<PAGE>2
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 AND EXCHANGE ACT OF 1934
For the Quarter ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
---------- ----------
Commission file number - 000-28787
Micro Laboratories, Inc.
Exact name of Registrant as specified in its charter)
NEVADA 05-049-4587
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdictions Classification Code Number) Identification number)
of incorporation
or organization
29 Lakeside Drive, Johnston, Rhode Island 02919
(Address of principal executive offices) (Zip Code)
Telephone: (401) 949-3562
(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 and Exchange
Act of 1934 during the preceding twelve months (or such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to file such filing requirements for the past thirty days.
Yes x No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
11,338,000 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
------- -------
<PAGE>3
Micro Laboratories, Inc.
PART I: Financial Information
ITEM 1 - Financial statements
ITEM 2 - Management's' discussion and analysis of
financial condition and results of operations
PART II: Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
<PAGE>4
PART I
Item 1. Financial Statements:
MICRO LABORATORIES, INC.
(A Development Stage Company)
Balance Sheet
September 30, 2000 and 1999
Unaudited
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
2000 1999
------ -------
Current Assets
Cash $ 0 $ 18,564
Inventory 27,040 4,375
Prepaid expenses 20,033 21,539
Loans and exchanges 27,664 3,215
--------- ---------
Total Current Assets 74,737 47,693
Property and Equipment
Machinery and equipment 47,070 51,774
Computer software 11,723 140,755
Furniture and fixtures 3,664 3,664
Leasehold improvements 2,357 2,357
--------- ---------
64,814 198,550
Less accumulated depreciation (17,791) (14,070)
--------- ---------
Net Property and Equipment 47,023 184,480
Other Assets
Deposits 600 600
Formulas and trademarks (net of accum.amort) 60,600 75,921
-------- ---------
Total Other Assets 61,200 76,521
-------- -------
Total Assets $182,960 $308,694
========= =========
LIABILITIES & EQUITY
Current Liabilities
Accounts payable-trade $ 265,897 $ 44,434
Due to related parties 179,933 40,300
--------- ----------
Total Current Liabilities 445,830 84,734
Stockholders Equity
Common stock 11,338 5,553
Additional paid-in capital 1,531,345 1,170,600
Accumulated deficit (1,805,553) (952,193)
--------- ---------
Total Stockholders Equity (262,870) 223,960
--------- ---------
Total Liabilities & Equity $182,960 $ 308,694
========= =========
</TABLE>
<PAGE>5
MICRO LABORATORIES, INC.
( A Development Stage Company)
Statement of Income
For the Six Months Ended September 30, 2000 and 1999
Unaudited
<TABLE>
<CAPTION>
2000 1999
------ -------
<S> <C> <C>
Revenue
Sales $ 0 $ 554
Operating Expenses
Purchases 0 13,213
Freight 0 423
Advertising 0 26,886
Depreciation expense 1,559 0
Insurance expense 1,264 0
Amortization expense 0 0
Auto 3,450 3,389
Bank service charge 0 870
Bookkeeping service 2,000 7,490
Consulting 450 74,369
Education and training 0 73
Legal and Fullfilment expenses 0 55,000
Office expense 535 4,108
Dues and subscriptions 0 1,035
Postage 6 595
Printing 2,945 119
Professional fees 0 7,865
Rent 450 22,350
Meal and entertainment 0 1,026
Repairs and maintenance 0 2,033
Research and development expense 0 96,095
Office supplies 0 0
Service expense 500 250
Telephone 4,191 13,546
Travel 2,456 1,727
Utilities 125 933
Miscellaneous 30 0
Payroll and payroll taxes 0 0
Licenses 200 200
---------- ----------
Total Operating Expenses 60,997 355,543
---------- ---------
Loss from Operations ( 60,997) (354,989)
Other Income
Gain on sale of assets 0 9,825
Interest income 0 1,681
---------- --------
Total Other Income 0 11,506
---------- --------
Loss before Income Taxes ( 60,997) (343,483)
---------- --------
Provision for Income Taxes
Provision for state income taxes 0 0
---------- --------
Total Provision for Income Taxes 0 0
Net Loss $( 60,997) $(343,483)
======= =======
</TABLE>
<PAGE>6
MICRO LABORATORIES, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Six Months Ended September 30, 2000
Unaudited
<TABLE>
<CAPTION>
2000 1999
------ -------
<S> <C> <C>
Cash flows from operating activities:
Net loss $( 60,997) $(340,125)
Adjustments to reconcile net income to net cash used for operating
activities:
Depreciation and amortization 1,559 5,642
(Increase) decrease in assets:
Deposits 0 0
Prepaid expenses 0 17,934
Increase (decrease) in liabilities:
Accounts payable 4,335 ( 30,488)
Notes payable 55,103 ( 4,700)
-------- --------
Net cash used by operating activities 60,997 ( 11,612)
Investing activities:
Acquisition of intangible assets 0 (24,979)
Gain on sale of asset 0 0
Acquisition of property and equipment(net) 0 ( 28,025)
Shareholder loans 0 ( 600)
-------- ---------
Net cash used for investing activities 0 ( 53,604)
Net increase (decrease) in cash during the period 0 ( 405,341)
Cash balance, beginning of period 0 412,899
Cash balance, end of period $ 0 $ 7,558
======== ==========
</TABLE>
<PAGE>7
Note 1. In the opinion of management of Micro Laboratories, Inc.,
the unaudited financial statements of Micro Laboratories, Inc. for the
interim period shown, include all adjustments, necessary for a fair
presentation of the financial position at September 30, 2000, and the
results of operations and cash flows for the period then ended. The
results of operations for the interim periods shown may not be
indicative of the results that may be expected for the fiscal year.
