UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended July 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
Commission File Number: 0-25024
TITAN TECHNOLOGIES, INC.
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(Exact name of Registrant as specified in its charter)
New Mexico 85-0388759
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(State or other jurisdiction of (I.R.S. Employer
incorporation or other organization) (Identification No.)
3206 Candelaria Road, N.E., Albuquerque, New Mexico 87107
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(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 505-884-0272
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
No Par Value Common Stock
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(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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 [__].
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: $32,585.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of October 20, 2000: $6,011,545.
The number of shares outstanding of the Registrant's No Par Value common stock,
as of October 20, 2000, was: 33,786,561 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference herein:
Part II - Items 5(c), 6, 7, - Registrant's Annual Report for the fiscal
year ended July 31, 2000.
PartIII - Items 9, 10, 11, and 12 - Registrant's Definitive Proxy
Statement for the Annual Meeting of Shareholders to be held
on December 15, 2000.
<PAGE>
PART I
ITEM 1: DESCRIPTION OF BUSINESS
TITAN TECHNOLOGIES, INC.
ANNUAL REPORT TO SHAREHOLDERS
FOR THE FISCAL YEAR ENDED JULY 31, 2000
TITAN TECHNOLOGIES, INCORPORATED
Unless otherwise indicated, "the Company" and "Titan" are used in this report to
refer to the business of Titan Technologies, Incorporated.
TITAN'S BUSINESS
Summary
Titan Technologies, Incorporated was incorporated under the laws of New Mexico
on July 14, 1954. In its early years, the Company was involved in the uranium
industry under the original name of Titan Uranium Corporation. The corporate
name was changed in 1986 when Titan began to seek business opportunities in
other industries. In recent years, Titan has focused its efforts on several
recycling technologies, particularly in the area of tires, electronic scrap and
certain components of salvaged automobiles. Titan believes it has reached an
advanced stage of development of its tire recycling technology, which has now
been used in three plants, which have been built and operated in the Far East
(South Korea and Taiwan).
Historically, much of Titan's business was performed through Tire Recycling
Technologies Corporation ("TRTC"), formerly a wholly owned subsidiary which was
merged into Titan during 1999. TRTC was directly involved in licensing the
Company's proprietary technology, as well as construction of two plants in South
Korea. Both Korean plants have been shut down because of the economic downturn
in the South Korean economy and the insolvency of the owners, which was not
related to operation of the plants. The Company has been informally advised that
these plants would probably resume operations under different ownership, but the
change of ownership did not occur during the year. A third plant utilizing the
Company's tire recycling technology has now been in operation in Taiwan for
nearly two years by Forest All Industry Corporation. Although there has been
some difficulty in obtaining English translations of the operating results and
product information for Korean plants and the Taiwan plant, Forest All has
assured the Company that translated operating results and product information
will be furnished in the near future.
As described below, recycling of tires using the Titan technology results in
production of oil (similar in quality to fuel oil), scrap steel and carbon
black. Forest All reports that it has been easily able to market the oil and
carbon black into Asian markets and that it is stockpiling the scrap steel (a
minor part of production) for future disposal. Forest All has also advised the
Company that pilot plant research has successfully produced activated carbon
from the carbon black and that Forest All plans to implement commercial
production of activated carbon within the next few months, which is expected to
significantly improve the financial results of operation. The Company has not
yet received any written information concerning these results or plans but has
been assured by Forest All that such information will be forthcoming. See
"Products and Marketing" below.
During the last quarter of the fiscal year, Titan representatives visited the
Forest All plant in Taiwan with the objective of establishing a new tire
recycling plant in the United States (or other parts of the world) pursuant to a
joint venture between the parties. On June 27, 2000, Titan and Forest All
entered into a non-binding Letter of Intent to accomplish this objective, but
there can be no assurance that it will result in construction of a new plant in
the United States or elsewhere.
