<PAGE> 1
U.S. 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 quarterly period ended March 31, 1999, or
[ ] Transition report under section 13 or 15(d) of the 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.)
4424 Skylane Avenue Riverton, Wyoming 82501
(Address of Principal Executive Offices)
(307) 856-1577
(Issuer'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 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 May 10, 1999, the Issuer had 5,870,000 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 MARCH 31, 1999
Table of Contents
<TABLE>
<CAPTION>
Page
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PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Balance Sheet at March 31, 1999 (unaudited)
Statements of Operations for the three months
ended March 31, 1999 and 1998 (unaudited)
Statements of Cash Flows for the three months
ended March 31, 1999 and 1998 (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operations
General
Results of Operations
Liquidity and Capital Resources
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature
Exhibit Index
</TABLE>
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QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
-------------- ---------------
(unaudited) (unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 4,039 $ 25,791
PROPERTY AND EQUIPMENT
Oil & Gas Working Interest $ 2,000 $ 2,000
OTHER ASSETS (Note 1)
Organization costs - net $ 3,750 $ 4,125
-------- --------
Total Assets $ 9,789 $ 31,916
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES 0 0
STOCKHOLDERS EQUITY (Notes 1 and 2)
Common Stock - $0.00001 par value,
50,000,000 shares authorized
5,870,000 shares issued and outstanding $ 58 $ 10
Additional paid in capital $ 47,312 $ 42,490
Retained earnings (deficit) $(37,581) $(10,584)
-------- --------
Total Liabilities and Stockholders' equity $ 9,789 $ 31,916
======== ========
</TABLE>
See accompanying notes to financial statements
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QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1999 1998
----------- -----------
<S> <C> <C>
INCOME
None -- --
OPERATING EXPENSES
General and
Administrative Expenses $ 26,622 $ 128
Amortization $ 375 $ 375
----------- -----------
NET (LOSS) $ (26,247) $ (503)
=========== ===========
NET (LOSS) PER SHARE $ (0.0045) $ (0.0005)
=========== ===========
WEIGHTED AVERAGE
NUMBER SHARES
OUTSTANDING 1,067,639 1,000,000
=========== ===========
</TABLE>
The Company is in the development stage and has not commenced operations.
See accompanying notes to financial statements.
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QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
3 Months 3 Months
Ended Ended
March 31, 1999 March 31, 1998
<S> <C> <C>
CASH FLOW PROVIDED (USED)
IN OPERATIONS
Net loss $(26,247) $ (503)
Adjustments to reconcile net income to net cash 375 375
provided by operating activities amortization
-------- --------
$ 25,872 $ (128)
CASH FLOW PROVIDED (USED) IN INVESTING ACTIVITIES -- --
None
CASH FLOW PROVIDED (USED) IN FINANCING ACTIVITIES $ 4,870
NET (DECREASE) IN CASH $(21,377) $ (128)
CASH BEGINNING OF PERIOD $ 27,983 $ 27,983
-------- --------
CASH END OF PERIOD $ 4,039 $ 27,855
======== ========
INTEREST PAID -- --
======== ========
INCOME TAXES PAID -- --
======== ========
</TABLE>
See accompanying notes to financial statements
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QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
Notes to Financial Statements
1. BASIS OF PRESENTATION
The accompanying financial information is unaudited, but, in the opinion of
management, reflects all adjustments (which include 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 been 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 three month period
ended March 31, 1998 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 been largely inactive
and has conducted no significant operations. The Company owns one gas lease.
Because of the speculative nature of the Company, there are significant risks
which are summarized as follows:
Newly formed company with no operating history and minimal assets.
Limited funds available for exploration and development.
Conflict-of-interest, as all employees have other part-time or full-time
employment.
The Company is considered to be in the development stage as defined in
Statement of Financial Accounting Standards No. 7. There have been no
operations since incorporation.
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QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
Notes to Financial Statements
Summary of Significant Accounting Principles:
Registration costs included fee payments for legal expenses relating to the
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:
The Common Stock offered and sold 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.
