U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-83125
POWER MARKETING, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3851304
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
311 South State Street, Suite 460, Salt Lake City, Utah 84111
(Address of principal executive offices)
(801) 364-9262
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (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 report(s), YES [X] NO [ ]
and (2) has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
The number of $.001 par value common shares outstanding at September 30, 2000:
1,250,000
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONTENTS
PAGE
Unaudited Condensed Balance Sheets,
September 30, 2000 and December 31, 1999 2
Unaudited Condensed Statements of Operations,
for the three and nine months ended
September 30, 2000 and 1999 and for the
period from inception on August 1, 1995
through September 30, 2000 3
Unaudited Condensed Statements of Cash Flows,
for the nine months ended September 30, 2000
and 1999 and for the period from inception on
August 1, 1995 through September 30, 2000 4
Notes to Unaudited Condensed Financial
Statements 5 - 8
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
September 30, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ 2,564 $ 12,356
Investment 153,571 153,571
___________ ___________
Total Current Assets 156,135 165,927
___________ ___________
$ 156,135 $165,927
___________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable-related party $ 110,500 $ 500
Note payable-related party - 115,830
Accrued interest-related party - 876
___________ ___________
Total Current Liabilities 110,500 117,206
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
500,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,250,000 shares issued and
outstanding 1,250 1,250
Additional paid-in capital 98,746 77,300
Deficit accumulated during the
development stage (54,361) (29,829)
___________ ___________
Total Stockholders' Equity 45,635 48,721
___________ ___________
$ 156,135 $ 165,927
___________ ___________
Note: The balance sheet at December 31, 1999 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statement.
2
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
For the Three For the Nine From Inception
Months Ended Months Ended on August 1,
September 30, September 30, 1995 Through
________________ ________________ September 30,
2000 1999 2000 1999 2000
_________ _______ ________ _______ _____________
REVENUE: $ - $ - $ - $ - $ -
_________ _______ ________ _______ _____________
EXPENSES:
General and
Administrative 14,732 285 19,791 1,426 30,488
_________ _______ ________ _______ _____________
Total Expenses 14,732 285 19,791 1,426 30,488
_________ _______ ________ _______ _____________
LOSS FROM OPERATIONS: (14,732) (285) (19,791) (1,426) (30,488)
OTHER INCOME
(EXPENSES):
Interest Expense (1,276) - (4,741) - (5,617)
Interest Income - - - - 44
_________ _______ ________ _______ _____________
Total Other
Income
(Expenses): (1,276) - (4,741) - (5,573)
_________ _______ ________ _______ _____________
LOSS BEFORE
INCOME TAXES (16,008) - (24,532) (1,426) (36,061)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
_________ _______ ________ _______ _____________
(LOSS) FROM CONTINUING
OPERATIONS (16,008) (285) (24,532) (1,426) (36,061)
_________ _______ ________ _______ _____________
DISCONTINUED OPERATION
(Loss) from
operations of
discontinued
hair product
marketing
operations - - - - (18,990)
Gain on disposition
of hair product
marketing
operations - - - - 690
_________ _______ ________ _______ _____________
LOSS FROM DISCONTINUED
OPERATION - - - - (18,300)
_________ _______ ________ _______ _____________
NET LOSS $ (16,008)$ (285)$(24,532)$(1,426)$ (54,361)
_________ _______ ________ _______ _____________
LOSS PER COMMON SHARE:
Continuing
operations $ (.01)$ (.00)$ (.02)$ (.00)$ (.03)
Discontinued
operations (.00) (.00) (.00) (.00) (.02)
_________ _______ ________ _______ _____________
Loss per common
share (.01) (.00) (.02) (.00) (.05)
_________ _______ ________ _______ _____________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
3
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
For the Nine From Inception
Months Ended on August 1,
September 30, 1995 Through
__________________ September 30,
2000 1999 2000
_________ ________ __________
Cash Flows From Operating
Activities:
Net loss $ (24,532)$ (1,426) $ (54,361)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Amortization - - 500
Changes is assets and
liabilities:
Increase in accounts
payable - related part 110,000 446 110,500
Increase in accrued
interest-related party 4,741 - 5,616
_________ ________ __________
Net Cash Provided (Used) by
Operating Activities 90,209 (980) 62,255
_________ ________ __________
Cash Flows From Investing Activities:
Organization costs - - (500)
Purchase investment - - (153,571)
_________ ________ __________
Net Cash Provided (Used)
by Investing Activities - - (154,071)
_________ ________ __________
Cash Flows From Financing Activities:
Proceeds from sale of
common stock - - 83,500
Payment of stock offering
costs - - (4,950)
Proceeds from note
payable - related party - - 115,830
Payment on note
payable - related party (100,000) - (100,000)
_________ ________ __________
Net Cash Provided by Financing
Activities - - 94,380
_________ ________ __________
Net Increase (Decrease) in Cash (9,791) (980) 2,564
Cash at Beginning of Period 12,355 1,089 -
_________ ________ __________
Cash at End of Period $ 2,564 $ 109 $ 2,564
_________ ________ __________
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Non-Cash Investing and Financing
Activities:
For the Nine Months Ended September 30, 2000:
The Company settled a debt consisting of a note and accrued
interest payable of $121,446 for $100,000. Because of the
related party nature of the note the gain on settlement was
accounted for as a contribution to capital.
