UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter ended July 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
Commission file number - 0-25614
GLOBUS CELLULAR & USER PROTECTION, LTD.
(formerly Leridges International, Inc.)
(Exact name of Small Business Issuer in its charter)
NEVADA 88-0228274
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1980 Windsor Road
Kelowna, British Columbia, Canada V1Y 4R5
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code:
(604) 860-3130
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding twelve months (or such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
file such filing requirements for the past thirty days.
Yes x No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
3,297,241 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
-------- --------
GLOBUS CELLULAR & USER PROTECTION LTD.
PART I: Financial Information
ITEM 1 - Financial statements
ITEM 2 - Management's' discussion and analysis of
financial condition and results of operations
PART II: Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
PART I
Item 1. Financial Statements:
<TABLE>
Globus Cellular and User Protection Ltd.
Balance Sheet
July 31, 1996
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 136,982
Accounts receivable, trade 222,290
Inventories 65,216
Prepaid expenses 11,929
-----------
Total current assets 436,417
Property and equipment, at cost, less
accumulated depreciation of $28,132 132,872
-----------
$ 569,289
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Mortgage payable - bank $ 60,330
Accounts payable 64,123
Loans from stockholders 102,123
----------
Total current liabilities $ 226,576
Stockholders' equity:
Preferred stock, $.001 par value,
20,000,000 shares authorized, -
Common stock, $.001 par value,
100,000,000 shares authorized,
3,641,111 shares issued and
outstanding 3,641
Additional paid-in capital 1,991,452
Deficit (1,402,780)
-----------
342,713
-----------
$ 569,289
===========
</TABLE>
See accompanying notes to financial statements.
Globus Cellular and User Protection Ltd.
Statements of Operations
For the Three Months and Nine Months Ended July 31, 1996
<TABLE>
<CAPTION> Three Months Nine Months
Ended Ended
July 31 July 31
1996 1996
-------- --------
<S> <C> <C>
Sales $ 516,860 $ 563,368
Cost of sales 176,799 208,462
-------- ---------
Gross profit (loss) 340,061 354,906
Other costs and expenses:
General and administrative 333,461 597,178
Research and development 2,588 7,178
--------- ---------
336,049 604,356
----------- ---------
Income (loss)
from operations 4,012 (249,450)
Other income and (expense):
Interest income 518 1,254
Interest expense (2,252) (5,650)
Foreign exchange gain (loss) 5,551 2,763
----------- ----------
3,817 (1,633)
----------- ----------
Income (loss)
before income taxes 7,829 (251,083)
Provision for income taxes - -
----------- ----------
Net income (loss) $ 7,829 $ (251,083
========== ==========
Earnings (loss) per share:
Net income (loss) $ (0.00) $ (0.07)
========= =========
Weighted average
shares outstanding 3,578,606 3,390,489
========= =========
</TABLE>
See accompanying notes to financial statements.
Globus Cellular and User Protection Ltd.
Statements of Cash Flows
For the Nine Months Ended July 31, 1996
<TABLE>
Nine Months
Ended
July 31
1996
--------
<S> <C>
Net cash provided by (used in)
operating activities $ (95,417)
Cash flows from investing activities:
Purchase of equipment (11,800)
Other -
---------
Net cash provided by (used in)
financing activities (11,800)
Cash flows from financing activities:
Common stock sold for cash 96,850
Increase (repayment) of officer loans (9,500)
---------
Net cash provided by (used in)
financing activities 87,350
---------
Increase (decrease) in cash (19,867)
Cash and cash equivalents,
beginning of period 156,849
---------
Cash and cash equivalents,
end of period $ 136,982
=========
</TABLE>
See accompanying notes to financial statements.
Globus Cellular & User Protection, Ltd.
Notes to Financial Statements
Basis of presentation
The accompanying condensed unaudited financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to form 10-QSB. Accordingly, they do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair
presentation have been included.
