UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2002
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to __________
Commission File Number 0-26285
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AGE RESEARCH, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
DELAWARE 87-0419387
- ------------------------------ -------------------------
State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization
31103 Rancho Viejo Road, #2102, San Juan Capistrano, CA 92675
- ------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (800) 597-1970
---------------
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None N/A
- ------------------ -----------------------------------------
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $0.001
- ------------------------------
(Title of class)
Check whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 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. (1) Yes [X]
No [ ] (2) Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: $7,894
State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days:
The market value of shares held by nonaffiliates is $531,075 based on the
bid price of $0.01 per share at March 19, 2003.
As of March 19, 2003, the Company had 68,759,301 shares of common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the
part of the form 10-KSB (e.g., part I, part II, etc.) into which the document
is incorporated: (1) Any annual report to security holders; (2) Any proxy or
other information statement; and (3) Any prospectus filed pursuant to rule
424(b) or (c) under the Securities Act of 1933: NONE
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
ITEM 1. DESCRIPTION OF BUSINESS
Since December 1987, the Company has marketed its RejuvenAge products to
physicians practicing skin therapy medical specialities. The RejuvenAge
products are non-prescription skin care products that do not contain Retin-A
or any other precription drug. In addition to the RejuvenAge products, the
Registrant sells a proprietary moisturizing shaving cream for sensitive or
irritated beard conditions called Bladium.
The Company owns the formulations for both the RejuvenAge and Bladium
products. The products are manufactured by independent contractors. In order
to increase its profitability and reduce expenses, in fiscal 1998 the Company
reduced its office expenses to a minimum and eliminated its advertising and
salary expenses.
ITEM 2. DESCRIPTION OF PROPERTIES
None. The Company vacated its warehouse facility in May 2000. The remaining
minimal inventory is stored at the president's house.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during the
fourth quarter of the fiscal year ended December 31, 2002.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The table below sets forth, for the respective periods indicated, the prices
for the Company's common stock in the over-the-counter market as reported by
the NASD's OTC Bulletin Board. The Company's common stock was cleared for
quotations on the OTCBB in January 2000 under the symbol "AGER". The bid
prices represent inter-dealer quotations, without adjustments for retail mark-
ups, mark-downs or commissions and may not necessarily represent actual
transactions.
High Bid Low Bid
-------- -------
Fiscal Year Ended December 31, 2002
- -----------------------------------
First, Second, Third and Fourth Quarter .05 .00
Fiscal Year Ended December 31, 2001
- -----------------------------------
First, Second, Third, and Fourth Quarter .08 .03
Fiscal Year Ended December 31, 2000
- -----------------------------------
First, Second, Third, and Fourth Quarter .06 .03
At March 19, 2003, the bid and ask price for Company's Common Stock as quoted
on the OTC Bulletin Board was $0.01 and $0.01, respectively.
Since its inception, the Company has not paid any dividends on its Common
Stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future. At March 19, 2003, the Company had approximately 275
shareholders of record based on information provided by the Company's transfer
agent.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
- ---------------------
Year ended December 31, 2001 Compared to December 31, 2000
- ----------------------------------------------------------
Revenues and Costs of Sales. For the fiscal year ended December 31, 2002, the
Company had sales of $7,894, with cost of goods sold of $1,211. For the fiscal
year ended December 31, 2001, the Company had sales of $8,277, with cost of
goods sold of $1,146. Selling, general and administrative expenses for 2002
were $17,059, compared to selling, general and administrative expenses for
2001 of $16,400. Management believes that for the Company to have any
significant increase in sales volume the Company will require substantial
expenditures in advertising. The expenses in 2002 and 2001 are primarily
attributable to the preparation and filing of periodic reports under Section
13 and/or 15(d) of the Exchange Act. The slightly higher expenses in 2002 were
attributed primarily to higher accounting and legal expenses. The net loss
from operations for 2002 was $10,375 compared to net loss from operations for
2001 of $9,269.
