UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended September 30, 1996
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934 For the transition period from to
Commission File Number 33-55254-33
CLAIRE TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Nevada 87-0467224
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation)
7373 North Scottsdale Road, Suite B-150
Scottsdale, Arizona 85253
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 483-8700
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [X] Yes [ ] No
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of October 17, 1996
- ------------------------------------ -----------------------------------
$.001 par value Class A Common Stock 8,539,500 Shares
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BASIS OF PRESENTATION
General
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders'
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
Operating results for the nine months ended September 30, 1996 are not
necessarily indicative of the results that can be expected for the year ending
December 31, 1996.
Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Company had $4,446 cash in the bank. There
can be no assurance that the Company will be able to meet its financial
obligations. During the quarter ended September 30, 1996, the Company invested
no additional money in Hyperflow Technologies, Inc., a Nevada corporation (total
$1,259,000 invested to date). The Company owns approximately 70.5% of Hyperflow.
The investment is recorded under the equity method because the Company does not
control the operations of Hyperflow. During the quarter ended September 30,
1996, the Company loaned $118,000 to Hyperflow.
Hyperflow is a development stage Company engaged in the design,
engineering, manufacturing, and sales of etching, stripping, aqueous and
semi-aqueous precision cleaning systems for computer, electronic and
semi-conductor industries. Hyperflow has not generated significant income, and
lost $246,000 in the quarter ($645,000 for the nine months).
2
RESULTS OF OPERATIONS
The Company has not had operations that have generated income since its
inception. Its only receipts have been from the sale of its common stock, which
have been used to pay expenses and acquire a 70.5% interest in Hyperflow.
Further, there has been a limited trading market for the Company's common stock
since its inception to the date of this report.
During the nine months ended September 30, 1996, management fees in the
amount of $306,000 were paid or accrued ($168,800 is shown in accounts payable
at September 30, 1996). The Company's President received $90,000 and the
Company's Secretary received $90,000, including accrued amounts of $61,000 and
$30,000 respectively. $47,000 was paid or accrued to an entity controlled by the
Company's Secretary for rent and other administrative services, including
$36,000 accrued at September 30, 1996.
Net loss for the three months ended September 30, 1996 was $329,985
compared with net loss of $260,100 for the same period in 1995. The main reason
for the increase is due to the large amount of interest and loss on investment
expenses that were not present in 1995.
General and administrative expenses for the three months ended September
30, 1996 were $129,626 compared with $260,100 for the same period in 1995.
Depreciation and amortization expense for the three months ended September
30, 1996 was $23,278 compared with $0 for the same period in 1995.
Interest expense for the three months ended September 30, 1996 was $3,356
compared with $0 for the same period in 1995. Interest expense was paid on a
bridge loan and other short-term debt.
Net loss for the nine months ended September 30, 1996 was $1,092,918
compared with a net loss of $442,167 for the same period in 1995.
General and administrative expenses for the nine months ended September 30,
1996 were $497,512 compared with $442,167 for the same period in 1995, an
increase of 12%.
Depreciation and amortization expense for the nine months ended September
30, 1996 was $43,773 compared with $0 for the same period in 1995.
Interest expense for the nine months ended September 30, 1996 was $96,908
compared with $0 for the same period in 1995.
Loss from investment, which represents the Company's share of Hyperflow's
net loss was $173,725 for the three months ended September 30, 1996 and $454,725
for the nine months ended September 30, 1996.
3
PART II - OTHER INFORMATION
Item 6.
Exhibits and Reports on Form 8-K
(a) Exhibits Page
99.1 Financial Statements as of September 30, 1996. F-1
Financial Data Schedule
(b) Reports on Form 8-K
None.
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLAIRE TECHNOLOGIES, INC.
