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, 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 reports
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, 2002, approximately 2,572,923 shares of the Registrant's Common
Stock, $0.001 par value were outstanding.
As of March 31, 2002, approximately 50,204,102 shares of the Registrant's Class
A Preferred Non-voting Stock par value $0.001 were outstanding.
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 13, 2002 Advance Technologies, Inc.
(Registrant)
By: /s/ Gary E. Ball
-------------------
Gary E. Ball
President and Director
ITEM 1. FINANCIAL STATEMENTS
ADVANCE TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
March 31, 2002
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,
2002 2001
(Unaudited)
Current Assets
Cash $ 774 $ 3,515
Total Current Assets 774 3,515
Property & Equipment, Net 23,202 26,835
Total Assets $ 23,976 $ 30,350
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accrued Interest $ 18,137 $ 13,007
Note Payable - Officer 39,800 28,300
Advance Royalties 25,000 25,000
Total Current Liabilities 82,937 66,307
Long Term Liabilities
Line of Credit 85,500 85,500
Total Long Term Liabilities 85,500 85,500
Total Liabilities 168,437 151,807
Stockholders' Equity
Common Stock, Authorized 100,000,000 Shares of $.001 Par Value,
Issued and Outstanding 2,572,923 shares 2,573 2,573
Preferred Stock, Series A Authorized 100,000,000 Shares of $.001
Par Value, Issued and Outstanding 50,204,102 Shares 50,204 50,204
Additional Paid in Capital 446,496 446,496
Deficit Accumulated During the Development Stage (643,734) (620,730)
Total Stockholders' Equity (144,461) (121,457)
Total Liabilities and Stockholders' Equity $ 23,976 $ 30,350
Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
For the three For the six From inception on
months ended months ended October 1, 1985
March 31, March 31, thru December 31,
2002 2001 2002 2001 2001
----------- ----------- ----------- ---------- ------------
Revenues $ - $ - $ 17,447 $ - $ 48,432
Operating Expenses
Research & Development - - - - 72,750
General & Administrative 12,527 16,980 27,322 56,330 630,581
----------- ----------- ----------- ---------- ------------
Total Operating Expenses 12,527 16,980 27,322 56,330 703,331
----------- ----------- ----------- ---------- ------------
Operating Income (Loss) (12,527) (16,980) (9,875) (56,330) (654,899)
----------- ----------- ----------- ---------- ------------
Other Income (Expense)
Miscellaneous Income - - - - 98,000
Interest Expense (2,565) - (13,130) - (26,137)
----------- ----------- ----------- ---------- ------------
Total Other Income (Expense) (2,565) - (13,130) - 71,863
----------- ----------- ----------- ---------- ------------
Net Income (Loss) $ (15,092) $ (16,980) $ (23,005) $ (56,330) $ (583,036)
=========== =========== =========== ========== ============
Net Income (Loss) Per Share $ (0.01) $ (0.01) $ (0.01) $ (0.02) $ (1.13)
=========== =========== =========== ========== ============
Weighted Average Shares Outstanding 2,572,923 2,572,923 2,572,923 2,572,923 513,921
----------- ----------- ----------- ---------- ------------
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
December 31, thru
--------------------------------------
December 31,
2001 2000 2001
--------------------------------------------------------
Cash Flows from Operating Activities
Net Income (Loss) $ (23,004) $ (248) $ (583,035)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operations:
Depreciation & Amortization 3,633 - 25,298
Stock Issued for Services - - 399,775
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 - 18,139
--------------------------------------------------------
Net Cash Provided(Used) by Operating Activities (14,241) (248) (113,812)
--------------------------------------------------------
Cash Flows from Investing Activities
Investment in Subsidiary - - 286
Purchase of Equipment - - (36,000)
--------------------------------------------------------
Net Cash Provided (Used) by Investing Activities - - (35,714)
--------------------------------------------------------
Cash Flows from Financing Activities
Payments for Officer Loan - - (33,200)
Proceeds from Officer Loan 11,500 - 73,000
Proceeds from Line of Credit - - 85,500
Proceeds from Issuance of Stock - - 25,000
--------------------------------------------------------
Net Cash Provided(Used) by Financing Activities 11,500 - 150,300
--------------------------------------------------------
Increase (Decrease) in Cash (2,741) (248) 774
--------------------------------------------------------
Cash and Cash Equivalents at Beginning of Period 3,515 555 -
--------------------------------------------------------
Cash and Cash Equivalents at End of Period $ 774 $ 307 $ 774
========================================================
Cash Paid For:
Interest $ 8,000 $ - $ 8,000
========================================================
Income Taxes $ - $ - $ -
========================================================
ADVANCE TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2002
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, 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, 2001.
