UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
(x ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
---------------------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission File number 1-7301
-----------------------
COLORMAX TECHNOLOGIES, INC.
-----------------------------
(Exact name of registrant as specified in charter)
Delaware 75-1329265
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer incorporation or
organization) Identification No.)
14251 Chambers Rd Tustin Ca 92780
- --------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
1- 801- 262-5052
----------------
Registrant's telephone number, including area code
Renu-U International, Inc.
--------------------------
(Former name, former address, and former fiscal year, if changed since last
report.)
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), Yes [x ] No [ ] and (2) has
been subject to such filing requirements for the past 90 days. Yes [x ] No [
]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.
Class Outstanding as of Setember 30, 1999
- ------------------ ----------------------------------------
Common Stock, $0.001 4,122,957
<PAGE>
INDEX
Page
Number
------
PART I.
ITEM 1. Financial Statements (unaudited) 3
Balance Sheets 4
September 30, 1999 and December 31, 1998
Statements of Operations
For the three and nine months ended September 30, 1999 and 1998 5
and the period from April 28, 1999 to September 30, 1999
Statements of Cash Flows
For the nine months ended September 30, 1999 and 1998 6
and the period from April 28, 1999 to September 30, 1999
Notes to Financial Statements 7
ITEM 2. Management Discussion and Analysis 11
PART 2
ITEM 2. Changes in Securities 12
ITEM 6. Exhibits and Reports on Form 8-K 12
. Signatures 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of ColorMax Technologies, Inc. and subsidiary
(a development stage company) at September 30, 1999 and December 31 1998, and
the statements of operations for the three and nine months ended September 30,
1999 and 1998 and the period April 28, 1999 (date of development stage) to
September 30, 1999, the cash flows and the statement of stockholder' equity
for the nine months ended September 30, 1999 and 1998, and the period from
April 28, 1999 to September 30, 1999, have been prepared by the Company's
management and they do not include all information and notes to the financial
statements necessary for a complete presentation of the financial position,
results of operations, cash flows, and stockholders' equity in conformity with
generally accepted accounting principles. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature.
Operating results for the quarter ended September 30, 1999, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 1999.
<PAGE>
COLORMAX TECHNOLOGIES, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999, AND DECEMBER 31, 1998 (NOTE 4)
<TABLE>
<CAPTION>
SEPT 30, DEC 31,
1999 1998
--------- ----------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,887 $ -
Accounts receivable . . . . . . . . . . . . . . . . . . . 2,000 -
---------- ---------
Total Current Assets . . . . . . . . . . . . . . . . . . . . 28,887 -
---------- ---------
PROPERTY AND EQUIPMENT - net of accumulated. . . . . . . . . . 77,871 -
---------- ---------
depreciation
MARKETING RIGHTS - Note 4 . . . . . . . . . . . . . . . . . . - -
---------- ---------
PREPAID EXPENSES AND DEPOSITS. . . . . . . . . . . . . . . . . 30,613 -
---------- ---------
$ 137,371 $ -
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - related parties. . . . . . . . . . . . . . . $ 53,300 $ -
Accounts payable. . . . . . . . . . . . . . . . . . . . . 111,170 -
Total Current Liabilities. . . . . . . . . . . . . . . . . . . 164,470 -
---------- ---------
LONG TERM DEBT AND OTHER CONTINGENCIES . . . . . . . . . . . . - -
---------- ---------
Note 3
STOCKHOLDERS' EQUITY
Preferred stock
1,000,000 shares authorized, at $0.10 par value;
none outstanding . . . . . . . . . . . . . . . . . . . - -
Common stock
100,000,000 shares authorized, at $0.001 par value;
4,122,957 shares issued and outstanding at September 30;
332,041 at December 31 . . . . . . . . . . . . . . . . . 4,123 332
Capital in excess of par value . . . . . . . . . . . . . . . . 827,544 (332)
Accumulated deficit during development stage - Note 4. . . . . (858,766) -
---------- ---------
Total Stockholders' Deficiency . . . . . . . . . . . . . . . (27,099) -
---------- ---------
$ 137,371 $ -
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
COLORMAX TECHNOLOGIES INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999, AND 1998
AND THE PERIOD APRIL 28, 1999 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS APRIL 28, 1999 TO
SEPT 30, SEPT 30, SEPT 30, SEPT 30, NOTE 4
1999 1998 1999 1998 SEPT 30, 1999
----------- ------------- ------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
REVENUES. . . . . . . . . . . . . . . . . . $ 3,150 $ - $ 3,150 $ - $ 3,150
COST OF SALES . .. . . . . . . . . . . . . . - - - - -
------------- ----------- -------------- --------- ------------------
