-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CSoKPBLMcMTvOmM+mbWWvCh2pCck+nERwgOiVoDth2swku6BPMsHbByhqSO8hZxM UrQ6eVtwLfhMeEv7Pg3lnQ== 0001015402-00-001468.txt : 20000522 0001015402-00-001468.hdr.sgml : 20000522 ACCESSION NUMBER: 0001015402-00-001468 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA MOLECULAR ELECTRONICS CORP CENTRAL INDEX KEY: 0001069378 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 860888087 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 333-82493 FILM NUMBER: 640531 BUSINESS ADDRESS: STREET 1: 13924 N GREEN TREE DRIVE CITY: TUCSON STATE: AZ ZIP: 85737 BUSINESS PHONE: 5208258333 MAIL ADDRESS: STREET 1: 13924 N GREEN TREE DRIVE CITY: TUCSON STATE: AZ ZIP: 85737 10QSB 1 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 March 31, 2000 ---------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to _________ Commission file number: 333-82493 California Molecular Electronics Corp. - ----------------------------------------- (Exact name of small business is here as specified in its charter) Arizona - ------- (State or other jurisdiction of incorporation or organization) 86-0888087 - ---------- (IRS Employer Identification No.) 50 Airport Parkway, San Jose, CA 95110 - -------------------------------------------- (Address of principal executive offices) (408) 451-8404 - -------------- (Issuer's telephone number) Check whether the registrant (1) 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 report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes[X] No[ ] The number of shares outstanding of the issuer's common stock on May 15, 2000 was 5,064,743. CALIFORNIA MOLECULAR ELECTRONICS CORP. INDEX PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Page ---- Balance Sheets as of December 31, 1999 and March 31, 2000. 2 Statements of Operations for the three months ended March 31, 2000 and 1999 and cumulative from March 17, 1997 (date of incorporation) to March 31, 2000. 3 Statement of Stockholders' Equity (Deficit) from December 31, 1998 Through March 31, 2000 4 Statements of Cash Flows for the three months ended March 31, 2000 and 1999 and cumulative from March 17, 1997 (date of incorporation) to March 31, 2000. 5 Notes to Financial Statements. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 8 FINANCIAL CONDITION AND RESULTS OF OPERATIONS. PART II. OTHER INFORMATION 11 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K SIGNATURES 12 1 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
CALIFORNIA MOLECULAR ELECTRONICS CORP. -------------------------------------- (a development stage company) ----------------------------- BALANCE SHEET ------------- March 31 December 31 2000 1999 ------------ ------------- (unaudited) A S S E T S ----------- Current assets: Cash $ 325,343 $ 91,993 Grant receivable 66,667 - Employee advance 9,605 - ------------ ------------- Total current assets 401,615 91,993 Furniture and fixtures, net 1,968 2,099 Prepaid expenses - 6,493 Other 427 427 ------------ ------------- $ 404,010 $ 101,012 ============ ============= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ---------------------------------------------- Current liabilities: Deferred grant income $ 66,667 Accounts payable and accrued liabilities 15,129 $ 13,800 Other payable 5,000 5,000 ------------ ------------- Total current liabilities 86,796 18,800 ------------ ------------- Stockholders' equity (deficit): Common stock, no par value: Authorized 20 million shares; 5,041,292 and 4,994,065 issued and outstanding (including 4,800 and 4,800 Treasury shares) at March 31, 2000 and December 31, 1999, respectively 1,634,160 1,280,242 Less: Treasury stock at cost; 4,800 shares at March 31, 2000 and December 31, 1999 (28,800) (28,800) Deficit accumulated during development stage (1,288,146) (1,169,230) ------------ ------------- 317,214 82,212 ------------ ------------- ------------ ------------- $ 404,010 $ 101,012 ============ =============
See accompanying notes to financial statements. 2
CALIFORNIA MOLECULAR ELECTRONICS CORP. -------------------------------------- (a development stage company) ----------------------------- STATEMENT OF OPERATIONS ----------------------- (UNAUDITED) ----------- Cumulative amounts from March 17, 1997 Three months ended March 31 (date of incorporation) --------------------------- to March 31, 2000 2000 1999 ----------------------- ------------- ------------ Revenue: Grant income $ 33,333 $ 33,333 Interest income 14,036 1,896 $ 1,873 ----------------------- ------------- ------------ 47,369 35,229 1,873 ----------------------- ------------- ------------ Expenses: Research and development expenses 325,339 59,671 - Officers' compensation donated to the Company (Note 5) 735,833 47,500 67,500 Preoperating expenses 274,143 46,924 56,533 ----------------------- ------------- ------------ Total expenses 1,335,315 154,095 124,033 ----------------------- ------------- ------------ Loss before income taxes (1,287,946) (118,866) (122,160) Provision for state income taxes 200 50 50 ----------------------- ------------- ------------ Net loss $ (1,288,146) $ (118,916) $ (122,210) ======================= ============= ============ Basic and diluted loss per common share $ (.26) $ (.02) $ (.02) ======================= ============= ============ Weighted average number of common shares outstanding 4,880,556 5,000,196 4,910,387 ======================= ============= ============
