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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2004 Commission File Number 0-4539
TRANS-INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-2598139
- ------------------------------ ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2637 S. Adams Road, Rochester Hills, MI 48309
---------------------------------------------
(Address) (Zip Code)
Registrant's Telephone Number, including Area Code (248) 852-1990
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 and Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities and Exchange Act of 1934). YES [ ] NO
[X]
The number of shares outstanding of registrant's Common stock, par value $.10
per share, at March 31, 2004 was 3,139,737.
1
TRANS-INDUSTRIES, INC. AND SUBSIDIARY COMPANIES
FORM 10-Q - FOR THE QUARTER ENDED MARCH 31, 2004
INDEX
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
A. Consolidated Statements of Operations ---
Three months ended March 31, 2004 and 2003.
B. Consolidated Statements of Comprehensive
Income/(Loss) Three months ended March 31, 2004 and 2003.
C. Consolidated Balance Sheets ---
March 31, 2004 and December 31, 2003
D. Consolidated Statements of Cash Flows ---
Three months ended March 31, 2004 and 2003
E. Notes to Consolidated Financial Statements.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Item 3. QUANTITIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Item 4. CONTROLS AND PROCEDURES
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
2
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
A.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
QUARTER ENDED MARCH 31, 2004 AND 2003
3/31/04 3/31/03
------------ ------------
1. Gross sales less discounts, returns and allowances $ 7,534,929 $ 8,649,800
2. Cost of goods sold 5,605,874 6,058,931
------------ ------------
3. Gross profit 1,929,055 2,590,869
4. Selling, general and administrative exp. 1,965,333 2,638,388
5. Restructuring costs (note 8) 75,601 272,859
------------ ------------
6. Operating income/ (loss) (111,879) (320,378)
7. Other (income)/ expense
Interest expense 162,508 170,049
Other (income)/expense (6,931) (9)
------------ ------------
Total other expense 155,577 170,040
------------ ------------
8. Earnings/(loss) before income taxes (267,456) (490,418)
9. Income tax expense/(benefit) 0 (17,000)
------------ ------------
10. Net earnings/(loss) $ (267,456) $ ( 473,418)
============ ============
11. Earnings/(loss) per share (Note 6):
Basic $ (.09) $ (.15)
Diluted $ (.09) $ (.15)
============ ============
12. Dividends per share $ -- $ --
============ ============
See Notes to Financial Statements
3
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
B.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) (Unaudited)
THREE MONTHS ENDED MARCH 31, 2004 AND 2003
2004 2003
------------ ------------
Net earnings/(loss) $ (267,456) $ (473,418)
Other comprehensive loss:
Equity adjustment from foreign
currency translation. -0- (5,756)
------------ ------------
Comprehensive earnings/(loss) $ (267,456) $ (479,174)
============ ============
See Notes to Financial Statements
4
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
C. CONSOLIDATED BALANCE SHEETS
ASSETS
03/31/04 12/31/03
Current Assets (Unaudited) (Audited)
- ------------------------------------------ ------------- -------------
Cash $ 10,723 $ 166,488
Accounts receivable 6,160,169 7,528,157
Notes receivable 87,550 89,000
Inventories (Note 2) 9,248,016 9,204,145
Prepaid expenses 337,134 236,555
------------- -------------
Total current assets 15,843,592 17,224,345
Property, Plant & Equipment, at Cost
Land 140,089 140,089
Buildings 4,253,590 4,257,569
Machinery & equipment 10,778,985 10,732,305
------------- -------------
15,172,664 15,129,963
Less: accumulated
depreciation (11,618,909) (11,518,659)
------------- -------------
Net plant and equipment 3,553,755 3,611,304
Other Assets
Patents, licenses & trademarks,
net of accumulated amortization 9,939 11,071
Net real estate held for sale 141,706 142,428
Goodwill 150,369 150,369
