-----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, LGoSKX/MVMMjOhagu0Sb3GSH/riZoXYhpCBvYSEBMg/dK3VHfaTpS6ZefzJaQUO3 i7yLCMKpGOy0Esfo7UVt2Q== 0001010412-03-000112.txt : 20030520 0001010412-03-000112.hdr.sgml : 20030520 20030520121421 ACCESSION NUMBER: 0001010412-03-000112 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRL HOLDINGS INC CENTRAL INDEX KEY: 0000797662 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 880218411 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-15260 FILM NUMBER: 03711729 BUSINESS ADDRESS: STREET 1: 340 GRANITE STREET STREET 2: SUITE 200 CITY: MANCHESTER STATE: NH ZIP: 03102-4004 BUSINESS PHONE: 6036418443 MAIL ADDRESS: STREET 1: 340 GRANITE STREET STREET 2: SUITE 200 CITY: MANCHESTER STATE: NH ZIP: 13102-4004 FORMER COMPANY: FORMER CONFORMED NAME: BIORELEASE CORP DATE OF NAME CHANGE: 19930809 FORMER COMPANY: FORMER CONFORMED NAME: OIA INC DATE OF NAME CHANGE: 19920703 10QSB 1 q303.txt QUARTERLY REPORT ON FORM 10QSB FOR THE QUARTER ENDED MARCH 31, 2003 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 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 No. 0-15260 BRL Holdings, Inc. (Exact name of small business issuer as specified in its charter) Delaware 88-0218411 (State or other jurisdiction of (Internal Revenue Service Incorporation or organization) Employer Identification No.) 200 Perimeter Road, Manchester, NH 03103 (Address of principal Executive offices Zip Code) (603) 641-8443 Issuer's telephone number, including area code Former name, former address and formal 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date, 47,906,220 shares of common stock, par value $.01 per share as of May 14, 2003. _________________________________________________________________ Transitional Small Business Disclosure Format (Check One) Yes No X BRL HOLDINGS, INC. INDEX PART I. FINANCIAL INFORMATION Page Number Item 1 Financial Statements . . . . . . . . . . . . . . . . . . . . 3 Consolidated Balance Sheet as of March 31, 2003 (unaudited) and Balance Sheet at June 30, 2002 . . . . . . . . . . . . . . . . 3 Consolidated Statements of Operations for the Three Months Ended March 31, 2003 and Statement of Operations for the nine months ended March 31, 2003 and from inception of development stage (October 4, 2002) until March 31, 2003 (unaudited) . . . 4 Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2003 and from inception of development stage (October 4, 2002) until March 31, 2003.. . . . . . . . . . . . 5 Notes to Unaudited Consolidated Financial Statements . . . . . 7 Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operation. . . . . . . . . . . . . . . . . . . 8 PART II.OTHER INFORMATION Item 1.Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .10 Item 2.Changes in Securities . . . . . . . . . . . . . . . . . . . .10 Item 3.Defaults Upon Senior Securities . . . . . . . . . . . . . . .10 Item 4.Submission of Matters to a Vote of Security Holders . . . . .10 Item 5.Other Information . . . . . . . . . . . . . . . . . . . . . .10 Item 6.Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . .10 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statement BRL HOLDINGS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED BALANCE SHEETS March 31, 2003 and June 30, 2002
March 31, June 30, (Consolidated) 2003 2002 (Unaudited) --------- ---------- ASSETS Current Assets: Cash $ 606 $ 1,148 Other receivables 19,088 - Prepaid expenses and other current assets 1,575 1,050 --------- ---------- Total current assets 21,269 2,198 --------- ---------- Other assets: Investments in related party securities 2,717 - --------- ---------- Total assets $ 23,986 $ 2,198 ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCIES) Current liabilities: Accounts payable $ 203,969 $ 8,814 Accounts payable related party 20,687 20,687 Accrued expenses 379,721 5,000 --------- ---------- Total current liabilities 604,377 34,501 --------- ---------- Stockholders' equity (Deficiency): Preferred Stock of $.10 per share value, authorized 5,000,000 shares, no shares outstanding at December 31, 2002 and June 30, 2002, respectively - - Common stock of $.01 par value, 50,000,000 shares authorized, 47,906,220 and 5,433,800 issued and outstanding at March 31, 2003 and June 30, 2002 479,062 54,338 Additional paid-in capital 7,743,720 7,956,081 Accumulated deficit prior to development stage activities (7,981,338) (8,042,772) Development stage accumulated earnings (deficit) (821,835) - ---------- ---------- Total Stockholder's Equity (deficit) (580,391) (32,303) ---------- ---------- Total liabilities and stockholders' equity (deficit) $ 23,986 $ 2,198 ========== ==========
