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, 2002
[ ] 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 June 3,
2002 was: No Par Value Common 37,237,476
Transitional Small Business Format: Yes ________ No ____X____
PART I. FINANCIAL INFORMATION
Titan Technologies, Inc.
BALANCE SHEET
April 30, 2002
UNAUDITED
ASSETS
Current Assets
Cash ..................................................... $ 48,019
Property and Equipment, at cost
Furniture and fixtures ................................... 5,407
Machinery ................................................ 7,706
-----------
13,113
Less accumulated depreciation ............................ 11,417
-----------
Net property and equipment ............................. 1,696
Other Assets .............................................. 609
-----------
$ 50,324
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable ......................................... $ 7,119
Other accrued liabilities ................................ 3,033
-----------
Total Current Liabilities ................................ 10,152
Stockholders' Equity
Common stock - no par value; authorized,
50,000,000 shares;issued and outstanding,
37,237,476 shares ........................................ 2,702,857
Accumulated deficit ...................................... (2,662,685)
-----------
40,172
-----------
$ 50,324
===========
The accompanying notes are an integral part of these statements.
2
Titan Technologies, Inc.
STATEMENTS OF OPERATIONS
For The Three Months Ended April 30
UNAUDITED
2002 2001
------------ ------------
REVENUES
Other income ................................ $ 9,230 $ 8,530
------------ ------------
COSTS AND EXPENSES
General and administrative .................. 52,603 50,626
Outside services ............................ 12,230 6,507
Depreciation ................................ 231 279
------------ ------------
65,064 57,412
Loss before income taxes .................... (55,834) (48,882)
Provision for income taxes .................. -- --
------------ ------------
Net Loss .................................... $ (55,834) $ (48,882)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 3) .... 36,607,254 34,304,504
============ ============
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 OPERATIONS
For The Nine Months Ended April 30
UNAUDITED
2002 2001
------------ ------------
REVENUES
Other income ................................ $ 20,640 $ 25,790
------------ ------------
COSTS AND EXPENSES
General and administrative .................. 169,120 182,709
Outside services ............................ 34,000 59,308
Depreciation ................................ 692 836
------------ ------------
203,812 242,853
Loss before income taxes .................... (183,172) (217,063)
Provision for income taxes .................. -- --
------------ ------------
Net Loss .................................... $ (183,172) $ (217,063)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 3) .... 36,014,422 34,181,430
============ ============
Basic and diluted (loss) per common share ... $ (0.01) $ (0.01)
============ ============
The accompanying notes are an integral part of these statements.
4
Titan Technologies, Inc.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended April 30
UNAUDITED
2002 2001
--------- ---------
Cash flows from operating activities
Cash received from subcontractor ................ $ 20,640 $ 25,790
Cash paid for suppliers and employees ........... (190,696) (239,467)
--------- ---------
Net cash used in operating activities ........... (170,056) (213,677)
Cash flows from financing activities
Proceeds from sale of common stock .............. 183,700 74,500
--------- ---------
Net increase (decrease) in cash ................. 13,644 (139,177)
Cash at beginning of year ....................... 34,375 157,180
--------- ---------
Cash at end of period ........................... $ 48,019 $ 18,003
========= =========
Reconciliation of Net Loss to Net Cash
Used in Operating Activities
Net Loss ......................................... $(183,172) $(217,063)
Adjustments to reconcile net loss to
net cash used in Operating Activities:
Depreciation .................................... 692 836
Noncash compensation ............................ 7,500 --
Changes in assets and liabilities
Decrease in prepaid expenses .................... -- 1,025
Increase (decrease) in accounts payable ......... 5,153 (279)
(Decrease) increase in accrued liabilities ...... (229) 1,804
--------- ---------
Net cash used in operating activities ............ $(170,056) $(213,677)
========= =========
During the quarter ended April 30, 2002, the Company exchanged 75,000 shares of
common stock in settlement of professional fees amounting to $7,500.
The accompanying notes are an integral part of these statements.
