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 April 30, 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 May 21,
2001 was: No Par Value Common 34,454,893
Transitional Small Business Format: Yes [ ] No [X]
PART I. FINANCIAL INFORMATION
Titan Technologies, Inc.
BALANCE SHEET
April 30, 2001
UNAUDITED
ASSETS
Current Assets
Cash .................................................... $ 18,003
Property and Equipment, at cost
Furniture and fixtures .................................. 5,407
Machinery ............................................... 7,706
-----------
13,113
Less accumulated depreciation ........................... 10,434
-----------
Net property and equipment ........................... 2,679
Other Assets
Accounts receivable - stockholder ....................... 609
-----------
$ 21,291
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ........................................ $ 2,556
Other accrued liabilities ............................... 4,860
-----------
Total Current Liabilities ............................ 7,416
Stockholders' Equity
Common stock - no par value; authorized,
50,000,000 shares;issued and outstanding,
34,439,893 shares ....................................... 2,422,432
Accumulated deficit ....................................... (2,408,557)
-----------
13,875
-----------
$ 21,291
===========
The accompanying notes are an integral part of these statements.
Titan Technologies, Inc.
STATEMENTS OF OPERATIONS
For The Three Months Ended April 30
UNAUDITED
2001 2000
------------ ------------
REVENUES
Other income ................................. $ 8,530 $ 8,615
------------ ------------
COSTS AND EXPENSES
General and administrative ................... 50,626 57,770
Outside services ............................. 6,507 18,000
Depreciation ................................. 279 438
------------ ------------
57,412 76,208
Loss before income taxes ..................... (48,882) (67,593)
Provision for income taxes ................... -- --
------------ ------------
Net Loss ..................................... $ (48,882) $ (67,593)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 3) .... 34,304,504 31,107,172
============ ============
Basic and diluted (loss) per common share .... $ (0.00) $ (0.00)
============ ============
The accompanying notes are an integral part of these statements.
Titan Technologies, Inc.
STATEMENTS OF OPERATIONS
For The Nine Months Ended April 30
UNAUDITED
2001 2000
------------ ------------
REVENUES
Other income ................................. $ 25,790 $ 27,395
COSTS AND EXPENSES
General and administrative ................... 182,709 183,809
Outside services ............................. 59,308 36,150
Depreciation ................................. 836 1,317
------------ ------------
242,853 221,276
Loss before income taxes ..................... (217,063) (193,881)
Provision for income taxes ................... -- --
------------ ------------
Net Loss ..................................... $ (217,063) $ (193,881)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 3) .... 34,181,430 29,949,717
============ ============
Basic and diluted (loss) per common share .... $ (0.01) $ (0.01)
============ ============
The accompanying notes are an integral part of these statements.
Titan Technologies, Inc.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended April 30
UNAUDITED
2001 2000
--------- ---------
Cash flows from operating activities
Cash received from subcontractor ................. $ 25,790 $ 27,395
Cash paid for suppliers and employees ............ (239,467) (227,789)
--------- ---------
Net cash used in operating activities ............ (213,677) (200,394)
Cash flows from financing activities
Proceeds from sale of common stock ............... 74,500 428,464
--------- ---------
Net (decrease) increase in cash .................. (139,177) 228,070
Cash at beginning of year ........................ 157,180 6,881
--------- ---------
Cash at end of period ............................ $ 18,003 $ 234,951
========= =========
Reconciliation of Net Loss to Net Cash Used in
Operating Activities
Net Loss ........................................... $(217,063) $(193,881)
Adjustments to reconcile net loss to net cash
used in Operating Activities:
Depreciation ..................................... 836 1,317
Changes in assets and liabilities
Decrease in prepaid expenses ................... 1,025 555
(Decrease) increase in accounts payable ........ (279) (9,600)
Increase (decrease) in accrued liabilities ..... 1,804 (3,785)
--------- ---------
Net cash used in operating activities .............. $(213,677) $(205,394)
========= =========
The accompanying notes are an integral part of these statements.
Titan Technologies, Inc.
NOTES TO FINANCIAL STATEMENTS
April 30, 2001 and 2000
1) BASIS OF PRESENTATION
The balance sheet at April 30, 2001 and the statements of operations for the
three months and nine months ended April 30, 2001 and 2000 and statements of
cash flows for the nine months ended April 30, 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 nine months ended April 30, 2001 are not necessarily
indicative of operating results for the full year.
2) ISSUANCE OF COMMON STOCK
During the nine months ended April 30, 2000 the Company sold 4,615,150 shares of
common stock for which it received $428,464.
During the nine months ended April 30, 2001 the Company sold 703,332 shares of
common stock for which it received $74,500.
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 nine months ended April 30, 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 nine months ended April 30, 2001, the Company had no licensing
revenue. No plants are scheduled for construction at April 30, 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 its tire recycling
technology has 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
decreased $1,100 to $182,709 and outside services increased $23,158 to $59,308
for the nine months ended April 30, 2001 compared to the nine months ended April
30, 2000.
Financial Condition
The Company's liquidity decreased in the nine months ended April 30, 2001 as
cash decreased by $139,177 since July 31, 2000. Operations used $213,677
compared to the same period of the prior year in which operations used $200,394.
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
During the third quarter ended April 30, 2001, we sold common stock to seven
investors, each qualifying as an accredited investor within the meaning of Rule
501(a). The following table illustrates the dates of the transaction, the number
of shares and the proceeds from the sale.
Date Shares Issued Cash Received
-------- ------------- -------------
02/06/01 145,000 $14,500
02/26/01 60,000 6,000
04/24/01 20,000 2,000
04/25/01 65,000 6,500
------- -------
290,000 $29,000
======= =======
During the quarter ended April 30, 2001, 30,000 shares of our common stock were
issued to an attorney for legal services performed.
We relied on Rule 147 and Section 4(2) of the Securities Act of 1933 and Rule
506 of Regulation D for exemption from the registration requirements of the
Securities Act. Each investor was furnished with information concerning our
formation and operations, and had the opportunity to verify the information
supplied. Additionally, we obtained a representation from each of the acquiring
persons representing the intent to acquire the securities for the purpose of
investment only, and not with a view toward the subsequent distribution thereof.
Each of the certificates representing the common stock carry a legend
restricting transfer of the securities represented. Furthermore, we have issued
stop transfer instructions to Securities Transfer Corporation, the transfer
agent for the common stock, covering the certificates representing the common
stock issued in the above-described transactions.
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
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.
May 21, 2001 Ronald L. Wilder
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Ronald L. Wilder, President, Chief Executive Officer, Chief
Financial Officer and Chief Accounting Officer.