On the basis of the plant visit and subsequent discussions between the parties,
Titan believes that the Forest All operations to date have established the
commercial viability of the Company's tire recycling technology even though
Forest All modified the original plant design to accommodate geotechnical
restrictions imposed on construction by governmental authorities. In this
regard, Titan also believes that plant throughput can be improved and operations
simplified in a new plant by staying with original design specifications. Titan
and Forest All are also in general agreement as to several modifications, which
they believe can improve, plant efficiency and throughput in a new plant.
In December 1999, Titan also completed a new agreement with Skoda Klatovy s.r.o.
("Skoda"), a company in the Czech Republic, which is a wholly owned subsidiary
of a major Czech manufacturing, company. Titan has been working with Skoda for
more than 4 years on a project to build a tire recycling plant in Europe using
the Company's tire recycling technology and Skoda's expertise in civil
engineering and in construction and commissioning of industrial furnaces and
accessory equipment, including its willingness to guarantee mechanical
performance of a plant The agreement contemplated that Skoda would be able to
procure a customer for the first plant, including financing for the plant and
payment of an up-front licensing fee to the Company. Thereafter, Titan and Skoda
would undertake a joint venture to market and build additional plants in Europe,
with provisions for expanding the venture on a worldwide basis (subject to
certain exclusions) after successful operation of the initial plant.
To date, Skoda has been unable to procure a customer for the initial plant but
has completed preliminary engineering and some of the detailed engineering for
an initial plant in conformity with standards of the European Economic
Community. Skoda has advised Titan than its inability to date to procure a
customer has been primarily to due to reluctance of parties to finance the plant
without market guarantees for products, primarily carbon black. (See discussion
of "Products and Marketing" below) The agreement terminates on December 31, 2000
if Skoda has not been able to procure a binding commitment from a customer for a
plant on or before such date. Even if the agreement terminates, however, the
Company plans to remain in discussions with Skoda pending developments in
marketing of carbon products.
Titan continues its excellent working relationship with Adherent Technologies,
Inc. ("Adherent"), a research and development laboratory in Albuquerque which
has provided the Company with major assistance in developing its technologies
and product analysis. The President and principal shareholder of Adherent, Dr.
Ronald E. Allred, is a director and shareholder of the Company. During the year
the Company, Adherent and Dr. Allred executed a technical assistance agreement,
the terms of which are discussed in the Company's fiscal 2000 proxy material
under the heading "Certain Transactions." As a result of this agreement,
Adherent and Dr. Allred will receive a substantial percentage of all future
Company revenue that results primarily from advancements made to the technology
by Adherent's research and development efforts.
Business Development
The three plants in Asia have been constructed as a result of a marketing
agreement entered into during 1993 between Titan and Dowon Company, Ltd.
("Dowon"), a South Korean company affiliated with Dong Kook Steel Material
Company, Ltd. Pursuant to this agreement, the Company's tire recycling
technology was exclusively licensed to Dowon for use in Asia, except for certain
Asiatic portions of the Commonwealth of Independent States. In order to
encourage construction of plants and use of the TRTM technology, Titan
informally waived royalty rights for the two Korean plants but is entitled to
future production royalties from the Taiwan plant once it becomes fully
operational. Titan expects that the royalties will be set at 3.25% of sales for
the first two years of full operations and increase to 5% of sales thereafter.
As described above, however, certain design modifications made by Forest All
(out of necessity and without approval of the Company or Dowon) have impaired
the ability of the plant to achieve rated capacity and the Company cannot
predict when and if such royalties will in fact be paid.
The Company recently notified Dowon that it considers Dowon to be in continuous
default of the terms of the marketing agreement and that Titan intended to
cancel the agreement for all purposes. The default relates to the failure on the
part of Dowon to furnish information to Titan on a quarterly basis as required
by the agreement. As an alternative, Dowon has been offered the opportunity to
continue to market plants in Asia on a non-exclusive basis, but it must market
one plant each year in order for the agreement to continue in effect. At
present, the Company cannot predict the outcome of these negotiations but does
not believe resolution of the matter will materially affect development of its
tire recycling technology in the United States and Europe.
