<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 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
--------- --------
<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 Ltd.
Balance Sheet
January 31, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 301,596
Accounts receivable, trade 4,662
Accounts receivable, other 8,708
Inventories 60,509
Prepaid expenses 29,107
Prepaid expenses - related party -
-----------
Total current assets 404,581
Property and equipment, at cost, less
accumulated depreciation of $34,893 57,748
Other assets 22,860
-----------
$ 485,190
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 31,013
Loans from stockholders 151,844
-----------
Total current liabilities 182,857
Stockholders' equity:
Preferred stock, $.001 par value,
20,000,000 shares authorized, -
Common stock, $.001 par value,
100,000,000 shares authorized,
6,960,813 shares issued and
outstanding 7,156
Additional paid-in capital 3,354,410
Stock subscriptions (36,345)
Foreign exchange adjustment (21,467)
(Deficit) (3,001,421)
-----------
302,333
-----------
$ 485,190
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>5
Globus Cellular Ltd.
Statements of Operations
Three Months Ended January 31, 1998 and 1997
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
January 31, January 31,
1998 1997
-------- --------
<S> <C> <C>
Revenue:
Sales $ 19,268 $ 30,476
Other income 1,378 2,508
----------- -----------
20,646 32,984
Other costs and expenses:
Cost of sales 15,578 18,216
General and administrative 229,930 242,065
Research and development 11,041 11,541
----------- -----------
256,548 271,822
----------- -----------
Income (loss) from operations (235,903) (238,838)
Other income and (expense):
Interest expense (2,799) (1,301)
----------- -----------
(2,799) (1,301)
----------- -----------
Income (loss) before income taxes (238,702) (240,139)
Provision for income taxes - -
----------- -----------
Net income (loss) $ (238,702) $ (240,139)
=========== ===========
Basic (loss) per share:
Net income (loss) $ (0.03) $ (0.06)
=========== ===========
Weighted average shares outstanding 7,112,634 3,952,388
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>6
Globus Cellular Ltd.
Statements of Cash Flows
Three Months Ended January 31, 1998 and 1997
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
January 31, January 31,
1998 1997
-------- --------
<S> <C> <C>
Net cash provided by (used in)
Operating activities (69,954) (53,869)
--------- ---------
Cash flows from investing activities:
Purchase of equipment (32,889) ( 1,742)
Trademark costs 1,888 -
________ _________
Net cash provided by (used in)
investing activities (31,002) ( 1,742)
Cash flows from financing activities:
Common stock sold for cash 59,199 27,823
Increase in officer loans - 32,655
Repayment of officer loans (5,780) -
_________ __________
Net cash provided by (used in)
financing activities (53,419) 60,478
___________ __________
Increase (decrease) in cash (47,537) 4,867
Cash and cash equivalents,
beginning of period 349,133 40,009
--------- -------
Cash and cash equivalents,
end of period $ 301,596 $ 44,876
======== =======
Supplemental cash flow information:
Cash paid for interest $ 2,799 $ 1,301
Cash paid for income taxes $ - $ -
</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, 1997.
Stockholders equity
Basic (loss) per share was computed using the weighted average
number of common shares outstanding.
During the period ended January 31, 1998 the Company issued
53,271 shares of its common stock pursuant to a registration
statement on Form S-8. The shares issued were valued at $49,375
based on quoted market prices at the date the shares were
authorized for issuance. Additionally during the quarter, the
Company issued 19,500 shares of its restricted common stock for services
provided tot he Company valued at $13,467, completed the private sale of
72,500 shares of restricted common stock for net cash proceeds of $50,949,
and issued 50,000 shares of restricted common stock pursuant to the exercise
of stock options for which the Company received $8,250 in cash
During the quarter ended January 31, 1998, the Company continued
to amortize unpaid stock subscriptions for shares issued in prior
periods for future services. An aggregate of $36,345 of
consulting services and directors compensation is included in
general and administrative expense for the quarter.
<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 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, the 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.
During the three months ended January 31, 1998, the Company purchased
equipment valued at $32,889 and paid trademark costs of $1,888. As a
result, net cash used in investing activities was $31,002 for the three
months ending January 31, 1998.
The Company acquired plant and equipment valued at $3,595 for the year ended
October 31, 1997. The Company expended $1,804 on trademark costs. This
resulted in net cash used in investing activities of $16,893.
