-----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, WcRLJsOc+AqSdVVuWdwQNKvU1FopCs1fcLQUHIyjgbX2h1C3Sg6e4rZh377MQdQ8 XPs4MukRCXc7vOD8mfM7LA== 0001005444-00-000124.txt : 20000516 0001005444-00-000124.hdr.sgml : 20000516 ACCESSION NUMBER: 0001005444-00-000124 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CYBERECORD INC CENTRAL INDEX KEY: 0001096563 STANDARD INDUSTRIAL CLASSIFICATION: PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861] STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-27807 FILM NUMBER: 635503 BUSINESS ADDRESS: STREET 1: 10900 NE 8TH STREET STREET 2: SUITE 900 CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 4259905920 MAIL ADDRESS: STREET 1: 10900 NE 8TH STREET STREET 2: SUITE 900 CITY: BELLEVUE STATE: WA ZIP: 98004 10QSB 1 QUARTERLY REPORT FOR CYBERECORD, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-QSB [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 0-27807 CybeRecord, Inc. --------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Florida 91-1985843 ---------------------------------- -------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 800 Bellevue Way NE, 4th Floor, Bellevue, WA 98004 ------------------------------------------------------------------------ (Address of principal executive offices) (425) 990-5593 --------------------------- (Issuer's telephone number) As of May 1, 2000, there were 16,746,864 shares of CybeRecord, Inc.'s Common Stock, par value $.01 per share, outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] TABLE OF CONTENTS PART I -- FINANCIAL INFORMATION Item 1. Financial Statements................................................1 Item 2. Plan of Operation...................................................5 PART II -- OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders.................7 Item 6. Exhibits and Reports on Form 8-K....................................8 SIGNATURES...................................................................8 Note: Items 1, 2, 3, and 5 under Part II - Other Information have been omitted because they are not applicable. PART I -- FINANCIAL INFORMATION Item 1. Financial Statements.
CYBERECORD, INC. (A Development Stage Company) BALANCE SHEETS March 31, 2000 and December 31, 1999 March 31, December 31, 2000 1999 ASSETS (Unaudited) (Audited) =========== =========== Current Assets Cash .................................................................. $ 1,720,794 $ 111,154 Prepaid expenses and deposits ......................................... 10,257 15,194 =========== =========== Total current assets ......................................... 1,731,051 126,348 Furniture and Equipment, at cost, less accumulated depreciation of $10,940 at March 31, 2000 and $3,940 at December 31, 1999 ....................................... 78,690 25,328 Capitalized Development Costs ............................................. 114,020 ----------- ----------- $ 1,923,761 $ 151,676 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable ...................................................... $ 50,743 $ 21,436 Stockholders' Equity Common stock, par value $.01 .......................................... 167,469 154,719 Additional paid-in capital ............................................ 6,560,769 4,342,269 Deficit accumulated during the development stage .................................................. (4,855,220) (4,366,748) =========== =========== 1,873,018 130,240 =========== =========== $ 1,923,761 $ 151,676 =========== ===========
See Notes to Financial Statements 1 CYBERECORD, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS - Unaudited For the Three Months Ended March 31, 2000 and 1999, and the Period From September 27, 1996 to March 31, 2000
Total Accumulated During Development Stage (September 27, 1996 to March 31, 2000 1999 2000) ----------------- ----------------- ----------------- Revenues, Interest income $ 7,107 $ - $ 7,107 Expenses Write-off of acquired research and development 3,000,000 Research and development 96,699 272,124 General and administrative 398,880 9,199 1,590,203 ----------------- ----------------- ----------------- 495,579 9,199 4,869,434 ----------------- ----------------- ----------------- Net loss $ (488,472) $ (9,199) $ (4,855,220) ================= ================= ================= Basic loss per share of common stock $ (0.03) $ (0.00) $ (0.40) ================= ================= ================= Weighted average number of common shares outstanding 15,896,864 12,335,864 12,282,697 ================= ================= =================
See Notes to Financial Statements 2 CYBERECORD, INC. (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' EQUITY - Unaudited For the Three Months Ended March 31, 2000 and 1999, and the Period From September 27, 1996 to March 31, 2000