Gross Profit 3,150 - 3,150 - 3,150
EXPENSES. . . . . . .. . . . . . . . . . . . 861,916 - 861,916 - 861,916
------------- ----------- ------------- ---------- -------------------
Net Loss. . . . . . . . . . . . . . . . . $ (858,766) $ - $ (858,766) $ - $ (858,766)
============= =========== ============== ========= ===================
GAIN (LOSS) PER
COMMON SHARE
Basic. . . . . . . . . . . . . . . . . . $ ( 0.23) $ - $ ( 0.23) $ -
----------- ----------- -------------- ----------
AVERAGE
OUTSTANDING
SHARES
Basic. . . . . . . . . . . . . . . . . . . 3,736,290 - 3,736,290 -
----------- ----------- --------------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
COLORMAX TECHNOLOGIES, INC. AND SUBSIDIARY
( DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999, AND 1998
AND THE PERIOD APRIL 28, 1999 (DATE OF INCEPTION ) TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS APRIL 28, 1999
ENDED ENDED
SEPT 30, SEPT 30, NOTE 4
1999 1998 SEPT 30, 1999
------------- ------------ -----------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit (loss). . . . . . . . . . . . . . $ (858,766) $ - $ (858,766)
Adjustments to reconcile net loss to
net cash provided by operating activities
Depreciation . . . . . . . . . . . . . . 2,448 - 2,448
Issuance of common stock for expenses. . 686,667 - 686,667
Change in accounts receivable. . . . . . (2,000) - (2,000)
Change in prepaid expenses and deposits. (30,613) - (30,613)
Change in accounts payable. . . . . . . 164,470 - 164,470
------------- ------------ -----------------
Net Cash Used by Operations . . . . . . . . (37,794) - (37,794)
------------- ------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment. . . . . . . . . . (35,319) - (35,319)
------------- ------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock. 100,000 - 100,000
------------- ------------ -----------------
Net Increase (Decrease) in Cash. . . . . . . 26,887 - 26,887
Cash at Beginning of Period. . . . . . . . . - - -
------------- ------------ -----------------
Cash at End of Period. . . . . . . . . . . . $ 26,887 $ - $ 26,887
============= ============ =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
COLORMAX TECHNOLOGIES, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the State of Delaware on June
14, 1971. There have been several name changes and authorized stock changes
resulting in the present name and the authorized shares shown in the balance
sheet.
The Company has been involved in various activities over the years and during
the year 1983 discontinued all operations until 1996 when the Company started
developmental work on a device to be used in the physical care field however
during June 1999 the Company transferred the business as part of an acquisition
and reorganization. (Note 4 )
On July 30, 1999 the Company completed a reverse stock split of 30 shares of
outstanding stock for one share. This report has been prepared showing after
stock split shares from inception.
The company is in the development stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
- -------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
- ----------------
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
- -------------
On December 31, 1998, the Company had a net operating loss carry forward of
$1,077,831. The tax benefit from the loss carry forward has been fully offset
by a valuation reserve because the use of the future tax benefit is doubtful
since the Company had a substantial change in its stockholders resulting from
the reorganization outlined in note 5. $563,551 of the loss carryforward has
expired and the balance expires starting in the years 2000 through 2019.
Earnings (Loss) Per Share
- ----------------------------
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding, after the stock split, in accordance with
FASB statement number 128.
Principles of Consolidation
- -----------------------------
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary after the elimination of intercompany transactions.
See note 4
<PAGE>
COLORMAX TECHNOLOGIES, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments
- ----------------------
The carrying amounts of financial instruments, including all assets and
liabilities shown in the balance sheet, are considered by management to be
their estimated fair values. These values are not necessarily indicative of the
amounts that the Company could realize in a current market exchange.
Estimates and Assumptions
- ---------------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
3. TRANSFER OF COMPANY ASSETS IN EXCHANGE FOR ALL LIABILITIES
During June 1999 the Company transferred all its assets and the business in the
physical care field in exchange for the assumption of all its liabilities as
part of an acquisition and reorganization outlined in note 4, between the
Company and RGB Technology Group, Inc. and Kimrose Holdings. At the report date
$ 175,000 of assumed liabilities had been paid. The remaining balance of
$204,260 will remain as a contingent liability to the Company until they are
satisfied.
