UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from _______ to ________
Commission file number: 0-49900
RIVAL TECHNOLOGIES INC.
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(Exact Name of Small Business Issuer as specified in its charter)
British Columbia, Canada NA
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(State or Other Jurisdiction of I.R.S. Employer
Incorporation or Organization) Identification
Number
Suite 300, 625 West Kent Avenue N., Vancouver, British Columbia,
Canada V6E 3C9.
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(Address of Principal Executive Offices including Zip Code)
(604) 323-0090
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(Issuer's Telephone Number)
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 5,953,954
Transitional Small Business Disclosure Format? Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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RIVAL TECHNOLOGIES INC.
Balance Sheet
(Expressed in Canadian Dollars) June 30 December 31
(Unaudited - prepared by management) 2002 2001
(Unaudited) (Audited)
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Assets
Current
Cash $ 10,287 $ 22,407
Receivables 43,676 60,539
Inventories - -
Prepaids 2,854 2,713
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$ 56,817 $ 85,659
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Liabilities
Current
Payables and accruals $ 63,636 $ 76,519
Due to related parties - -
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63,636 76,519
Shareholders' (Deficiency) Equity
Capital stock (Note 3) 6,374,727 6,374,727
Deficit ( 6,381,546) ( 6,365,587)
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( 6,819) ( 9,140)
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$ 56,817 $ 85,659
Going Concern (Note 1)
On behalf of the Board
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Robin J. Harvey (signed) Director Perry Guglielmi (signed) Director
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ROBIN J. HARVEY PERRY GUGLIELMI
See accompanying notes to the financial statements
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RIVAL TECHNOLOGIES INC.
Statement of Income and Deficit
For the Six and Three months ended June 30, 2002
(Expressed in Canadian Dollars)
(Unaudited - prepared by management)
2002 2001 2002 2001
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(Six months) (Three months)
SALES $ 74,447 $ 101,328 $ 37,429 $ 73,822
COST OF SALES 37,347 48,392 21,554 39,732
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GROSS PROFIT 37,100 52,936 15,875 34,090
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EXPENSES
Accounting and legal 5,488 9,573 488 9,034
Automobile - 234 - 234
Conferences, meetings & dues 90 - 0 -
Interest and bank charges 942 254 108 147
Management fees 15,000 - 7,500 -
Office and other 5,434 2,078 3,552 1,744
Regulatory fees 3,241 4,765 838 1,598
Rent 18,889 16,602 9,693 8,202
Telephone and utilities 2,729 3,341 1,367 1,600
Travel 1,246 - 915 -
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53,059 36,847 24,461 22,559
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NET INCOME (LOSS) ( 15,959) 16,089 ( 8,586) 11,531
Basic earning (loss) per share ( 0.002) 0.01 ( 0.001) 0.01
DEFICIT, beginning of period ( 6,365,587) ( 6,949,821) (6,372,960) (6,945,263)
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DEFICIT, end of period $( 6,381,546) $(6,933,732) $(6,381,546) $(6,933,732)
Weight average number of shares 5,953,954 1,042,629 5,953,954 1,042,629
----------- ---------- ---------- ----------
Fully diluted earning (loss) per
Share ( 0.002) 0.01 ( 0.001) 0.01
See accompanying notes to financial statements
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RIVAL TECHNOLOGIES INC.
Statement of Cash Flows
For the Six and Three months ended June 30, 2002
(Expressed in Canadian Dollars)
(Unaudited - prepared by management)
2002 2001 2002 2001
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(Six months) (Three months)
Cash derived from (applied to)
Operating
Net income (loss) $ (15,959) $ 16,089 $ (8,586) $ 11,531
Change in non-cash
operating working capital 3,839 38,294 10,707 6,958
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(12,120) 54,383 2,121 18,489
Financing
Advances (to) from
related parties - ( 12,000) - -
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Increase in cash ( 12,120) 42,383 2,121 18,489
Cash
Beginning of period 22,407 5,894 8,161 29,788
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End of period $ 10,287 $ 48,277 $ 10,287 $ 48,277
See accompanying notes to financial statements
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Rival Technologies Inc.