For the Nine Months Ended September 30,1999:
None
The accompanying notes are an integral part of these unaudited
condensed financial statement.
4
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the
State of Delaware on August 1, 1995. The Company is considered a
development stage company as defined in SFAS No. 7. The Company
was formed to engage in the business of television marketing of
hair products. During 1996, the Company discontinued the
marketing of hair products and is currently considering other
business opportunities or potential business acquisitions.
During 1999, the Company purchased champagne as an investment,
but is still seeking other potential business ventures. The
Company has, at the present time, not paid any dividends and any
dividends that may be paid in the future will depend upon the
financial requirements of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at
September 30, 2000 and 1999 and for the periods then ended have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the company's December 31, 1999 audited financial
statements. The results of operations for the periods ended
September 30, 2000 are not necessarily indicative of the
operating results for the full year.
(Loss) Per Common Share - The computation of loss per common
share is based on the weighted average number of shares
outstanding during the period presented.
Investment - Investments in wine and champagne are carried at the
lower of cost or market value.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures 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 estimated by management.
Statement of Cash Flows - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or
holds contributions for others", SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133.),", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
5
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Preferred Stock - The Company has authorized 500,000 shares of
preferred stock, $.001 per value, with such rights, preferences
and designations and to be issued in such series as determined by
the Board of Directors. No shares are issued and outstanding at
September 30, 2000
Common Stock - During September, 1995, in connection with its
organization, the Company issued 950,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the
sale of stock amounted to $28,500 (or $.03 per share). During
October, 1995, the Company made a public offering of 50,000 of
its previously authorized but unissued common stock. Total
proceeds from the public sale of stock amounted to $5,000.
Direct offering costs offset against the proceeds were $4,950.
During December 1999, the Company issued 250,000 shares of its
previously authorized but unissued common stock. Total proceeds
from the sale of stock amounted to $50,000 (or $.20 per share)
Warrant Distribution - The Company completed a distribution of
warrants to purchase 1,250,000 shares of common stock. The
warrants are exercisable at $1.00 per share, on or before June
30, 2002. The warrants were distributed as a dividend on the
common stock to all the shareholders of record.
Preferred Stock - The Company has authorized 500,000 shares of
preferred stock, $.001 per value, with such rights, preferences
and designations and to be issued in such series as determined by
the Board of Directors. No shares are issued and outstanding at
September 30, 2000
NOTE 3 - INVESTMENT
During November 1999 the Company acquired champagne from an
entity that at the time was related to a significant shareholder
of the Company. The champagne was acquired for $115,830 which
was the carryover cost basis of the related entity. A note
payable in the amount of $115,830 was given as consideration for
the champagne.
During December 1999 the Company paid cash of $37,741 to purchase
wine as an investment. The wine was purchased from an unrelated
entity.
NOTE 4 - RELATED PARTY
Note Payable Settlement - On November 15, 1999 the Company
purchased $115,830 of its investment in champagne from an entity
controlled by a shareholder of the Company for a note payable in
the amount of $115,830. The note was due in 6 months and
provides for interest at 6% per annum. On September 5, 2000,
the Company settled a debt consisting of a note payable in the
amount of $115,830 plus accrued interest of $5,616 for $100,000.
The gain on settlement of $21,446 was accounted for as a
contribution to capital because of the related party nature of
the note.
6
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". FASB 109 requires the Company to provide a
net deferred tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or
tax credit carryforwards.
The Company has available at September 30, 2000, unused operating
loss carryforwards of approximately $54,300 which may be applied
against future taxable income and which expire in various years
from 2010 through 2019. The amount of and ultimate realization
of the benefits from the operating loss carryforwards for income
tax purposes is dependent, in part, upon the tax laws in effect,
the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards
the Company has established a valuation allowance equal to the
amount of the loss carryforwards and, therefore, no deferred tax
asset has been recognized for the loss carryforwards. The net
deferred tax assets are approximately $18,400 as of September 30,
2000, with an offsetting valuation allowance of the same amount
resulting in a change in the valuation allowance of approximately
$6,400 during the nine months ended September 30, 2000.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - Officers and directors have not devoted
any significant time to the Company's operations nor has the
Company paid any compensation to its officers and directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his office as a mailing address, as needed, at no
expense to the Company.
Shareholder Advance - During September 2000 a shareholder and
officer of the Company advanced the Company $110,500 to pay for
notes payable and other Company expenses.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since inception, has
expended most of its working capital and has not yet been
successful in establishing profitable operations. These factors
raise substantial doubt about the ability of the Company to
continue as a going concern. In this regard, management is
proposing to raise additional funds through loans, or through
additional sales of its
common stock or through the acquisition of other companies.
There is no assurance that the Company will be successful in
raising this additional capital.
