<PAGE>2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
AMENDMENT 1 TO
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: 33,683,120 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
<PAGE>4
GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30,
2000 December 31,
(unaudited) 1999
------------- ----------
<S> <C> <C>
ASSETS
CURRENT:
Cash $ 20,986 $ 233,689
Accounts Receivable - Trade 56,858
Prepaid expenses and other current assets 2,281,206
---------- -----------
TOTAL CURRENT ASSETS 2,359,050 233,689
PROPERTY AND EQUIPMENT, at cost:
Telliscreens - in progress 125,000
Equipment 258,040 118,364
Office furniture 51,656 13,824
Software 24,471 4,850
Leasehold improvements 19,710
---------- ----------
Totals 478,877 137,038
Less accumulated depreciation 96,731 63,970
--------- ----------
NET PROPERTY AND EQUIPMENT 382,146 73,068
--------- ----------
OTHER:
Trademarks and patents acquired, net of
$83,412 of accumulated amortization 2,420,632
Deferred lease costs, net of $15,178
of accumulated amortization 75,888
Lease deposits 6,709 6,709
----------- -----------
2,503,229 6,709
----------- -----------
$ 5,244,425 $ 313,466
=========== ===========
LIABILITIES
CURRENT:
Notes payable $ 435,000 $ 435,000
Loans payable 38,000
Stockholder advances 28,310 27,029
Accounts payable 248,749 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 1,857,098 1,547,386
----------- ----------
STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK, $.001 par value;
shares authorized 100,000,000;
issued and outstanding
33,683,120 and 26,294,610 shares 33,683 26,295
Additional paid-in capital 21,995,627 10,882,148
Deficit accumulated during
development stage (18,641,983) (12,142,363)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 3,387,327 (1,233,920)
------------ ------------
$ 5,244,425 $ 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>
REVENUES-ADVERTISING $ 110,016 $ 110,016 $ 110,015
------------ ----------- --------- ----------- ---------
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 502,948 96,108 28,999 49,026 9,720
Consulting services 2,670,358 2,670,358 1,141,132
Other administrative
Expenses 5,824,570 3,561,694 324,868 760,938 115,121
------------- ---------- --------- ----------- ---------
TOTAL OPERATING EXPENSES (19,267,664) (6,609,635) (457,841) 2,056,469 (159,499)
LOSS FROM OPERATIONS (19,157,648) (6,499,619) (457,841) (1,946,453) (159,499)
WRITE-OFF OF EXPIRED
LIABILITIES 515,665
------------- ---------- --------- ----------- ---------
NET LOSS $(18,641,983) $(6,499,619) $(457,841) $(1,946,453) $(159,499)
============= =========== ========= =========== =========
BASIC AND DILUTED
LOSS PER SHARE $ (.21) $ (.02) $ (.06) $ (.01)
============ ========== =========== =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 30,612,106 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 $(18,641,982) $(6,499,619) $(457,841) $(1,946,454) $(159,500)
Adjustments to reconcile net loss
to cash used in operations:
Depreciation 195,321 131,351 7,948 112,587 2,649
Decrease (increase) in
prepaid expenses (102,910) (102,910) 75,000 (45,218) 25,000
Decrease (increase in accounts receivable (56,858) (56,858) (56,858)
Increase (decrease) in
accounts payable 384,926 164,796 (62,896) 108,920 (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 5,235,175 4,836,875 4,500 1,185,415
Deferred royalty income 125,000
Increase in deferred advertising 11,600 11,600 11,600
Accrued for unissued stock
Accrued payroll (35,000) (35,000) (34,053)
----------- ---------- -------- --------- --------
(11,999,289) (1,461,730) (387,368) (600,623) (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 3,791,199 1,197,574 476,550 504,649 253,000
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
---------- --------- --------- -------- ---------
12,529,850 1,626,855 393,610 702,106 206,848
---------- --------- --------- -------- --------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 20,986 (212,703) (18,390) (28,848) 83,934
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 233,689 105,913 49,834 3,589
---------- -------- -------- ------- ----------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 20,986 $ 20,986 $ 87,522 $ 20,986 $ 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 acquisition includes
cash of $9,649, receivables of $23,859, equipment of $5,077, and
trademarks and patents of $2,502,415.
Note 5: Pro Forma Consolidated Statement of Operations: In
connection with the August 4, 2000 acquisition described in Note 4
above, the following sets forth pro forma consolidated statement of
operations for the nine month periods ended September 30, 2000 and
1999 as if Newsurfer.com Corporation was acquired on the first day
of each nine month period.
2000 1999
------ -----
Revenues - advertising $ 219,131 $96,515
---------- --------
Operating expenses:
Internet expense 87,975 80,529
Officers' salaries 193,500 59,500
Rent 97,912 30,297
Consulting services 2,706,699 17,106
Other administrative expenses 3,654,440 395,716
---------- --------
6,740,526 583,148
---------- --------
Net Loss $(6,521,395) $(486,633)
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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.
Effective August 4, 2000, the Company issued
1,000,000 shares of its common stock valued at
$2,500,000, for the acquisition of a company
specializing in the design, development and
licensing of search and knowledge management
technology.
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: December 14, 2000