UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JULY 30, 2011.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM TO .
Commission File Number: 0-1455
OPT-SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 21-0681502
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1912 Bannard Street, Cinnaminson, New Jersey 08077
(Address of principal executive offices) (zip code)
(856) 829-2800
|
(Registrant's telephone number,
including area code)
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 shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (S232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [?] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See definition of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if smaller
reporting company)
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Indicate by check mark whether the registrant is a shell company(as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date: 775,585 Shares of Common Stock,
par value $0.25, were outstanding as of September 12, 2011.
FORM 10-Q THIRD QUARTER REPORT - FISCAL YEAR 2010
OPT-SCIENCES CORPORATION AND SUBSIDIARY
TABLE OF CONTENTS
Page
PART I FINANCIAL INFORMATION
Item 1 .Financial Statements 3
Consolidated Balance Sheets at July 30, 2011 (unaudited) and
October 30, 2010 3
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Consolidated Statements of Income and Retained Earnings
(unaudited) for thirteen and thirty-nine weeks ended July 30, 2011
and thirteen and thirty-nine weeks ended July 31, 2010 5
Consolidated Statements of Cash Flows (unaudited) for thirty-nine
weeks ended July 30, 2011 and thirty-nine weeks ended July 31,2010 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Result of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Item 4. Controls and Procedures 12
PART II OTHER INFORMATION 13
Item 1. Legal Proceedings 13
Item 1A. Risk Factors 13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. (Removed and Reserved) 13
Item 5. Other Information 13
Item 6. Exhibits 13
Signatures 13
Exhibit 31.1 14
Exhibit 32.1 15
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Opt-Sciences Corporation
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
ASSETS
July 30, 2011 October 30, 2010
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 1,752,846 $ 8,398,276
Trade accounts receivable 735,029 684,313
Inventories 658,211 634,247
Prepaid expenses 18,750 25,406
Loans and exchanges 13,443 12,543
Accrued interest receivable 60,434 -0-
Marketable securities 7,816,849 502,809
----------- -----------
Total current assets 11,055,562 10,257,594
----------- -----------
PROPERTY AND EQUIPMENT
Land 114,006 114,006
Building and improvements 606,244 606,244
Machinery and equipment 2,134,804 2,134,804
Small tools 53,580 53,580
Furniture and fixtures 17,712 17,712
Office equipment 76,742 76,742
Automobiles 71,211 71,211
----------- -----------
Total property and equipment 3,074,299 3,074,299
Less: accumulated depreciation 2,219,066 2,110,104
----------- -----------
Net property and equipment 855,233 964,195
----------- -----------
OTHER ASSETS
Deposits 2,837 2,837
Total assets $11,913,632 $11,224,626
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Opt-Sciences Corporation
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
July 30, 2011 October 30, 2010
(Unaudited)
CURRENT LIABILITIES
Accounts payable - trade $ 117,278 $ 84,317
Accrued Income taxes 193,085 124,500
Accrued salaries and wages 113,524 154,993
Accrued professional fees 65,495 81,138
Deferred income taxes 86,620 66,205
Other current liabilities 6,530 4,280
----------- -----------
Total current liabilities 582,532 515,433
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STOCKHOLDERS' EQUITY
Common capital stock - par value $0.25 per share-
authorized and issued 1,000,000 shares 250,000 250,000
Additional paid in capital 272,695 272,695
Retained earnings 10,996,407 10,401,501
Accumulated other comprehensive income:
Unrealized holding (loss) on Marketable Securities (784) (27,785)
Less treasury stock at cost - 224,415 shares (187,218) (187,218)
----------- -----------
Total stockholders' equity 11,331,100 10,709,193
----------- -----------
Total liabilities and stockholders' equity $ 11,913,632 $ 11,224,626
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Opt-Sciences Corporation
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited)
