UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2001
Or
[ ] 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: 000-31663
American I R Technologies Inc.
------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0440536
------ ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3080 W. Post Road, Las Vegas, NV 89118
-------------------------------- -----
(Address of principal executive (Zip Code)
offices)
(702) 368-4571
--------------
(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by 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.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
8,490,787
/1/
AMERICAN I R TECHNOLOGIES INC.
(A Development Stage Company)
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet March 31, 2001 3
Statements of Operations for the Three Months Ended 4
March 31, 2001 and 2000, and for the Period October
29, 1999 (Inception) to March 31, 2001
Statements of Cash Flows for the Three Months Ended 5
March 31, 2001 and 200, and for the Period October
29, 1999 (Inception) to March 31, 2001
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis and Plan
of Operation 10
PART II - OTHER INFORMATION
Item 6. Exhibits 11
SIGNATURES 12
EXHIBIT INDEX
/2/
PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
AMERICAN I R TECHNOLOGIES INC.
(a Development Stage Company)
BALANCE SHEET
March 31, 2001
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 3,573
Accounts receivable 9,271
Inventory 1,361
Due from officer 8,445
Prepaid expenses 11,970
-----------
Total Current Assets 34,620
-----------
PROPERTY AND EQUIPMENT, net 13,252
-----------
OTHER ASSETS 3,839
-----------
$ 51,711
===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 250,844
Due to related party 171,401
-----------
Total Current Liabilities 422,245
-----------
STOCKHOLDERS' (DEFICIT)
Preferred stock, $0.001 par value
5,000,000 shares authorized
no shares issued and outstanding -
Common stock, $0.001 par value,
20,000,000 shares authorized,
7,135,267 issued and outstanding 7,135
Additional paid in capital 242,918
Deficit accumulated during the development stage (620,587)
-----------
(370,534)
-----------
$ 51,711
==========
The accompanying notes are an integral part of these financial
statements.
/3/
AMERICAN I R TECHNOLOGIES INC.
(a Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Three October 29, 1999
Months Months (inception)
Ended Ended Through
March 31, March 31, March 31,
2001 2000 2001
---------- ---------- ----------
REVENUE $ 22,212 $ - $ 28,369
---------- ---------- ----------
OPERATING EXPENSES
Cost of sales 17,906 - 23,947
General and administrative
expenses 213,358 32,535 625,009
---------- ---------- ----------
231,264 32,535 648,956
---------- ---------- ----------
Net (loss) $ (209,052) $ (32,535) $ (620,587)
========== ========== ==========
Weighted average shares
outstanding - basic and
fully diluted 7,135,267 6,000,000 6,602,836
========== ========== ==========
Net (loss) per common share
- basic and fully diluted $ (0.03) $ (0.01) $ (0.09)
========== ========== ==========
The accompanying notes are an integral part of these financial
statements
/4/
AMERICAN I R TECHNOLOGIES INC.
(a Development Stage Company)
STATEMENTS OF CASH FLOWS
(unaudited)
Three Three October 29, 1999
Months Months (Inception)
Ended Ended Through
March 31, March 31, March 31,
2001 2000 2001
---------- ---------- ----------
Net cash provided by (used in)
operating activities $ 9,126 $ (2,134) $ (68,184)
---------- ---------- ----------
Cash flows from investing activities:
Purchase of fixed assets (9,796) (1,113) (14,643)
---------- ---------- ----------
Net cash (used in) investing
activities (9,796) (1,113) (14,643)
---------- ---------- ----------
Cash flows from financing activities:
Proceeds from stock issuance - - 86,400
---------- ---------- ----------
Net cash provided by
financing activities - - 86,400
---------- ---------- ----------
Net increase (decrease) in cash (670) (3,247) 3,573
Beginning - cash balance 4,243 8,375 -
---------- ---------- ----------
Ending - cash balance $ 3,573 $ 5,128 $ 3,573
========== ========== ==========
The accompanying notes are an integral part of these financial
statements.
/5/
American I R Technologies Inc.
(a Development Stage Company)
Notes to Financial Statements
(1) Basis Of Presentation
The accompanying unaudited financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America ("GAAP") for interim
financial information and Item 310(b) of Regulation S-B. They do
not include all of the information and footnotes required by GAAP
for complete financial statements. In the opinion of management,
all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full
year. For further information, refer to the audited financial
statements of the Company as of December 31, 2000 and for the two
years then ended, including notes thereto, included in the
Company's Form 10-KSB.
(2) Earnings Per Share
The Company calculates net income (loss) per share as required by
SFAS No. 128, "Earnings per Share." Basic earnings (loss) per
share is calculated by dividing net income (loss) by the weighted
average number of common shares outstanding for the period.
Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and
dilutive common stock equivalents outstanding. During the periods
presented, common stock equivalents were not considered, as their
effect would be anti-dilutive.
(3) Subsequent Events
Subsequent to March 31, 2001 the Company entered into financial
consulting and corporate advisory agreements in exchange for
700,000 shares of common stock. The agreements have one-year
terms, expiring during April 2002. The Company also entered into
a financing, consulting, and corporate advisory service agreements.
The consultants are assisting the Company with negotiations to obtain
bridge financing in the amount of $350,000. If the consultants
successfully negotiate the financing and the terms are acceptable
to the Company, the Company will pay to the consultants $100,000
from the loan proceeds. Of the total fee paid to the
consultants, $50,000 will be applied to a retainer which will be
used against future consulting services.
/6/
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.
FORWARD LOOKING STATEMENTS
In addition to historical information, this Quarterly Report on
Form 10-QSB contains forward-looking statements. The forward-
looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those
reflected in such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinions only as of the
date hereof. The Company undertakes no obligation to revise or
publicly release the results of any revision to these forward-
looking statements. Readers should carefully review the risk
factors described herein and in other documents the Company files
from time to time with the SEC, including its Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2000 and the
Quarterly Reports on Form 10-QSB, filed by the Company in fiscal
2000.
OVERVIEW
American I R Technologies Inc. ("American IR" or "the Company") is
a development stage company. Our principal business objective is
to design, manufacture and market consumer electronic products
that target the home health and safety, and the quality of life
and leisure markets. Initially, we have developed and introduced
to the market a portable, dedicated-beam, Infra Red sensor
security/monitoring system (Safety BeamT). The American IR
"signature" beam technology can function at a distance of up to
75 feet and under varying light exposures, and our products have
been designed to achieve optimum performance under battery power
allowing for complete, wireless portability.
The mission of American IR is to offer the most innovative
technology, with the widest appeal, while driving for the most
efficient costing. The core team at American IR brings
significant industry and related experience to the Company.
Among the management and executives there is approximately 75
years experience in the development, marketing and administration
of consumer products distribution.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2001 Compared to Three Months Ended
March 31, 2000.
Net sales for the three months ended March 31, 2001 and 2000 were
$22,212 and $0 respectively. The increase in net sales was due to
our focus shifting from design and development activities to the
launch of our product line.
Cost of goods sold for the three months ended March 31, 2001 and
2000 were $17,906 and $0, respectively. The cost of sales is
high compared to the net sales due to the high shipping costs on
a relatively low volume of products sold. The Company expects
that these costs will be maintained at or near current levels in
the future. Shipping and freight incurred on the sales for the
three months ending March 31, 2001 was $3,389, which represents
19% of the total cost of goods sold. We expect that the
percentage of shipping costs as compared to total cost of goods
sold will decrease as the quantity of the product order
sizes increase. As a percentage of revenue, cost of goods sold
for the three months ended March 31, 2001 and 2000 were 81% and
0%, respectively.
Selling, general and administrative expense includes advertising
and marketing expenses, employee compensation, corporate
overhead, trade show marketing, corporate and financial
consulting. For the three months ended March 31, 2001 and 2000,
selling, general and administrative expenses were $213,358 and
$32,535, respectively, a 555% increase. The percentage of
selling, general and administrative expenses as a percentage of
revenue for the three months ended March 31, 2000 could not be
calculated as the Company did not have any sales during that
period. The increase in selling, general and administrative
expenses were primarily due to consulting fees, advertising,
trade show, and other marketing efforts, an additional employee,
and increased office rent incurred because of a larger office and
warehousing space. Also, as we establish our brand name in the
marketplace, we believe that our need for outside consultants
will be diminished once initial development stage
activities are completed and we are receiving recurring
purchases. Given this outcome, it is our intention to hire key
personnel to carry on the functions now performed by numerous
outside independent consultants.
For the three months ended March 31, 2001, the Company recorded a
net loss of $209,052, or $0.03 per common share, as compared to a
net loss of $32,535, or $0.01 per common share for the three
months ended March 31, 2000.
/7/
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations have resulted in net losses of $208,902
and $32,535 for the three months ended March 31, 2001 and 2000,
respectively. Since the Company's inception in October 1999, the
Company has financed its operations primarily through the sale of
its Common Stock.