The accompanying notes are an integral part of the consolidated financial statements. 3 BRL HOLDINGS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months and Nine Months Ended March 31, 2003 and the Cumulative Period (October 4, 2002) to March 31, 2003 (Unaudited)
Inception (October 4, Three Months Ended Six Months Ended 2002) to March 31, March 31, March 31, 2003 2002 2003 2002 2003 (Unaudited) (Unaudited) (Unaudited) ------------------ ----------------- ----------- Revenues $ - $ - $ - $ - $ - Cost of goods sold - - - - - --------- -------- --------- -------- --------- Gross profit - - - - - Costs and expenses: Research and development - (169,501) - (262,879) - Purchased technologies cost - - (2,445) - (2,445) General and administrative income (expense) (109,017) (186,736) (659,812) - (620,990) --------- -------- --------- --------- -------- Total costs and expenses (109,017) (356,237) (662,257) (688,797) (623,435) --------- -------- --------- --------- -------- (Loss)/Gain from operations (109,017) (356,237) (662,257) (688,797) (623,435) --------- -------- --------- --------- -------- Other Income (Costs): Loss from investments - - (288,585) - (288,585) Other income (cost) - 3,000 90,017 13,000 90,017 --------- -------- --------- --------- -------- Total other income (cost) - 3,000 (198,568) 13,000 (198,568) --------- -------- --------- --------- -------- Gain (loss) before provision for (benefit from) income taxes - (353,237) (860,825) (675,797) (822,003) Provision for income taxes - - - - - --------- -------- --------- --------- -------- Net gain (loss) $ (109,017)$(353,237)$(860,825)$(675,797)$(822,003) ========= ======== ========= ========= ======== Weighted average shares 47,906,220 5,401,756 31,389,168 3,577,878 16,926,724 Basic and fully diluted loss per share $ (0.00) $ (0.07)$ (0.03)$ (0.19)$ (0.05)
The accompanying notes are an integral part of the consolidated financial statements. 4 BRL HOLDINGS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended March 31, 2003 and 2002 and the Cumulative Period from Inception to March 31, 2003 (Unaudited)
Inception Nine Months Ended (October 4, 2002) March 31, To March 31, 2003 2002 2003 ------------------ ---------------- Cash flows from operating activities: Net (loss) $(860,825) $(675,797) $(822,003) Adjustments to reconcile net loss to net cash used in development activities: Depreciation and amortization - 110,813 - Common stock issued in exchange for purchased technology 2,445 52,500 2,445 Net effect of subsidiary transactions 97,930 97,392 Common stock issued in exchange for common stock of subsidiary 212,362 - 212,362 Common stock issued in exchange for services rendered - 156,422 - (Increase) Decrease in current assets: Notes receivable - 13,624 - Accounts receivable (19,088) - (19,088) Other receivables - (995) 764 Prepaid expenses and other current assets (525) (595) (1,050) Related party securities (2,717) - (2,717) Other non-current assets - - - Increase (Decrease) in current liabilities: Notes payable, stockholders for service - 83,755 - Accounts payable 195,155 199,601 158,886 Accrued expenses 374,721 23,516 373,221 Other liabilities - (10,124) - --------- -------- --------- Net cash used in operating activities $ (542) $(47,280) $ 212 --------- -------- ---------
The accompanying notes are an integral part of the consolidated financial statements. 5 BRL HOLDINGS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended March 31, 2003 and 2002 and the Cumulative Period from Inception to March 31, 2003 (Unaudited)
Inception Nine Months Ended (October 4, 2002) March 31, To March 31, 2003 2002 2003 ------------------ ---------------- Cash flows from investing activities: Purchase of fixed assets $ - $ (6,015) $ - Purchase of intangible assets - (661) - Proceeds from sale of assets - - - -------- ---------- ------------ Net cash used in investing activities - (6,676) - -------- ---------- ------------ Cash flows from financing activities: Notes receivable - - - Notes payable - 57,000 - Issuance of common stock, net - - - Payment of deferred offering costs - - - -------- --------- ------------ Net cash provided by investing activities $ - $ 57,000 $ - -------- --------- ------------ Net increase (decrease) in cash (542) 3,044 212 Cash at beginning of period 1,148 119 394 -------- --------- ------------ Cash at end of period $ 606 $ 3,163 $ 606 ======== ========= ============ Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - $ - Income taxes $ - $ - $ - Supplemental Schedule of Non cash Investing and Financing Activities: Cash paid for interest - - - Stock issued for acquisition of subsidiary 212,362 490,000 212,362 Liabilities repaid through issuance of common stock 2,445 - 2,445 The accompanying notes are an integral part of these consolidated financial statements.
