<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 JUNE 30, 1999, 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: 19,580,247 shares.
<PAGE>3
GUINNESS TELLI*PHONE CORPORATION
INDEX
PART I. - Financial Information Page No.
--------------------- --------
Item 1. Financial Statements
Consolidated Balance Sheet
June 30, 1999 and December 31, 1998 4
Consolidated Statement of Operations -
Three Months Ended June 30, 1999 and 1998
and Six Months Ended June 30, 1999 and 1998
and Cumulative During Development Stage 5
Consolidated Statement of Cash Flows -
Three Months Ended June 30, 1999 and 1998
and Six Months Ended June 30, 1999 and 1998
and Cumulative During Development Stage 6
Note to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. - None
Signatures 9
<PAGE>4
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
June 30,
1999 December 31,
(Unaudited) 1998
------------ -----------
ASSETS
------
CURRENT ASSETS:
Cash $ 3,589 $ 105,913
Prepaid expenses 50,000 100,000
----------- -----------
TOTAL CURRENT ASSETS 53,589 205,913
----------- -----------
FIXED ASSETS:
Equipment 89,343 71,432
Less accumulated depreciation 56,893 51,595
----------- -----------
32,450 19,837
----------- -----------
$ 86,039 $ 225,750
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------
CURRENT LIABILITIES:
Notes payable $ 435,000 $ 435,000
Accounts payable 531,622 583,518
Payments and accruals for
unissued stock 540,500 660,500
Accrued payroll 34,053
Due to related parties 140,390 177,177
Accrued interest payable 684,688 631,372
Deferred royalty income 125,000 125,000
------------ -----------
TOTAL CURRENT LIABILITIES 2,457,200 2,646,620
------------ -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
authorized 25,000,000 shares;
issued and outstanding
19,580,247 and 17,434,910 shares 19,580 17,435
Additional paid-in capital 9,606,313 9,260,408
Deficit accumulated during
development stage (11,997,054) (11,698,713)
------------ ------------
(2,371,161) (2,420,870)
------------ ------------
$ 86,039 $ 225,750
============ ============
See accompanying notes.
<PAGE>5
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative Six Months Three Months
During Ended June 30, Ended June 30,
Development ---------------- -------------------
Stage 1999 1998 1999 1998
------------ --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
Research and development $ 4,551,152
Interest expense 4,409,407 $ 53,316 $ 48,472 $ 26,658 $ 24,236
Officer's salary 930,940 16,000 16,000 6,500 8,000
Rent 391,715 19,279 12,804 13,345 6,402
Other administrative
expenses 1,713,840 209,746 100,251 110,893 28,733
------------ --------- --------- --------- --------
NET LOSS $(11,997,054) $(298,341) $(177,527)$(157,396) $(67,371)
============ ========= ========= ========= ========
LOSS PER SHARE $ (.02) $ (.01) $ (.01) $ --
============ ========= ========= ========
WEIGHTED AVERAGE
SHARES OUTSTANDING 18,473,243 15,422,038 18,943,022 15,591,479
=========== ========= ========== ==========
</TABLE>
See accompanying notes.
<PAGE>6
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative Six Months Ended Three Months Ended
During June 30, June 30,
Development -------------- ---------------
Stage 1999 1998 1999 1998
------------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CASH USED IN OPERATIONS:
Net loss $(11,997,054) $(298,341) $(177,527) $(157,396) $(67,371)
Adjustments to reconcile net loss
to cash used in operations:
Depreciation 56,893 5,298 5,300 2,649 2,650
Decrease (increase) in
prepaid expenses (50,000) 50,000 14,587 25,000
Increase (decrease) in
accounts payable 708,799 (51,896) 35,362 (31,700) 3,016
Increase in accrued interest 684,688 53,316 48,472 26,658 24,236
Stock issues for consulting services 398,300 4,500 45,250 9,000
Deferred royalty income 125,000
Accrued for unissued stock 540,000
Accrued payroll (34,053)
------------ --------- ------- -------- --------
(9,532,874) (271,176) (28,556) (134,789) (28,469)
------------ --------- ------- -------- -------
CASH USED IN INVESTING ACTIVITIES:
Additions to fixed assets (89,343) (17,911) (2,031) (16,311) (2,031)
------------ -------- ------ ------- ------
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Contributed capital 7,543,938
Sale of stock 1,203,075 223,550 223,550
Notes payable 435,000
Stockholder advances 286,613 (36,787) 36,770 (69,614) 36,770
Collection of stock subscriptions
receivable 157,180
---------- -------- ------- ------- -------
9,625,806 186,763 36,770 153,936 36,770
---------- -------- ------- ------- ------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 3,589 (102,324) 6,183 2,836 6,720
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR -- 105,913 87 753 --
---------- --------- ------- -------- ------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 3,589 $ 3,589 $ 6,270 $ 3,589 $ 6,270
=========== ========= ======== ======== =======
</TABLE>
See accompanying notes.
<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 June 30, 1999, 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, 1998.
<PAGE>8
GUINNESS TELLI*PHONE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1999
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, 1998. Reference is made to that
document with regard to these matters.
The Company has begun negotiations to raise the necessary capital to
commence operations.
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: January 5, 2000
-----------------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1998
<CASH> 3,589
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53,589
<PP&E> 89,343
<DEPRECIATION> 56,893
<TOTAL-ASSETS> 86,039
<CURRENT-LIABILITIES> 2,457,200
<BONDS> 0
<COMMON> 19,580
0
0
<OTHER-SE> (2,390,741)
<TOTAL-LIABILITY-AND-EQUITY> 86,039
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 245,025
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,316
<INCOME-PRETAX> (298,341)
<INCOME-TAX> 0
<INCOME-CONTINUING> (298,341)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (298,341)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
