FORM 10-QSB-QUARTERLY OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly period ended April 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the transition period from___________to___________
Commission File Number: 0-25024
TITAN TECHNOLOGIES, INC.
(Exact name of small business issuer as
specified in its charter)
NEW MEXICO 85-0388759
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3206 Candelaria Road NE. Albuquerque, NM 87107
----------------------------------------------
(Address of principal executive offices)
(505) 884-0272
---------------------------
(Issuer's telephone number)
N/A
- -------------------------------------------------------------------------------
(Former name, former address and former three-months, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 of the registrant's common stock outstanding as of May
25, 1997, was:
No Par Value Common 18,236,411
Transitional Small Business Format: Yes [ ] No [ X ]
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
April 30, 1997
UNAUDITED
ASSETS
Current Assets
Cash ............................................... $ 76,913
Accounts receivable - stockholder .................. 609
-----------
Total Current Assets .......................... 77,522
Property and Equipment, at cost
Furniture and fixtures ............................. 5,737
Machinery .......................................... 5,059
-----------
10,796
Less accumulated depreciation ...................... (7,766)
-----------
Net property and equipment .................... 3,030
-----------
$ 80,552
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ................................... $ 4,344
Note payable stockholder ........................... 112,000
Other accrued liabilities .......................... 12,437
-----------
Total Current Liabilities ..................... 128,781
Stockholders' Equity
Common stock - no par value; authorized,
50,000,000 shares; issued and
outstanding, 18,236,411 shares ..................... 1,160,694
Accumulated deficit ................................ (1,208,923)
-----------
(48,229)
-----------
$ 80,552
===========
The Accompanying Notes Are An Integral Part of These Financial Statements
2
<PAGE>
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended April 30
UNAUDITED
1997 1996
------------ ------------
REVENUES
Gain on sale of assets ................ $ -- $ --
Other income .......................... 1,492 4,965
------------ ------------
1,492 4,965
COSTS AND EXPENSES
General and administrative ............ 90,173 83,724
Outside services ...................... 11,807 10,246
Depreciation and amortization ......... 345 1,456
Interest .............................. 3,360 1,608
------------ ------------
105,685 97,034
------------ ------------
Income (loss) before income taxes ..... (104,193) (92,069)
Provision for income taxes ............ -- --
------------ ------------
Net income (loss) ..................... $ (104,193) $ (92,069)
============ ============
Weighted average common shares
outstanding (Note 2) ............. 18,236,411 17,989,497
============ ============
Net income (loss) per common share ......... $ 0.00 $ 0.00
============ ============
The Accompanying Notes Are An Integral Part of These Financial Statements
3
<PAGE>
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended April 30
UNAUDITED
1997 1996
------------ ------------
REVENUES
Gain on sale of assets ................ $ 162,678 $ --
Other income .......................... 7,282 15,420
------------ ------------
169,960 15,420
COSTS AND EXPENSES
General and administrative ............ 281,575 231,236
Outside services ...................... 30,978 34,959
Depreciation and amortization ......... 2,042 10,095
Interest .............................. 8,583 4,894
------------ ------------
323,178 281,184
------------ ------------
Income (loss) before income taxes ..... (153,218) (265,764)
Provision for income taxes ............ -- --
------------ ------------
Net income (loss) ..................... $ (153,218) $ (265,764)
============ ============
Weighted average common shares
outstanding (Note 2) ............. 18,236,411 17,989,497
============ ============
Net income (loss) per common share ......... $ 0.00 $ (0.02)
============ ============
The Accompanying Notes Are An Integral Part of These Financial Statements
4
<PAGE>
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended April 30
UNAUDITED
1997 1996
--------- ---------
Cash flows from operating activities
Interest received ............................. $ 7,282 $ 15,420
Cash paid for suppliers and subcontractors .... (304,178) (263,039)
Interest paid ................................. (8,583) (4,894)
--------- ---------
Net cash provided by (used in)
operating activities .......................... (305,479) (252,513)
Cash flows from investing activities
Acquisition of property and equipment ......... (2,322) --
Cash flows from financing activities
Payments on borrowing ......................... -- (893)
Proceeds from stockholder loan ................ 112,000 --
Proceeds from sale of common stock ............ -- 450,000
--------- ---------
112,000 449,107
--------- ---------
Net increase (decrease) in cash ............... (195,801) 196,594
Cash at beginning of year ..................... 272,714 169,493
--------- ---------
Cash at end of period ......................... $ 76,913 $ 366,087
========= =========
Reconciliation of Net earnings (loss) to
Cash Provided by (used in)
Operating Activities
Net earnings (loss) ........................... $(153,218) $(265,764)
Adjustments
Gain on sale of assets ........................ (162,678) --
Depreciation and amortization ................. 2,042 10,095
Changes in assets and liabilities
(Decrease) Increase
in accounts payable ...................... (749) (1,398)
Increase in interest payable .................. 7,238 3,728
Increase in accrued liabilities ............... 1,886 826
--------- ---------
Net cash provided by (used in)
operating activities ..................... $(305,479) $(252,513)
========= =========
Noncash investing and financing activities:
Certain rights and patents with a net book value of approximately $75,000
were transferred to the developer in exchange for notes payable, accrued
interest and other liabilities to the developer totaling approximately
$238,000.
