UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| Quarterly Report Pursuant To Section 13 or 15(d) of The Securities
Exchange Act Of 1934
For the quarterly period ended June 30, 2012
|_| Transition Report Under Section 13 or 15(d) of The Securities Exchange
Act Of 1934
For the transition period from __________ to __________
Commission File Number: 000-53316
TRANSBIOTEC, INC.
-------------------------
(Exact name of registrant as specified in its charter)
Delaware 26-0731818
-------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
3030 Old Ranch Parkway, Suite 350
Seal Beach, CA 90740
---------------------------
(Address of principal executive offices, including Zip Code)
(562) 280-0483
----------------------
(Issuer's telephone number, including area code)
-----------------------------------
(Former name or former address if changed since last report)
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. Yes [x] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer," "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 28,150,427 shares of common stock as
of August 14, 2012.
TransbioTec, Inc.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
June. 30, 2012
(unaudited) Dec. 31, 2011
-------------- -------------
ASSETS
Cash $ 215 $ 108,019
Due from Triumph Capital 100 100
Prepaid expenses 2,127 192
-------------- -------------
Total current assets 2,442 108,311
-------------- -------------
Fixed assets - net 1,799 1,132
-------------- -------------
Total Assets $ 4,241 $ 109,443
============== =============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 237,952 $ 207,660
Accrued interest payable 117,763 87,411
Notes payable - current - related
parties 381,635 191,260
Notes payable - current 214,159 86,000
Note discount (28,023)
Notes payable - 8% Debenture - 30,000
Related party payables 286,501 288,448
Other payables 157,988 158,006
-------------- -------------
Total current liabilities 1,367,975 1,048,785
-------------- -------------
Notes payable - related parties 330,865 549,263
-------------- -------------
Total Liabilities 1,698,840 1,598,048
-------------- -------------
Stockholders' Equity
Common stock, $.00001 par value;
100,000,000 shares authorized;
28,150,427 and 25,471,672
shares issued and outstanding
at June 30, 2012 and December
31, 2011 respectively. 282 254
Additional paid in capital 11,345,996 9,266,959
Deficit accumulated during the
development stage (13,000,823) (10,720,938)
-------------- -------------
Total Transbiotec
stockholders' equity (1,654,545) (1,453,725)
Noncontrolling interest (40,054) (34,880)
-------------- -------------
Total Stockholders' Equity (1,694,599) (1,488,605)
-------------- -------------
Total Liabilities and Stockholders'
Equity $ 4,241 $ 109,443
============== =============
The accompanying notes are an integral part of the consolidated
financial statements.
2
TransbioTec, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Period From
For Three Months Ended For Six Months Ended July 19, 2004
June 30, June 30, (Inception) To
2012 2011 2012 2011 June 30, 2012
-------------- -------------- -------------- ------------- ------------------
Revenues $ - $ - $ - $ - $ -
-------------- -------------- -------------- ------------- ------------------
- - - - -
-------------- -------------- -------------- ------------- ------------------
Operating expenses:
Amortization & depreciation - 71 151 770 75,895
General and administrative 145,699 90,871 2,176,847 150,062 11,858,085
-------------- -------------- -------------- ------------- ------------------
145,699 90,942 2,176,998 150,832 11,933,980
-------------- -------------- -------------- ------------- ------------------
Gain (loss) from operations (145,699) (90,942) (2,176,998) (150,832) (11,933,980)
-------------- -------------- -------------- ------------- ------------------
Other income (expense):
Gain on sale of fixed asset - - 4,790 - 4,790
Interest expense (20,777) (53,835) (48,680) (12,449) (1,0023,645)
Interest expense - beneficial
conversion feature (44,035) - (64,171) - (134,171)
-------------- -------------- ------------- ------------------ -----------
(64,812) (53,835) (108,061) (112,449) (1,153,026)
-------------- -------------- -------------- ------------- ------------------
Income (loss) before provision for
income taxes (210,511) (144,777) (2,285,059) (263,281) (13,087,006)
Provision for income tax - - - - -
-------------- -------------- -------------- ------------- ------------------
Net income (loss) (210,511) (144,777) (2,285,059) (263,281) (13,087,006)
Less: Net (income) loss attributable
to noncontrolling interest 2,095 - 5,174 - 86,183
-------------- -------------- -------------- ------------- ------------------
Net income (loss) attributable to
Transbiotec $ (208,416) $ (144,777) $ (2,279,885) $ (263,281) $(13,000,823)
============== ============== ============== ============= ==================
Net income (loss) per share
(Basic and fully diluted) $ (0.01) $ (0.02) $ (0.08) $ (0.03)
============== ============== ============== =============
Weighted average number of
common shares outstanding 28,007,094 9,309,450 26,952,017 9,309,450
============== ============== ============== =============
The accompanying notes are an integral part of the
consolidated financial statements.