(Registrant)
DATED: November 15, 1996 /s/ Logan B. Anderson
--------------------- ----------------------
Logan B. Anderson, Secretary/Treasurer
5
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
September 30,
1996
ASSETS
CURRENT ASSETS
Cash in bank $ 4,446
----------------------
TOTAL CURRENT ASSETS 4,446
EQUIPMENT 18,626
OTHER ASSETS
Investment 88,460
Loan receivable - Hyperflow 118,000
Goodwill 398,220
----------------------
604,680
----------------------
$ 627,752
======================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 180,314
Bridge loan 14,999
Loans payable - related parties 231,750
Accrued interest payable 18,300
----------------------
TOTAL CURRENT LIABILITIES 445,363
STOCKHOLDERS' EQUITY Common Stock $.001 par value:
Authorized - 50,000,000 shares
Issued and outstanding
8,539,500 shares 8,540
Additional paid-in capital 2,260,710
Deficit accumulated during the
development stage (2,086,861)
----------------------
TOTAL STOCKHOLDERS' EQUITY 182,389
----------------------
$ 627,752
======================
F-1
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
5/3/88
Three months ended Nine months ended (Date of
September 30, September 30, inception)
1996 1995 1996 1995 to 9/30/96
------------- ------------- -------------- ------------- -------------
Net Sales $ 0 $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0 0
------------- ------------- -------------- ------------- ---------------
GROSS PROFIT 0 0 0 0 0
General and Administrative
expenses 129,626 260,100 497,512 442,167 1,205,420
Depreciation and amortization 23,278 0 43,773 0 56,666
Interest expense 3,356 0 96,908 0 102,750
Bad debts 0 0 0 0 2,300
------------- ------------- -------------- ------------- ---------------
156,260 260,100 638,193 442,167 (1,367,136)
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE OTHER (156,260) (260,100) (638,193) (442,167) (1,367,136)
OTHER EXPENSE
Loss on investment (173,725) 0 (454,725) 0 (719,725)
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE
INCOME TAXES (329,985) (260,100) (1,092,918) (442,167) (2,086,861)
INCOME TAXES 0 0 0 0 0
------------- ------------- -------------- ------------- ---------------
NET LOSS $ (329,985) $ (260,100) $ (1,092,918) $ (442,167) $ (2,086,861)
============= ============= ============== ============= ===============
Net income (loss) per weighted
average share - operations $ (.02) $ (.04) $ (.09) $ (.15)
Net income (loss) per weighted
average share - other expense (.02) .00 (.06) .00
------------- ------------- -------------- -------------
Net income (loss) per weighted
average share $ (.04) $ (.04) $ (.15) $ (.15)
============= ============= ============== =============
Weighted average number of
common shares used to
compute net income (loss)
per weighted average share 8,537,761 5,856,304 7,283,547 2,998,461
============= ============= ============== =============
F-2
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
Deficit
Accumulated
Common Stock Additional Stock During
Par Value $.001 Paid-in Subscription Development
Shares Amount Capital Receivable Stage
------------- ------------- ----------------- ---------------- ------------------
Balances at 5/3/88 (Date of inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted)
at $.002 per share at 5/5/88 1,000,000 1,000 1,000
Net loss for period (1,950)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/88 1,000,000 1,000 1,000 0 (1,950)
Net loss for year (10)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/89 1,000,000 1,000 1,000 0 (1,960)
Net loss for year (10)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/90 1,000,000 1,000 1,000 0 (1,970)
Net loss for year (10)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/91 1,000,000 1,000 1,000 0 (1,980)
Net loss for year (20)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/92 1,000,000 1,000 1,000 0 (2,000)
Net income for year 0
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/93 1,000,000 1,000 1,000 0 (2,000)
Net income for year 0
