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 March 31, 1997
[ ] 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 Small Business Issuer 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)
Issuer's telephone number, including area code: (602) 483-8700
Indicate by a check mark whether the Issuer (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 Issuer 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 Issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of April 28, 1997
- ------------------------------------ --------------------------------
$.001 par value Class A Common Stock 8,639,500 Shares
1
<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' deficit 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 three months ended March 31, 1997 are not necessarily
indicative of the results that can be expected for the year ending December 31,
1997.
Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company had $897 cash in the bank. There can be no
assurance that the Company will be able to meet its financial obligations.
During the quarter ended March 31, 1997, the Company foreclosed on the loans
made to Hyperflow, and sold the assets to Hyperflo, Inc. (an Arizona company,
unrelated to both Claire and Hyperflow), which had some common management with
Hyperflow.
The assets were sold to Hyperflo, Inc. for a $305,500 Promissory Note. The Note
bears interest at 7.87% per annum and the accrued interest and principle are due
September 6, 2003. The Company will also receive a royalty of 2.5% of the gross
revenue received from sales of products developed with Hyperflow technology. The
first $1,500,000 of gross revenue is not subject to the royalty. The Promissory
Note must also be paid in full if Hyperflo, Inc. sells the technology. The Note
has been reserved fully due to the long time before payment is due and is not
reflected on the balance sheet as an asset.
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 common stock and loans,
which have been used to pay expenses.
2
<PAGE>
During the three months ended March 31, 1997, management fees in the amount of
$90,000 were accrued. The Company's President received $30,000 and the Company's
former Secretary received $30,000, and $30,000 was accrued to another
consultant. On March 31, 1997, the Company terminated by mutual agreement all
management and consulting contracts. $1,800 was accrued to an entity controlled
by the Company's former Secretary for rent. In order to cover administrative
costs, a loan was extended by Dynamic Associates, Inc. for $3,070. Dynamic is a
related party.
Net loss for the three months ended March 31, 1997 was $130,124 compared with a
net loss of $302,062 for the same period in 1996. The decrease is due to fewer
general and administrative expenses and no loss from Hyperflow in 1997.
General and Administrative expenses for the three months ended March 31, 1997
were $98,354 compared with $160,429 in 1996.
Interest expense for the three months ended March 31, 1997 was $30,586 compared
with $19,586 for the same period in 1996. The increase was due to interest on
loans taken to finance investments in 1996.
Depreciation and amortization expense for the three months ended March 31, 1997
was $1,184 compared to $9,047 for the same period in 1996. The reduction is due
to the Hyperflow investment not being amortized in 1997 as it was in 1996.
Management is continuing to look for a viable business opportunity.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Financial Statements as of March 31, 1997
27 Financial Data Summary
(b) Reports on Form 8-K
None.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLAIRE TECHNOLOGIES, INC.
DATED: May 9, 1997 /s/ Jan Wallace
Jan Wallace, President and Director
4
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
March 31,
1997
----------------------
ASSETS
CURRENT ASSETS
<S> <C>
Cash in bank $ 897
----------------------
TOTAL CURRENT ASSETS 897
EQUIPMENT 23,944
----------------------
$ 24,841
======================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 6,794
Accrued expenses - related parties 375,600
Bridge loan - related party 14,999
Loans payable - related parties 401,820
Accrued interest payable - related parties 33,590
----------------------
TOTAL CURRENT LIABILITIES 832,803
STOCKHOLDERS' (DEFICIT) Common Stock $.001 par value:
Authorized - 100,000,000 shares
Issued and outstanding
8,639,500 shares 8,640
Additional paid-in capital 2,280,610
Deficit accumulated during the
development stage (3,097,212)
----------------------
TOTAL STOCKHOLDERS' (DEFICIT) (807,962)
----------------------
$ 24,841
======================
</TABLE>
F-1
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
5/3/88
Three Months Ended (Date of
March 31, inception) to
1997 1996 3/31/97
------------------ ----------------- -----------------------
<S> <C> <C> <C>
Net sales $ 0 $ 0 $ 0
Cost of sales 0 0 0
------------------ ----------------- -----------------------
GROSS PROFIT 0 0 0
General and administrative expenses 98,354 160,429 1,386,374
Depreciation and amortization 1,184 9,047 17,286
Interest expense 30,586 19,586 137,785
Bad debts 0 0 307,800
------------------ ----------------- -----------------------
130,124 189,062 1,849,245
