UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
--------------------------------------------------------------------------------
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
---------- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
---------- OF 1934
For the transition period from ____________ to ___________
--------------------------------------------------------------------------------
Commission File Number: 0-31291
RPM Technologies, Inc.
(Exact name of small business issuer as specified in its charter)
Colorado 36-4391958
------------------------------ -------------------------
(State of incorporation) (IRS Employer ID Number)
Two Mid America Plaza, Suite 800, Oakbrook Terrace, IL 60181
------------------------------------------------------------
(Address of principal executive offices)
(708) 481-6713
--------------
(Issuer's telephone number)
--------------------------------------------------------------------------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: October 31, 2000: 12,040,000
----------------------------
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
<PAGE>
RPM Technologies, Inc.
Form 10-QSB for the Quarter ended September 30, 2000
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 13
Part II - Other Information
Item 1 Legal Proceedings 15
Item 2 Changes in Securities 15
Item 3 Defaults Upon Senior Securities 15
Item 4 Submission of Matters to a Vote of Security Holders 15
Item 5 Other Information 15
Item 6 Exhibits and Reports on Form 8-K 15
Signatures 15
2
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
Item 1 - Part 1 - Financial Statements
Accountant's Review Report
--------------------------
Board of Directors and Shareholders
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
We have reviewed the accompanying balance sheets of RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.) (a Delaware corporation and a development stage
company) as of September 30, 2000 and 1999 and the accompanying statement of
operations and comprehensive income for the nine and three months ended
September 30, 2000 and 1999 and the statement of cash flows for the nine months
ended September 30, 2000 and 1999. These financial statements are prepared in
accordance with the instructions for Form 10-QSB, as issued by the U. S.
Securities and Exchange Commission, and are the sole responsibility of the
company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression on an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
S. W. HATFIELD, CPA
Dallas, Texas
October 31, 2000
Use our past to assist your future sm
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
3
<PAGE>
<TABLE>
<CAPTION>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Balance Sheets
September 30, 2000 and 1999
(Unaudited)
September 30, September 30,
2000 1999
----------- -----------
<S> <C> <C>
ASSETS
------
Current Assets
Cash and cash equivalents $ 233,958 $ 121,049
Due from affiliate -- 80,738
Inventory 57,424 --
Prepaid expenses 10,518 22,500
----------- -----------
Total current assets 301,900 224,287
----------- -----------
Property and equipment - at cost
Molds, tools and dies 589,289 548,679
Computer equipment 11,640 --
----------- -----------
600,929 548,679
Accumulated depreciation (58,253) --
----------- -----------
Net property and equipment 542,676 548,679
----------- -----------
TOTAL ASSETS $ 844,576 $ 772,966
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
Accounts payable - trade $ 33,000 $ --
----------- -----------
Total current liabilities 33,000 --
----------- -----------
Commitments and contingencies
Stockholders' Equity
Preferred stock - $1.00 par value
1,000,000 shares authorized
None issued and outstanding -- --
Common stock - $0.001 par value
20,000,000 shares authorized
15,723,461 and 11,352,603 shares
issued and outstanding, respectively 15,723 11,353
Additional paid-in capital 2,259,090 1,919,528
Deficit accumulated during the development phase (1,463,237) (1,157,915)
----------- -----------
Total stockholders' equity 850,579 772,966
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 883,579 $ 772,966
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent certified public accountants. See accountants'
review report.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Statements of Operations and Comprehensive Income
Nine and Three months ended September 30, 2000 and 1999
(Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 98,574 $ -- $ 13,374 $ --
Cost of goods sold 6,687 -- 6,687 --
------------ ------------ ------------ ------------
Gross profit 91,887 -- 6,687 --
------------ ------------ ------------ ------------
Operating Expenses
Research and development costs 100,924 59,286 -- 49,726
Sales and marketing expenses 7,478 -- 3,435 --
Payroll and related expenses 27,603 20,606 8,796 6,812
General and administrative expenses 144,999 139,859 18,096 128,395
Interest expense -- 39,743 -- 13,850
Depreciation 47,157 -- 15,719 --