Liquidity and Capital Resources
- -------------------------------
Historically, the Company has financed its operations through a combination of
cash flow derived from operations and debt and equity financing. At December
31, 2002, the Company had a working capital deficit of $15,867 based on
current assets of $1,062 consisting of cash $310, and accounts receivable of
$752, and current liabilities $16,929, consisting of accounts payable and
accrued expenses of $8,429 and officers' loan of $8,500.
Based on its current marketing program and sales, it is clear that the Company
will have to increase its sales volume significantly in order to have
profitable operations. At this time, however, the Company does not have any
working capital to expand its marketing efforts.
The Company proposes to finance its needs for additional working capital
through some combination of debt and equity financing. Given its current
financial condition, it is unlikely that the Company could make a public sale
of securities or be able to borrow any significant sum from either a
commercial or private lender. The most likely method available to the Company
would be the private sale of its securities. There can be no assurance that
the Company will be able to obtain such additional funding as needed, or that
such funding, if available, can be obtained on terms acceptable to the
Company.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately following
the signature page to this Form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no disagreements with its certified public accountants
with respect to accounting practices or procedures or financial disclosure.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The names of the Company's executive officers and directors and the
positions held by each of them are set forth below:
Name Position
- ---- --------
Richard F. Holt President and Director
Wendy E. Holt Vice President and Director
The term of office of each director is one year and until his or her
successor is elected at the Company's annual shareholders' meeting and is
qualified, subject to removal by the shareholders. The term of office for
each officer is for one year and until a successor is elected at the annual
meeting of the board of directors and is qualified, subject to removal by the
board of directors.
Biographical Information
- ------------------------
Set forth below is certain biographical information with respect to each
of the Company's officers and directors.
Richard F. Holt, age 62, has been president and director of the Company since
August 1995. In 1963, Mr. Holt graduated from Stanford University with a
Bachelor of Science degree. Mr. Holt earned an MBA from UCLA School of
Business in 1968. From 1969 to 1985, Mr. Holt was the CEO of Modulearn, Inc.,
and Micro General, Inc. From 1985 until 1995, when he became president of the
Company, Mr. Holt worked independently as an investor.
Wendy E. Holt, age 30, was appointed vice-president and director of the
Company in April 2000. Ms. Holt is a graduate of UCLA (1995) with degrees in
business and history. For the past six years she has worked for Tricon Food
Services as a creator and implementor of internet functions in the Human
Resources department.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- -------------------------------------------------
The Company believes that under the SEC's rules for reporting of securities
transactions by directors and executive officers, all required reports have
been timely filed.
ITEM 10. EXECUTIVE COMPENSATION
The Company has not had a bonus, profit sharing, or deferred compensation plan
for the benefit of its employees, officers or directors. Except as noted
below, the Company has not paid any salaries or other compensation to its
officers, directors or employees for the years ended December 31, 2002, 2001
and 2009, nor at any time during 2002, 2001 or 2000. Further, the Company has
not entered into an employment agreement with any of its officers, directors
or any other persons and no such agreements are anticipated in the immediate
future. It is intended that the Company's directors may be compensated for
services provided to the Company. As of the date hereof, no person has
accrued any compensation from the Company.
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's or its principal subsidiaries chief executive
officer and each of its other executive officers that received compensation in
excess of $100,000 during such period (as determined at December 31, 2002, the
end of the Company's last completed fiscal year):
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
Richard F. Holt 2002 $ -0- -0- -0- -0- -0- -0- -0-
President 2001 $ -0- -0- -0- -0- -0- -0- -0-
2000 $ -0- -0- -0- -0- -0- -0- -0-
Options/SAR Grants in Last Fiscal Year
None.
Bonuses and Deferred Compensation
None.
Compensation Pursuant to Plans
None.
Pension Table
Not Applicable.
Other Compensation
None.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables sets forth the number of shares of the Company's
Common Stock, par value $0.001, held by each person who is believed to be
the beneficial owner of 5% or more of the 68,759,301 shares of the Company's
common stock outstanding at March 19, 2003, based on the Company's transfer
agent's list, and the names and number of shares held by each of the Company's
officers and directors and by all officers and directors as a group.
