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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 March 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 0-29049
RHOMBIC CORPORATION
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(Exact name of registrant as specified in its charter)
Nevada 86-0824125
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11811 N. Tatum Blvd. # 3031
Phoenix, Arizona 85028
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(Address of principal executive offices (zip code))
(602) 953-7702
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the last 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at March 31, 2002
------------------------------ -----------------------------
Common Stock, par value $0.001 28,697,042
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RHOMBIC CORPORATION
CONSOLIDATED BALANCE SHEET
(A Development Stage Company)
March 31, 2002
(Unaudited)
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ASSETS
CURRENT ASSETS:
Cash $ 6,820
-----------
Total Current Assets 6,820
-----------
OTHER ASSETS:
Investments 12,042
Licensing Agreements and Intellectual property 281,258
Patents 734
-----------
Total assets $ 300,854
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LIABILITIES
CURRENT
Accounts Payable $ 29,961
Due to affiliates 58,543
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Total current liabilities 88,504
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 70,000,000 shares
authorized, 28,697,042 issued and outstanding 28,697
Additional paid-in capital 8,452,629
(Deficit) accumulated during the development stage (8,261,500)
Net unrealized holding loss on securites held for sale (7,476)
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Total stockholders' equity 212,350
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Total liabilities and stockholders' equity $ 300,854
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SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
1
RHOMBIC CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
March 31, 2002
(Unaudited)
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Cummulative from
For the 3 months ended November 21, 1994
--------------------------------- (Inception) to
March 31, 2002 March 31, 2001 March 31, 2002
-------------- -------------- --------------
Royalty income $ 0 $ 0 $ 5,729
Interest income 0 80 6,954
------------ ------------ ------------
0 80 12,683
EXPENSES
Research and development expense 0 5,781 697,747
Write down on intellectual property 0 0 1,891,788
Legal & accounting 27,235 50,871 763,552
Transfer Agent Expenses 300 164 26,854
Consulting, related party 0 0 367,000
Consulting 0 875 2,876,830
Interest 0 252 2,918
Other general & administrative 14,457 86,392 1,577,204
------------ ------------ ------------
Total Expenses 41,992 144,335 8,203,893
------------ ------------ ------------
Net (loss) from operations (41,992) (144,255) (8,191,210)
OTHER REVENUES & EXPENSES
Loss on sale of investments 0 0 (70,290)
------------ ------------ ------------
NET (LOSS) $ (41,992) $ (144,255) $ (8,261,500)
============ ============ ============
NET LOSS PER SHARE:
Basic $ (0.00) $ (0.01)
============ ============
Diluted $ (0.00) $ (0.01)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 28,697,042 25,984,243
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Diluted 28,697,042 25,984,243
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SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
2
RHOMBIC CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
March 31, 2002
(Unaudited)
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(Deficit) Net unrealized
Accumulated holding loss on
Common Stock Additional During on available
----------------------- Paid-In Development securities
Shares Amount Capital Stage held for sale Total
------ ------ ------- ----- ------------- -----
Balance at December 31, 2000 26,286,100 $ 26,286 $ 8,043,540 $(7,236,754) $ 0 $833,072
Shares issued for services 290,000 290 59,710 0 0 60,000
Net loss for the quarter
ended March 31, 2001 (144,255) 0 (144,255)
----------- -------- ----------- ----------- ------- --------
Balance at March 31, 2001 26,576,100 $ 26,576 $ 8,103,250 $(7,381,009) $ 0 $748,817
Balance at December 31, 2001 28,697,042 $ 28,697 $ 8,452,629 $(8,219,508) $(7,476) $254,342
Net loss for the quarter
Ended March 31, 2002 (41,992) (41,992)
----------- -------- ----------- ----------- ------- --------
Balance at March 31, 2002 28,697,042 $ 28,697 $ 8,452,629 $(8,261,500) $(7,476) $212,350
=========== ======== =========== =========== ======= ========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
RHOMBIC CORPORATION
(A Devlopment Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOW
March 31, 2002
(Unaudited)
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For the three months ended Cummulative from
March 31, November 21,1994
----------------------------- (Inception) to
2002 2001 March 31, 2002
----------- ----------- --------------
OPERATING ACTIVITIES
Net (loss) income for the period $ (41,992) $ (144,255) $(8,261,500)
Adjustments to reconcile net cash used by operations:
Write down on intellectual property and patents 0 0 1,891,788
Loss on sale of marketable securities 0 0 70,290
Rockford shares issued for services 0 0 32,275
Common stock issued for services 0 60,000 1,920,484
Fair value of options granted 0 0 2,000,912
(Increase) decrease in prepaid expenses 300 (1,000) 0
(Increase) decrease in deferred offering costs 0 (10,000) 0
Increase (decrease) in accounts payable (9,301) (20,743) 29,961
Increase (decrease) in due to affiliates 30,111 0 58,543
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Net Cash (Used) by Operating Activities (2,280) (115,998) (2,257,247)
FINANCING ACTIVITIES
Proceeds from private placements 0 0 1,347,830
Proceeds from convertible debenture 0 100,000 200,000
Proceeds from exercise of stock options 0 0 1,006,750
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Cash provided from financing activities 0 100,000 2,554,580
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INVESTING ACTIVITIES
Cost of patents 0 (14,120) (168,430)
Proceeds from sale of marketable securities 0 0 95,673
Investment in marketable securities 0 0 (217,756)
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Cash used in investment activities 0 (14,120) (290,513)
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Increase in cash (2,280) (30,118) 6,820
Cash at beginning of period 9,100 93,384 0
--------- ---------- -----------
Cash at end of period $ 6,820 $ 63,266 $ 6,820
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SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Issuance of common stock for licensing agreements $ 0 $ 0 $ 2,005,350
and intellectual property
Unrealized loss on securities available held for sale $ 0 $ 0 $ 7,476
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
RHOMBIC CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2002
The unaudited financial statements included herein were prepared from the
records of the Company in accordance with generally accepted accounting
principles. These financial statements reflect all adjustments which are, in the
opinion of management, necessary to provide a fair statement of the results of
operations and financial position for the interim periods. Such financial
statements generally conform to the presentation reflected in the Company's
Forms 10-KSB and 10-KSB filed with the Securities and Exchange Commission for
the year ended December 31, 2001. The current interim period reported herein
should be read in conjunction with the Company's Form 10-KSB subject to
independent audit at the end of the year.
