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, 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 September 30, 1997
- -------------------------------------- --------------------------------------
$.001 par value Class A Common Stock 3,319,168 Shares
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.
The debt conversion and the 4:1 reverse split which was approved at the Annual
Shareholders Meeting held on June 30, 1997 was implemented. Conversion of shares
became effective on October 1, 1997.
Operating results for the nine months ended September 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 September 30, 1997, the Company had $993.13 cash in the bank. There
can be no assurance that the Company will be able to meet its financial
obligations. During the quarter ending September 30, 1997 and to date, the
Company was investigating several viable new investment possibilities.
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.
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 September 30, 1997.
Net loss for the three months ended September 30, 1997 was $20,295 compared with
net loss of $329,985 for the same period in 1996. This decrease is due to the
cancellation of all management and consulting contracts. Also, the Company had
no losses on investments as it did in 1996. The Company's main expense for this
quarter was administrative.
General and administrative expenses for the three months ended September 30,
1997 were $22,182 compared with $129,626 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 September 30,
1997 was $1,183 compared with $23,278 for the same period in 1996.
Interest expense for the three months ended September 30, 1997 was $(3,070)
compared with $3,356 for the same period in 1996. The decrease is because of the
debt conversion that was approved at the annual general meeting and a reduction
of interest calculated in prior quarters.
Net loss for the nine months ended September 30, 1997 was $157,326 compared with
net loss of $1,092,918 for the same period in 1996.
General and administrative expenses for the nine months ended September 30, 1997
were $108,759 compared with $497,512 for the same period in 1996.
Depreciation and amortization expense for the nine months ended September 30,
1997 was $3,551 compared with $43,773 for the same period in 1996.
Interest expense for the nine months ended September 30, 1997 was $27,516
compared with $96,908 for the same period in 1996.
For the nine months ended September 30, 1997 we incurred bad debt expense of
$17,500, which was a settlement reached with a contractor for which Claire had
guaranteed payment to.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Financial Statements as of September 30, 1997.
Financial Data Schedule
(b) Reports on Form 8-K
None.
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: November 11, 1997 /s/ Jan Wallace
Jan Wallace, President and Director
CLAIRE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
September 30,
1997
----------------------
ASSETS
CURRENT ASSETS
Cash in bank $ 993
Loan receivable 70,000
----------------------
TOTAL CURRENT ASSETS 70,993
EQUIPMENT 21,576
----------------------
$ 92,569
======================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 13,694
Accrued expenses - related parties 6,600
----------------------
TOTAL CURRENT LIABILITIES 20,294
STOCKHOLDERS' EQUITY Common Stock $.001 par value:
Authorized - 50,000,000 shares
Issued and outstanding
3,319,168 shares * 3,319
Additional paid-in capital 3,193,370
Deficit accumulated during the
development stage (3,124,414)
----------------------
TOTAL STOCKHOLDERS' EQUITY 72,275
----------------------
$ 92,569
======================
* 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 Nine months ended (Date of
September 30, September 30, inception)
1997 1996 1997 1996 to 9/30/97
------------- ------------- -------------- ------------- ---------------
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 22,182 129,626 108,759 497,512 1,396,779
Depreciation and amortization 1,183 23,278 3,551 43,773 19,653
Interest expense (3,070) 3,356 27,516 96,908 134,715
Bad debts 0 0 17,500 0 325,300
------------- ------------- -------------- ------------- ---------------
20,295 156,260 157,326 638,193 1,876,447
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE OTHER (20,295) (156,260) (157,326) (638,193) (1,876,447)
OTHER EXPENSE
Loss on investment 0 (173,725) 0 (454,725) (1,247,967)
------------- ------------- -------------- ------------- ---------------
NET LOSS BEFORE
INCOME TAXES (20,295) (329,985) (157,326) (1,092,918) (3,124,414)
INCOME TAXES 0 0 0 0 0
------------- ------------- -------------- ------------- ---------------
NET LOSS $ (20,295) $ (329,985) $ (157,326) $ (1,092,918) $ (3,124,414)
============= ============= ============== ============= ===============
Net income (loss) per weighted
average share - operations $ (.01) $ (.07) $ (.06) $ (.35)
Net income (loss) per weighted
average share - other expense .00 (.08) .00 (.25)
------------- ------------- -------------- -------------
Net income (loss) per weighted
average share $ (.01) $ (.15) $ (.06) $ (.60)
============= ============= ============== =============
Weighted average number of
common shares used to
compute net income (loss)
per weighted average share 3,041,070 2,134,440 2,429,419 1,820,887
============= ============= ============== =============
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
Issuance of common stock (S-8) at
$.78 per share to cancel liabilities at
7/28/97 1,034,293 1,034 806,405
Net loss for period (157,326)
------------- ------------- --------------- --------------- ---------------
Balances at 9/30/97 3,319,168 $ 3,319 $ 3,193,370 $ 0 $ (3,124,414)
============= ============= =============== =============== ===============
*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
Nine months ended (Date of
September 30, inception)
1997 1996 to 9/30/97
------------- -------------- ---------------
OPERATING ACTIVITIES
Net (loss) $ (157,326) $ (1,092,918) $ (3,124,414)
Adjustments to reconcile net (loss) to
cash used by operating activities:
Depreciation & amortization 3,552 43,773 19,654
Stock issued for expenses 20,000 65,000 106,044
Loss on investment 0 454,725 757,967
Changes in assets and liabilities:
Prepaid expenses 5,000 0 0
Accounts payable 5,573 45,924 13,694
Accrued expenses 93,486 0 400,290
Accrued interest payable 0 12,609 0
------------- -------------- ---------------
NET CASH USED BY
OPERATING ACTIVITIES (29,715) (470,887) (1,826,765)
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 (199,815) (331,000)
Organization costs 0 0 (50)
------------- -------------- ---------------
NET CASH USED BY
INVESTING ACTIVITIES (70,000) (610,023) (869,197)
FINANCING ACTIVITIES
Proceeds from sale of common stock 100,000 784,045 1,648,000
Loan proceeds 0 474,986 1,372,193
Loan repayments 0 (255,001) (323,238)
------------- -------------- ---------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 100,000 1,004,030 2,696,955
------------- -------------- ---------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 285 (76,880) 993
Cash and cash equivalents at beginning
of period 708 81,326 0
------------- -------------- ---------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 993 $ 4,446 $ 993
============= ============== ===============
SUPPLEMENTAL INFORMATION
Cash paid for:
Interest $ 65 $ 256 $ 484
============= ============== ===============
During the quarter ended September 30, 1997, the Company issued 1,034,293 shares
of restricted common stock to pay $807,439 of debt and liabilities.
F-5