Title of Name and Address Amount and Nature of Percent
Class Of Beneficial Owner Beneficial Ownership of Class
- -------- ------------------- --------------------- --------
Common Mark A. Scharmann(1) 5,193,100 7.55
1661 Lakeview Circle
Ogden, UT 84403
Common Wendy E. Holt (2) 5,000,000 7.27
205 1/2 Agate Street
Balboa Island, CA 92662
Common Richard B. Holt (3) 5,400,000 7.85
24382 Antilles Way
Dana Point, CA 92629
Common Jean Armstrong 8,026,050 11.67
P.O. Box 6743
Pine MTN. Club, CA 93222
Common Eldridge D. Huntington 6,000,000 8.73
5314 Anaheim Road
Long Beach, CA 90815
Common Richard F. Holt (4) 10,651,833 15.49
1 Strawberry Lane
San Juan Capistrano, CA 92675
Officers and Directors
- ----------------------
Common Richard F. Holt, ---- see above ----
President/director
Common Wendy E. Holt (2) ---- see above ----
Vice-president/director
All Officers, Directors,
as a Group (2 Persons) 15,651,833 22.76
==================== =====
- -----------------------
(1) Includes 13,100 held of record by Troika Capital Investments, an entity
controlled by Mr. Scharmann.
(2) Wendy E. Holt is the adult daughter of Richard F. Holt.
(3) Richard B. Holt is the adult son of Richard F. Holt.
(4) Richard F. Holt's share numbers include 6,537,290 shares held in a family
trust and 50,000 shares held in a trust by his spouse.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our president, Richard F. Holt, is currently making payments to purchase
inventory on behalf of the Company. As of December 31, 2002 and 2001, the
balance due him related the purchases was $1,231 and $223. The Company also
has notes payable to him in the amount of $8,500, accruing interest at 6% per
annum.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a)(1)FINANCIAL STATEMENTS. The following financial statements are included
in this report:
Title of Document Page
- ----------------- ----
Independent Auditors' Report of Harold Y. Spector,
Certified Public Accountant 10
Balance Sheet as of December 31, 2002 and 2001 11
Statements of Operations for the years ended
December 31, 2002 and 2001 12
Statements of Changes in Stockholders' Equity for the years ended
December 31, 2002 and 2001 13
Statements of Cash Flows for the years ended December 31, 2002 and 2001 14
Notes to Financial Statements 15
(a)(2)FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedules are included as part of this report:
None.
(a)(3)EXHIBITS.
Exhibit 99 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(b) REPORTS ON FORM 8-K. None.
ITEM 14. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. We believe our
disclosure controls and procedures (as defined in Sections 13a-14(c) and 15d-
14(c) of the Securities Exchange Act of 1934, as amended) are adequate, based
on our evaluation of such disclosure controls and procedures on March 3, 2003.
(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the Company and in the capacities and on the dates indicated:
Date: April 7, 2003 By /S/ Richard F. Holt, President,
Principal Accounting Officer, and
Director
Date: April 7, 2003 BY /S/ Wendy E. Holt, Director
CERTIFICATIONS
I, Richard F. Holt, certify that:
1. I have reviewed this annual report on Form 10-KSB of Age Research, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;
4. The registrant's other certifying officers 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 annual 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 annual
report (the "Evaluation Date"); and
c) presented in this annual 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 officers 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 control;
and
6. The registrant's other certifying officers and I have indicated in this
annual report whether of 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: April 7, 2003 /S/Richard F. Holt
Principal Executive Officer
Principal Financial Officer
Harold Y. Spector
Certified Public Accountant
80 South Lake Avenue, Suite 723
Pasadena, California 91101
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and stockholders of Age Research, Inc.
We have audited the accompanying balance sheet of Age Research, Inc. (a
Delaware corporation) as of December 31, 2002, and the related statements of
operations, changes in stockholders' deficit, and cash flows for the years
ended December 31, 2002 and 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Age Research, Inc. as of
December 31, 2002, and the results of its operations and its cash flows for
the years ended December 31, 2002 and 2001, in conformity with accounting
principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company's significant operating losses raises
substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters are also described in Note 2. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/Harold Spector
Spector & Wong, LLP
Pasadena, California
March 12, 2003
AGE RESEARCH, INC.
