FORM 10-QSB - QUARTERLY OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended January 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-25024
TITAN TECHNOLOGIES, INC.
(Exact name of small business issuer as
specified in its charter)
NEW MEXICO 85-03388759
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3206 Candelaria Road NE, Albuquerque, NM 87107
(Address of principal executive offices)
(505) 884-0272
(Issuer's telephone number)
N/A
(Former name, former address, and former three-months, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares of the registrant's common stock outstanding as of February
16, 2001 was: No Par Value Common 34,264,893
Transitional Small Business Format: Yes [ ] No [X]
PART I. FINANCIAL INFORMATION
Titan Technologies, Inc.
BALANCE SHEET
January 31, 2001
UNAUDITED
ASSETS
Current Assets
Cash ......................................................... $ 42,776
Property and Equipment, at cost
Furniture and fixtures ....................................... 5,407
Machinery .................................................... 7,706
-----------
13,113
Less accumulated depreciation ................................. 10,155
-----------
Net property and equipment ................................. 2,958
Other Assets
Accounts receivable - stockholder ............................ 609
-----------
$ 46,343
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ............................................. $ 11,958
Other accrued liabilities .................................... 3,628
-----------
Total Current Liabilities .................................... 15,586
Stockholders' Equity
Common stock - no par value; authorized, 50,000,000 shares;
issued and outstanding, 34,119,893 shares .................... 2,390,432
Accumulated deficit .......................................... (2,359,675)
-----------
30,757
-----------
$ 46,343
===========
The acccompanying notes are an integral part of these statements.
Titan Technologies, Inc.
STATEMENTS OF OPERATIONS
For The Three Months Ended January 31
UNAUDITED
2001 2000
------------ ------------
REVENUES
Other income ................................. $ 8,220 $ 8,810
------------ ------------
COSTS AND EXPENSES
General and administrative ................... 74,480 70,443
Outside services ............................. 15,280 18,000
Depreciation ................................. 278 438
------------ ------------
90,038 88,881
Loss before income taxes ..................... (81,818) (80,071)
Provision for income taxes ................... -- --
------------ ------------
Net Loss ..................................... $ (81,818) $ (80,071)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 3) .... 34,084,597 30,194,563
============ ============
Basic and diluted (loss) per common share .... $ (0.00) $ (0.00)
============ ============
The acccompanying notes are an integral part of these statements.
Titan Technologies, Inc.
STATEMENTS OF OPERATIONS
For The Six Months Ended January 31
UNAUDITED
2001 2000
------------ ------------
REVENUES
Other income ................................. $ 17,260 $ 18,780
------------ ------------
COSTS AND EXPENSES
General and administrative ................... 132,083 126,039
Outside services ............................. 52,801 18,150
Depreciation ................................. 557 879
------------ ------------
185,441 145,068
Loss before income taxes ..................... (168,181) (126,288)
Provision for income taxes ................... -- --
------------ ------------
Net Loss ..................................... $ (168,181) $ (126,288)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 2) .... 33,940,856 29,373,628
============ ============
Basic and diluted (loss) per common share .... $ (0.00) $ (0.00)
============ ============
The acccompanying notes are an integral part of these statements.
Titan Technologies, Inc.
STATEMENTS OF CASH FLOWS
For the Six Months Ended January 31
UNAUDITED
2001 2000
--------- ---------
Cash flows from operating activities
Cash received from subcontractor ............... $ 17,260 $ 18,780
Cash paid for suppliers and employees .......... (174,164) (149,518)
--------- ---------
Net cash used in operating activities .......... (156,904) (130,738)
Cash flows from financing activities
Proceeds from sale of common stock ............. 42,500 210,100
--------- ---------
Net (decrease) increase in cash ................ (114,404) 79,362
Cash at beginning of year ...................... 157,180 6,881
--------- ---------
Cash at end of period .......................... $ 42,776 $ 86,243
========= =========
Reconciliation of Net Loss to Net Cash Used
in Operating Activities
Net Loss ......................................... $(168,181) $(126,288)
Adjustments to reconcile net loss to net
cash used in Operating Activities:
Depreciation ................................... 557 879
Changes in assets and liabilities
Decrease in prepaid expenses ................... 1,025 5,555
(Decrease) increase in accounts payable ........ 9,123 (9,619)
Increase (decrease) in accrued liabilities ..... 572 (1,265)
--------- ---------
Net cash used in operating activities ............ $(156,904) $(130,738)
========= =========
The acccompanying notes are an integral part of these statements.
Titan Technologies, Inc.
