UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2015

 

OR

 

[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

COMMISSION FILE NO. 0-17629

 

ADM TRONICS UNLIMITED, INC.
(Exact name of registrant as specified in its charter)

 

Delaware (State or Other Jurisdiction of Incorporation or organization)

22-1896032 (I.R.S. Employer Identification Number)

 

224-S Pegasus Ave., Northvale, New Jersey 07647
(Address of Principal Executive Offices)

 

Registrant's Telephone Number, including area code: (201) 767-6040

 

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 (§232.405 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 [X] 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 the definitions 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 [  ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

                                                            

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

YES [  ] NO [X]

 

State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date:

 

67,008,502 shares of Common Stock, $.0005 par value, as of November 20, 2015.

 

 

ADM TRONICS UNLIMITED, INC., AND SUBSIDIARY 

 

INDEX

 

		Page
		Number
Part I - Financial Information
Item 1.	Condensed Consolidated Financial Statements:
	Condensed Consolidated Balance Sheets – September 30, 2015 (unaudited) and March 31, 2015		3
	Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2015 and 2014 (unaudited)		4
	Condensed Consolidated Statements of Cash Flow for the six months ended September 30, 2015 and 2014 (unaudited)		5
	Notes to the Condensed Consolidated Financial Statements (unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		16
Item 4.	Controls and Procedures		16
Part II - Other Information
Item 1.	Legal Proceedings		17
Item 1A.	Risk Factors		17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3.	Defaults Upon Senior Securities		17
Item 4.	Mine Safety Disclosures		17
Item 5.	Other Information		17
Item 6.	Exhibits		18

 

 

 PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

		September 30,				March 31,
		2015				2015
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	942,143			$	216,395
Accounts receivable, net of allowance for doubtful accounts of $25,000 for each period			800,813				616,070
Inventories			193,749				137,704
Prepaid expenses and other current assets			21,595				16,595
Restricted cash			232,874				232,525
Deferred tax asset			410,000				-
Total current assets			2,601,174				1,219,289
Property and equipment, net of accumulated depreciation of $74,972 and $74,070, respectively			2,344				3,246
Inventories - long-term portion			74,639				88,257
Intangible assets, net of accumulated amortization of $154,365 and $153,667, respectively			13,784				14,481
Other assets			16,144				16,144
Deferred tax asset			447,000				-
Total other assets			553,911				122,128
Total assets		$	3,155,085			$	1,341,417
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank		$	108,966			$	121,966
Accounts payable			238,754				329,291
Accrued expenses and other current liabilities			271,128				221,106
Customer deposits			99,102				99,102
Due to shareholder			249,606				223,849
Total current liabilities			967,556				995,314
Total liabilities			967,556				995,314
Stockholders' equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding			-				-
Common stock, $0.0005 par value; 150,000,000 authorized, 67,008,502 and 64,939,537 shares issued and outstanding at September 30, 2015 and March 31, 2015, respectively			33,504				32,470
Additional paid-in capital			33,195,759				32,298,094
Accumulated deficit			(31,041,734	)			(31,984,461	)
Total stockholders' equity			2,187,529				346,103
Total liabilities and stockholders' equity		$	3,155,085			$	1,341,417

 

The accompanying notes are an integral part of these

condensed consolidated financial statements.

 

 

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

		Three months ended								Six months ended
		September 30,								September 30,
		2015				2014				2015				2014
Net revenues		$	1,252,881			$	748,593			$	2,308,809			$	1,372,267
Cost of sales			495,680				263,869				796,553				602,085
Gross Profit			757,201				484,724				1,512,256				770,182
Operating expenses:
Research and development			30,522				18,241				55,211				30,286
Selling, general and administrative			475,186				337,142				770,411				573,697
Stock based compensation			598,699				-				598,699				-
Depreciation and amortization			709				555				1,306				1,680
Total operating expenses			1,105,116				355,938				1,425,627				605,663
Income (loss) from operations			(347,915	)			128,786				86,629				164,519
Other income (expense):
Interest income			248				1,325				569				2,372
Interest expense			(830	)			(740	)			(1,471	)			(1,693	)
Total other income (expense)			(582	)			585				(902	)			679
Income (loss) before benefit for income taxes			(348,497	)			129,371				85,727				165,198
Benefit for income taxes - deferred			857,000				-				857,000				-
Net income		$	508,503			$	129,371			$	942,727			$	165,198
Basic and diluted per common share:		$	0.01			$	0.00			$	0.01			$	0.00
Weighted average shares of common stock outstanding - basic			66,176,418				64,939,537				65,561,357				64,939,537
Weighted average shares of common stock outstanding - diluted			66,994,600				65,539,537				66,379,539				65,539,537

 

 The accompanying notes are an integral part of these

condensed consolidated financial statements.

