Full Press Release Details
C TECHNOLOGIES, INC.
FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018
ACCOUNTANTS REVIEW REPORT
C TECHNOLOGIES, INC.
| Page | ||||
| Independent Accountants Review Report | 1 | |||
| Financial Statements | ||||
| Balance Sheets | 2 | |||
| Statements of Income | 3 | |||
| Statements of Stockholder s Equity | 4 | |||
| Statements of Cash Flows | 5 | |||
| Notes to Financial Statements | 6 |
INDEPENDENT ACCOUNTANTS REVIEW REPORT
of C Technologies, Inc.
We have reviewed the accompanying financial statements of C Technologies, Inc., which comprise the balance sheet as of March 31, 2019 and 2018, and the
related statements of income, stockholder s equity and cash flows for the three-month periods ended March 31, 2019 and 2018. A review includes primarily applying analytical procedures to management s financial data and making
inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.
Management s Responsibility for the Financial Information
Management is responsible for the preparation and fair presentation of the interim financial statements in accordance with accounting principles generally
accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of interim financial statements that are free from material misstatement
whether due to fraud or error.
Accountant s Responsibility
Our responsibility is to conduct the reviews in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and
Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them
to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.
Accountant s Conclusion
Based on our reviews, we
are not aware of any material modifications that should be made to the accompanying interim financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America.
Report on Balance Sheets as of December 31, 2018 and 2017
We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the balance sheets of C Technologies,
Inc. as of December 31, 2018 and 2017, and the related statements of income, stockholder s equity, and cash flows for the years then ended (not presented herein); and in our report dated March 8, 2019, we expressed an unmodified audit
opinion on those audited financial statements. In our opinion, the accompanying balance sheet of C Technologies, Inc. as of December 31, 2018 and 2017, is consistent, in all material respects, with the audited financial statements from which it
| /s/ Friedman LLP |
| May 8, 2019 |
C Technologies, Inc.
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,953,000 | $ | 11,200,000 | ||||
| Accounts receivable | 2,732,000 | 2,782,000 | ||||||
| Inventories, net | 2,252,000 | 1,765,000 | ||||||
| Prepaid expenses and other current assets | 61,000 | 48,000 | ||||||
| Total current assets | 7,998,000 | 15,795,000 | ||||||
| Property and equipment, net | 42,000 | 23,000 | ||||||
| Other assets | 17,000 | |||||||
| Total assets | $ | 8,040,000 | $ | 15,835,000 | ||||
| Liabilities and stockholder s equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 214,000 | 233,000 | ||||||
| Accrued expenses | 991,000 | 717,000 | ||||||
| Deferred revenue, current | 1,818,000 | 1,349,000 | ||||||
| Total current liabilities | 3,023,000 | 2,299,000 | ||||||
| Deferred revenue, non-current | 76,000 | 147,000 | ||||||
| Total liabilities | 3,099,000 | 2,446,000 | ||||||
| Commitments and contingencies | ||||||||
| Stockholder s equity: | ||||||||
| Common stock, $1.00 par value, 400 authorized, 400 shares at March 31, 2019 and 2018 issued and outstanding | ||||||||
| Retained earnings | 4,941,000 | 13,389,000 | ||||||
| Total stockholder s equity | 4,941,000 | 13,389,000 | ||||||
| Total liabilities and stockholder s equity | $ | 8,040,000 | $ | 15,835,000 |
The accompanying notes are an integral part of these financial statements.
C Technologies, Inc.
Statements of Income
| Three Months Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenue, net | $ | 5,418,000 | $ | 4,340,000 | ||||
| Operating expenses: | ||||||||
| Cost of revenue | 1,803,000 | 1,451,000 | ||||||
| Research and development | 160,000 | 120,000 | ||||||
| Selling, general and adminstrative | 1,151,000 | 744,000 | ||||||
| Total operating expenses | 3,114,000 | 2,315,000 | ||||||
| Income from operations | 2,304,000 | 2,025,000 | ||||||
| Other income | 5,000 | 2,000 | ||||||
| Net income | $ | 2,309,000 | $ | 2,027,000 |
The accompanying notes are an integral part of these financial statements.
