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 JUNE 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
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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: 31,127,316 shares.
<PAGE>2
GUINNESS TELLI*PHONE CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. - Financial Information Page No.
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheet
June 30, 2000 and December 31, 1999 2
Consolidated Statement of Operations -
Three Months Ended June 30, 2000 and 1999
and Six Months Ended June 30, 2000 and 1999
and Cumulative During Development Stage 3
Consolidated Statement of Cash Flows -
Three Months Ended June 30, 2000 and 1999
and Six Months Ended June 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. - None
Signatures 7
<PAGE>3
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
</TABLE>
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
---------- --------------
(unaudited)
<S> <C> <C>
ASSETS
--------
CURRENT:
Cash $ 49,834 $ 233,689
Prepaid expenses and other
current assets 3,217,536
------------ -----------
TOTAL CURRENT ASSETS 3,267,370 233,689
------------ -----------
PROPERTY AND EQUIPMENT, at cost:
Equipment 254,314 118,364
Office furniture 40,785 13,824
Software 23,559 4,850
Leasehold improvements 12,669
------------ -----------
Totals 331,327 137,038
Less accumulated depreciation 82,734 63,970
NET PROPERTY AND EQUIPMENT 248,593 73,068
------------ -----------
OTHER:
Deferred lease costs 103,208
Lease deposits 6,709 6,709
------------ -----------
109,917 6,709
------------ -----------
$ 3,625,880 $ 313,466
============ ===========
LIABILITIES
-------------
CURRENT:
Notes payable $ 435,000 $ 435,000
Loans payable 200,000
Stockholder advances 58,853 27,029
Accounts payable 98,829 42,953
Deferred royalty income 125,000 125,000
Accrued interest 796,654 738,004
Accrued payroll taxes 144,400 144,400
Accrued salaries and wages 35,000
----------- -----------
TOTAL LIABILITIES 1,858,736 1,547,386
STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK, $.001 par value;
shares authorized 100,000,000;
issued and outstanding
31,127,316 and 26,294,610 shares 31,127 26,295
Additional paid-in capital 18,431,545 10,882,148
Deficit accumulated during
development stage (16,695,528) (12,142,363)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 1,767,144 (1,233,920)
$ 3,625,880 $ 313,466
=========== ===========
</TABLE>
See accompanying notes.
<PAGE>4
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATION
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative Six Months Three Months
During Ended June 30, Ended June 30,
Development ---------------- ---------------
Stage 2000 1999 2000 1999
----------- ---- ---- ---- ----
<C> <C> <C> <C> <C>
OPERATING EXPENSES:
Research and development $ 4,551,152
Interest expense 4,521,373 $ 58,650 $ 53,316 $ 29,325 $ 26,658
Officers' salaries 1,091,890 117,450 16,000 58,925 6,500
Rent 453,922 47,082 19,279 31,655 13,345
Consulting services 1,529,224 1,529,224 1,529,224
Other administrative
Expenses 5,063,632 2,800,759 209,746 2,585,557 110,893
------------ --------- -------- ---------- --------
LOSS FROM OPERATIONS (17,211,193) (4,553,165) (298,341) (4,234,686) (157,396)
WRITE-OFF OF EXPIRED
LIABILITIES 515,665
------------ ----------- -------- ----------- ---------
NET LOSS $(16,695,528) $(4,553,165) $(298,341) $(4,234,686) $(157,396)
============ =========== ========= =========== =========
BASIC AND DILUTED
LOSS PER SHARE $ (.16) $ (.02) $ (.15) $ (.01)
=========== ========= ======== =======
WEIGHTED AVERAGE
SHARES OUTSTANDING 29,167,537 18,473,243 27,879,591 18,943,022
</TABLE>
See accompanying notes.
<PAGE>5
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative Six Months Three Months
During Ended June 30, Ended June 30,
Development ---------------- ---------------
Stage 2000 1999 2000 1999
----------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CASH USED IN OPERATIONS:
Net loss $(16,695,528) $(4,553,165) $(298,341) $(4,234,686) $(157,396)
Adjustments to reconcile net loss
to cash used in operations:
Depreciation 82,734 18,764 5,298 13,271 2,649
Decrease (increase) in
prepaid expenses (57,692) (57,692) 50,000 (37,039) 25,000
Increase (decrease) in
accounts payable 276,006 55,876 (51,896) 36,579 (31,700)
Increase in accrued interest 856,054 58,650 53,316 29,325 26,658
Stock issues for consulting
services, employee
compensation and
settlement 4,049,760 3,651,460 4,500 3,651,460
Deferred royalty income 125,000
Accrued for unissued stock
Accrued payroll (35,000) (35,000) (34,053)
----------- --------- ------- --------- ---------
(11,398,666) (861,107) (271,176) (541,090) (134,789)
----------- --------- ------- -------- --------
CASH USED IN INVESTING ACTIVITIES:
Deposits (6,709)
Deferred Lease Costs (103,208) (103,208) (103,208)
Additions to fixed assets (269,327) (144,289) (17,911) (88,332) (16,311)
--------- --------- ------- --------- --------
(379,244) (247,497) (17,911) (191,540) (16,311)
--------- --------- ------- --------- --------
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Contributed capital 7,543,938
Sale of stock 3,286,550 692,925 223,550 426,825 223,550
Notes payable 435,000
Loans payable 200,000 200,000
Stockholder advances 205,076 31,824 (36,787) 258,853 (69,614)
Collection of stock subscriptions
Receivable 157,180
--------- -------- -------- --------- -------
11,827,744 924,749 186,763 685,678 153,936
---------- -------- -------- --------- -------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 49,834 (183,855) (102,324) (46,952) 2,836
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 233,689 105,913 96,786 753
---------- -------- --------- ---------- ---------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 49,834 $ 49,834 $ 3,589 $ 49,834 $ 3,589
========== ========== ========= ========== =========
</TABLE>
See accompanying notes.
<PAGE>6
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 June 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 4,447,350 shares of
its common stock in payment of various services, equipment and a
dispute settlement. The fair market value of these shares was
$6,861,304.
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.
<PAGE>7
GUINNESS TELLI*PHONE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 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.
<PAGE>8
GUINNESS TELLI*PHONE CORPORATION
OTHER INFORMATION
JUNE 30, 2000
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in Securities and Use of Proceeds:
During the first six months of 2000, the Company issued
4,447,350 shares of its common stock in payment of various
services, equipment and a dispute settlement. The fair
market value of these shares was $6,861,304. This
resulted in charges to operations of $3,651,460, equipment
of $50,000 and prepaid expenses of $3,159,844.
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.
<PAGE>9
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: August 14, 2000