 

 

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

 

 

		2015				2014
Cash flows from operating activities:
Net income (loss)		$	942,727			$	165,198
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation			598,699				-
Depreciation and amortization			1,600				3,054
Interest receivable			-				(2,106	)
Deferred income tax			(857,000	)			-
Increase (decrease) in cash flows as a result of changes in net assets and liabilities balances:
Accounts receivable			(184,743	)			(164,620	)
Inventories			(42,427	)			(183,704	)
Prepaid expenses and other current assets			(5,000	)			(5,819	)
Accounts payable			(90,538	)			51,282
Customer deposit			-				103,492
Accrued expenses and other current liabilities			50,022				60,369
Due to shareholder			25,757				57,894
Total adjustments			(503,630	)			(80,158	)
Net cash provided by operating activities			439,097				85,040
Cash flows from investing activities:
Investment in Angiodroid			-				(1,000	)
Restricted cash			(349	)			(261	)
Net cash used by investing activities			(349	)			(1,261	)
Cash flows provided (used) in financing activities:
Repayments on note payable - Bank			(13,000	)			(7,000	)
Sale of common stock			300,000				-
Net cash provided by (used) in financing activities			287,000				(7,000	)
Net increase (decrease) in cash			725,748				76,779
Cash and cash equivalents - beginning of year			216,395				83,156
Cash and cash equivalents - end of year		$	942,143			$	159,935
Cash paid for:
Interest		$	1,471			$	1,693

 

The accompanying notes are an integral part of these

condensed consolidated financial statements.

 

 

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014

 

 

 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion of our operations and financial condition should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

 

 

FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the "safe harbor" provisions under section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Act of 1995. We use forward-looking statements in our description of our plans and objectives for future operations and assumptions underlying these plans and objectives. Forward-looking terminology includes the words "may", "expects", "believes", "anticipates", "intends", "forecasts", "projects", or similar terms, variations of such terms or the negative of such terms. These forward-looking statements are based on management's current expectations and are subject to factors and uncertainties which could cause actual results to differ materially from those described in such forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Form 10-Q to reflect any change in our expectations or any changes in events, conditions or circumstances on which any forward-looking statement is based. Factors which could cause such results to differ materially from those described in the forward-looking statements include those set forth under "Item. 1 Description of Business – Risk Factors" and elsewhere in or incorporated by reference into our Annual Report on Form 10-K for the year ended March 31, 2015.      

  

CRITICAL ACCOUNTING POLICIES

 

REVENUE RECOGNITION

 

We recognize revenue from engineering services on a project or monthly basis and contract manufacturing revenues are recognized after shipment of completed products. For the sale of our electronic products, revenues are recognized when they are shipped to the purchaser. Shipping and handling charges and costs are de minimis. We offer a limited 90 day warranty on our electronics products and a limited 5 year warranty on our electronic controllers for spas and hot tubs. Historically, the amount of warranty revenue included in the sales of our electronic products have been de minimis. We have no other post shipment obligations and sales returns have been de minimis.

 

Revenues from sales of chemical products are recognized when products are shipped to end users.  Shipments to distributors are recognized as sales where no right of return exists.

 

USE OF ESTIMATES

 

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to reserves, deferred tax assets and valuation allowance, impairment of long-lived assets, fair value of equity instruments issued to consultants for services and fair value of equity instruments issued to others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above described items, are reasonable.