Deficit Accumulated Additional During the Common Common Paid-in Development Receivable for Shares Stock Capital Stage Shares Sold Total ---------- ---------- ----------- ----------- ------------ ---------- Balances, September 27, 1996 335,864 $ 3,359 $ 769 $ - $ - $ 4,128 Issuance of common stock (October and November 1996) 8,700,000 8,700 49,410 58,110 Net loss (3,192) (3,192) ---------- ---------- ----------- ----------- --------- ------------ Balances, December 31, 1996 9,035,864 12,059 50,179 (3,192) 59,046 Issuance of common stock, net of effects of exchange of Chrysalis shares for Pillar shares (October 1997) 3,300,000 111,300 128,700 240,000 Additional capital contributed by shareholders 46,700 46,700 Net loss (345,688) (345,688) ---------- ---------- ----------- ----------- --------- ------------ Balances, December 31, 1997 12,335,864 123,359 225,579 (348,880) 58 Additional capital contributed by shareholders 83,500 83,500 Net loss (82,251) (82,251) ---------- ---------- ----------- ----------- --------- ------------ Balances, December 31, 1998 12,335,864 123,359 309,079 (431,131) 1,307 Issuance of common stock in exchange for subscriptions receivable (March 1999) 1,970,000 19,700 965,300 (985,000) Issuance of common stock in exchange for services (March 1999) 6,000 60 2,940 3,000 Additional capital contributed by shareholders 6,300 6,300 Net loss (9,199) (9,199) ---------- ---------- ----------- ----------- --------- ------------ Balances, March 31, 1999 14,311,864 143,119 1,283,619 (440,330) (985,000) 1,408 Contribution of shares back to the corporation by shareholders (April 1999) (5,000,000) (50,000) 50,000 Issuance of common stock in exchange for services (April 1999) 90,000 900 36,100 37,000 Issuance of common stock in exchange for Kristal Group assets (April 1999) 6,000,000 60,000 2,940,000 3,000,000 Issuance of common stock in exchange for services (November 1999) 70,000 700 30,800 31,500 Additional capital contributed by shareholders 1,750 1,750 Collection of subscriptions receivable 985,000 985,000 Net loss (3,926,418) (3,926,418) ---------- ---------- ----------- ----------- --------- ------------ Balances, December 31, 1999 15,471,864 154,719 4,342,269 (4,366,748) - 130,240 Issuance of common stock in exchange for cash (March 2000) 1,275,000 12,750 2,218,500 2,231,250 Net loss (488,472) (488,472) ---------- ---------- ----------- ----------- --------- ------------ Balances, March 31, 2000 16,746,864 $ 167,469 $ 6,560,769 $(4,855,220) $ - $ 1,873,018 ========== ========== =========== =========== ========= ============
See Notes to Financial Statements 3 CYBERECORD, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS Unaudited For the Three Months Ended March 31, 2000 and 1999, and the Period From September 27, 1996 to March 31, 2000
Total Accumulated During Development Stage (September 27, 1996 to March 31, 2000 1999 2000) ----------------- ----------------- ----------------- Cash Flows From Operating Activities Net loss $ (488,472) $ (9,199) $ (4,855,220) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 7,000 10,940 Writeoff of purchased inprocess research and development that had not reached technological feasibility 3,000,000 Professional fees exchanged for common stock 3,000 71,500 Changes in operating assets and liabilities Prepaid expenses and deposits 4,937 (10,257) Accounts payable 29,307 50,743 ----------------- ----------------- ----------------- Cash used in operating activities (447,228) (6,199) (1,732,294) Cash Flows From Investing Activities Purchase of equipment (60,362) (89,630) Capitalized Development Costs (114,020) (114,020) ----------------- ----------------- ----------------- Cash used in investing activities (174,382) (203,650) Cash Flows From Financing Activities Issuance of common stock 2,231,250 3,514,360 Capital contribution 6,300 138,250 ----------------- ----------------- ----------------- Cash provided by financing activities 2,231,250 6,300 3,652,610 Net increase in cash 1,609,640 101 1,716,666 Cash, beginning of period 111,154 1,307 4,128 ----------------- ----------------- ----------------- Cash, end of period $ 1,720,794 $ 1,408 $ 1,720,794 ================= ================= =================
See Notes to Financial Statements 4 Note 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and therefore do not include all disclosures necessary for a fair presentation of financial position, results of operations, changes in stockholders' equity, and cash flows in conformity with generally accepted accounting principles. The operating results for interim periods are unaudited and are not necessarily an indication of the results to be expected for the full fiscal year. In the opinion of management, the results of operations as reported for the interim period reflect all adjustments which are necessary for a fair presentation of operating results. Note 2. Per Share Information Basic loss per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding in the period. Diluted loss per share has not been presented as inclusion of any such shares would be antidilutive to the loss per share. Note 3. Capitalized Development Costs CybeRecord's