4. OFFICES AND EMPLOYEES
The Company's office is located at 4424 Skylane Avenue, Riverton, Wyoming.
The Company currently has no employees other than certain of its officers and
directors and does not anticipate a need to engage any full-time employees so
long as it is seeking and evaluating business opportunities. The Company has
no retirement, pension, profit sharing or insurance plans covering its
officers and directors.
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QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
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 Company's liquidity, capital resources and results of
operations.
RESULTS OF OPERATIONS
There were no revenues or operations for the periods ended March 31, 1999 and
1998. Expenses consisted of administration and accounting fees.
LIQUIDITY AND CAPITAL RESOURCES
The Company is a development stage company as defined in Statement of Financial
Accounting Standards No. 7.
Current assets at March 31, 1999 and at December 31, 1998 were $4,039 and
$25,791, respectively, and consisted entirely of cash.
There were no liabilities at March 31, 1999.
On April 29, 1999, the Company entered into a letter of intent with the
shareholders of IPSL, Inc. ("IPSL") pursuant to which the Company proposed to
issue 1,500,000 shares of its common stock in exchange for all of the issued and
outstanding shares of common stock of IPSL. The parties intend to consummate the
transaction, subject to drafting and negotiating definitive documentation, by
May 30, 1999.
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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:
10.1 Letter of Intent by and between the
Registrant and IPSL, Inc., dated April
29, 1999.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
On April 19, 1999, the Registrant filed a Form
8-K pursuant to which the Registrant reported a
change in control pursuant to Item 1 of Form 8-K
which occurred pursuant to the terms and provisions
of a Stock Purchase Agreement dated as of March 26,
1999. In connection therewith, the Registrant sold
4,870,000 shares of its Common Stock to the
purchasers identified.
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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: May 14, 1999
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EXHIBIT 10
LETTER OF INTENT BETWEEN
IPSL, INC. AND QUINTESSENCE OIL CORPORATION
Quintessence Oil Company a Wyoming corporation, hereinafter referred to
as "QTSN", the shareholders of IPSL, Inc. who collectively the "SHAREHOLDERS" of
IPSL, Inc. ("IPSL"), agree as follows:
ARTICLE 1. PROPOSED PLAN OF REORGANIZATION
PLAN TO BE ADOPTED
Section 1.01 The plan if adopted will be a Plan of Reorganization of
QTSN and IPSL, pursuant to the provisions of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, is adopted as follows:
(a) SHAREHOLDERS will transfer to QTSN one hundred percent (100%) of the
issued and outstanding shares of the common stock of IPSL as set forth in
Exhibit "A" attached hereto.
(b) In exchange for the shares transferred by SHAREHOLDERS, QTSN will
issue and cause to be delivered to SHAREHOLDERS 1,500,000 shares of common
stock, par value $0.00001, of QTSN.
CLOSING DATE
Section 1.02 Subject to the conditions precedent set forth herein, the
parties shall consummate the transaction and the plan of reorganization on or
prior to May 30, 1999, or at such other time as selected by QTSN but no later
than June 15, 1999 without the mutual consent of the parties hereto.
ARTICLE 2. WARRANTIES AND REPRESENTATIONS
OF QUINTESSENCE OIL, INC.
Section 2.01 QUINTESSENCE OIL is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Wyoming.
Section 2.02 QUINTESSENCE OIL will obtain the corporate power and
authority to enter into this Plan and Agreement of Reorganization.
Section 2.03 QUINTESSENCE OIL will have at least 1,500,000 shares of
common stock authorized but unissued as of the date of this transaction.
Section 2.04 There will be no liens, pledges, chattel mortgages, or
other encumbrances of any kind against the 1,500,000 shares of common stock to
be issued by QUINTESSENCE OIL pursuant to this transaction.