See accompanying notes to financial statements. 3 CALIFORNIA MOLECULAR ELECTRONICS CORP. -------------------------------------- (a development stage company) ----------------------------- STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) ------------------------------------------- FOR THE PERIOD FROM DECEMBER 31, 1998 TO MARCH 31, 2000 -------------------------------------------------------
Deficit Accumulated Common Stock During ----------------------------- Treasury Development Shares Amount Stock Stage Total ------------ ------------- --------------- -------------- --------- Balance at December 31, 1998 4,887,520 $ 636,556 $ - $ (494,561) $ 141,995 Stock issued in private placement 91,540 347,900 - - 347,900 Stock issuance costs - (49,239) - - (49,239) Officers' compensation donated to the Company (Note 5) - 270,000 - - 270,000 Stock issued for license technology fee 15,005 75,025 - - 75,025 Treasury stock, at cost (4,800) - (28,800) - (28,800) Net loss - - - (674,669) (674,669) ------------ ------------- --------------- -------------- --------- Balance at December 31, 1999 4,989,265 1,280,242 (28,800) (1,169,230) 82,212 Stock issued in public offering 52,127 312,762 - - 312,762 Stock issuance costs - (6,344) - - (6,344) Officers' compensation donated to the Company (Note 5) - 47,500 - - 47,500 Net loss - - - (118,916) (118,916) ------------ ------------- --------------- -------------- --------- Balance at March 31, 2000 5,041,392 $ 1,634,160 $ (28,800) $ (1,288,146) $ 317,214 ============ ============= =============== ============== =========
See accompanying notes to financial statements. 4
CALIFORNIA MOLECULAR ELECTRONICS CORP. -------------------------------------- (a development stage company) ----------------------------- STATEMENT OF CASH FLOWS ----------------------- (UNAUDITED) ----------- Cumulative amounts from March 17, 1997 Three months ended March 31 (date of incorporation) --------------------------- to March 31, 2000 2000 1999 ----------------------- -------------- ----------- Operations: Net loss $ (1,288,146) $ (118,916) $(122,210) Items not requiring current use of cash: Officers' compensation, donated to the Company (Note 5) 735,833 47,500 67,500 License fees 75,025 - - Depreciation 656 131 - Changes in other operating items: Payable to related party - - (14,500) Employee advances (34,752) (9,605) (5,000) Accounts payable and accrued liabilities 15,129 1,329 2,128 Other payable 5,000 - - Prepaid expenses - 6,493 - Other (427) - (7,408) ----------------------- -------------- ----------- Cash used for operating activities (491,682) (73,068) (79,490) ----------------------- -------------- ----------- Investments: Furniture and fixtures (2,624) - - ----------------------- -------------- ----------- Cash used for investing activities (2,624) - - ----------------------- -------------- ----------- Financing: Issuance of common stock, after stock issuance expense 823,302 306,418 155,761 Purchase of Treasury stock (3,653) - - ----------------------- -------------- ----------- Cash provided by financing activities 819,649 306,418 155,761 ----------------------- -------------- ----------- Increase in cash 325,343 233,350 76,271 Cash at beginning of period - 91,993 154,626 ----------------------- -------------- ----------- Cash at end of period $ 325,343 $ 325,343 $ 230,897 ======================= ============== =========== Supplemental cash flow disclosures: Taxes paid $ 150 $ - $ - ======================= ============== =========== Acquisition of Treasury stock $ (25,147) $ - $ - For cancellation of employee advances 25,147 - - ----------------------- -------------- ----------- $ - $ - $ - ======================= ============== ===========
See accompanying notes to financial statements. 5 CALIFORNIA MOLECULAR ELECTRONICS CORP. -------------------------------------- (a development stage company) ----------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- NOTE 1 - Basis of presentation: The financial statements included herein for California Molecular Electronics Corp. ("CALMEC" or the "Company") have been prepared by the Company, without audit pursuant to the rules and regulations of the Securities and Exchange Commission. In management's opinion, the interim financial data presented includes all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three months ended March 31, 2000 are not necessarily indicative of the operating results expected for the entire fiscal year. The financial statements included herein should be read in conjunction with other documents the Company files from time to time with the Securities and Exchange Commission, including the Company's Form 10-KSB for the fiscal year ended December 31, 1999. NOTE 2 - Reclassifications: Certain prior period amounts have been reclassified in order to conform to the current period presentation. NOTE 3 - Loss per share: Basic and dilutive loss per common share is calculated by dividing the net loss for the period by the average number of common shares outstanding. For