Sundry 25,000 25,000
------------- -------------
Total assets $ 19,724,361 $ 21,164,517
============= =============
LIABILITIES AND STOCKHOLDERS EQUITY
03/31/04 12/31/03
Current Liabilities (Unaudited) (Audited)
- ------------------------------------------ ------------- -------------
Notes Payable (Note 5) $ 4,764,337 $ 6,298,288
Current installments
- Long term debt (Note 5) 2,664,678 3,143,195
Accounts payable - trade 3,594,440 3,930,700
Accrued liabilities 2,236,845 2,341,322
------------- -------------
Total current liabilities 13,260,300 15,713,505
Long term debt, less
Current portion shown above (Note 5) -0- -0-
Other non-current liabilities 294,173 296,669
Stockholders' Equity
Preferred stock of $1.00 par value
per share - authorized 500,000 shares;
212,799 and 19,000 shares issued at
3/31/04 and 12/31/03, respectively 212,799 19,000
Common stock of $.10 par value per
share - authorized 10,000,000 shares;
3,139,737 shares issued 313,974 313,974
Additional paid-in capital 7,121,004 5,953,081
Accumulated deficit (1,575,798) (1,229,621)
Foreign currency translation 97,909 97,909
------------- -------------
6,169,888 5,154,343
------------- -------------
Total liabilities and stockholders' equity $ 19,724,361 $ 21,164,517
============= =============
See Notes to Financial Statements.
5
TRANS-INDUSTRIES, INC.
Consolidated Statements of Cash Flows
D. For the Three Months Ended March 31, 2004 and 2003
2004 2003
------------- -------------
(Unaudited) (Unaudited)
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings/(loss) $ (267,456) $ (473,418)
Adjustments to reconcile net earnings/(loss)
To net cash provided by operations:
Loss on disposal of Vultron International Ltd. assets -0- 272,859
Depreciation/amortization 217,454 230,952
Decrease (increase) in accts. receivable 1,369,438 430,709
Decrease income taxes (benefit) -0- (17,000)
Decrease (increase) in inventory (43,871) 234,289
Decrease (increase) in prepaid exp. (100,579) (50,375)
Increase (decrease) in accts. payable (336,260) 499,542
Increase (decrease) in accr. liabilities (104,477) (247,683)
(Gain) loss on sale of property and equipment (912) -0-
Other 1,132 (48,796)
------------- -------------
Net cash provided (used) by operations 734,469 831,079
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (159,183) (134,892)
Proceeds from sale of property & equip. 912 -0-
------------- -------------
Net cash provided (used) by investing (158,271) (134,892)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (repayment) of term
Borrowings (481,013) (230,097)
Net proceeds (payment) of credit line (1,533,951) (409,270)
Net proceeds from issuance of preferred stock 1,283,001 -0-
------------- -------------
Net cash provided (used) by financing (731,963) (639,367)
Foreign currency translation -0- (5,756)
------------- -------------
Net increase (decrease) in cash (155,765) 51,064
Cash at beginning of year 166,488 24,996
------------- -------------
Cash at end of quarter $ 10,723 $ 76,060
============= =============
Supplemental Disclosures:
Interest paid $ 141,073 $ 170,481
Income taxes paid $ -0- $ -0-
Supplemental disclosure of non-cash investing activities:
In March 2003, the Company sold certain assets of Vultron International, Ltd. in
exchange for a note receivable of $ 160,000.
See Notes to Financial Statements
6
E. TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The financial information presented as of any date other than December 31,
2003 has been prepared from the Company's books and records without audit.
Financial information as of December 31, 2003 has been derived from the
audited financial statements of the Company. In the opinion of management,
all adjustments consisting of normal recurring adjustments, necessary for
a fair presentation of the financial information for the periods
indicated, have been included. For further information regarding the
Company's accounting policies, refer to the consolidated financial
statements and related notes included in the Company's annual report on
the Form 10-K for the year ended December 31, 2003.
