UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
FORM 10-QSB
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
NeuroGenesis, Inc.
Incorporated in the State of Delaware
Employer Identification Number 76-0320137
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__X____ No______
and (2) has been subject to such filing requirements for the past 90
days. Yes_____ No_X____
As of November 15, 2000 there were 1,993,680 outstanding shares of
NeuroGenesis, Inc. Common Stock, par value $0.025. There is 25,000,000 shares
of Common Stock, par value $0.025, and 500,000 shares of Preferred Stock
authorized.
Transitional Small Business Disclosure Format ( check one): Yes___ No_X_
<PAGE>
NeuroGenesis, Inc.
Index to Form 10-QSB
Part I
FINANCIAL INFORMATION ( UNAUDITED)
ITEM I. FINANCIAL STATEMENTS
Balance Sheets as of September 30, 2000 and December 31, 2000 ( Audited ).
Statements of Operations for the Three and Six Months ended June 30, 1999/2000
and September 30, 1999/2000.
Statements of Cash Flows for the Three and Six Months Ended June 30, 1999/2000
and September 30, 1999/2000.
Notes to Financial Statements.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Part II
OTHER INFORMATION
Item 6
SIGNATURES
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NeuroGenesis, Inc.
Balance Sheets
September 30, December 31,
2000 1999
___(Unaudited)_______ (Audited )____
ASSETS
Current Assets
Cash and cash equivalent $ 78,554 $ 31,231
Accounts receivable, net of allowance
for doubtful accounts 20,984 20,327
Inventories 23,099 44,544
Prepaid expenses 3,435 33,042
Deferred tax asset, net of valuation
valuation allowance of $13,966 for 1999
and $8,415 for 1998 10,113 10,113
Total Current assets $ 136,184 $ 139,257
Fixed Assets
Furniture, office equipment and patents,
net of accumulated depreciation. 17,352 19,816
Total Fixed Assets $ 17,352 $ 19,816
Other Assets
Deferred tax asset, net of valuation
allowance of $245,454 for 1999 and
$251,005 for 1998 179,460 179,460
Total Other Assets $ 179,460 $ 179,460
Total Assets $ 332,996 $ 338,533
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 2,333 $ 22,533
Loans from Directors 136,280 144,120
Total Current Liabilities $ 138,613 $ 166,653
Long-term liabilities
Note payable to stockholder 155,959 155,959
Total Long Term Liabilities $ 155,959 $ 155,959
STOCKHOLDERS EQUITY (DEFICIT)
25,000,000 Common Shares @ $0.025 and
500,000 Preferred Shares authorized
1,993,680 Common Shares @ $0.025 par
value, outstanding 49,842 49,840
Additional Paid in capital 2,157,803 2,157,705
Accumulated Deficit (2,169,221) (2,191,624)
Total Stockholders Equity $ 38,424 $ 15,921
Total Liabilities and Stockholders
Equity $ 332,996 $ 338,533
See accompanying notes.
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NEUROGENESIS, INC.
Statements of Operations
Three Months Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
Revenues $ 98,114 $ 62,301 $ 360,424 $ 183,677
Cost of Goods Sold 23,499 16,925 74,753 52,160
Gross Profit 74,614 45,376 285,671 131,516
Expenses:
General and Administrative 13,195 11,207 68,899 33,954
Sales and Marketing 49,530 26,427 163,782 74,711
Depreciation 137 635 1,878 1,494
Manufacturing and
Delivery Expense 1,577 (1,577) 6,365 2,954
Other Expense 35 10 17,446 694
Total Expense 64,474 37,619 258,370 113,807
Net Income From Operations 10,140 7,757 27,301 17,708
Assets Acquired from Lawsuits 0 12,269 0 12,269
Net Income $ 10,140 $ 20,026 $ 27,301 $ 29,977
Basic Earnings per Share $0.005 $0.011 $0.014 $0.017
Weighted Average Number of
Shares Outstanding 1,993,680 1,750,760 1,993,680 1,750,760
See Accompanying Notes.
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NEUROGENESIS, INC.
Statements of Cash Flows
Nine Months Ended
September 30
2000 1999
Cash flows from operating activities:
Net earnings $ 27301 $ 29977
Adjustments to reconcile net
earnings to net cash flows
from operating activities:
Depreciation 2289 2058
( Increase) decrease in
accounts receivable. (2869) (5582)
( Increase) decrease in
inventories. 26093 (640)
Increase (decrease) in
in accounts payable. (22841) 17391
Net cash flows from
operating activities 29973 43204
Cash flows from financing
activities:
Advance from related party(s) - 1800
Repayment of note payable (7798) (8015)
Debt issuance - 13223
Net cash flows from financing Activities (7798) 7008
Net increase in cash and cash
and cash equivalents. 22175 50212
Cash and cash equivalents beginning
of period. 31231 16601
Cash and cash equivalents ending of year. $ 33506 $ 66813
Supplementary cash flow
information:
Cash paid for interest 0 0
See accompanying notes.
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NEUROGENESIS, INC.