BALANCE SHEET
December 31, 2002
ASSETS
Current Assets
Cash $ 310
Accounts Receivable 752
-----------
Total Current Assets 1,062
-----------
Property and Equipment, net of
accumulated depreciation of $7,354 -
-----------
TOTAL ASSETS $ 1,062
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 8,429
Officers' Loan 8,500
-----------
Total Current Liabilities 16,929
-----------
Stockholders' Deficit
Common stock, $.001 par value, 100,000,000
shares authorized, 68,759,301 shares
issued and outstanding 68,759
Paid-in Capital 736,264
Accumulated Deficit (820,890)
-----------
(15,866)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,062
===========
See notes to financial statements.
AGE RESEARCH, INC.
STATEMENTS OF OPERATIONS
For the years ended December 31, 2002 and 2001
2002 2001
------------- ----------------
Sales $ 7,894 $ 8,277
Cost and Expenses
Cost of Goods Sold 1,211 1,146
Selling General and Administrative
Expenses 17,059 16,400
------------- ----------------
18,269 17,546
Operating (loss) (10,375) (9,269)
Other Income (Expense)
Interest Income 0 6
Interest Expense (458) (203)
------------- ----------------
Total Other Income (Expenses) (458) (197)
------------- ----------------
Net (loss) before taxes (10,833) (9,466)
Provision for Income Taxes 800 800
------------- ----------------
Net (loss) $ (11,633) $ (10,266)
============= ================
Net (loss) per share-Basic and Diluted $ (0.00) $ (0.00)
============= ================
Weighted Average Number of Shares 67,884,301 67,259,301
============= ================
See notes to financial statements.
AGE RESEARCH, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
For The Years Ended December 31, 2001 and 2000
Paid
Common in Accumulated
Shares Stock Capital Deficit Total
------------ ------------ ------------ ------------ ------------
Balance at December 31, 2000 67,259,301 $ 67,259 $ 730,264 $ (798,990) $ (1,467)
Net (loss) (10,266) (10,266)
------------ ------------ ------------ ------------ ------------
Balance at December 31, 2001 67,259,301 67,259 730,264 (809,256) (11,733)
Issuance of stock for cash 1,500,000 1,500 6,000 7,500
Net (loss) (11,633) (11,633)
------------ ------------ ------------ ------------ ------------
Balance at December 31, 2002 68,759,301 $ 68,759 $ 736,264 $ (820,889) $ (15,866)
============ ============ ============ ============ ============
See notes to financial statements.
AGE RESEARCH, INC.
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2002 and 2001
2002 2001
------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (11,633) $ (10,266)
Adjustment to reconcile net income to
net cash provided by operating
activities
Depreciation - 65
Decrease in:
Accounts Receivable 177 884
Inventory 253 923
Increase (Decrease) in:
Accounts Payable and Accrued Expenses (256) 2,341
------------- ----------------
Net cash flows (used in) Operating
activities (11,459) (6,053)
------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES - -
------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock 7,500 -
Proceeds from Officers' Loan 2,300 6,200
------------- ----------------
Net Cash Provided by Financing
Activities 9,800 6,200
------------- ----------------
NET INCREASE (DECREASE)IN CASH (1,659) 147
CASH AT BEGINNING OF YEAR 1,970 1,823
------------- ----------------
CASH AT END OF YEAR $ 310 $ 1,970
============= ================
Supplemental Disclosure of Cash Flow
Information:
Income Taxes Paid $ 800 $ 800
See notes to financial statements.
AGE RESEARCH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND CRITICAL ACCOUNTING POLICIES
Nature of Business. Age Research, Inc. (the "Company') produces and sells a
line of premium skin care products to physicians and mail order. The Company
has developed its own line of dermatologist-formulated skin care products
including moisturizers, cleaners, sunscreens, and anti-aging emollients with
glycolic acid. The products are sold under the name of RejuvenAge, which is
trademarked in United States and United Kingdom, and name of Bladium, which is
trademarked in United States. The trademark in United Kingdom will be expired
in September 2006.
