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, 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 85-0206831
(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 December 6, 2002
was: No Par Value Common 38,702,226
Transitional Small Business Format: Yes ________ No X
PART I. FINANCIAL INFORMATION
Titan Technologies, Inc.
BALANCE SHEET
October 31, 2002
UNAUDITED
ASSETS
Current Assets
Cash ......................................................... $ 3,262
Property and Equipment, at cost
Furniture and fixtures ....................................... 5,407
Machinery .................................................... 7,706
-----------
13,113
Less accumulated depreciation ................................ 11,825
-----------
Net property and equipment ............................. 1,288
Other Assets .................................................. 609
-----------
$ 5,159
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable ............................................. $ 13,783
Other accrued liabilities .................................... 6,131
-----------
Total Current Liabilities .................................... 19,914
Stockholders' Equity (Deficit)
Common stock - no par value; authorized, 50,000,000 shares;
issued and outstanding, 37,820,226 shares .................... 2,766,132
Accumulated deficit .......................................... (2,780,887)
-----------
(14,755)
-----------
$ 5,159
===========
The accompanying notes are an integral part of these statements
Titan Technologies, Inc.
STATEMENTS OF OPERATIONS
For The Three Months Ended October 31
UNAUDITED
2002 2001
------------ ------------
REVENUES
Other income ................................ $ 7,170 $ 4,960
------------ ------------
COSTS AND EXPENSES
General and administrative .................. 51,131 58,838
Outside services ............................ 9,000 9,000
Depreciation ................................ 177 230
------------ ------------
60,308 68,068
Loss before income taxes .................... (53,138) (63,108)
Provision for income taxes .................. -- --
------------ ------------
Net Loss .................................... $ (53,138) $ (63,108)
============ ============
Weighted average common shares
outstanding, basic and diluted (Note 3) .... 37,778,226 35,424,035
============ ============
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 CASH FLOWS
For the Three Months Ended October 31
UNAUDITED
2002 2001
-------- --------
Cash flows from operating activities
Cash received from subcontractor .................. $ 7,170 $ 4,960
Cash paid for suppliers and employees ............. (50,136) (57,741)
-------- --------
Net cash used in operating activities ............. (42,966) (52,781)
Cash flows from financing activities
Proceeds from sale of common stock ................ 33,500 53,300
-------- --------
Net (decrease) increase in cash ................... (9,466) 519
Cash at beginning of period ....................... 12,728 34,375
-------- --------
Cash at end of period ............................. $ 3,262 $ 34,894
======== ========
Reconciliation of Net Loss to Net Cash
Used in Operating Activities
Net Loss ........................................... $(53,138) $(63,108)
Depreciation ...................................... 177 230
Changes in assets and liabilities
Increase in accounts payable ..................... 6,961 10,216
Increase (decrease) in accrued liabilities ....... 3,034 (119)
-------- --------
Net cash used in operating activities .............. $(42,966) $(52,781)
======== ========
The accompanying notes are an integral part of these statements
Titan Technologies, Inc.
NOTES TO FINANCIAL STATEMENTS
October 31, 2002 and 2001
1) BASIS OF PRESENTATION
The balance sheet at October 31, 2002 and the statements of operations for the
three months ended October 31, 2002 and 2001 and statements of cash flows for
the three months ended October 31, 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 accounting principles generally accepted in the United States of America
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the Company's audited financial statements and Form
10-KSB for the year ended July 31, 2002. The results of operations for the three
months ended October 31, 2002 are not necessarily indicative of operating
results for the full year."
2) ISSUANCE OF COMMON STOCK
During the three months ended October 31, 2002 the Company sold 335,000 shares
of common stock for which it received $35,500.
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 1,500,000 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 is
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, 2002, the Company had no licensing
revenue. No plants are scheduled for construction at October 31, 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.
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
decreased $7,707 to $51,131 for the three months ended October 31, 2002 compared
to the three months ended October 31, 2001, primarily due to the decrease in
travel and legal expenses.
Financial Condition
- -------------------
The Company's liquidity decreased in the three months ended October 31, 2002 as
cash decreased by $9,466 since July 31, 2002. Operations used $42,966 compared
to the same period of the prior year in which operations used $52,781. Proceeds
from the sale of common stock was $33,500 during the three months ended October
31, 2002, compared to $53,300 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 is
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 3. CONTROLS AND PROCEDURES
The Company's principal executive and financial officer has evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14(c) and 15d-14(c)) as of a date within 90 days of the
"filing date (the ""Evaluation Date"") of this quarterly report, and has
concluded" "that as of the Evaluation Date, the Company's disclosure controls
were adequate," effective and ensure that material information relating to the
Company would be made known to him timely by others within the entity.
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect the Company's disclosure controls
and procedures subsequent to the Evaluation Date, nor were there any
significant deficiencies or material weaknesses in such disclosure controls and
procedures requiring corrective actions. As a result, no corrective actions
were taken.
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, 2002, the Company sold common stock
to four 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
-------- ------------- -------------
08/04/02 200,000 $20,000
08/06/02 50,000 5,000
08/20/02 10,000 1,000
09/1//02 50,000 5,000
10/01/02 25,000 2,500
------- -------
335,000 $33,500
======= =======
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) Exhibit 99, Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, attached.
(b) Reports on Form 8-K. State whether any reports on Form 8-K have been
filed during the quarter for which this report is filed, listing the items
reported, any financial statements filed, and the dates of any such reports.
NONE
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.
December 6, 2002 Ronald L. Wilder
-----------------------------------------------------
Ronald L. Wilder, President, Chief Executive Officer,
Chief Financial Officer and Chief Accounting Officer.
CERTIFICATION
I, Ronald L. Wilder, the principal executive and financial officer, of Titan
Technologies, Inc. certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Titan Technologies,
Inc., SEC file No 0-25024;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented" in this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant is made known to us by others
within this entity, particularly during the period in which this quarterly
report is being prepared.
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
c) preseented in this quarterly report my conclusions about the effectiveness
of the disclosure controls and procedures based on my evaluation as of the
Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and" board of directors:
a) all significant defiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identidied for the
registrant's auditors and any material weaknesses in internal controls; and
b) any fraud, whetheror not material, that involves management or other
employees who have a sighificant role in the registrant's internal
controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls "subsequent to the date of my most
recent evaluation, including any corrective actions with" regard to
significant defiencies and material weaknesses.
Date: December 9, 2002
Ronald L. Wilder
----------------------------------
Ronald L. Wilder, principal executive
and financial officer
[Signature] [Title]
There are no other certifying officers.
Exhibit 99.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. 1350 (as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002), I, the undersigned, hereby certify that to the best of my
knowledge the Quarterly Report on Form 10-QSB of Titan Technologies, Inc. for
the quarterly period ended October 31, 2002 (the "Report") fully complies
with the requirements of section 13(a) or 15(d) of the Securities Exchange Act
of 1934 and that the information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of
the Company.
Date: December 9, 2002 Ronald L. Wilder
------------------- ---------------------------------------
Ronald L. Wilder, President
(Chief Executive Officer)
(Chief Financial Officer)