------------------ ----------------- -----------------------
NET LOSS BEFORE OTHER (130,124) (189,062) (1,849,245)
OTHER EXPENSE
Loss on investment 0 (113,000) (1,247,967)
------------------ ----------------- -----------------------
NET LOSS BEFORE
INCOME TAXES (130,124) (302,062) (3,097,212)
INCOME TAXES 0 0 0
------------------ ----------------- -----------------------
NET LOSS $ (130,124) $ (302,062) $ (3,097,212)
================== ================= =======================
Net income (loss) per weighted
average share - operations $ (.02) $ (.03)
Net income (loss) per weighted
average share - other expenses .00 (.02)
------------------ -----------------
Net income (loss) per weighted
average share $ (.02) $ (.05)
================== =================
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 8,572,833 6,156,000
================== =================
</TABLE>
F-2
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional Stock During
Par Value $.001 Paid-in Subscription Development
Shares Amount Capital Receivable Stage
------------- ------------- --------------- --------------- ---------------
Balances at 5/3/88
<S> <C> <C> <C> <C> <C>
(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 loss 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
Sale of common stock (restricted) at $1.00
per share at 7/24/95 455,000 455 454,545
Costs associated with stock sales (100,000)
Issuance of common stock (restricted) at
$.001 per share for services at 11/30/95 25,000 25 (25)
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)
</TABLE>
F-3
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(continued)
<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 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
Issuance of common stock (Regulation S)
to pay interest expense and reduce debt
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 (100,000)
Sale of common stock (S-8) at $.75 per share
at 7/8/96 20,000 20 14,980
Net loss for year (1,973,145)
------------ ------------- --------------- --------------- ---------------
Balances at 12/31/96 8,539,500 8,540 2,260,710 0 (2,967,088)
Issuance of common stock (restricted) at
$.20 per share for interest expense at
2/28/97 100,000 100 19,900
Net loss for quarter (130,124)
------------ ------------- --------------- --------------- ---------------
Balances at 3/31/97 8,639,500 $ 8,640 $ 2,280,610 $ 0 $ (3,097,212)
============= ============= =============== =============== ===============
</TABLE>
F-4
<PAGE>
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
5/3/88
(Date of
Three Months Ended March 31, Inception) to
1997 1996 3/31/97
--------------- --------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net (loss) $ (130,124) $ (302,062) $ (3,097,212)
Adjustments to reconcile net (loss) to cash used
by operating activities:
Depreciation and amortization 1,184 9,047 17,286
Stock issued for expenses 20,000 0 106,044
Loss on investment 0 113,000 757,967
Changes in assets and liabilities:
Prepaid expenses 5,000 0 0
Accounts payable (1,327) (64,184) 6,794
Accrued expenses 91,800 0 375,600
Accrued interest payable 10,586 19,450 33,590
--------------- --------------- ----------------
NET CASH USED
BY OPERATING ACTIVITIES (2,881) (224,749) (1,799,931)
INVESTING ACTIVITIES
Purchase of equipment 0 (2,023) (30,147)
Purchase of investment 0 (71,213) (438,000)
Goodwill 0 (53,787) (331,000)
Organization costs 0 0 (50)
--------------- --------------- ----------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES 0 (127,023) (799,197)
FINANCING ACTIVITIES
Proceeds from sale of common stock 0 81,000 1,548,000
Loan proceeds 3,070 350,236 1,375,263
Loan repayments 0 (155,000) (323,238)
--------------- --------------- ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 3,070 276,236 2,600,025
--------------- --------------- ----------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 189 (75,536) 897
Cash and cash equivalents at beginning of year 708 81,326 0
--------------- --------------- ----------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 897 $ 5,790 $ 897
=============== =============== ================
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 0 $ 136 $ 419
=============== =============== ================
</TABLE>
During 1997, the Company issued 100,000 shares of restricted common stock to pay
$20,000 of interest expense.
F-5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Claire Technologies, Inc. March 31, 1997 financial
statements and is qualified in its entirety by reference to such
financial statements
</LEGEND>
<CIK> 0000894546
<NAME> Claire Technologies, Inc.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 897
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 897
<PP&E> 30,147
<DEPRECIATION> (6,203)
<TOTAL-ASSETS> 24,841
<CURRENT-LIABILITIES> 832,803
<BONDS> 0
0
0
<COMMON> 8,640
<OTHER-SE> (816,602)
<TOTAL-LIABILITY-AND-EQUITY> 24,841
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 99,538
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,586
<INCOME-PRETAX> (130,124)
<INCOME-TAX> 0
<INCOME-CONTINUING> (130,124)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (130,124)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