3
TransbioTec, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period From
July 19, 2004
For Six Months Ended (Inception)
June 30, To
2012 2011 June 30. 2012
------------- ----------- --------------
Cash Flows From Operating Activities:
Net income (loss) $(2,285,059) $ (263,281) (13,094,148)
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Amortization & depreciation 303 770 76,046
Compensatory equity issuances 1,888,871 - 8,228,188
Asset write offs 850 - 38,363
Accrued payables 3,621 131,768 1,917,107
Gain on sale of fixed asset (4,790) - (4,790)
Note payable/ beneficial
conversion expense 92,194 - 365,758
Original issue discount -
interest expense - - 40,000
------------- ----------- --------------
Net cash provided by (used
for) operating activities (304,010) (130,743) (2,340,151)
------------- ----------- --------------
Cash Flows From Investing Activities:
Proceeds received on sale of
fixed asset 4,790 - 4,790
Fixed asset purchases (970) - (77,845)
------------- ----------- --------------
Net cash provided by (used
for) investing activities 3,820 - (73,055)
------------- ----------- --------------
The accompanying notes are an integral part of the consolidated
financial statements.
(Continued On Following Page)
4
TransbioTec, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued From Previous Page)
Period From
July 19, 2004
For Six Months Ended (Inception)
June 30, To
2012 2011 June 30. 2012
------------- ----------- --------------
Cash Flows From Financing Activities:
Notes & loans payable -
borrowings 94,386 2,845 950,647
Notes & loans payable -
payments - (6,500) (38,726)
Repurchase of equity - (24,688) (250,000)
Equity issuances 98,000 172,812 1,751,500
------------- ----------- --------------
Net cash provided
by (used for) financing
activities 192,386 144,469 2,413,421
------------- ----------- --------------
Net Increase (Decrease) In Cash (107,804) 13,726 215
Cash At The Beginning Of The Period 108,019 30,695 -
------------- ----------- --------------
Cash At The End Of The Period $ 215 $ 44,421 $ 215
============= =========== ==============
Schedule Of Non-Cash Investing And Financing Activities
$
Compensatory equity issuances $ 1,888,871 $ - $ 8,228,188
Debt converted to capital $ 43,000 $ 433,669 $ 1,530,875
Supplemental Disclosure
Cash paid for interest $ 4,500 $ 563 $ 11,735
Cash paid for income taxes $ - $ - $ -
The accompanying notes are an integral part of the
consolidated financial statements.
5
TransBioTec, Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Imagine Media, LTD. was incorporated in August 2007 in the State of Delaware.
TransBioTec, Inc. was formed in the state of California in July 2004. Effective
September 19, 2011 Imagine Media, LTD. was acquired by TransBioTec, Inc. in a
transaction classified as a reverse acquisition. In January 2012 Imagine Media,
LTD. changed its name to TransBioTec, Inc., resulting in a parent company and
subsidiary of the same name. The financial statements represent the activity of
TransBioTec, Inc. from July 19, 2004 forward, and the consolidated activity of
Imagine Media, LTD. and TransBioTec, Inc. from September 19, 2011 forward.
Imagine Media, LTD. and TransBioTec, Inc. are hereinafter referred to
collectively as the "Company". The Company has developed and plans to market and
sell a non-invasive alcohol sensing system which includes an ignition interlock.