Notes to the Financial Statements
(Expressed in Canadian Dollars)
(Unaudited-prepared by management)
June 30, 2002
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1. Organization and continuing operations
These financial statements have been prepared on the basis of generally
accepted accounting principles applicable to a going concern, which assumes
that the company will realize its assets and discharge its liabilities in the
normal course of business. The company has accumulated substantial losses and
has a working capital deficiency of $ 6,816.00. Accordingly, its continuation
will depend upon the company's ability to obtain adequate financing and to
generate profitable operations in the future.
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2. Summary of significant accounting policies
Basis of presentation
This interim period consolidated financial statements have been prepared by the
Company in accordance with Canadian generally accepted auditing standards and
practices consistent with those used in the preparation of the company's annual
financial statements. Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These interim period
statements should be read together with the annual financial statements and the
accompanying notes included in the company's latest annual report.
Financial instruments
The company's financial instruments consist of cash, receivables, payables and
accruals and amounts due to (from) related parties. It is management's opinion
that the company is not exposed to significant interest, currency or credit
risks arising from these financial instruments. The fair value of these
financial instruments approximates their carrying values.
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Rival Technologies Inc.
Notes to the Financial Statements (continued)
(Expressed in Canadian Dollars)
(Unaudited - prepared by management)
June 30, 2002
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3. Capital stock
Authorized:
100,000,000 common shares, without par value
Issued: June 30, June 30,
2002 2001
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Number Number
of Shares Amount of Shares Amount
--------- ------ --------- ------
Balance, beginning
of period 5,953,934 $ 6,374,725 1,042,629 $ 5,785,371
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Balance, end
of period 5,953,934 $ 6,374,725 1,042,629 $ 5,785,371
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4. Canadian and US Generally Accepted Accounting Principles
The financial statements have been prepared in accordance with accounting
principles generally accepted in Canada ("Canadian GAAP") which differ in
certain respects from those principles and practices that the company would
have followed had its financial statements been prepared in accordance with
accounting principles and practices accepted in the United States of America
("U.S. GAAP")
* Under US GAPP, services provided by management for $Nil consideration would
be accounted for as a capital contribution at the fair market value of the
services provided. Canadian GAAP does not require such an adjustment.
* Under U.S. GAA, stock issued to settle debts owed to related parties is
recorded at the face value of the debt settled rather than the fair value of
the debt as required under Canadian GAAP. The debts settled in 2001 through
the issuance of stock were previously owed to related parties as defined in
SFAS 57.
Had the company followed U.S. GAAP the effect on the financial statements of
the company of the above differences is as follows:
2002 2001 2002 2001
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(Six months) (Three months)
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Statement of operation and deficit
Net (Loss) earning under Canadian GAAP 15,959 16,089 (8,586) 11,531
Service contribution by management (30,000) (45,000) (15,000) 11,500
Gain on settlement of debt recorded
Under Canadian GAAP not recognized
Under US GAAP - - - -
- - - -
Net loss for the year under US GAAP (45,297) (28,911) (23,586) (10,969)
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Loss per share (basic and diluted)
Under GAAP US $ (0.01) $ (0.00) $ (0.03) $ (0.004)
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RIVAL TECHNOLOGIES INC.
Balance Sheet
(Expressed in Canadian Dollars)
(Unaudited - prepared by management)
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4. Differences between Canadian and U.S. generally accepted accounting
principles and practices (Continued)
December 31 June 30
2001 2002
Balance Sheet
Shareholder (deficiency) equity under
Canadian GAAP
Items increasing (decreasing) reported
shareholders equity $ 9,140 (6,189)
Additional paid in capital for services
contributed by management 75,000 30,000
Services contributed by management
recognized for the period
expenses under U.S. GAAP (75,000) (30,000)
Increase in capital stock for settlement
of debt Under U.S. GAAP 584,022 -
Gain in settlement of debt not recognized
under U.S. GAAP (584,022)
Shareholders equity (deficiency) under
U.S. GAAP $ 9,140 (6,819)
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For the Six months ended June 30, 2002 the company had two significant
customers which account for 90% and 10% of sales. For the six months ended
June 30, 2001 the company had to significant customers, which accounted for 75%
and 25% of the sales
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following is management's discussion and analysis of significant factors
that have affected the Company's financial position and operations during the
three and six month period ended June 30, 2002.
