of the recognition of compensation
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expense related to option grants
to employees and others. We have recorded a
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proportional increase in our
investment in Ivivi in the amount of $269,365,
with
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a related credit to additional
paid-in capital. We have also recorded a change
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of ownership percentage adjustment
of $798.
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The accompanying notes are an
integral part of these unaudited
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condensed consolidated financial
statements.
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Current
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Long Term
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Total
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||||||||||
Raw
materials
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$ | 295,283 | $ | 45,313 | $ | 340,596 | ||||||
Finished
goods
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70,462 | 39,230 | 109,692 | |||||||||
$ | 365,745 | $ | 84,543 | $ | 450,288 |
Current
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Long Term
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Total
|
||||||||||
Raw
materials
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$ | 361,897 | $ | 39,186 | $ | 401,083 | ||||||
Finished
goods
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107,506 | 39,230 | 146,736 | |||||||||
$ | 469,403 | $ | 78,416 | $ | 547,819 |
Pre-tax cumulative-effect
adjustment to retained earnings:
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$ | 9,220,483 | ||
Deferred tax
liability:
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2,425,188 | |||
Post-tax cumulative-effect
adjustment to retained earnings:
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$ | 6,795,295 |
Six Months
Ended
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Six Months
Ended
|
|||||||
September 30,
2008
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September 30,
2007
|
|||||||
(unaudited)
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(unaudited)
|
|||||||
Revenue
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$ | 971,423 | $ | 686,731 | ||||
Costs and expenses,
net
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5,351,888 | 3,906,404 | ||||||
Net loss
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$ | (4,380,465 | ) | $ | (3,219,673 | ) | ||
Assets at September 30,
2008
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$ | 5,222,938 | ||||||
Liabilities at September 30,
2008
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1,663,798 | |||||||
Equity at September 30,
2008
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$ | 3,559,140 | ||||||
Assets at September 30,
2007
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$ | 6,926,749 | ||||||
Liabilities at September 30,
2007
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1,531,873 | |||||||
Equity at September 30,
2007
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$ | 5,394,876 |
Level
1
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Unadjusted
quoted prices in active markets that are accessible at the measurement
date for identical, unrestricted assets or liabilities.
|
|
Level
2
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Quoted
prices in markets that are not active; or other inputs that are
observable, either directly or indirectly, for substantially the full term
of the asset or liability.
|
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Level
3
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Prices
or valuation techniques that require inputs that are both significant to
the fair value measurement and
unobservable.
|
Level 1
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Level 2
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Level 3
|
|||||||||||
Investment in
Ivivi
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$ | 1,560,000 | $ | -- | $ | -- |
Chemical
|
Electronics
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Total
|
||||||||||
Three months ended September 30,
2008
|
||||||||||||
Revenues from external
customers
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$ |
181,025
|
$ |
208,504
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$ |
389,589
|
||||||
Segment operating
loss
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(58,665
|
) | (121,928 | ) | (180,593 | ) | ||||||
Three months ended September 30,
2007
|
||||||||||||
Revenues from external
customers
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$ | 245,474 | $ | 154,373 | $ | 399,847 | ||||||
Segment operating profit
(loss)
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(119,599 | ) | 23,421 | (96,178 | ) | |||||||
Six months ended September 30,
2008
|
||||||||||||
Revenues from external
customers
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$ | 421,349 | $ | 569,181 | $ | 990,530 | ||||||
Segment operating
loss
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(116,600 | ) | (150,931 | ) | (267,531 | ) | ||||||
Six months ended September 30,
2007
|
||||||||||||
Revenues from external
customers
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$ | 443,688 | $ | 249,245 | $ | 692,933 | ||||||
Segment operating profit
(loss)
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(258,850 | ) | 34,487 | (224,363 | ) | |||||||
Total assets at September 30,
2008
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$ | 3,652,717 | $ | 561,224 | $ | 4,213,941 | ||||||
Total assets at March 31,
2008
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$ | 4,592,031 | $ | 525,704 | $ | 5,117,735 |
Inventory
|
$ | 19,184 | |||
Equipment
|
9,140 | ||||
Non-Compete
Agreement
|
50,000 | ||||
Controller
design
|
100,000 | ||||
Customer
list
|
62,491 | ||||
Total
|
$ | 240,825 |
Three Months
Ended
|
Six Months
Ended
|
||||||||
September 30,
2008
|
September 30,
2008
|
||||||||
Revenue
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$ | 427,242 | $ | 1,090,611 | |||||
Net loss
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$ | (4,381,685 | ) | $ | (7,584,624 | ) | |||
Net loss per
share
|
$ | (0.08 | ) | $ | (0.14 | ) |
By:
|
/s/ Andre' DiMino | ||||
Andre' DiMino, Chief Executive | |||||
|
|
Officer and Chief Financial Officer | |||
Dated: |
Northvale,
New Jersey
|
||||
November 19, 2008 |