-----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, GYf8JRTpxSkTzM7da213imm0OM0rEoD9onXJIo458b48K2OcAv736B22GXHOAlzK ulxwC8YwuamTWpB/XlWkFA== 0001016295-99-000133.txt : 19991018 0001016295-99-000133.hdr.sgml : 19991018 ACCESSION NUMBER: 0001016295-99-000133 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990831 FILED AS OF DATE: 19991014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELSECUR CORP CENTRAL INDEX KEY: 0000894498 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 870438451 STATE OF INCORPORATION: NV FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-55254-15 FILM NUMBER: 99728301 BUSINESS ADDRESS: STREET 1: 1801 MCGILL COLLEGE, SUITE 1330 STREET 2: STE 107 CITY: MONTREAL STATE: A8 ZIP: H3A2N4 BUSINESS PHONE: 514-282-9000 MAIL ADDRESS: STREET 1: 1800 E SAHARA STREET 2: SUITE 107 CITY: LAS VEGAS STATE: NV ZIP: 89104 FORMER COMPANY: FORMER CONFORMED NAME: GRANDEUR INC DATE OF NAME CHANGE: 19940422 10QSB 1 1ST QUARTER FILING SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 August 31, 1999 [ ] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from _________ to ___________ Commission file number 33-55254-15 delSECUR Corporation (Exact Name of Small Business Issuer as Specified in Its Charter) NEVADA 87-0438451 (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 1801 McGill College, Suite 1330, Montreal, Quebec Canada H3A 2N4 (Address of Principal Executive Offices) (Zip Code) (Issuer's Telephone Number, Including Area Code) (514) 282-9000 Indicate by a check mark whether the issuer (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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares of each of the issuer's classes of common equity, as of the latest practicable date: Class Outstanding as of August 31, 1999 - ----------------------- --------------------------------- $.001 PAR VALUE CLASS A 13,995,300 SHARES COMMON STOCK 1 PART I FINANCIAL INFORMATION ITEM 1. Financial Statements. The accompanying unaudited financial statements (pages F-1 through F-3) have been prepared in accordance with the instructions to Form 10-QSB and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows and stockholders' deficit in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operation and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the quarter ended August 31, 1999 are not necessarily indicative of the results that can be expected for the year ending May 31, 2000. ITEM 2. Management's Plan of Operation. Pursuant to an Agreement made and entered into on February 25th 1998 the Company issued and delivered on February 26, 1998, 12,848,300 shares of its Common Stock bearing a restrictive legend to 3127575 Canada Inc. (now delSECUR Inc.), a Canadian Corporation, in exchange for which issuance, it acquired all of the outstanding shares of 3127575 Canada Inc. Through 3127575 Canada Inc., the Company has become the exclusive licensee of the del-ID technology for personal identification by means of electronic scanning of finger characteristics. 3127575 Canada Inc., obtained these exclusive rights by the Exclusive License Agreement dated November 12, 1997 between it and Pierre de Lanauze, inventor of the del-ID technology. The transaction was exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof. Also, because the 12,848,300 shares were issued solely to non-U.S. persons, the transaction qualified for exemption under Rules 901 et seq. of Regulation S. Following the above transaction the former shareholders of 3127575 Canada Inc. owned 92.78% of the outstanding shares of the Company. The del-ID technology permits precise and positive authentication of the identity of any living individual and is applicable to a wide range of financial transactions where authentication of the individual is necessary to eliminate fraud and other improper use of services. The del-ID system collects biological data from the finger image of the individual and transfers the image to a unique electronic signature called the "del-gram". The del-gram is not a digitized bitmap image of the finger, but a synthesized subset of biological data sufficient to identify the individual. 2 Patent protection is currently pending for the del-ID system in the United States. The International Preliminary Examination Report was issued in accordance with the Patent Cooperation Treaty application (PCT) that included 82 countries. The Examiner has recognized and acknowledged the inventive step, the novelty and the industrial applicability by accepting all of the 11 claims represented by the technology. In April 1998, 3127575 Canada Inc. signed an agreement with the "Centre de Recherche en Informatique de Montreal (CRIM)" for a scientific evaluation of the technology. The evaluation holds two topics. The primary one covers theoretical and accurate applications. The secondary covers the implementation of a study in a controlled laboratory environment. Here are the following details of the laboratory : - - The