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 June 30, 1997
[ ] 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 Small Business issuer as specified in its charter)
Nevada 87-0467224
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation)
7373 North Scottsdale Road, Suite B-169
Scottsdale, Arizona 85253
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (602) 483-8700
Indicate by a check mark whether the issuer (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 issuer 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 issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of June 30, 1997
- ------------------------------------ ---------------------------------
$.001 par value Class A Common Stock 2,284,875 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'
deficit 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.
The Annual Shareholders Meeting was held on June 30, 1997 at our office
location. The results of voting on presented items on the agenda were as
follows: Election of Directors, 99.9% in favor, approval of conversion of the
Company debt to shares and the issuance of shares; 99.7% in favor, approval of
4:1 reverse split of the Company stock; 99.4% in favor, approval of Smith &
Company as the accountants for the Company; 99.9% in favor and 99.99% in favor
of transacting any business that may come before the meeting or any
adjournments. There was no further business discussed at the meeting.
Operating results for the six months ended June 30, 1997 are not
necessarily indicative of the results that can be expected for the year ending
December 31, 1997.
Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997, the Company had $26,704 cash in the bank. There can be
no assurance that the Company will be able to meet its financial obligations.
During the quarter ending June 30, 1997 and to date, the Company was
investigating several viable new investment possibilities. The Company has
negotiated the settlement of $827,434 in debt by issuing 1,034,293 shares of its
common stock at $.80 per share. The shares were issued and the debt settled in
July 1997.
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. Further, there has been a limited trading market
for the Company's common stock since its inception to the date of this report.
2
As of March 31, 1997 all management and consulting contracts were canceled.
Neither the Company's President or Company's Secretary received any fees for the
quarter ending June 30, 1997.
Net loss for the three months ended June 30, 1997 was $6,907 compared with net
loss of $460,871 for the same period in 1996. The main reason for the decrease
is the large decrease in management and consulting contracts. Also, the Company
had no losses on investments as it did in 1996. The Company is still in the
process of looking for a viable investment and the main expense for this quarter
was bad debts.
General and administrative expenses for the three months ended June 30, 1997
were $(11,777) compared with $207,457 for the same period in 1996. The decrease
is mainly due to the cancellation of all management fees and a reduction in
administrative fees and a re-negotiation and reduction of such expenses.
Depreciation and amortization expense for the three months ended June 30, 1997
was $1,184 compared with $11,448 for the same period in 1996.
Interest expense for the three months ended June 30, 1997 was $0 compared with
$73,966 for the same period in 1996. The decrease is mainly due to the reduction
in principle on a bridge loan and other short-term debt.
Net loss for the six months ended June 30, 1997 was $137,031 compared with net
loss of $762,933 for the same period in 1996.
General and administrative expenses for the six months ended June 30, 1997 were
$86,577 compared with $367,886 for the same period in 1996.
Depreciation and amortization expense for the six months ended June 30, 1997 was
$2,368 compared with $20,495 for the same period in 1996.
Interest expense for the six months ended June 30, 1997 was $30,586 compared
with $93,552 for the same period in 1996.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Financial Statements as of June 30, 1997.
Financial Data Schedule
(b) Reports on Form 8-K
None.
3
SIGNATURES
Pursuant to the requirements of the Securities and 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.
DATED: August 14, 1997 /s/ Jan Wallace
Jan Wallace, President and Director
4
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
June 30,
1997
----------------------
ASSETS
CURRENT ASSETS
Cash in bank $ 26,704
Loan receivable 50,000
Loan receivable - related party 20,000
----------------------
TOTAL CURRENT ASSETS 96,704
EQUIPMENT 22,760
----------------------
$ 119,464
======================
LIABILITIES & DEFICIT
CURRENT LIABILITIES
Accounts payable $ 23,894
Accrued expenses - related parties 363,100
Bridge loan - related party 14,999
Loans payable - related parties 398,750
Accrued interest payable - related parties 33,590
----------------------
TOTAL CURRENT LIABILITIES 834,333
STOCKHOLDERS' DEFICIT
Common Stock $.001 par value:
Authorized - 50,000,000 shares
Issued and outstanding
2,284,875 shares * 2,285
Additional paid-in capital 2,386,965
Deficit accumulated during the
development stage (3,104,119)
----------------------
TOTAL STOCKHOLDERS' DEFICIT (714,869)
----------------------
$ 119,464
======================
* Reflects 4-for-1 reverse split which was approved June 30, 1997.
