FORM 10 QSB
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 March 31, 2003
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 March 31, 2003, approximately 22,766,517 shares of the Registrant's Common
Stock, $0.001 par value were outstanding.
As of March 31, 2003, approximately 38,748,857 shares of the Registrant's Class
A Preferred Non-voting Stock par value $0.001 were outstanding.
ITEM 1. FINANCIAL STATEMENTS
ADVANCE TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
March 31, 2003
Chisholm & Associates, CPA
PO Box 540216
North Salt Lake, UT 84054
Tel: (801) 292-8756
ADVANCE TECHNOLOGIES, INC.
(a Development Stage Company)
Consolidated Balance Sheets
ASSETS
March 31, September 30,
2003 2002
----------------- -----------------
(Unaudited)
Current Assets
Cash $ 11 $ 1,719
----------------- -----------------
Total Current Assets 11 1,719
----------------- -----------------
Property & Equipment, Net 18,439 22,367
----------------- -----------------
Total Assets $ 18,450 $ 24,086
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accrued Interest $ 28,397 $ 23,267
Note Payable - Officer 25,000 25,000
Advance Royalties 37,300 36,300
----------------- -----------------
Total Current Liabilities 90,697 84,567
----------------- -----------------
Long Term Liabilities
Line of Credit 90,000 85,500
----------------- -----------------
Total Long Term Liabilities 90,000 85,500
----------------- -----------------
Total Liabilities 180,697 170,067
----------------- -----------------
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 (664,770) (648,504)
----------------- -----------------
Total Stockholders' Equity (162,247) (145,981)
----------------- -----------------
Total Liabilities and Stockholders' Equity $ 18,450 $ 24,086
================= =================
ADVANCE TECHNOLOGIES, INC.
(a Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
For the six For the six For the three For the three From inception on
months ended months ended months ended months ended October 1, 1985
March 31, March 31, March 31, March 31, thru March 31,
2003 2002 2003 2002 2003
------------------------------------------- ------------- -----------------
Revenues $ 1,648 $ 17,447 $ - $ - $ 61,672
Operating Expenses
Depreciation & Amortization 3,928 - 1,964 - 33,447.00
Oranization Costs - - - - 11,331.00
Research & Development - - - - 72,750
General & Administrative 8,856 27,322 4,251 12,527 617,818
------------- ----------- ------------ ------------ ---------------
Total Operating Expenses 12,784 27,322 6,215 12,527 735,346
------------- ----------- ------------ ------------ ---------------
Operating Income (Loss) (11,136) (9,875) (6,215) (12,527) (673,674)
------------- ----------- ------------ ------------ ---------------
Other Income (Expense)
Miscellaneous Income - - - - 98,000
Interest Expense (5,130) (13,130) (2,565) (2,565) (28,397)
------------- ----------- ------------ ------------ ---------------
Total Other Income (Expense) (5,130) (13,130) (2,565) (2,565) 69,603
------------- ----------- ------------ ------------ ---------------
Net Income (Loss) $ (16,266.00) $ (23,005) $ (8,780) $ (15,092) $ (604,071)
============= =========== ============ ============ ===============
Net Income (Loss) Per Share $ (0.00) $ (0.01) $ (0.00) $ (0.01) $ (0.40)
============= =========== ============ ============ ===============
Weighted Average Shares Outstanding 17,218,967 2,572,923 17,218,967 2,572,923 1,518,424
============= =========== ============ ============ ===============
ADVANCE TECHNOLOGIES, INC.