Titan has provided engineering and design assistance to Dowon for construction
of the plants and Titan has been reimbursed for its out-of-pocket costs and
expenses, including salaries for the engineering personnel involved.
Management intends that all future plants constructed and operated pursuant to a
license agreement, whether sold under a new arrangement with Dowon or otherwise,
will result in payment to the Company of a production royalty equal to 7.5% of
sales, plus a negotiated up-front fee per plant. However, in order to promote
continued development of its tire recycling technology (and other technologies),
Titan will retain the flexibility to modify these arrangements, as it deems
necessary. Titan plans on remaining actively involved in construction and
operation of future plants on a cost-plus basis in addition to receiving
licensing fees. As an alternative and as developments warrant, Titan may also
consider joint venture arrangements in which it would acquire, directly or
indirectly, an ownership interest in new plants.
In addition to its tire recycling technology, Titan has been working closely
with Adherent in developing new technologies for recycling electronic (computer)
scrap and waste plastic recovered from automobile salvage ("fluff"). Titan and
Adherent believe that the plastics contained in these materials can be recycled
and recovered in the form of marketable liquid and gaseous hydrocarbons. Also,
the electronic scrap contains recoverable metals, including precious metals.
Titan and Adherent believe that this technology has now been developed to a
point where a commercial pilot facility is warranted, particularly for the
electronic scrap, and are planning to devote a significant effort to
commercialization of the technology for recycling of these non-tire scrap and
waste items.
Description of Technology
The first step in all of the Company's recycling technology involves shredding
the feed waste using conventional equipment, which has been commercially proven
in many applications.
The Titan technology utilizes pyrolysis (together with a proprietary catalyst)
to recycle tires and other scrap material. Pyrolysis is a process, which breaks
down its raw material feed into basic products through a combination of elevated
temperature and other components, including absence of oxygen and use of a
proprietary catalyst. In the case of the Company's proprietary tire recycling
technology, pyrolysis is accomplished at lower temperatures than are normally
associated with conventional pyrolysis techniques for recycling. Titan's process
is referred to as a "tertiary" process because it reduces the tire feed to its
primary raw components, which consist of oil, steel and carbon black As
mentioned, the Titan technology uses a proprietary reactor catalyst in
connection with the pyrolysis process. The lower pyrolysis temperature allows
recovery of these products in marketable form and is the key to success of
plants using the technology. Titan also holds process patents covering the feed
and discharge components of its system, which it believes, represent an
advancement over conventional pyrolysis equipment. Although not trademarked, the
Titan tire recycling technology is often referred to informally as "TRTM"
technology.
In addition to its relatively low operating temperatures, the Company's
technology is regarded as environmentally friendly. The TRTM process is a closed
system and the only emissions are exhaust gases from clean-burning fuels (most
of which are generated by the process itself) and a small amount of dirt and ash
which is environmentally suitable for normal landfill. In fact, non-condensable
gases recovered using TRTM technology provide the fuel to generate required
process heat for pyrolysis.
The technology used to recover hydrocarbons, carbon and metals from electronic
scrap and automobile fluff also utilizes pyrolysis to recover the hydrocarbons
and carbon followed by other conventional processes to recover the metals.
Titan has also designed and built a fully operational mobile unit, which it has
used for research and development on most plastics, oil recovery from oil soaked
sand, the neutralization of poultry waste and other uses. Unlike laboratory
testing, this unit has the capacity to test large volumes of material and,
because it is mounted on a trailer, can be operated at any location. The Company
believes that it can manufacture and market this type of unit worldwide for oil
spill recovery and for processing animal waste.
Products and Marketing
Titan estimates that a single plant using TRTM technology at the rate of 100
tons of tires per day will produce on an annual basis:
(1) approximately 80,000 barrels of oil (34 degree API);
(2) approximately 3,300 tons of high quality scrap steel; and
(3) approximately 8,000 tons of carbon black.
The supply of tires available for recycle is virtually unlimited in terms of
plants processing 100 tons per day, and Titan believes that the commercial
viability of its TRTM technology and the resulting products has been fully
established through pilot plant operations and the three operating plants in
Asia.