Thirteen Thirteen Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
July 30, July 31, July 30, July 31,
2011 2010 2011 2010
NET SALES $ 1,407,444 $ 1,260,011 $ 4,704,361 $ 3,203,670
COST OF SALES 968,787 905,565 3,173,981 2,444,340
---------- ---------- ---------- ---------
Gross profit on sales 438,657 354,446 1,530,380 759,330
---------- ---------- ---------- ---------
OPERATING EXPENSES
Sales & delivery 6,699 8,761 17,010 21,856
General and administrative 179,906 177,334 645,206 545,757
---------- ---------- ---------- ---------
Total operating expenses 186,605 186,095 662,216 567,613
---------- ---------- ---------- ---------
Operating income 252,052 168,351 868,164 191,717
OTHER INCOME 111,394 18,170 140,141 56,212
---------- ---------- ---------- ---------
Income before taxes 363,446 186,521 1,008,305 247,929
FEDERAL AND STATE INCOME TAXES 149,000 80,200 413,400 106,600
Net income 214,446 106,321 594,905 141,329
RETAINED EARNINGS -
beginning of period 10,781,961 9,975,860 10,401,502 9,940,851
---------- ---------- ---------- ---------
RETAINED EARNINGS -
end of period $10,996,407 $10,082,181 $10,996,407 $10,082,181
---------- ---------- ---------- ---------
EARNINGS PER SHARE OF
COMMON STOCK $ 0.28 $ 0.14 $ 0.77 $ 0.18
Average shares of stock
outstanding 775,585 775,585 775,585 775,585
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Opt-Sciences Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
July 30, 2011 July 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 594,905 $141,329
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Adjustments to reconcile net income to net
cash(used) provided by operating activities:
Depreciation 108,963 118,296
Loss on sale of securities 1,229 4,166
Decrease (increase) in:
Trade accounts receivable (50,716) (59,211)
Inventories (23,964) 92,679
Prepaid expenses 6,656 1,611
Prepaid taxes -0- 138,200
Loans and exchanges (900) (4,960)
Accrued interest receivable (60,434) -0-
(Decrease) increase in:
Accounts payable 32,961 37,966
Accrued salaries and wages 68,585 11,998
Accrued professional fees (41,469) (34,008)
Accrued income taxes (15,643) (16,895)
Other current liabilities 2,250 (20)
---------- ----------
Net cash provided by operating
activities 622,423 431,151
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment -0- (30,289)
Purchases of securities (7,336,103) (4,145)
Proceeds from sales of securities 68,250 25,000
----------- ----------
Net cash (used) provided by investing
activities (7,267,853) (9,434)
(Decrease) increase in cash (6,645,430) 421,717
Cash and cash equivalents at
beginning of period 8,398,276 7,606,849
Cash and cash equivalents at
end of period $1,752,846 $8,028,566
SUPPLEMENTAL DISCLOSURES:
Income taxes paid $ 344,325 $ 35,711
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the accounts of
Opt-
Sciences Corporation, Inc. and its wholly-owned subsidiary, O&S Research, Inc.
All significant intercompany accounts and transactions have been eliminated in
consolidation. These consolidated financial statements have been prepared by
the Company, without audit, and reflect normal recurring adjustments which, in
the opinion of management, are necessary for a fair presentation of the
results for the first nine months of the Company's fiscal year 2011. These
consolidated financial statements do not include all disclosures associated
with annual consolidated financial statements and, accordingly, should be read
in conjunction with footnotes contained in the Company's consolidated
financial statements for the year ended October 30, 2010, together with the
auditors' report filed as part of the Company's 2010 Annual Report on Form 10-
K.
The preparation of these consolidated financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
2. INVENTORIES
Inventories consisted of the following:
July 30, 2011 October 30, 2010
Unaudited
Raw materials and supplies $ 315,513 $ 175,014
Work in progress 215,096 334,370
Finished goods 129,602 124,863
------------ -----------
Total Inventory $ 658,211 $ 634,247
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End of quarter inventories are stated at the lower of cost (first-in, first-
out)or market. The inventory included in unaudited quarterly financial
statements and in this Form 10-Q is based on estimates derived from an
unaudited physical inventory count of work-in-progress and raw materials.