2. Inventories
The major components of inventories are:
03/31/04 12/31/03
---------- ----------
Raw Materials $4,974,467 $4,886,286
Work in Process 1,842,319 2,373,247
Finished Goods 2,431,230 1,944,612
---------- ----------
$9,248,016 $9,204,145
========== ==========
3. Principles of Consolidation
There have been no significant changes in the principles of consolidation
since our most recent audited financial statements.
4. Significant Accounting Policies
There have been no significant changes in accounting policies since our
most recent audited financial statements.
7
E. TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Long-Term Debt
The Company continues to be in default on certain covenants of its credit
agreement. The Company has not received a waiver for these defaults and
the lender has reserved its rights and remedies. The lender has been
monitoring the Company's demand line of credit and its term and mortgage
loans. Efforts are currently underway to refinance this debt.
Trans-Industries has retained Relational Advisors, LLC, financial
advisors, to assist with ongoing discussions with its lender, and in the
refinancing efforts of this debt. As a result of these circumstances, the
Company has reflected all of its existing lender debt as current, though
the lender has not accelerated term debt maturity or demanded payment.
Additionally, on February 26, 2004 the bank increased the interest rate on
all the bank debt from prime plus 3.00% to prime plus 3.50%.
Pursuant to an agreement between the Company and Comerica Bank (Comerica)
dated February 26, 2004, Comerica has agreed to forebear from taking
action to collect the liabilities until January 3, 2005. Among other
things the agreement requires Trans-Industries to (a) continue to apply
100% of its collections to the line of credit; (b) use its best efforts to
refinance all the debt by January 3, 2005; (c) pay interest on the debt at
a rate of prime plus 3.50%; (d) pledge to Comerica all of its common stock
holdings in its wholly owned subsidiaries; and (e) maintain certain
tangible net worth levels. The Company is not in compliance with the
tangible net worth covenant and is seeking a waiver. Additionally,
Comerica required personal guarantees from two of the Company's directors
each in the amount of $250,000 for which the Company has provided
indemnification to these directors.
The Company has begun negotiations with several other lenders to replace
Comerica. The Company anticipates completing the new financing in the
third quarter of 2004. However, there can be no assurance of when, or if
the successful completion of any agreement with one of these other lenders
will occur.
The Company also has a secured $7,500,000 line of credit, in the form of a
demand note, of which $4,764,337 was utilized at March 31, 2004. Interest
is charged at the bank's prime lending rate, plus 3.50% and is payable
monthly.
6. Earnings (Loss) Per Share
For the three months ended March 31, 2004, and the three months ended
March 31, 2003 all options outstanding have been excluded from the
computation of diluted earnings (loss) per share as the effect would be
anti-dilutive.
8
E. TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Segment Information
The Company operates in one market segment, the transportation industry,
with products directed towards customers in the mass transit, highway,
airline and rental car segments. Financial information summarized by
geographic area is as follows:
03/31/04 03/31/03
----------------------------- -----------------------------
LONG-LIVED LONG-LIVED
REVENUES REVENUES
REVENUES ASSETS REVENUES ASSETS
------------- ------------- ------------- -------------
United States $ 5,415,936 $ 3,880,769 $ 6,728,185 $ 4,304,485
United Kingdom 39,275 -0- 197,658 -0-
Canada 2,034,639 -0- 1,722,646 -0-
Other 45,079 -0- 1,311 -0-
------------- ------------- ------------- -------------
Total $ 7,534,929 $ 3,880,769 $ 8,649,800 $ 4,304,485
============= ============= ============= =============
8. Restructuring Costs
In March of 2003, the Company sold the assets of its foreign subsidiary,
Vultron International. As a result, in the first quarter of 2003 the
Company recorded restructuring charges primarily related to the sale of
inventory, in the amount of $272,859. Additionally, to address its
profitability, in July 2003 the Company initiated a significant yearlong
restructuring program in the informational systems business. Restructuring
costs for the first quarter of 2004 amounted to $75,601 of consulting
fees.
