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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarter Ended: June 30, 2000
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period from _____________ to ____________
Commission File Number: 0-26285
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AGE RESEARCH, INC.
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(Name of Small Business Issuer in its charter)
Delaware 87-0419387
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(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
31103 Rancho Viejo Road, #2102, San Juan Capistrano, CA 92675
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(Address of principal executive offices and Zip Code)
(800) 597-1970
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(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.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, Par Value $0.001 67,259,301
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Title of Class Number of Shares Outstanding
as of June 30, 2000
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ITEM 1. FINANCIAL STATEMENTS
AGE RESEARCH, INC.
BALANCE SHEET
June 30, 2000 and 1999
ASSETS
2000 1999
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Current Assets
Cash $ 795 $ 1,164
Accounts Receivable 1,959 2,851
Inventory 3,377 6,649
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Total Current Assets 6,131 10,664
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Property and Equipment
Furniture and Fixtures 5,560 5,560
Machinery and Equipment 1,794 1,794
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7,354 7,354
Less: Accumulated Depreciation (7,173) (6,875)
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Total Property and Equipment 181 475
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TOTAL ASSETS $ 6,312 $ 11,139
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 2,325 $ 5,416
Accrued Expense 220 30,763
Income Taxes Payable 800 800
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Total Current Liabilities 3,345 36,979
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Long-Term Liabilities
Due to Stockholders 0 96,602
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Total Liabilities 3,345 133,581
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Stockholders' Equity
Common stock, $.001 par value, 100,000,000
shares authorized and 67,259,301 shares issued
and outstanding in 2000 and 63,944,251 shares
in 1999 67,259 63,944
Paid-in Capital 730,264 600,977
Less: Stocks Subscription Receivable 0 (2,500)
Accumulated Deficit (794,556) (784,863)
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Total Stockholders' Equity (Deficits) 2,967 (122,442)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,312 $ 11,139
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The accompanying notes are an integral part of these financial statements.
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AGE RESEARCH, INC.
STATEMENT OF INCOME AND ACCUMULATED DEFICIT
For the three and six months ended June 30, 2000 and 1999
<TABLE>
<CAPTION>
Three Months ended Six Months ended
June 30, June 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
SALES $ 3,643 $ 6,307 $ 7,232 $ 11,604
COST OF SALES 2,972 1,882 3,575 3,462
---------- ---------- ---------- ----------
GROSS PROFIT 671 4,425 3,657 8,142
OPERATING EXPENSES 4,393 8,561 6,454 15,243
---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (3,722) (4,136) (2,797) (7,101)
---------- ---------- ---------- ----------
OTHER INCOME (EXPENSES)
Interest Income 2 0 5 0
Other Income 14 0 165 0
Interest Expenses 0 (1,720) 0 (3,440)
---------- ---------- ---------- ----------
Total Other Income (Expenses) 16 (1,720) 170 (3,440)
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE TAXES (3,706) (5,856) (2,627) (10,541)
PROVISION FOR INCOME TAXES 0 0 800 800
---------- ---------- ---------- ----------
NET INCOME (LOSS) (3,706) (5,856) (3,427) (11,341)
ACCUMULATED DEFICITS
Beginning Balance (790,850) (777,695) (791,129) (772,210)
Prior Year Adjustments 0 (1,312) 0 (1,312)
---------- ---------- ---------- ----------
Ending Balance $ (794,556) $ (784,863) $ (794,556) $ (784,863)
========== ========== ========== ==========
Net Income (Loss) per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
Weighted Average number of shares 67,259,301 63,944,251 65,601,776 63,944,251
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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AGE RESEARCH, INC.
