UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarter ended March 31, 2000 Commission file number 000-25523
ANONYMOUS DATA CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 86-0857752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6170 W. Desert Inn
Las Vegas, Nevada 89146
(Address of principal executive offices) (Zip Code)
(702) 221-0756
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 No X
As of March 31, 2000, there were 11,530,660 shares of common stock
outstanding.
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ANONYMOUS DATA CORPORATION
FOR THE QUARTER ENDED
MARCH 31, 2000
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheets as of March 31, 2000 3
and December 31, 1999
Statement of Stockholders' Equity
for the three months ended March 31, 2000 4
Income Statements for the three-month period
ended March 31, 2000 and March 31, 1999 5
Statements of Cash Flow for the three-month 6
period ended March 31, 2000 and March 31, 1999
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 7-10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults by the Company upon its
Senior Securities 9
Item 4. Submission of Matter to a Vote of
Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports of Form 8-K 10
SIGNATURES 11
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ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ASSETS
March 31, 2000 December, 31, 1999
(unaudited)
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Current assets:
Cash $ 18,071 $ 3,939
Prepaid expenses 646,920
----------------- ----------------
664,991 3,939
Furniture, fixtures and equipment 127,930 125,449
Accumulated depreciation (36,224) (36,224)
----------------- ----------------
91,706 89,225
Unamortized patent costs 96,415 96,038
------------------ --------------
$853,112 189,202
================ ===============
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Accounts payable $ 37,190 37,569
Payroll taxes payable 7,089 7,089
Accrued interest, officer 5,100 5,100
Other 605 1,528
---------------- --------------
49,984 51,286
Long-term debt, officer 148,000 51,000
---------------- --------------
Total liabilities 197,984 102,286
----------------- --------------
Stockholders' equity:
Common stock, $.001 par, 100,000,000 shares
authorized, 11,531,000 shares issued and
outstanding 11,531 9,438
Preferred stock, $.001 par, 25,000,000 shares
authorized, none issued and outstanding
Additional paid-in capital 4,738,664 1,692,376
Deficit accumulated during
development stage (4,095,067) (1,614,898)
---------------- --------------
655,128 86,916
---------------- --------------
$853,112 $189,202
====== =======
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ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
FOR THE THREE MONTHS ENDING MARCH 31, 2000
Common Stock Additional Accumulated
Shares Par Value Paid-In Capital Deficit Total
----------- -------- ----------- ---------- --------
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Balance 12-31-99 $9,438,160 $9,438 $1,692,376 $(1,614,898) $86,916
Shares Issued To:
Consultants for
services 2,092,500 2,093 3,046,288 3,048,381
Net loss (2,480,169)(2,480,169)
----------- ------ ----------- ---------- ---------
Balance 3-31-00 $11,530,660 $11,531 $4,738,664 $(4,095,067) $655,128
========== ========= ========== ======== ========
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ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
INCOME STATEMENTS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2000 AND MARCH 31, 1999
(unaudited)
2000 1999
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Operating costs and expenses:
Research and development $2,407,311 $217,642
Administrative 75,333 335,464
----------- ------------
2,482,644 553,106
----------- -------------
Income, other 2,475 1,510
----------- ------------
Net loss $(2,480,169) $(551,596)
------------ -------------
Loss per share (0.24) (0.06)
========= =========
Weighted average of number of shares
outstanding 10,386,077 9,079,260
========= =========
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ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDING MARCH 31, 2000 AND MARCH 31, 1999
2000 1999
(unaudited)
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Operating activities:
Net loss $(2,480,169) $(551,596)
Expenses reimbursed with stock 3,048,381 376,210
Change in operating assets:
Increase in employee advances (2,300)
Increase in prepaid expenses (646,920) (2,750)
Decrease in deferred offering costs 144,000
Change in operating liabilities:
Decrease in accounts payable (378)
---------------- ----------
Net cash used by operating activities (79,086) (36,436)
--------------- --------------
Investing activities:
Purchase of equipment (2,481) (6,025)
Patent costs (377) (12,988)
--------------- --------------
Net cash used in investing activities (2,858) (19,013)
--------------- ------------
Financing activities:
Payments on lease purchase obligation (924) (1,757)
Sale of common stock 365,250
Loan from principal shareholder 97,000
------------ -------------
Net cash provided by financing
activities 96,076 363,493
------------ --------------
Net increase in cash 14,132 308,044
Cash, beginning 3,939 13,793
------------ --------------
Cash, ending 18,071 321,837
============= =============
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ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
1. Summary of significant accounting policies:
Nature of business. The Company is a development stage enterprise and,
therefore, as of March 31, 2000, has not commenced business operations.