Net cash provided by operations for the three months ended March
31, 2001 was $9,126, while net cash used in operations for the
three months ended March 31, 2000 was $2,134. The positive cash
flows generated from operations for the three months ended March
31, 2001 were primarily due to increases in accounts and related
party payables and a decrease in prepaid expenses. The negative
cash flows generated from operations for the three months ended
March 31, 2000 were primarily due to operating losses incurred
during the period.
Net cash used in investing activities for the three months ended
March 31, 2001 and 2000 was $9,796 and $1,113, respectively,
which consisted of purchases of property and equipment during the
period. The Company expects to continue to invest in capital and
other assets.
At March 31, 2001, cash and cash equivalents totaled $3,573. In
addition, at March 31, 2001, the Company had a working capital
deficiency of $387,625 and an accumulated deficit of $620,587.
Based on the Company's ability to meet its operating goals, the
Company will be required to raise additional funds to meet the
Company's working capital and capital expenditure needs at least
through the next twelve months.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon 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) Exhibits
Incorporated by reference
(b) Reports on Form 8-K
Incorprated by reference Form 8-K filed on
March 15, 2001 and May 15, 2001 concerning
change in auditors
EXHIBIT INDEX
Exhibit Name and/or Identification of Exhibit
Number
3 Articles of Incorporation & By-Laws
3a Articles of Incorporation of the Company filed October 29,
1999. Incorporated by reference to Exhibit 3(a) to the
Company's General Form For Registration Of Securities Of Small
Business Issuers on Form 10-SB, previously filed with the
Commission on October 2, 2000 - file #000-31663.
/8/
3b By-Laws of the Company adopted November 1, 1999. Incorporated
by reference to the Exhibit 3(b) to the Company's General Form
For Registration Of Securities Of Small Business Issuers on
Form 10-SB, previously filed with the Commission on October 2,
2000 - file #000-31663.
10 Material contracts
10(a) Technology license agreement with American Infrared
Technologies, Inc., incorporated by reference to Exhibit 10(a)
to the annual report on Form 10-KSB filed on March 30, 2001 -
file #000-31663
10(b) License agreement with WellMike Enterprise Company, Ltd.,
incorporated by reference to Exhibit 10(b) to Form 10-KSB
filed on March 30, 2001 - file #000-31663
10(c) Consulting agreement with Elsa Bugarini incorporated by
reference to Exhibit 4.11 to Form S-8 registration statement
filed on April 30, 2001 - file #333-59858
10(d) Consulting agreement with Tore Dietrich incorporated by
reference to Exhibit 4.12 to Form S-8 registration statement
filed on April 30, 2001 - file #333-59858
10(e) Consulting agreement with Christopher McNeill incorporated by
reference to Exhibit 4.13 to Form S-8 registration statement
filed on April 30, 2001 - file #333-59858
10(f) Independent contractor agreement with Larry Klessman
incorporated by reference to Exhibit 4.14 to Form S-8
registration statement filed on April 30, 2001 - file #333-
59858
10(g) Consulting agreement with Ross Wilkensen incorporated by
reference to Exhibit 4.15 to Form S-8 registration statement
filed on April 30, 2001 - file #333-59858
10(h) Consulting agreement with Betty Vancrey incorporated by
reference to Exhibit 4.16 to Form S-8 registration statement
filed on April 30, 2001 - file #333-59858
10(i) Independent contractor agreement with Mitchell Nusbaum
incorporated by reference to Exhibit 4.17 to Form S-8
registration statement filed on April 30, 2001 - file #333-
59858
10(j) Independent contractor agreement with Michael Sund incorporated
by reference to Exhibit 4.18 to Form S-8 registration statement
filed on April 30, 2001 - file #333-59858
10(k) Consulting agreement with Vaughn Inman incorporated by
reference to Exhibit 4.19 to Form S-8 registration statement
filed on April 30, 2001 - file #333-59858
10(l) Consulting agreement with M. Blaine Riley, Randal Letcavage and
Rosemary Nguyen incorporated by reference to Exhibit 4.1 to
Form S-8 registration filed on May 15, 2001 - file #333-60936
10(m) Consulting agreement with iCapital Corporation incorporated by
reference to Exhibits 4.2 to Form S-8 registration statement
filed on May 15, 2001 - file #333-60936
10(n) Consulting agreement with Citadel Consulting, LLC.
/9/
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
American I R Technologies Inc.
(Registrant)
Date: May 21, 2001
By: /s/ Ron Allen Ryan
- -----------------------
Ronald A. Ryan, Director, Chief Executive Officer, and President
Date: May 21, 2001
By: /s/ Gerald S. Peatz
- ------------------------
Gerald S. Peatz, Director, Secretary, Treasurer, and Principal
Financial and Accounting Officer
/10/