Oil
Management believes that Titan has established a legitimate potential to become
a major player in the fields of oil production from recycling and alternative
energy production. The oil produced using TRTM technology is low in sulfur
content and viscosity (it flows readily at room temperature) and contains a high
percentage of "fuel" oils which are attractive for direct feed (without
blending) into refineries. Accordingly, the oil is readily marketable at prices
comparable to light, sweet crude oil. As an example of the dynamics of this new
source of energy, a stockpile of 165,000 tons of tires, not an uncommon number -
about a 5-year supply for a single TRTM plant -- contains more than 400,000
barrels of recoverable oil. Similarly, more than 250 million tires are being
disposed of annually in the United States, which represents a potential supply
of about 1 million barrels of recoverable oil per year.
Steel
The scrap steel recovered using TRTM technology is good quality carbon-steel
used in manufacturing tires and is also readily marketable. Except for having
been shredded, it is essentially the same steel wire, which was incorporated
into the original manufacture of tires. Although the quantity recovered in a 100
ton per day plant is relatively minor, it nevertheless represents about $300,000
per year in revenue recovered at minimal cost.
Carbon Products
Titan, working with its licensees and others, will be closely involved in the
effort to optimize the market for the third component of tire recycling, which
is commonly referred to as "carbon black."
Conventional carbon black is produced through controlled burning of natural gas
or oil (much like soot) and it relatively free of impurities. The largest use of
carbon black (by a significant margin) is for manufacture of tires, although
carbon black is also used extensively in production of ink, paint, shoe polish,
plastics, moldings, gaskets and similar applications in which a black product is
necessary or deemed desirable. Many different grades of carbon black are
produced, depending upon the intended use, but virtually all conventionally
produced carbon black is nearly ash-free.
The carbon black produced through TRTM pyrolysis consists of the various grades,
which went into manufacture of the tire. Because of the very fine physical
composition of the material, it is not realistically practicable to separate the
product by grade. In addition, carbon black produced through pyrolysis contains
varying amounts of ash attributable to other minor materials used in
manufacturing the tire.
Because relatively pure carbon black has been in abundant supply at all grades
(which determines price), there has been little incentive for carbon black
consumers to investigate use of pyrolysis-produced carbon black with its
impurities, since the product has not been commercially available in any event,
at least in any significant quantities.
The successful experience of Forest All in marketing carbon black in certain
Asian markets would seem to dictate a change in attitude on the part of carbon
black consumers for certain applications, including low-speed tires. Moreover,
it may well be possible to use TRTM carbon black in normal tire production in
the United States when blended with other grades of carbon black. Titan believes
that once a TRTM plant has been established in the United States or Europe,
there will be ample demand for the product once consumers have had an
opportunity to evaluate a steady and consistent supply of the product. In this
regard, TRTM carbon black, as a relative by-product, can be produced much
cheaper than conventional carbon black, which should be of major significance in
achieving market penetration once a plant is operational in the United States.
Nevertheless, Titan recognizes that the ability to market the carbon black (or a
further refined carbon product) into U.S. and European markets will be a key
factor in obtaining commitments for new plants in these geographical areas.
In order to enhance marketability of the carbon black which is produced through
the TRTM process, Titan (and Forest All) have been working on process additions
to pelletize the carbon black and convert it into activated carbon. Activated
carbon is a product, which is extensively used in water purification and
commands a significantly higher market price than the price for carbon black.
The results of this work are particularly important to Titan because the carbon
black recovered in the TRTM process is by far and away the largest portion of
material produced through tire recycling. The Company is encouraged as a result
of work conducted to date by its independent contractors and results reported by
Forest All, which has advised Titan that it plans to start up its activated
carbon circuit in the near future. The Company's own testing is being conducted
on a bulk sample of carbon black produced by Forest All in Taiwan and is
expected to be completed during November 2000 using commercially available
equipment. Although the activation process is expected to generate only about
50-60% of the product weight of the carbon black fed to process, this is more
than offset by the much higher market price and the ability to obtain a secure
market for product.