The results of operations for the three months ended March 31, 2002 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion is intended to provide an analysis of the
Company's financial condition and Plan of Operation and should be read in
conjunction with the Company's financial statements and the notes thereto. The
matters discussed in this section that are not historical or current facts deal
with potential future circumstances and developments. Such forward-looking
statements include, but are not limited to, the development plans for the
technologies of the Company, trends in the results of the Company's development,
anticipated development plans, operating expenses and the Company's anticipated
capital requirements and capital resources. The Company's actual results could
differ materially from the results discussed in the forward-looking statements.
The Company has not generated revenue from operations during the first
three months of 2002 or since its inception.
At December 31, 2001 the Company had $ 9,000 in cash and $ 49,092 in
current payables. At March 31, 2002 the Company had approximately $ 6,800 in
cash and approximately $ 88,500 in current payables. Although the company could
probably settle debt to affiliates in the amount of $ 58,543 for restricted
common stock, it would have approximately 30,000 in debt remaining.
The competition in the technology proliferation and transfer market is
highly intense and is based on product and technology recognition and
acceptance, novelty and marketability of an invention, price, and sales
expertise. The Company has placed its primary emphasis on product development,
dependability and commercial viability of its acquired technologies. Management
is currently determining the expenses involved to develop its Excimer Lamp
intellectual property into commercial applications. To date, the Company has not
generated any revenues from any of its acquired intellectual property except
minimal royalties from Daimler Benz from the IEC Technology. Rhombic is
currently a development stage company and is operating at a loss. None of the
technologies have been developed to commercialization. The Company is not able
to determine an approximate date for commercialization of any of its
intellectual property at this time. No assurances can be given that any of the
Company's intellectual property will ever be developed to a point of usefulness
or, if developed, that any will be commercially feasible.
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Development of its intellectual property may be possible through joint
ventures where Rhombic contributes its intellectual property for an ownership
percentage in a joint venture and all costs are paid by the other joint venture
partners.
On March 19, 2002, Rhombic canceled the letter intent for the proposed
merger with FAMCO because it had not received sufficient financial information
from the six corporations in order to negotiate an agreement. During the
calendar year 2002, Rhombic plans to actively seek the acquisition of a revenue
generating operation. Ideally, the acquisition will have operations that bear
some relationship to one or more of the intellectual properties currently held
by Rhombic; however, the acquisition may or may not bear a relationship to the
intellectual property currently owned. The objective of management it to
optimize the value of the company through acquisitions or development projects.
In the event Rhombic had an opportunity to raise cash, it would pay for a
marketing study and development plan for the Excimer Lamp. An 18-month budget of
approximately $ 350,000 to develop a prototype with patent protection.
The Company currently has options outstanding from which it could obtain
cash; however, it is not probable that Rhombic will obtain cash from the options
while the stock price trades below the outstanding option strike prices. In the
event all of the outstanding options were exercised, the Company would receive
$1,725,000 before December 31, 2002. The Company has a total of 2,000,000
options outstanding at an average exercise price of $ .86 per share. The
exercise prices range from $.50 to $4.50.
The Company does not have any employees and uses consultants for matters
pertaining to coordinating technology development and administration. The
Company may hire employees during the next twelve months depending upon its
success in developing prototype applications for sale and financing more
development. This report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, and Section 21E of the Exchange
Act of 1934. Although the Company believes that the expectations reflected in
the forward-looking statements and the assumptions upon which the
forward-looking statements are based are reasonable, it can give no assurance
that such expectations and assumptions will prove to be correct.
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PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company is
unaware of any proceedings contemplated against it.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
NONE
(b) Reports on Form 8-K
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.
RHOMBIC CORPORATION
Dated: May 15, 2002 By: /s/ Albert Golusin
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Acting Chief Executive Officer,
Principal Executive Officer,
Chief Financial Officer,
Principal Financial Officer
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