 

BUSINESS OVERVIEW

 

ADM is a corporation that was organized under the laws of the State of Delaware on November 24, 1969. During the six months ended September 30, 2015 and 2014, our operations are conducted through ADM Tronics Unlimited, Inc. ("ADM") and its subsidiary, Sonotron Medical Systems, Inc. ("SMI"). In addition, the Company owns a minority interest in Montvale Technologies, Inc. (formerly known as Ivivi Technologies, Inc.) ("ITI"), which until October 18, 2006 was operated as a subsidiary of the Company. ITI was deconsolidated as of October 18, 2006 upon the consummation of ITI's initial public offering.

 

We are a technology-based engineering and manufacturing company with diversified lines of products in the following four areas: (1) electronic products for numerous industries, including therapeutic non-invasive electronic medical devices and electronic controllers for spas and hot tubs, (2) environmentally safe chemical products for industrial use, (3) cosmetic and topical dermatological products and (4) antistatic paint and coatings products.

 

 

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2015 AS COMPARED TO SEPTEMBER 30, 2014 

 

For the Three Months Ended September 30, 2015            

 

		Chemical				Electronics				Engineering				Total
Revenue		$	385,072			$	202,374			$	665,435			$	1,252,881
Cost of Sales			174,205				84,650				236,825				495,680
Gross Profit			210,867				117,724				428,610				757,201
Gross Profit Percentage			55	%			58	%			64	%			60.4	%
Operating Expenses			352,634				179,946				572,536				1,105,116
Operating Income (Loss)			(141,767	)			(62,222	)			(143,926	)			(347,915	)
Other income (expenses)			(140	)			(94	)			(348	)			(582	)
Income (loss) before benefit from income taxes		$	(141,907	)		$	(62,316	)		$	(144,274	)		$	(348,497	)

 

For the Three Months Ended September 30, 2014
		Chemical				Electronics				Engineering				Total
Revenue		$	340,470			$	318,203			$	89,920			$	748,593
Cost of Sales			110,108				138,086				15,675				263,869
Gross Profit			230,362				180,117				74,245				484,724
Gross Profit Percentage			68	%			57	%			83	%			65	%
Operating Expenses			162,438				150,361				43,139				355,938
Operating Income (Loss)			67,924				29,756				31,106				128,786
Other income (expenses)			272				240				73				585
Income (loss) before benefit from income taxes		$	68,196			$	29,996			$	31,179			$	129,371

 

Variance
		Chemical				Electronics				Engineering				Total
Revenue		$	44,602			$	(115,829	)		$	575,515			$	504,288
Cost of Sales			64,097				(53,436	)			221,150				231,811
Gross Profit			(19,495	)			(62,393	)			354,365				272,477
Gross Profit Percentage			-13	%			2	%			-18	%			-4	%
Operating Expenses			190,196				29,585				529,397				749,178
Operating Income (Loss)			(209,691	)			(91,978	)			(175,032	)			(476,701	)
Other income (expenses)			(412	)			(334	)			(421	)			(1,167	)
Income (loss) before benefit from income taxes		$	(210,103	)		$	(92,312	)		$	(175,453	)		$	(477,868	)

 

 

For the Six Months Ended September 30, 2015
		Chemical				Electronics				Engineering				Total
Revenue		$	751,016			$	377,603			$	1,180,190			$	2,308,809
Cost of Sales			228,154				191,000				377,399				796,553
Gross Profit			522,862				186,603				802,791				1,512,256
Gross Profit Percentage			70	%			49	%			68	%			65.5	%
Operating Expenses			463,729				233,157				728,741				1,425,627
Operating Income (Loss)			59,133				(46,554	)			74,050				86,629
Other income (expenses)			(294	)			(148	)			(460	)			(902	)
Income (loss) before benefit from income taxes		$	58,839			$	(46,702	)		$	73,590			$	85,727

 

For the Six Months Ended September 30, 2014
		Chemical				Electronics				Engineering				Total
Revenue		$	637,629			$	560,413			$	174,225			$	1,372,267
Cost of Sales			200,802				292,150				109,133				602,085
Gross Profit			436,827				268,263				65,092				770,182
Gross Profit Percentage			69	%			48	%			37	%			56	%
Operating Expenses			281,424				247,343				76,896				605,663
Operating Income (Loss)			155,403				20,920				(11,804	)			164,519
Other income (expenses)			316				277				86				679
Income (loss) before benefit from income taxes		$	155,719			$	21,197			$	(11,718	)		$	165,198