Once a plant is operating in the United States, Management is optimistic that
plants using its process will ultimately be able to develop a sufficient share
of the market for a number of carbon black applications in addition to sale of
activated carbon. Titan is fully aware of the significance of being able to
secure these markets and expects it will encounter strong resistance from
existing producers of carbon black to protect their current markets. However,
the Company believes that its costs of production will be less than those of
current producers of the product and that it will have access to available
markets for the product once consistent quality of its carbon has been
established commercially. In addition, the Company and Adherent have already
demonstrated at bench scale the technical ability to remove much of the ash
impurities from the carbon black and are optimistic that further work will allow
ash removal on a commercial scale, which would enhance product use in
applications requiring higher product specifications.
Review of 2000
Asia
The fiscal year ended July 31, 2000 was a year of continued progress for the
Company, particularly with respect to the operation of the plant in Taiwan,
which has now been operating for nearly two years. The Taiwan plant has
demonstrated the ability to operate on a continuous basis and is selling all of
the plant's oil and carbon black as it is produced. Titan is awaiting receipt of
English translations of operating results from the plant in order to analyze the
day-to-day production runs and product quality. However, based upon visits to
the plant and preliminary information furnished by the Forest All, the Company's
management is confident that a TRTM plant is capable of operating at design
capacity.
Titan enjoys an excellent relationship with its licensees and believes that the
work performed at the Taiwan plant has been useful in establishing a wider range
of operating parameters and capabilities for the TRTM technology. In this
regard, the Taiwan plant incorporated modifications to the process design, which
have further improved the overall technology, on the basis of observations made
from operation of the Korean plants. Such improvements are part of normal
commercial process development and the Company expects that further improvements
will be made as additional plants are constructed and operated.
Europe
Fiscal 2000 continued the adverse impact of the failure Environmental Solutions
Agency, Inc. ("ESA"), which had been licensed by Titan (and TRTC) to market the
Company's technology in Europe and other arenas in the world market for tire
recycling. These efforts collapsed following the arrest and prosecution of its
principles for bank fraud in Austria.
As previously reported by the Company, at the time this collapse, arrangements
were well advanced with Skoda construction of a TRTM plant in Austria under
license from Titan. As mentioned above, Skoda is a wholly-owned subsidiary of a
major manufacturing company in the Czech Republic and had performed a
significant amount of design and engineering work on the anticipated plant
construction pursuant to a 1996 Memorandum of Agreement with the Company, which
also terminated following the problems with ESA. During the year, discussions
with Skoda continued following their renewal in 1999, resulting in a new
agreement with the objective of construction of a plant in the Czech Republic
under direct license from Titan. Although there can be no assurance that
licenses for new plant construction and operation will result from these
efforts, the Company is very encouraged by the discussions and believes that
there is a strong level of European interest in the Titan TRTM technology.
Research and Development
Fiscal 2000 continued the long ongoing process of development by Titan's of
other recycling technologies for electronic scrap and plastics recovered from
automobile salvage fluff. These efforts have continually been conducted in
conjunction with Adherent and represent a significant potential for independent
recycling plants, as well as for expansion of plants based upon the TRTM
technology.
Outlook
During the fiscal year ending July 31, 2001, the Company's efforts will be
directed toward continued efforts with Forest All and others to optimize and
expand profitable operations in the North American, European and Asian markets.
This will include:
o Efforts to conclude contractual arrangements in Europe and Asia to
establish the Company's technologies for the TRTM technology.
o Additional research and development (working with Adherent) of Titan
technologies for recovery of salable products.
o Completion of preliminary arrangements to construction and operation of a
TRTM plant in the United States during the year.
o Establish financing for a North American market for the construction of a
TRTM plant designed for the specific purpose of recycling scrap electronics
and perhaps auto fluff.