------------ ------------ ------------ ------------
Total operating expenses 328,161 259,494 46,046 198,783
------------ ------------ ------------ ------------
Loss from operations (236,274) (259,494) (39,359) (198,783)
Other income
Interest income 1,069 1,069 356 356
------------ ------------ ------------ ------------
Loss before provision
for income taxes (235,205) (258,425) (39,003) (198,427)
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net Loss (235,205) (258,425) (39,003) (198,427)
Other comprehensive income -- -- -- --
------------ ------------ ------------ ------------
Comprehensive Loss $ (235,205) $ (258,425) $ (39,003) $ (198,427)
============ ============ ============ ============
Net loss per weighted-average share
of common stock outstanding,
calculated on Net Loss -
basic and fully diluted $ (0.02) $ (0.03) nil $ (0.02)
============ ============ ============ ============
Weighted-average number of shares
of common stock outstanding 11,978,963 9,255,583 12,040,000 9,784,077
============ ============ ============ ============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent certified public accountants. See accountants'
review report.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Statements of Cash Flows
Nine months ended September 30, 2000 and 1999
(Unaudited)
Nine months Nine months
ended ended
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities
Net loss for the period $(235,205) $(258,425)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation 47,157 --
Expenses paid with common stock -- 175,154
(Increase) Decrease in
Inventory (57,424) --
Prepaid expenses 1,982 (22,500)
Increase (Decrease) in
Accounts payable 33,000 --
Accrued interest -- 39,743
--------- ---------
Net cash used in operating activities (210,490) (66,028)
--------- ---------
Cash Flows from Investing Activities
Purchase of property and equipment (1,100) (476,679)
--------- ---------
Cash Flows from Financing Activities
Funds advanced by affiliate -net -- --
Capital contributed to support the corporate entity 234 --
Proceeds from notes payable -- 668,044
Cash paid to raise capital -- (69,575)
Proceeds from sales of common stock 343,698 --
--------- ---------
Net cash used in financing activities 343,932 598,469
--------- ---------
Increase in Cash 132,342 55,762
Cash at beginning of period 101,616 65,287
--------- ---------
Cash at end of period $ 233,958 $ 121,049
========= =========
Supplemental Disclosure of Interest and Income Taxes Paid
Interest paid for the period $ -- $ --
========= =========
Income taxes paid for the period $ -- $ --
========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent certified public accountants. See accountants'
review report.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Notes to Financial Statements
Note A - Organization and Description of Business
Mann Enterprise, Inc. was incorporated on April 10, 1996 in accordance with the
laws of the State of Delaware. The Company was formed to seek a merger with,
acquisition of or affiliation with a privately-owned entity wishing to become
publicly-owned.
The Company, in April 1996, filed a Form D, using an exemption from registration
under Regulation 504, with the U. S. Securities and Exchange Commission to
distribute approximately 3,683,461 shares of common stock as a dividend
distribution to the stockholders of Peark Corp..
On March 17, 2000, Mann Enterprise, Inc. merged with and into RPM Technologies,
Inc., a Colorado corporation. Mann Enterprise, Inc. was the surviving entity to
the merger and concurrent with the merger changed its corporate name to RPM
Technologies, Inc. The merged entities are referred to as Company.
At the time of the merger, Mann Enterprise, Inc. and RPM Technologies, Inc.
shared common ownership and management. Accordingly, the merger was accounted
for pursuant to Interpretation #39 of Accounting Principles Board Opinion # 16,
"Business Combinations", whereby the combination of entities under common
control are accounted for on an "as-if-pooled" basis. The combined financial
statements of Mann Enterprise, Inc. and RPM Technologies, Inc. became the
historical financial statements of the Company as of the first day of the first
period presented.
RPM Technologies, Inc. was incorporated on December 10, 1997 in accordance with
the laws of the State of Colorado. The Company is in the business to develop,
produce, market and sell plastic pallets to various unrelated entities located
throughout the United States, Canada, Central and South America. The Company has
developed what it believes is a proprietary process for the manufacture of
plastic pallets at costs comparable to those currently in use constructed of
wood which will meet current and future anticipated environmental standards,
encourage the preservation of trees and promote plastic recycling.
Since inception, the Company has been principally involved in research and
development of its products and the development of a market for its products.
