<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 33-25253
TRIANGLE, INC.
Exact Name of Registrant as Specified in its Charter
COLORADO 93-0969365
State or Other Jurisdiction of IRS Employer Identification
Incorporation or Organization Number
830 NORTHEAST LOOP 410, SUITE 305B, SAN ANTONIO, TX 78209
(Address of principal executive offices) (Zip Code)
(210) 821-5577
Registrant's Telephone Number, Including Area Code
N/A
(Former Name, Former Address and Formal Fiscal Year, if Changed
Since Last Report.)
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.
Yes X No
----- -----
The number of shares outstanding of each of the issuer's classes of
common shares, as of the latest practicable date:
No Par Value Outstanding at May 31, 1996
Common Shares 57,003,090 shares
------------------- ---------------------------
Class of Securities Outstanding Securities
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX
PAGE
----
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets
March 31, 1996, and December 31,
1995 1
Condensed Statements of Operations
for the period from December 8, 1981
(inception), to March 31, 1996, and
the three months ended March 31, 1996
and 1995 2
Statement of Stockholders' Equity (Deficit)
for the period from December 8, 1981
(inception), to March 31, 1996 3 - 7
Condensed Statements of Cash Flows
for the period from December 8, 1981
(inception), to March 31, 1996, and
the three months ended March 31, 1996
and 1995 8
Notes to Condensed Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
Part II. OTHER INFORMATION 11
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1996 1995
---------- ------------
ASSETS
------
Current assets:
Cash $ 110 $ 136
Prepaid expenses 1,000 -
--------- ---------
$ 1,110 $ 136
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 8,467 $ 10,840
--------- ---------
Stockholders deficit:
Preferred stock - -
Common stock 216,924 213,324
Deficit accumulated during
development stage (224,281) (224,028)
--------- ---------
(7,357) (10,704)
--------- ---------
$ 1,110 $ 136
--------- ---------
--------- ---------
Note: The balance sheet at December 31, 1995 has been taken from the audited
financial statements at that date and condensed.
-1-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
December 8,
1981
Three Months Ended (Inception)
March 31, to
------------------------- March 31,
1996 1995 1996
----------- ----------- -----------
Interest income $ - $ - $ 3,230
----------- ----------- ---------
Operating expenses:
Legal and accounting 224 1,242 52,262
Filing fees - - 6,861
Public relations - - 14,414
Other 29 267 34,864
----------- ----------- ---------
253 1,509 108,401
----------- ----------- ---------
(253) (1,509) (105,171)
Writeoff of advances/
recision of merger - - (119,110)
----------- ----------- ---------
Net (loss) $ (253) $ (1,509) $(224,281)
----------- ----------- ---------
----------- ----------- ---------
Net (loss) per share (a) (a)
----------- -----------
----------- -----------
Weighted average number
of shares outstanding 56,805,947 56,081,868
----------- -----------
----------- -----------
(a) Less than $.01 loss
per share
-2-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period December 8, 1981 (Inception)
To March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Class B Deficit
Common Stock Common Stock Accumulated
------------------------ ---------------------- During
Number of Number of Development
Shares Amount Shares Amount Stage
---------- --------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balance at inception
December 8, 1981 - $ - - $ - $ -
Issuance of stock to
officers and
directors March,
1988:
for cash ($.003
per share) 2,118,640 6,355 - - -
Issuance of stock
March, 1988:
for cash ($.003
per share) 2,881,360 8,645 - - -
Net loss for the
year ended December
31, 1988 - - - - (7,179)
---------- --------- --------- -------- --------
Balances, December
31, 1988 5,000,000 15,000 - - (7,179)
Issuance of stock in
public offering, net
of expenses of
$71,435 20,316,000 131,725 - - -
Issuance of stock to
underwriter 677,200 100 - - -
Issuance of stock to
affiliated entities - - 1,000,000 10,000 -
Conversion of stock 15,000,000 10,000 (1,000,000) (10,000) -
Shares not returned
in merger reversal 10,000,000 - - - -
</TABLE>
-3-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
For the Period December 8, 1981 (Inception)
To March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Class B Deficit
