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 June 30, 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 X No
As of June 30, 2000, there were 11,530,660 shares of common stock
outstanding.
<PAGE>
ANONYMOUS DATA CORPORATION
FOR THE QUARTER ENDED
JUNE 30, 2000
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheets as of June 30, 2000
and December 31, 1999 3
Income Statements for the three-month periods
ended June 30, 2000 and June 30, 1999 4
Income Statements for the six-month periods
ended June 30, 2000 and June 30, 1999 5
Statement of Stockholders' Equity
for the six months ended June 30, 2000 6
Statements of Cash Flow for the six-month
periods ended June 30, 2000 and June 30, 1999 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 8-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults by the Company upon its
Senior Securities 13
Item 4. Submission of Matter to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports of Form 8-K 13
SIGNATURES 14
<PAGE>
<TABLE>
ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
BALANCE SHEETS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ASSETS
June 30, 2000 December 31, 1999
(unaudited)
<S> <C> <C>
Current assets:
Cash $ 12,982 $ 3,939
Prepaid expenses 445,569
-------------- -------------
458,551 3,939
Furniture, fixtures and equipment 160,554 125,449
Less accumulated depreciation (49,455) (36,224)
---------------- -------------
111,099 89,225
Unamortized patent costs 103,979 96,038
------------------- -------------
$673,629 $189,202
================ ===============
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 1,908 $ 37,569
Payroll taxes payable 7,089 7,089
Accrued interest, officer 13,500 5,100
Other 1,528
--------------- -------------
22,497 51,286
Long-term debt, officer 240,500 51,000
---------------- -------------
Total liabilities 262,997 102,286
---------------- -------------
Stockholders' equity:
Common stock, $.001 par,
100,000,000 shares
authorized, 11,530,660
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 (4,339,563) (1,614,898)
--------------- ------------
410,632 86,916
--------------- ------------
$673,629 $189,202
=============== ============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
INCOME STATEMENTS
FOR THE THREE MONTH PERIODS ENDED JUNE 30, 2000 AND JUNE 30, 1999 (unaudited)
2000 1999
<S> <C> <C>
Operating costs and expenses:
Research and development $ 201,352 $ 23,828
Administrative 21,339 139,821
Depreciation 13,231
Interest 8,574
------------- ------------
244,496 163,649
-------------- ------------
Income, other -- 5,668
-------------- ------------
Net loss $ (244,496) $(157,981)
-------------- -------------
Loss per share (0.02) (0.02)
============= ============
Weighted average of number of shares
outstanding 10,786,374 9,413,160
============= ============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
ANONYMOUS DATA CORPORATION ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
INCOME STATEMENTS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2000 AND JUNE 30, 1999 (unaudited)
2001 1999
<S> <C> <C>
Operating costs and expenses:
Research and development $2,606,481 $228,394
Administrative 98,854 488,360
Depreciation 13,231
Interest 8,574
------------ ---------
$2,727,140 $716,754
------------ ---------
Income, other 2,475 7,177
------------ ---------
Net loss $(2,724,665) $(709,577)
------------ ---------
Loss per share (0.03) (0.08)
============ ==========
Weighted average of number
of shares outstanding 10,786,374 9,222,360
============ ==========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
FOR THE SIX MONTHS ENDING JUNE 30, 2000
Common Stock Additional Accumulated
Shares Par Value Paid-In Capital Deficit Total
----------- ------ ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
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 (2,724,665)(2,724,665)
----------- ------- ---------- ---------- ---------
Balance 6-30-00 11,530,660 $11,531 $4,738,664 $(4,339,563) $410,632
========== ========= ========== ========== ========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
ANONYMOUS DATA CORPORATION
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2000 AND JUNE 30, 1999
2000 1999
(unaudited)
<C> <C>
Operating activities:
Net loss $ (2,724,665) $(709,577)
Expenses reimbursed with stock 3,048,381 376,210
Depreciation 13,231
Change in operating assets:
Increase in other assets (2,750)
Increase in prepaid expenses (445,569)
Change in operating liabilities:
Decrease in accounts payable (35,661)
Increase in accrued interest 8,400
------------ --------------
Net cash used by operating activities (135,883) (336,117)
------------ --------------
Investing activities:
Purchase of equipment (35,105) (9,741)
Patent costs (7,941) (23,465)
Deferred offering costs 144,000
----------- -------------
Net cash used in investing activities (43,046) 110,794
------------ -------------
Financing activities:
Payments on lease purchase obligation (1,528) (3,928)
Sale of common stock 365,250
Loan from principal shareholder 189,500
----------- -------------
Net cash provided by financing
activities 187,972 361,322
----------- -------------
Net increase in cash 9,043 135,999
Cash, beginning 3,939 13,793
----------- -------------
Cash, ending 12,982 149,792
=========== =============
</TABLE>
See notes to financial statements.
