<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
X Quarterly report under section 13 or 15(d) of the Securities Exchange
- ----- Act of 1934 for the quarterly period ended June 30, 1999 or
Transition report under section 13 or 15(d) of the Securities Exchange
- ----- Act for the transition period from _______ to _______
Commission file number: 000-21811
QUINTESSENCE OIL COMPANY
(Exact Name of Small Business Issuer as Specified In Its Charter)
Wyoming 83-0317306
(State of Incorporation) (I.R.S. Employer Identification No.)
2932 Thorne Drive, Elkhart, Indiana 46514
(Address of Principal Executive Offices)
(219) 264-2628
(Issuer's Telephone Number, Including Area Code)
4424 Skylane Avenue, Riverton, Wyoming 82501
(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 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
---- ----
As of June 30, 1999, the Issuer had 7,370,000 shares of Common Stock, par value
$0.00001, outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
---- ----
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QUINTESSENCE OIL COMPANY
FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
Table of Contents
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet at June 30, 1999 (unaudited) 3
Statements of Operations for the six months
ended June 30, 1999 and 1998 (unaudited) 4
Statements of Cash Flows for the six months
ended June 30, 1999 and 19998 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis or Plan of Operations 8
General 8
Results of Operations 8
Liquidity and Capital Resources 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Change in Securities 9
Item 3. Defaults upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signature 10
Exhibit Index
2
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<TABLE>
QUINTESSENCE OIL COMPANY
A WYOMING CORPORATION
BALANCE SHEET
<CAPTION>
ASSETS
June 30, December 31,
1999 1998
(unaudited) (audited)
-------------- --------------
<S> <C> <C>
CURRENT ASSETS
Cash & Marketable Securities $ 196,793 $ 25,791
Accounts Receivable 876 -0-
Inventory 1,035,963 -0-
PROPERTY AND EQUIPMENT 11,983,918 2,000
OTHER ASSETS (Note 2) 3,375 4,125
Organization costs - net
-------------- --------------
Total Assets $ 13,220,925 $ 31,916
============== ==============
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ 43,806 $ -0-
Accrued Expenses 30,089 -0-
Notes Payable 4,000 -0-
OTHER LIABILITIES 120,000 -0-
STOCKHOLDERS EQUITY (Notes 1,2 and 3)
Common Stock - $0.00001 per value,
7,370,000 shares issued and outstanding 74 10
Additional paid in capital 13,172,296 42,490
Retained earnings (deficit) (149,340) (10,584)
-------------- --------------
Total Liabilities and Stockholders' Equity $ 13,220,925 $ 31,916
============== ==============
</TABLE>
See accompanying notes to financial statements
3
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<TABLE>
QUINTESSENCE OIL COMPANY
A WYOMING CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30 June 30 June 30 June 30
1999 1998 1999 1998
------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCOME $ 86,537 $ -0- $ 86,537 $ -0-
OPERATING EXPENSES
General & Administrative Expenses 133,223 1,078 159,845 1,206
Depreciation & Amortization 66,643 375 67,018 750
NET (LOSS) (113,329) (1,453) (140,326) (1,956)
NET (LOSS) PER SHARE (0.018) (0.001) (0.022) (0.002)
WEIGHTED AVERAGE
NUMBER SHARES
OUTSTANDING 6,370,000 1,000,000 6,370,000 1,000,000
</TABLE>
The Company commenced operations May 28, 1999.
See accompanying notes to financial statements.
4
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<TABLE>
QUINTESSENCE OIL COMPANY
A WYOMING CORPORATION
STATEMENT OF CASH FLOW
(unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
CASH FLOW PROVIDED (USED)
IN OPERATIONS
Net loss (140,326) (1,956)
Adjustments to reconcile net income to net cash
provided by operating activities 109,848 750
------------- -------------
(30,458) (1,206)
CASH FLOW PROVIDED (USED) IN
INVESTING ACTIVITIES
None
CASH FLOW PROVIDED (USED) IN
FINANCING ACTIVITIES 8,870 -0-
NET (DECREASE) IN CASH (21,588) (1,206)
CASH BEGINNING OF PERIOD 25,791 27,983
------------- -------------
CASH END OF PERIOD 4,203 26,777
------------- -------------
INTEREST PAID
INCOME TAXES PAID
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
QUINTESSENCE OIL COMPANY
A WYOMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying financial information is unaudited, but, in the opinion of the
management, reflects all adjustments (which included only normally recurring
adjustments) necessary to present fairly the Company's financial position,
operating results and cash flows for the periods presented. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have bee condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. The financial information should be read in conjunction with the
audited financial statements and notes thereto for the year ended December 31,
1998 included in the Company's Annual Report on Form 10-KSB filed with the
Securities and Exchange Commission. The results of operations for the six month
period ended June 30, 1999 are not necessarily indicative of the results to be
expected for the full year.
2. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization: Quintessence Oil Company was incorporated on June 26, 1996. Under
the laws of the State of Wyoming. The Company has adopted a year ending of
December 31.
The Company was organized to engage in the development, production and sale of
oil and gas. Since its inception, the Company has bee largely inactive and has
conducted no significant operations. The Company does not own any operating oil
and gas leases.
Because of the speculative nature of the Company, there are significant risks
which are summarized as follows:
Newly formed company with no operating history.
Limited funds available for development and production.
The Company was considered to be in the development stage as defined in
Statement of Financial Accounting Standards No. 7, prior to May 28, 1999. There
had been no operations since incorporation. On May 28th, the company entered the
transportation technology industry where its core business is the manufacturing
and marketing of marine pleasure boat engines.
6
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QUINTESSENCE OIL COMPANY
A WYOMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
Summary of Significant Accounting Principles:
---------------------------------------------
Registration costs included fee payments for legal expenses relating to
public stock offering. The offering was successful, and $7,500 of legal
fees were charged to additional paid-capital.
The Company amortizes organization costs over 60 months using the straight
line method.
3. STOCKHOLDERS' EQUITY
Public Stock Offering:
----------------------
On July 2, 1996 and October 9, 1996, the Company issued a total of 1,000,000
shares of common stock pursuant to an exemption from registration contained in
Regulation 504 of the Securities Act of 1933, as amended, (the "Act").
Regulation 504 provides that the Company can sell securities with an aggregate
offering price not exceeding $1,000,000 within a twelve (12) month period
without registration with the Securities and Exchange Commission.
On March 25th, 1999, the Company sold 4,870,000 shares in a private placement at
$0.001 per share.
On May 28th, 1999, the company issued 1,500,000 shares of its common stock in
exchange for 100% of the outstanding stock of IPSL, Inc. The acquisition of IPSL
brought to the company the rights, patents, tooling, designs, machinery,
inventory and facilities to commence production of the Torque V-12 Engine. The
engine, designed especially for the pleasure boating industry, is a 14-liter, 90
degree, sequentially fuel injected, advanced V-12, all aluminum, light weight,
powerful engine that delivers 900 horsepower and 1100 foot pounds of torque on
pump gasoline.
4. OFFICES AND EMPLOYEES
The Company's office is located at 2932 Thorne Drive, Elkhart, Indiana. The
Company currently has 11 employees other than certain of its officers and
directors and anticipates a need to engage more full-time employees.
7
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QUINTESSENCE OIL COMPANY
A WYOMING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following is Management's discussion and analysis of significant factors
which have affected the Registrant's liquidity, capital resources and results of
operations.
RESULTS OF OPERATIONS
There were no revenues or operations for the periods ended June 30, 1998 and
minimal revenues or operations for the period ended June 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
Current assets at June 30, 1999 and 1998 were $1,233,632 and $26,777
respectively.
There were $197,895 of current liabilities at June 30, 1999 and no
liabilities at June 30, 1998
8
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
------------------
None.
Item 2. Changes in Securities.
----------------------
None.
Item 3. Defaults Upon Senior Securities.
--------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
None.
Item 5. Other Information.
------------------
None.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K.
On June 10th, 1999, the registrant filed a Form 8-K pursuant
to which the registrant reported pursuant to item 5, the
issuance of 1,500,000 shares of its common stock in exchange
for 100% of the outstanding common stock of IPSL, Inc.,
pursuant to terms and provisions of a plan and agreement of
reorganization dated May 21, 1999.
9
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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.
QUINTESSENCE OIL COMPANY
By: /S/Raymond B. Wedel, Jr.
--------------------------------
Name: Raymond B. Wedel, Jr.
Title: President
Date: August 13, 1999
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 196,793
<SECURITIES> 0
<RECEIVABLES> 876
<ALLOWANCES> 0
<INVENTORY> 1,035,963
<CURRENT-ASSETS> 1,233,632
<PP&E> 11,983,918
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,220,925
<CURRENT-LIABILITIES> 77,895
<BONDS> 0
0
0
<COMMON> 74
<OTHER-SE> 13,022,956
<TOTAL-LIABILITY-AND-EQUITY> 13,220,925
<SALES> 86,537
<TOTAL-REVENUES> 86,537
<CGS> 0
<TOTAL-COSTS> 83,002
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (140,326)
<INCOME-TAX> 0
<INCOME-CONTINUING> (140,326)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (140,326)
<EPS-BASIC> (.022)
<EPS-DILUTED> (.022)
</TABLE>