Accordingly, the Company has no substantial operations or substantial assets and
is considered to be in the "development stage". During the second quarter of
2000, the Company began direct sales of its plastic pallet products and
anticipates exiting the development stage.
For segment reporting purposes, the Company operated in only one industry
segment during the periods represented in the accompanying financial statements
and makes all operating decisions and allocates resources based on the best
benefit to the Company as a whole.
7
<PAGE>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Notes to Financial Statements - Continued
Note A - Organization and Description of Business - Continued
During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-SB filed with the U. S. Securities and Exchange Commission.
The information presented herein may not include all disclosures required by
generally accepted accounting principles and the users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained in its Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 on Form 10-KSB when reviewing the interim
financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 2000.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
2. Inventory
---------
Inventory consists of pallets for resale which are manufactured by third
parties for the Company. Inventory is valued at the lower of cost or market
using the first-in, first-out method.
3. Property and equipment
----------------------
Property and equipment is recorded at cost and is depreciated on a
straight-line basis, over the estimated useful lives (generally 3 to 10
years) of the respective asset. Major additions and betterments are
capitalized and depreciated over the estimated useful lives of the related
assets. Maintenance, repairs, and minor improvements are charged to expense
as incurred.
8
<PAGE>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Notes to Financial Statements - Continued
Note B - Summary of Significant Accounting Policies - Continued
4. Organization costs
------------------
The Company has adopted the provisions of AICPA Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities" whereby all organizational
and initial costs incurred with the incorporation and initial
capitalization of the Company were charged to operations as incurred.
5. Research and development expenses
---------------------------------
Research and development expenses are charged to operations as incurred.
6. Advertising expenses
--------------------
Advertising and marketing expenses are charged to operations as incurred.
7. Income Taxes
------------
The Company utilizes the asset and liability method of accounting for
income taxes. At September 30, 2000 and 1999, respectively, the deferred
tax asset and deferred tax liability accounts, as recorded when material,
are entirely the result of temporary differences. Temporary differences
represent differences in the recognition of assets and liabilities for tax
and financial reporting purposes, primarily accumulated depreciation and
amortization.
8. Earnings (loss) per share
-------------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of September 30, 2000 and 1999,
respectively, the Company had no warrants and/or options outstanding.
Note C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
9
<PAGE>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Notes to Financial Statements - Continued
Note D - Concentrations of Credit Risk
The Company maintains its cash accounts in a financial institution subject to
insurance coverage issued by the Federal Deposit Insurance Corporation (FDIC).
Under FDIC regulations, the Company and its subsidiaries are entitled to
aggregate coverage of $100,000 per account type per separate legal entity per
financial institution. During the nine months ended September 30, 2000 and 1999,
respectively, the various operating companies had deposits in a financial
institution with credit risk exposures in excess of statutory FDIC coverage. The
Company has incurred no losses during 2000 and 1999 as a result of any of these
unsecured situations.
Note E - Property and Equipment
Property and equipment consist of the following components at September 30, 2000
and 1999, respectively:
September 30, September 30, Estimated
2000 1999 useful life
------------- ------------ -----------
Molds, tools and dies $589,289 $548,679 10 years
Computer equipment 11,640 - 3 years
-------- --------
600,929 548,679
Accumulated depreciation (58,253) -
------- --------
Net property and equipment $542,676 $548,679
======== ========
Depreciation expenses for the nine months ended September 30, 2000 and 1999,
respectively, were approximately $47,157 and $-0-.
Note F - Notes Payable
During 1998 and 1999, the Company issued various $25,000 unsecured convertible
notes payable to various investors pursuant to a Private Placement Memorandum
dated November 12, 1998. The notes bore interest at 10.0% per annum, payable
semi-annually. The notes were convertible into common stock of the Company at
any time prior to the notes maturity at $0.50 per share. On August 31, 1999, the
Company converted the notes, with the written affirmation of the noteholder(s),
into an aggregate of 2,365,646 shares of restricted, unregistered common stock
of the Company for 100.0% outstanding notes payable and all accrued, but unpaid,
interest.