9. Sale of Series B Preferred Stock and Warrants
On March 4, 2004, the Company completed the sale of 193,799 shares of
Series B Convertible Preferred Stock and 145,384.84 warrants to purchase
common stock for $1,500,000 to a member of the Company's Board of
Directors. Issuance costs were $217,000. The warrants have an exercise
price of $3.00 per share. Additionally, at the closing, the Company
granted an option to the Board member to purchase between $500,000 and
$1,500,000 additional shares of Series B Convertible Preferred Stock and
related warrants for $9.00 per share, including warrants. The warrants
have been allocated a value of $195,000, which is the estimated fair value
of the warrants on the date of the sale as determined by the Black-Scholes
pricing model. The proceeds allocated to the preferred stock is
$1,305,000. The preferred stock contains a beneficial conversion feature
of $78,721 attributable to the difference between the ascribed value of
the preferred stock and the market value of the underlying number of
common shares into which the preferred
9
E. TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Sale of Series B Preferred Stock and Warrants (Continued)
stock may be converted. The value assigned to the beneficial conversion
feature is amortized from the date of issuance to the earliest conversion
date and is treated as a dividend. Because the preferred stock is
convertible at any time after issuance, the entire beneficial conversion
feature was treated as a dividend on the date the preferred stock was
issued.
Dividends
The holder is entitled to receive cumulative quarterly dividends at a rate
per annum of $0.387 per share, commencing on April 1, 2004. The Company at
its option, in no more than eight of the first twelve full quarters, may
elect to pay the accruing dividends in additional shares of Series B
Convertible Stock at $7.74 per share, or in cash.
Conversion
At the holder's option, each share of Series B Preferred Stock is
convertible into three shares of the Company's common stock. At any time
after February 27, 2007 and on the business day immediately following the
period of 30 consecutive business days on which trades occur during which
the market price of the Company's common stock equals or exceeds $5.16 per
share, each share of Series B Convertible Preferred Stock will
automatically be converted into three shares of common stock
Redemption
At any time after February 27, 2007, the Company may, at its option,
redeem all, but not less than all of the holder's shares of Series B
Convertible Preferred Stock by paying cash equal to the stated value,
$7.74 per share, plus all declared or accumulated but unpaid dividends.
Liquidation
In the event of any liquidation, dissolution or winding up of the Company,
either voluntary or involuntary, the holder of each share of Series B
Convertible Preferred Stock is entitled to receive, prior to and in
preference to any distributions to the holders of common stock, an amount
equal to the stated value of $7.74 per share, plus unpaid, accrued and
accumulated dividends.
Voting rights
The holder has the right to vote with other stockholders of the Company on
an as-converted basis.
10
E. TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Stock Based Compensation
At March 31, the Company has a stock-based employee compensation plan, which is
described more fully in Notes B & I in the Company's Annual Report. The Company
accounts for this plan under the recognition and measurement principles of APB
Opinion No. 25, Accounting for Stock Issued to Employees, and related
Interpretations. No stock-based employee compensation cost is reflected in net
income, as all options granted under those plans had an exercise price greater
than or equal to the market value of the underlying common stock on the date of
grant. The following table illustrates the effect on net earnings (loss) and
earnings (loss) per share if the company had applied the fair value recognition
provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation,
to stock-based employee compensation.