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 and commercial solutions. The Company has a worldwide license
from Hughes Aircraft Company, Los Angeles, California for a patented advanced
infrared Enhanced Vision System. Advance Technologies licenses and develops
applied infrared enhanced vision solutions for use in diverse industries
including aviation, recreational vehicles, commercial trucking, marine, security
and fire fighting.
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.
On October 16, 2001, Gulfstream Aerospace Corporation, a wholly owned subsidiary
of General Dynamics, announced it has received certification from the Federal
Aviation Administration to install the "revolutionary" Enhanced Vision System on
the Gulfstream V ultra-long range business jet aircraft. The FAA-issued
Supplemental Type Certificate allows Gulfstream to offer EVS as an option on new
GV ultralong range business jet aircraft and also to install the system as a
retrofit on in-service GV aircraft.
Gulfstream Aerospace Corporation issued the following news release:
GULFSTREAM'S REVOLUTIONARY ENHANCED VISION SYSTEM RECEIVES FAA
CERTIFICATION; STC APPROVES EVS FOR GV ULTRA-LONG RANGE BUSINESS JET
AIRCRAFT
SAVANNAH, Georgia--(BUSINESS WIRE)--Oct. 16, 2001--Gulfstream Aerospace
Corporation, a wholly owned subsidiary of General Dynamics (NYSE: GD), has
received certification from the Federal Aviation Administration to install
the revolutionary Enhanced Vision System on the Gulfstream V ultra-long
range business jet aircraft.
The FAA-issued Supplemental Type Certificate allows Gulfstream to offer EVS
as an option on new GV ultralong range business jet aircraft and also to
install the system as a retrofit on in-service GV aircraft.
"The EVS is a revolutionary safety enhancement for operators of Gulfstream
V business jet aircraft," said Bill Boisture, Gulfstream president and
chief operating officer. "Offered exclusively by Gulfstream, it
significantly improves situational awareness for flight crews and provides
instant access to the information needed to make safe flying decisions in
adverse weather and low-visibility conditions."
Gulfstream has integrated the enhanced vision technology onboard the
revolutionary Gulfstream V-SP; it is a standard component of its exclusive
PlaneView(TM) cockpit. Next month Gulfstream will begin to design and test
EVS for retrofit on in-service Gulfstream IV business jet aircraft. EVS
will be offered as an option on all new Gulfstream IV-SP business jet
aircraft. Certification for the GIV is expected by mid-year 2002.
"EVS and the exclusive PlaneView cockpit represent two more revolutionary
firsts by a company that is already known for taking the leadership role in
product development," said Pres Henne, senior vice president, programs.
The EVS incorporates a unique sensor system based on Forward-Looking
Infrared (FLIR) technology developed and manufactured by Kollsman Inc.,
Merrimack, NH. The EVS sensor projects an infrared, real-world conformal
image on Honeywell's Head-Up Display in the cockpit. The image enables a
pilot to see through fog and darkness. In-service GVs outfitted with HUD
can be retrofitted with EVS to achieve the same safety enhancements.
The FAA's Safer Skies initiative has identified several situations that
cause accidents, including deteriorating weather conditions, controlled
flights into terrain, runway incursions and mistakes during approaches and
landings.
EVS can assist with each of these volatile situations. Enhancing vision
during adverse weather conditions, darkness or obstructed landings
significantly reduces the margin for error.
"As part of our FAA certification flight testing last month, three pilots
and an FAA flight test engineer flew 80 approaches using EVS during the day
and at night in all kinds of weather conditions," said Mike Mena, program
manager for the GV-SP and EVS. "The Gulfstream flight crew, pilots Ron
Newton and Gary Freeman and Flight Test Engineer Bill Osborne, flew the
aircraft over mountains at night to show the FAA how well EVS detects
terrain. EVS met or exceeded all expectations during this testing,
successfully meeting the demanding FAA certification criteria. Thanks to
their expertise and knowledge, our team was able to demonstrate EVS to the
fullest extent possible."
"There's a lot of demand for the EVS," Mena added. "To date, we've sold
about 35 Enhanced Vision Systems for GV retrofit installation. This number
does not include the systems that will be installed as standard equipment
on the GV-SP business jet aircraft." Gulfstream service centers will begin
EVS retrofit installations on in-service GVs in the first quarter of 2002.