(a Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
From inception
inception on
For the six months ended October 1, 1985
March 31, thru
-------------------------------------
March 31,
2003 2002 2003
----------------- ------------------ ---------------
Cash Flows from Operating Activities
Net Income (Loss) $ (16,266) $ (23,005) $ (604,071)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operations:
Depreciation & Amortization 3,928 3,633 33,447
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 5,130 5,130 28,399
----------------- ------------------ ---------------
Net Cash Provided(Used) by Operating Activities (7,208) (14,242) (113,189)
----------------- ------------------ ---------------
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 1,000 11,500 78,500
Proceeds from Line of Credit 4,500 - 90,000
Proceeds from Issuance of Stock - - 25,000
----------------- ------------------ ---------------
Net Cash Provided(Used) by Financing Activities 5,500 11,500 152,300
----------------- ------------------ ---------------
Increase (Decrease) in Cash (1,708) (2,741) 11
----------------- ------------------ ---------------
Cash and Cash Equivalents at Beginning of Period 1,719 3,515 -
----------------- ------------------ ---------------
Cash and Cash Equivalents at End of Period $ 11 $ 774 $ 11
================= ================== ===============
Cash Paid For:
Interest $ - $ 8,000 $ -
================= ================== ===============
Income Taxes $ - $ - $ -
================= ================== ===============
ADVANCE TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2003
GENERAL
Advance Technologies, Inc.(the Company) has elected to omit substantially all
footnotes to the financial statements for the three and six months ended March
31, 2003 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.
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 IR technology into application-specific markets shortens the
development-to-market cycle and the investment risk.
Advance Technologies has entered into a licensing agreement with Kollsman, Inc
in 1997., which has incorporated the Company's technology into an Enhanced
Vision System ("EVS") for use with Gulfstream Aerospace aircraft. The Kollsman
EVS has board applicability to commercial aviation.
BUSINESS OVERVIEW
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
the last year reflecting the general slow down of our markets.
The aftermath of 9-11 additionally effected Advance Technologies Inc. because of
our involvement in Infrared Technology, a technology regulated 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), our government's 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, our government's new requirements to ensure our
applications meet the commodity jurisdiction regulations and are compliant to
the International Traffic in Arms Regulation (ITAR) have slowed our growth.
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, which is valid
for two (2) years. 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 xxxxxxx (xx) EVS have been delivered to their customer during this
quarter.
UNITS DELIVERED & SOLD PER QUARTER
INITIAL DELIVERY UNITS SOLD TOTAL
1ST QT. 2002 2 0 0
2ND QT 2002 7 5 5
3RD QT. 2002 14 6 11
4TH QT. 2002 23 17 28
1ST QT. 2003 YY YY YY
TOTAL 45 28
The delivery rates are increasing as Kollsman ramps up production. Kollsman has
released no information on future production plans. Their Gulfstream customer
continues to expand the application to additional aircraft through certification
activity with the FAA. This will serve to increase and extend 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. 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 yielded no specific opportunities 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. The terms are reasonable based upon assumptions on the price
and availability of a low cost imports from Taiwan. This product has just
recently became available. No price-performance information has been provided to
date. Once this information becomes available, the need to negoitiate and
finalize an agreement with Honeywell will be addressed.
NITEAGLETM
Telesis Technologies provided two preproduction units for market evaluation.
Tests are completed. The baseline configuration is up to date with the latest
advancements. The rapid pace of the technology has it enters production has been
an impediment to finalizing the system, price reduction of 30% per year has been
typical. We believe that 2003 will bring price and sourcing stability to the
market.
Meetings last year were conducted with the ATI-Telesis team meeting with our
launch customer (OEM RV supplier) and a key IR supplier in the USA. It was
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.
We are currently waiting on price and delivery information from our USA
supplier. The plan to launch Niteagle has been prepared and submitted to
Telesis. Once our USA supplier provides the necessary information, ATI and
Telesis will seek final approval.
SPECTRUM 9000, MEDICAL EQUIPMENT
Telesis Technologies has not announced a date for introduction of the Spectrum
9000 into the US market. Telesis has announced the receipt of FDA approval from
the US Government. 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.
Advance Technologies Inc. has received an offer to convert our Line of Credit
Indebtedness into Class B restricted shares. Terms of the proposed agreement are
in negotiations, and finalization is expected next quarter.
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: May 14, 2003
ADVANCE TECHNOLOGIES, INC.
(Registrant)
By: /s/ GARY E. BALL
__________________________
Gary E. Ball
President and Director
CERTIFICATION
I, Gary E. Ball, as the President and Director of ADVANCE TECHNOLOGIES, INC.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of ADVANCE TECHNOLOGIES,
INC.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 45 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 14, 2003 /s/ GARY E. BALL
___________________________
Gary E. Ball
President and Director
ADVANCE TECHNOLOGIES, INC.