UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended June 30, 1996
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934 For the transition period from to
Commission File Number 33-55254-33
CLAIRE TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Nevada 87-0467224
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation)
7373 North Scottsdale Road, Suite B-150
Scottsdale, Arizona 85253
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 483-8700
Indicate by a 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 [X] Yes [ ] No
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of July 8, 1996
- ------------------------------------ --------------------------------
$.001 par value Class A Common Stock 8,539,500 Shares
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BASIS OF PRESENTATION
General
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders'
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
Operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that can be expected for the year ending
December 31, 1996.
Item 2.
Management's Discussion and Analysis of Financial Conditions and Results of
Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company had $91,801 cash in the bank. There can be
no assurance that the Company will be able to meet its financial obligations.
During the quarter ending June 30, 1996, the Company invested an additional
$365,000 to increase its investment in Hyperflow Technologies, Inc., a Nevada
corporation (total $1,259,000 invested to date). The Company owns approximately
70.5% of Hyperflow. The investment is recorded under the equity method because
the Company does not control the operations of Hyperflow.
Hyperflow is a development stage Company engaged in the design,
engineering, manufacturing, and sales of etching, stripping, aqueous and
semi-aqueous precision cleaning systems for computer, electronic and
semi-conductor industries. Hyperflow has not generated significant income, and
lost $196,000 in the quarter ($399,000 for the six months).
RESULTS OF OPERATIONS
The Company has not had operations that have generated income since its
inception. Its only receipts have been from the sale of its common stock, which
have been used to pay expenses and acquire a 70.5% interest in Hyperflow.
Further, there has been a limited trading market for the Company's common stock
since its inception to the date of this report.
During the six months ended June 30, 1996, management fees in the amount of
$210,700 were paid or accrued ($116,000 is shown in accounts payable at June 30,
1996). The Company's President received $60,000 and the Company's Secretary
received $60,000,
<PAGE>
including accrued amounts of $31,000 and $25,000 respectively. $35,000 was paid
or accrued to an entity controlled by the Company's Secretary for rent and other
administrative services, including $30,000 accrued at June 30, 1996.
Net loss for the three months ended June 30, 1996 was $460,871 compared
with net loss of $182,067 for the same period in 1995. The main reason for the
increase is due to the large amount of interest and loss on investment expenses
that were not present in 1995.
General and administrative expenses for the three months ended June 30,
1996 were $207,457 compared with $182,067 for the same period in 1995. The
increase is mainly due to increased management fees, administrative fees, and a
large amount of travel outside of the United States looking for prospective
purchasers of the Company's common stock.
Depreciation and amortization expense for the three months ended June 30,
1996 was $11,448 compared with $0 for the same period in 1995.
Interest expense for the three months ended June 30, 1996 was $73,966
compared with $0 for the same period in 1995. Interest expense was paid on a
bridge loan and other short-term debt.
Net loss for the six months ended June 30, 1996 was $762,933 compared with
net loss of $182,067 for the same period in 1995.
General and administrative expenses for the six months ended June 30, 1996
were $367,886 compared with $182,067 for the same period in 1995, an increase of
102%.
Depreciation and amortization expense for the six months ended June 30,
1996 was $20,495 compared with $0 for the same period in 1995.
Interest expense for the six months ended June 30, 1996 was $93,552
compared with $0 for the same period in 1995.
Loss from investment, which represents the Company's share of Hyperflow's
net loss was $168,000 for the three months ended June 30, 1996 and $281,000 for
the six months ended June 30, 1996.
<PAGE>
PART II - OTHER INFORMATION
Item 6.
Exhibits and Reports on Form 8-K
(a)
Exhibits
99.1 Financial Statements as of June 30, 1996.
Financial Data Schedule
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLAIRE TECHNOLOGIES, INC.