The Company is currently considered to be in the development stage, and has not
generated revenues from its activities.
Principles of Consolidation
---------------------------
The accompanying consolidated financial statements include the accounts of the
Company and its majority owned subsidiary. All intercompany accounts and
transactions have been eliminated in consolidation.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Cash and cash equivalents
-------------------------
The Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
Accounts receivable
-------------------
The Company reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary. At June 30, 2012, and 2011 the Company had no balance in
accounts receivable or the allowance for doubtful accounts.
6
TransBioTec, Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont'd)
Property and equipment
----------------------
Property and equipment are recorded at cost and depreciated under straight line
methods over each item's estimated useful life.
Revenue recognition
-------------------
Revenue is recognized on an accrual basis as earned under contract terms. The
Company has had no revenues to date
Advertising costs
-----------------
Advertising costs are expensed as incurred. The Company recorded no material
advertising costs during the six months ended June 30, 2012 or 2011.
Income tax
----------
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740
deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss carry
forwards and deferred tax liabilities are recognized for taxable temporary
differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.
Net income (loss) per share
---------------------------
The net income (loss) per share is computed by dividing the net income (loss) by
the weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.
Financial Instruments
---------------------
The carrying value of the Company's financial instruments, as reported in the
accompanying balance sheets, approximates fair value.
7
TransBioTec, Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(cont'd)
Long-Lived Assets
-----------------
In accordance with ASC 350, the Company regularly reviews the carrying value of
intangible and other long-lived assets for the existence of facts or
circumstances, both internally and externally, that may suggest impairment. If
impairment testing indicates a lack of recoverability, an impairment loss is
recognized by the Company if the carrying amount of a long-lived asset exceeds
its fair value.
Products and services, geographic areas and major customers
-----------------------------------------------------------
The Company is currently in the developmental stage and has no revenue.
Stock based compensation
------------------------
The Company accounts for employee and non-employee stock awards under ASC 718,
whereby equity instruments issued to employees for services are recorded based
on the fair value of the instrument issued and those issued to non-employees are
recorded based on the fair value of the consideration received or the fair value
of the equity instrument, whichever is more reliably measurable.
Minority Interest (Noncontrolling Interest)
-------------------------------------------
A subsidiary of the Company has minority members, representing ownership
interests of 2.46% at June 30, 2012. The Company accounts for these minority, or
noncontolling interests pursuant to ASC 810-10-65 whereby gains or losses in a
subsidiary with a noncontrolling interest are allocated to the noncontrolling
interest based on the ownership percentage of the noncontrolling interest, even
if that allocation results in a deficit noncontrolling interest balance.
NOTE 2. RELATED PARTY TRANSACTIONS
During the six months ended June 30, 2012 and June 30, 2011, the Company had
payables due to officers for accrued compensation of $33,445 and $157,827
respectively.
In 2010 an officer converted $325,000 in compensation owed him into 516,750
common shares. During the year ended December 31, 2011 related party
shareholders converted $829,164 in note principal and interest and $135,000 in
compensation into 2,408,977 common shares.
8
TransBioTec, Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. FIXED ASSETS
Fixed asset values recorded at cost are as follows:
December 31,
------------------------ (Unaudited)
2010 2011 June 30, 2012
---------- --------- -------------
Automobile $ 33,383 $ 33,383 $ -
Office and Lab Equipment 31,896 31,896 31,616
Furniture and fixtures 11,596 11,596 11,556
---------- --------- --------
76,875 76,875 43,172
Less accumulated depreciation (74,832) (75,743) (41,373)
---------- --------- --------
Total $ 2,043 $ 1,132 $ 1,799
========== ========= ========
Depreciation expense for the six months ended June 30, 2012 and June 30, 2011
was $152 and $770 respectively.