The Company provides for estimated obsolescence on unmarketable inventory
based upon assumptions about future demand and market conditions. If actual
demand and market conditions are less favorable than those projected by
management, additional inventory write downs may be required. Inventory, once
written down, is not subsequently written back up, as these adjustments are
considered permanent adjustments to the carrying value of the inventory. The
Company conducts a physical inventory at the end of the fiscal year in
connection with its audited financial statements and preparation of its
Form 10-K.
3. REVENUE RECOGNITION
The Company recognizes revenue in accordance with U.S. GAAP and SEC Staff
Accounting Bulletin ("SAB") No. 104, Revenue Recognition. SAB No. 104 requires
that four basic criteria must be met before revenue can be recognized: (1)
persuasive evidence of an arrangement exists; (2) delivery has occurred or
services have been rendered; (3) the price to the buyer is fixed and
determinable; and (4) collectability is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the price to the buyer charged for products delivered or services
rendered and collectability of the sales price. The Company assesses credit
worthiness of customers based upon prior history with the customer and
assessment of financial condition. The Company's shipping terms are
customarily
FOB shipping point.
4. FINANCIAL INSTRUMENTS
SFAS No. 157 (ASC 820), "Fair Value Measurements", requires an entity to
maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. SFAS No. 157 (ASC 820) establishes a fair
value hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial instrument's
categorization within the fair value hierarchy is based upon the lowest level
of input that is significant to the fair value measurement. SFAS No 157
(ASC 820) prioritizes the inputs into three levels that may be used to measure
fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in
active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than
quoted prices that are observable for the asset or liability such as quoted
prices for similar assets or liabilities in active markets; quoted prices for
identical assets or liabilities in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable
inputs to the valuation methodology that are significant to the measurement of
the fair value of the assets or liabilities. The Company's financial
instruments consist principally of cash, cash equivalents, marketable
securities, trade accounts receivable, accounts payable and accrued
liabilities. Pursuant to SFAS No. 157 (ASC 820), the fair value of our cash
equivalents and marketable securities is determined based on "Level 1" inputs,
which consist of quoted prices in active markets for identical assets. The
Company believes that the recorded values of all of the other financial
instruments approximate their current fair values because of their nature and
respective maturity dates or durations.
In January 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and
Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.
This amendment to Topic 820 has improved disclosures about fair value
measurements on the basis of input received from the users of financial
statements. This is effective for interim and annual reporting periods
beginning after December 15, 2009, except for the disclosures about purchases,
sales, issuances, and settlements in the roll forward of activity in Level 3
fair value measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal
years. Early adoption is permitted. The Company does not expect the provisions
of ASU 2010-06 to have a material effect on the financial position, results of
operations or cash flows of the Company.
5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued Accounting Standards Update No. 2011-04
Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in GAAP and IFRS ("ASU 2011-04"), which amends ASC 820 Fair Value
Measurement. ASU 2011-04 improves the comparability of fair value
measurements presented and disclosed in financial statements prepared in
accordance with U.S. GAAP and International Financial Reporting Standards.
The amended guidance changes the wording used to describe many requirements in
U.S.GAAP for measuring fair value and for disclosing information about fair
value measurements. Additionally, the amendments clarify the FASB's intent
about the application of existing fair value measurement and disclosure
requirements. Although ASU 2011-04 is not expected to have a significant
effect on practice, it changes some fair value measurement principles and
disclosure requirements. ASU 2011-04 is effective for interim and annual
periods beginning after December 15, 2011, and must be applied prospectively.
Early application is not permitted. We do not anticipate that the adoption of
ASU 2011-04 will have a material impact on our financial position or results
of operations.
