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 Quarter Ended: September 30, 2001
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period from _____________ to ____________
Commission File Number: 0-26285
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AGE RESEARCH, INC.
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(Name of Small Business Issuer in its charter)
Delaware 87-0419387
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(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
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(Address of principal executive offices and Zip Code)
(800) 597-1970
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(Registrant's telephone number, including area code)
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.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, Par Value $0.001 67,259,301
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Title of Class Number of Shares Outstanding
as of September 30, 2001
ITEM 1. FINANCIAL STATEMENTS
AGE RESEARCH, INC.
BALANCE SHEET (Unaudited)
September 30, 2001
ASSETS
2001
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Current Assets
Cash $ 209
Accounts Receivable 762
Inventory 388
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Total Current Assets 1,359
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Property and Equipment
Furniture and Fixtures 5,560
Machinery and Equipment 1,794
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7,354
Less: Accumulated Depreciation (7,338)
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Total Property and Equipment 16
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TOTAL ASSETS $ 1,375
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses $ 4,580
Officers' Loan 5,000
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Total Current Liabilities 9,580
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Stockholders' Equity
Common stock, $.001 par value, 100,000,000
shares authorized, 67,259,301 shares issued
and outstanding 67,259
Paid-in Capital 730,264
Accumulated Deficit (805,728)
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Total Stockholders' Deficit (8,205)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,375
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The accompanying notes are an integral part of these financial statements.
AGE RESEARCH, INC.
STATEMENTS OF OPERATIONS (Unaudited)
For Three Months Ended For Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
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SALES $ 820 $ 3,863 $ 5,150 $ 11,095
COST OF SALES 96 520 788 4,095
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GROSS PROFIT 724 3,343 4,362 7,000
OPERATING EXPENSES 1,485 3,092 10,395 9,546
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INCOME (LOSS) FROM OPERATIONS (761) 251 (6,033) (2,546)
INTEREST AND OTHER INCOME 12 32 95 186
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NET INCOME (LOSS) BEFORE TAXES (749) 283 (5,938) (2,360)
PROVISION FOR INCOME TAXES - - 800 800
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NET INCOME (LOSS) $ (749) 283 (6,738) (3,160)
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INCOME (LOSS)
PER SHARE - BASIC AND DILUTED $ (0.00) $ 0.00 $ (0.00) $ (0.00)
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WEIGHTED AVERAGE NUMBER OF SHARES 67,259,301 67,259,301 67,259,301 66,154,284
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The accompanying notes are an integral part of these financial statements.
AGE RESEARCH, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended
2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (6,738) $ (3,160)
Adjustment to reconcile net income to
net cash provided by operating
activities
Depreciation 49 173
(Increase) Decrease in:
Accounts Receivable 1,051 1,301
Inventory 788 4,095
Increase (Decrease) in:
Accounts Payable and Accrued Expenses (1,764) (1,846)
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Net Cash provided by (used in)
Operating Activities (6,614) 563
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CASH FLOWS FROM INVESTING ACTIVITIES - -
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Officers' Loan 5,000 -
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Net Cash Provided by Financing Activities 5,000 -
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NET INCREASE (DECREASE) IN CASH (1,614) 563
CASH AT BEGINNING OF PERIOD 1,823 1,015
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CASH AT END OF PERIOD $ 209 $ 1,578
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SUPPLEMENTARY DISCLOSURES:
Interest Paid $ - $ -
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Income Taxes Paid $ 800 $ 800
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The accompanying notes are an integral part of these financial statements.
AGE RESEARCH, INC.
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presentation of Interim Information
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In the opinion of the management of Age Research, Inc. (the "Company"), the
accompanying unaudited financial statements include all normal adjustments
considered necessary to present fairly the financial positions as of September
30, 2001, the results of operations for the three and nine months ended
September 30, 2001 and 2000, and cash flows for the nine months ended
September 30, 2001 and 2000. Interim results are not necessarily indicative of
results for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended December 31, 2000.
Recent Accounting Pronouncements
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In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 provides new
guidance on the accounting for a business combination at the date a business
combination is completed. Specifically, it requires use of the purchase method
of accounting for all business combinations initiated after June 30, 2001,
thereby eliminating use of the pooling-of-interest method. SFAS No. 142
establishes new guidance on how to account for goodwill and intangible assets
after a business combination is completed. Among other things, it requires
that goodwill and certain other intangible assets will no longer be amortized
and will be tested for impairment at least annually written down only when
impaired. This statement will apply to existing goodwill and intangible
assets, beginning with fiscal years starting after December 15, 2001. Early
adoption of the statement will be permitted for companies with a 2001 fiscal
year beginning after March 15, 2001, for which first quarter financial
statements have not been issued. The Company is currently evaluating these
statements but does not expect that they will have a material impact on the
Company's financial position, results of operations, or cash flows.
