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 January 31, 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 March
5, 1998 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
January 31, 1999
UNAUDITED
ASSETS
Current Assets
Cash ............................................... $ 73,581
Note and interest receivable ....................... 25,366
Accounts receivable - stockholder .................. 609
-----------
Total Current Assets ...................... 99,556
Property and Equipment, at cost
Furniture and fixtures ............................. 5,407
Machinery .......................................... 7,706
-----------
13,113
Less accumulated depreciation ...................... 6,485
-----------
Net property and equipment ................ 6,628
$ 106,184
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ................................... $ 2,750
Other accrued liabilities .......................... 4,017
Deferred revenue ................................... 39,353
-----------
Total Current Liabilities ................. 46,120
Stockholders' Equity
Common stock - no par value; authorized,
50,000,000 shares; issued and
outstanding, 26,780,411 shares ..................... 1,785,669
Accumulated deficit ................................ (1,725,605)
-----------
60,064
-----------
$ 106,184
===========
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 January 31
UNAUDITED
1999 1998
------------ ------------
REVENUES
Plant licensing .......................... $ -- $ 39,353
Other income ............................. 17,054 182
------------ ------------
17,054 39,535
COSTS AND EXPENSES
General and administrative ............... 74,956 65,707
Outside services ......................... 2,129 1,020
Depreciation and amortization ............ 644 1,311
Interest ................................. -- 3,360
------------ ------------
77,729 71,398
------------ ------------
Income (loss) before income taxes ........ (60,675) (31,863)
Provision for income taxes ............... -- --
------------ ------------
Net income (loss) ........................ $ (60,675) $ (31,863)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 2) 26,780,411 21,962,824
============ ============
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 Six Months Ended January 31
UNAUDITED
1999 1998
------------ ------------
REVENUES
Plant licensing .......................... $ -- $ 39,353
Other income ............................. 17,919 1,041
------------ ------------
17,919 40,394
COSTS AND EXPENSES
General and administrative ............... 146,659 141,499
Outside services ......................... 2,963 12,733
Depreciation and amortization ............ 1,288 2,621
Interest ................................. 3,361 6,720
------------ ------------
154,271 163,573
------------ ------------
Income (loss) before income taxes ........ (136,352) (123,179)
Provision for income taxes ............... -- --
------------ ------------
Net income (loss) ........................ $ (136,352) $ (123,179)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 2) 25,541,906 21,962,824
============ ============
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 Six Months Ended January 31
UNAUDITED
1999 1998
--------- ---------
Cash flows from operating activities
Cash from customers .......................... $ -- $ 39,353
Other receipts ............................... 15,460 --
Interest received ............................ 2,459 1,041
Cash paid for suppliers and subcontractors ... (179,538) (147,375)
Interest paid ................................ (3,361) (6,720)
--------- ---------
Net cash provided by (used in)
operating activities ......................... (164,980) (113,701)
Cash flows from investing activities
Acquisition of property and equipment ........ -- (28,624)
Additions to notes receivable ................ (25,366) --
Cash flows from financing activities
Proceeds from sale of common stock ........... 218,500 145,000
Proceeds from stockholder loan ............... -- 12,350
--------- ---------
218,500 157,350
Net increase (decrease) in cash .............. 28,154 15,025
--------- ---------
Cash at beginning of year .................... 45,427 3,125
--------- ---------
Cash at end of period ........................ $ 73,581 $ 18,150
========= =========
Reconciliation of Net earnings (loss) to
Cash Provided by (used in)
Operating Activities
Net earnings (loss) .......................... $(136,352) $(123,179)
Adjustments
Depreciation and amortization ................ 1,288 2,621
Changes in assets and liabilities
(Decrease) increase
in accounts payable ....................... 1,836 1,682
Increase in interest payable ................. 3,361 6,720
(Decrease) increase in accrued liabilities ... 537 (1,545)
Decrease in stockholders payables ............ (35,650) --
--------- ---------
Net cash provided by (used in)
operating activities ...................... $(164,980) $(113,701)
========= =========
Noncash investing and financing activities:
During the six months ended January 31, 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.
During the six months ended January 31, 1999 stock was issued in
exchange for notes payable and accrued interest totaling $140,224.
The Accompanying Notes Are An Integral Part of These Financial Statements
Titan Technologies, Inc. and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended January 31, 1999
1) NOTES TO FINANCIAL STATEMENTS
The balance sheet at January 31, 1999, and the statements of operations for the
three months and six months ended January 31, 1999 and 1998 and statements of
cash flow for the six months ended January 31, 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 three months ended January 31, 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) 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
- ---------------------
During the three months ended January 31, 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 January 31,
1999. As a result of these activities by management general and administrative
expenses increased $5,160 to $146,659 and outside services decreased $9,770 to
$2,963 for the six months ended January 31, 1999 as compared to the six months
ended January 31, 1998.
Financial Condition
- -------------------
The Company's liquidity increased in the six months ended January 31, 1999 as
cash increased by $28,154 since July 31, 1998. Operations used $164,980 compared
to the same period of the prior year in which operations used $113,701.
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
customers, 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
March 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> 6-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 73581
<SECURITIES> 0
<RECEIVABLES> 25975
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 99556
<PP&E> 13113
<DEPRECIATION> 6485
<TOTAL-ASSETS> 106184
<CURRENT-LIABILITIES> 46120
<BONDS> 0
0
0
<COMMON> 1785669
<OTHER-SE> (1725605)
<TOTAL-LIABILITY-AND-EQUITY> 60064
<SALES> 0
<TOTAL-REVENUES> 17919
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 154271
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3361
<INCOME-PRETAX> (136352)
<INCOME-TAX> 0
<INCOME-CONTINUING> (136352)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (136352)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
