<PAGE>2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
COMMISSION FILE NUMBER 0-25632
GUINNESS TELLI*PHONE CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 68-0310550
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
655 Redwood Highway #111, Mill Valley, CA 94941
Registrant's Telephone Number, including area code
(415) 389-9442
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 twelve months, and (2) has been
subject to such filing requirements for the past 90 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: 32,683,120 shares.
<PAGE>3
GUINNESS TELLI*PHONE CORPORATION
INDEX
PART I. - Financial Information Page No.
Item 1. Financial Statements
Consolidated Balance Sheet
September 30, 2000 and December 31, 1999 2
Consolidated Statement of Operations -
Three Months Ended September 30, 2000 and
1999 and Nine Months Ended September 30,
2000 and 1999 and Cumulative During
Development Stage 3
Consolidated Statement of Cash Flows -
Three Months Ended September 30, 2000 and 1999
and Nine Months Ended September 30, 2000
and 1999 and Cumulative During Development
Stage 4
Note to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Part II. - Other Information 7
Signatures 8
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30,
1999 December 31,
(unaudited) 2000
------------- ----------
<S> <C> <C>
ASSETS
CURRENT:
Cash $ 9,335 $ 233,689
Accounts Receivable - Trade 11,660
Prepaid expenses and other current assets 2,281,206
---------- -----------
TOTAL CURRENT ASSETS 2,302,201 233,689
PROPERTY AND EQUIPMENT, at cost:
Telliscreens - in progress 125,000
Equipment 252,963 118,364
Office furniture 51,656 13,824
Software 24,471 4,850
Leasehold improvements 19,710
---------- ----------
Totals 473,800 137,038
Less accumulated depreciation 96,731 63,970
--------- ----------
NET PROPERTY AND EQUIPMENT 377,069 73,068
---------
INVESTMENT IN ACQUIRED BUSINESS 2,541,000
----------
OTHER:
Deferred lease costs, net of $15,178
of accumulated amortization 75,888
Lease deposits 6,709 6,709
----------- -----------
82,597 6,709
----------- -----------
$ 5,302,867 $ 313,466
=========== ===========
LIABILITIES
<S> <C> <C>
CURRENT:
Notes payable $ 435,000 $ 435,000
Loans payable 38,000
Stockholder advances 28,310 27,029
Accounts payable 182,464 42,953
Deferred royalty income 125,000 125,000
Accrued interest 825,979 738,004
Accrued payroll taxes 144,400 144,400
Deferred advertising income 11,660
Accrued salaries and wages 35,000
----------- ----------
TOTAL LIABILITIES 1,790,813 1,547,386
----------- ----------
ACCRUED PURCHASE PRICE OF ACQUIRED BUSINESS 2,541,000
-----------
STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK, $.001 par value;
shares authorized 100,000,000;
issued and outstanding
32,683,120 and 26,294,610 shares 32,683 26,295
Additional paid-in capital 19,496,627 10,882,148
Deficit accumulated during
development stage (18,558,256) (12,142,363)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 971,054 (1,233,920)
------------ ------------
$ 5,302,867 $ 313,466
============ ============
</TABLE>
See accompanying notes.
<PAGE>5
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 September 30, Ended September 30,
Stage 2000 1999 2000 1999
----------- ------------------- --------------------
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
Research and development $ 4,551,152
Interest expense 4,550,698 $ 87,975 $ 79,974 $ 29,325 $ 26,658
Officers' salaries 1,167,938 193,500 24,000 76,048 8,000
Rent 502,048 95,208 28,999 48,126 9,720
Consulting services 2,670,358 2,670,358 1,141,132
Other administrative
Expenses 5,631,727 3,368,852 324,868 568,095 115,121
------------- ---------- --------- ----------- ---------
LOSS FROM OPERATIONS (19,073,921) (6,415,893) (457,841) (1,862,728) (159,499)
WRITE-OFF OF EXPIRED
LIABILITIES 515,665
------------- ---------- --------- ----------- ---------
NET LOSS $(18,558,256) $(6,415,893) $(457,841) $(1,862,728) $(159,499)
============= =========== ========= =========== =========
BASIC AND DILUTED
LOSS PER SHARE $ (.21) $ (.02) $ (.06) $ (.01)
============ ========== =========== =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 29,945,439 19,019,892 28,657,495 20,095,367
</TABLE>
See accompanying notes.
