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: September 30, 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 IR Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 88-0440536
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3080 W. Post Road, Las Vegas, NV 89118
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(Address of principal executive offices) (Zip Code)
(702) 368-4571
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(Registrant's telephone number, including area code)
N/A
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(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: 10,270,787
/1/
AMERICAN IR TECHNOLOGIES, INC.
(A Development Stage Company)
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet September 30, 2001 (unaudited) 3
Statement of Operations for the Three Months Ended September 30, 4
2001 (unaudited) and 2000 (unaudited), and for the Nine Months
Ended September 30, 2001 (unaudited) and 2000 (unaudited) and for
the Period October 29, 1999 (Inception) through September 30, 2001
(unaudited)
Statement of Cash Flows for the Nine Months Ended September 30, 5
2001 (unaudited) and 2000 (unaudited) and for the Period October
29, 1999 (Inception) through September 30, 2001 (unaudited)
Notes to Financial Statements 6
Item 2. Management's Discussion and Plan of Operation 7
PART II - OTHER INFORMATION
Item 6. Exhibits 10
SIGNATURES 11
/2/
AMERICAN IR TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
September 30, 2001
(unaudited)
ASSETS
CURRENT ASSETS:
Accounts receivable, net $ 30,073
Inventory 7,168
Prepaid expenses 189,486
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Total Current Assets 226,727
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PROPERTY AND EQUIPMENT, net 12,196
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OTHER ASSETS 13,844
------------
$ 252,767
============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Bank overdraft $ 7,512
Accounts payable and accrued expenses 150,385
Due to employee 1,555
Due to related parties 272,134
Subscription payable 161,946
------------
Total Current Liabilities 593,532
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STOCKHOLDERS' (DEFICIT)
Preferred stock, $0.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $0.001 par value,
20,000,000 shares authorized,
10,270,787 issued and outstanding 10,271
Additional paid in capital 716,784
Deficit accumulated during the development stage (1,067,820)
------------
(340,765)
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$ 252,767
============
The accompanying notes are an integral part of these financial statements.
/3/
AMERICAN IR TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
Three Three Nine Nine October 29, 1999
Months Months Months Months (Inception)
Ended Ended Ended Ended Through
September September September September September
30, 30, 30, 30, 30,
2001 2000 2001 2000 2001
----------- ---------- ---------- ---------- -----------
REVENUE $ 7,361 $ 12,036 $ 76,265 $ 12,036 $ 82,422
----------- ---------- ---------- ---------- -----------
OPERATING
EXPENSES
Cost of sales 30,260 4,818 51,773 4,818 57,814
General and 205,255 168,549 680,777 184,633 1,092,428
administrative
expenses
235,515 173,367 732,550 189,451 1,150,242
---------- ---------- ---------- ---------- -----------
Net (loss) $ (188,154) $ (161,331) $ (656,285) $ (177,415) $(1,067,820)
========== ========== ========== ========== ===========
Weighted average
shares outstanding
- basic and fully
diluted 9,414,917 6,206,412 8,238,324 6,206,412 7,173,035
========== ========== ========== ========== ===========
Net (loss) per
common share
- basic and fully
diluted $ (0.02) $ (0.03) $ (0.08) $ (0.03) $ (0.15)
========== ========== ========== ========== ===========
The accompanying notes are an integral part of these financial statements.
/4/
AMERICAN IR TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
October 29,
1999
Nine Months Nine Months (Inception)
Ended Ended Through
September September September
30, 30, 30,
2001 2000 2001
---------- ---------- ----------
Net cash provided by (used
in) operating activities $ 6,301 $ (71,137) $ (71,009)
Cash flows from investing
activities:
Purchase of fixed assets (10,544) - (15,391)
Net cash (used in) investing
activities (10,554) - (15,391)
---------- ---------- ----------
Cash flows from financing
activities:
Proceeds from stock issuance - 63,400 86,400
Net cash provided by ---------- ---------- ----------
financing activities - 63,400 86,400
---------- ---------- ----------
Net increase (decrease) in cash (4,243) (7,737) -
Beginning - cash balance 4,243 8,375 -
---------- ---------- ----------
Ending - cash balance $ - $ 638 $ -
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
/5/
American IR Technologies, Inc.
(a Development Stage Company)
Notes to Financial Statements
(Unaudited)
(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 year 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) Stockholders' (Deficit)
During the nine months ended September 30, 2001 the Company entered into
various financial consulting and corporate advisory agreements in exchange for
3,135,520 shares of common stock. The agreements have one-year terms, expiring
between April 1 and September 30, 2002.
/6/
Item 2. Management's Discussion and Plan of Operation
Forward Looking Statements
Some of the statements contained in this Form 10-QSB that are not historical
facts are "forward-looking statements". They can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. These forward-looking
statements reflect our current beliefs with respect to future events and involve
known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can
be given regarding the achievement of future results, as actual results may
differ materially as a result of the risks we face, and actual events may differ
from the assumptions underlying the statements that have been made regarding
anticipated events.
General
American IR Technologies Inc. ("American IR") 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, American IR has developed and introduced
to the market a portable, dedicated-beam, Infra Red sensor security/monitoring
system (Safety Beam). 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
Revenue for the three months ended September 30, 2001 was $47,361, nine
months ended September 30, 2001 was $76,265 and since October 29, 1999
(inception) we have recorded revenue of $82,422. As compared to revenue of
$12,036 for the three months ended September 30, 2000, and $12,036 for the nine
months ended September 30, 2000. This increase in revenue is due to increased
reorders from Hammacher-Schlemmer and initial orders from QVC and Brookstone.