Three Months Ended March 31,
------------------------------
2004 2003
------------- -------------
Net earnings (loss), as reported $ (267,456) $ (473,418)
Deduct: Total stock-based employee compensation
expense determined under fair value based method for
all awards, net of tax (15,733) (10,195)
------------- -------------
Pro forma net earnings (loss) $ (283,189) $ (483,613)
------------- -------------
Earnings (loss) per share:
Basic-as reported $ (.09) $ (.15)
Basic-pro forma $ (.09) $ (.15)
Diluted-as reported $ (.09) $ (.15)
Diluted-pro forma $ (.09) $ (.15)
11
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For The Three Months Ended Mach 31, 2004
Forward-Looking Statements
This discussion highlights significant factors influencing the financial
condition and results of operations of Trans-Industries, Inc. It should be read
in conjunction with the financial statements and related notes. This discussion
includes certain forward-looking statements based on management's estimate of
trends and economic factors in the markets in which the corporation is active,
as well as the corporation's business plans. We have used words such as "may,"
"will," "expect," "anticipate," "believe," "estimate," "plan," "intend," and
similar expressions in this report to identify forward-looking statements. In
light of recent securities law developments, including the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the
corporation notes that such forward-looking statements are subject to risks and
uncertainties. Accordingly, the corporation's actual results may differ from
those set forth in such statements. Significant changes in economic conditions,
regulatory or legislative changes affecting Trans-Industries, Inc., its
competitors, or the markets in which it is active, or changes in other factors
may cause future results to vary from those expected by the Corporation. The
Company believes any forward-looking statements it has made are based on current
management expectations and they are subject to risks and uncertainties. These
risks and uncertainties include, but are not limited to the following:
- The potential inability to close the sale of the Company's Rochester
Hills manufacturing facility;
- The continued forbearance by the Company's bank lender of their
right to call the debt now due;
- A further decline of economic conditions in general and in the mass
transit industry in particular;
- Changes in customer requirements or reduced demand for the Company's
products and services;
- The inability of the Company to successfully implement its
restructuring program in the informational systems business;
- Competitive factors (including the introduction or enhancement of
competitive products and their successful introduction into the
marketplace);
- Product pricing decreases and component price increases that may
result in materially reduced gross profit margins for the Company's
product;
- Unforeseen increases in operating expenses;
- The inability to attract or retain management, sales, or engineering
talent.
All of our forward-looking statements should be considered in light of the
above factors and all other risks discussed from time to time in our filings
with the Securities and Exchange Commission. We do not undertake to update our
forward-looking statements to reflect future events or circumstances.
-12-
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For The Three Months Ended Mach 31, 2004
Results of Operations
Sales for the first quarter of 2004 were $7,534,929 compared with $8,649,800 for
the same period a year ago. This decrease of $1,114,871 was primarily from a
decrease in sales of the Company's variable message signs and the sale of
Vultron International, LTD in March 2003 whose sales were approximately $175,000
for the first quarter of 2003. Cost of sales for the first quarter of 2004 was
$5,605,874 compared with $6,058,931 for the first quarter of 2003. This
reduction of $453,057 is the result of lower sales for the 2004 period.
For the first quarter of 2004, the Company posted a loss of $267,456, or $.09
per share, compared to a loss of $473,418, or $.15 per share, for the same
period of 2003. This reduced loss amounted to $205,962 and was the result of
management's efforts to pare costs. For the first quarter of 2004, the Company's
general and administrative costs decreased by $673,055 to $1,965,333 from
$2,638,388 for the first quarter of 2003. This decrease in SG&A resulted
primarily from personnel reductions. Additionally, restructuring costs were
reduced by approximately $197,000 for the first quarter of 2004 compared to the
first quarter of 2003.
Interest
Interest expense amounted to approximately $163,000 and $170,000 for the first
quarters of 2004 and 2003, respectively. This decrease of $7,000 was the result
of lower debt levels in 2004, offset by higher interest rates.
Liquidity and Capital Resources
For 2004, anticipated increases in required working capital are expected to be
met from the cash flow from operations and the receipt of $1.5 million in
connection with the private placement of convertible preferred stock, which was
completed March 2004. Additionally, the Company has signed an agreement to sell
one of its manufacturing facilities and anticipates closing this deal in July
2004. Net proceeds from this transaction are estimated to be approximately $2.6
million.
As disclosed in Note 5 to the financial statements, the Company continues to be
in default of certain covenants of its credit agreement. The Company has not
received a waiver for these defaults and the lender has reserved its rights and
remedies. The lender has been monitoring the Company's demand line of credit and
its term mortgage loans. Efforts are currently underway to refinance this debt.
