<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-QSB
-----------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended August 31, 1999
Commission file number 0-18515
Therapy Lasers, Inc. and Subsidiary
Incorporated in the State of Nevada
Employer Identification Number 93-0960302
10450 Westoffice
Houston, Texas 77042
(713) 339-2722
Check whether the issuer (1) timely 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; Yes No X
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and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
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As of August 31, 1999, there were outstanding 11,302,627 shares of Therapy
Lasers, Inc. Common Stock, par value $.001.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): Yes No X
--- ---
<PAGE>
Therapy Lasers, Inc.
Index to Form 10-QSB
Part I
FINANCIAL INFORMATION (UNAUDITED)
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of August 31, 1999 and February 28, 1999
Statements of Loss for the Three and Six Months Ended August 31, 1999 and 1998
Statements of Cash Flows for the Three and Six Months Ended August 31,1999 and
1998
Notes to Financial Statements
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Part II
OTHER INFORMATION
Item 6
SIGNATURES
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial statements
THERAPY LASERS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
<TABLE>
<CAPTION>
AUGUST 31,
1999 FEBRUARY 28,
(UNAUDITED) 1999
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 65 $ 6,708
----------- -----------
Total current assets 65 6,708
----------- -----------
Office and computer equipment, net of
accumulated depreciation of $1,000 - -
----------- -----------
Other assets - -
----------- -----------
Total assets $ 65 $ 6,708
=========== ===========
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 21,446 $ 66,964
Due to related parties 4,000 4,000
----------- -----------
Total current liabilities 25,446 70,964
----------- -----------
Total liabilities 25,446 70,964
----------- -----------
Commitments and contingencies - -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.001 per share,
100,000,000 shares authorized, 11,302,627 and
10,762,627 shares issued and outstanding 11,303 10,763
Capital in excess of par value 4,651,911 4,598,085
Accumulated deficit:
Prior operating accumulated deficit (4,452,105) (4,452,105)
Accumulated during the development stage (236,490) (220,999)
----------- -----------
Total stockholders' equity (deficit) (25,381) (64,256)
----------- -----------
Total liabilities and stockholders'
equity $ 65 $ 6,708
=========== ===========
</TABLE>
See accompanying notes.
<PAGE>
THERAPY LASERS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF LOSS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
---------------------------- ----------------------------
1999 1998 1999 1998
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $ 28,700
Cost of Goods Sold - - - 20,436
------------ ----------- ----------- -----------
Gross Profit - - 8,264
------------ ----------- ----------- -----------
Expenses:
Legal and professional 5,887 5,135 8,369 5,405
Salaries and fees for
services - - 6,000 -
Other general and
administrative 469 4,736 1,020 8,921
------------ ----------- ----------- -----------
Total expenses 6,356 9,871 15,389 14,326
------------ ----------- ----------- -----------
Income (loss) from
operations (6,356) (9,871) (6,062)
Other income (expenses):
Interest 102 - 102 -
------------ ----------- ----------- -----------
Net (loss) ($6,458) ($9,871) ($15,491) ($6,062)
============ =========== =========== ===========
Basic earnings per share ($0.00) ($0.00) ($0.00) ($0.00)
============ =========== =========== ===========
Weighted average number
of shares outstanding 11,302,627 10,401,757 11,032,627 10,532,192
============ =========== =========== ===========
</TABLE>
See accompanying notes.
<PAGE>
CONDOR WEST CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
----------------------- --------------------------
1999 1998 1999 1998
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net (loss) ($6,458) ($9,977) ($15,491) ($6,062)
Adjustments to reconcile net
gain (loss) to net cash used
in operating activities
(Increase) decrease in
accounts receivable - 9,704 - 6,567
(Decrease) in accounts pay-
able and accrued expenses 5,006 (7,858) (45,518) (8,243)
Less, Accrued expenses paid
by issuance of stock - - 54,000
Operating expenses paid by
shareholders - - 366
-------- ------- --------- --------
Net cash flows from
operating activities (1,452) (8,131) (6,643) (7,738)
-------- ------- --------- --------
Cash flows from investing
activities - - -
-------- ------- --------- --------
Cash flows from financing
activities:
Repayment of note payable - - - (2,000)
Sale of stock for cash - - - 15,000
-------- ------- --------- --------
Net cash flows from
financing activities - - - 13,000
-------- ------- --------- --------
Net increase in cash and
cash equivalents (1,452) (8,131) (6,643) 5,262
Cash and cash equivalents,
beginning of period 1,517 14,677 6,708 1,284
-------- ------- --------- --------
Cash and cash equivalents, end
of period $ 65 6,546 $ 65 $ 6,546
======== ======= ========= ========
Supplementary cash flow
information:
Non-cash investing and
financing activities:
Operating expenses paid by
shareholders - $ 366
Shares issued for accrued
expenses - 54,000
</TABLE>
See accompanying notes.