the three months ended March 31, 2000 and 1999, dilutive loss per share excludes the effect of options, because the effect would have been antidilutive. NOTE 4 - Leases: The Company has entered into a cost reimbursable contract with San Jose State University Foundation ("Foundation") for the period from April 1, 1999 through March 31, 2000. The contract includes advisory services to be provided by the San Jose State University Department of Chemistry, facilities, supplies and equipment use. The Company is negotiating with the Foundation to extend the lease until March 31, 2001. NOTE 5 - Related party transactions: CALMEC's three officers have devoted 100% of their time to the business of the Company since their hire in 1997. The officers have elected to forego their salaries until such time after the Company has completed its startup phase and 6 upon determination by the Board of Directors that sufficient capital is available for operations. Planned annual remuneration for the three officers is as follows: $40,000 - Chairman and Treasurer; $110,000 - President and Chief Executive Officer; and $120,000 - Executive Vice President and Secretary. As required by the Securities and Exchange Commission accounting rules, in the accompanying financial statements the officers' unpaid salaries totaling $47,500 and $67,500 for the quarters ended March 31, 2000 and 1999 are reflected as compensation expense and a credit to common stock, as the Company does not intend to repay such forfeited salaries in the future. Effective February 2000, the Executive Vice President and Secretary began to receive a salary for his services. NOTE 6 - Grants: During the first quarter of 2000, the Company received a grant from The National Science Foundation in the amount of $100,000, to be paid in three equal installments. The grant will support research to demonstrate the feasibility of the unique Chiropticene molecular switch. The first installment of $33,333 was received in January 2000, and was recognized as grant income during the quarter ended March 31, 2000. The grant will be recognized in earnings in the period in which the related expenditures are incurred by the Company. The grant receivable of $66,667 is included in other current assets, and deferred grant income of $66,667 is included in current liabilities at March 31, 2000. NOTE 7 - Recent accounting pronouncements: In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments," SFAS 137 extends the effective date of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," SFAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The statement requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. As amended by SFAS 137, SFAS 133 is effective for the Company's fiscal year ending June 30, 2001. The Company does not anticipate that SFAS No. 137 will have a material impact on its financial statements. 7 CALIFORNIA MOLECULAR ELECTRONICS CORP. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: FORWARD-LOOKING STATEMENTS From time to time, statements made by California Molecular Electronics Corp.'s ("CALMEC" or the "Company") employees or information included in CALMEC's filings with the Securities and Exchange Commission (including this Form 10-QSB) may contain statements that are not historical facts, so called "forward-looking statements," which are subject to risks and uncertainties that could cause actual results to differ materially. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this Form 10-QSB, the terms "anticipates," "expects," "estimates," "believes," and other similar terms as they relate to CALMEC or its management are intended to identify such forward-looking statements. For example, statements made herein relating to acquiring intellectual property, marketing intellectual property to potential customers, maintaining commercial acceptance of our products, and anticipated growth of our target markets are forward-looking statements. Because these forward-looking statements involve risk and uncertainties, actual results could differ materially from those expressed or implied by these forward-looking statements for a number of reasons, including those discussed in the section entitled "Risk Factors" of CALMEC's Form SB-2 filed with the Securities and Exchange Commission on January 31, 2000. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. CALMEC undertakes no obligation to update or revise these statements. OVERVIEW AND PLAN OF OPERATION CALMEC was formed to engage primarily in the business of producing and selling products and services related to the new technological field of molecular electronics. Molecular electronics is the technology of using single molecules to form components of electronic devices. The Company continues to be in the start-up phase of its existence, and through December 31, 1999, CALMEC's three officers had elected to forego their salaries. Commencing February 2000, the Executive Vice President and Secretary began receiving remuneration for his services. The Company will transition from the start-up phase to the operational phase when the Board of Directors has determined sufficient capital has been accumulated to do so. At that time, all employees and executive officers will receive salaries, additional space will be leased, capital equipment will be purchased, and other operating expenses will be incurred. Prior to that time, activities will be restricted to low cost activities that will keep the Company within its cash resources. 