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, 1999
[ ] 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 June 5,
1999 was:
No Par Value Common 26,780,411
Transitional Small Business Format: Yes No X
--- ---
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
April 30, 1999
UNAUDITED
ASSETS
Current Assets
Cash .................................................. $ 27,066
Note and interest receivable .......................... 25,732
Accounts receivable - stockholder ..................... 609
-----------
Total Current Assets ............................. 53,407
Property and Equipment, at cost
Furniture and fixtures ................................ 5,407
Machinery ............................................. 7,706
-----------
13,113
Less accumulated depreciation ......................... 7,129
-----------
Net property and equipment ....................... 5,984
-----------
$ 59,391
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ...................................... $ 2,676
Other accrued liabilities ............................. 3,710
Deferred revenue ...................................... 39,353
-----------
Total Current Liabilities ........................ 45,739
Stockholders' Equity
Common stock - no par value; authorized,
50,000,000 shares; issued and
outstanding, 26,780,411 shares ........................ 1,785,669
Accumulated deficit ................................... (1,772,017)
-----------
13,652
-----------
$ 59,391
===========
The Accompanying Notes Are An Integral Part of These Financial Statements
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended April 30
UNAUDITED
1999 1998
------------ ------------
REVENUES
Loss on sale of assets ............. $ -- $ (174)
Other income ....................... 18,595 4,541
------------ ------------
18,595 4,367
COSTS AND EXPENSES
General and administrative ......... 63,248 64,562
Outside services ................... 1,115 --
Depreciation and amortization ...... 644 (1,130)
Interest ........................... -- 3,360
------------ ------------
65,007 66,792
------------ ------------
Income (loss) before income taxes .. (46,412) (62,425)
Provision for income taxes ......... -- --
------------ ------------
Net income (loss) .................. $ (46,412) $ (62,425)
============ ============
Weighted average common shares
outstanding, basic and
diluted (Note 2) .............. 26,780,411 22,002,593
============ ============
Basic and diluted (loss) per common share $ 0.00 $ 0.00
============ ============
The Accompanying Notes Are An Integral Part of These Financial Statements
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended April 30
UNAUDITED
1999 1998
------------ ------------
REVENUES
Plant licensing .................... $ -- $ 39,353
Loss on sale of assets ............. -- (174)
Other income ....................... 36,514 5,582
------------ ------------
36,514 44,761
COSTS AND EXPENSES
General and administrative ......... 209,907 206,061
Outside services ................... 4,078 12,733
Depreciation and amortization ...... 1,932 1,491
Interest ........................... 3,361 10,080
------------ ------------
219,278 230,365
------------ ------------
Income (loss) before income taxes .. (182,764) (185,604)
Provision for income taxes ......... -- --
Net income (loss) .................. $ (182,764) $ (185,604)
============ ============
Weighted average common shares
outstanding, basic and diluted
(Note 2) ...................... 25,945,667 22,002,593
============ ============
Basic and diluted (loss) per common share $ (0.01) $ (0.01)
============ ============
The Accompanying Notes Are An Integral Part of These Financial Statements
Titan Technologies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended April 30
UNAUDITED
1999 1998
--------- ---------
Cash flows from operating activities
Cash from customers .......................... $ -- $ 39,353
Other receipts ............................... 33,245 4,423
Interest received ............................ 3,269 1,159
Cash paid for suppliers and
subcontractors ........................... (244,283) (183,154)
Interest paid ................................ (3,361) (10,080)
--------- ---------
Net cash provided by (used in)
operating activities ..................... (211,130) (148,299)
Cash flows from investing activities
Acquisition of property and equipment ........ -- (32,277)
Proceeds from sale of assets ................. -- 24,606
Additions to notes receivable ................ (25,732) --
--------- ---------
(25,732) (7,761)
Cash flows from financing activities
Proceeds from sale of common stock ........... 218,500 157,250
Proceeds from stockholder loan ............... -- 12,350
--------- ---------
218,500 170,000
Net increase (decrease) in cash .............. (18,362) 14,030
--------- ---------
Cash at beginning of year .................... 45,427 3,125
--------- ---------
Cash at end of period ........................ $ 27,065 $ 17,155
========= =========
Reconciliation of Net Loss to Net Cash
Used in Operating Activities
Net (loss) .................................. $(182,764) $(185,604)
Adjustments
Loss on sale of assets ....................... -- (174)
Depreciation and amortization ................ 1,932 1,491
Changes in assets and liabilities
Increase in accounts payable ................. 1,762 5,023
Increase in interest payable ................. 3,361 10,080
Increase in accrued liabilities .............. 230 20,537
Decrease in stockholders payables ............ (35,650) --
--------- ---------
Net cash used in operating activities ........ $(211,130) $(148,299)
========= =========
Noncash investing and financing activities:
During the nine months ended April 30, 1999 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
Titan Technologies, Inc. and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
For the Nine Months Ended April 30, 1999
1) NOTES TO FINANCIAL STATEMENTS
The balance sheet at April 30, 1999, and the statements of operations for the
three months and nine months ended April 30, 1999 and 1998 and statements of
cash flow for the nine months ended April 30, 1999 and 1998 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, 1998. The results of
operations for the nine months ended April 30, 1999 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
In August 1997 the Company sold 580,000 shares of common stock for which it
received $145,000.