 

Variance
		Chemical				Electronics				Engineering				Total
Revenue		$	113,387			$	(182,810	)		$	1,005,965			$	936,542
Cost of Sales			27,352				(101,150	)			268,266				194,468
Gross Profit			86,035				(81,660	)			737,699				742,074
Gross Profit Percentage			1	%			2	%			31	%			9	%
Operating Expenses			182,305				(14,186	)			651,845				819,964
Operating Income (Loss)			(96,270	)			(67,474	)			85,854				(77,890	)
Other income (expenses)			(610	)			(425	)			(546	)			(1,581	)
Income (loss) before benefit from income taxes		$	( 96,880	)		$	( 67,899	)		$	85,308			$	( 79,471	)

 

 

 

Revenues for the three months ended September 30, 2015 increased by $504,288, or 67% due to an increase in engineering revenue of $575,515 coupled with an increase in sales in our chemical division of $44,602 offset by a decrease in our electronic segment in the amount of $115,829. The increase in engineering services is primarily the result of several projects for one customer.

 

Revenues for the six months ended September 30, 2015 increased by $936,542 or 68% due to an increase in engineering revenue of $1,005,965 coupled with an increase in sales in our chemical division of $113,387 offset by a decrease in our electronic segment in the amount of $182,810. The increase in engineering services is primarily the result of several projects for one customer.

   

Gross profit for the three months ended September 30, 2015 increased by $272,477. Gross profit for the six months ended September 30, 2014 increased by $742,074. The increase in gross profit in the electronics and chemical segments resulted from changes in the mix of products sold. The increase in gross profit in the engineering segment resulted from better utilization of labor due to the increased revenue from new projects from one customer.

 

We are highly dependent upon certain customers. During the three and six months ended September 30, 2015 one customer accounted for 42% of our revenue. During the three and six months ended September 30, 2014, one customer accounted for 18% of our revenue. The complete loss of or significant reduction in business from, or a material adverse change in the financial condition of any of our customers could cause a material and adverse change in our revenues and operating results.

 

 

Income from operations for the three months ended September 30, 2015 decreased by $476,701 due to stock based compensation of $598,699. Selling, general, and administrative expenses increased by $153,685 or 48%, from $321,501 to $475,186 mainly due to an increase of $28,884 wages, a $23,560 increase in commission and royalty fees, $39,860 in consulting fees, $54,383 in engineering fees and $13,437 in insurance.

 

Income from operations for the six months ended September 30, 2015 decreased by $77,890. Selling, general, and administrative expenses increased by $196,714 or 34% from $573,697 to $770,411 mainly due to an increase of $40,021 in wages, $63,944 in commission and royalty fees and an increase in contract services of $37,974.

 

During the six months ended September 30, 2015, we had $598,699 of stock based compensation related to 3,000,000 options granted to employees. There was no stock based compensation for the six months ended September 30, 2014.

 

Interest income decreased $1,077 to $248 in the three months ended September 30, 2015, from $1,325 in the three months ended September 30, 2014 and interest income decreased $1,803 to $569 in the six months ended September 30, 2015 from $2,372 in the six months ended September 30, 2014 due to decreased funds invested in a money market account.

 

For the three and six months ended September 30, 2015, the $857,000 credit for deferred income taxes results from a reduction in the valuation allowance.

 

The foregoing resulted in net income for the three months ended September 30, 2015 of $508,503, or $0.01 per share, compared to net income for the three months ended September 30, 2014 of $129,371 or $0.00 per share.

 

The net income for the six months ended September 30, 2015 and 2014 was $942,727 or $0.01 per share and $165,198 or $0.00 per share, respectively.

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

At September 30, 2015, we had cash and cash equivalents of $942,143 as compared to $216,395 at March 31, 2015. The $725,748 increase was primarily the result of cash provided in operations during the six month period in the amount of $439,097 and cash provided in financing activities in the amount of $287,000 offset by cash used in investing activities of $349. Our cash will continue to be used for increased marketing costs, and the related administrative expenses, in order to attempt to increase our revenue.  We expect to have enough cash to fund operations for the next twelve months. Our note payable of $108,966 at September 30, 2015, is secured and collateralized by restricted cash of $232,874. This note bears an interest rate of 2% above the rate of the savings account. The interest rate at September 30, 2015 was 2.15% and is payable upon demand.

