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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10- QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the quarterly period ended September 30, 2000
Commission File number 0-15654
TRANSPIRATOR TECHNOLOGIES. INC.
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Exact Name of Small Business Issuer as Specified in its Charter
DELAWARE 22-2789408
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State or Other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification Number
850 - 870 U.S. HWY #1 NORTH BRUNSWICK, NEW JERSEY 08902
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(Address of Principal Executive Offices)
732-246-5900
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(Registrants Telephone Number Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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 November 1, 2000 the Registrant had 3,245,950 shares of common stock,
$.0001 par value, outstanding.
Transitional Small Business Disclosure format: [ ] Yes [X] No
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INDEX
Page No.
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Part I: Financial Information
Item 1. Financial Statements:
Balance Sheets as of September 30, 2000 (Unaudited) 3
Statements of Operations, Three Months Ended
September 30, 2000 (Unaudited) and Three Months
Ended September 30, 1999 (Unaudited) 4
Statements of Cash Flows, Three Months Ended
September 30, 2000 (Unaudited) and Three Months
Ended September 30, 2000 (Unaudited) 5
Notes to Financial Statements 6
Item 2. Management's Plan of Operation 7
Part II: Other Information 8
Item 1. Legal Proceedings 8
Item 2. Change in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote
of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
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TRANSPIRATOR TECHNOLOGIES, INC.
BALANCE SHEETS
AS OF
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
2000 2000
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UNAUDITED
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 47,036 $ 58,126
Royalties and interest receivable 86,213 74,166
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Total Current Assets: 133,249 132,292
Patents, Net -- --
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Total Assets $ 133,249 $ 132,292
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 28,235 $ 23,818
Notes payable - related parties 29,750 29,750
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Total Current Liabilities 57,985 53,568
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Related party transactions (notes 2 and 3)
Stockholders' Equity:
Preferred stock, $.10 par value - 1,000,000 shares
authorized, none outstanding
Common Stock , $.10 par value - 3,500,000 shares authorized,
3,245,950 issued and outstanding at September 30 and March 31, 2000 32,460 32,460
Additional paid-in capital 3,593,897 3,593,897
Retained Earnings (3,551,093) (3,547,633)
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Total Stockholders Equity 75,264 78,724
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Total Liabilities and Stockholders Equity $ 133,249 $ 132,292
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</TABLE>
The accompanying notes are an integral part of these financial statements
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TRANSPIRATOR TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
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2000 1999 2000 1999
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $ -- $ 25,000 $ 8,334 $ 45,833
General and administrative expenses 4,223 14,319 14,466 46,311
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Income (loss) from operations (4,223) 10,681 (6,132) (478)
Interest net (3,192) 521 (2,672) 1,041
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Net earnings (loss) $ (1,031) $ 10,160 $ (3,460) $ (1,519)
=========== ========== =========== ===========
Basic and diluted earnings (loss) loss per share $ (0.000) $ 0.003 $ (0.001) (0)
=========== ========== =========== ===========
Weighted average number of shares outstanding for
basic and diluted earnings per share 3,245,950 3,220,126 3,245,950 3,220,126
=========== ========== =========== ===========
</TABLE>
The accompanying notes are an intergral part of these financial statements .
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TRANSPIRATOR TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
September 30,
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2000 1999
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<S> <C> <C>
Cash Flows from operating activities:
Net loss $ (3,460) $ (1,519)
Adjustments to reconcile net earnings (loss)
to net cash provided by (used in) operating
activities:
Common stock issues for services 23,500
Amortization -- 5,906
Increase in accounts receivable (12,047) (20,833)
Increase in accounts payable 4,417 7,040
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Net cash provided by(used in)
operations (7,630) 15,613
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Net increase (decrease) in cash (11,090) 14,094
Cash at beginning of the year 58,126 14,820
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Cash at September 30, 2000 and 1999 $ 47,036 $ 28,914
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Supplemental Disclosures of Cash Flow Information:
Interest(Income) Expense $ (2,672) $ 1,041
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Common stock issued for services $ -- $ 23,500
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</TABLE>
The accompanying notes are an integral part of these financial statements
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TRANSPIRATOR TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: Basis of Presentation
The unaudited condensed financial statements have been prepared from the books
and records of Transpirator Technologies, Inc. (the Company) in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary for a fair presentation have been
included. It is suggested that the condensed financial statements be read in
conjunction with the audited financial statements and notes thereto for the
year ended March 31, 2000 included in the company's annual report on Form 10-K.