The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full
year. The accompanying financial statements should be read in
conjunction with the Company's form 10-KSB filed for the year
ended October 31, 1995.
Income (loss) per share was computed using the weighted average
number of common shares outstanding.
During the period ended July 31, 1996 the Company issued 64,567
shares of its common stock pursuant to the exercise of warrants
for cash aggregating $96,850. In addition, during the period,
The Company issued 343,870 shares of its common stock as
compensation to consultants, pursuant to a registration statement
on Form S-8, filed in January 1996. The shares were valued at
the market price of the common stock on the date the issuance of
shares was authorized. The aggregate amount charged to
operations for these transactions was $438,238 of which $188,638 was
charged to operations for the nine months ended July 31, 1996. Form S-8
shares issued and issuable (95,000 shares valued at $118,750) to a financial
consultant are for a service contract with a two year term beginning April
15, 1996. Shares issued prior to the performance of contracted services are
accounted for as unpaid subscriptions to common stock.
The required financial information for the nine months ended July
31, 1995 is not included herein as the information necessary to
prepare these financial statements is not available.
Prior to the quarter ended July 31, 1996, the Company was
considered to be in its development stage.
GLOBUS CELLULAR & USER PROTECTION LTD.
PART I (cont.)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations:
Capital Resources and Liquidity.
The Company has emerged (October 18, 1994) from a Chapter 11
bankruptcy proceeding which it filed in March, 1993. Since the date of
filing of the bankruptcy proceeding, Company had been inactive and had
been engaged in no business. The acquisition of the assets of Globus
Cellular & User Protection Ltd., a Canadian corporation, put the Company
into the position of starting a new business.
Globus Cellular & User Protection Ltd. (Canada), a British Columbia
corporation, was incorporated on July 28, 1993. Thereafter, the
corporation acquired the patent rights to the cellular phone product (the
"C.U.P"), which it subsequently sold to Company pursuant to the Plan of
Reorganization, filed and approved by the U.S. Bankruptcy Court.
The Company completed a private sale of 500,000 common shares for
$500,000 in the third and fourth quarter of fiscal 1995 and has settled all
debts, including payment on the License of Technology to January 1, 1995.
The payment on License of Technology for the first six months of 1996 was
rescheduled by Dr. Bickert and the Company due to the expense being
incurred by the Company to secure world-wide patent protection on its
patent co-operation treaty filing. Additionally, the Company commenced
reselling of x-ray products (film, shielding garments, x-ray machines and
accessories) to generate an immediate input of additional revenues. The
Company believes that the proceeds of the sale of Common Stock and the
exercise of outstanding warrants will be sufficient to allow it to operate with
minimum revenues over the next twelve (12) months. However, such
proceeds will not allow the Company to commence full scale operations
regarding its planned C.U.P. product.
Long-term liquidity will be dependent on anticipated future revenue.
Additionally, the Company shall pursue a registration of its Common
Shares and Class "A" Warrants and will, in part, rely on the subsequent
exercise of said Warrants. Any additional funds raised and any revenues
received from sale of Company's products will enable Company to expand
its plan of operations by increasing its production and expanding its product
line.
During the period ended July 31, 1996, the Company issued 64,567 shares
of its restricted common stock pursuant to the exercise of warrants for cash
aggregating $96,850. Additionally, the Company repaid a portion of its
shareholder loans ($9,500) resulting in net cash provided by financing
activities of $87,350 for the nine months ended July 31, 1996.
The Company acquired plant and equipment valued at $11,800 for the
period ended July 31, 1996. This resulted in net cash used in investing
activities of $11,800. The Company does not anticipate purchasing any
additional plant or significant equipment and does not expect any significant
changes in the number of its employees, nor does Company expect to
perform any material product research and development during the next
twelve (12) months.
The Company is not presently aware of any known trends, events or
uncertainties that may have a material impact on net sales, revenues or
income from its operations. However, Company's product is new in the
market and there are not assurances it can be marketed successfully and/or
profitably.