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/94 1,000,000 1,000 1,000 0 (2,000)
Issuance of common stock (restricted)
at 4/3/95 for subsidiary 10,500,000 10,500 (6,000)
Cancellation of stock at 5/31/95 (10,400,000) (10,400) 6,000
Sale of common stock (Regulation "S")
at $.05 per share at 5/16/95 2,000,000 2,000 98,000
Issuance of common stock (restricted)
at $.001 per share for services at
6/30/95 1,900,000 1,900
Sale of common stock (restricted)
at $1.00 per share at 6/30/95 520,000 520 519,480
Costs associated with stock sales (100,000)
Sale of common stock (restricted)
at $1.00 per share at 7/24/95 455,000 455 454,545
Issuance of common stock (restricted)
at $.001 per share for services at
11/30/95 25,000 25 (25) 0
Options exercised 156,000 156 155,844 (81,000)
Net loss for year (991,943)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/95 6,156,000 $ 6,156 $ 1,128,844 $ (81,000) $ (993,943)
F-3
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Continued)
(Unaudited)
Deficit
Accumulated
Common Stock Additional Stock During
Par Value $.001 Paid-in Subscription Development
Shares Amount Capital Receivable Stage
------------- ------------- ----------------- ---------------- ------------------
Balances at 12/31/95 6,156,000 $ 6,156 $ 1,128,844 $ (81,000) $ (993,943)
Collection of stock subscription 81,000
Issuance of common stock (restricted)
at $.50 per share for interest expense
at 5/14/96 130,000 130 64,870
Sale of common stock (Regulation S)
at $.50 per share at 5/14/96 1,308,500 1,309 652,941
Sale of common stock (S-8) at $1.00
per share at 5/20/96 25,000 25 24,975
Sale of common stock (Regulation S)
at $.50 per share at 5/31/96 800,000 800 399,200
Sale of common stock (S-8) at $.75 per
share at 6/24/96 25,000 25 18,725
Sale of common stock (S-8) at $.75 per
share at 6/25/96 45,000 45 33,705
Sale of common stock (S-8) at $.75 per
share at 6/27/96 30,000 30 22,470
Deferred offering costs (100,000)
Sale of common stock (S-8) at $.75 per
share at 7/8/96 20,000 20 14,980
Net loss for period (1,092,918)
------------- ------------- ----------------- ----------------- ------------------
Balances at 9/30/96 8,539,500 $ 8,540 $ 2,260,710 $ 0 $ (2,086,861)
============= ============= ================= ================= ==================
F-4
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
5/3/88
Nine months ended (Date of
September 30, inception)
1996 1995 to 9/30/96
------------- -------------- -------------
OPERATING ACTIVITIES
Net (loss) $ (1,092,918) $ (442,167) $ (2,086,861)
Adjustments to reconcile net (loss) to
cash used by operating activities:
Depreciation & amortization 43,773 0 56,666
Stock issued for expenses 65,000 2,000 67,000
Loss on investment 454,725 0 719,725
Changes in assets and liabilities:
Accounts receivable 0 (36,538) 0
Accounts payable 45,924 31,692 180,314
Accrued interest payable 12,609 0 18,300
------------- -------------- ---------------
NET CASH USED BY
OPERATING ACTIVITIES (470,887) (445,013) (1,044,856)
INVESTING ACTIVITIES
Purchase of equipment (2,023) (20,230) (22,647)
Purchase of investment (370,185) (500,000) (808,185)
Loan - related party (118,000) 0 (118,000)
Goodwill (119,815) 0 (450,815)
Organization costs 0 0 (50)
------------- -------------- ---------------
NET CASH USED BY
INVESTING ACTIVITIES (610,023) (520,230) (1,399,697)
FINANCING ACTIVITIES
Proceeds from sale of common stock 1,250,250 1,075,000 2,202,250
Loan proceeds 474,986 0 1,036,193
Loan repayments (721,206) 0 (789,444)
------------- -------------- ---------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 1,004,030 1,075,000 2,448,999
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (76,880) 109,757 4,446
Cash and cash equivalents at beginning
of period 81,326 0 0
------------- -------------- ---------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 4,446 $ 109,757 $ 4,446
============= ============== ===============
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 19,299 $ 0 $ 19,450
============= ============== ===============
F-5