NOTE 4. NOTES PAYABLE
December 31, December 31, (Unaudited)
------------ ------------ -----------
2010 2011 June 30, 2012
---- ---- -------------
Note payable to related party,
unsecured, due 8/3/2012, $1,950 $1,950 $1,950
interest rate 0%
9
Note payable to related party, $184,156 - -
unsecured, due 9/17/2008,
convertible at holder's option
at $1 per share,
interest rate 10% plus agreed
upon amounts
Note payable to related party, $150,000 - -
unsecured, due 12/15/2013,
monthly interest due,
convertible at holder's option
at $2.50 per share,
interest rate 22.1%
Note payable to related party, $240,000 - -
unsecured, due 05/28/2009,
convertible at holder's option
at $2.50 per share,
original issue discount of
20%, with interest at
$444 per day after due date
Note payable to related party, $151,929 - -
unsecured, due 07/27/2012,
convertible at holder's option
at $2.50 per share,
interest rate 8%
Notes payable to related $5,000 - -
parties, unsecured, due
01/29/2011, convertible
at holder's option at $2.50
per share, interest rate 9%
Notes payable to related $15,810 $11,810 $11,810
parties, unsecured, due
12/31/2012, interest rate 0%
Note payable to related party, - $16,000 $16,000
unsecured, due 09/15/2012,
convertible at holder's option
at $2.50 per TransBioTec
share.
Note payable to related party, - $10,000 $10,000
lien against company assets,
unsecured, due 2/8/12,
quarterly interest
due, convertible at holder's
option at $0.3235688 per IMLE
share, interest rate 30%
10
Note payable to related party,
lien against company assets, - $25,000 $25,000
unsecured, due 2/8/12,
quarterly interest due,
convertible at holder's option
at $0.3235688 per IMLE share,
interest rate 30%
Note payable to related party, - $25,000 $25,000
lien against company assets,
unsecured, due 2/17/12,
quarterly interest due,
convertible at holder's option
at $0.3235688 per IMLE share,
interest rate 30%
Note payable to related party,
lien against company assets, - $10,000 $10,000
unsecured, due 2/18/12,
quarterly interest due,
convertible at holder's option
at $0.3235688 per IMLE share,
interest rate 30%
Note payable to related party,
unsecured, due 2/18/13, annual - - $750
interest due, convertible at
holder's option at $0.3235688
per IMLE share, interest rate
18%
Note payable to related party, - - $6,875
unsecured, due 2/18/13, annual
interest due, convertible at
holder's option at $0.3235688
per IMLE share, interest rate
18%
Note payable to related party, - - $2,500
unsecured, due 2/15/13, annual
interest due, convertible at
holder's option at $0.3235688
per IMLE share, interest rate
12%
11
Note payable to related party, - - $3,750
unsecured, due 2/20/13,
annual interest due, convertible
at holder's option at $0.3235688
per IMLE share, interest rate 12%
Note payable to related party, - - $2,625
unsecured, due 2/21/13, annual
interest due, convertible at
holder's option at $0.3235688
per IMLE share, interest rate
12%
Note payable to related party, - - $5,433
unsecured, due 3/20/13, annual
interest due, convertible at
holder's option at $0.3235688
per IMLE share, interest rate
12%
Note payable to related party, - - $3,203
unsecured, due 3/22/13, annual
interest due, convertible at
holder's option at $0.3235688
per IMLE share, interest rate
12%
Note payable to related party, - - $37,500
lien against company assets,
unsecured, due 1/05/13, annual
interest due, convertible at
holder's option at 51% of
market as defined, interest
rate 8%, conversion limited to
total beneficial ownership of
4.99%
Note payable to related party, - - $37,500
lien against company assets,
unsecured, due 2/25/13, annual
interest due, convertible at
holder's option at 51% of
market as defined, interest
rate 8%, conversion limited to
total beneficial ownership of
4.99%
Note payable to related party, - - $726,763
unsecured, lien against
company assets, $731,763, 5-years
at 0% simple interest, due
7/1/2016, payment
amounts vary each month.
12
$ 748,845 $ 826,523 $926,659
Less Note discounts - - (28,023)
Less current portion (594,966) (277,260) (567,771)
--------- --------- --------
Long-term portion $153,879 $ 549,263 $330,865
======== ========= ========
Required principal payments from December 31, 2011 forward are as follows:
2012 $ 282,260
2013 $ 285,511
2014 $ 196,881
2015 $ 123,709
2016 $ 38,298
---------
$ 926,659
Interest expense under notes payable for the six months ended June 30, 2012 and
June 30, 2011 was $40,788 and $107,575, respectively.