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2000 and 1999
2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (3,427) $ (11,341)
Adjustment to reconcile net income to
net cash provided by operating
activities
Depreciation 115 179
Prior Year Adjustment 0 (1,312)
(Increase) Decrease in:
Accounts Receivable 1,302 (348)
Inventory 3,575 180
Increase (Decrease) in:
Accounts Payable (2,291) 2,767
Accrued Expenses (294) 3,123
Income Taxes Payable 800 0
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Net Cash Provided (Used) by Operating
Activities (220) (6,752)
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CASH FLOWS FROM INVESTING ACTIVITIES 0 0
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CASH FLOWS FROM FINANCING ACTIVITIES
Stockholder subscriptions received 0 5,000
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Net Cash Provided (Used) by Financing
Activities 0 5,000
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NET INCREASE (DECREASE)IN CASH (220) (1,752)
CASH AT BEGINNING OF PERIOD 1,015 2,916
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CASH AT END OF PERIOD $ 795 $ 1,164
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SUPPLEMENTARY DISCLOSURES:
Cash paid for:
Interest Paid $ 0 $ 0
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Income Taxes $ 0 $ 1,600
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The accompanying notes are an integral part of these financial statements.
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AGE RESEARCH, INC.
NOTES OF FINANCIAL STATEMENTS
For The Six Months Ended June 30, 2000 and 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presentation of Interim Information
-----------------------------------
In the opinion of the management of Age Research, Inc. (the "Company"), the
accompanying unaudited financial statements include all normal adjustments
considered necessary to present fairly the financial positions as of June 30,
2000 and 1999, and the results of operations for the three and six months
then ended, and cash flows for the six months ended June 30, 2000 and 1999.
Interim results are not necessarily indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended December 31, 1999.
Use of estimates
----------------
In preparing financial statements in conformity with GAAP, management is
required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
Revenue Recognition
-------------------
Revenue from sales is recognized when the products are delivered and accepted
by the customers.
Accounts Receivable
-------------------
The Company has not established an allowance for doubtful accounts and does
not use reserve method for recognizing bad debts. Bad debts are treated as
direct write-offs in the period management determines that collection is not
probable. There was no bad debt expense for the six months ended June 30,
2000 and 1999.
Inventories
-----------
Inventories consist of products already packaged and ready for shipments to
customers, and are stated at cost, using the first-in, first-out method.
Property and Equipment
----------------------
Property and Equipment are stated at cost. Depreciation is computed over
their estimated useful lives using straight-line method for financial
reporting, and accelerated methods for tax reporting, therefore, temporary
differences exist. Expenditures for major renewals and betterment that extend
the useful lives of the assets are capitalized. Expenditures for maintenance
and repairs are charged to expense as incurred.
Depreciation expense was $115 and $179 for the six months ended June 30, 2000
and 1999, respectively.
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AGE RESEARCH, INC.
NOTES OF FINANCIAL STATEMENTS
For The Six Months Ended June 30, 2000 and 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Statement of Cash Flows
-----------------------
The Company prepares its statement of cash flows using the indirect method as
defined under Financial Accounting Standards Board Statement No. 95. For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.
Income Taxes
------------
The Company accounts income taxes in accordance with Financial Accounting
standards Board Statement No. 109. "Accounting For Income Taxes" (SFAS No.
109). SFAS No. 109 requires a company to recognize deferred tax liabilities
and assets for the expected future income tax consequences of events that
have been recognized in the Company's financial statements. Under this
method, deferred tax assets and liabilities are determined based on temporary
differences between the financial carrying amounts and the tax bases of
assets and liabilities using the enacted tax rates in effect in the years in
which the temporary differences are expected to reverse.
NOTE 2 - SUBSIDIARY
The Company has a wholly-owned subsidiary, Evergreen Skin Care Centers of
America, Inc. which is inactive with no assets and liabilities, and has no
activity either in 2000 or 1999.
NOTE 3 - COMMON STOCK
On December 13, 1999, the Board of Directors approved to convert notes
payable of $96,602 plus accrued interest of $36,000 into 3,315,050 shares of
the Company's common stock. The transaction was recorded as paid-in capital
in 1999. In April 2000, all 3,315,050 shares was issued.
NOTE 4- GOING CONCERN
The accompanying financial statements are presented on the basis that the
Company is a going concern. Going concern contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business
over a reasonable length of time. As shown in the accompanying financial
statements, the Company has accumulated deficit of $794,556 as of June 30,
2000, which is due to significant operating losses in past several years.