6 BRL HOLDING, INC. (A DEVELOPMENT STAGE ENTERPRISE) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2003 (UNAUDITED) Note 1 Basis of presentation The accompanying unaudited consolidated financial statements have been prepared from the books and records of BRL Holdings, Inc. (the "Company") or "BRL") in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Rule 310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements and should be read in conjunction with the Company's audited consolidated financial statements at and for the fiscal year ended June 30, 2002. In the opinion of management, all adjustments (consisting only of normal recurring accruals and adjustments associated with the Element 21 acquisition in the current fiscal year) considered necessary for a fair presentation have been included. Operating results for the nine months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ended June 30, 2003. Note 2 Investment in related parted securities On April 1, 2002 we divested our majority interest in the AssureTec Systems subsidiary by exchanging with AssureTec founders and consultants shares in AssureTec held by the Company. After divesting these shares previously held, the Company currently holds as an investment through its Tech Ventures, Inc. subsidiary a minority interest consisting of 2,716,900 shares of AssureTec stock carried at a nominal value equal to the par value of the stock. (See our 8-K Current Report dated April 1, 2002, which has been previously filed with the Securities and Exchange Commission and which is incorporated herein by reference.) Note 3 Consolidation of financial statements Since June 30, 2002 the Company has been consolidated with Advanced Conductor Technologies, Inc., Tech Ventures, Inc. and Tech Venture's wholly owned subsidiaries IJAM Entertainment, Inc. For the period of October 4, 2002 to March 31, 2003 the Company was also consolidated with Element 21 Golf Company, a development stage enterprise. For the nine month period ended March 31, 2003 and prior to the formation of Tech Ventures, the Company was consolidated with AssureTec Systems, Inc., from November 9, 2001 to March 31, 2002. Prior to November 9, 2001 and from April 1, 2002 through October 4, 2002 the Company had no business activities other than administrative costs necessary for remaining a publicly reporting entity. On April 1, 2002 the Company divested itself of its controlling interest in AssureTec Systems, Inc. retaining an investment interest carried at nominal value (see Item 2). On October 4, 2002 the Company acquired 100% of Element 21 Golf Company in a stock for stock transaction issuing 21,236,210 shares of the Company's common stock in exchange for a like number of shares of Element 21 Golf Company. 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following discussion includes the business of Element 21 Golf Company (the "Subsidiary"), since the Company, prior to its acquisition of the Subsidiary, had recently divested its majority interest in AssureTec Systems, Inc., retaining only an investment interest carried at a nominal value through a newly formed subsidiary Tech Ventures, Inc. Otherwise the Company had no operations other than raising capital and searching for an acquisition candidate (i.e., the Subsidiary). Where relevant, all numbers retroactively take into account the operations of the Company, Tech Ventures and Element 21. The Company has announced its plans to spin off Tech Ventures as an independent company, but such is still pending. Three Months Ended March 31, 2003 and 2002 For the three months ended March 31, 2003 the Company, including the Subsidiaries had no revenues, general and administrative costs of $109,017 resulting in a loss of $109,017 as compared with the three months ended March 31, 2002, the Company, including the Subsidiary AssureTec had no revenues, research