IPSL and QTSN, 4-03-99
Page 1 of 9
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LETTER OF INTENT BETWEEN
IPSL, INC. AND QUINTESSENCE OIL CORPORATION
ARTICLE 3. THE FOLLOWING WARRANTIES AND REPRESENTATIONS OF IPSL INC. AND THE
SHAREHOLDERS OF IPSL INC. WILL BE MADE AS PART OF THE CLOSING.
Section 3.01 IPSL is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada.
Section 3.02 IPSL has the corporate power and authority to enter into
this Plan and Agreement of Reorganization.
Section 3.03 By executing this Agreement and Plan of Reorganization,
IPSL is acting solely for its own behalf.
Section 3.04 SHAREHOLDERS are acquiring the 1,500,000 shares of common
stock of QUINTESSENCE OIL for their own behalf and not with a view to distribute
or transfer the shares to a third party.
(a) Seller will not, directly or indirectly, offer or sell,
transfer or otherwise dispose of all or any portion of the
Shares, or solicit any offer to buy, purchase or otherwise
acquire all or any portion of the Shares, after the Closing
Date, unless the Shares are duly registered under the Securities
Act of 1933, as amended (the "Act") and under applicable state
securities laws, or such proposed offer, sale, transfer or other
disposition of the Shares is exempt from the registration
requirements of the Act and applicable state securities laws.
(b) Certificates representing the Shares may bear a legend in
form and substance satisfactory to counsel for Buyer referring
to the investment commitment contained in this Agreement, that
the Shares have not been registered under the Act or any state
securities laws, and that no transfer of the Shares may be made
unless the Shares are registered under the Act or an exemption
from such registration is available.
(c) Seller will provide Buyer with all information relating to
Seller, including complete details as to their proposed
disposition of the Shares, required in connection with any
Registration Statement filed pursuant to this Agreement and any
amendments thereto or required by the Securities and Exchange
Commission.
IPSL and QTSN, 4-03-99
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LETTER OF INTENT BETWEEN
IPSL, INC. AND QUINTESSENCE OIL CORPORATION
Section 3.05 The assets of QUINTESSENCE OIL are sufficient to permit it
to purchase the IPSL shares in accordance with the terms of this Agreement;
Section 3.06 SHAREHOLDERS and IPSL will have had access to the extent it
deems necessary to the financial information of QUINTESSENCE OIL sufficient to
permit it to evaluate the business of QUINTESSENCE OIL and the merits and risks
associated with the purchase of the QUINTESSENCE OIL shares described herein;
ARTICLE 4. COVENANTS OF QUINTESSENCE OIL, INC.
Section 4.01 At the Closing, QUINTESSENCE OIL shall undertake to deliver
to IPSL certificates for the QUINTESSENCE OIL shares to be issued;
Section 4.02 From the date of execution of this Agreement, QUINTESSENCE
OIL shall take no action that would encumber or restrict the QUINTESSENCE OIL
shares to be issued;
Section 4.03 QUINTESSENCE OIL will file all disclosure documents
required by state and federal securities law upon the execution and consummation
of this Agreement.
ARTICLE 5. COVENANTS OF QUINTESSENCE OIL, INC.
Section 5.01 QUINTESSENCE OIL will assist IPSL in filing all disclosure
documents required by state and federal securities law upon the execution and
consummation of this Agreement.
ARTICLE 6. CONDUCT OF THE BUSINESS OF
QUINTESSENCE OIL INC. PENDING CLOSING
Section 6.01 (a) QUINTESSENCE OIL will afford SHAREHOLDERS and
accredited representatives, from the date hereof until consummation of the plan
of reorganization, full access during normal business hours to all books,
accounts, contracts, commitments, and records of every kind of QUINTESSENCE OIL
in order that SHAREHOLDERS may have full opportunity to investigate the affairs
of QUINTESSENCE OIL.
IPSL and QTSN, 4-03-99
Page 3 of 9
<PAGE> 4
LETTER OF INTENT BETWEEN
IPSL, INC. AND QUINTESSENCE OIL CORPORATION
(b) SHAREHOLDERS will use any information so secured only
for his own purposes in connection with the consummation of the transaction
contemplated hereby and will not divulge the information to any persons not
entitled thereto.