Titan believes that its technologies offer an environmentally sound and
commercially viable solution for dealing with significant worldwide waste
disposal problems, which are growing at an alarming rate. For example, it is
estimated that more than 3 billion tires are now in U.S. dumps and that tire
stockpiles continue to grow at an ever-increasing rate. Similarly, little
thought has been given to disposal of computer waste and auto fluff, which
contains a large amount of non-biodegradable plastic waste. Through the Titan
processes, these can be converted into marketable hydrocarbon products. In
addition, electronic scrap contains several metals (including precious metals)
which Titan believes can be recovered and marketed on a commercially viable
basis based upon research and development work performed to date. Although a
considerable amount of additional research and development work must be
performed in order to confirm commercial viability of the electronic scrap and
auto fluff technologies, Titan and Adherent are very encouraged at the results
achieved to date and intend to continue work towards establishing commercial
processes in these technologies.
The Industry and the Registrant's Competition.
Tires.
Historically, scrap tires have been piled or buried, neither of which offer a
solution to disposal of scrap tires.
The scrap Tire Management Council in its Scrap Tire Use Disposal Study published
September 11, 1990, identified two basic areas in which waste tires have been
used in industry. Each of these areas has developed into separate industries
that will compete with the Registrant for tires. These areas and industries are:
(i) a substitute for traditional fossil fuels in cement kilns, paper mills,
utilities, and dedicated tire-to-energy facilities, and (ii) as an ingredient
for asphalt paving. Limited numbers of tires have been made into sandals and
other rubber products, but have not and probably will not contribute
significantly to waste tire disposal. Numerous companies now exist that are
using waste tires in their products, including, ball-point pens, video
cassettes, bulletin boards, flooring products, rubber mats, rubber protection
devices for marine applications, garden products, various forms of hoses, belts,
and similar products that have historically been made from new product. It is
unknown what percentage of used tires these competing products use, rubber.
Management believes that these products consume a very small percentage of the
more than 250 million scrap tires that are discarded in the United States each
year.
Management believes that as a substitute fuel, waste tires provide only marginal
savings for the user, while their use in asphalt paving has yet to be proven
viable or to meet the expectations that it will substantially extend asphalt
service life. At present, these industries consume less than twelve percent of
the waste tires discarded in this country each year.
With respect to recycling, the only technology at all comparable to that
developed by the Registrant is another type of pyrolysis. Such pyrolytic
facilities as currently exist in Japan and Germany, however, rely on government
subsidies because they involve significant capital outlays and operating costs
and are unable to handle any significant tonnage of scrap tire rubber. The Scrap
Tire Management Council has observed, "the volume capability of pyrolysis is
negligible". Furthermore, due to the high temperatures employed in pyrolysis,
the by-products recovered from the scrap tire rubber are of a lower, less
marketable quality than those derived through the TRTM process as demonstrated
at its Taiwan plant. Because the TRTM process operates efficiently at
temperatures of approximately 450 degrees Fahrenheit the oil and carbon black
recovered through the TRTM process undergo minimal degradation and have
correspondingly higher market value than pyrolytic byproducts.
The Registrant does not know of any other uses for the tires that might compete
with its business, however, continual research into the problem of waste tires
is continuing throughout the world and it should be anticipated that new and
novel approaches to a solution to the problem will, from time to time, be put
forward.
Management estimates that there is a market for approximately one hundred TRTM
tire recycling plants in the United States alone. This estimate is based on
demographic to scrap tire stockpile ratios indicating approximately 27.1 scrap
tires per capita of population. Given this figure, it appears that a population
base of approximately one million people will generate sufficient scrap tires to
sustain the operations of a TRTM recycling machine.
Preliminarily, marketing efforts in the United States have been focused on the
larger population centers. Management believes that because of the current
policies of providing incentives and inducements to promote recycling, market
conditions for its technology should continue to improve.
Plastics.
The technology developed by Titan with the Assistance of Adherent Technology is
now ready for implementation. The Registration is now looking to establish a
plastics recycling plant at some location in the United States, either on the
east or the west coast near major metropolitan areas. No specific location has
yet been selected and the funding for the initial plant has not yet been
arranged. Management believes that during the current fiscal year a site will be
selected and financing will be arranged for the construction of the initial
plant, either by the Registrant directly or through a license or joint venture
arrangement with others.
