<PAGE> 2
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, 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:
4,095,515 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
------- --------
<PAGE> 3
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
<PAGE> 4
PART I
Item 1. Financial Statements:
Globus Cellular and User Protection Ltd.
Balance Sheet
July 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 18,659
Accounts receivable, trade 13,733
Accounts receivable, other 7,559
Inventories 76,279
Prepaid expenses 5,000
Prepaid expenses - related party 3,119
---------
Total current assets 124,350
Property and equipment, at cost, less
accumulated depreciation of $38,397 45,071
Other assets 1,804
--------
$171,226
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,758
Loans from stockholders 141,757
--------
Total current liabilities 158,515
Stockholders' equity:
Preferred stock, $.001 par value,
20,000,000 shares authorized, -
Common stock, $.001 par value,
100,000,000 shares authorized,
4,095,515 shares issued and
outstanding 4,276
Additional paid-in capital 2,321,622
Stock subscriptions 206,430
Foreign exchange adjustment (3,487)
(Deficit) (2,516,130)
---------
12,710
---------
$ 171,226
=========
</TABLE>
See accompanying notes to financial statements.
<PAGE>5
Globus Cellular and User Protection Ltd.
Statements of Operations
Three Months and Mine Months Ended July 31, 1997 and 1996
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
July 31, July 31, July 31, July 31,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales $ 14,323 $ 516,860 $ 74,177 $ 563,368
Cost of sales 5,392 176,799 46,556 208,462
----------- ----------- ----------- -----------
Gross profit (loss) 8,931 340,061 27,621 354,906
Other costs and expenses:
General and administrative 218,477 331,461 663,362 597,178
Research and development 8,984 2,588 28,170 7,178
----------- ----------- ----------- -----------
227,460 336,049 691,531 604,356
----------- ----------- ----------- -----------
Income (loss) from operations (218,529) 4,012 (663,910) (249,450)
Other income and (expense):
Interest income 25 518 102 1,524
Gain on sale of building 5,604
Other income 9,335 5,551 22,897 2,763
Interest expense (190) (2,252) (2,439) (5,650)
----------- ----------- ----------- -----------
9,170 3,817 26,164 (1,633)
----------- ----------- ----------- -----------
Income (loss) before income taxes (209,359) 7,829 (637,746) (251,083)
Provision for income taxes
----------- ----------- ----------- -----------
Net income (loss) $ (209,359) $ 7,829 $ (637,746) $ (251,083)
=========== =========== =========== ===========
Earnings (loss) per share:
Net income (loss) $ (0.05) $ (0.00) $ (0.16) $ (0.07)
=========== =========== =========== ===========
Weighted average shares outstanding 4,223,830 3,578,606 4,074,391 3,390,489
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>6
Globus Cellular and User Protection Ltd.
Statements of Cash Flows
Nine Months Ended July 31, 1997 and 1996
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
July 31 July 31
1997 1996
-------- --------
<S> <C> <C>
Net cash provided by (used in)
operating activities $ (98,267) $ (95,417)
Cash flows from investing activities:
Purchase of equipment (18,465) (11,800)
----------- -----------
Net cash provided by (used in)
financing activities (18,465) (11,800)
Cash flows from financing activities:
Common stock sold for cash 48,073 96,850
Increase (repayment) of officer loans 47,309 (9,500)
----------- -----------
Net cash provided by (used in)
financing activities 95,382 87,350
----------- -----------
Increase (decrease) in cash (21,350) (19,867)
Cash and cash equivalents,
beginning of period 40,009 156,849
----------- -----------
Cash and cash equivalents,
end of period $ 18,659 $ 136,982
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>7
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, 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 $48,073.
In addition, the Company issued 86,190 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 shares issued in these transactions was $54,950.
Additionally, the Company issued restricted common stock as
compensation to consultants and others for services performed for
the Company aggregating 50,842 shares valued at $27,725, based on
the market value of the stock on the grant date.
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 nine months ended July 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 $101,250 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. Additionally one of the
officers received 110,720 shares of restricted common stock for
services rendered during the second quarter of the current fiscal
year and for payment of other amounts due him. The aggregate
value of the stock issued was $23,930.
During the quarter ended April 30, 1997, the Company sold its
interest the building used for its office and warehouse
activities to its president. The Company recorded a gain from
the transaction of $5,604. Corresponding reductions of mortgage
indebtedness of $60,960 and amounts due its president of $33,205
were recorded in connection with the transaction. The Company
plans to lease the facility from its president at market rates.
<PAGE> 8
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 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 six 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.
During the nine months ended July 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
$101,250 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. Additionally one of the
officers received 110,720 shares of restricted common stock for services
rendered during the second quarter of the current fiscal year and for
payment of other amounts due him. The aggregate value of the stock issued
was $23,930.
During the nine months ended July 31, 1997, the Company sold its interest
the building used for its office and warehouse activities to its president.
The Company recorded a gain from the transaction of $5,604. Corresponding
reductions of mortgage indebtedness of $60,960 and amounts due its president
of $33,205 were recorded in connection with the transaction. The Company
plans to lease the facility from its president at market rates.
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 nine months ended July 31, 1997, the Company issued 32,049 shares
of its restricted common stock pursuant to the exercise of warrants for cash
aggregating $48,073. Additionally, the Company received additional
shareholder loans ($47,309) resulting in net cash provided by financing
activities of $95,382 for the nine months ended July 31, 1997.
The Company acquired plant and equipment valued at $18,465 for the nine
months ended July 31, 1997. This resulted in net cash used in investing
activities of $18,465. 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.
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.
Results of Operations.
The Company experienced a net loss from operating activities of $98,267 for the
nine months ended July 31, 1997. Total Sales were $14,323 for the three
months ended July 31, 1997 and $74,177 for the nine months ended July 31, 1997.
Cost of Sales, however, were $5,392 and $46,556 for the same periods
respectively. Substantial selling, general and administrative expenses of
$218,477 were incurred for the three months ended July 31, 1997 and $663,362 for
<PAGE>9
the nine months ended July 31, 1997 due to the Company's increased operations.
The Company expended $8,984 on research and development expenses for the three
months ended July 31, 1997 and $28,170 for the nine months ended July 31, 1997
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 $95,417 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 $238,370 and $270,033 for the same periods
respectively. Substantial selling, general and administrative expenses of
$641,561 were incurred for the three months ended July 31, 1996 and $905,278 for
the nine months ended July 31, 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.
<PAGE>10
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: September 15, 1997 /s/ Dr. Paul F. Bickert
----------------------------------
Dr. Paul F. Bickert, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JUL-31-1997
<CASH> 18,657
<SECURITIES> 0
<RECEIVABLES> 21,292
<ALLOWANCES> 0
<INVENTORY> 76,279
<CURRENT-ASSETS> 124,350
<PP&E> 45,017
<DEPRECIATION> 38,397
<TOTAL-ASSETS> 171,226
<CURRENT-LIABILITIES> 158,515
<BONDS> 0
<COMMON> 4,276
0
0
<OTHER-SE> 8,434
<TOTAL-LIABILITY-AND-EQUITY> 171,226
<SALES> 74,177
<TOTAL-REVENUES> 74,177
<CGS> 0
<TOTAL-COSTS> 691,531
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,437
<INCOME-PRETAX> (637,746)
<INCOME-TAX> 0
<INCOME-CONTINUING> (637,746)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (637,746)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