<PAGE>
THERAPY LASERS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION:
The financial statements include the accounts of Therapy Lasers, Inc. The
balance sheet as of August 31, 1999, the statements of loss for the three months
and six months ended August 31, 1999 and 1998, and the statements of cash flows
for the three months and six months ended August 31, 1999 and 1998 have been
prepared by the Company without audit. In the opinion of management, these
financial statements include all adjustments necessary to present fairly the
financial position, results of operations and cash flows as of August 31, 1999
and for all periods presented. All adjustments made have been of a normal
recurring nature. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The Company
believes that the disclosures included are adequate and provide a fair
presentation of interim period results. Interim financial statements are not
necessarily indicative of financial position or operating results for an entire
year. It is suggested that these interim financial statements be read in
conjunction with the audited financial statements and the notes thereto included
in the Company's Form 10-K for the year ended February 28, 1999 filed with the
United States Securities and Exchange Commission (SEC) on or about June 15,1999.
NOTE 2 - THE COMPANY:
Therapy Lasers, Inc. (the Company) is a Nevada corporation engaged principally
in searching for capital, in organizing and developing a wholesale electrical
components business, and in investigating other business opportunities. From
March 1, 1995 until late 1996, the Company was attempting to establish markets
in foreign countries (primarily Mexico and Canada) for medical laser products it
had developed, and was seeking financing to obtain approval of the Food and Drug
Administration to market the medical laser products in the United States. In
late 1996, the Company substantially discontinued its efforts in the laser
field, as its efforts had been unsuccessful. Also in late 1996, the Company
commenced activities in the wholesale electrical components business, serving as
a non-stocking sales representative based in Houston, Texas for an affiliated
company. In that connection, the Company sells primarily to another affiliated
company. At quarter end, the Company was investigating other opportunities in
related fields.
The Company is deemed to have been in the development stage since March 1, 1995.
Prior to that time, it was in the operating stage and was engaged in the sale
and rental of medical supplies and equipment; these operations have been sold
and/or discontinued.
In its current development stage, management anticipates incurring substantial
additional losses as it pursues its wholesale lighting business and as it
investigates other business opportunities.
On February 27, 1995, the Company changed its name from Medeci Corporation to
Therapy Lasers, Inc.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Following is a summary of the Company's significant accounting policies:
<PAGE>
BASIS OF PRESENTATION - The accounting and reporting policies of the
Company conform to generally accepted accounting principles, and, effective
March 1, 1995, the accounting and reporting policies conform to generally
accepted accounting principles of development stage enterprises.
PRINCIPLES OF CONSOLIDATION - The accompanying financial statements include
the accounts of its wholly owned subsidiary, LaserCare, Inc., also a
development stage enterprise. All significant intercompany transactions
have been eliminated.
USES OF ESTIMATES - 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 amount of revenues and
expenses during the reporting period. Actual results could differ from
those estimates. The Company's periodic filings with the Securities and
Exchange Commission include, where applicable, disclosures of estimates,
assumptions, uncertainties and concentrations in products and markets which
could affect the financial statements and future operations of the Company.
CASH AND CASH EQUIVALENTS - For purposes of the statement of cash flows,
the Company considers all cash in banks, money market funds, and
certificates of deposit with a maturity of less than one year to be cash
equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS -
The carrying amounts of cash, accounts receivable, accounts payable, notes
payable, and accrued expenses approximate fair value because of the short
maturity of these items. These fair value estimates are subjective in
nature and involve uncertainties and matters of significant judgment, and,
therefore, cannot be determined with precision. Changes in assumptions
could significantly affect these estimates. At August 31, 1999, the
Company had no derivative financial instruments.
EQUIPMENT AND FURNISHINGS - Equipment and furnishings is stated at cost
less accumulated depreciation, computed principally on the straight-line
method over the estimated useful lives of the assets. Estimated useful
lives approximate five years. Depreciation is taken on the straight-line
method for tax purposes also, using lives prescribed by the Internal
Revenue Code, which are similar to book basis lives.
Maintenance and repairs of equipment and furnishings are charged to
development stage expenses and new purchases and major improvements are
capitalized. Upon retirement, sale or other disposition, the cost and
accumulated depreciation are eliminated from the accounts, and any gain or
loss is included in operating income.
FEDERAL INCOME TAXES - Deferred income taxes are reported for timing
differences between items of income or expense reported in the financial
statements and those reported for income tax
<PAGE>
purposes in accordance with Statement of Financial Accounting Standards
number 109 Accounting for Income Taxes, which requires the use of the
asset/liability method of accounting for income taxes. Deferred income
taxes and tax benefits are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases,
and for tax loss and credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Company provides deferred taxes
for the estimated future tax effects attributable to temporary differences
and carryforwards when realization is more likely than not.
Differences between book and tax income arise primarily from the valuation
of stock issued for services.
NET INCOME PER SHARE OF COMMON STOCK - Net income per share of common stock
is computed by dividing net income by the weighed average number of shares
of common stock outstanding during the period, after giving retroactive
effect to stock splits, if any.
NOTE 4 - UNCERTAINTY, GOING CONCERN:
The Company has incurred net operating losses and negative cash flow from
operations in recent years, and has disposed of its last operating subsidiary.