During the six months ended January 31, 1999 the Company sold 2,185,000 shares
of common stock for which it received $218,500.
On October 20, 1998 the Company settled a lawsuit and the parties agreed to the
following:
(a) 1,000,000 shares of stock previously issued for sale in Europe would be
returned to the Company;
(b) a creditor canceled the obligation of the Company in exchange for 2,500,000
shares of the Company's stock. The debt and accrued interest totaled $140,224.
4) CERTAIN TRANSACTIONS
In order to raise working capital, on April 23, 1998, the company sold a truck
to Jeff Wilder, an employee of Tire Recycling Technologies Corp., for $16,830
and the forgiveness of one month's salary due but unpaid to Jeff Wilder. Jeff
Wilder granted Tire Recycling Technologies Corp. the right to continue to use
the truck for its business purposes and the right to repurchase the truck by
assuming the amount of the loan and repaying all payments made by Jeff Wilder on
the bank note signed by him to finance his purchase of the truck. Jeff Wilder is
the son of Ronald L Wilder, the President of Tire Recycling Technologies Crop.
On May 22, 1998, the Company granted an option to purchase 300,000 shares of its
common stock to Jeff Wilder and to Dana Finley, both of whom are full-time
Company employees. Each option grants the holder the right, for a period of five
years from the date of the option, to purchase all or any part of 300,000 shares
of the Company's stock at an exercise price per share of $0.24, the market price
of the Company's stock on May 22, 1998.
The Company granted an option to purchase 300,000 shares of the Company's common
stock to Dr. Ronald Allred, in recognition of the time and effort devoted by him
and by Adherent Technology to advancing the Company's technology. The option
grants the holder the right, for a period of five years from the date of the
option, to purchase 300,000 shares of the Company's common stock at an exercise
price per share of $0.24. The option may be exercised at any time, or from time
to time, for all or any pert of the shares subject to the option.
5) LOSS PER SHARE
Loss per common share is computed using the weighted average number of common
shares outstanding during the period. The Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share " during the quarter ended
January 31, 1998. Since the Company has only common stock outstanding, the
adoption of this standard had no significant effect on the Company's financial
statements.
The Company merged with its wholly owned subsidiary, Tire Recycling Technologies
Corporation, effective April 26, 1999. The subsidiary was dissolved as of that
date.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
During the nine months ended April 30, 1999, 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.
As a result of certain acts by the principals of that company, the Registrant
exercised its right to terminate the license agreement. Other persons who have
been assisting the licensee in establishing its plant in Austria have expressed
their desire to continue with the project under a new license. The Registrant
has, in principle, agreed with that proposal, but no new license agreement has
yet been negotiated. No plants are scheduled for construction at April 30, 1999.
As a result of these activities by management general and administrative
expenses increased $3,846 to $209,907 and outside services decreased $8,655 to
$4,078 for the nine months ended April 30, 1999 compared to the nine months
ended April 30, 1998.
Financial Condition
The Company's liquidity decreased in the nine months ended April 30, 1999 as
cash decreased by $18,362 since July 31, 1998. Operations used $211,130 compared
to the same period of the prior year in which operations used $148,299.
Year 2000 Issue
Many existing computer programs use only two digits to identify a year in the
date field (i.e. 12/31/99). These programs were designed and developed without
considering the impact of the upcoming change in the century. If not corrected,
many computer applications could fail or create erroneous results by or at the
Year 2000 (the "Year 2000 Issue").
The Company has addressed the Year 2000 Issue relating to its business, its
operations (including operating systems) and its relationships with its
suppliers and other constituents. All computer software used to process the
company's financial, accounting and reporting information are presently
compliant in this issue. The Company has no significant electronic interaction
with its customers, suppliers, creditors or financial service organizations.
Management does not expect that the Year 2000 Issue, or the cost of addressing
it will have a material impact on its business, operations or financial
condition. However, management intends to review, on an ongoing basis, whether
there are any changes in anticipated costs, problems or uncertainties associated
with the Year 2000 Issue.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The only legal proceedings to which the Registrant is a party to or of which any
of its property is subject to, or is pending or known to be contemplated are the
following:
1. Recently the Company received a demand for money and a threat of litigation
from a law firm in California representing a client claiming that through a
contract with Don Won Company, Inc., a Korean corporation, he is entitled
to a fee resulting from the sale of a TRTM-60 plant to purchasers in
Taiwan. The Company has asked for additional clarification but has not yet
received a response.
The Company knows of no other legal proceedings pending or threatened or
judgement against any director or officer of the Registrant 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
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
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
June 7, 1999 Ronald L. Wilder
-----------------------------------------------------------
Ronald L. Wilder, President, Chief Executive Officer, Chief
Financial Officer and Chief Accounting Officer.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> APR-30-1999
<CASH> 27066
<SECURITIES> 0
<RECEIVABLES> 26341
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53407
<PP&E> 13113
<DEPRECIATION> 7129
<TOTAL-ASSETS> 59391
<CURRENT-LIABILITIES> 45739
<BONDS> 0
0
0
<COMMON> 1785669
<OTHER-SE> (1772017)
<TOTAL-LIABILITY-AND-EQUITY> 59391
<SALES> 0
<TOTAL-REVENUES> 36514
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 219278
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3361
<INCOME-PRETAX> (182764)
<INCOME-TAX> 0
<INCOME-CONTINUING> (182764)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (182764)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