C Technologies, Inc.
Statements of Stockholder s Equity
| Total | ||||||||||||||||
| Common | Retained | Stockholder s | ||||||||||||||
| Shares | Stock | Earnings | Equity | |||||||||||||
| December 31, 2016 | 400 | $ | $ | 9,232,000 | $ | 9,232,000 | ||||||||||
| Net income | 6,045,000 | 6,045,000 | ||||||||||||||
| Distributions | (3,904,000 | ) | (3,904,000 | ) | ||||||||||||
| December 31, 2017 | 400 | 11,373,000 | 11,373,000 | |||||||||||||
| Net income | 10,662,000 | 10,662,000 | ||||||||||||||
| Distributions | (11,807,000 | ) | (11,807,000 | ) | ||||||||||||
| December 31, 2018 | 400 | 10,228,000 | 10,228,000 | |||||||||||||
| Net income | 2,309,000 | 2,309,000 | ||||||||||||||
| Distributions | (7,596,000 | ) | (7,596,000 | ) | ||||||||||||
| March 31, 2019 | 400 | $ | $ | 4,941,000 | $ | 4,941,000 |
The accompanying notes are an integral part of these financial statements.
C Technologies, Inc.
Statements of Cash Flow
| Three Months Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 2,309,000 | $ | 2,027,000 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 3,000 | 5,000 | ||||||
| Gain on sale of property and equipment | (5,000 | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 570,000 | 1,350,000 | ||||||
| Inventories | (512,000 | ) | (243,000 | ) | ||||
| Prepaid expenses and other assets | (13,000 | ) | (31,000 | ) | ||||
| Accounts payable | (131,000 | ) | (115,000 | ) | ||||
| Accrued expenses | 84,000 | 107,000 | ||||||
| Deferred revenue | 547,000 | 379,000 | ||||||
| Net cash provided by operating activities | 2,852,000 | 3,479,000 | ||||||
| Cash flows from investing activities: | ||||||||
| Proceeds from disposal of property and equipment | 4,000 | |||||||
| Net cash used in investing activities | 4,000 | |||||||
| Cash flows from financing activities: | ||||||||
| Distributions to stockholder | (7,596,000 | ) | (11,000 | ) | ||||
| Net cash used in financing activities | (7,596,000 | ) | (11,000 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (4,740,000 | ) | 3,468,000 | |||||
| Cash and cash equivalents, beginning of the period | 7,693,000 | 7,732,000 | ||||||
| Cash and cash equivalents, end of the period | $ | 2,953,000 | $ | 11,200,000 |
The accompanying notes are an integral part of these financial statements.
C Technologies, Inc.
Notes to the Financial Statements
NOTE 1 NATURE OF BUSINESS
financial statements include the accounts of C Technologies, Inc. (the Company ). The Company designs and manufactures solutions for the biopharmaceutical industry. Specifically, it has developed a unique way to perform UV/Vis analysis
using Slope Spectroscopy. By leveraging the advantages of this technique, the Company has been able to create a platform by which its customers can make off-line or at-line protein concentration measurements of their drug substance, at various
points in the manufacturing process. At-line testing can be performed in-house by manufacturing personnel on the production floor, while off-line testing is typically performed by quality control and formulation laboratories within the
biopharmaceutical production facility, eliminating the need to send samples off-site for testing. Since SoloVPE has become an accepted standard in the industry for off-line and at-line testing, the Company launched an
in-line version of the instrument called FlowVPE which over the next few years will allow manufacturing and production facilities to measure protein concentration in-line, providing real-time protein
concentration data during the manufacturing process.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements
included herein have been prepared by the Company in accordance with generally accepted accounting principles in the United States ( U.S. GAAP ).