NOTE 2 - NET LOSS PER SHARE
Net loss per share is computed based on the weighted average number of shares
of common stock outstanding during the period. Basic net loss per share for
three and nine months ended September 30, 2001 and 2000 was $0.00 for all
periods. Diluted net loss per share is the same as basic net loss per share
due to the lack of dilution items in the Company.
AGE RESEARCH, INC.
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
NOTE 2 - NET LOSS PER SHARE (Continued)
Three Months ended Nine Months ended
September 30, September 30,
2001 2000 2001 2000
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Numerator:
Net Income (Loss) $ (653) $ 283 $ (6,642) $ (3,160)
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Denominator:
Weighted Average Shares 67,259,301 67,259,301 67,259,301 66,154,284
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Basic and Diluted Net Loss Per Share $ (0.00) $ 0.00 $ (0.00) $ (0.00)
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NOTE 3 - SEGMENT INFORMATION
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires that a publicly trade 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 4 - RELATED PARTY TRANSACTION
As of September 30, 2001, the Company has a balance of $5,000 due to an
officer. The note is unsecured and bears no interest.
NOTE 5 GOING CONCERN
The accompanying financial statements are presented on the basis that the
Company is a going concern. Going concern contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business
over a reasonable length of time. As shown in the accompanying financial
statements, the Company suffered losses of $6,738 and $3,160 for nine months
ended September 30, 2001 and 2000, and as of September 30, 2001, the Company
had a working capital deficiency of $8,221 and a net worth deficit of $8,205.
Management is currently involved in active negotiations to obtain additional
financing and actively increasing marketing efforts to increase revenues. The
Company's continued existence depends on its ability to meet its financial
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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Cautionary Statement Regarding Forward-looking Statements
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This report may contain "forward-looking" statements. Examples of forward-
looking statements include, but are not limited to: (a) projections of
revenues, capital expenditures, growth, prospects, dividends, capital
structure and other financial matters; (b) statements of plans and objectives
of the Company or its management or Board of Directors; (c) statements of
future economic performance; (d) statements of assumptions underlying other
statements and statements about the Company and its business relating to the
future; and (e) any statements using the words "anticipate," "expect," "may,"
"project," "intend" or similar expressions.
Results of Operations
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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.
Three and Nine Month Periods Ended September 30, 2001 compared to 2000
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Revenues and Costs of Sales. For the three month period ended September 30,
2001, the Registrant had revenues of $820 with cost of sales of $96, or
approximately 11.7% of revenues, for a gross profit of $724, compared to the
prior year's revenues for the same period of $3,863 with cost of sales of
$520, or approximately 13.5% of revenues, for a gross profit of $3,343. For
the nine month period ended September 30, 2001, the Registrant had revenues of
$5,150 with cost of sales of $788, or approximately 15.3% of revenues, for a
gross profit of $4,362, compared to the prior year's revenues for the same
period of $11,095 with cost of sales of $4,095, or approximately 36.9% of
revenues, for a gross profit of $7,000. The decrease in sales are directly
attributed to reductions in marketing efforts associated by the Registrant.
General and Administrative Expense. Total operating expenses for three and
nine month periods ended September 30, 2001 were $1,485 and $10,395, compared
to $3,092 and $9,546, for the same periods in 2000. The overall increase in
general and administrative expenses during the nine month period is attributed
to an increase in legal and professional fees during the current fiscal year
periods as compared to the prior year periods. The net loss from operations
for the three and nine month periods ended September 30, 2001 was $749 and
$5,938, respectively, compared to net gain of $283 and net loss of $2,360 for
the corresponding periods in fiscal year 2000.
Liquidity and Capital Resources
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Historically, the Company has financed its operations through a combination of
cash flow derived from operations and debt and equity financing. At September
30, 2001, the Company had a working capital deficit of $8,221 based on current
assets of $1,359 and current liabilities of $9,580.
The Registrant's accompanying financial statements have been presented on the
basis that the Company is a going concern because the Registrant has an
accumulated deficit of $805,728 at September 30, 2001, which is due to
significant operating losses in past several years. The Registrant's
management is seeking additional financing to increase marketing efforts to
increase revenues or pursue a new business opportunity.
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 continue
operations. At this time, however, the Company does not have any significant
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.
The Registrant has been relying on the efforts of its President and
controlling shareholder at no charge and does not intend to use any employees,
with the possible exception of part-time clerical assistance on an as-needed
basis. The Registrant is confident that it will be able to operate in this
manner, however, it may need to search for new or alternative business
opportunities in order to continue in operation. Accordingly, since the end of
its most recent period, the Registrant has been exploring alternative business
opportunities. The Registrant does not propose to restrict its search for a
business opportunity to any particular industry or geographical area and may,
therefore, in the future engage in essentially any business in any industry.
During the reporting period, the Registrant began negotiations with an
unrelated entity to acquire certain assets and proprietary technology in
exchange for the issuance of a controlling equity interest in the Registrant.
The specific terms of the proposed transaction are still under negotiation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
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None.
(b) Reports on Form 8-K.
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None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Age Research, Inc.
Dated: November 13, 2001 By:/S/Richard F. Holt, President