ARTICLE 7. CONDUCT OF BUSINESS OF
IPSL PENDING CLOSING
Section 7.01 (a) SHAREHOLDERS will cause IPSL to afford the officers and
accredited representatives of QUINTESSENCE OIL, from the date hereof until
consummation of the plan of reorganization, full IPSL during normal business
hours to all books, accounts, contracts, commitments, and records of every kind
of IPSL in order that QUINTESSENCE OIL may have full opportunity to make such
investigation as it shall desire to make of, and to keep itself informed with
respect to, the affairs of IPSL.
(b) QUINTESSENCE OIL will use any information so secured
only for its own purposes in connection with the consummation of the transaction
contemplated hereby and will not divulge the information to any persons not
entitled thereto.
Section 7.02 SHAREHOLDERS will cause IPSL to carry on its business in
substantially the same manner as heretofore.
ARTICLE 10. CONSUMMATION OF TRANSACTION
Section 10.01 SHAREHOLDERS will deliver to QUINTESSENCE OIL, at the
closing, certificates representing one hundred percent (100%) of the issued and
outstanding shares of stock of IPSL. See Section 12 regarding irrevocable
requirement of the Shareholders of IPSL to close.
Section 10.02 QUINTESSENCE OIL shall deliver to SHAREHOLDERS, on the
closing date, certificates representing 1,500,000 shares of common stock of
QUINTESSENCE OIL.
Section 10.03 QUINTESSENCE OIL shall pay its own expenses, and
SHAREHOLDERS shall pay their own expenses and costs incident to the preparation
of this agreement and to the consummation of the plan of reorganization.
ARTICLE 11. INTERPRETATION AND ENFORCEMENT
IPSL and QTSN, 4-03-99
Page 4 of 9
<PAGE> 5
LETTER OF INTENT BETWEEN
IPSL, INC. AND QUINTESSENCE OIL CORPORATION
Section 11.01 Any notice or other communication required or permitted
hereunder shall be deemed to be properly given when deposited in the United
States mails for transmittal by certified or registered mail, postage prepaid.
Section 11.02 (a) Except as limited by the provisions of subsection (b)
of this Section, this Agreement shall be binding upon and inure to the benefit
of the respective successors and assigns of the parties, as well as to the
parties.
(b) Any assignment of this agreement or the rights
hereunder of any of the parties, without the written consent of the other
parties hereto, shall be void.
Section 11.03 This instrument and any exhibits hereto contain the entire
agreement between the parties with respect to the transaction contemplated
hereby. It may be executed in any number of counterparts, each of which shall be
deemed an original, but such counterparts together constitute only one and the
same instrument.
Section 11.04 The validity, interpretation, and performance of this
agreement shall be controlled by and construed under the laws of the State of
California.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of
the dates set forth below.
QUINTESSENCE OIL COMPANY:
By: ___________________________ Dated: ________________________
Raymond Wedel, President
IPSL, Inc.
By: ____________________________ Dated: _________________________
Michel Attias, President
IPSL and QTSN, 4-03-99
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LETTER OF INTENT BETWEEN
IPSL, INC. AND QUINTESSENCE OIL CORPORATION
EXHIBIT "A"
SHAREHOLDERS OF IPSL, INC.:
Shares Owned: ______________________________
By: _________________________________ Dated:___________________
Shares Owned: ______________________________
By: _________________________________ Dated:___________________
Shares Owned: ______________________________
By: _________________________________ Dated:___________________
Shares Owned: ______________________________
By: _________________________________ Dated:___________________
Shares Owned: ______________________________
By: _________________________________ Dated:___________________
IPSL and QTSN, 4-03-99
Page 6 of 9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1999
<CASH> 4,039
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,039
<PP&E> 2,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,789
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 58
<OTHER-SE> 9,731
<TOTAL-LIABILITY-AND-EQUITY> 9,789
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 26,247
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (26,247)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,247)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,247)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
