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, 2003
{ } 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 89,759,301
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Title of Class Number of Shares Outstanding
as of September 30, 2003
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TABLE OF CONTENTS
Filing Sections
Part I.........................................................................3
Financial Statement Item.......................................................3
Financial Statements...........................................................3
Balance Sheet..................................................................4
Income Statement...............................................................5
Cashflow Statement.............................................................6
Financial Footnotes..........................................................7,8
Management Discussion & Analysis...............................................9
Controls and Procedures........................................................9
Part II.......................................................................10
Legal Proceedings.............................................................10
Changes in Securities.........................................................10
Defaults Upon Securities......................................................10
Submission to a Vote..........................................................10
Other Information.............................................................10
Exhibits and Reports..........................................................10
List of Exhibits..............................................................10
Signatures....................................................................11
EXHIBITS
Exhibits...................................................................12-13
Additional Exhibits........................................................12-13
2
PART I
ITEM 1. FINANCIAL STATEMENTS
To the Board of Directors and Stockholders
Age Research, Inc.
San Juan Capistrano, California
We have reviewed the accompanying balance sheet of Age Research, Inc. as of
September 30, 2003, and the related statements of operations for three and nine
months ended September 30, 2003 and 2002, and the related statements of cash
flows for the nine months ended September 30, 2003 and 2002, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information included in
these financial statements is the representation of the management of Age
Research, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit, in accordance with generally accepted auditing standards, the objectives
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with accounting principles generally accepted in the United States.
As discussed in the Note 2 to the financial statements, certain conditions
indicate the Company may be unable to continue as a going concern. The
accompanying financial statements do not include any adjustments to the
financial statements that might be necessary should the Company be unable to
continue as a going concern.
/s/Spector & Wong, LLP
Spector & Wong, LLP
Pasadena, California
October 28, 2003
3
AGE RESEARCH, INC.
BALANCE SHEET (Unaudited)
September 30, 2003
ASSETS
Current Assets
Cash and Cash Equivalents $ 85
Accounts Receivable 584
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Total Current Assets 669
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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 (7,354)
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Total Property and Equipment -
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TOTAL ASSETS $ 669
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable and Accrued Expenses $ 8,768
Officers' Loan 13,700
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Total Current Liabilities 22,468
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Stockholders' Deficit
Common Stock, $0.001 par value; 100,000,000 shares
authorized; 81,759,301 shares issued and outstanding 81,759
Paid-in Capital 853,264
Accumulated Deficit (956,822)
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Total Stockholders' Deficit (21,799)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 669
=========
See notes to interim unaudited financial statements.
4
AGE RESEARCH, INC.
STATEMENTS OF OPERATIONS (Unaudited)
For Three Months ended For Nine Months ended
September 30, September 30,
2003 2002 2003 2002
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Sales $1,020 $1,670 $4,932 $6,632
Cost and Expenses
Cost of Goods Sold 99 249 631 973
Selling, General and Administrative 58,672 3,012 138,999 12,078
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58,771 3,261 139,630 13,051
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OPERATIING (LOSS) (57,751) (1,591) (134,698) (6,419)
Other Income (Expenses)
Interest and Other Income - - 97 -
Interest Expense (207) (128) (532) (330)
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(207) (128) (435) (330)
NET (LOSS) BEFORE TAXES (57,958) (1,719) (135,133) (6,749)
Provision for Income Taxes - - 800 800
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NET (LOSS) $(57,958) (1,719) (135,933) (7,549)
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Net (loss) per share-Basic and Diluted $ 0.00) $ (0.00) $ (0.00) $ (0.00)
====================================================================================
Weighted Average Number of Shares 81,759,301 68,259,301 75,981,523 67,592,634
See notes to interim unaudited financial statements.
