SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter Ended: September 30, 1997; or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period _________ to __________
Commission File Number: 0-25632
GUINNESS TELLI*PHONE CORPORATION
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(Exact name of Registrant as specified in its charter)
Nevada 68-0310550
- ------------------------------ -----------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
655 Redwood Highway, #273, Mill Valley, California 94941
- ---------------------------------------------------- ------------------------
(Address of principal executive offices) Zip Code)
(415) 389-9442
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(Registrant's telephone number, including area code)
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 Exchange Act of
1934 during the preceding 12 months (or for such shorter period that a
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
On September 30, 1997, there were 14,244,480 shares of the registrant's
Common Stock, $.001 par value, outstanding.
<PAGE>
GUINNESS TELLI*PHONE CORPORATION
INDEX
PART I. Financial Information Page No.
-----------------------------------------------------------
Item 1. Financial Statements 3
Consolidated Balance Sheet
September 30, 1997 and December 31,1996 4
Consolidated Statement of Operations - 5
Three Months Ended September 30, 1997 and 1996
and Nine Months Ended September 30, 1997 and 1996
and cumulative During Development Stage
Consolidated Statement of Cash Flows - 6
Three Months Ended September 30, 1997 and 1996
and Nine Months Ended September 30, 1997 and 1996
and Cumulative During Development Stage
Note to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. Other Information
Item 1. Legal Proceedings 8
Item 2. Change in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission to Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Page 2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The condensed financial statements included herein have been prepared by
the Company, without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosure
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.
In the opinion of the Company, all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the financial position of the
Company as of September 30, 1997 and the results of its operations and changes
in its financial position from inception through September 30, 1997 have been
made. The results of its operations for such interim period is not necessarily
indicative of the results to be expected for the entire year.
Page 3
<PAGE>
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A Development Stage Company)
Consolidated Balance Sheet
<TABLE>
<CAPTION>
(Unaudited)
Sept. 30, December 31,
1997 1996
---------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 41,030 $ 9,805
---------------------------------------
TOTAL CURRENT ASSETS $ 41,030 9,805
---------------------------------------
FIXED ASSETS:
Equipment 66,833 60,118
Less accumulated depreciation 38,345 30,395
---------------------------------------
28,488 29,723
---------------------------------------
$ 69,518 $ 39,528
=======================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 435,000 $ 435,000
Accounts payable 659,216 630,733
Accrued interest payable 512,396 446,300
Deferred royalty income 125,000 125,000
---------------------------------------
TOTAL CURRENT LIABILITIES 1,731,612 1,637,033
---------------------------------------
ADVANCES FROM STOCKHOLDERS -- 250,000
---------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
authorized 25,000,000 shares,
issued and outstanding
14,244,480 and 13,427,480 shares 14,244 13,427
Additional paid-in capital 8,864,849 8,363,766
Deficit accumulated during
development stage (10,541,187) (10,224,698)
----------------------------------------
( 1,622,094) ( 1,847,505)
----------------------------------------
$ 69,518 $ 39,528
========================================
</TABLE>
See accompanying notes.
Page 4
<PAGE>
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement Of Operations
(Unaudited)
<TABLE>
<CAPTION>
Cumulative
During Nine Months Three Months
Development Ended Sept. 30, Ended Sept. 30,
Stage 1997 1996 1997 1996
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
Research and development $ 4,551,152
Interest expense $ 4,237,115 $ 66,096 $ 60,090 22,032 $ 20,030
Officer's salary 517,006 34,017 17,293 16,909 5,764
Rent 338,605 25,152 17,540 10,710 7,061
Other administrative
expense 897,309 191,224 161,581 86,326 67,709
-----------------------------------------------------
NET LOSS $(10,541,187) $(316,489) $(256,504)$(135,977)$(100,564)
=======================================================
LOSS PER SHARE $ (.02) $ (.02) $ (.01) $ (.01)
=========================================
WEIGHTED AVERAGE
SHARES OUTSTANDING 14,092,165 13,427,480 14,144,426 13,427,480
==============================================
</TABLE>
See accompanying notes.