Use of estimates. The preparation of the accompanying financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make certain estimates and assumptions that directly
affect the results of reported assets, liabilities, revenue, and expenses.
Actual results may differ from these estimates.
Revenue Recognition. The Company generally recognizes product revenue when
persuasive evidence of an arrangement exists, delivery has occurred, the fee
is fixed or determinable, and collection is probable. In instances where final
acceptance of the product is specified by the customer, revenue is deferred
until all acceptance criteria have been met. No provisions were established
for estimated product returns and allowances based on the Company's historical
experience.
Accounts Receivable. Management of the Company considers accounts receivable
to be fully collectible, accordingly, no allowance for doubtful accounts is
required. If amounts become uncollectible, they will be charged to operations
when that determination is made. Bad debt expense for years ended December 31,
2002 and 2001 was $97 and $105, respectively.
Computation of Net Income (Loss) per Share. Basic net income (loss) per share
is computed using the weighted average number of common stock outstanding
during the period. Diluted net income per share is computed using the weighted
average number of shares and dilutive potential common shares outstanding
during the period. Diluted net loss per share is computed using the weighted
average number of common shares and excludes dilutive potential common shares
outstanding, as their effect is anti-dilutive.
Other Significant Accounting Policies
Cash Equivalents. For purposes of the statements of cash flows, the Company
considers all highly liquid debt instruments with an original maturity of
three months or less to be cash equivalents.
Fair Value of Financial Instruments. The carrying amounts of the financial
instruments have been estimated by management to approximate fair value.
Inventories. Inventory consists of products already packaged and ready for
shipments to customers, and are stated at cost, using the first-in, first-out
method.
AGE RESEARCH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND CRITICAL ACCOUNTING POLICIES (Continued)
Property and Equipment. Property and Equipment are valued at cost. Maintenance
and repair costs are charged to expenses as incurred. Depreciation is computed
on the straight-line method based on the following estimated useful lives of
the assets: 5 to 7 years for computer and office equipment, and 7 years for
furniture and fixtures. Depreciation expense was $0 and $65 for 2002 and 2001,
respectively. Property and Equipment are fully depreciated as of 12/31/01.
Income Taxes. Income tax expense is based on pretax financial accounting
income. Deferred tax assets and liabilities are recognized for the expected
tax consequences of temporary differences between the tax bases of assets and
liabilities and their reported amounts.
Shipping and Handling Costs. The Company historically has included inbound
shipping charges in cost of sales and classified outbound shipping charges as
operating expenses. For years ended December 31, 2002 and 2001, the outbound
shipping charges included as operating expenses were $747 and $830,
respectively.
Derivatives. In June 1998, Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities", as amended by SFAS No. 138,
which was issued in June 2000. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments. The Company currently does not
use derivative financial products for hedging or speculative purposes and as a
result, does not anticipate any impact on the Company's financial statements.
New Accounting Standards:
On December 31, 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure." SFAS No. 148 amends
SFAS No. 123, "Accounting for Stock-Based Compensation," to provide
alternative methods of transition to SFAS No. 123's fair value method of
accounting for stock-based employee compensation. SFAS No. 148 also amends the
disclosure provisions of SFAS No. 123 and APB Opinion No. 28, "Interim
Financial Reporting," to require disclosure in the summary of significant
accounting policies of the effects of an entity's accounting policy with
respect to stock-based employee compensation on reported net income and
earnings per share in annual and interim financial statements. While SFAS No.
148 does not amend SFAS No. 123 to require companies to account for employee
stock options using the fair value method, the disclosure provisions of SFAS
No. 148 are applicable to all companies with stock-based employee
compensation, regardless of whether they account for that compensation using
the fair value method of SFAS No. 123 or the intrinsic value method of APB
Opinion 25.
In June 2002, FASB issued Statement No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." The standard requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
Previous accounting guidance provided by EITF Issue No. 94-3, "Liability
AGE RESEARCH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND CRITICAL ACCOUNTING POLICIES (Continued)
Recognition for Certain employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring) is replaced
by this Statement. Statement 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. Management does not
anticipate that the adoption of this Statement will have a significant effect
on the Company's financial statements.