Interim results are not necessary indicative of the full year.
Note 2: Earnings (Loss) Per Common Share
Earnings (Loss) per common share is based upon the weighted average number of
common shares and common equivalent shares outstanding during each period. When
stock options and warrants are dilutive, they are included as share equivalents
using the treasury stock method.
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TRANSPIRATOR TECHNOLOGIES, INC.
ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company has been dormant since 1990 and there is no active trading in the
Company's common stock on a recognized exchange.
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2000 VERSUS THREE AND SIX MONTHS ENDED
SEPTEMBER 30, 1999
There were no revenues for the three months ended September 30, 2000 because
the licensee of its technology has not yet launched its initial products. The
$25,000 and $45,833 of royalty income for the three and six months ended
September 30, 1999 was the result of minimum royalties due for those respective
periods. The royalty agreement signed in May of 1997 provides for minimum
royalties for three years from the signing of the agreement in the amounts of
$25,000, $50,000 and $100,000 respectively. The agreement provides for
royalties from the sale of products developed from use and further enhancements
of the patents. The royalty agreement also provides an option for the patents
to be purchased for $2,000,000. The licensee has informed the Company that its
product should be commercially available sometime in the forth quarter of
calendar 2000. There is no assurance that the licensee's product will be
commercially viable and that the Company will receive additional royalties
under this licensing agreement.
General and administrative expenses decreased $10,096 for the three months
ended September 30, 2000 and $31,845 for the six months ended September 30,
2000 versus September 30, 1999. This decrease is the result of the fact that
the patents were fully amortized at March 31, 2000 and therefore no
amortization exists in 2000. Additionally, in the September 1999 period the
Company issued $23,500 in stock for services rendered. Most if not all of the
Company's expenses relate to the filing of the annual report on Form 10- K, and
the employment agreements that provide for aggregate salary of $1,000 per month
through August 2001. It is expected that this trend will continue for the
foreseeable future.
STATEMENT OF CASH FLOWS
Net cash used in operations of $7,630 for the six months ended September 30,
2000 was the result of an increase of $12,047 in royalties receivable, $3,460
net loss for the period offset by an increase in accounts payable of $4,417.
The net increase in cash in 1999 was the result of third year minimum royalties
due under its licensing agreement, the issuance of Common Stock for services
offset by increases in accounts receivable and payable and the net loss.
LIQUIDITY
The Company's annual and quarterly operating results will be affected by a
number of factors, the most important of which will be the realization of
royalties as outlined above. Additionally, future expenses relating to legal
and accounting expenses are expected to remain stable. Additionally, the
Company has employment agreements with two officers for salaries of $1,000 per
month through August 2001.
The Company has signed a note receivable for $82,500 with interest at 9%, which
represents the balance owned the Company under the licensing agreement. The
note was due on October 31, 2000. The Company is in the process of extending
this note for an additional 90 days to enable the licensee to complete a
private equity funding.
NET OPERATING LOSS CARRYFORWARDS
The Company has net operating loss carryforwards for Federal Income Tax
purposes of approximately $3,200,000, which begin to expire in the year 2001.
The ability of the company to utilize the NOL is not probable at June 30, 1998
and therefore, no benefit has been recorded.
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PART II. OTHER INFORMATION
Item 1. Legal proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information
None
Item 6. Exhibits
(a) Exhibits
NUMBER EXHIBIT
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27 Financial Data Schedule (For SEC Use Only)
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SIGNATURERS
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.
Transpirator Technologies, Inc.
By: /s/ Raymond J. Romano
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Date: November 10, 2000 Raymond J. Romano
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