7
<PAGE>
POWER MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 8 - LOSS PER SHARE
The following data shows the amounts used in computing loss per
share for the periods presented.
For the Three For the Nine From Inception
Months Ended Months Ended on August 1,
September 30, September 30, 1995 Through
___________________ __________________ September 30,
2000 1999 2000 1999 2000
_________ _________ _________ _________ _____________
Loss from
continuing
operations
available to
common
shareholders
(numerator) $ (16,008)$ (285)$ (24,532)$ (1,426)$ (36,061)
_________ _________ _________ _________ _____________
Loss from
discontinued
operations
(numerator) $ - $ - $ - $ - $ (18,300)
_________ _________ _________ _________ _____________
Weighted average
number of
common shares
outstanding
used in loss
per share
calculation for
the period
(denominator) 1,250,000 1,000,000 1,250,000 1,000,000 1,037,652
_________ _________ _________ _________ _____________
At September 30, 2000 the Company had 1,250,000 warrants
outstanding that were not included in the calculation of fully
diluted earnings per share because their effect was anti-
dilutive.
8
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS
Power Marketing, Inc., a development stage company, was incorporated
under the laws of the State of Delaware on August 1, 1995. In connection with
its organization, the founder contributed $28,500 cash to initially capitalize
Power Marketing in exchange for 950,000 shares of common stock. On September
19, 1995, Power Marketing commenced a public offering in reliance upon Rule
504 of Regulation D, promulgated by the U.S. Securities & Exchange Commission
under the Securities Act of 1933. 50,000 shares of common stock were offered
and sold and the offering closed in October, 1995.
Power Marketing was initially formed to engage in the infomercial
business marketing hair products. This business was not successful and
operations were eventually discontinued. In November-December, 1999,
management of Power Marketing decided to engage in the business of wine
investing, and raised additional capital for this purpose. Power Marketing
sold 250,000 shares of common stock in a non public offering, at $.20 per
share, and raised gross proceeds of $50,000. This increased the total issued
and outstanding common stock to 1,250,000 shares.
In February, 2000, the Company filed a registration statement on Form
SB-2 with the U.S. Securities & Exchange Commission under the Securities Act
of 1933, to register the distribution and exercise of warrants. This
registration statement was declared effective on June 22, 2000. At that time
the Company became subject to the information requirements of the Securities
Exchange Act of 1934. The warrants were distributed as soon as practicable
after the date of the prospectus to common stockholders of record as of
September 30, 1999. No securities have yet been sold pursuant to exercise of
warrants in this offering.
PLAN OF OPERATIONS.
Management's plan of operation for the next twelve months is to continue
using existing capital and any funds from exercise of warrants in this
offering, which are its sources of liquidity, to acquire additional inventory
of select wines to hold for investment and resale, and also to provide general
working capital during the next twelve months. Under this plan of operations
Power Marketing has no specific capital commitments and the timing of capital
expenditures for wine investing will depend upon the receipt of additional
funds from warrant exercise or elsewhere, none of which is assured. The time
frame for revenue generating activities and cash flows is also not assured or
known and will depend upon the timing of sale of the wines, and receipt of the
proceeds from these sales. We do not presently anticipate that we will have to
raise additional funds within the next twelve months, but we have not
determined how long beyond that existing capital can satisfy any cash
requirements. While we do not anticipate any need to raise additional
capital, we believe Power Marketing will have the opportunity to invest
whatever additional funds may be received from the exercise of warrants in
purchasing additional vintages of investment grade wines. If we do not receive
sufficient funds to carry out the full plan of operations, Power Marketing
will modify operations and reduce the amount spent purchasing additional
vintages of investment grade wines, to the extent these funds are needed to
cover other business expenses, including the lease of storage space, other
overhead expenses, and fulfillment of our reporting obligations. We do not
anticipate any capital commitments for product research
<PAGE>
and development or significant purchases of plant or equipment, or any change
in the number of employees.
In November, 1999, we sold 250,000 shares of common stock in a non
public offering, at $.20 per share, and raised gross proceeds of $50,000. We
later purchased several different vintages of investment grade wines at a cost
of $37,741. We also purchased one hundred cases of investment grade champagne
from an affiliated company, at the affiliate's cost, for a note payable in the
amount of $115,830, due in 6 months with interest at 6% per annum. We intend,
but are not assured of being able, to repay the note upon sale of the wine
from sale proceeds. If that is not possible, management intends to loan Power
Marketing the money to repay the original note, until it can sell the wine. On
September 5, 2000, we settled the debt consisting of the note payable in the
amount of $115,830 plus accrued interest of $5,616 for $100,000. The gain on
settlement of $21,446 was accounted for as a contribution to capital because
of the related party nature of the note.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) None.
(b) None.
(c) See Part I, Item 1 (financial statements) and Item 2 (management's
discussion) for financial information and a discussion regarding
use of proceeds.
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
None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
POWER MARKETING, INC.
Date: November 13, 2000 by: /s/ Lynn Dixon
Lynn Dixon, President & Director