6. SUBSEQUENT EVENTS
The Company is not aware of any significant events that occurred subsequent to
the balance sheet date but prior to the filing of this report that would have
a material impact on our financial position or results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
We make statements in this Report, and we may from time to time make other
statements, regarding our outlook or expectations for earnings, revenues,
expenses and/or other matters regarding or affecting the Company that are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. Forward-looking statements are typically identified by
words such as "believe," "expect," "anticipate," "intend," "outlook,"
"estimate," "forecast," "project" and other similar words and expressions.
Forward-looking statements are subject to numerous assumptions, risks and
uncertainties, which change over time. Forward-looking statements speak only
as of the date they are made. We do not assume any duty and do not undertake
to update our forward-looking statements. Actual results or future events
could differ, possibly materially, from those that we anticipated in our
forward-looking statements, and future results could differ materially from
our historical performance. Our forward-looking statements are subject to the
following principal risks and uncertainties:
- Uncertain demand for our products because of the current international
financial uncertainties;
- Risks associated with dependence on two major customers; and
- The performance, financial strength and reliability of our vendors.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's discussion and analysis of financial condition and results of
operations are based upon the Company's consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP"). The preparation of
these financial statements requires the Company to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues
and expenses. The Company bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions. Specifically, inventory is estimated
quarterly and reconciled at the end of the fiscal year when a comprehensive
physical count is conducted (also see Notes to Consolidated Financial
Statements, Note 1 Summary of Significant Accounting Policies and Note 2
Inventories).
EXECUTIVE SUMMARY
Opt-Sciences Corporation, through its wholly owned subsidiary, O & S Research,
Inc., both New Jersey corporations, manufactures anti-glare and transparent
conductive optical coatings which are deposited on glass used primarily to
cover instrument panels in aircraft cockpits. The Company's business is highly
dependent on a robust commercial, business, regional and military aircraft
market. We recognized third quarter sales of $1,407,444 and net income of
$214,446. Sales are down 4% from the second quarter of fiscal year 2011.
Compared to the third quarter of 2010, sales are up 12%. During the third
quarter of 2011, the Company booked $1,190,000 in new orders compared to
$1,277,000 in new orders booked for the second quarter of 2011 and $1,976,000
for the third quarter of fiscal year 2010. Our backlog of unshipped orders was
approximately $1,545,000 at the end of the third quarter, down approximately
12% from $1,762,000 at the end of the second quarter of 2011 and down 30% from
the $2,201,000 backlog at the end of the third quarter of fiscal year 2010. We
currently expect fourth quarter sales to be approximately $1,100,000. The
recent decreases of orders and sales to a major customer are a result of
significant inventory buildup by that customer earlier in the year during a
manufacturing site transition. We continue to be concerned that the weakness
in the financial markets and its impact on the aircraft industry specifically
may adversely affect future sales to other customers. We generally have a four
to twelve week delivery cycle depending on product complexity, available plant
capacity and required lead time for specialty raw materials such as polarizers
or filter glass. Our sales tend to fluctuate from quarter to quarter because
all orders are custom manufactured and customer orders are generally scheduled
for delivery based on our customer's need date and not based on our ability to
make shipments. The Company has two customers that together represent
approximately 67% of sales and approximately 74% of receivables. Any
significant change in the requirements of either of those customers has a
direct impact on our revenue for the quarter.
RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED JULY 30, 2011 COMPARED WITH THIRTEEN WEEKS ENDED
JULY 31, 2010
Net Sales
Net sales for the third quarter ended July 30, 2011 were $1,407,444 which is
$147,433 and 12% more than the net sales of $1,260,011 for the same quarter
last year. This increase in sales is primarily the result of an unanticipated
order by one of our major customers.