 

Future Sources of Liquidity:

 

We expect that growth in profitable revenues and continued focus on new customers will enable us to continue to generate cash flows from operating activities during fiscal 2016.

 

If we do not generate sufficient cash from operations, face unanticipated cash needs or do not otherwise have sufficient cash, we may need to consider the sale of certain intellectual property which does not support the Company’s operations. In addition, we have the ability to reduce certain expenses depending on the level of business operation.

 

Based on current expectations, we believe that our existing cash of $942,143 as of September 30, 2015 and other potential sources of cash will be sufficient to meet our cash requirements. Our ability to meet these requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

 

 

OPERATING ACTIVITIES 

 

Net cash provided by operating activities was $439,097 for the six months ended September 30, 2015, as compared to net cash provided by operating activities of $85,040 for the six months ended September 30, 2014.  The cash provided during the six months ended September 30, 2015 was primarily due to net income of $942,727, stock based compensation of $598,699, deferred income tax of $857,000 and decreases in operating liabilities of $14,759, and net operating assets of $232,170.   

 

INVESTING ACTIVITIES

 

Cash was used in investing activities in the amount of $349 from deposits in the restricted cash in the amount of $349.

 

FINANCING ACTIVITIES

 

For the six months ended September 30, 2015 and 2014, net cash provided (used) in financing activities were $287,000 and $(7,000), respectively. For the six months ended September 30, 2015 and 2014, $13,000 and $7,000 respectively, was used for repayments on a note from a commercial bank to facilitate our acquisition of Action Industries Unlimited, Inc. (AIU).

 

Additionally, during the six months ended September 30, 2015, $300,000 was provided for through the sale of common stock to a major customer.

  

OFF BALANCE SHEET ARRANGEMENTS

 

We have no off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

  

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Concentration of Credit Risk

 

Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and our investment in ITI. We have no control over the market value of our investment in ITI.

 

We maintain cash and cash equivalents with FDIC insured financial institutions.

 

Our sales are materially dependent on a small group of customers, as noted in Note 4 of our condensed consolidated financial statements. We monitor our credit risk associated with our receivables on a routine basis. We also maintain credit controls for evaluating and granting customer credit.

  

ITEM 4. CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

The Company's management, including the Company's principal executive officer and principal financial officer, have evaluated the effectiveness of the Company's "disclosure controls and procedures," as such term is defined in Ru1e 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the "SEC") (1) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (2) is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. During the quarterly period ended September 30, 2015, there were no changes in the Company's internal control over financial reporting which materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

 

 

The determination that our disclosure controls and procedures were not effective as of September 30, 2015 are a result of:

 

a. Deficiencies in Internal Control Structure Environment. During the current year, the Company’s focus was on expanding their customer base to initiate revenue production.  

 

b. Inadequate staffing and supervision within the accounting operations of our company. The relatively small number of employees who are responsible for accounting functions prevents the Company from segregating duties within its internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews.  The Company’s plan is to expand its accounting operations as the business of the Company expands.

 

The Company believes that the financial statements fairly present, in all material respects, the Company’s condensed consolidated balance sheets as of September 30, 2015 and March 31, 2015 and the related condensed consolidated statements of operations, and cash flows for the three and six months ended September 30, 2015 and 2014, in conformity with generally accepted accounting principles, notwithstanding the material weaknesses we identified. 

 

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

 

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

NONE

 

ITEM 1A. RISK FACTORS

 

There have been no material changes to the risk factors contained in our Annual Report on Form 10-K for the year ended March 31, 2015.

  

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None

 

ITEM 5. OTHER INFORMATION

 

None 

 

 

ITEM 6. EXHIBITS.

 

(a) Exhibit No.

 

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 Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

 

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 

 

SIGNATURES

 

Pursuant to the requirements 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.

 

 

	ADM TRONICS UNLIMITED, INC.
	(Registrant)
	By:	/s/ Andre' DiMino
		Andre' DiMino, Chief Executive
		Officer and Chief Financial Officer

 

	Dated:	Northvale, New Jersey
		November 23, 2015

 

 

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