The Company was incorporated in 1996, for the purpose of developing
biometric equipment and related software to store and retrieve date of
medical laboratory testing. The Company is in the research and
development phase of testing its technical equipment and software. The
Company's future operations could be affected by adverse changes in local
and national economic conditions. (See Note 3.)
Basis of presentation. The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and disclosures required by
generally accepted accounting principles for annual financial statements.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) considered necessary for a fair presentation have
been included. The results of operations for any interim period are not
necessarily indicative of results for the full year. For further
information, please refer to the financial statements of Anonymous Data
Corporation (the "Company"), and the related notes, included within the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999 (the "1999 Form 10-K"), previously filed with the Securities and
Exchange Commission.
Offering costs. The Company has offered its unregistered common stock to
the public in offerings intended to be exempt from registration with the
United States Securities and Exchange Commission (SEC) pursuant to Rule
504 promulgated under the Securities Act of 1933. The costs of the
offerings have been offset against the proceeds to date.
Use of estimates. Timely preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect reported amounts
and disclosures, some of which may require revision in future proceeds.
Equipment, depreciation and amortization. Equipment is stated at cost.
Depreciation and amortization is provided by an accelerated method over
the estimated useful live of the assets.
Stock compensation awards. The company has adopted Financial Accounting
Standard Board Statement No. 123 Accounting for Stock-Based Compensation,
for valuing compensatory stock and option awards. (See Note 5.)
Patent costs. Cost associated with patents and patents pending are
deferred and amortized based on the lives of patents granted. In the
event patent applications are denied or abandoned, such costs are written
off. For patents granted late in the year, amortization begins in the
following year.
<PAGE>
ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of significant accounting policies (Continued):
Loss per share. Loss per share is computed based on the weighted average
number of shares outstanding for the periods presented.
2. Related party transactions:
Dr. James E. Beecham (Chairman of the Board of Directors and majority
shareholder and president of the Company) has licensed to the Company the
rights associated with two U.S. patents pending. The licenses are
irrevocable until May 14, 2008. Dr. Beecham has also agreed to extend
the licenses for an additional eight years depending upon performance.
In consideration for the assignment of rights, Dr. Beecham will receive a
royalty of 3% of the first $10 million, 2% of $10 to $25 million, and 1%
in excess of $25 million in gross revenues to the Company from the
manufacture, use, sale or operation of the products and services.
The Chairman has loaned the Company an additional $97,000 for a total of
$148,000 dollars at 10% annually. Interest payments are due annually
with principal balance due in its entirety at the five year maturity
date.
During early 1999, the Company issued 129,500 shares of its common stock
valued at $1 per share to its officers/directors as compensation.
3. Prepaid expenses:
Prepaid expenses represents the unamortized portion of future services to
be rendered through January 31, 2001 by consultants who received the
Company's common shares for such services
$646,920
=======
4. Going concern contingency:
The Company's ability to complete certain research projects and
development of its equipment and software development is dependent upon
obtaining additional equity or debt financing. This condition could
prevent the Company from commencing business operations and continuing as
a going concern. The balance sheet, however, has been prepared assuming
the Company will continue as a going concern, and it reflects no
adjustments that might result from the outcome of this uncertainty.
However, because of this uncertainty, no effect has been given in the
balance sheet to any future income tax benefit of the loss recorded to
date. The Company has a net operating loss carryforward expiring in year
2019 available to reduce future income tax expense in the amount of
approximately $1,600,000.
<PAGE>
4. Going concern contingency (Continued):
Management expects to raise additional equity capital by offering its
common stock for sale to investors through private placement or by
registration with the SEC under the Securities Act of 1933 or obtain debt
financing to complete its research projects and equipment and obtain the
related additional patents. Management expects that the Company's
medical data management equipment, when completed, will have a wide range
of applications in medical testing data storage. Management's ability to
effectively implement its plans could have a material and adverse effect
upon the Company's business, financial condition and future operations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's financial statements and the notes thereto contained elsewhere
in this filing.
Overview
Anonymous Data Corporation, a Nevada corporation (the "Company" or
"ADC") formed in November 1996, is a development stage enterprise engaged in
the business of data management using a biometric identification system. The
biometric identification system; (i) archives individual data, such as
medical educational information, for access by registered users through
rapid sorting using scanning of a portion of their anatomy as a preliminary
search method; and, (ii) permits a second method of identification of
individuals volunteering for payment as plasma donors.
Background
We have obtained rights to a method of linking files of archived data
to the anatomy of an individual. This method allows the search function for
records to be more rapid and accurate and re-checked according to the name
of the individual. We have spent $281,438 during 1999 toward research and
development toward the refinement of our biometric individual data
identification system.
The term BIOMETRIC derives from the words body (BIO) and measurement
(METRIC). The science of biometrics has in recent years developed the
technology to take a reading from a human (such as electronic scan of a
fingerprint, iris scan, facial recognition, palm print, voice sample, etc).