10
<PAGE>
<TABLE>
<CAPTION>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Notes to Financial Statements - Continued
Note G - Income Taxes
The components of income tax (benefit) expense for the nine months ended
September 30, 2000 and 1999, respectively, are as follows:
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
Federal:
Current $ - $ -
Deferred - -
------------- -------------
- -
------------- -------------
State:
Current - -
Deferred - -
------------- -------------
- -
------------- -------------
Total $ - $ -
============= =============
As of December 31, 1999, the Company has a net operating loss carryforward of
approximately $84,000 to offset future taxable income. Subject to current
Federal income tax regulations, this carryforward will begin to expire in 2018.
The amount and availability of the net operating loss carryforwards may be
subject to limitations set forth by the Internal Revenue Code. Factors such as
the number of shares ultimately issued within a three year look-back period;
whether there is a deemed more than 50 percent change in control; the applicable
long-term tax exempt bond rate; continuity of historical business; and
subsequent income of the Company all enter into the annual computation of
allowable annual utilization of the carryforwards.
The Company's income tax expense for the nine months ended September 30, 2000
and 1999, respectively, differed from the statutory federal rate of 34 percent
as follows:
September 30, September 30,
2000 1999
------------- -------------
Statutory rate applied to loss before income taxes $ (79,970) $ (87,865)
Increase (decrease) in income taxes resulting from:
State income taxes - -
Deferral of start-up costs
for tax reporting purposes 14,129 31,649
Deferral of research and development
costs for tax reporting purposes 34,314 20,157
Deferral of interest expense for tax reporting purposes - 13,513
Other, including reserve for deferred tax asset 31,527 22,546
------------- -------------
Income tax expense $ - $ -
============= =============
</TABLE>
11
<PAGE>
RPM Technologies, Inc.
(formerly Mann Enterprise, Inc.)
(a development stage company)
Notes to Financial Statements - Continued
Note G - Income Taxes - Continued
Temporary differences, consisting primarily of statutory deferrals of expenses
for pre-operations interest expense, research and development expenses and
start-up costs and statutory differences in the depreciable lives for property
and equipment, between the financial statement carrying amounts and tax bases of
assets and liabilities give rise to deferred tax assets and liabilities as of
September 30, 2000 and 1999, respectively:
September 30, September 30,
2000 1999
------------- -------------
Deferred tax assets
Net operating loss carryforwards $ 465,370 $ 417,037
Less valuation allowance (465,370) (417,037)
------------- -------------
Net Deferred Tax Asset $ - $ -
============= =============
Note H - Common Stock Transactions
During the period from January 1, 2000 through March 31, 2000, the Company sold
an aggregate 632,947 shares of unregistered, restricted common stock to existing
shareholders and other individuals related to the existing shareholders pursuant
to a Private Stock Subscription Agreement at a price of $0.50 per share for
aggregate proceeds of approximately $343,698.
Note I - Commitments
In January 2000, the Company purchased the rights to a pallet related product
for $1,100 cash and 25,000 shares of unregistered, restricted common stock to be
issued at an unspecified future date. The acquisition agreement also requires a
royalty payment of approximately $7.50 per unit sold.
As of June 30, 2000, the Company is still in the research and development phase
on this product and no sales have been made. The 25,000 shares of unregistered,
restricted common stock are anticipated to be issued during the second quarter
of 2000.
12
<PAGE>
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) General comments
Mann Enterprise, Inc. was incorporated on April 10, 1996 in accordance with the
laws of the State of Delaware. The Company was formed to seek a merger with,
acquisition of or affiliation with a privately-owned entity wishing to become
publicly-owned.
The Company, in April 1996, filed a Form D, using an exemption from registration
under Regulation 504, with the U. S. Securities and Exchange Commission to
distribute approximately 3,683,461 shares of common stock as a dividend
distribution to the stockholders of Peark Corp..
On March 17, 2000, Mann Enterprise, Inc. merged with and into RPM Technologies,
Inc., a Colorado corporation. Mann Enterprise, Inc. was the surviving entity to
the merger and concurrent with the merger changed its corporate name to RPM
Technologies, Inc. The merged entities are referred to as Company.