Cost of Sales
Cost of sales for the quarter ended July 30, 2011 increased $63,222 or 7% to
$968,787 or 69% of sales, compared to $905,565 or 72% of sales for the third
quarter last year. This increase in cost of sales is primarily related to
increased sales. The cost of sales as a percentage of sales has declined
because of the operating efficiency realized from a greater volume of sales.
Cost of sales is comprised of raw materials, manufacturing direct labor and
overhead expenses. The overhead portion of cost of sales includes salaries,
benefits, building expenses, production supplies, and maintenance costs
related to our production, inventory control and quality control departments.
Gross Profit
Gross profit for the quarter ended July 30, 2011 increased $84,211 to $438,657
or 31% of sales from $354,446 or 28% of sales reported for the same quarter
last year, primarily as a result of increased efficiencies from economies of
scale.
Operating Expenses
Operating expenses increased very slightly by $510 to $186,605 from $186,095
for the same quarter last year. Operating expenses consist of marketing and
business development expenses, professional expenses, salaries and benefits
for executive and administrative personnel, legal, accounting, and other
general corporate expenses.
Operating Income
The Company realized operating income of $252,052 or 18% of sales, for the
quarter ended July 30, 2011, an increase of $83,701 over operating income of
$168,351 or 13% of sales for the same quarter last year. The increase in
operating income is principally the result of above described increase in
sales and operating efficiencies discussed above.
Other Income (Expenses)
Other income of $111,394 for the third quarter of fiscal year 2011 increased
$93,224 from $18,170 for the same quarter last year primarily due to a second
quarter redeployment of most of the Company's liquid assets into a managed
portfolio of income securities.
Provisions for Income Tax
Income tax expense for the third quarter ended July 30, 2011 was $149,000 or
41% of pre-tax income, compared to $80,200 or 43% of pre-tax income for the
third quarter ended July 31, 2010.
Net Income
Net income for the third quarter ended July 30, 2011 was $214,446 or $0.28 per
share, compared to net income of $106,321 or $.14 per share, for the third
quarter ended July 31, 2010, primarily due to increased sales and a
redeployment of much of the Company's cash and cash equivalents into a managed
portfolio of income securities.
THIRTY-NINE WEEKS ENDED JULY 30, 2011 COMPARED WITH THIRTY-NINE WEEKS
ENDED July 31, 2010
Net Sales
Net sales for the three quarters ended July 30, 2011 were $4,704,361 which is
$1,500,691 and 47% more than the net sales of $3,203,670 for the same three
quarter period last year. This is primarily due to the increased inventory
accumulation during the first two quarters of Fiscal Year 2011 by one of the
Company's principal customers in anticipation of its relocation of
manufacturing operations from Japan to Taiwan.
Cost of Sales
Cost of sales for the three quarters ended July 30, 2011 was $3,173,981 or 68%
of sales, compared to $2,444,320 or 76% of sales, for the same period last
year. The cost of sales increased primarily because of increased sales. The
reduction in cost of sales as a percentage of sales is because of increased
efficiencies resulting from better utilization of plant capacity.
Gross Profit
Gross profit for the three quarters ended July 30, 2011 increased $771,050 to
$1,530,380 or 33% of sales, from $759,330 or 24% of sales, reported for the
same period last year. The increase in total gross profit was primarily a
result of increased sales for the period.
Operating Expenses
Operating expenses increased by $94,603 and 17% from $567,613 during the three
quarter period ended July 31, 2010 to $662,216 during the three quarter period
ended July 30, 2011. This was primarily due to increases in employee benefits
and increased office expenses.
Operating Income
The Company realized operating income of $868,164 or 19% of sales, for the
three quarter period ended July 30, 2011, compared to operating income of
$191,717 or 6% of sales, for the same period last year, primarily because of
increased sales and efficiencies in operations.
Other Income
Other income of $140,141 for the three quarter period ended July 30, 2011
increased 83,928 from $56,212 for the same period for last year, primarily due
to a second quarter redeployment of much of the Company's cash and cash
equivalents into a managed portfolio of income securities.
