<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, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THEE EXCHANGE ACT
For the transition period to
Commission file number - 0-25614
GLOBUS CELLULAR, LTD.
(FORMERLY GLOBUS CELLULAR & USE PROTECTION, LTD.
And LERIDGES INTERNATIONAL, INC.)
(Exact name of Small Business Company in its charter)
NEVADA 88-0228274
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1955 Moss Court,
Kelowna, British Columbia, Canada V1Y 9L3
(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:
6,856,583 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
--------- --------
<PAGE>3
GLOBUS CELLULAR, 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, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 20,655
Accounts receivable, other 4,934
Inventories 2,548
Prepaid expenses 8,357
Net assets of discontinued operation 52,566
-----------
Total current assets 89,059
Property and equipment, at cost, less
accumulated depreciation of $55,293 58,836
Other assets 26,410
-----------
$ 174,305
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,363
Notes payable 1,691
Loans from stockholders 464,603
-----------
Total current liabilities 477,656
Stockholders' equity:
Preferred stock, $.001 par value,
20,000,000 shares authorized, -
Common stock, $.001 par value,
100,000,000 shares authorized,
6,856,583 shares issued and
outstanding 6,857
Additional paid-in capital 3,353,647
Stock subscriptions -
Foreign exchange adjustment (10,088)
(Deficit) (3,653,767)
-----------
(303,352)
-----------
$ 174,305
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>5
Globus Cellular Ltd.
Statements of Operations
Three Months Ended January 31, 1999 and 1998
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
January 31, January 31,
1999 1998
------------ -----------
<S> <C> <C>
Revenue:
Other income $ 147 $ 615
----------- -----------
147 615
Other costs and expenses:
General and administrative 151,348 227,634
Research and development 10,065 11,041
----------- -----------
161,413 238,675
----------- -----------
Income (loss) from operations (161,266) (238,060)
Other income and (expense):
Interest expense (825) (2,799)
----------- -----------
(825) (2,799)
----------- -----------
Income (loss) from continuing operations
before income taxes (162,091) (240,858)
Provision for income taxes 3,019 733
----------- -----------
Income (loss) from continuing operations (159,073) (240,125)
Income (loss) from discontinued operation
net of income taxes of $3,019 and $733 5,860 1,424
----------- -----------
Net income (loss) $ (153,213) $ (238,701)
=========== ===========
Basic earnings (loss) per share:
Net income (loss) from continuing operations $ (0.02) $ (0.03)
Net income (loss) from discontinued operation - -
----------- -----------
$ (0.02) $ (0.03)
=========== ===========
Weighted average shares outstanding 6,810,937 7,112,634
=========== ===========
Net income (loss) $ (153,213) $ (238,701)
Foreign exchange gain net of income taxes 27,718 15,416
----------- -----------
Comprehensive income (loss) $ (125,495) $ (223,285)
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>6
Globus Cellular Ltd.
Statements of Cash Flows
Three Months Ended January 31, 1999 and 1998
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
January 31, January 31,
1999 1998
-------- --------
<S> <C> <C>
Net cash provided by (used in)
operating activities $ (39,943) $ (68,067)
------------ -----------
Cash flows from investing activities:
Purchase of equipment (10,124) (32,889)
----------- -----------
Net cash provided by (used in)
investing activities (10,124) (32,889)
Cash flows from financing activities:
Common stock sold for cash - 59,199
Increase in officer loans 39,249 -
Repayment of notes payable (199) -
Repayment of officer loans - (5,780)
----------- -----------
Net cash provided by (used in)
financing activities 39,049 53,419
----------- -----------
Increase (decrease) in cash (11,018) (47,537)
Cash and cash equivalents,
beginning of period 31,673 349,133
----------- -----------
Cash and cash equivalents,
end of period $ 20,655 $ 301,596
=========== ===========
Supplemental cash flow information:
Cash paid for interest $ 825 $ 2,799
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, 1998.
Stockholders' equity
Basic (loss) per share was computed using the weighted average
number of common shares outstanding.
During the period ended January 31, 1999 the Company issued
87,214 shares of its common stock pursuant to a registration
statement on Form S-8. The shares issued were valued at $23,112
based on quoted market prices at the date the shares were
authorized for issuance. Additionally during the period, the
Company issued 24,658 shares of its restricted common stock for
services provided to the Company valued at $6,200.
<PAGE>8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations:
Capital Resources and Liquidity.