4. ACQUISITION OF ALL OUTSTANDING STOCK OF RGB TECHNOLOGY GROUP INC.
On June 8, 1999 the Company acquired all of the outstanding stock of RGB
Technology Group Inc. through a stock for stock exchange in which the
stockholder (Kimrose Holdings) of RGB Technology Group Inc. received 3,000,000,
after stock split, common shares of the Company in exchange for all of the stock
of RGB Technology Group Inc. RGB Technology Group Inc. was organized in the
state of Delaware on April 28, 1999 for the purpose of marketing ColorMaxTM
lenses and a computer color vision test software. After the completion of the
transaction the outstanding stock of the Company was 3,332,041 common shares of
which 3,000,000 was owned by Kimrose Holdings.
The only asset held by RGB Technology Inc. on June 8, 1999 consisted of the
marketing rights for the above technology which was recorded with no value.
<PAGE>
COLORMAX TECHNOLOGIES, INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. ACQUISITION OF ALL OUTSTANDING STOCK OF RGB TECHNOLOGY GROUP INC.
- continued
For reporting purposes, the acquisition is treated as an acquisition of the
Company by RGB Technology Group Inc., the acquirer, (a reverse acquisition) and
a recapitalization of RGB Technology Group Inc. The historical financial
statements prior to June 8, 1999 are those of RGB Technology Group Inc.
No good will was recognized from the consolidation. All material intercompany
accounts and transactions have been eliminated.
See note 8 for prior combined comparative operating information of the Company
and RGB.
5. RELATED PARTY TRANSACTIONS
See notes 3 and 4 for the transfer of assets and the assumption of liabilities
to related parties as part of an acquisition and reorganization of the Company.
6. GOING CONCERN
The Company has acquired marketing rights, described above, and in the opinion
of management, will provide a profit to the Company. The Company will need
additional working capital to be successful in this acquisition. The
management of the Company has developed a strategy, which it believes will
accomplish this objective through additional equity funding and long term
financing, which will enable the Company to operate for the coming year.
7. SUBSEQUENT EVENTS
During October the Company issued 2,000,000 shares of its common capital stock
for the rights to market ColorMax products in England.
8. PRIOR COMPARATIVE OPERATING INFORMATION OF THE COMPANY AND RGB
Included in the following is the comparative combined operating information of
the Company and RGB, including the operations prior to the acquisition, as
outlined in note 4.
<PAGE>
COLORMAX TECHNOLOGIES INC. AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999, AND 1998
AND THE PERIOD JANUARY 1, 1983 (DATE OF INCEPTION OF DEVELOPMENT STAGE) TO
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS JANUARY 1, 1983
SEPT 30, SEPT 30, SEPT 30, SEPT 30, TO
1999 1998 1999 1998 SEPT 30, 1999
------------ ------------ ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
REVENUES . . . . . . . . . . . . . . . . . . . . . $ 3,150 $ 33,850 $ 3,150 $ 93,447 $ 147,354
COST OF SALES. . . . . . . . . . . . . . . . . . . - 8,425 - 22,036 51,117
------------- ------------ ------------- ------------ ---------------
Gross Profit 3,150. 25,425 3,150 71,411 96,237
EXPENSES . . . . . . . . . . . . . . . . . . . . . 861,916 28,244 861,916 137,033 1,514,751
------------- ------------ ------------- ----------- ---------------
Net Loss. . . . . . . . . . . . . . . . . . . . (858,766) (2,819) (858,766) (65,622) (1,418,514)
OTHER INCOME
Gain from transfer of
assets - note 4 . . . . . . . . . . . . . . . - - 347,496 347,496
------------- ----------- ------------- ------------ ---------------
NET GAIN ( LOSS ). . . . . . . . . . . . . . . . . $ (858,766) $ (2,819) $ (544,238) $ (65,622) $ (1,071,018)
============= ============ ============ ============ ===============
GAIN (LOSS) PER
COMMON SHARE
Basic . . . . . . . . . . . . . . . . . . . . $ ( 0.23) $ (0.01) $ ( 0.15) $ (0.20)
------------- ----------- ------------- ------------
AVERAGE
OUTSTANDING
SHARES
Basic . . . . . . . . . . . . . . . . . . . . 3,736,290 336,290 3,736,290 336,290
------------ ----------- ------------- ------------
</TABLE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
The following contains some "forward looking statements" which are based upon
the plans, goals, and objectives of the Company and its management. Such
statements are subject to various risks and uncertainties. Numerous factors
exist within the business world which may prevent the successful attainment of
such plans, goals and objectives. Consequently, the reader should consider that
such risks, uncertainties, and unknown factors may cause actual results to vary
materially from those stated goals outlined below.