The management of Company is led by Dr. Paul F. Bickert, Dr. Ronald
Armstrong and Bernard Penner. Dr. Bickert and Dr. Armstrong are both
doctors of chiropractic who have studied the principles, practice and use of
X-rays and have a thorough understanding of the nature of U.H.F.
radiation and the potential health risks to persons exposed to radiation over
long period of time. Mr. Penner owns and operates a large and highly
successful construction business and will provide quality control and
management skills to Company, which are necessary to develop a labor
force to manufacture and market Company's products.
Results of Operations.
The Company experienced a net loss from operating activities of $249,450
for the nine months ended July 31, 1996. Total Sales were $516,860 for
the three months ended July 31, 1996 and $563,368 for the nine months
ended July 31, 1996. Cost of Sales, however, were $176,799 and
$208,462 for the same periods respectively. Substantial selling, general
and administrative expenses of $333,461 were incurred for the three months
ended July 31, 1996 and $597,178 for the nine months ended July 30,
1996 due to the Company's increased operations. The Company expended
$2,588 on research and development expenses for the three months ended
July 31, 1996 and $7,178 for the nine months ended July 31, 1996 due to
the stage of development of the C.U.P. product and commencement of sale
of said product.
The Company experienced a net loss from operating activities of $706,368
for the year ended October 31, 1995. Total Sales increased from $4,411
for the year ended October 31, 1995 to $40,980 for the year ended October
31, 1995 due to increased operations. However, Cost of Sales increased
from $6,438 to $22,045 for those same periods respectively. Selling,
general and administrative expenses increased substantially to $690,600 for
the year ended October 31, 1995 compared to $224,982 for the same period
in 1994 due to the Company's increased operations. Research and
development expenses decreased from $148,573 for the year ended October
31, 1994 to $24,476 for the same period in 1995 due to the stage of
development of the C.U.P. product and commencement of sale of said
product.
The Company issued stock options for officer services of $272,679 for the
year ended October 31, 1995. Depreciation for the year ended October 31,
1995 was $12,421. For the year ended October 31, 1995, the Company
experienced an increase in accounts receivable of $6,008, an increase in
inventory of $31,570, and increase in prepaid expenses of $23,815 and a
decrease in accounts payable of $10,544, all due to increased operations.
Foreign exchange translation adjustment was $1,049 for the year ended
October 31, 1995. These items resulting in net cash used in operating
activities of $444,526 for the year ended October 31, 1995.
The Company experienced a net loss from operating activities of $375,335
for the Ten Months Ended October 31, 1994 compared to a net loss of
$70,627 for the year ended December 31, 1993. This increased loss is
mainly a result of the selling, general, administrative costs of consulting of
$48,137 and legal fees of $27,685 associated with the merger and royalty
and licensing fees of $87,183. Total Sales decreased for the Ten months
ended October 31, 1994 to $4,411 from $25,534 for the year ended
December 31, 1995 due to the Company's decision to cease the distribution
of its products by direct sale and instead engage in extensive research to
demonstrate effectiveness of its product and to make necessary
modifications to increase said effectiveness.. Additionally, Cost of Sales
have also decreased from $18,415 to $6,438 for those same periods
respectively. Selling, general and administrative expenses increased
substantially to $225,718 for the six months ended July 31, 1995 compared
to $14,454 for the year ended December 31, 1994 mainly as result of
consulting of $48,137 and legal fees of $27,685 associated with the merger
and royalty and licensing fees of $87,183. Research and development
expenses increased from $63,765 for the year ended December 31, 1993 to
$148,573 for the ten months ended October 31, 1993 due to the stage of
development of the C.U.P. product and commencement of sale of said
product.
GLOBUS CELLULAR & USER PROTECTION LTD.
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
None
(b) Reports on Form 8-K
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 25, 1996 /s/ Dr. Paul F. Bickert
----------------------------------
Dr. Paul F. Bickert, President