The Accompanying Notes Are An Integral Part of These Financial Statements
5
<PAGE>
Titan Technologies, Inc. and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
For the Nine Months Ended April 30, 1997
1) NOTES TO FINANCIAL STATEMENTS
The balance sheet at April 30, 1997, and the statements of operations and cash
flow for the nine months ended April 30, 1997 and 1996 have been prepared
without audit. In the opinion of management, all adjustments, including normal
recurring adjustments necessary to present fairly the financial position,
results of operations and cash flows, 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 financial statements be read in conjunction
with the Company's audited financial statements at July 31, 1996. The results of
operations for the nine months ended April 30, 1997 are not necessarily
indicative of operating results for the full year.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net income (loss) per common share is calculated using the weighted average
number of share outstanding during each period.
3) ISSUANCE OF COMMON STOCK
On October 3, 1995 the company sold 1,111,111 shares of common stock to Wolfgang
Reiger Gembh, for which it received $450,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
- ---------------------
During the nine months ended April 30, 1997 and April 30, 1996, the company had
no licensing revenue. During the year ended July 31, 1996 the Company granted
tire recycling license rights for Europe, Australia, New Zealand and South
Africa to a company. The agreement requires the payment of licensee fees of
$1,500,000 to $2,500,000 to the Company for each plant constructed and royalties
of 3.5% of the gross sales price of by-products from the plants. No plants are
scheduled for construction at April 30, 1997. As a result of these activities by
management general and administrative expenses increased $50,339 to $281,575 and
outside services decreased $3,981 to $30,978 for the nine months ended April 30,
1997 as compared to the nine months ended April 30, 1996.
Financial Condition
- -------------------
The Company's liquidity decreased in the nine months ended April 30, 1997 as
cash decreased by $195,801 since July 31, 1996. Operations used $305,479
compared to the same period of the prior year in which operations used $252,513.
Based on the results of fiscal 1996 and its prospects for 1997, management
considers the Company's liquidity position adequate with funds sufficient to
meet its operating needs.
6
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
1. On June 17, 1996, the Company filed an action in the Second Judicial District
Court for Bernalillo County, New Mexico (Civil Action CV-96-6134) against Robert
Aragon and Anne Trawicky for fraud or negligent misrepresentation by them at the
time they issued a license to Aegis Technologies, a Company subsidiary, in
exchange for Company shares. At the time the Company shares were issued to Mr.
Aragon and Ms. Trawicky they represented to the Company that a license
previously issued to Aegis Technologies was in full force and effect. Subsequent
to the issuance of the Company shares to them, they informed the Company that
the license had expired prior to the date that Aegis Technologies was acquired
by the Company. Aegis' only business at the time of its acquisition by the
company was the ownership of the license. The defendants have denied the
allegations of the complaint and Ms. Trawicky has filed a counterclaim against
the Company seeking the removal of a stop-transfer instruction given by the
Company to its transfer agent relating to Ms. Trawicky's shares.
No time has yet been set for discovery in this matter. It is anticipated that
unless the matters can be settled by a mutually agreed release, discovery will
take place during fiscal 1997 and trial will not occur until some time
thereafter.
The Company knows of no other legal proceedings pending or threatened, or
judgement against any director or officer of the Company in their capacity as
such.
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS IN SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
7
<PAGE>
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits required by Item 601 of Regulation S-K
(b) Reports on Form 8-K. State whether any reports on Form 8-K have been
filed during the quarter for which this report is filed, listing the items
reported, any financial statements filed, and the dates of any such reports.
NONE
8
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TITAN TECHNOLOGIES, INC. AND SUBSIDIARIES
May 27, 1997 Ronald L. Wilder
-------------------------------------------------------
Ronald L. Wilder, President and Chief Executive Officer
May 27, 1997 Bruce R. Clark
--------------------------------------------------------
Bruce R. Clark, General Counsel, Chief Financial Officer
and Chief Accounting Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> APR-30-1997
<CASH> 76913
<SECURITIES> 0
<RECEIVABLES> 609
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 77522
<PP&E> 10796
<DEPRECIATION> 7766
<TOTAL-ASSETS> 80552
<CURRENT-LIABILITIES> 128781
<BONDS> 0
0
0
<COMMON> 1160694
<OTHER-SE> (1208923)
<TOTAL-LIABILITY-AND-EQUITY> 80552
<SALES> 0
<TOTAL-REVENUES> 169960
<CGS> 0
<TOTAL-COSTS> 312553
<OTHER-EXPENSES> 10625
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8583
<INCOME-PRETAX> (153218)
<INCOME-TAX> 0
<INCOME-CONTINUING> (153218)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (153218)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