DATED: JULY 31, 1996 /s/ Logan B. Anderson
---------------
Logan B. Anderson, Secretary/Treasurer
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
June 30,
1996
ASSETS
CURRENT ASSETS
<S> <C>
Cash in bank $ 91,801
Prepaid expenses 50,000
----------------------
TOTAL CURRENT ASSETS 141,801
EQUIPMENT 19,363
OTHER ASSETS
Investment 262,185
Goodwill 420,761
682,946
$ 844,110
======================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 159,783
Bridge loan 15,000
Loan payable - related party 107,000
Accrued interest payable 14,953
----------------------
TOTAL CURRENT LIABILITIES 296,736
STOCKHOLDERS' EQUITY Common Stock $.001 par value:
Authorized - 50,000,000 shares
Issued and outstanding
8,519,500 shares 8,520
Additional paid-in capital 2,295,730
Deficit accumulated during the
development stage (1,756,876)
TOTAL STOCKHOLDERS' EQUITY 547,374
$ 844,110
======================
</TABLE>
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
5/3/88
Three months ended Six months ended (Date of
June 30, June 30, inception)
1996 1995 1996 1995 to 6/30/96
------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Sales $ -0- $ -0- $ -0- $ -0- $ -0-
Cost of sales -0- -0- -0- -0- -0-
------------- ------------- -------------- ------------- ---------------
GROSS PROFIT -0- -0- -0- -0- -0-
General and Administrative
expenses 207,457 182,067 367,886 182,067 1,075,794
Depreciation and amortization 11,448 -0- 20,495 -0- 33,388
Interest expense 73,966 -0- 93,552 -0- 99,394
Bad debts -0- -0- -0- -0- 2,300
------------- ------------- -------------- ------------- ---------------
292,871 182,067 481,933 182,067 1,210,876
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE OTHER (292,871) (182,067) (481,933) (182,067) (1,210,876)
OTHER EXPENSE
Loss on investment (168,000) -0- (281,000) -0- (546,000)
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE
INCOME TAXES (460,871) (182,067) (762,933) (182,067) (1,756,876)
INCOME TAXES -0- -0- -0- -0- -0-
NET LOSS $ (460,871) $ (182,067) $ (762,933) $ (182,067) $ (1,756,876)
============= ============= ============== ============= ===============
Net income (loss) per weighted
average share - operations $ (.04) $ (.09) $ (.07) $ (.12)
Net income (loss) per weighted
average share - other expense (.02) .00 (.04) .00
------------- ------------- -------------- -------------
Net income (loss) per weighted
average share $ (.06) $ (.09) $ (.11) $ (.12)
============= ============= ============== =============
Weighted average number of
common shares used to
compute net income (loss)
per weighted average share 7,158,291 2,126,593 6,667,536 1,563,392
============= ============= ============== =============
</TABLE>
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional Stock During
Par Value $.001 Paid-in Subscription Development
-----------------------------
Shares Amount Capital Receivable Stage
<S> <C> <C> <C> <C> <C>
Balances at 5/3/88 (Date of inception) - 0 - $ - 0 - $ - 0 - $ - 0 - $ - 0 -
Issuance of common stock (restricted)
at $.002 per share at 5/5/88 1,000,000 1,000 1,000
Net income for period (1,950)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/88 1,000,000 1,000 1,000 - 0 - (1,950)
Net loss for year (10)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/89 1,000,000 1,000 1,000 - 0 - (1,960)
Net loss for year (10)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/90 1,000,000 1,000 1,000 - 0 - (1,970)
Net loss for year (10)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/91 1,000,000 1,000 1,000 - 0 - (1,980)
Net loss for year (20)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/92 1,000,000 1,000 1,000 - 0 - (2,000)
Net income for year - 0 -
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/93 1,000,000 1,000 1,000 - 0 - (2,000)
Net income for year - 0 -
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/94 1,000,000 1,000 1,000 - 0 - (2,000)
Issuance of common stock (restricted)
at 4/3/95 for subsidiary 10,500,000 10,500 (6,000)
Cancellation of stock at 5/31/95 (10,400,000) (10,400) 6,000
Sale of common stock (Regulation "S")
at $.05 per share at 5/16/95 2,000,000 2,000 98,000
Issuance of common stock (restricted)
at $.001 per share for services at
6/30/95 1,900,000 1,900
Sale of common stock (restricted)
at $1.00 per share at 6/30/95 520,000 520 519,480
Costs associated with stock sales (100,000)
Sale of common stock (restricted)