Total operating expenses for the three months ended September 30, 2001 were
$235,515. This represents an increase of $62,148 in total operating expenses
from the comparable three month period ended September 30, 2000, when we
reported total operating expenses of $173,367. Total operating expenses for the
nine months ended September 30, 2001 were $732,550. This represents an increase
/7/
of $543,099 in total operating expenses from the comparable nine month period
ended September 30, 2000, when we reported total operating expenses of $189,451.
Since October 29, 1999 (inception) we have incurred $1,150,242 in total
operating expenses. Almost all of the operating expenses incurred by the
Company to date are related to general and administrative expenses. These
expenses consist mainly of:
a. Travel related to financing and promotion of product;
b. Salaries;
c. Financial consulting fees;
d. Sales and marketing consulting fees;
e. Other professional fees; and
f. Accrued officer salaries.
As we establish our brand name in the marketplace, we believe that our need
for outside consultants will be greatly 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.
Cost of sales for the three months ended September 30, 2001 was $30,260, nine
months ended September 30, 2001 was $51,773 and since October 29, 1999
(inception) we have incurred cost of sales of $57,814. As compared to the three
and nine month period ended September 30, 2000 when we were just beginning to
manufacture our products and had only incurred cost of sales of $4,818. Our
cost of sales will continue to increase, as the number of units sold increases
to meet the expected demand for our products.
Due to the increase in cost of sales and general and administrative expenses,
we recorded a net loss for the three months ended September 30, 2001 of $188,154
as compared to the loss of $161,331 reported in the comparable period of 2000.
We recorded a net loss for the nine months ended September 30, 2001 of $656,285
as compared to the loss of $177,415 reported in the comparable period of 2000.
Furthermore, since October 29, 1999 (inception) we have incurred $1,067,820 in
net losses. The net loss to date is attributed to a minimal amount of sales and
the high cost of introducing our product and stock to the market, however, the
net loss has been reduced due to sales increases and reduced general and
administrative costs as a result of streamlining many of our processes.
As of September 30, 2001 we have a working capital deficit of $366,805. The
net cash provided by operational activities for the nine months ended September
30, 2001 was $6,301 as compared to net cash used in operational activities of
$71,137 reported in the comparable period of 2000. To date we have used $71,009
in operating activities.
During the current quarter we signed a vendor agreement with Staples (SPLS).
We have also entered into a manufacturers representative agreement with a
national sales and marketing firm, (I I DA), to promote our family of products.
This firm has strong relationships with our primary retail customer base. In
addition, we have increased sales and enhanced our exposure in the technology
products market through advertisements placed in several new catalogues, such as
Taylor Gifts, Home Trends, Smart Home and Improvements.
/8/
Future Business
Our goal over the next quarter and for the next year is to establish and
build the American IR brand name, and to market and merchandise our consumer
electronic products based on our proprietary characteristics. Management will
focus its efforts on accounts such as Costco Mexico, which is now submitting the
Safety Beam for regulatory approval in Mexico. We do not foresee any
circumstances that would inhibit our ability to obtain regulatory approval and
expect to begin generating sales in Mexico in early 2002. We are also in
negotiations with other large retail accounts that are desirous of scheduling
space for American IR product in the coming months. To meet this expected
demand for our product line we have secured the services of an additional
manufacturer.
We expect to be able to increase revenues by offering an expanded product
line to an increasing consumer base through current and additional sales
channels. Our original product offering, The Safety Beam, has been well
received and we are now responding to exact market requests with two new
versions of the Safety Beam.
1. The Safety Beam V2 - will be marketed as a smaller mass merchant item
with a lower price point; and
2. The Safety Beam RF - will be marketed as a higher end product that
operates with a radio frequency remote control. The Safety Beam RF
has just received preliminary approval with FCC.
We have introduced new packaging and graphics that are specifically designed
for each of our target markets, which should help to contribute to further the
acceptance of our products.
Liquidity and Capital Resources
To fund ongoing fiscal 2001 and 2002 operations, we will need to begin to
generate greater revenues or raise additional capital to fund our operations and
provide for our working capital needs. As at September 30, 2001, we have
recognized minimal revenue to date and have accumulated operating losses of
$1,067,820 since inception. Our ability to continue as a going concern is
contingent upon the successful completion of additional financing arrangements
and our ability to achieve and maintain profitable operations. Management plans
to raise equity capital to finance the operating and capital requirements of the
Company. Amounts raised will be used for further development of our products,
to provide financing for marketing and promotion, to secure additional property
and equipment, and for other working capital purposes. While we are expending
our best efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
/9/
PART II - OTHER INFORMATION
Item 6. Exhibits
Exhibit Name and/or Identification of Exhibit
Number
3 Articles of Incorporation & By-Laws
(a) Articles of Incorporation of the Company
filed October 29, 1999. Incorporated by
reference to the exhibits 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.
(b) By-Laws of the Company adopted November 1,
1999. Incorporated by reference to the exhibits
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/
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 IR Technologies, Inc.
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(Registrant)
Date: 11-20-01
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By: /s/ Ronald A. Ryan
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Ronald A. Ryan, Director, Chief Executive Officer and President
Date: 11-20-01
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By: /s/ Gerald S. Peatz
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Gerald S. Peatz, Director, Secretary, Treasurer, and Principal Financial and
Accounting Officer
/11/