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AGE RESEARCH, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
For Nine Months ended September 30, 2003 2002
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Cash Flow From Operating Activities
Net (loss) $ (135,933) $ (7,549)
Adjustments to reoncile net (loss) to net cash (used in)
operating activities:
Stock for services 130,000 -
(Increase) Decrease in:
Accounts Receivable 169 (123)
Inventory - 236
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 339 (2,286)
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CASH FLOWS (USED IN) OPERATING ACTIVITIES (5,425) (9,722)
Cash Flow From Investing Activities - -
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Cash Flow From Financing Activities
Proceeds from Issuance of Common Stock 7,500
Proceeds from Officers' Loan 5,200 2,300
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CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 5,200 9,800
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (225) 78
Cash and cash equivalents, at beginning of period 310 1,970
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CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 85 $ 2,048
================= ===============
Supplemental Disclosure of Cash Flow Information:
Income Taxes Paid $ - $ 800
================= ===============
See notes to interim unaudited financial statements.
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AGE RESEARCH, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT 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.
Presentation of Interim Information: The financial information at September 30,
2003 and for the three and nine months ended September 30, 2003 and 2002 is
unaudited but includes all adjustments (consisting only of normal recurring
adjustments) that the Company considers necessary for a fair presentation of the
financial information set forth herein, in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") for interim
financial information, and with the instructions to Form 10-QSB. Accordingly,
such information does not include all of the information and footnotes required
by U.S. GAAP for annual financial statements. For further information refer to
the Financial Statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2002.
The results for the nine months ended September 30, 2003 may not be indicative
of results for the year ending December 31, 2003 or any future periods.
Net Loss Per Share Basic net loss per share includes no dilution and is computed
by dividing net loss available to common stockholders by the weighted average
number of common stock outstanding for the period. Diluted net loss per share
does not differ from basic net loss per share due to the lack of dilutive items
in 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. 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.
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.
NOTE 3 - PENDING BUSINESS COMBINATION
In May 2003, the Company announced to acquire all the issued and outstanding
shares of common stock of The Varsity Group, Inc. ("VARS", a Missouri
corporation) in exchange for 9,343,920 post split shares of the Company's common
stock. This acquisition will be accounted for as a purchase.
NOTE 4 - PENDING REVERSE STOCK SPLIT
In connection with the acquisition, the Board of Directors authorized a reverse
split of 1 for 35 shares of stock prior to the closing date of acquisition and
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increase the capitalization to 750,000,000 shares.
NOTE 5 - NONCASH EXPENSES
On May 22, 2003, the Company issued 13,000,000 shares of the Company's common
stock for services rendered by nonemployees. The stocks are fully vested and
nonforfeitable. The Company recorded the stock transactions at their fair market
value, capitalized the costs of transactions, and amortized them over the length
of the services. As of September 30, 2003, the total cost of $130,000 was fully
charged to operations.
NOTE 6 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net loss per
share for the periods:
Three Months ended Nine Months ended
September 30, September 30,
2003 2002 2003 2002
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Numerator:
Net (Loss) $ (57,958) $ (1,719) $ (135,933) $ (7,549)
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Denominator:
Weighted Average Number of Shares 81,759,3301 68,259,301 75,981,523 67,592,634
-------------- ------------ ----------- -----------
Loss per share-Basic and Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============= ============ =========== ===========
NOTE 7 - SEGMENT INFORMATION
The Company is currently managed and operated as one business. The entire
business is managed by a single management team that reports to the Company's
President. The Company does not operate separate lines of business or separate
business entities with respect to any of its product candidates. Accordingly,
the Company does not prepare discrete financial information with respect to
separate product areas or by location and dose not have separately reportable
segments as defined by Statement of Financial Accounting Standards ("SFAS") No.
131 "Disclosures about Segments of an Enterprise and Related Information".
NOTE 8 - RELATED PARTY TRANSACTIONS
An officer is currently making payments to purchase inventory on behalf of the
Company. As of September 30, 2003, the balance due to the officer related the
purchases was $1,912. The Company also has notes payable to the officer in the
amount of $13,700, accruing interest at 6% per annum. Accrued interest to the
officer as of September 30, 2003 is $1,193.