at $1.00 per share at 7/24/95 455,000 455 454,545
Issuance of common stock (restricted)
at $.001 per share for services at
11/30/95 25,000 25 (25) - 0 -
Options exercised 156,000 156 155,844 (81,000)
Net loss for year (991,943)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/95 6,156,000 6,156 1,128,844 (81,000) (993,943)
Collection of stock subscription 81,000
Issuance of common stock (restricted)
at $.50 per share for interest expense
at 5/14/96 130,000 130 64,870
Sale of common stock (Regulation S)
at $.50 per share at 5/14/96 1,308,500 1,309 652,941
Sale of common stock (S-8) at $1.00
per share at 5/20/96 25,000 25 24,975
Sale of common stock (Regulation S)
at $.50 per share at 5/31/96 800,000 800 399,200
Sale of common stock (S-8) at $.75 per
share at 6/24/96 25,000 25 18,725
Sale of common stock (S-8) at $.75 per
share at 6/25/96 45,000 45 33,705
Sale of common stock (S-8) at $.75 per
share at 6/27/96 30,000 30 22,470
Deferred offering costs (50,000)
Net loss for period (762,933)
Balances at 6/30/96 8,519,500 $ 8,520 $ 2,295,730 $ -0- $ (1,756,876)
============= ============= ================= ================= ==================
</TABLE>
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
5/3/88
Three months ended Six months ended (Date of
June 30, June 30, inception)
1996 1995 1996 1995 to 6/30/96
-------------- ------------- ------------- -------------- -------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C> <C>
Net (loss) $ (460,871) $ (182,067) $ (762,933) $ (182,067) $ (1,756,876)
Adjustments to reconcile net (loss) to
cash used by operating activities:
Depreciation & amortization 11,448 -0- 20,495 -0- 33,388
Stock issued for expenses 65,000 -0- 65,000 -0- 67,000
Loss on investment 168,000 -0- 281,000 -0- 546,000
Changes in assets and liabilities:
Prepaid expenses -0- -0- -0- -0- (100,000)
Accounts receivable -0- (24,178) -0- (24,178) -0-
Accounts payable 89,577 30,137 25,393 30,137 159,783
Accrued interest payable (10,188) -0- 9,262 -0- 14,953
-------------- ------------- ------------- -------------- ---------------
NET CASH USED BY
OPERATING ACTIVITIES (137,034) (176,108) (361,783) (176,108) (1,035,752)
INVESTING ACTIVITIES
Purchase of equipment -0- (18,919) (2,023) (18,919) (22,647)
Purchase of investment (298,972) (250,000) (370,185) (250,000) (808,185)
Deferred costs -0- (4,350) -0- (4,350) -0-
Goodwill (66,028) -0- (119,815) -0- (450,815)
Organization costs -0- -0- -0- -0- (50)
-------------- ------------- ------------- -------------- ---------------
NET CASH USED BY
INVESTING ACTIVITIES (365,000) (273,269) (492,023) (273,269) (1,281,697)
FINANCING ACTIVITIES
Proceeds from sale of common stock 1,154,250 622,000 1,235,250 622,000 2,287,250
Loan proceeds -0- -0- 350,236 -0- 911,443
Loan repayments (566,205) -0- (721,205) -0- (789,443)
-------------- ------------- ------------- -------------- ---------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 588,045 622,000 864,281 622,000 2,409,250
INCREASE IN CASH
AND CASH EQUIVALENTS 86,011 172,263 10,475 172,263 91,801
Cash and cash equivalents at beginning
of period 5,790 -0- 81,326 -0- -0-
-------------- ------------- ------------- -------------- ---------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 91,801 $ 172,263 $ 91,801 $ 172,263 $ 91,801
============== ============= ============= ============== ===============
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 19,155 $ -0- $ 19,291 $ -0- $ 19,442
============== ============= ============= ============== ===============
</TABLE>
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Claire
Technologies, Inc. and Subsidiary June 30, 1996 financial statements and is
qualified in its entirety by reference to such financial statements
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-96
<PERIOD-END> JUN-30-96
<CASH> 91,801
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 141,801
<PP&E> 22,647
<DEPRECIATION> (3,284)
<TOTAL-ASSETS> 844,110
<CURRENT-LIABILITIES> 296,736
<BONDS> 0
0
0
<COMMON> 8,520
<OTHER-SE> 538,854
<TOTAL-LIABILITY-AND-EQUITY> 844,110
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 388,381
<OTHER-EXPENSES> 281,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 93,552
<INCOME-PRETAX> (762,933)
<INCOME-TAX> 0
<INCOME-CONTINUING> (481,933)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (762,933)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