Page 5
<PAGE>
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement Of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Cumulative
During Nine Months Three Months
Development Ended Sept. 30, Ended Sept. 30,
Stage 1997 1996 1997 1996
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
CASH USED IN OPERATIONS:
Net loss $(10,541,187) $(316,489) $(256,504) $(135,977)$(100,564)
Adjustments to
reconcile net
loss to cash used
in operations:
Depreciation 38,345 7,950 5,597 2,650 2,135
Increase (decrease) in
accounts payable 659,216 28,483 -- -- (11,529)
Increase in accrued
interest 512,396 66,096 60,090 22,032 20,030
Deferred royalty income 125,000 -- -- -- --
------------------------------------------------------
(9,206,230) (213,960) (190,817) (111,295) (89,928)
CASH USED IN INVESTING ACTIVITIES:
Additions to fixed
assets ( 66,833) ( 6,715) ( 33,070) ( 3,128) ( 8,079)
------------------------------------------------------
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Contributed capital 7,543,938 -- -- -- --
Sale of stock 1,177,975 501,900 -- -- 178,500
Notes payable 435,000 -- -- -- --
Stockholder advances -- (250,000) 27,195 ( 23,059) 27,195
Collection of stock
subscriptions receivable 157,180 -- 101,250
------------------------------------------------------
9,314,093 251,900 128,445 155,441 27,195
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NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 41,030 31,225 ( 95,442) 41,018 (70,812)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR -- 9,805 97,997 12 73,367
------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 41,030 $ 41,030 $ 2,555 $ 41,030 $ 2,555
======================================================
</TABLE>
See accompanying notes.
Page 6
<PAGE>
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A Development Company)
Note To Consolidated Financial Statements
Note 1. In the opinion of the management of Guinness Telli*Phone Corporation and
Subsidiary, the unaudited financial statements of Guinness Telli*Phone
Corporation and Subsidiary for the interim periods shown include all
adjustments, consisting only of normal recurring accruals, necessary for a fair
presentation of the financial position at September 30, 1997, and the results of
operations and cash flows for the periods then ended. The results of operations
for the interim periods shown may not be indicative of the results that may be
expected for the fiscal year. These statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Form
10-K for the year December 31, 1996.
Page 7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations September 30, 1997
Liquidity and Capital Resources:
There have been no significant changes in the Company's liquidity and
capital resources since the Company filed its annual report on Form 10-K for the
year ended December 31, 1996, except for the private placements reflected in the
accompanying financial statements. Reference is made to that document with
regard to these matters.
The Company has begun negotiations to raise the necessary capital to
commence operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
At the present time there are no legal proceedings against the Company and
the Company is unaware of any unasserted claim or assessment which will have a
material effect on the financial position or future operations of the Company.
Item 2. Changes in Securities.
Not required.
Item 3. Defaults Upon Senior Securities.
Not required.
Item 4. Submission of Matters to a Vote of Security Holders.
Not required.
Item 5. Other Information.
Not required.
Item 6. Exhibits and Reports on Form 8-K.
(a) No exhibits have been filed with this Form 10-Q.
(b) No other reports on Form 8-K were filed during the last quarter of the
period covered.
Page 8
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GUINNESS TELLI*PHONE CORPORATION
(Registrant)
Date: September 12, 1997 /S/ Lawrence A. Guinness
----------------------------------
By: Lawrence A. Guinness
Its: President
Date: September 12, 1997 /S/ Arthur Korn
----------------------------------
By: Arthur Korn
Its: Chief Financial Officer
Page 9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 41,030
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 41,030
<PP&E> 66,833
<DEPRECIATION> 38,345
<TOTAL-ASSETS> 28,488
<CURRENT-LIABILITIES> 1,731,612
<BONDS> 0
0
0
<COMMON> 14,244
<OTHER-SE> 8,864,849
<TOTAL-LIABILITY-AND-EQUITY> 28,022
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> 0
</TABLE>