NOTE 9 - GUARANTEES
The Company from time to time enters into certain types of contracts that
contingently require the Company to indemnify parties against third-party
claims. These contracts primarily relate to: (i) divestiture agreements, under
which the Company may provide customary indemnifications to purchasers of the
Company's businesses or assets; and (ii) certain agreements with the Company's
officers, directors and employees, under which the Company may be required to
indemnify such persons for liabilities arising our of their employment
relationship.
The terms of such obligations vary. Generally, a maximum obligation is not
explicitly stated. Because the obligated amounts of these types of agreements
often are not explicitly stated, the overall maximum amount of the obligation
cannot be reasonably estimated. Historically, the Company has not been obligated
to make significant payments for these obligations, and no liabilities have been
recorded for these obligations on its balance sheet as of September 30, 2003.
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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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Three and Nine Months Ended September 30, 2003 compared to September 30, 2002
- ------------------------------------------------------------------
Revenues and Costs of Sales. For the three and nine month periods ended
September 30, 2003, our revenues were $1,020 and $4,932, respectively, with cost
of goods sold of $99 and $631, for a gross profit of $921 and $4,301,
respectively. For the three and nine month periods ended September 30, 2002, our
revenues were $1,670 and $6,632, respectively, with cost of goods sold of $249
and $973, for a gross profit of $1,421 and $5,659, respectively.
Operating Expenses. Total operating expenses for three and nine month period
ended September 30, 2003 were $58,672 and $138,999, respectively compared to
$3,012 and $12,078 for 2002. The net losses for the three and nine months
ended September 30, 2003 were $57,958 and $135,133, compared to the net losses
for the three and nine months ended September 30, 2002 were $1,719 and $6,749.
Liquidity and Capital Resources
- -------------------------------
Historically, we have financed our operations through a combination of cash flow
derived from operations and debt and equity financing. At September 30, 2003, we
had a working capital deficit of $21,799 based on current assets of $669 and
current liabilities of $22,468.
Based on our current marketing program and sales, it is clear that we will have
to increase our sales volume significantly in order to have profitable
operations. At this time, however, we do not have any working capital to expand
our marketing efforts.
We propose to finance our needs for additional working capital through some
combination of debt and equity financing. Given our current financial condition,
it is unlikely that we 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 us would be the private sale of our securities. There
can be no assurance that we will be able to obtain such additional funding as
needed, or that such funding, if available, can be obtained on terms acceptable
to us.
ITEM 3. 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 as of September 30, 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.
9
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
On July 28th we filed a preliminary proxy and on October 10, 2003 we filed an
amendment to the proxy in which notice was given that the following actions will
be taken pursuant to the written consent of a majority of our shareholders,
dated May 28, 2003, in lieu of a special meeting of the shareholders. The SEC
has some additional comments which we will respond to shortly. Once effective,
the following actions will be taken:
1. To approve the acquisition of The Varsity Group, Inc., a Missouri
corporation, where the total consideration paid is 9,343,920 authorized
and unissued post reverse split common shares, where that number of
shares is to equal 80% of the total outstanding after the acquisition.
2. Amend our certificate of incorporation to change the Company name from
AGE Research, Inc. to Enstruxis, Inc., and concurrently to change the
Company's OTCBB trading symbol.
3. Amend our certificate of incorporation to provide for a stock
combination (reverse split) of the Common Stock in an exchange ratio to
be approved by the Board, ranging from one newly issued share for each
two outstanding shares of Common Stock to one newly issued share for
each thirty outstanding shares of Common Stock.
4. Amend our Certificate of Incorporation to increase the authorized number
of shares of our common stock from 100,000,000 to 750,000,000.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
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31.1 Certification of the Chief Executive Officer and Chief Financial
Officer pursuant to Rule 13a-14(a) ( Section 302 of the
Sarbanes-Oxley Act of 2002)
32.1 Certification of the Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C.ss.1350 (Section 906 of the
Sarbanes-Oxley Act of 2002)
(b) Reports on Form 8-K.
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May 22, 2003 Item 2: Acquisition of The Varsity Group, Inc
by Age Research Inc. on May 22, 2003
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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 14, 2003 By:/S/Richard F. Holt, President
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(Chief Executive and Financial Officer)
11