and development costs of $169,501, general and administrative expenses of $186,736 and other income of $3,000 for a net loss of $353,237. Nine Months Ended March 31, 2003 and 2002 For the nine months ended March 31, 2003 the Company, including the subsidiaries had no revenues, $2,445 of purchased technology costs, administrative costs of $659,812, loss on investment of $288,585, other income of $90,017 resulting in a net loss of $860,825 as compared with the nine months ended March 31, 2002 wherein the Company, including the subsidiary AssureTec from November 9, 2001 through March 31, 2002, had research and development costs of $262,879, general and administrative expenses of $425,918, other income of $13,000 yielding a net loss of $675,797. Inception to March 31, 2003 From inception of the consolidation of the Company with Element 21 Golf Company, (October 4, 2002), through March 31, 2003, the Company, including the Subsidiaries, had revenues of $0, purchased technology costs of $2,445, administrative costs of $620,990, loss from investments of $288,585 and other income of $90,017 yielding an accumulated net loss of $822,003. Liquidity and Capital Resources The Company including its subsidiary Element 21 Golf Company has a negative working capital of $583,108 at March 31, 2003. It's liquidity from inception until the closing of the Reorganization was primarily the funds of the Company and from advances by stockholders of the Company. Absent continued accruals by consultants retained by the Company to manage its operations and further advances by stockholders of the Company, the Company cannot continue operations without additional capital, the source of which, if any cannot be certain at this time. Dividend Policy The Company has not declared or paid any cash dividends on its common stock since its inception and does not anticipate the declaration or payment of cash dividends in the foreseeable future. The Company intends to retain earnings, if any, to finance the development and expansion of its subsidiary's business. Future dividend policy will be subject to the discretion of the Board of Directors and will be contingent upon future earnings, if any, the Company's financial condition, capital requirements, general business conditions and other factors. Therefore, there can be no assurance that dividends of any kind will ever be paid. 8 Effect of Inflation Management believes that inflation has not had a material effect on its operations for the periods presented. 9 PART II OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities. None Item 3. Default Upon Senior Securities. None Item 4. Submission of matters to a Vote of Securities Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K. None. 10 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BRL Holdings, Inc. May 19, 2003 By: /s/ Nataliya Hearn ----------------------------- Nataliya Hearn, Ph.D. President and Director By: /s/ Jim Morin -------------------------- Secretary, Treasurer, CFO and Director 11 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Jim Morin, Secretary/Treasurer and Chief Financial Officer of BRL Holdings, Inc. (the "Registrant"), certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB of the Registrant; 2. Based on my knowledge, this Quarterly Report does not contain any un-true statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have: a) Designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared; b) Evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date"); and c) Presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function); a) All significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officer and I have indicated in this Quarterly Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 19, 2003 By/s/Jim Morin Secretary/Treasurer, CFO and Director 12 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of BRL Holdings, Inc. (the "Registrant") on Form 10-QSB for the quarter ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof, we, Nataliya Hearn, Ph.D., President and Chief Executive Officer, and Jim Morin, Secretary/Treasurer and Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge and belief: (1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant. Date: ________________________ By/s/Nataliya Hearn, Ph.D. President and Director Date: _______________________ By/s/Jim Morin Secretary/Treasurer, CFO and Director 13 -----END PRIVACY-ENHANCED MESSAGE-----