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 October 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
incorporation or organization) Identification No.)
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
November 26, 2001 was: No Par Value Common 35,858,476
Transitional Small Business Format: Yes [ ] No [ X ]
PART I. FINANCIAL INFORMATION
Titan Technologies, Inc.
BALANCE SHEET
October 31, 2001
UNAUDITED
ASSETS
Current Assets
Cash ..................................................... $ 34,894
Property and Equipment, at cost
Furniture and fixtures .................................... 5,407
Machinery ................................................. 7,706
-----------
13,113
Less accumulated depreciation ............................. 10,955
-----------
Net property and equipment ........................... 2,158
Other Assets
Accounts receivable - stockholder ........................ 609
-----------
$ 37,661
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ......................................... $ 12,182
Other accrued liabilities ................................ 3,142
-----------
Total Current Liabilities ................................ 15,324
Stockholders' Equity
Common stock - no par value;
authorized, 50,000,000 shares;
issued and outstanding, 35,858,476 shares ................ 2,564,957
Accumulated deficit ...................................... (2,542,620)
-----------
22,337
-----------
$ 37,661
===========
The accompanying notes are an integral part of these statements
2
Titan Technologies, Inc.
STATEMENTS OF OPERATIONS
For The Three Months Ended October 31
UNAUDITED
2001 2000
------------ ------------
REVENUES
Other income ................................ $ 4,960 $ 9,040
------------ ------------
COSTS AND EXPENSES
General and administrative .................. 58,838 57,603
Outside services ............................ 9,000 37,521
Depreciation ................................ 230 279
------------ ------------
68,068 95,403
Loss before income taxes .................... (63,108) (86,363)
Provision for income taxes .................. -- --
------------ ------------
Net Loss .................................... $ (63,108) $ (86,363)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 3) .... 35,424,035 33,797,116
============ ============
Basic and diluted (loss) per common share ... $ (0.00) $ (0.00)
============ ============
The accompanying notes are an integral part of these statements
3
Titan Technologies, Inc.
STATEMENTS OF CASH FLOWS
For the Three Months Ended October 31
UNAUDITED
2001 2000
--------- ---------
Cash flows from operating activities
Cash received from subcontractor ................ $ 4,960 $ 9,040
Cash paid for suppliers and employees ........... (57,741) (94,720)
--------- ---------
Net cash used in operating activities ........... (52,781) (85,680)
Cash flows from financing activities
Proceeds from sale of common stock .............. 53,300 15,500
--------- ---------
Net increase (decrease) in cash ................. 519 (70,180)
Cash at beginning of year ....................... 34,375 157,180
--------- ---------
Cash at end of period ........................... $ 34,894 $ 87,000
========= =========
Reconciliation of Net Loss to Net Cash
Used in Operating Activities
Net Loss ......................................... $ (63,108) $ (86,363)
Depreciation .................................... 230 279
Changes in assets and liabilities
Decrease in prepaid expenses .................... -- 1,025
Increase (decrease) in accounts payable ........ 10,216 (724)
(Decrease) increase in accrued liabilities ...... (119) 103
--------- ---------
Net cash used in operating activities ............ $ (52,781) $ (85,680)
========= =========
The accompanying notes are an integral part of these statements
4
Titan Technologies, Inc.
NOTES TO FINANCIAL STATEMENTS
October 31, 2001 and 2000
1) BASIS OF PRESENTATION
The balance sheet at October 31, 2001 and the statements of operations for the
three months ended October 31, 2001 and 2000 and statements of cash flows for
the three months ended October 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, 2001. The results of
operations for the three months ended October 31, 2001 are not necessarily
indicative of operating results for the full year.
2) ISSUANCE OF COMMON STOCK
During the three months ended October 31, 2000 the Company sold 119,999 shares
of common stock for which it received $15,500.
During the three months ended October 31, 2001 the Company sold 526,333 shares
of common stock for which it received $53,300.
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 on 1,900,000 shares of common stock at
an average exercise price of $.15 are antidilutive.
4) 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 agreements, joint ventures or sales
of additional equity securities in private placements. However, there are
significant risks associated with the Registrant's 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 three months ended October 31, 2001, the Company had no licensing
revenue. No plants are scheduled for construction at October 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 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 are also under consideration. Although the Company is optimistic that
recent results in producing readily marketable activated carbon from tire
derived carbon black enhances 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 $1,235 to $58,838 and outside services decreased $28,521 to $9,000 for
the three months ended October 31, 2001 compared to the three months ended
October 31, 2000, primarily due to decreased research activities.
Financial Condition
- -------------------
The Company's liquidity increased in the three months ended October 31, 2001 as
cash increased by $519 since July 31, 2001. Operations used $52,781 compared to
the same period of the prior year in which operations used $85,680.
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 first quarter ended October 31, 2001, the Company sold common stock
to three 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
-------- ------------- -------------
09/12/01 13,333 $ 2,000
09/24/01 100,000 10,000
10/09/01 200,000 20,000
10/15/01 200,000 20,000
10/23/01 13,000 1,300
------------- -------------
526,333 $53,300
============= =============
We relied on Rule 147 and Section 4(2) of the Securities Act of 1933 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 and ask questions of
Management. 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.
November 26, 2001 Ronald L. Wilder
-----------------------------------------------------
Ronald L. Wilder, President, Chief Executive Officer,
Chief Financial Officer and Chief Accounting Officer.