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<PAGE>6
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 September 30, Ended September 30,
Stage 2000 1999 2000 1999
----------- ------------------- --------------------
<S> <C> <C> <C> <C> <C>
CASH USED IN OPERATIONS:
Net loss $(18,558,256) $(6,415,893) $(457,841) $(1,862,728) $(159,500)
Adjustments to reconcile net loss
to cash used in operations:
Depreciation 111,909 47,939 7,948 29,175 2,649
Decrease (increase) in
prepaid expenses (101,280) (101,280) 75,000 (43,588) 25,000
Increase (decrease) in
accounts payable 359,641 139,511 (62,896) 83,635 (11,000)
Increase in accrued interest 885,379 87,975 79,974 29,325 26,658
Stock issues for consulting
services, employee
compensation and settlement 5,211,316 4,813,016 4,500 1,161,556
Deferred royalty income 125,000
Accrued for unissued stock
Accrued payroll (35,000) (35,000) (34,053)
----------- ---------- -------- --------- --------
(12,001,291) (1,463,732) (387,368) (602,625) (116,193)
----------- ---------- -------- --------- --------
CASH USED IN INVESTING ACTIVITIES:
Deposits (6,709)
Deferred Lease Costs (91,066) (91,066) 12,142
Additions to fixed assets (411,800) (286,762) (24,632) (142,473) (6,721)
---------- ---------- -------- -------- --------
(509,575) (377,828) (24,632) (130,331) (6,721)
---------- ---------- -------- -------- --------
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Contributed capital 7,543,938
Sale of stock 3,781,550 1,187,925 476,550 495,000 253,000
Notes payable 435,000 (5,000) (5,000)
Loans payable 428,000 428,000 (77,940) 228,000 (41,152)
Stockholder advances 174,533 1,281 (30,543)
Collection of stock subscriptions
Receivable 157,180
---------- --------- --------- -------- ---------
12,520,201 1,617,206 393,610 692,457 206,848
---------- --------- --------- -------- --------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 9,335 (224,354) (18,390) (40,499) 83,934
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 233,689 105,913 49,834 3,589
---------- -------- -------- ------- ----------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 9,335 $ 9,335 $ 87,522 $ 9,335 $ 87,523
========== ======== ========= ======== =========
</TABLE>
See accompanying notes.
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<PAGE>7
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, 2000, 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, 1999.
Note 2. During the year 2000, the Company issued 5,302,839 shares of
its common stock in payment of various services, equipment and a
dispute settlement. The fair market value of these shares was
$7,432,942.
Note 3: The Company has entered into an agreement with Southwest Bell
Communications (SBC) whereby SBC will provide the Company with business
listings which will be fed into the Telli system, allowing for an
easier and faster creation of Telli directories.
Note 4: Effective August 4, 2000, the company acquired the assets of
NewsSurfer.com Corporation in exchange for 1,000,000 shares of stock,
valued at $2.50 per share, and the assumption of approximately $41,000
in liabilities. The shares were not issued as of September 30, 2000.
The Company has not yet obtained all of the financial data necessary to
include the balance sheet, operating statement and statement of cash
flows of the acquired business in this Form 10-Q. When that
information is received, the Company will file an amended Form 10-Q.
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<PAGE>8
GUINNESS TELLI*PHONE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 2000
Liquidity and Capital Resources:
Since filing its annual report on Form 10-K for the year ended December
31, 1999, the Company has obtained a $30 million equity line from
Swartz Private Equity LLC, subject to registration with the SEC and
governed by a percentage of the Company's trading volume.
- 6 --
<PAGE>9
GUINNESS TELLI*PHONE CORPORATION
OTHER INFORMATION
SEPTEMBER 30, 2000
PARI II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in Securities and Use of Proceeds:
During the first nine months of 2000, the Company
issued 5,302,839 shares of its common stock in
payment of various services, equipment and a
dispute settlement. The fair market value of
these shares was $7,432,942. This resulted in
charges to operations of $5,203,016, equipment of
$50,000 and prepaid expenses of $2,179,926.
The Company also issued 385,356 shares in
exchange for $692,925 of cash, which was used for
current operations.
Item 3. Defaults Upon Senior Securities - None.
Item 4. Submission of Matters to a Vote of Security Holders -
None.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None.
- 7 -
Signatures
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 hereunto duly authorized.
GUINNESS TELLI*PHONE CORPORATION
By: /s/Lawrence A. Guinness
Lawrence A. Guinness, President
Date: November 12, 2000