During the six months ended June 30, 2012 and June 30, 2011 the Company
recognized a beneficial conversion feature expense on borrowing from convertible
notes of $64,171 and none, respectively.
Convertible debenture payable
to unrelated party, unsecured,
due 04/1/2009, convertible at
holder's option at $.25 per
share, interest rate 8% Default
interest rate 12% $ 30,000 $ 30,000 $ -
13
TransBioTec, Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. INCOME TAXES
Deferred income taxes arise from the temporary differences between financial
statement and income tax recognition of net operating losses. These loss
carryovers are limited under the Internal Revenue Code should a significant
change in ownership occur.
NOTE 6. STOCK OPTIONS
The Company accounts for employee and non-employee stock options under ASC 718,
whereby option costs are recorded based on the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more
reliably measurable. Unless otherwise provided for, the Company covers option
exercises by issuing new shares.
The Company's stock option activity is described below.
Non-employee stock options
--------------------------
At the beginning of 2010 the Company had 10,000 non-employee stock options
outstanding in the Company's subsidiary TransBiotec, Inc. During 2010 the
Company granted 22,500 options for services, allowing the holder to purchase one
share of common stock per option, with 22,500 options exercisable immediately at
prices from $0.10 - $0.15 per share with the option terms expiring from January
2012 through January 2015. During 2011 no options were exercised, and no options
expired, leaving a 2010 year end outstanding balance of 32,500 non-employee
stock options. The fair value of the 22,500 options granted in 2010 was
estimated on the date of grant using the Black-Scholes option pricing model with
the following assumptions: risk free interest rate of 1.08% - 2.67%, dividend
yield of 0%, expected lives of 2 - 5 years, volatility of 100%. The Company
incurred and recorded compensation expense under these stock option grants of
$53,262 in 2010.
During the six months ended June 30, 2012, 10,000 options were exercised, and no
options expired, leaving a June 30, 2012 outstanding balance of 22,500
non-employee stock options, exercisable at prices from $0.10 - $0.15 per share
with the option terms expiring from July 2012 through January 2015.
14
TransBioTec, Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. STOCK OPTIONS (cont'd)
Employee stock options
----------------------
The Company had no outstanding employee stock options in 2010 or 2011, or during
the six months ended June 30, 2012.
NOTE 7. GOING CONCERN
The Company has suffered recurring losses from operations and has a working
capital deficit and stockholders' deficit, and in all likelihood will be
required to make significant future expenditures in connection with continuing
marketing efforts along with general administrative expenses. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern.
The Company may raise additional capital through the sale of its equity
securities, through an offering of debt securities, or through borrowings from
financial institutions or others. By doing so, the Company hopes to generate
revenues from sales of its alcohol sensing and ignition lock systems. Management
believes that actions presently being taken to obtain additional funding provide
the opportunity for the Company to continue as a going concern.
15
Item 2. Management's Discussion and Analysis of Financial Condition and Plan
of Operation
The Company was formed in August 2007 to publish and distribute Image
Magazine, a monthly guide and entertainment source for the Denver, Colorado
area. The Company generated only limited revenue and essentially abandoned its
business plan in January 2009.
In January 2012 the Company completed its acquisition of TransBiotec, Inc.
("TBT") a California corporation.
As a result of the acquisition, TBT's business is that of the Company's,
and, unless otherwise indicated, any references to the Company include the
business and operations of TBT.
The Company, now headquartered in Seal Beach, California, has developed and
patented a high technology, state-of-the-art transdermal sensor system, that
detects blood alcohol levels through a person's skin. Ethanol is produced as
alcohol is ingested and metabolized in the body. The system senses ethanol
excreted through perspiration. A person places their finger on the sensor, and
within 5-8 seconds, the sensor will detect the ethanol level. A signal can then
be sent to output devices that control the ignition in a vehicle to prevent it
from starting. The system can also communicate with other devices such as a GPS
unit, or cell phone.