basic analysis of the technology ( technical specifications). - - Practical applications in simulated commercial environment such as banking, telephony, e-commerce etc. The primary topic analysis has been done by the CRIM in collaboration with a major American University. The positive results have been published and shall be available soon on the delSecur web site at delsecur.com. The secondary topic is presently in the making and will be done in collaboration with majors firms who are well recognized in their fields of activity. These majors firms will sponsor part of the implementation costs of the laboratory studies. For the time frame and more details about this section, we refer the reader to the delSecur web site. Commercial applications of the del-ID technology are numerous and include access to the information highway/internet, identification of employees working from a home office and requiring access to certain databases or informations, health cards, social insurance cards, drivers' licenses, passport control encryptions and access to confidential files, control of payment by debit or credit payment systems such as credit cards, smartcards, authentication of oral telephone ordering, access control to sensitive areas, hotel room access, cellular and digital telephone controls, automobile entry and protection, census and election control, door locks, vault locks, residential alarm system controls, timesheet management, student file management and many others. The Company expects to encounter substantial competition in the business in which it proposes to engage. It is likely that the competing entities will have significantly greater experience, resources, facilities, contacts and managerial expertise than the Company and will, consequently, be in a better position than the Company to obtain access to and to engage in the proposed business. Therefore it is to our advantage to associate ourselves to such major firms by gaining credibility and recognition. This enables us to use their know how, their resources and networking. 3 The Company will not manufacture del-ID cards or card readers directly. This will tend to minimize the capital requirements of the Company, its principal activities being limited to marketing the del-ID system to manufacturers and/or users internationally. Anticipated sources of revenue are license fees payable by government agencies and corporate entities for the right to manufacture, use or sell cards and card readers incorporating the del-ID system, as well as royalty payments by such entities for each card and reader employed in a del-ID system. We anticipate the first commercial revenue in twelve months from the present. As of August 31, 1999, the Company's balance sheet showed an accumulated deficit of $4,054,008, an increase of $892,209 during the first quarter. Operations to date have been financed principally by loans from senior management and others. Additional unsecured loan facilities continue to be available and are believed by management to be sufficient to finance operations over the next several months, pending the anticipated initial receipt of contract revenues during the second half of the 2000 fiscal year. No financing involving the issuance of additional shares is presently contemplated. The Company had a net loss of $892,209 for the three months ended August 31, 1999 compared with a loss of $282,051 for the same period for the prior year. The main increase from 1998 was approximately $479,000 spent for promotion. About $716,000 of expenses were paid by issuing 147,000 shares of common stock. The Company will continue to seek marketing opportunities for product licensing with governmental agencies and corporate entities on a world-wide basis. As the Company will be engaged in securing licensing contracts for use of its existing del-ID technology, no significant expansion of the physical plant, equipment or number of employees is foreseen for the period of the next twelve months. The Year 2000 issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems many recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 Issue may be experienced before, on, or after January 1, 2000, and if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 Issue affecting the Company, including those related to the efforts of customers, suppliers, or other third parties will be fully resolved. 4 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 delSECUR Corporation Date: October 14, 1999 By: Pierre de Lanauze, President, Chairman of the Board and Director 5 delSECUR CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED BALANCE SHEETS (expressed in Canadian dollars)
