FORM 10 QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
{X} Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2004
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, 2004, approximately 22,897,717 shares of the Registrant's Common
Stock, $0.001 par value were outstanding. As of March 31, 2004, approximately
38,618,657 shares of the Registrant's Class A Preferred Stock par value $0.001
were outstanding.
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Page 1
TABLE OF CONTENTS
Page
Cover Page 1
Part I 2
Financial Statement Item 2
Financial Statements 3
Balance Sheet 4
Income Statement 5
Cashflow Statement 6
Financial Footnotes 7
Management Discussion 7
Announcements 8
Business Overview 8
Actions, Board of Directors 10
Signatures 10
Exhibits
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ITEM 1. FINANCIAL STATEMENTS
ADVANCE TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
March 31, 2004
Chisholm & Associates, CPA
PO Box 540216
North Salt Lake, UT 84054
Tel: (801) 292-8756
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ADVANCE TECHNOLOGIES, INC.
(a Development Stage Company)
Consolidated Balance Sheets
December 31, September 30,
2003 2003
____________ _____________
(Unaudited)
ASSETS
Current Assets
Cash $ 51,581 $ (2,029)
_________ _________
Total Current Assets 51,581 (2,029)
_________ _________
Property & Equipment, Net 12,476 14,440
_________ _________
Total Assets $ 64,057 $ 12,411
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ - $ 9,637
Accrued Interest - -
Note Payable - Officer 46,800 46,800
Advance Royalties 25,000 25,000
_________ _________
Total Current Liabilities 71,800 81,437
_________ _________
Long Term Liabilities
Line of Credit - -
_________ _________
Total Long Term Liabilities - -
_________ _________
Total Liabilities 71,800 81,437
_________ _________
Stockholders' Equity
Common Stock, Authorized 100,000,000 Shares of $.001 Par Value,
Issued and Outstanding 17,218,967 shares 22,766 22,766
Preferred Stock, Series A Authorized 100,000,000 Shares of $.001
Par Value, Issued and Outstanding 38,858,057 Shares 38,748 38,749
Additional Paid in Capital 549,780 549,780
Deficit Accumulated During the Development Stage (619,037) (680,321)
_________ _________
Total Stockholders' Equity (7,743) (69,026)
_________ _________
Total Liabilities and Stockholders' Equity $ 64,057 $ 12,411
========= =========
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Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
From the beginning
For the three For the three of Development stage
months ended months ended October 1, 1985
December 31, December 31, thru December 31,
2003 2002 2003
_____________ _____________ ____________________
Revenues $ 122,205 $ 1,648 $ 182,229
Operating Expenses
Depreciation & Amortization 1,964 1,964 39,410
Oranization Costs - - 11,331
Research & Development - - 72,750
General & Administrative 58,957 4,605 691,809
___________ ___________ _________
Total Operating Expenses 60,921 6,569 815,300
___________ ___________ _________
Operating Income (Loss) 61,284 (4,921) (633,071)
___________ ___________ _________
Other Income (Expense)
Miscellaneous Income - - 98,000
Interest Expense - (2,565) (23,267)
___________ ___________ _________
Total Other Income (Expense) - (2,565) 74,733
___________ ___________ _________
Net Income (Loss) $ 61,284 $ (7,486) $(558,338)
=========== =========== =========
Net Income (Loss) Per Share $ 0.00 $ (0.00) $ (0.23)
=========== =========== =========
Weighted Average Shares Outstanding 22,766,317 17,218,967 2,424,076
=========== =========== =========
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Advance Technologies, Inc.
(a Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
For the three months ended From the beginning
December 31, of development stage
__________________________ October 1, 1985
2003 2002 thru December 31, 2003
_______ _______ ______________________
Cash Flows from Operating Activities
Net Income (Loss) $61,284 $(7,486) $(558,338)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operations:
Depreciation & Amortization 1,963 1,964 39,409
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 (9,637) 2,565 23,274
_______ _______ _________
Net Cash Provided(Used) by Operating Activities 53,610 (2,957) (66,619)
_______ _______ _________
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 - - 88,000
Proceeds from Line of Credit - 4,500 85,500
Proceeds from Issuance of Stock - - 25,000
_______ _______ _________
Net Cash Provided(Used) by Financing Activities - 4,500 157,300
_______ _______ _________
Increase (Decrease) in Cash 53,610 1,543 51,581
_______ _______ _________
Cash and Cash Equivalents at Beginning of Period (2,029) 1,719 -
_______ _______ _________
Cash and Cash Equivalents at End of Period 51,581 3,262 $ 51,581
======= ======= =========
Cash Paid For:
Interest $ - $15,695 $ 31,097
======= ======= =========
Income Taxes $ $ - $ -
======= ======= =========
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ADVANCE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2004
GENERAL
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.
BUSINESS OVERVIEW
The tragic events of September 11, 2001 have produced economic and bureaucratic
shock waves that continue to effect ATI and our strategic plans. As time goes on
the effect on ATI is less and the over-all business recovery is improving. Cost
of capital and venture capital remain difficult in the high technology sector.