Common Stock Common Stock Accumulated
---------------------- ----------------- During
Number of Number of Development
Shares Amount Shares Amount Stage
--------- ------ --------- ------ -----------
<S> <C> <C> <C> <C> <C>
Net loss for the year
ended December 31,
1989 - - - - (154,955)
---------- ------- ------- ------- -------
Balances, December
31, 1989 50,993,200 156,825 - - (162,134)
Net loss for the year
ended December 31,
1990 - - - - (4,622)
---------- ------- ------- ------- -------
Balances, December
31, 1990 50,993,200 156,825 - - (166,756)
Net loss for the year
ended December 31,
1991 - - - - (330)
---------- ------- ------- ------- -------
Balances, December
31, 1991 50,993,200 156,825 - - (167,086)
Issuance of stock
to officers and
directors, for
cash, June, 1992,
($.01 per share) 731,910 7,319 - - -
Net loss for the
year ended
December 31, 1992 - - - - (10,929)
---------- ------- ------- ------- -------
Balances, December
31, 1992 51,725,110 164,144 - - (178,015)
</TABLE>
-4-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
For the Period December 8, 1981 (Inception)
To March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Class B Deficit
Common Stock Common Stock Accumulated
-------------------- -------------------- During
Number of Number of Development
Shares Amount Shares Amount Stage
--------- ------ --------- ------ -----------
<S> <C> <C> <C> <C> <C>
Issuance of stock
to officers and
directors, for
cash, during 1993
($.01 per share) 1,375,000 13,750 - - -
Issuance of stock
for cash, April,
1993
($.01 per share) 90,480 905 - - -
Issuance of stock
for officer
compensation,
November, 1993
($.01 per share) 2,500,000 25,000 - - -
Net (loss) for the
year ended December
31, 1993 - - - - (33,944)
---------- ------- -------- -------- -------
Balances, December
31, 1993 55,690,590 203,799 - - (211,959)
Issuance of stock
to an officer/
director and a
shareholder for
cash, November,
1994 ($.01 per
share) 230,000 2,300 - - -
Issuance of stock
to officer for
reimbursement of
expenses, November,
1994 ($.01 per
share) 142,500 1,425 - - -
</TABLE>
-5-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
For the Period December 8, 1981 (Inception)
To March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Class B Deficit
Common Stock Common Stock Accumulated
------------------------- ---------------------- During
Number of Number of Development
Shares Amount Shares Amount Stage
--------- ------ --------- ------ -----------
<S> <C> <C> <C> <C> <C>
Net (loss) for the
year ended December
31, 1994 - - - - (5,216)
---------- --------- --------- --------- ---------
Balances, December
31, 1994 56,063,090 207,524 - - (217,175)
Issuance of stock
to officer for
cash, January, 1995,
($.01 per share) 20,000 200 - - -
Issuance of stock
to officer for
cash, May, 1995,
($.01 per share) 200,000 2,000 - - -
Issuance of stock
to officer for
cash, August, 1995
($.01 per share) 60,000 600 - - -
Issuance of stock
to officer for
cash, September, 1995 300,000 3,000 - - -
($.01 per share)
Net (loss) for the
year ended December
31, 1995 - - - - (6,853)
---------- --------- --------- --------- ---------
Balances, December
31, 1995 56,643,090 213,324 - - (224,028)
Issuance of stock
to officer for
cash, January, 1996 100,000 1,000 - - -
($.01 per share)
</TABLE>
-6-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (Concluded)
For the Period December 8, 1981 (Inception)
To March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Class B Deficit
Common Stock Common Stock Accumulated
--------------------------------------------- During
Number of Number of Development
Shares Amount Shares Amount Stage
----------- -------- --------- ------ -----------
<S> <C> <C> <C> <C> <C>
Issuance of stock
to officer for
cash, February, 1996 260,000 2,600 - - -
($.01 per share)
Net (loss) for the
three months ended
March 31, 1996 - - - - (253)
---------- -------- ------ ------- --------
Balance, March 31,
1996 57,003,090 $216,924 - $ - $224,281
---------- -------- ------ ------- --------
---------- -------- ------ ------- --------
</TABLE>
-7-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
December 8,
1981
Three Months Ended (Inception)
March 31, to
-------------------- March 31,
1996 1995 1996
------- ------- -----------
Cash flows from operating
activities:
Net (loss) $ (253) $(1,509) $(224,094)
Adjustments to reconcile
net (loss) to net cash
used by operating
activities:
Amortization - - 750