August 31, May 31, 1999 1999 ---------------------- -------------------- ASSETS (Unaudited) (Audited) CURRENT ASSETS Cash $ 9,941 $ 14,473 Sales taxes receivable 35,006 35,508 Prepaid expenses 43,750 30,858 Receivable-related party 187,736 170,736 Receivable - officer 160,562 357,420 ---------------------- -------------------- TOTAL CURRENT ASSETS 436,995 608,995 OTHER ASSETS Property and equipment 160,001 168,423 License from related party 1 1 ---------------------- -------------------- 160,002 168,424 ---------------------- -------------------- $ 596,997 $ 777,419 ====================== ==================== LIABILITIES & DEFICIT CURRENT LIABILITIES Accounts payable $ 270,032 $ 311,929 Accrued liabilities 34,820 34,927 Payable-related party 189,877 189,877 Payable - officer 1,492,500 1,474,000 Loans payable 237,987 247,987 ---------------------- -------------------- TOTAL CURRENT LIABILITIES 2,225,216 2,258,720 Deferred credit 6,516 6,900 STOCKHOLDERS' DEFICIT Common Stock $.001 par value: Authorized - 100,000,000 shares Issued and outstanding 13,995,300 shares (13,848,300 at May 31, 1999) 19,862 19,715 Additional paid-in capital 2,399,411 1,653,883 Deficit accumulated during the development stage (4,054,008) (3,161,799) ---------------------- -------------------- TOTAL STOCKHOLDERS' DEFICIT (1,634,735) (1,488,201) ---------------------- -------------------- $ 596,997 $ 777,419 ====================== ====================
F - 1 delSECUR CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS (expressed in Canadian dollars) (Unaudited)
Three Months Ended From Date of August 31, inception to 1999 1998 August 31, 1999 ------------------ ----------------- ----------------------- Net sales $ 0 $ 0 $ 0 Cost of sales 0 0 0 ------------------ ----------------- ----------------------- GROSS PROFIT 0 0 0 Other income 0 0 8,000 Depreciation and amortization 8,422 13,704 159,039 Interest expense 5,850 3,000 53,176 Research and development 29,517 45,562 506,973 General and administrative expenses 848,420 219,785 3,299,554 ------------------ ----------------- ----------------------- 892,209 282,051 4,018,742 ------------------ ----------------- ----------------------- NET LOSS $ (892,209) $ (282,051) $ (4,010,742) ================== ================= ======================= Net income (loss) per weighted average share $ (.06) $ (.02) ================== ================= Weighted average number of common shares used to compute net income (loss) per weighted average share 13,995,300 13,848,300 ================== =================
F - 2 delSECUR CORPORATION AND SUBSIDIARY (A Development Stage Company) STATEMENTS OF CASH FLOWS (expressed in Canadian dollars) (Unaudited)
From Date of Three Months Ended August 31, inception to 1999 1998 August 31, 1999 --------------- --------------- ------------------ OPERATING ACTIVITIES Net (loss) $ (892,209) $ (282,051) $ (4,010,742) Adjustments to reconcile net (loss) to cash used by operating activities: Depreciation 8,422 13,704 159,039 Amortization of deferred credit (384) 0 (1,150) Free rent 0 0 7,666 Stock issued for services 716,675 0 716,675 Related party advances 0 0 290,402 Foreign exchange fluctuation 18,500 0 79,200 Changes in assets and liabilities: Sales tax receivable 502 (9,668) (35,006) Prepaid expenses (12,892) (5,636) (43,750) Officer loan 196,858 (11,053) (160,562) Receivable - related party (17,000) (14,856) (478,138) Accounts payable (41,897) 36,536 270,032 Accrued liabilities (107) 33,950 34,820 Payable - related party 0 22,487 189,877 --------------- --------------- ------------------ NET CASH USED BY OPERATING ACTIVITIES (23,532) (216,587) (2,981,637) INVESTING ACTIVITIES Purchase of property & equipment 0 (9,496) (319,040) --------------- --------------- ------------------ NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 0 (9,496) (319,040) FINANCING ACTIVITIES Loan 0 0 601,850 Repayment of loan (10,000) 0 (363,863) Loan from director 0 0 2,085,250 Stock sold 0 0 100 Contribution to paid-in capital by director 29,000 247,539 987,281 --------------- --------------- ------------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 19,000 247,539 3,310,618 --------------- --------------- ------------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,532) 21,456 9,941 Cash and cash equivalents at beginning of year 14,473 3,197 0 --------------- --------------- ------------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,941 $ 24,653 $ 9,941 =============== =============== ================== Cash paid for interest $ 5,850 $ 1,500 $ 36,200 =============== =============== ==================
During 1999, the Company issued 147,000 shares of common stock for services of $716,675. F - 3 EX-27 2 FDS -- 1ST QUARTER FILING
5 This schedule contains summary financial information extracted from delSECUR CORPORATION August 31, 1999 consolidated financial statements and is qualified in its entirety by reference to such financial statements. 0000894498 delSECUR CORPORATION Canadian dollars 3-MOS MAY-31-2000 AUG-31-1999 .66854 9,941 0 383,304 0 0 436,995 319,040 (159,039) 596,997 2,225,216 0 0 0 19,862 (1,654,597) 596,997 0 0 0 0 892,209 0 5,850 (892,209) 0 (892,209) 0 0 0 (892,209) (.06) (.06)
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