During the three months ended January 31, 1998, the Company sold common stock
for cash of $59,199 and repaid $5,780 of officer loans. As a result, the
Company has net cash used in financing activities of $53,419.
The Company received $501,898 from the sale of its common stock for the year
ended October 31, 1997. The Company experienced an increase of officer loans
of $68,000 and a repayment of officer loans of $18,180 for the year ended
October 31, 1997. As a result, the Company had net cash provided by financing
activities of $552,718 for the year ended October 31, 1997.
During the year ended October 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 384,140 shares of the Company's common stock
previously issued to an officer were exercised for cash consideration to the
Company aggregating $62,864.
In addition, the Company issued 198,298 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 $160,426. Additionally, the Company issued restricted common stock as
compensation to consultants and others for services performed for the Company
aggregating 274,095 shares valued at $104,542, based on the market value of
the stock on the grant date discounted by 50% due to their restricted nature.
During the year ended October 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 August 1997, the Company commenced a private offering of its common
stock, restricted for a period of eighteen months, to a limited group of
Canadian investors. The Company received net proceeds of $438,211 for the
sale of 830,000 shares of common stock. The shares were sold in a unit
offering which provided for a total of 2,500,000 units to be sold at a price
of $.56 per unit. Each unit consists of one share of common and a warrant to
purchase an additional share of stock. The warrants are exercisable at $.875
each and expire if not exercised within a two year period of their issue date.
At October 31, 1997 the Company had received subscription agreements for the
sale of $85,898 of the common stock the payment for which was received
subsequent to that date. This amount is included in accounts receivable other
at October 31, 1997 and the corresponding shares are included in
stockholders' equity. Subsequent to October 31, 1997, the Company sold an
additional 77,500 shares of common stock for net proceeds of $58,000.
No dividends have been declared since the inception of the Company nor does
the Company anticipate that dividends will be declared in the ensuing fiscal
year.
<PAGE>9
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.
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. For the three months ended January 31, 1998.
Total sales decreased from $281,059 for the year ended October 31, 1996 to
$90,630 for the year ended October 31, 1997 due to the one time sale of
C.U.P. product in 1996 and distributorship sales in 1996 that did not occur in
1997. However, cost of sales decreased from $233,202 to $67,571 for
those same periods respectively. Selling, general and administrative
expenses decreased slightly to $856,545 for the year ended October 31, 1997
compared to $898,939 for the same period in 1996 due to accounting fees of
$22,610, advertising of $9,125, consulting of $403,177, legal of $26,031,
management contract payments of $92,858, technology lease expense of
$120,000, travel of $25,386 and miscellaneous office expenses of $157,341.
Research and development expenses increased from $13,220 for the year ended
October 31, 1996 to $78,789 for the same period in 1997 due to the stage of
development of the antenna product.
For the year ended October 31, 1997. Total sales decreased from $30,476 for
the three months ended January 31, 1997 to $19,268 for the three months ended
January 31, 1998. However, cost of sales decreased from $2,508 to $1,378 for
those same periods respectively. Selling, general and administrative
expenses decreased slightly to $229,930 for the three months ended January 31,
1998 compared to $242,065 for the same period in 1997 due to accounting fees
of $9,040, advertising of $6,760, consulting of $122,008, legal of $9,285,
management contract payments of $27,500, technology lease expense of $30,000,
travel of $6,605 and miscellaneous expenses of $18,632. Research and
development expenses stayed approximately the same at $11,541 for the three
months ended January 31, 1997 and $11,041 for the same period in 1997.
<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: March 16, 1998 /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-31-1998
<PERIOD-END> JAN-31-1998
<CASH> 301,596
<SECURITIES> 0
<RECEIVABLES> 13,700
<ALLOWANCES> 0
<INVENTORY> 60,509
<CURRENT-ASSETS> 404,581
<PP&E> 57,748
<DEPRECIATION> 34,893
<TOTAL-ASSETS> 485,190
<CURRENT-LIABILITIES> 182,857
<BONDS> 0
<COMMON> 7,156
0
0
<OTHER-SE> 3,354,410
<TOTAL-LIABILITY-AND-EQUITY> 485,190
<SALES> 19,268
<TOTAL-REVENUES> 20,646
<CGS> 15,578
<TOTAL-COSTS> 15,578
<OTHER-EXPENSES> 240,971
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,799
<INCOME-PRETAX> (238,702)
<INCOME-TAX> 0
<INCOME-CONTINUING> (238,702)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (238,702)
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