Stock issued for services - - 26,425
Change in assets and
liabilities:
(Increase) in prepaid
expenses (1,000) - (1,000)
(Decrease) in accounts
payable (2,373) 1,189 8,280
------- ------- ---------
Net cash used by
operating activities (3,626) (320) (189,639)
------- ------- ---------
Cash flows from investing
activities:
Organization costs - - (750)
Cash flows from financing
activities:
Proceeds from issuance
of common stock 3,600 225 251,934
Proceeds from issuance
of Class B common
stock - - 10,000
Deferred offering costs - - (71,435)
------- ------- ---------
Net cash provided by
financing activities 3,600 225 190,499
------- ------- ---------
Net increase (decrease) in
cash (26) (95) 110
Cash, beginning of period 136 116 -
------- ------- ---------
Cash, end of period $ 110 $ 21 $ 110
------- ------- ---------
------- ------- ---------
-8-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED FINANCIAL STATEMENTS
The condensed balance sheet as of March 31, 1996, and the condensed
statements of operations and cash flows for the three months ended March
31, 1996 and 1995, and the period December 8, 1981 (inception), to March
31, 1996, have been prepared by the Company without audit. In the opinion
of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at March 31, 1996, and for all periods presented
have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the December 31,
1995, financial statements and notes thereto included in the Company's Form
10-K. The results of operations for the periods ended March 31, 1996 and
1995, are not necessarily indicative of the operating results for the full
year.
2. PROPOSED MERGER
On November 21, 1995, the Company signed a letter of intent to acquire
Texas Quick Service, Inc. (TQSI) in exchange for common stock of the
Company. Under the terms of the letter of intent, the Company plans to
acquire 100% of TQSI's stock in exchange for 90% of the Company's
outstanding common stock. TQSI is a holding company with no operations and
was formed to acquire the assets of Red Line Burgers, Inc. under a
reorganization plan. Red Line Burgers, Inc. owns, operates or franchises
several hamburger restaurant chains in Texas and is presently in
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
3. SUBSEQUENT EVENT
On April 22, 1996, the Company entered into a Financial Advisory Agreement
with First Capital Investments, Inc. in anticipation of capital
requirements associated with the proposed merger with TQSI. The Company
will be required to pay First Capital a retainer of $7,500 and monthly fees
of $3,000 for a term of two years, commencing on the date of successful
closing of various financial transactions.
-9-
<PAGE>
TRIANGLE, INC.
(A DEVELOPMENT STAGE COMPANY)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash of $110 and no working capital at March 31, 1996, and cash
of $136 and no working capital at December 31, 1995.
RESULTS OF OPERATIONS
For the period from December 8, 1981 (inception), to March of 1988, the Company
was inactive. The Company is in the development stage and its activities
through March 31, 1996, consisted primarily of efforts to complete the public
offering and pursue a merger.
The Company's limited expenditures consist of minimal operating expenses.
Management expects the Company will continue to incur small losses until such
time as a merger or acquisition is completed.
Management does not expect inflation or changing prices to have any effect on
the Company's financial condition.
-10-
<PAGE>
TRIANGLE, INC.
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 MATTER TO A VOTE OF SECURITY HOLDERS.
NONE.
ITEM 5. OTHER INFORMATION.
NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
NONE.
-11-
<PAGE>
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 hereunto duly authorized.
TRIANGLE, INC.
Date: May 31, 1996 By: /s/ ROBERT ELLIS, PRESIDENT
---------------------------------
Robert Ellis, President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 110
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1110
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1110
<CURRENT-LIABILITIES> 8467
<BONDS> 0
0
0
<COMMON> 216924
<OTHER-SE> (224281)
<TOTAL-LIABILITY-AND-EQUITY> 1110
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 253
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (253)
<INCOME-TAX> 0
<INCOME-CONTINUING> (253)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (253)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