The Company emerged (October 18, 1994) from a Chapter 11 bankruptcy
proceeding that it filed in March, 1993. Since the date of filing of the
bankruptcy proceeding, Company was inactive and was not engaged in any
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"), that
it subsequently sold to Company pursuant to the Plan of Reorganization, filed
and approved by the U.S. Bankruptcy Court.
During the period ended January 31, 1999, the Company issued 87,214 shares of
its common stock pursuant to a registration statement on Form S-8. The
shares issued were valued at $23,112 based on quoted market prices at the
date the shares were authorized for issuance. Additionally, during the
period, the Company issued 24,658 shares of its restricted common stock for
services provided to the Company valued at $6,200.
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.
Commitments and Contingencies. The Company has an agreement with Dr. Paul
F. Bickert (its founder, product inventor, President and General Manager,
Director and major stockholder) to pay Dr. Bickert lease of technology
payments of $10,000 (US) monthly for the technology utilized in the Company's
products. This agreement expires in 2002, with an option to renew. Total
payments required under this lease are as follows:
1999 $120,000
2000 120,000
2001 120,000
2002 40,000
- ---------
$400,000
During May 1997, the Company entered into a royalty agreement whereby Dr.
Bickert is to receive a 4% royalty fee on gross receipts from the sale of
products incorporating newly developed technology for a high performance
antenna for a portable communication device.
The Company entered into an employment contract with an officer. The
agreement covers the period ended January 31, 1999 and provides for payments
aggregating $7,500 per month. The agreement is expected to continue in
force until terminated by either party.
Additionally, the Company shall pursue a registration of its Common Shares
and Class A and B 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 three months ended January 31, 1999, the Company purchased
equipment valued at $10,124 resulting in net cash provided used in
investing activities of $10,124.
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.
During the three months ended January 31, 1999, the Company had an
increase in officer loans of $39,249. For that same period, the Company
repaid $199 of notes payable. As a result, the Company had net cash
provided by financing activities of $39,049.
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 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, the Company's product is new in the
market and there are no assurances it can be marketed successfully and/or
profitably.
Results of Operations.
Results of Operations. For the three months ended January 31, 1999
compared to January 31, 1998. The Company only has minimal revenue of
$147 for the three months ended January 31, 1999 compared to $615 for the
three months ended January 31, 1998. The Company had research and
development costs of $10,065 for the three months ended January 31, 1999
compared to $11,041 for the three months ended January 31, 1998.
General and administrative expenses for the three months ended January 31,
1999 were $151,348. These expenses consisted primarily of accounting
($3,128), consulting ($23,509), legal fees ($10,750), marketing expense
($11,103), office expense ($3,921), promotion ($5,223), profession fees
($2,684), rent ($1,359), telephone ($3,591), travel ($11,282) and wages
($10,339). The Company had technology lease expense of $30,000 for the
three months ended January 31, 1999 and made management contract payments
of $22,500. For the three months ended January 31, 1999, the Company had
depreciation of $4,000 and amortization of $3,000 for the period ended
January 31, 1999.
General and administrative expenses for the three months ended January 31,
1998 were $227,634 These expenses consisted primarily of accounting
($7,206), consulting ($99,048), legal fees ($9,769), office expense
($4,272), promotion ($22,806), rent ($2,711), telephone ($2,083), travel
($6,832) and wages ($110,666). The Company had technology lease expense
of $30,000 for the three months ended January 31, 1998 and made management
contract payments of $22,500. For the three months ended January 31,
1998, the Company had depreciation of $4,000 and amortization of $1,888 for
the period ended January 31, 1998.
<PAGE>9
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: April 20, 1999 /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-31-1999
<PERIOD-END> JAN-31-1999
<CASH> 20,655
<SECURITIES> 0
<RECEIVABLES> 4,934
<ALLOWANCES> 0
<INVENTORY> 2,548
<CURRENT-ASSETS> 89,059
<PP&E> 59,836
<DEPRECIATION> 55,293
<TOTAL-ASSETS> 174,305
<CURRENT-LIABILITIES> 477,656
<BONDS> 0
<COMMON> 6,857
0
0
<OTHER-SE> (310,208)
<TOTAL-LIABILITY-AND-EQUITY> 174,305
<SALES> 0
<TOTAL-REVENUES> 147
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 161,413
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 825
<INCOME-PRETAX> (162,091)
<INCOME-TAX> 3,019
<INCOME-CONTINUING> (153,213)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (153,213)
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