5
Titan Technologies, Inc.
NOTES TO FINANCIAL STATEMENTS
April 30, 2002 and 2001
1) BASIS OF PRESENTATION
The balance sheet at April 30, 2002 and the statements of operations for the
three months and nine months ended April 30, 2002 and 2001 and statements of
cash flows for the nine months ended April 30, 2002 and 2001 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 nine months ended April 30, 2002 are not necessarily
indicative of operating results for the full year.
2) ISSUANCE OF COMMON STOCK
During the nine months ended April 30, 2001 the Company sold 703,332 shares of
common stock for which it received $74,500.
During the nine months ended April 30, 2002 the Company sold 1,830,333 shares
of common stock for which it received $183,700. Additionally, the Company
exchanged 75,000 shares of common stock for professional services provided
amounting to $7,500.
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 for the three months and nine months ended April 30, 2002 and 2001
because the inclusion of options on 1,900,000 shares of common stock at an
average exercise price of $.16 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.
6
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 Company to continue as a
going concern in the immediate future, together with results of ongoing 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 Company'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
The following Results of Operations should be read in connection with the
Company's financial statements and notes thereto. Information discussed herein
includes forward-looking statements or opinions regarding future events or the
future financial performance of the Company, and are subject to a number of
risks and other factors which could cause the actual results to differ
materially from those contained in forward looking statements. Among such
factors are: general business and economic conditions; customer acceptance of
anticipated products which may be produced from plants using the Company's
technology; the Company's ability to license its technology for additional
plants; the ability of licensees to obtain financing for such plants; the
ability of any additional plants, if financed, constructed and operated, to
perform in accordance with expectation; and other risk factors listed in this
Form 10-QSB or listed from time to time in documents filed by the Company with
the Securities and Exchange Commission.
Results of Operations
- ---------------------
During the nine months ended April 30, 2002, the Company had no licensing
revenue. No plants are scheduled for construction at April 30, 2002.
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.
7
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 $13,589 to $169,120 and outside services decreased $25,308 to $34,000
for the nine months ended April 30, 2002 compared to the nine months ended April
30, 2001, primarily due to decreased research activities.
As a result of activities by management, general and administrative expenses
increased $1,977 to $52,603 and outside services increased $5,723 to $12,230 for
the three months ended April 30, 2002 compared to the three months ended April
30, 2001, primarily due to increased research activities.
Financial Condition
- -------------------
The Company's liquidity increased in the nine months ended April 30, 2002 as
cash increased by $13,644 since July 31, 2001. Operations used $170,056 compared
to the same period of the prior year in which operations used $213,677. Proceeds
from the sale of common stock was $183,700 during the nine months ended April
30, 2002, compared to $74,500 for the same period in 2001.
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.
8
Defer payment of officer salaries if required.
Management believes that these steps will allow the Company 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 Company'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.
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 nine months ended April 30, 2002, we sold common stock to fourteen
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
9/12/01 13,333 $ 2,000
9/24/01 100,000 10,000
10/9/01 200,000 20,000
10/15/01 200,000 20,000
10/23/01 13,000 1,300
12/17/01 150,000 15,000
01/02/02 30,000 3,000
01/08/02 10,000 1,000
01/15/02 100,000 10,000
01/25/02 50,000 5,000
02/01/02 220,000 22,000
02/05/02 24,000 2,400
02/08/02 100,000 10,000
03/29/02 135,000 13,500
04/10/02 235,000 23,500
04/11/02 50,000 5,000
04/15/02 200,000 20,000
--------- --------
1,830,333 $183,700
========= ========
Additionally, the Company exchanged 75,000 shares of common stock for
professional services provided amounting to $7,500.
9
We relied on 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. 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 Jersey Transfer & Trust Co., 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.
June 3, 2002 Ronald L. Wilder
-----------------------------------------------------
Ronald L. Wilder, President, Chief Executive Officer,
Chief Financial Officer and Chief Accounting Officer.