The electronic scan is then matched with the same biometric marker for
purposes of recognition and verification of identity. The United States
Patent and Trademark Office has issued two U.S. patents to Dr. James E.
Beecham, Chairman of the Company. The Patents, Patent Numbers U.S. 5,876,926
[PCT/U.S. 98/16435]) and U.S. 5,897,989 [PCT/U.S. 97/08015], pertain to a
method, system and apparatus that permit an individual to submit biologic
test specimens for medical testing under biometric identification. The
system then allows for the subsequent retrieval of test results from a
computerized database utilizing the same biometric personal identification.
These Patents have been exclusively licensed to us from Dr. Beecham. - See
"Certain Transactions - License Agreement."
The patented applications, in non-U.S. territories, will be utilized
for collecting medical specimens in containers labeled by "biometric index".
For example, a biometric index may be obtained from the scan of a
fingerprint and/or the scan of the iris of the eye of the specimen donor.
After testing in a certified laboratory, the test data is stored
electronically under linkage to that same personal biometric index. Access
to such "biometrically" stored information is controlled by the re-scan of
the specimen donor. Since viewing the data requires "unlocking" the computer
file by scanning the same fingerprint and/or eye as was used for sending the
specimen to the lab in the first place, our system provides the secure
protection of the donors sample and limits mistakes that are sometimes made
in the donation process.
<PAGE>
We have developed a plan and are in the process of developing a method
for providing services and products worldwide based on our exclusive patent
licenses. We plan to offer these products as turnkey systems and also to
offer services directly to subscribers domestically and abroad
Results of Operations for the three months ended March 31, 2000 and March
31, 1999
(unaudited)
Total operating expenses from continuing operations were $2,482,644 for
the three months ended March 31, 2000 compared to $553,106 for the three
months ended March 31, 1999. Operating expenses for the three months ended
March 31, 2000 includes $2,401,997 expense related to the value of Company
shares issued to consultants for services. Utilizing an average daily
calculation of operating expenses of $27,282 for the period ending March 31,
2000, and an average daily calculation of operating expenses of $6,146 for
the period ending March 31, 1999, this represented a 588% increase in average
daily operating expenses.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking statements
made pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. These forward looking statements are based largely on
the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control, including, but
not limited to, economic, competitive and other factors affecting the
Company's operations, markets, products and services, expansion strategies
and other factors discussed elsewhere in this report and the documents filed
by the Company with the Securities and Exchange Commission. Actual results
could differ materially from these forward-looking statements. In light of
these risks and uncertainties, there can be no assurance that the forward-
looking information contained in this report will in fact prove accurate.
The Company does not undertake any obligation to revise these forward-looking
statements to reflect future events or circumstances.
Liquidity and Capital Reserves
As of March 31, 2000 and March 31, 1999 (Unaudited)
As of March 31, 2000, the Company's assets were $853,112 and its
liabilities were $197,984, resulting in an excess of assets of $655,128. The
assets include prepaid expenses of $646,920 representing the unamortized
portion of future services to be rendered through January 31, 2001 by
consultants who received the Company's common shares for such service. Cash
was $18,071 at March 31, 2000 as compared to cash of $324,137 on March 31,
1999, a decrease of $306,066. This represented a 94% decrease in available
cash. This decrease was primarily the result of an increase in operating
expenses.
The Company has continued to fund its deficit cash flow from private
placements of the Company's common stock. It is anticipated that loans and
the sale of the Company's stock will continue until such time as the Company
generates sufficient revenues from its operations to cover operating
expenses.
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
The Company recently settled a suit filed on January 14, 2000 by Asia
Pacific, Inc., a Nevada Corporation, dba Laser Barcode Solutions, which was
filed in District Court in Clark County, Nevada, Case Number A413603
Department XII against Anonymous Data Corporation and the President James
Beecham claiming Breach of Contract, Tortious Breach of Contract and
Negligent/Intentional Misrepresentation.
Item 2. Changes in Securities.
None.
Item 3. Defaults by the Company upon its Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports of Form 8--K.
None
<PAGE>
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.
ANONYMOUS DATA CORPORATION
(Registrant)
By:/s/ James Beecham
James E. Beecham
President
Date: May 19, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 18,071
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 646,920
<INVENTORY> 0
<CURRENT-ASSETS> 664,920
<PP&E> 127,930
<DEPRECIATION> (36,224)
<TOTAL-ASSETS> 853,112
<CURRENT-LIABILITIES> 49,984
<BONDS> 0
0
0
<COMMON> 11,531
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 853,112
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,482,644
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,480,169)
<INCOME-TAX> (2,480,169)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,480,169)
<EPS-BASIC> (.24)
<EPS-DILUTED> (.24)
</TABLE>