Income Tax
Income tax expense for the three quarter period ended July 30, 2011 was
$413,400 and 41% of pre-tax income, compared to $106,600 and 43% of pre-tax
income for the nine month period ended July 31, 2010.
Net Income
Net income for the three quarter period ended July 30, 2011 increased $453,575
to $594,905 or $0.77 per share, compared to net income of $141,329 or $.18 per
share for the prior comparable period, for the reasons outlined above.
Financial Condition
The Company utilizes its working capital to finance current operations and
capital improvements and during the second quarter redeployed $7,267,853 into
a managed portfolio of income securities. Cash and cash equivalents have
decreased $6,645,430 from $8,398,276 at the end of the fiscal year on
October 30, 2010 to $1,752,846 for the nine month period ended July 30, 2011.
The Company maintains a strong liquidity in its current position in order to
improve its ability to deal with the risks and uncertainties in the market
place and, at the same time, increase its yield on those assets not needed for
day to day operations at this time.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting Company" as defined by Item 10 of Regulation S-K, the
Company is not required to provide information required by Item 3.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Based on an evaluation
conducted as of July 30, 2011 by our management, including our Chief Executive
Office ("CEO") and Chief Financial Officer ("CFO"), he has concluded that our
disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") are effective to reasonably ensure that information required to be
disclosed in reports that we file or submit under the Exchange Act, is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms, and that such
information is accumulated and communicated to our management, including the
CEO and CFO, as appropriate to allow timely decisions regarding required
disclosure.
Changes in Internal Controls. There were no changes in our internal controls
during the last fiscal quarter that have materially affected, or are
reasonably likely to materially affect, these controls over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently subject to any material litigation
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provide the information
required by this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. (Removed and Reserved)
ITEM 5. OTHER INFORMATION
The registrant does not have in place procedures by which stockholders may
recommend nominees to the registrant's Board of Directors.
ITEM 6. EXHIBITS
(a) EXHIBITS
31.1 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Office and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunder duly authorized.
OPT-SCIENCES CORORATION
/s/ Anderson L. McCabe
----------------------
Anderson L. McCabe
Chief Executive Officer &
Chief Financial Officer
September 13, 2011
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EXHIBIT 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Anderson L. McCabe, as CEO and CFO of Opt-Sciences Corporation, certify
that:
1. I have reviewed this quarterly report of Opt-Sciences Corporation;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of Opt-Sciences
Corporation as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 1 3a-1 5(e) and 1 5d-1 5(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 1
3a-1 5(f) and 1 5d-1 5(f)) for Opt-Sciences Corporation and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision, to
ensure that material information relating to Opt-Sciences Corporation,
including its consolidated subsidiaries, is made known to me by others within
those entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under my supervision,
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of Opt-Sciences Corporation's disclosure
controls and procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in Opt-Sciences Corporation's
internal control over financial reporting that occurred during Opt-Sciences
Corporation's most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, Opt-Sciences Corporation's internal
control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control
over financial reporting, to Opt- Sciences Corporation's auditors and the
audit committee of Opt-Sciences Corporation's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect Opt-Sciences Corporation's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in Opt-Sciences Corporation's internal
control over financial reporting.
/s/ Anderson L. McCabe
----------------------
Anderson L. McCabe
Chief Executive Officer &
Chief Financial Officer
September 13, 2011
|
EXHIBIT 32.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.
I, Anderson L. McCabe as CEO and CFO of Opt-Sciences Corporation (the
"Company"), certify to my knowledge, pursuant to section 906 of the Sarbanes-
Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Quarterly Report on Form 1 0-Q of the Company for the quarterly
period ended July 30, 2011 (the "Report") fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Anderson L. McCabe
----------------------
Anderson L. McCabe
Chief Executive Officer &
Chief Financial Officer
September 13, 2011
|
-13-
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