On December 1, 1999, the Registrant and Adherent Technology and Dr. Allred
reestablished the research and development parameters through which Adherent
operates to advance the Registrant's technology. Adherent and Dr. Allred were
granted a royalty of ranging from 1% to 5% on all proceeds received by the
Registrant from any tire recycling plant and 50% of all proceeds received by the
Registrant from any recycling plant for products other than tires. In addition,
the Registrant sold Dr. Allred 1,000,000 shares of its common stock for a
consideration of $10,000. Management believes that the continued relationship
with Adherent is to the Registrant's advantage and that the compensation given
to Adherent and Dr. Allred is reasonable in light of the substantial advances
that they have made in the Registrant's technology over the past 5 years. It is
anticipated that there will be a continual stream of new applications for the
technology in the future.
All developments relating to the technology belong to the Registrant.
Employees.
The Registrant has three full time employees, each of whom is presently paid at
the rate of $3,000 per month.
ITEM 2: DESCRIPTION OF PROPERTIES
The Registrant has the exclusive right to use the technology incorporated into
its TRTM plants and the right to develop such technology for the recycling of
plastics and other organic materials. In addition, the Registrant owns a
transportable research and development facility which has an estimated
replacement value of approximately $500,000. Since the plant was built for
research and development purposes, all plant expenditures have been charged to
operations. It also owns certain office furniture having an estimated
replacement value of approximately $12,000. Management believes that its
facility and equipment is adequate for the Registrant's needs at the present and
during the foreseeable future.
The Registrant leases approximately 2,150 square feet for its executive offices
located at 3206 Candelaria, N.E., Albuquerque, New Mexico 87107 at a month to
month rent of $3,500. The Registrant's Management believes that the executive
offices now leased by it will be adequate for the Registrant's business for the
near future.
ITEM 3: LEGAL PROCEEDINGS
At the date of this report there are no known legal proceedings pending, or
judgment against the Registrant or against any director or officer of the
Registrant in their capacity as such.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended July 31, 2000.
PART II
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information required by this item is incorporated by reference to the item in
the Registrant's Annual Report to Shareholders for the year ended July 31, 2000
entitled "Market Price and Dividends on the Company's Common Equity and Related
Stockholder Matters."
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The information required by this item is incorporated by reference to the item
in the Registrant's Annual report to Shareholders for the fiscal year ended July
31, 2000 entitled "Management's Discussion and Analysis of Financial Condition
and Results of Operation."
ITEM 7: FINANCIAL STATEMENTS
The information required by this item is incorporated by reference to the
Financial Statements in the Registrant's Annual Report to Shareholders for the
fiscal year ended July 31, 2000 which is attached as exhibit 13 to this report.
ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in or disagreements with Accountants of the kind
described by Item 304 of Regulation S-B at any time during the Registrant's two
(2) most recent fiscal years.
PART III
ITEM 9: DIRECTORS, EXECUTIVE OFFICERS PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The information required by this item is incorporated by reference to the items
in the Registrant's Definitive Proxy Statement for the 2000 Annual Meeting of
Shareholders entitled "Election of Directors" and "Directors and Executive
Officers". All reports required by Section 16(a) of the Exchange Act to be filed
during the fiscal year were filed.
ITEM 10: EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the item
in the Registrant's Definitive Proxy Statement for the 2000 Annual Meeting of
Shareholders entitled "Executive Compensation".
ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to the item
in the Registrant's Definitive Proxy Statement for the 2000 Annual meeting of
Shareholders entitled "Voting Securities and Principal Holders Thereof".
ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the item
in the Registrant's Definitive Proxy Statement for the 2000 Annual Meeting of
Shareholders entitled "Voting Securities and Principal Holders Thereof,"
"Executive Compensation" and "Certain Transactions."