F-1
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
5/3/88
Three months ended Six months ended (Date of
June 30, June 30, inception)
1997 1996 1997 1996 to 6/30/97
------------- ------------- -------------- ------------- ---------------
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 (11,777) 207,457 86,577 367,886 1,374,597
Depreciation and amortization 1,184 11,448 2,368 20,495 18,470
Interest expense 0 73,966 30,586 93,552 137,785
Bad debts 17,500 0 17,500 0 325,300
------------- ------------- -------------- ------------- ---------------
6,907 292,871 137,031 481,933 1,856,152
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE OTHER (6,907) (292,871) (137,031) (481,933) (1,856,152)
OTHER EXPENSE
Loss on investment 0 (168,000) 0 (281,000) (1,247,967)
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE
INCOME TAXES (6,907) (460,871) (137,031) (762,933) (3,104,119)
INCOME TAXES 0 0 0 0 0
------------- ------------- -------------- ------------- ---------------
NET LOSS $ (6,907) $ (460,871) $ (137,031) $ (762,933) $ (3,104,119)
============= ============= ============== ============= ===============
Net income (loss) per weighted
average share - operations $ (.00) $ (.16) $ (.06) $ (.29)
Net income (loss) per weighted
average share - other expense .00 (.10) .00 (.17)
------------- ------------- -------------- -------------
Net income (loss) per weighted
average share $ (.00) $ (.26) $ (.06) $ (.46)
============= ============= ============== =============
Weighted average number of
common shares used to
compute net income (loss)
per weighted average share 2,165,370 1,789,573 2,154,488 1,666,884
============= ============= ============== =============
F-2
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(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
$.008 per share at 5/5/88 250,000 250 1,750
Net loss for period (1,950)
Balances at 12/31/88 250,000 250 1,750 0 (1,950)
Net loss for year (10)
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/89 250,000 250 1,750 0 (1,960)
Net loss for year (10)
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/90 250,000 250 1,750 0 (1,970)
Net loss for year (10)
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/91 250,000 250 1,750 0 (1,980)
Net loss for year (20)
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/92 250,000 250 1,750 0 (2,000)
Net income for year 0
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/93 250,000 250 1,750 0 (2,000)
Net income for year 0
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/94 250,000 250 1,750 0 (2,000)
Issuance of common stock (restricted) at
4/3/95 for subsidiary 2,625,000 2,625 1,875
Cancellation of stock at 5/31/95 (2,600,000) (2,600) (1,800)
Sale of common stock (Regulation "S") at
$.20 per share at 5/16/95 500,000 500 99,500
Issuance of common stock (restricted) at
$.004 per share for services at 6/30/95 475,000 475 1,425
Sale of common stock (restricted) at $4.00
per share at 6/30/95 130,000 130 519,870
Sale of common stock (restricted) at $4.00
per share at 7/24/95 113,750 114 454,886
Costs associated with stock sales (100,000)
Issuance of common stock (restricted) at
$.001 per share for services at 11/30/95 6,250 6 (6)
Options exercised 39,000 39 155,961 (81,000)
Net loss for year (991,943)
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/95 1,539,000 1,539 1,133,461 (81,000) (993,943)
F-3
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(continued)
Deficit
Accumulated
Common Stock Additional Stock During
Par Value $.001 Paid-in Subscription Development
Shares Amount Capital Receivable Stage
------------- ------------- --------------- --------------- ---------------
Balances at 12/31/95 1,539,000 $ 1,539 $ 1,133,461 $ (81,000) $ (993,943)
Collection of stock subscription 81,000
Issuance of common stock (restricted) at
$2.00 per share for interest expense
at 5/14/96 32,500 33 64,967
Issuance of common stock (Regulation S)
to pay interest expense and reduce debt
at $2.00 per share at 5/14/96 327,125 327 653,923
Sale of common stock (S-8) at $4.00 per
share at 5/20/96 6,250 6 24,994
Sale of common stock (Regulation S) at $2.00
per share at 5/31/96 200,000 200 399,800
Sale of common stock (S-8) at $3.00 per share
at 6/24/96 6,250 6 18,744
Sale of common stock (S-8) at $3.00 per share
at 6/25/96 11,250 11 33,739
Sale of common stock (S-8) at $3.00 per share
at 6/27/96 7,500 8 22,492
Deferred offering costs (100,000)
Sale of common stock (S-8) at $3.00 per share
at 7/8/96 5,000 5 14,995
Net loss for year (1,973,145)
Balances at 12/31/96 2,134,875 2,135 2,267,115 0 (2,967,088)
Issuance of common stock (restricted) at
$.80 per share for interest expense at
2/28/97 25,000 25 19,975
Sale of common stock (restricted) at $.80
per share at 6/25/97 93,750 94 74,906
Sale of common stock (restricted) at $.80
per share at 6/30/97 31,250 31 24,969
Net loss for period (137,031)
------------- ------------- --------------- --------------- ---------------
Balances at 6/30/97 2,284,875 $ 2,285 $ 2,386,965 $ 0 $ (3,104,119)
============= ============= =============== =============== ===============
*Common stock shares, amounts and per share figures reflect a 4-for-1 reverse
split of the Company's stock which was approved June 30, 1997.
F-4
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
5/3/88
Six months ended (Date of
June 30, inception)
1997 1996 to 6/30/97
------------- -------------- ---------------
OPERATING ACTIVITIES
Net (loss) $ (137,031) $ (762,933) $ (3,104,119)
Adjustments to reconcile net (loss) to cash used by
operating activities:
Depreciation & amortization 2,368 20,495 18,470
Stock issued for expenses 20,000 65,000 106,044
Loss on investment 0 281,000 757,967
Changes in assets and liabilities:
Prepaid expenses 5,000 0 0
Accounts payable 15,773 0 23,894
Accrued expenses 79,300 25,393 363,100
Accrued interest payable 10,586 9,262 33,590
------------- -------------- ---------------
NET CASH USED BY OPERATING ACTIVITIES (4,004) (361,783) (1,801,054)
INVESTING ACTIVITIES
Purchase of equipment 0 (2,023) (30,147)
Purchase of investment 0 (370,185) (438,000)
Loans (70,000) 0 (70,000)
Goodwill 0 (119,815) (331,000)
Organization costs 0 0 (50)
------------- -------------- ---------------
NET CASH USED BY INVESTING ACTIVITIES (70,000) (492,023) (869,197)
FINANCING ACTIVITIES
Proceeds from sale of common stock 100,000 769,045 1,648,000
Loan proceeds 0 350,236 1,372,193
Loan repayments 0 (255,000) (323,238)
------------- -------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 100,000 864,281 2,696,955
------------- -------------- ---------------
INCREASE IN CASH AND CASH EQUIVALENTS 25,996 10,475 26,704
Cash and cash equivalents at beginning
of period 708 81,326 0
------------- -------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 26,704 $ 91,801 $ 26,704
============= ============== ===============
SUPPLEMENTAL INFORMATION
Cash paid for:
Interest $ 54 $ 136 $ 473
============= ============== ===============
F-5