Notes to financial Statements
Note 1 - Basis of Presentation:
The financial statements include the accounts of NeuroGenesis, Inc. and
it's subsidiaries. The balance sheet as of September 30, 2000, the statements
of operations for the six months ended June 30, 2000 and 1999 and the nine
months ended September 30, 2000 and 1999 and the statements of cash flows for
the same period in 2000 and 1999 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 September 30, 2000 and for all periods
presented except as explained in note 2. 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 operation results for an
entire year. It is suggested that these interim financial statements read in
conjunction with the audited financial statements and the notes thereto
included in the audited financial statements and the notes thereto included
in the Company's Form 10 for the year ended 1999 filed with the United States
Securities and Exchange Commission (SEC) on or about September 1, 2000, as
amended September 22, 2000 and as amended on or about October 3, 2000.
Note 2 - The Company.
NeuroGenesis, Inc. ( the Company) is a Delaware Corporation and is the
successor to the business operations of Matrix Technologies Inc., a Texas
Corporation, which was incorporated in November 1984 for the purpose of
completing the development of a series of products to be used as adjuncts to
therapy by the substance-abuse treatment community.
In November of 1989, one of the components of the main product,
1-tryptophan was banned by the FDA. This required destruction of product
inventory and resulted in a substantial decline in sales over the next few
years over the next few years. During 1991 the majority of the Company's
Directors resigned and new Directors were elected. By 1993 sales had fallen to
less than 20% of the 1990 level. In 1991 one of the Company's original
founders formed a new company, Natural Neuro Nutrition, Inc. (3NI), to develop
new research and pursue similar goals of the original company.
NeuroGenesis, Inc. unsuccessfully pursued legal action against the new
company,3NI, which was settled in August 1993 and resulted in the Company
giving 3NI a royalty free license and reinstating the founder of 3NI on the
Board of Directors of NeuroGenesis, Inc.
After settlement of the litigation in 1993, the founder began
reorganization of NeuroGenesis, Inc. The Company, from an operational point of
view, was basically inactive until February 1998. At that time the Company
acquired 3NI and a network marketing company Neuro Health Products, in
exchange for 500,000 shares of the Company's Common Stock valued at
approximately $62,500.
On July 29,2000 the Company's Stockholders approved a resolution to
change the capital structure of the Company from three million five hundred
thousand common shares to twenty five million common shares and five hundred
thousand preferred shares.
Note 3 - Summary of significant accounting policies:
Following is a summary of the Company's significant accounting policies:
Basis of presentation - The accounting and reporting policies of the
Company conform to generally accepted accounting principals.
Principals of Consolidation - The accompanying financial statements
include the accounts of its wholly owned subsidiaries, Natural Neuro Nutrition,
Inc. and Neuro Health Products. All significant inter company transactions have
been eliminated.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principals requires management
to make estimates and assumptions that effect 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 revenue 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.
Inventory - Inventories are stated at the lower cost or market. Cost
is determined using an average cost method.
Property and Equipment - Property and equipment are reported at
cost. Repairs and maintenance costs are charged to operations as they occur.
Depreciation - Depreciation is calculated using the straight line
method, based on the estimated useful life of the respective asset, which
ranges between five years and ten years.
Net income per share of common stock - Net income per share of common
stock is computed by dividing net income by the weighted average number of
shares of common stock outstanding during the period , after giving
retroactive effect to stock splits if any.
Note 5 - Subsequent event
On July 29, 2000 the shareholders passed a resolution to increase
the authorized capitalization from three and one half million common shares
to twenty five million common shares and five hundred thousand preferred
shares.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of operations
For the nine month period ending September 30, 2000 the Company had sales
of three hundred sixty thousand four hundred twenty four dollars almost
twice the figure of one hundred eighty three thousand six hundred seventy
seven dollars for the nine month period ending September 31, 1999. Net income
from operations for the same periods were twenty seven thousand three hundred
one dollars or 2000 and seventeen thousand seven hundred eight for 1999. Assets
acquired from lawsuits increased the net profit to twenty nine thousand nine
hundred seventy seven in 1999.
Liquidity and capital resources
The Company had total liabilities approximating two hundred ninety four
thousand five hundred seventy two dollars at September 30, 2000 as compared
to three hundred twenty two thousand six hundred twelve dollars at September
30, 2000. This decrease is attributed to net earnings. It is anticipated that
cash requirements for the next fiscal year will be provided by increased sales
and net earnings. However, there can be no assurance that these activities
will , in fact, provide the necessary working capital for working capital.
This Form 10QSB includes or may include certain forward-looking
statements that involve risks and uncertainties. This Form 10QSB 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 it's 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 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 10QSB
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 competition
and other factors all, as more fully described in the Company's report on Form
10 for the period ended December 31, 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 Results" and elsewhere from time to time in the Company's 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 Form10QSB. 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 8K.
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 it's behalf by the undersigned, thereunto duly authorized on the 15th day
of November, 2000.
NeuroGenesis, Inc.
By ____________________________________ Dated: November 15, 2000
Albert H. Bieser, Chairman of the Board,
President, Chief Executive Officer