At the time of the merger, Mann Enterprise, Inc. and RPM Technologies, Inc.
shared common ownership and management. Accordingly, the merger was accounted
for pursuant to Interpretation #39 of Accounting Principles Board Opinion # 16,
"Business Combinations", whereby the combination of entities under common
control are accounted for on an "as-if-pooled" basis. The combined financial
statements of Mann Enterprise, Inc. and RPM Technologies, Inc. became the
historical financial statements of the Company as of the first day of the first
period presented.
RPM Technologies, Inc. was incorporated on December 10, 1997 in accordance with
the laws of the State of Colorado. The Company is in the business to develop,
produce, market and sell plastic pallets to various unrelated entities located
throughout the United States, Canada, Central and South America. The Company has
developed what it believes is a proprietary process for the manufacture of
plastic pallets at costs comparable to those currently in use constructed of
wood which will meet current and future anticipated environmental standards,
encourage the preservation of trees and promote plastic recycling.
Since inception, the Company has been principally involved in research and
development of its products and the development of a market for its products.
Accordingly, the Company has no substantial operations or substantial assets and
is considered to be in the "development stage". During the second quarter of
2000, the Company began direct sales of its plastic pallet products and
anticipates exiting the development stage.
For segment reporting purposes, the Company operated in only one industry
segment during the periods represented in the accompanying financial statements
and makes all operating decisions and allocates resources based on the best
benefit to the Company as a whole.
13
<PAGE>
(3) Results of Operations
The Company exited the development stage during the second quarter of 2000.
Prior to that period, the Company had no revenues. During the second and third
quarters of 2000, respectively, the Company derived revenues of $85,200 from the
sale of prototype plastic pallets acquired during various research and
development efforts and $13,400 from the sale of production plastic pallets.
For the nine months ended September 30, 2000 and 1999, respectively, the Company
had total expenses of approximately $328,000 and $259,000.
During the nine month period ended September 30, 2000, the Company incurred
approximately $101,000 in research and development expenses, which were incurred
during the first quarter, and had legal and professional fees of approximately
$90,000, general office expenses of approximately $44,000 and depreciation
expenses on property and equipment of approximately $47,000. All other operating
expenses related to various normal general and administrative expenses of the
Company. The Company anticipates experiencing relatively constant expenditure
levels in future periods for other general operating expenses. Management
continues to monitor its expenditure levels to achieve optimum financial
results.
For the nine months ended September 30, 1999, the Company incurred research and
development expenses of approximately $60,000, which were predominately
experienced during the third quarter, legal and professional fees of $71,000 and
general office expenses of approximately $15,000. Additionally, during the nine
months ended September 30, 1999, the Company incurred approximately $40,000 in
accrued interest charges on notes payable which were converted to common stock
on August 31, 1999.
The Company experienced a net loss of $(235,000) and $(258,000) for the nine
months ended September 30, 2000 and 1999, respectively, and a net loss per
weighted-average share of common stock outstanding of approximately $(0.02) and
$(0.03) per share.
(4) Liquidity and Capital Resources
For all periods through September 30, 2000, the Company has maintained liquidity
through the issuance and sale of various securities, including convertible notes
and common stock. At September 30, 2000 and 1999, the Company has working
capital of approximately $269,900 and $224,000, respectively. Included in the
working capital is available cash on hand of approximately $224,000 and
$121,000, respectively as compared to cash balances of approximately $102,000
and $65,000 at December 31, 1999 and 1998, respectively.
Management anticipates that the available cash will be sufficient to support the
liquidity needs of the Company in the near future.
The Company has identified no significant capital requirements for the current
annual period. Liquidity requirements mandated by future business expansions or
acquisitions, if any are specifically identified or undertaken, are not readily
determinable at this time as no substantive plans have been formulated by
management.
Management is of the opinion that there is additional potential availability of
incremental short-term debt collateralized by firm customer orders and the
opportunity for the sale of additional common stock through either private
placements or secondary offerings.
However, there can be no assurance that the Company will be able to obtain
additional funding or, that such funding, if available, will be obtained on
terms favorable to or affordable by the Company.
14
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings
of shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
Reports on Form 8-K - None
--------------------------------------------------------------------------------
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RPM Technologies, Inc.
October 31 , 2000 /s/ Randy Zych
-------- -----------------------------
Randy Zych
Chairman, Director and
Chief Accounting Officer
15