Gulfstream Aerospace Corporation, a wholly owned subsidiary of General
Dynamics (NYSE:GD), designs, develops, manufactures, markets and services
the world's most technologically advanced intercontinental business jet
aircraft. Gulfstream has produced more than 1,200 aircraft for customers
around the world since 1958. To meet the aviation needs of its customers,
Gulfstream offers a full range of aircraft products and services, including
the Gulfstream 100(R), Gulfstream 200(R), Gulfstream IV-SP(R), the
ultra-long range Gulfstream V(R) and Gulfstream V-SP(R), Gulfstream
Shares(R), Gulfstream Financial Services(R), Gulfstream Lease(R),
Gulfstream Pre-Owned Aircraft Sales(R), Gulfstream Management Services(R)
and Gulfstream ServiceCare(R). The company employs more than 8,750 people
at eight locations. We invite you to visit our Web site at
www.gulfstream.com for photos of Gulfstream aircraft and related
information
General Dynamics, headquartered in Falls Church, Virginia, employs
approximately 52,000 people and anticipates 2001 sales of approximately $12
billion. The company has leading market positions in business aviation,
information systems, shipbuilding and marine systems, and land and
amphibious combat systems. More information about the company can be found
at www.generaldynamics.com.
Enhance Vision System will enter production this year. AVTX benefits through its
license agreement with Kollsman Inc. whereby AVTX achieves royalties that
increase in time. AVTX will provide guidance based upon production commitments
and delivery schedules between Gulfstream Aerospace Company and Kollsman Inc. as
this information becomes available. In February 2002, as a result of the FAA's
granting of the Supplemental Type Certification in October 2001, Kollsman
notified the Company that it has received its first production order for
Enhanced Vision Systems (EVS). The purchase agreement calls for its initial
aircraft launch customer to purchase in excess of 140 systems at a price of
approximately $1 million each. Under terms of this Agreement, Advance
Technologies is entitled to royalties from the sale of EVS units for the
commercial aviation market. This event marks the first Federal Aviation
Administration (FAA) certified EVS to enter into production. As of March 31,
2002, no EVS systems have been delivered to Gulfstream. The Company expects
additional sales based upon an industry report which indicates customers are
selecting the EVS equipment option at a higher than anticipated rate. EVS is
planned to be made available on additional aircraft in the future.
The Company anticipates a positive cash flow will occur by the third Quarter of
2002.
Enhance Vision Systems has been receiving extremely positive reviews in the
professional publications. (Professional Pilot, November 2001, Avionics News,
January 2002, Aviation Week & Space Technology, January 2001) Aviation
International News, January 2002 called "EVS could easily be listed as one of
the most important aviation safety innovations of the last 20 years." The
achievement of EVS Certification was called by Aviation International News as
"on the list of top news makers of the year (2001)".
AVTX and Kollsman also discussed collaboration on an Advanced EVS incorporating
AVTX's proprietary technology that is not included or a part of the current
production EVS. A process was initiated in which Kollsman would provide AVTX
with certain hardware items to support AVTX's development activities for the
Advanced EVS.
Advance Technologies, Inc. also continues its development phase with several
projects moving forward at a pace dictated by market conditions, technical
innovations and market factors.
NITEAGLE(TM) Advance Technologies' proprietary infrared system for recreational
vehicles has been under field evaluation since delivery in November from our
Taiwanese partner, Telesis Technologies. This unit is being evaluated for market
acceptance and performance evaluation. The result of this evaluation will
establish our future direction with product and a better understanding of its
market potential. Telesis Technologies has provided AVTX a second preproduction
system for our market evaluation and our market development activities. We are
conducting marketing presentations and demonstrations of NITEAGLE(TM), which
appear to be well-received.
AVTX and Telesis Technologies also have signed an agreement that designates
Telesis Technologies as our EVS representative for Far East opportunities. This
agreement gives Telesis the right to present limited information about AVTX's
EVS technology to potential customers in which to identify the benefits that EVS
can provide civil aviation.
Honeywell International solicited AVTX's participation in developing a "field
application" and/or "market use" of their Micro-bolometer detector technology.
Honeywell is establishing licenses for their Micro-bolometer detector
technology, for both technology and fields of application. AVTX has provided
Honeywell proprietary information on four potential license fields for potential
development, and further discussions are ensuing.
Db-associates has submitted a market study proposal to Telesis Technologies to
address key issues associated with introducing the Spectrum 9000, Infrared
Thermograph Medical Instrument into the USA. The Spectrum 9000 was introduced in
Taiwan in 2000 and in Korea in 2001. It has received excellent reviews from the
medical community for its use in alternative medical applications. AVTX is
collaborating with Telesis under a time and service reimbursement agreement on a
plan to introduce this system in the USA at some future time.
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 formal announcements are appropriate
without compromising the development plan and/or the application marketplace.
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.
The Company has received revenue pursuant to an agent agreement with, that
allows the Company to receive fixed monthly service fees, and to bill for
additional services provided. The Company records revenues when the services are
performed.
The Company is entitled to reimbursement for various expenses associated with
the development of its night vision technology pursuant to the joint venture
agreement with Telesis Technologies. These reimbursements are recorded as
miscellaneous income when received.
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.