<PAGE>
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 June 30, 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 data 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. These statements
should be read in conjunction with the financial statements and related
notes, that appear in the Company's Annual Report on Form 10-KSB for the
period ended December 31, 1999. The balance sheet at June 30, 2000, was
derived from the audited financial statements included in that report.
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 during the three months ended March 31,
2000, $92,500 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. Common stock issuances:
For the current period, the Company issued 2,092,500 shares for
services. Of these 1,720,000 shares previously registered using Form S-8
were issued to employees under established stock based employee benefit
programs. Accordingly, these shares were valued at market value on the date
of grant. The Company also issued 372,500 restricted shares to others for
services pursuant to Rule 144, which were valued based on the market value
of the term of grant, less a 15% discount. Of those shares issued to
employees, 550,000 shares were issued for future services. Of those shares
issued under Rule 144, 35,000 shares were issued for future services.
Prepaid expenses represents the unamortized portion of future services to be
rendered through January 31, 2001, and is a result of these grants.
<PAGE>
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 as of December 31, 1999, expiring in year 2019
available to reduce future income tax expense in the amount of approximately
$1,600,000.
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.
5. Subsequent event:
Subsequent to June 30, 2000, the Company issued 310,500 shares of registered
common stock as compensation to employees including 300,000 shares to
directors.
<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 and six months ended June 30, 2000 and
June 30, 1999
(unaudited)
Total operating expenses from continuing operations were $244,496 for
the three months ended June 30, 2000 compared to $163,649 for the three
months ended June 30, 1999. Operating expenses for the three months ended
June 30, 2000 includes $201,351 expense related to the value of Company
shares issued to consultants for services. Utilizing an average daily
calculation of operating expenses of $2,687 for the period ending June 30,
2000, and an average daily calculation of operating expenses of $1,798 for
the period ending June 30, 1999, this represented a 49% increase in average
daily operating expenses.
Total operating expenses from continuing operations were $2,727,140 for
the six months ended June 30, 2000, compared to $716,754 for the six months
ended June 30, 1999. Operating expenses for the six months ended June 30,
2000, includes $2,603,348 expense related to the value of company shares
issued to consultants for services. Utilizing an average daily calculation
of operating expenses of $14,984 for the period ending June 30, 2000, and an
average daily calculation of operating expenses of $3,960 for the period
ending June 30, 1999, this represents a 253% 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 June 30, 2000 and June 30, 1999 (Unaudited)
As of June 30, 2000, the Company's assets were $673,629 and its
liabilities were $262,997, resulting in an excess of assets of $410,632. The
assets include prepaid expenses of $445,569 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 $12,982 at June 30, 2000 as compared to cash of $149,792 on June 30,
1999, a decrease of $136,810. This represented a 91% decrease in available
cash. This decrease was primarily the result of an increase in operating
expenses.
<PAGE>
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.
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 E. Beecham
James E. Beecham
President
Date: August 11, 2000