In April 2002, FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
This Statement updates, clarifies and simplifies existing accounting
pronouncements. The provisions of this Statement related to the rescission of
Statement No. 4 are to be applied for fiscal years beginning after May 15,
2002. Any gain or loss on extinguishments of debt that was classified as an
extraordinary item in prior periods presented that does not meet the criteria
in Opinion No. 30 for classification as an extraordinary item should be
reclassified. Provisions of the Statement related to the amendment of
Statement No. 13 should be applied for transactions occurring after May 15,
2002, and all other provisions should be applied for financial statements
issued on or after May 15, 2002. Management does not anticipate that the
adoption of this Statement will have a significant effect on the Company's
financial statements.
In October 2001, FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. The Statement supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of, however it retains the fundamental provisions of that
statement related to the recognition and measurement of the impairment of
long-lived assets to be "held and used." In addition, SFAS No. 144 provides
more guidance on estimating cash flows when performing a recoverability test,
requires that a long-lived asset (group) to be disposed of other than by sale
(e.g., abandoned) be classified as "held and used" until it is disposed of,
and establishes more restrictive criteria to classify an asset (group) as
"held for sale." The adoption of SFAS No. 144 did not have an impact on the
Company.
NOTE 2 - GOING CONCERN
The Company's financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. As shown in the
accompanying financial statements, the Company suffered losses of $11,633 and
$10,266 for years ended December 31, 2002 and 2001, respectively, and as of
December 31, 2002, the Company's current liabilities exceeded its current
assets by $15,867 and its total liabilities exceeded its total assets by
$15,866.
In the near term, the Company expects operating costs to continue to exceed
funds generated from operations. As a result, the Company expects to continue
to incur operating losses and may not have enough money to grow its business
in the future. The Company can give no assurance that it will achieve
profitability or be capable of sustaining profitable operations. As a result,
operations in the near future are expected to continue to use working capital.
AGE RESEARCH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - GOING CONCERN (Continued)
Management is currently involved in active negotiations to obtain additional
financing and actively increasing marketing efforts to increase revenues. The
Company continued existence depends on its ability to meet its financing
requirements and the success of its future operations. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
Currently the Company does not stock any inventory. Purchases are incurred and
charged through loan from an officer when products are sold to customer. In
addition, the Company has generated approximately $7,500 in additional
operating capital through sales of its common stock during August 2002.
NOTE 3 - INCOME TAXES
Provision for income tax for years ended December 31, 2002 and 2001 consisted
of $800 minimum state franchise tax each year.
As of December 31, 2002, the Company has net operating loss carryforwards,
approximately, of $654,408 to reduce future taxable income. To the extent not
utilized, the carryforwards will begin to expire through 2022. The Company's
ability to utilize its net operating loss carryforwards is uncertain and thus
a valuation reserve has been provided against the Company's net deferred tax
assets.
The deferred net tax assets consist of the following at December 31:
2002 2001
----------- -----------
Net Operating Loss Carryforwards $ 227,644 $ 218,813
Valuation Allowance (227,644) (218,813)
----------- -----------
Net deferred tax assets $ 0 $ 0
=========== ===========
NOTE 4 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net (loss)
per share:
2002 2001
----------- -----------
Numerator:
Net (Loss) $ (11,633) $ (10,266)
----------- -----------
Denominator:
Weighted Average Number of Shares 67,884,301 67,259,310
----------- -----------
Loss per share-Basic and Diluted $ (0.00) $ (0.00)
AGE RESEARCH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - SEGMENT INFORMATION
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires that a publicly traded company must disclose information
about its operating segments when it presents a complete set of financial
statements. Since the Company has only one segment; accordingly, detailed
information of the reportable segment is not presented.
NOTE 6 - RELATED PARTY TRANSACTIONS
An officer is currently making payments to purchase inventory on behalf of the
Company. As of December 31, 2002 and 2001, the balance due to the officer
related the purchases was $1,231 and $223. The Company also has notes payable
to the officer in the amount of $8,500, accruing interest at 6% per annum.