The preparation of the financial
statements require management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from those estimates.
The Company s operations are affected by numerous
factors including market acceptance, changes in technologies and new laws and government regulations and policies. The Company cannot predict what impact, if any, the occurrence of these or other events might have on the Company s operations.
Significant estimates and assumptions made by management are used for, but not limited to, the allowance for doubtful accounts and sales returns, the
reserve for slow moving or obsolete inventories and the fair value of long-lived assets. Actual results could differ from these estimates.
The Company classifies all highly liquid investments with original maturities of 90 days or less at the time of purchase as cash
and cash equivalents.
Concentrations of Credit Risks for Cash
The Company s cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations.
C Technologies, Inc.
Notes to the Financial Statements
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Accounts receivable are carried at original invoice
amount less any estimate made for doubtful receivables based on a review of all outstanding amounts monthly. No interest is charged on past due accounts. Historically, the Company has not maintained an allowance for doubtful accounts and has
incurred zero bad debt expense for the periods ended March 31, 2019 and 2018.
Inventories are stated at the lower of cost or net realizable value accounted for using the first-in, first-out method. The Company writes down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value, and inventory in excess of expected requirements to cost
of product revenue. Manufacturing of finished goods is done to order and tested for quality specifications prior to shipment.
Work-in-process and finished products inventories consist of material, labor, outside processing costs and manufacturing overhead.
Property and equipment are
recorded at cost, net of accumulated depreciation and amortization. Depreciation of property and equipment is provided using the straight-line method over the estimated useful lives (ranging from 3 to 20 years). Leasehold improvements are amortized
on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. Amortization of leasehold improvements is included with depreciation expense.
The Company periodically reviews its long-lived assets to determine potential impairment by comparing the carrying value of the long-lived assets with the
estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Long-lived assets evaluated for impairment are grouped with other assets to the lowest level for which identifiable
cash flows are largely independent of the cash flows of other groups of assets and liabilities. Should the sum of the expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date. An
impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value (estimated discounted future cash flows) of the long-lived assets. No impairments related to long-lived assets were recorded during the
periods ended March 31, 2019 and 2018.
No provision has been made for federal and state income taxes for the periods ended March 31, 2019 and 2018. The Company has elected to be an
S Corporation whereby the stockholder accounts for their share of the Company s earnings, losses, deductions and credits on their federal and state income tax returns.
Several states impose a sales tax on
product sales to non-exempt customers. The taxes are recorded as liabilities until remitted to state agencies. The Company s accounting policy is to exclude the tax collected and remitted to the
appropriate state from revenue and direct costs.
C Technologies, Inc.
Notes to the Financial Statements
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
Defined Contribution Profit Sharing 401(k) Plan
The Company has a defined contribution profit sharing 401(k) plan covering all eligible employees. The Company may make discretionary contributions to the
revenue recognition policy is to recognize revenues from product sales and services when persuasive evidence of an arrangement exists, product delivery, including customer acceptance, has occurred or services have been rendered, the price is fixed
or determinable and collectability is reasonably assured. Determination of whether these criteria have been met are based on management s judgments primarily regarding the fixed nature of the fee charged for the product delivered and the
collectability of those fees. The Company has had no significant write-offs of uncollectible invoices in the periods presented.
element such as equipment, consumables, and services are contained in a single arrangement, the Company allocates revenue between the elements based on each element s relative selling price, provided that each element meets the criteria for
treatment as a separate unit of accounting. An item is considered a separate unit of accounting if it has value to the customer on a stand-alone basis. The selling price of the undelivered elements is determined by the price charged when the element
is sold separately, or in cases when the item is not sold separately, by third-party evidence of selling price or management s best estimate of selling price.
The Company s product revenues are from the sale of measurement systems, consumables, service contracts, accessories and other products. On product sales