ITEM 13: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Financial Statements, incorporated by reference to the Registrant's Annual
Report to Shareholders as of and for each of the two years in the period ended
July 31, 2000:
Report of Independent Certified Public Accountants
Balance Sheets
Statements of Operations
Statements of Stockholders' Equity (Deficit)
Statements of Cash Flows
Notes to Financial Statements
Exhibits:
The following exhibits are incorporated herein by reference to the Registrant's
Form 10-SB, File no. 0-25024
Exhibit
Number Title
3. Articles of Incorporation and By-laws.
(i) Articles of Incorporation:
Articles of Incorporation dated July 14, 1954.
Articles of Amendment to Articles of
Incorporation dated October 2, 1986.
(ii) By-laws currently in effect.
10. Material Contracts.
------------------
10.1 Consulting Agreement dated September 15, 1992, the
Registrant and Ronald E. Allred.
10.2 Purchase and Nonexclusive Licensing Agreement dated June 9,
1993, between the Registrants and Geotechnologies
Corporation and Dong Kook Steel Material Company, Ltd.
10.3 Technical License Agreement dated July 23, 1993, between the
Registrant and Hannam Co., Ltd.
10.4 Technical License Agreement dated July 23, 1993, between the
Registrant and Dong Kook Steel Material Co., Ltd.
10.5 Purchase and Nonexclusive Licensing Agreement dated July 21,
1994, between the Registrant and Geotechnologies
Corporation.
10.6 Purchase and Nonexclusive Licensing Agreement dated July 21,
1994, between the Registrant and Geotechnologies Corporation
and Southeast Environmental Tire Recycling Corporation.
The following exhibit is incorporated herein by reference to the Registrants
Annual Report on Form 10-KSB for the fiscal year ended July 31, 1995.
10.7 Option agreement between the Registrant and Joseph Henry
dated September 19, 1995.
The following exhibits are incorporated by reference to the Registrant's Annual
Report on Form 10-KSB for the fiscal year ended July 31, 1996:
10. 8 License Agreement as amended dated February 16, 1996, with
Environmental Solutions Agency, Inc., relating to Europe,
South Africa and North and South America.
10.9 Marketing and License Agreement dated March 19, 1996, with
Dowan Company, Ltd., relating to Asia.
10.10 Agreement dated April 25, 1996, with SKODA Klatovy S.P.D.,
relating to the construction of a TRTM recycling plant in
Austria.
10.11 Addendum to SKODA Klotovy S.P.D agreement. Agreement dated
April 25, 1996.
10.12 Irrevocable Option Agreement with Abtech Industries, LLC,
dated June 10, 1996.
10.13 Option agreement between the Registrant, Adherent
Technologies and Fiberite, Inc. dated September 4, 1996.
10.14 Promissory Note dated September 24, 1996.
Exhibits are filed with this Annual Report on Form 10-KSB.
10.15 Consulting Agreement between the Registrant and Adherent
Technology and Ronald Allred dated December 1, 1999.
13. Annual Report to Shareholders for the Fiscal year ended July
31, 2000.
21. Subsidiaries of the Small Business Issuer.
The Registrant has no subsidiaries
All other exhibits required by Item 601 of Regulation S-B are inapplicable to
this Registrant in this filing.
(b) Reports on Form 8-K:
No report on Form 8-K was filed by the Registrant during the last quarter
of the period covered by this report.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TITAN TECHNOLOGIES, INC.
By Ronald L. Wilder
-----------------------------------------------------
Ronald L. Wilder, President, Chief Executive Officer,
Chief Operating Officer, and Director
Dated October 20, 2000
By Robert Simon
-----------------------
Robert Simon, Secretary
Date: October 20, 2000
In accordance with the Exchange Act, this report has been signed below by the
following persons in behalf of the Registrant and in the capacities and on the
dates indicated.
By Ronald L. Wilder
--------------------------
Ronald L. Wilder, Director
Date: October 20, 2000
By Ronald E. Allred
------------------------------
Dr. Ronald E. Allred, Director
Date: October 20, 2000
By Jelle deBoer
--------------------------
Dr. Jelle deBoer, Director
Date: October 20, 2000
