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 January 31, 1997
[ ] 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:
3,965,207 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:
Globus Cellular and User Protection Ltd.
Balance Sheet
January 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 44,876
Accounts receivable, trade 51,384
Accounts receivable, other 11,956
Inventories 76,321
Prepaid expenses - related party 3,191
-----------
Total current assets 187,728
Property and equipment, at cost, less
accumulated depreciation of $38,217 127,818
Other assets 1,804
-----------
$ 317,350
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Mortgage payable - bank $ 61,318
Accounts payable 46,015
Loans from stockholders 32,655
-----------
Total current liabilities 139,988
Stockholders' equity:
Preferred stock, $.001 par value,
20,000,000 shares authorized, -
Common stock, $.001 par value,
100,000,000 shares authorized,
3,965,207 shares issued and
outstanding 3,965
Additional paid-in capital 2,217,323
Common stock subscribed 304,636
Unpaid stock subscriptions (238,069)
Accumulated foreign exchange adjustment 8,030
Accumulated (deficit) (2,118,523)
-----------
177,362
-----------
$ 317,350
===========
</TABLE>
See accompanying notes to financial statements.
Globus Cellular and User Protection Ltd.
Statements of Operations
For the Three Months January 31, 1997 and 1996
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
January 31, January 31,
1997 1996
-------- --------
<S> <C> <C>
Sales $ 30,476 $ 23,020
Cost of sales 18,216 25,223
----------- -----------
Gross profit (loss) 12,260 (2,203)
Other costs and expenses:
General and administrative 242,065 121,058
Research and development 11,541 3,436
----------- -----------
253,606 124,494
----------- -----------
Income (loss) from operations (241,346) (126,697)
Other income and (expense):
Other income 2,508 660
Interest expense (1,301) (1,699)
----------- -----------
1,207 (1,039)
----------- -----------
Income (loss) before income taxes (240,139) (127,736)
Provision for income taxes - -
----------- -----------
Net income (loss) $ (240,139) $ (127,736)
=========== ===========
Earnings (loss) per share:
Net income (loss) $ (0.06) $ (0.04)
=========== ===========
Weighted average shares outstanding 3,952,388 3,264,957
=========== ===========
</TABLE>
See accompanying notes to financial statements.
Globus Cellular and User Protection Ltd.
Statements of Cash Flows
For the Three Months January 31, 1997 and 1996
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
January 31, January 31,
1997 1996
-------- --------
<S> <C> <C>
Net cash provided by (used in)
operating activities $ (53,869) $ (90,400)
Cash flows from investing activities:
Purchase of equipment (1,742) (1,842)
----------- -----------
Net cash provided by (used in)
financing activities (1,742) (1,842)
Cash flows from financing activities:
Common stock sold for cash 27,823 96,850
Increase (repayment) of officer loans 32,655 (47,328)
----------- -----------
Net cash provided by (used in)
financing activities 60,478 49,522
----------- -----------
Increase (decrease) in cash 4,867 (42,720)
Cash and cash equivalents,
beginning of period 40,009 156,849
----------- -----------
Cash and cash equivalents,
end of period $ 44,876 $ 114,129
=========== ===========
</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 January 31, 1997 the Company issued 1,823
shares of its common stock pursuant to the exercise of warrants
for cash aggregating $1,823. Also, options to purchase 100,000
shares of the Company's common stock issued to an officer during
the year ended October 31, 1995 were exercised for cash
consideration to the Company aggregating $26,000.
In addition, the Company issued 35,944 shares of its common stock
as compensation to consultants and employees, 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 value
of the 60,095 shares issued in these transactions was $35,944.
Form S-8 shares were issued to a financial consultant during the
year ended October 31, 1996 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 Company records monthly
expense of $17,130 related to the services it receives pursuant
to the contract and reduces the unpaid subscription account by a
corresponding amount.
During the quarter ended January 31, 1997, two of the Company's
officers agreed to forego cash payments for salary and technology
lease payments accrued during the quarter in exchange for common
stock of the Company. The restricted shares to be issued to the
officers in lieu of cash payments of $57,500 were valued at $.22
per share, an amount equal to one-half of the bid price for the
Company's common stock on the date the transaction was approved
by the Company's board of directors.
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 1996 and the first three months of 1997 was made by
the issuance of the Company's common stock to Dr. Bickert. 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 January 31, 1997, the Company issued 1,823 shares of its
restricted common stock pursuant to the exercise of warrants for cash
aggregating $1,823 and issued 100,000 shares of common stock pursuant to the
exercise of outstanding options at $.26 per common share. Additionally, the
Company borrowed $32,655 from an officer resulting in net cash provided by
financing activities of $60,478 for the three months ended January 31, 1997.
The Company acquired plant and equipment valued at $1,742 for the period ended
January 31, 1997. This resulted in net cash used in investing activities of
$1,742. 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 $241,346 for the
three months ended January 31, 1997. Total Sales were $30,476 for the three
months ended January 31, 1996 and did not vary significantly from the 1996
amount. Cost of Sales, however, were $18,216 and $25,223 for the same periods,
respectively. The reduction of these costs and the resulting gross profit
increase for the current year is due to increases in the selling price of
shielding products and the reduction of certain fixed costs included in cost of
sales in the prior year. No CUP products were sold during the periods
presented. Substantial selling, general and administrative expenses of
$242,065 were incurred for the three months ended January 31, 1997 due to the
Company's increased operations. This increase of $121,007 over the amount
incurred in the comparable period of 1996 ($121,058) is due to amounts paid to
consultants by the issuance of the Company's common stock. The Company
expended $11,541 and $3,426 on research and development expenses for the three
months ended January 31, 1997 and January 31, 1996, respectively.
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: March 23, 1997 /s/ Dr. Paul F. Bickert
----------------------------------
Dr. Paul F. Bickert, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 44,876
<SECURITIES> 0
<RECEIVABLES> 51,384
<ALLOWANCES> 0
<INVENTORY> 76,321
<CURRENT-ASSETS> 187,728
<PP&E> 127,818
<DEPRECIATION> 38,217
<TOTAL-ASSETS> 317,350
<CURRENT-LIABILITIES> 139,988
<BONDS> 0
<COMMON> 3,965
0
0
<OTHER-SE> 173,397
<TOTAL-LIABILITY-AND-EQUITY> 317,350
<SALES> 30,476
<TOTAL-REVENUES> 30,476
<CGS> 18,216
<TOTAL-COSTS> 271,822
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,301
<INCOME-PRETAX> (240,139)
<INCOME-TAX> 0
<INCOME-CONTINUING> (240,139)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (240,139)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