The Company's system is unobtrusive, accurate, reliable, durable, low cost,
easier to use and faster than the current breathalyzer applications. The Company
has completed its beta testing of the sensor and is currently developing its
manufacturing capability.
Initially, the Company intends to offer its sensor only for commercial
vehicle applications. Later, the Company plans to market its sensor to the
public for use in automobiles, SUV's, RV's, boats and other vehicles.
The following discussion:
o summarizes the Company's plan of operation; and
o analyzes the Company's financial condition and the results of its
operations for the six months ended June 30, 2012.
This discussion and analysis should be read in conjunction with the
Company's financial statements included as an exhibit to this report.
Plan of Operation and Capital Requirements
------------------------------------------
The Company's plan of operations is as follows:
16
Projected Estimated
Activity Completion Date Cost
-------- --------------- ----
Develop relationship with initial customers
willing to work with Company in refining SOBR.
Will discount price for units sold to customers
who partner with Company in this phase.
Identify add-on features that may appeal to
customers. Complete design of printed circuit
boards and injection molding tools. Sales target
of 500 units. December 2012 $160,000
Outsource manufacturing, packaging and shipping.
Complete joint venture agreement with GPS partner.
Develop add-on features such as cameras, GPS and
radio interfaces, and a fingerprint reader which
would allow the SOBR to determine the driver's
identity and blood alcohol content at the same
time. Improve production capability to 1,000
units per month. February 2013 $370,000
Improve manufacturing capability to 10,000
units per month. June 2013 $370,000
The Company will maintain its research and development efforts with a goal
of continuously improving the SOBR.
The Company's sources and (uses) of funds for the six months ended June 30,
2012 and 2011 are shown below:
For the six months ended
------------------------
June 30,
--------
2012 2011
---- ----
Net cash provided by (used for)
operations $(304,010) $(130,743)
Sale of equipment $ 4,790 $ -
Purchase of equipment $ (970) $ -
Loans, net of loan repayments $ 94,386 $ (3,655)
Repurchase of common stock $ -- $ (24,688)
Sale of stock $ 98,000 $ 172,812
Cash on hand at beginning of the
period $ 107,804 $ -
The Company does not have any off-balance sheet arrangements that have or
are reasonable likely to have a current or future material effect on its
financial condition, changes in financial condition, results of operations,
liquidity or capital resources.
17
Other than as disclosed above, the Company does not know of any trends,
demands, commitments, events or uncertainties that will result in, or that
reasonably likely to result in, the Company's liquidity increasing or decreasing
in any material way.
Other than as disclosed above, the Company does not know of any significant
changes in its expected sources and uses of cash.
Results of Operations
---------------------
The Company was formed in August 2007 and generated only limited revenue
before it effectively ceased operations in January 2009.
Material changes in the Company's Statement of Operations for the three and
six months ended June 30, 2012 as compared to the same periods in the prior year
are discussed below:
Increase (I)
Item or Decrease (D) Reason
---- --------------- ------
General and Administrative Expenses I Value of shares issued to
financial consultant.
Item 4. Controls and Procedures.
(a) The Company maintains a system of controls and procedures designed to
ensure that information required to be disclosed in reports filed or submitted
under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded,
processed, summarized and reported, within time periods specified in the SEC's
rules and forms and to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act, is
accumulated and communicated to the Company's management, including its
Principal Executive and Financial Officer, as appropriate to allow timely
decisions regarding required disclosure. As of June 30, 2012, the Company's
Principal Executive and Financial Officer evaluated the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Principal Executive and Financial Officer concluded that
the Company's disclosure controls and procedures were effective.
(b) Changes in Internal Controls. There were no changes in the Company's
internal control over financial reporting during the quarter ended June 30,
2012, that materially affected, or are reasonably likely to materially affect,
its internal control over financial reporting.
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PART II
Item 6. Exhibits
Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
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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.
TRANSBIOTEC, INC.
August 14, 2012 By: /s/ Scott Painter
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Scott Painter, Principal Executive,
Financial and Accounting Officer
20