Management is currently involved in active negotiations to obtain additional
financing and actively increasing marketing efforts to increase revenues. The
Company's continued existence depends on its ability to meet its financial
requirements and the success of its future operations. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Results of Operations
---------------------
Since December 1987, the Company has marketed its RejuvenAge products to
physicians practicing skin therapy medical specialities. The RejuvenAge
products are non-prescription skin care products that do not contain Retin-A
or any other precription drug. In addition to the RejuvenAge products, the
Registrant sells a proprietary moisturizing shaving cream for sensitive or
irritated beard conditions called Bladium.
The Company owns the formulations for both the RejuvenAge and Bladium
products. The products are manufactured by independent contractors. In
order to increase its profitability and reduce expenses, in fiscal 1998 the
Company reduced its office expenses to a minimum and eliminated its
advertising and salary expenses.
Three and Six Month Periods Ended June 30, 2000 compared to 1999
----------------------------------------------------------------
Revenues and Costs of Sales. For the three month period ended June 30, 2000,
the Registrant had revenues of $3,643 with cost of sales of $2,972, or
approximately 81.6% of revenues, for a gross profit of $671, compared to the
prior year's revenues for the same period of $6,307 with cost of sales of
$1,882, or approximately 29.8% of revenues, for a gross profit of $4,425. For
the six month period ended June 30, 2000, the Registrant had revenues of
$7,232 with cost of sales of $3,575, or approximately 49.4% of revenues, for
a gross profit of $3,657, compared to the prior year's revenues for the same
period of $11,604 with cost of sales of $3,462, or approximately 29.8% of
revenues, for a gross profit of $8,142. The decrease in sales and the
decrease in gross profit are directly attributed to reductions in marketing
efforts and reduction in cost margins associated with low volume sales.
General and Administrative Expense. Total operating expenses for three and
six month periods ended June 30, 2000 and 1999 were $4,393 and $6,454,
respectively, compared to $8,561 and 15,243 for the same periods in 1999.
The reduction in general and administrative expenses during the recent period
is attributed to a reduction in legal and professional fees during the
current fiscal year periods as compared to the prior year periods, where the
Registrant incurred increased expenses associated the preparing and filing
its general form of Registration Statement on Form 10SB with the Securities
and Exchange Commission. The net loss from operations for the three and six
month periods ended June 30, 2000 was $3,722 and $2,797, respectively,
compared to net loss of $4,136 and $7,101 for the corresponding periods in
fiscal year 1999.
Liquidity and Capital Resources
-------------------------------
Historically, the Company has financed its operations through a combination
of cash flow derived from operations and debt and equity financing. At June
30, 2000, the Company had a working capital of $2,786 based on current assets
of $6,131 and current liabilities of $3,345.
The Registrant's accompanying financial statements have been presented on the
basis that the Company is a going concern because the Registrant has an
accumulated deficit of $794,556 at June 30, 2000, which is due to significant
operating losses in past several years. The Registrant's management is
actively seeking additional financing to increase marketing efforts to
increase revenues.
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Based on its current marketing program and sales, it is clear that the
Company will have to increase its sales volume significantly in order to
continue operations. At this time, however, the Company does not have any
significant working capital to expand its marketing efforts. The Company
proposes to finance its needs for additional working capital through some
combination of debt and equity financing. Given its current financial
condition, it is unlikely that the Company could make a public sale of
securities or be able to borrow any significant sum from either a commercial
or private lender. The most likely method available to the Company would be
the private sale of its securities. There can be no assurance that the
Company will be able to obtain such additional funding as needed, or that
such funding, if available, can be obtained on terms acceptable to the
Company.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
On December 13, 1999, the Board of Directors approved a resolution
providing for the conversion of notes payable to the Company in the principal
amount of $96,602 plus accrued interest of $36,000 into 3,315,050 shares of
the Company's common stock. For accounting purposes the transaction was
recorded as paid-in capital in 1999. The 3,315,050 shares were issued during
April 2000.
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 AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K.
--------------------
None.
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.
Age Research, Inc.
Dated: August 4, 2000 By:/S/Richard F. Holt, President