Acquisition of Marketing Rights
- ----------------------------------
In June 1999, the Company obtained the exclusive, long-term license to market,
sell and distribute the propriety technologies of the ColorMax product line in
the Unites States, Australia and New Zealand. ColorMax Color vision Enhancement
Lenses give color deficient people the ability to experience a level of color
vision and discrimination never before attainable. Color blindness and color
vision deficiencies is a genetic condition that affects 8.0% of males and 0.5%
of females of the population. Color vision is a key element in many
occupational and leisure activities. Additionally, color vision is a necessity
for educational needs. Currently, there are few effective aids on the market
that help the over 12,000,000 color deficient people in the United States.
Due to the complexity of the technology and the specialized nature of the
science of color vision deficiencies, the Company has determined that
distribution through Optometric doctors is the ideal method. By placing
distribution in the optometry offices, higher standards of quality and patient
care can be guaranteed.
The Company plans to establish ColorMax Centers in all major U.S. markets, as
well as key international markets, by the end of next year. The ColorMax brand
will be further established by significant advertising and marketing campaigns
to enhance awareness of this major technological breakthrough. The Company will
require additional working capital and management has developed a strategy which
it believes
will accomplish this objective through additional equity funding and long term
financing.
Results of Operations
- -----------------------
Due to anticipated increases in future demand, in September 1999 Company moved
its headquarters to a larger facility in Tustin, California, equipped with three
clean rooms. Furthermore, the Company has added edging and finishing facilities
to fully service each patient lens. The Company has augmented its research and
development department with the addition of a highly qualified Ph.D in Physics
following a rigorous search. These changes will allow the Company to meet its
product development schedule and follows
the Company's mission for scientific leadership.
During this period, the Company has worked with Captek, Inc, a strategic
business services consulting company. Captek has provided the Company's
management with guidance in matters relating to business growth planning and
market positioning.
<PAGE>
The Company is preparing for significant growth in the domestic market as a
greater level of consumer awareness develops from the initiation of a consumer
marketing and advertising campaign. The Company is designing a highly targeted
program that includes Internet marketing and other media outlets to reach people
with color vision deficiencies. A variety of marketing collateral and press kit
materials have been
developed for this purpose.
As part of the Company's global branding strategy, the Company has been working
on expanding the international markets for ColorMax products. In Australia,
there have been ongoing negotiations with OPSM, the largest retail optical chain
in the country with 330 stores and a 35% market share, to open up ColorMax
Centers within their stores. By early 2000, the Company expects to commence
operation in New Zealand. The Company has begun making marketing contacts in
the Far East with the assistance of a marketing consultant who specializes in
expanding U.S. based business in the Asia-Pacific Region. With the strong
recovery of the area and IMF reforms, the Asian market holds great opportunity
for significant sales for ColorMax products. Due to the Company's limited cash
reserves, the consultant performed services in exchange for common stock of the
Company issued pursuant to the S-8 Registration Statement filed September 2,
1999. The Company also contracted with an individual to assist in domestic
marketing plans under the same S-8 Registration Statement. Overseas expansion is
a key factor for growth in the Company's revenues in the future. The Company
will continue to aggressively expand overseas markets.
Subsequent Events
- ------------------
In line with the Company's strategy for international expansion, the Company has
acquired the marketing rights to the territory of the United Kingdom.
PART 2
ITEM 2. Changes in Securities
During the quarter ended September 30, 1999 the registrant issued 100,000
regulation D common shares for cash at $1.00 , 686,667 shares for services, and
3,000,000 shares for the acquisition outlined in note 4.
ITEM 6. Exhibits and Reports on Form 8-K
See Form 8-K filed July 2, 1999 regarding acquisition and reorganization and
change of accountants.
<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 who are duly authorized.
COLORMAX TECHNOLOGIES, INC.
[Registrant]
/s/ Donald H. Hansen
Dated: November 11, 1999 By
----------------------------------
Donald H. Hansen , President
<PAGE>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 26887
<SECURITIES> 0
<RECEIVABLES> 2000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 28887
<PP&E> 80319
<DEPRECIATION> 2448
<TOTAL-ASSETS> 137371
<CURRENT-LIABILITIES> 164470
<BONDS> 0
0
0
<COMMON> 4123
<OTHER-SE> (31222)
<TOTAL-LIABILITY-AND-EQUITY> 137371
<SALES> 3150
<TOTAL-REVENUES> 3150
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 861916
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