NOTES TO FINANCIAL STATEMENTS
January 31, 2001 and 2000
1) BASIS OF PRESENTATION
The balance sheet at January 31, 2001 and the statements of operations for the
three months and six months ended January 31, 2001 and 2000 and statements of
cash flows for the six months ended January 31, 2001 and 2000 have been prepared
without audit. In the opinion of management, all adjustments including normal
recurring adjustments necessary to present fairly the financial position,
results of operations and cash flows, have been made. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. It is suggested that these financial statements be read in conjunction
with the Company's audited financial statements at July 31, 2000. The results of
operations for the six months ended January 31, 2001 are not necessarily
indicative of operating results for the full year.
2) ISSUANCE OF COMMON STOCK
During the six months ended January 31, 2000 the Company sold 2,163,000 shares
of common stock for which it received $210,100.
During the six months ended January 31, 2001 the Company sold 383,332 shares of
common stock for which it received $42,500."
3) NET LOSS PER COMMON SHARE
Net loss per common share is calculated using the weighted average number of
shares outstanding during the period. Basic and diluted earnings per share are
the same because the inclusion of options to purchase additional shares of stock
are antidilutive.
4) LICENSE DISPUTE
During the three months ended January 31, 2001, the Registrant learned that a
California company, Envirotire was identifying itself as the North American
representative for the Registrant's tire recycling technology based on a letter
of understanding between the parties dated March 17, 1999. If valid, the
agreement would convey most of the Registrant's North American marketing rights
to Envirotire. It is the Registrant's belief that a license agreement was never
completed and approved by the parties. The Registrant believes that Envirotire
has no licensing rights under the letter of understanding and is considering its
remedies.
5) MANAGEMENT'S PLANS FOR OPERATIONS
The company has experienced significant losses from operations in recent years
and the Company has used rather than provided cash in its operations.
The Company's ability to continue as a going concern is contingent upon its
ability to maintain adequate financing or obtain capital from other sources and
to attain profitable operations. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts that might be necessary should the Company be unable to continue in
existence.
Management has taken the following steps to address the financial and operating
condition of the Company which it believes will be sufficient to provide the
Company with the ability to continue in existence.
Improve marketing efforts for recycling plants and bring plastics recycling
technology to a marketable product.
Reduce operating and administrative expenses, and issue stock and notes
payable where possible for payment of expenses.
Defer payment of officer salaries if required.
Management believes that these steps will allow the Registrant to continue as a
going concern in the immediate future, together with results of on going efforts
to raise working capital through licensing of agreements, joint ventures or
sales of additional equity securities in private placements. However, there are
significant risks associated with the Registrants business development and there
can be no assurance that its efforts will be successful or that it will be able
to raise sufficient working capital to survive as a going concern.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
- ---------------------
During the six months ended January 31, 2001, the Company had no licensing
revenue. No plants are scheduled for construction at January 31, 2001.
With respect to existing plants constructed in Korea (not currently operating
because of financial failure of parent companies unrelated to the Company's
technology) and Taiwan using the Company's technology, no licensing fees or
royalties have been received by the Company. The Company is optimistic that
royalties will be received in the future from the operator/sub-licensee of the
Taiwan plant, but there can be no assurance that this will occur or what the
amounts will be.
In recent months, the Company has been concentrating its efforts to license its
technology in the United States because it believes that the tire recycling have
been proven at commercial scale through operation of the Taiwan plant. Current
discussions with prospective U.S. licensees involve payment of an up-front
licensing fee and on-going production royalties on a negotiated basis, depending
on the scope of the licensing agreement, although joint venture arrangements in
which the Company would be involved in operation and ownership of plants is also
under consideration. Although the Company is optimistic that recent results in
producing readily marketable activated carbon from tire derived carbon black
enhance the probability that one or more U.S. plants will be built using the
Company's technology, there can be no assurance that the Company will be
successful in its U.S. licensing or joint venture efforts or, if successful,
what the amount of the up-front payment or production royalties will be.
As a result of activities by management general and administrative expenses
increased $6,044 to $132,083 and outside services increased $34,651 to $52,801
for the six months ended January 31, 2001 compared to the six months ended
January 31, 2000.
Financial Condition
The Company's liquidity decreased in the six months ended January 31, 2001 as
cash decreased by $114,404 since July 31, 2000. Operations used $156,904
compared to the same period of the prior year in which operations used $130,738.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
At the date of this report there are no known legal proceedings pending or
judgments against the Registrant or against any director or officer of the
Registrant in their capacity as such.
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS IN 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
(a) There are no exhibits required by Item 601 of Regulation S-K
(b) The Company filed a Form 8-K dated January 22, 2001 describing a
dispute which has arisen regarding whether or not a California company has
licensing rights to the Company's technologies pursuant to a letter of
understanding dated March 17, 1999.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
TITAN TECHNOLOGIES, INC.
February 16, 2001 Ronald L. Wilder
-----------------------------------------------------
Ronald L. Wilder, President, Chief Executive Officer,
Chief Financial Officer and Chief Accounting Officer.