<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, 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: 21,192,247 shares.
<PAGE>3
GUINNESS TELLI*PHONE CORPORATION
INDEX
PART I. - Financial Information Page No.
---------------------- ---------
Item 1. Financial Statements
Consolidated Balance Sheet
September 30, 1999 and December 31, 1998 4
Consolidated Statement of Operations -
Three Months Ended September 30, 1999
and 1998 and Nine Months Ended
September 30, 1999 and 1998 and
Cumulative During Development Stage 5
Consolidated Statement of Cash Flows -
Three Months Ended September 30, 1999
and 1998 and Nine Months Ended
September 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
September 30,
1999 December 31,
(Unaudited) 1998
------------ ------------
ASSETS
------
CURRENT ASSETS:
Cash $ 87,523 $ 105,913
Prepaid expenses 25,000 100,000
------------ -----------
TOTAL CURRENT ASSETS 112,523 205,913
------------ -----------
FIXED ASSETS:
Equipment 96,064 71,432
Less accumulated depreciation 59,542 51,595
----------- -----------
36,522 19,837
----------- -----------
$ 149,045 $ 225,750
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------
CURRENT LIABILITIES:
Notes payable $ 430,000 $ 435,000
Accounts payable 520,622 583,518
Payments and accruals for
unissued stock 540,500 660,500
Accrued payroll 34,053
Due to related parties 99,237 177,177
Accrued interest payable 711,346 631,372
Deferred royalty income 125,000 125,000
---------- ----------
TOTAL CURRENT LIABILITIES 2,426,705 2,646,620
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
authorized 25,000,000 shares;
issued and outstanding
21,192,247 and 17,434,910
shares 21,192 17,435
Additional paid-in capital 9,857,701 9,260,408
Deficit accumulated during
development stage (12,156,553) (11,698,713)
---------- -----------
(2,277,660) (2,420,870)
----------- -----------
$ 149,045 $ 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 Nine Months Three Months
During Ended September 30, Ended September 30,
Development ------------------- -------------------
Stage 1999 1998 1999 1998
------- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
Research and development $ 4,551,152
Interest expense 4,436,065 $ 79,974 $ 72,708 $ 26,658 $ 24,236
Officer's salary 938,940 24,000 24,000 8,000 8,000
Rent 401,435 28,999 20,266 9,720 7,462
Other administrative
expenses 1,828,961 324,868 263,772 115,121 163,521
------------ --------- --------- --------- ---------
NET LOSS $(12,156,553) $(457,841) $(380,746) $(159,499) $(203,219)
============ ========= ========= ========= =========
LOSS PER SHARE $ (.02) $ (.02) $ (.01) $ (.01)
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 19,019,892 15,527,508 20,095,367 15,735,008
========== ========== ========== ==========
</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 Nine Months Three Months
During Ended September 30, Ended September 30,
Development ------------------- -------------------
Stage 1999 1998 1999 1998
------- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C>
CASH USED IN OPERATIONS:
Net loss $(12,156,554) $(457,841) $(380,746) $(159,500) $(203,219)
Adjustments to reconcile net loss
to cash used in operations:
Depreciation 59,542 7,948 7,950 2,649 2,650
Decrease (increase) in
prepaid expenses (25,000) 75,000 14,587 25,000
Increase (decrease) in
accounts payable 697,799 (62,896) 104,240 (11,000) 68,878
Increase in accrued interest 711,346 79,974 72,708 26,658 24,236
Stock issues for consulting services 398,300 4,500 135,250 90,000
Deferred royalty income 125,000
Accrued for unissued stock 540,500
Accrued payroll (34,053)
------------ -------- -------- ------- --------
(9,649,067) (387,368) (46,011) (116,193) (17,455)
------------ -------- -------- -------- -------
CASH USED IN INVESTING ACTIVITIES:
Additions to fixed assets (96,064) (24,632) (4,599) (6,721) (2,568)
------------ -------- -------- --------- -------
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Contributed capital 7,543,938
Sale of stock 1,456,075 476,550 4,950 253,000 4,950
Notes payable 430,000 (5,000) 15,000 (5,000) 15,000
Stockholder advances 245,461 (77,940) 36,515 (41,152) (255)
Collection of stock subscriptions
receivable 157,180
---------- ------- ------- ------- --------
9,832,654 393,610 56,465 206,848 19,695
---------- ------- ------- ------- ------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 87,523 (18,390) 5,855 83,934 (328)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR -- 105,913 87 3,589 6,270
--------- --------- ------ ------- ------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 87,523 $ 87,522 $ 5,942 $ 87,523 $ 5,942
========== ========= ======== ======== =======
</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 September 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
SEPTEMBER 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.
<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: January 5, 2000
-------------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1998
<CASH> 87,523
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 112,523
<PP&E> 96,064
<DEPRECIATION> 59,542
<TOTAL-ASSETS> 149,045
<CURRENT-LIABILITIES> 2,426,705
<BONDS> 0
<COMMON> 21,192
0
0
<OTHER-SE> (2,298,852)
<TOTAL-LIABILITY-AND-EQUITY> 149,045
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 244,867
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 79,974
<INCOME-PRETAX> (457,841)
<INCOME-TAX> 0
<INCOME-CONTINUING> (457,841)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (457,841)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