As of August 31, 1999, the Company had negative net worth in excess of $25,000
and operating revenues that were insufficient to generate a profit. Although
the Company settled a Federal tax lien during the prior year for approximately
$4,000, resulting in an extraordinary gain of $25,051, and although the Company
realized $20,000 in cash from sales of common stock during the prior year, and
although management is currently seeking additional cash flow through potential
acquisitions and/or mergers with operating companies, and although management is
seeking to expand its wholesale components business, there is no assurance that
these activities will be successful.
These factors create substantial doubt about the Company's ability to continue
as a going concern. The ability of the Company to continue as a going concern
is dependent upon (a) obtaining sufficient additional debt or equity financing
to finance operations, capital improvements, and other necessary activities, (b)
achieving a profitable level of operations, (c) acquiring a profitable business,
or (d) a combination of these actions. The financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as
a going concern.
NOTE 5 - COMPREHENSIVE INCOME:
FASB Statement Number 130, Reporting Comprehensive Income, became effective for
fiscal years beginning after December 15, 1997, and establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains, and losses) in a full set of general-purpose financial
statements. This Statement requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. The Company had no comprehensive income other than
net
<PAGE>
income during the periods included in the accompanying financial statements.
<PAGE>
THERAPY LASERS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITON AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company had no sales during the quarter ending August 31, 1999. The Company
is essentially dormant and management continues to investigate various business
opportunities. The company incurred operating expenses of $6,356 and $15,389
during the quarter and six months ended August 31, 1999, compared to $9,871 and
$14,326 during the comparable periods of the preceding year. The difference is
the result of timing in the incurring of expenses necessary to maintain the
corporate entity and to file required reports.
LIQUIDITY AND CAPITAL RESOURCES
The Company had total liabilities approximating $25,000 and a working capital
deficit of $25,000 as of August 31, 1999 compared to $40,000 at August 31, 1998.
This change in working capital is attributable to the issuance of common stock
in exchange for certain accrued expenses. The Company expects that cash
requirements for development stage operations for the next fiscal year will be
provided from the wholesale electrical components business or from private
placements of common stock. However, there can be no assurance that these
activities will, in fact, provide the necessary working capital for operations.
OTHER MATTERS
The Company utilizes "off-the-shelf" computer software in its operations
obtained from major vendors such as Peachtree and Microsoft. Currently,
management believes that most critical systems are year 2000 compliant, or will
be made compliant prior to December 31, 1999. The estimated cost of becoming
compliant is minimal, and is not expected to have a material effect on the
financial statements or the Company's ability to serve its customers.
This Form 10-QSB includes or may include certain forward-looking statements that
involve risks and uncertainties. This Form 10-QSB contains certain forward-
looking statements concerning the Company's financial position, business
strategy, budgets, projected costs and plans and objectives of management for
future operations as well as other statements including words such as
"anticipate," "believe," "plan," "estimate," "expect," "intend," and other
similar expressions. Although the Company believes its expectations reflected in
such forward-looking statements are based on reasonable assumptions, readers are
cautioned that no assurance can be given that such expectations will prove
correct and that actual results and developments may differ materially from
those conveyed in such forward-looking statements. Important factors that could
cause actual results to differ materially from the expectations reflected in the
forward-looking statements in this Form 10-QSB include, among others, the pace
of technological change, the Company's ability to manage growth and attract and
retain employees, general business and economic conditions in the Company's
operating regions, and competitive and other factors, all as more fully
described in the Company's Report on Form 10-K for the period ended February 28,
1999 under Management's Discussion and Analysis of Financial Condition and
Results of Operations "Assumptions Underlying Certain Forward-Looking Statements
and Factors that May Affect Future
<PAGE>
Results" and elsewhere from time to time in the Company's other SEC reports.
Such forward-looking statements speak only as of the date on which they are made
and the Company does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this Form 10-QSB.
If the Company does update or correct one or more forward-looking statements,
investors and others should not conclude that the Company will make additional
updates or corrections with respect thereto or with respect to other forward-
looking statements. Actual results may vary materially.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
None.
All other items in Part II are either not applicable to the Company during
the current quarter, the answer is negative, or a response has been
previously reported and an additional report of the information is not
required, pursuant to the instructions to Part II.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on the 18th day of April,
2000.
Therapy Lasers, Inc.
By: /s/ LEON D HOGG Date: April 18, 2000
-----------------------------
Leon D. Hogg, Chairman of
the Board, President, Chief
Executive Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF THERAPY LASERS, INC. AS OF AUGUST 31, 1999 AND FOR THE THREE
MONTHS AND SIX MONTHS THEN ENDED, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-START> JUN-01-1999
<PERIOD-END> AUG-31-1999
<CASH> 65
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 65
<PP&E> 1,000
<DEPRECIATION> (1,000)
<TOTAL-ASSETS> 65
<CURRENT-LIABILITIES> 25,446
<BONDS> 0
0
0
<COMMON> 11,303
<OTHER-SE> (36,684)
<TOTAL-LIABILITY-AND-EQUITY> 65
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,389
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 102
<INCOME-PRETAX> (15,491)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,491)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,491)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