These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-K for
the year March 31, 2000.
<PAGE>8
Micro Laboratories, Inc.
PART I (cont.)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations:
Trends and Uncertainties. Demand for Micro's products will be
dependent on, among other things, general economic conditions, which
are cyclical in nature. Inasmuch as a major portion of the
Corporation's activities is the receipt of revenues from the sale of
its products, Micro's business operations may be adversely affected by
its competitors and prolonged recessionary periods.
Micro is entering a phase of conversion from a Development Stage
Corporation to an Operational Corporation. Agreements have been
reached to provide key personnel in the areas of marketing and sales.
An agreement has been reached with three large distributors to include
the west coast, mid west and New England. Preliminary market research
was conducted to arrive at the flavorings for the Micro SprayT product
line. Micro sent a representative to the National Association of
Chain Drug Stores (NACDS) trade convention in Philadelphia, PA also
the packaging show in Chicago Ill. The Corporation plans to use a
"target" marketing approach for the distribution of its Micro SprayT
product line.
Capital and Source of Liquidity. Micro currently has no material
commitments for capital expenditures.
For the six months ended September 30, 2000, Micro did not pursue any
investing activities.
For the six months ended September 30, 1999, Micro acquired property
and equipment (net) of $28,025, acquired intangible assets of $24,979
and repaid shareholder loans of $600. For the six months ended
September 30, 1999, Micro had net cash used for investing activities
of $(53,604).
For the three months ended September 30, 2000 and 1999, Micro did not
pursue any financing activities.
On a long term basis, liquidity is dependent on commencement of
operations as discussed above, receipt of revenues, additional
infusions of capital and debt financing. Micro believes that
additional capital and debt financing in the short term will allow
Micro to increase its marketing and sales efforts and become a fully
operational Corporation thereafter resulting in increased revenue and
greater liquidity in the long term. However, there can be no
assurance that Micro will be able to obtain additional equity or debt
financing in the future, if at all.
Results of Operations.
Micro is accurately classified as a "development stage Corporation"
and as such has conducted startup and development operations that
include:
completed photo shoots, created Corporation logos, brochures, sales
literature, product labels and packaging design, UPCs
prepared the product line of six items for distribution roll out
completed negotiations with three large distributors to include
west coast, mid west, and New England to represent and sell the
companies product lines to national chains.
Micro has not received any material revenues since inception.
For the six months ended September 30, 2000, Micro had a net loss of
$60,997. Operating expenses for the six months ended September 30,
2000 were $60,997 and consisted of depreciation of $1,559, insurance
of $1,264,auto expense of $3,450, bookkeeping service of $2,000,
consulting of $450, office expense of $535, postage of $6, printing
expense of $2,945, rent of $50, service expense of $500, telephone of
$4,191, travel of $2,456, utilities of $125, licenses of $300 and
miscellaneous of $30.
For the six months ended September 30, 19999, Micro had a net loss of
$354,989. Operating expenses for the six months ended September 30,
1999 were $355,543 and consisted of purchases of $13,213, freight of
$423, advertising of $26,886, auto expense of $3,389, bank service
charge of $870, bookkeeping service of $7,490, consulting of $74,369
Education and training of $73, legal and fulfillment expenses of
$55,000, office expense of $4,108, dues and subscriptions of $1,035,
postage of $595, printing of $119, professional fees of $7,865, rent
of $22,350, meals and entertainment of 1,026, repairs and maintenance
of $2,033, research and development expenses of $96,095, service
expense of $250, telephone of $13,546,utilities of $933, and licenses
of $200.
Plan of Operation. Micro is in the development stage and has not
conducted any significant operations to date or received any material
operating revenues. Micro may experience problems; delays, expenses
and difficulties sometimes encountered by an enterprise in Micro's
stage of development, many of which are beyond Micro's control. These
include, but are not limited to, unanticipated problems relating to
additional costs and expenses that may exceed current estimates and
competition.
Micro is not delinquent in any of its obligations even though Micro
has generated limited operating revenues. The Corporation intends to
market its products and services utilizing cash made available from
the private sale of its securities and operations. Micro's management
is of the opinion that the proceeds of the sales of its securities and
future revenues will be sufficient to pay its expenses for the next
twelve months.
<PAGE>10
MICRO LABORATORIES, INC.
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
None
(b) Reports on Form 8-K
None
SIGNATURE
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.
/s/ Robert Thistle
----------------------------
Robert Thistle, President
December 14, 2000