ScanServer product reached the stage of technological feasibility as defined by Statements of Financial Accounting Standards ("SFAS") 86 on February 16, 2000. Accordingly, all product development costs prior to that date have been charge to expense as research and development and all product development costs subsequent to that date have been included in capitalized development costs. Item 2. Plan of Operation. Forward-Looking Statements In describing our plan of operation for the next 12 months as required by Part I, Item 2 of this report, much of what we say will be "forward-looking statements." Words such as "expect," "anticipate," "intend," "believe," "plan," "objective," "target," "goal," and similar expressions indicate that a statement is forward-looking. Our forward-looking statements reflect our management's beliefs and assumptions based on the information we currently have available. Because our forward-looking statements are based on what we know and expect at the time we are preparing this report, we cannot be sure that the actual course of our business activities will correspond to what we say in our forward-looking statements. There are many risks and uncertainties that could cause the assumptions we have used to formulate our business plans to turn out to be wrong. If our assumptions turn out to be wrong, our business's actual performance could be much worse than we anticipate based on our current assumptions. If our business does not perform as well as investors expect, or analysts or investors develop concerns about how well our business will perform, the trading prices for our stock are likely to decline, perhaps substantially. 5 Part I, Item 1 of our Annual Report on Form 10-KSB for the fiscal year completed December 31, 1999 (filed with the Securities and Exchange Commission on April 14, 2000) identifies some of the key risks and uncertainties that we believe could have a serious negative effect on our business. These risks are described under the heading "Forward-Looking Statements" in our 1999 Form 10-KSB. We direct investors' attention to that disclosure and caution that if our business does encounter unexpected problems because of these or other risks and uncertainties, investors could lose some or all of their investments in our business. Plan of Operation In February 2000 we produced two prototype ScanServers that have been used for testing and evaluation. Our current focus is on progressing from a development stage company to sustained commercial production of the ScanServer. During March 2000, we ordered sufficient hardware components to assemble 30 ScanServers and sufficient computer and electronic components for 10 ScanServers. (We ordered hardware for a larger number of ScanServers because these components require custom manufacturing.) We previously arranged for a subcontractor in central California to assemble ScanServers for commercial distribution. In May 2000 we hired a manufacturing manager to oversee commercial production of ScanServers. Based on our manufacturing manager's recommendations, we have shifted our initial production strategy from one of relying on outside contractors to managing the initial commercial assembly process in-house. This is intended to give us more direct control over production schedules and quality assurance, as well as the ability to quickly identify and resolve any problems that may arise during the initial assembly process. We still expect to shift the bulk of our assembly requirements to an outside contractor as soon as possible. At the same time, we plan to maintain at least limited capacity for in-house assembly. We intend for this capacity to act as a safety net. It will give us the ability to complete a minimal number of ScanServers even if we experience problems with outside assembly contractors. We had initially established a target of completing 10 ScanServers for commercial distribution by the end of May 2000. Since placing our initial parts orders in March 2000, however, we have encountered delays in vendors shipping us the ordered parts. Because of these delays, as of the filing date of this report we are uncertain about how many ScanServers we will be able to complete by the end of May 2000. It may be as few as one or two units if the delays are not resolved soon. Once we have received the delayed components, we expect to be able to complete another nine units during June 2000. After that, our goal is to achieve an on-going production rate of approximately 20 units per month. We have also initiated the steps necessary to apply for Federal Communications Commission approval and comparable approval for Canada (CSA). We intend to complete these steps by the end of May 2000 if possible, and to begin commercial shipping of ScanServers as soon as approvals are pending. We also plan to initiate, by the end of May 2000, the process for receiving Underwriters' Laboratory listings. Our initial target geographical market is the