General Overview
The Company was incorporated in 1987 for the purpose of developing a line of
fire extinguishing products that would be an alternative to Halon. These
products consist of vapor gas that smothers a fire in confined areas. They
are used in commercial applications where water or solid chemicals would cause
damage to expensive equipment, such as computers. The Company developed a
product, known as NAF S-111, with two main advantages over Halon, being less
toxic to humans and less damaging to the Ozone layer.
Sales of NAF S-III in North America have been steady over the past number of
years. However, at the same time environmental policy in the United States and
Canada has scheduled the gradual reduction of fire extinguishants that use
Ozone Depleting Products ("ODPs"). This reduction will commence at the end of
2004 with complete elimination by 2030. As NAF S-III is like all Halon type
fire extinguishers containing ODPs, the Company believes that future sales of
NAF S-III will continue to decrease over time. While new products have been
introduced by Dupont and Tyco that do not contain ODPs, the use of these
products require the installation of new equipment. Rival believes that there
will continue to be a market for its product as a replacement for Halon 1301
in existing applications. Rival intends to expand its business operations in
the next year through the acquisition of additional fire prevention products.
Results of Operations
Three and Six Months Ended June 30, 2002 compared to June 30, 2001.
Revenues for the three months ended June 30, 2002 decreased to $37,429 as
compared to $73,822 for the three months ended June 30, 2001 due to a general
decrease in demand for the product. Revenues for the six months ended
June 30, 2002 decreased to $74,447 as compared to $101,328 for the six months
ended September 30, 2001 due to a general decrease in demand for the product.
General and Administrative expenses for the three months ended June 30, 2002
were $24,461 as compared to $22,559 for the three months ended June 30, 2001,
representing an increase of 8%. This increase was primarily attributed to
payment of a full time management fee. General and Administrative expenses for
the six months ended June 30, 2002 were $53,059 as compared to $36,847 for the
six months ended June 30, 2001, representing an increase of 44%. This increase
was primarily attributed to payment of a full time management fee.
The Company did not incur any Research and Development costs during the three
or six month period ended June 30, 2002.
Liquidity and Capital Resources
During three and six month period ending June 30, 2002, the Company did not
sell any of it securities.
Rival's cash position at June 30, 2002 was $10,287 as compared to $22,407 at
June 30, 2001, representing a decrease of 54%.
Rival's net working capital position (current assets less current liabilities)
decreased to negative ($6,816) at June 30, 2002 from $9,140 at June 30, 2001,
due primarily to decreasing sales.
During the three and six month period ending June 30, 2002, the Company met all
cash flow needs from internal operations.
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
Except for historical information contained herein, this Form 10-QSB contains
express or implied forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Exchange Act. We
intend that such forward-looking statements be subject to the safe harbors
created thereby. We may make written or oral forward-looking statements from
time to time in filings with the SEC, in press releases, quarterly conference
calls or otherwise. The words "believes," "expects," "anticipates," "intends,"
"forecasts," "project," "plans," "estimates" and similar expressions identify
forward-looking statements. Such statements reflect our current views with
respect to future events and financial performance or operations and speak only
as of the date the statements are made.
Forward-looking statements involve risks and uncertainties and readers are
cautioned not to place undue reliance on forward-looking statements. Our
actual results may differ materially from such statements. Factors that
cause or contribute to such differences include, but are not limited to, those
discussed elsewhere in this Form 10-QSB.
Although we believe that the assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate with
the result that there can be no assurance the results contemplated in such
forward-looking statements will be realized. The inclusion of such forward-
looking information should not be regarded, as a representation that the future
events, plans, or expectations contemplated will be achieved. We undertake no
obligation to publicly update, review, or revise any forward-looking statements
to reflect any change in our expectations or any change in events, conditions,
or circumstances on which any such statements based. Our filings with the SEC
may be accessed at the SEC's Web site, www.sec.gov.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any material pending legal proceedings and, to
the best of its knowledge, no such action has been threatened by or against the
Company.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Default on Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Shareholders
None.
Item 5. Other Matters
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
None
(b) Reports on Form 8-K during the quarter ended June 30, 2002.
Current Report on Form 8-K12G3, dated June 28, 2002, filed with the Securities
Exchange Commission on July 3, 2002.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, hereunto duly authorized.
Rival Technologies Inc.
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By: Perry Guglielmi
President, Director
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By: Robin Harvey
Director