US Government restrictions on the application of Infrared Technology to
commercial application continue as we learn to work with new restrictions and
reporting requirements. The commercial applications are becoming easier, export
restriction are more difficult. The effect has been most notable in the decline
of the price of our common stock and a general slow down of our markets.
Advance Technologies has reached an agreement in principle with a marketing and
sales group to launch the NITEAGLE program. Terms of this agreement are expected
to be finalized in April 2004.
The acquisition of Telesis Technologies Inc., a privately held Taiwanese
corporation was officially completed this fall by United Integrated Services
(UIS), a publicly traded Taiwan Corporation. Our agent agreement and joint
projects have been converted to UIS with no change in terms and conditions.
In January 2004 ATI delivered 15 Nightview camera to UIS for their Spectrum 9000
medical system sold in the far east. These units were exported under the terms
of our agent agreement and in compliance with the terms and conditions of
Department of Commerce License No. D293324 issued October 26, 2002. This second
shipment completes the number of systems authorized under the export license.
ATI has applied for another export license for 50 additional IR Cameras. This
will be the third license ATI has obtained for UIS (Telesis).
ATI was contacted by a medical service facility in the USA. The medical company
is interested in conducting clinical trials on the Spectrum 9000 produced by UIS
to investigate potential benefits in the treatment of diabetes, varicose veins,
and other circulatory diseases.
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 a through March 31, 2004 a total program to date deliveries
and sales.
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ANNUAL UNITS DELIVERED & SOLD
=============================
INITIAL DELIVERY UNITS SOLD TOTAL
________________ __________ _____
Year 2002 47 29 29
Year 2003 108 107 107
Year 2004 (Q1) 19 28 28
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TOTAL 174 164 164
The EVS market continues to develop on schedule.
On March 30, 2004 Gulfstream Aerospace announced that they have received an
amendment to the EVS Supplemental Type Certification (STC) for their G-IV
Aircraft. The addition of the G-IV increases the EVS market by more than 500
systems. As a result of this action, Gulfstream now offers EVS as a retrofit on
six models (GIV, GIV-SP, G300, G400, and GV). The retrofit modification is
combined with scheduled maintenance and can be performed at five Service Centers
in the USA. EVS remains standard equipment on G450 & G550 currently in
production.
The proposed rule change (February 2003, Federal Registrar) by the FAA have been
adopted after nearly a year of study and review. The flight rule specifically
approvals EVS for precision approaches in FAA defined low visibility operations.
This rule takes away the last restriction, and EVS can now be expanded beyond
the Business Jet (Part -91 operations) to the Regional Carriers (Part -135),
Major Carriers (Part -121), and the Package Carrier operators (Part -127/-121).
The agreement between Kollsman and FedEx is proceeding with the EVS being slated
for operation on all of FedEx's widebody aircraft.
NITEAGLE
The advancements in price, performance, and delivery of the microbolometer IR
technology have matured to the point where NITEAGLE is commercially viable. This
long awaited event is key to several commercial applications beyond NITEAGLE.
Details of the final NITEAGLE agreement will be released in our next quarterly
filing.
SPECTRUM 9000, MEDICAL EQUIPMENT
Advanced Technologies is working with a US medical service company to provide a
clinical study, peer group review proposal to study and evaluate potential
benefits to the treatment of circulatory diseases such as varicose veins,
diabetes, and other potential applications. This study will be conducted under
the direction of well recognized Surgeon.
UIS has asked ATI to submit a peer review study proposal. UIS has offered a
Spectrum 9000 to the medical company at a very competitive price. We are still
waiting on the medical company to prepare the "peer group" study proposal. The
medical company has been very busy with their start up, and we expect a firm
proposal to initiate negotiations with UIS. ATI believes the Spectrum 9000 can
be used on a joint basis for the medical company daily business as well as a
"show and tell" demonstrator for the US market.
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.
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ADVANCE TECHNOLOGIES INC. BOARD OF DIRECTOR ACTIONS
The maturity of the Enhanced Vision Project has provided the need to make
adjustments to prepare for our transition from a "development company" to a
mature self-sustaining company. We anticipate a full transition by mid-2004.
Accordingly, the following actions have been authorized by the AVTX Board of
Directors to smooth the transition of AVTX.
On December 14, 2003 the Board of Directors directed the Corporate attorney to
file for authorization to issue 4,000,000 shares of AVTX common stock for the
purpose of generating operating capitol for 2004. The proceeds of sales will be
used to cover operating expense as AVTX completes their transition from a
development company, dependent upon investments to an on-going profitable
enterprise.
In February 2004, the Board of Directors rescinded the direction to the
corporate attorney to file for the issuance of 4,000,000 shares and instructed
the corporate attorney to prepare a Private Placement Memorandum for the private
placement of 4,000,000 common shares subject to Rule 144 restrictions to provide
for operating capital and new business development for 2004. Management believes
this equity placement better suits the company's needs.
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.
ADVANCE TECHNOLOGIES, INC.
(Registrant)
Date: May 12, 2004 By: /s/ GARY E. BALL
______________________________
Gary E. Ball
President and Director
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