United States, to be followed by Canada, the United Kingdom, Columbia, Brazil, and Mexico. Based on cash raised from stock sales earlier this year, we believe we have sufficient cash available to meet our manufacturing and marketing schedule as described in this report. If we are able to implement our production plans as we intend, we believe that we will be able to generate adequate revenues from placing ScanServer units into service to maintain operations at the modest level described in the preceding 6 paragraphs. Without raising additional funds through stock sales, we do not expect to be able to expand the scale of our production and marketing efforts quickly, but we believe we could sustain our business and grow slowly. Additional capital investment in our business during the next 12 months would influence our activities in three key respects: how much advertising we are able to do, how quickly we can expand the scale of our production operations, and how quickly we can enter additional geographical markets. If we are able to secure additional funding through stock sales, we would expect to pursue these areas to the extent we considered it feasible. We cannot, however, be certain of placing enough ScanServers into service over the next 12 months to meet our operating requirements. If we do not place enough units, then we will need to either obtain adequate commercial credit arrangements or sell additional stock to fund our continuing operations. We do not currently have commitments in place for obtaining credit or selling additional stock. As of May 2000, we do not intend to conduct significant new research and development efforts relating to the ScanServer during the next 12 months. We expect to give primary operational focus to manufacturing ScanServers and placing them into commercial service. As an integral part of moving from product development to production, we expect to conduct on-going evaluation of possible ways to improve production and lower costs. We also expect to devote a modest level of development effort to completion of a roll-film feeder for the ScanServer. In addition, if sufficient capital is available during the next 12 months, we expect to begin research and development on a machine that will transfer digital images onto microfilm. As our operations continue, we also expect to watch for new opportunities to further develop or build on our core technologies in ways that complement our microfilm scanning business. We do not currently have any concrete plans in this regard, however. In May 2000 we leased facilities in Modesto, California to provide space for our initial in-house assembly activities. As of the filing date of this report, over the next 12 months we do not intend to acquire significant new plant or equipment or any other significant new facilities devoted to the production or assembly of ScanServers. We do not currently expect to hire a significant number of additional employees during the next 12 months. We believe that overall, the complement of management, technical, and sales and marketing personnel we currently employ should enable us to proceed with production and marketing at our initial target levels over the next 12 months. PART II -- OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. We held a special meeting of security holders on February 17, 2000. The sole purpose of the special meeting was to submit to a vote of our security holders the question of whether CybeRecord, Inc. (currently a Florida corporation) should reincorporate as a Nevada corporation. To accomplish the reincorporation, CybeRecord (Florida) would be merged into a newly-formed Nevada corporation also named CybeRecord, Inc. 7 The proposal to reincorporate CybeRecord (Florida) as a Nevada corporation by merger was approved by our shareholders at the February 17, 2000 special meeting. The tabulation of the votes cast at the special meeting was as follows: Votes cast in favor - 8,246,930 Votes cast against - 0 Abstentions and broker non-votes - 0 Although our shareholders approved reincorporating as a Nevada corporation at the February 17, 2000 special meeting, our Board of Directors has elected not to proceed with reincorporation at this time. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 27 Financial Data Schedule (b) Reports on Form 8-K. The Company did not file any reports on Form 8-K during the quarterly period covered by this report. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CybeRecord, Inc. --------------------- (Registrant) Date: May 10, 2000 By: /s/ JAMES J. LUCAS ----------------------- --------------------- James J. Lucas, President, CEO, and Principal Financial Officer 8 EX-27 2 FDS --
5 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 1,720,794 0 0 0 0 1,731,051 89,630 10,940 1,923,761 50,743 0 0 0 167,469 1,705,549 1,923,761 0 7,107 0 0 495,579 0 0 (488,472) 0 (488,472) 0 0 0 (488,472) (0.03) (0.03)
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