8 In the second quarter of 1999, the Company started paying salaries to two chemists to perform research. Also in the second quarter of 1999, CALMEC began leasing lab space from San Jose State University for the purpose of housing these chemists and developing Chiropticene demonstration chemistry. The lease ran through March 31, 2000, and the Company is negotiating with San Jose State University to extend the lease until March 31, 2001. On January 31, 2000, CALMEC filed Form SB-2, Registration Statement under the Securities Act of 1933, with the SEC. On February 7, 2000, the Registration Statement became effective and CALMEC commenced its sale of up to 1,000,000 shares of common stock at $6.00 per share. CALMEC plans to raise $6 million with this offering, before payment of estimated offering expenses of $50,000, although no assurance can be made as to how many shares the Company will sell. Subsequent to the effective date of the Registration Statement through May 15, 2000, CALMEC has sold 75,578 shares of its common stock, for a total of $453,468. CALMEC's business currently consists of two major areas of activity, Research and Development ("R&D") and Sales and Corporate Development. R&D consists of Research, Intellectual Property Development and Product Technology Development. The foregoing segments work together. Research develops the Company's knowledge, Intellectual Property Development fashions that knowledge into patent-protectable or trade-secret-protectable units that can be licensed and otherwise exploited for business, and Product Technology Development puts in place those technical processes and technology arrangements necessary for the Company to produce or support the production of salable products. All three research segments are currently functioning at a low but valuable level. Sales and Corporate Development's purpose is to exploit CALMEC's R&D results in order to generate revenue. This area of activity is responsible for selling products and for developing business arrangements so as to foster these sales. The Company's "early" products will be licenses to third parties of the Company's intellectual property and contract research in the development-support of third party products based on these licenses. CASH REQUIREMENTS The full extent of CALMEC's future capital requirements and the adequacy of its available funds will depend on many factors, not all of which can be accurately predicted. Although no assurance can be given, the Company believes it can continue to operate in its present status for at least the next twelve months, and proceeds from the aforementioned offering will be used to accelerate the Company's progress and amplify its influence in molecular electronics. In the event that additional capital is required, CALMEC may seek to raise that capital through public or private equity or debt financings. Future capital funding transactions may result in dilution to shareholders. 9 There can be no assurance that additional capital will be available on favorable terms, if at all. CALMEC's inability to obtain additional capital on acceptable terms could limit its ability to meet its plan of operation. PURCHASE OF CAPITAL EQUIPMENT Over the next year, the Company expects to expend up to approximately 20% of its expenditures on the purchase of capital equipment and capital facilities improvement primarily for use in R&D. The actual percentage will depend upon the availability of cash. If cash is limited, it is possible very little expenditures will be made on capital equipment. In that case, CALMEC will focus on intellectual property development of the type that does not depend upon the use of research equipment. Hiring of employees CALMEC will transition from its start-up phase to its operational phase when its accumulated cash balances permit it to do so according to the business judgment of management. At that time, employees currently working without pay will begin receiving pay. Regardless of when that time occurs, as mentioned above, the Company has already hired and is supporting the lab work of two chemists, and is paying one of the executive officers. 10 CALIFORNIA MOLECULAR ELECTRONICS CORP. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number - --------------- 27.1 Financial Data Schedule (b) Reports on Form 8-K. None. 11 SIGNATURES CALIFORNIA MOLECULAR ELECTRONICS CORP. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: May 18, 2000 - --------------------- California Molecular Electronics Corp. - ----------------------------------------- (Registrant) /s/ James Marek, Jr. - ----------------------- James Marek, Jr. President and Chief Executive Officer 12 EX-27.1 2
5 1 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 325343 0 76272 0 0 401615 2624 (656) 404010 86796 0 0 0 1634160 (1316946) 404010 0 35229 0 154095 0 0 0 (118866) 50 (118916) 0 0 0 (118916) (.02) (.02)
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