Trans-Industries has retained Relational Advisors, LLC., financial advisors, to
assist with ongoing discussions with its lender and in the refinancing efforts
of the debt. As a result of these circumstances, the Company has reflected all
of its existing lender debt as current, though the lender has not accelerated
term debt maturity or demanded payment. Additionally, on February 26, 2004, the
bank increased the interest rate on all bank debt from prime plus 3.00% to
-13-
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For The Three Months Ended March 31, 2004
prime plus 3.50%. This increase in interest is not expected to have a material
affect on 2004 operating results.
Pursuant to an agreement between the Company and Comerica Bank (Comerica) dated
February 26, 2004, Comerica has agreed to forbear from taking action to collect
the liabilities until January 3, 2005. Among other things the agreement requires
Trans-Industries to (a) continue to apply 100% of its collections to the line of
credit: (b) use its best efforts to refinance all the debt by January 3, 2005;
(c) pay interest on the debt at a rate of prime plus 3.50%; (d) pledge to
Comerica all of its common stock holdings in its wholly owned subsidiaries; and
(e) maintain certain tangible net worth levels. The Company is not in compliance
with the tangible net worth covenant and is seeking a waiver. Additionally,
Comerica required personal guarantees from two of the Company's directors each
in the amount of $250,000 for which the Company has provided indemnification to
these directors.
The Company has begun negotiations with several other lenders to replace
Comerica. The Company has targeted the third quarter of 2004 for the completion
of new financing, however, there can be no assurance of when, or it the
successful completion of any agreement with one of these other lenders will
occur.
-14-
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are exposed to the impact of interest rate changes and, to a lesser extent,
foreign currency fluctuations. We have not entered into interest rate
transactions for speculative purposes or otherwise. Our foreign currency
exposures were immaterial as of March 31, 2004. Our primary interest rate risk
exposure has resulted from floating rate debt related to our revolving loan
facility and would be immaterial to our results from operations if rates were to
increase 1% from March 31, 2004 rates. We currently do not hedge our exposure to
floating interest rate risk.
Item 4. CONTROLS AND PROCEDURES
In Item 9A, controls and procedures of the Company's Form 10-K for the year
ended December 31, 2003 the following item was identified as a reportable
condition:
Due to extending the filing deadlines for recent SEC filings it was
determined the Company lacked certain resources to address the financial
reporting related to significant and complex business transactions. The
Company is evaluating its resources to address its financial reporting and
make appropriate changes to provide sufficient resources and time to
prepare, and provide for reviews by management, the Audit Committee and
the Board of Directors, and file periodic reports within the time periods
specified in the SEC's rules and regulations.
Our Chief Executive Officer and Chief Financial Officer have concluded, based on
their evaluation as of March 31, 2004, that our disclosure controls and
procedures, with the exception of above, are effective for gathering, analyzing
and disclosing the information we are required to disclose in our reports filed
under the Securities Exchange Act of 1934. There have been no changes in our
internal controls that occurred during the Company's most recent fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
the Company's internal controls.
-15-
TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
4 Series B convertible preferred stock and warrant purchase
agreement.
31.1 Certification of the CEO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of the CFO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of the CEO and CFO pursuant of 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) Reports on Form 8-K
On March 8, 2004, the Company furnished a Form 8-K under item 5 -
"Other Events" concerning the Company's press release announcing its
sale of Series B convertible preferred stock and accompanying
warrants.
-16-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANS-INDUSTRIES, INC.
Date: May 14, 2004 /s/ Kai Kosanke
--------------------------
Kai Kosanke, Treasurer
and Chief Financial Officer
Date: May 14, 2004 /s/ Keith LaCombe
--------------------------
Keith LaCombe
Assistant Treasurer
-17-
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------
4 Series B convertible preferred stock and warrant purchase
agreement.
31.1 Certification of the CEO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of the CFO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of the CEO and CFO pursuant of 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.