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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 000-31099
Water Petroleum and Environmental Technologies Company
(Exact name of small business issuer as specified in its charter)
Nevada 04-3365594
(State or other Jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
5882 S. 900 E., Suite 202, Salt Lake City, Utah
(Address of principal executive offices)
801-269-9500
(Issuer's telephone number)
Not Applicable
(Former name, address and 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 preceding 12
months (or for such shorter period that the issuer was required to file
such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [ X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required
to be filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to
the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes
of common equity, as of October 6, 2000: 5,292,924 shares of common stock.
Transitional Small Business Format: Yes [ ] No [ X ]
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FORM 10-QSB
WATER PETROLEUM AND ENVIRONMENTAL TECHNOLOGIES COMPANY
INDEX
Page
PART I. Financial Information
Item I. Financial Statements (unaudited) 4
Balance Sheets - September 30, 2000 5
(unaudited) and December 31, 1999
Statements of Operations (unaudited) for 6
the Three and Nine Months Ended September
30, 2000 and 1999, and for the Period
from April 24, 1997 (Inception) to
September 30, 2000
Statements of Cash Flows (unaudited) for 7
the Three and Nine Months Ended September
30, 2000 and 1999, and from the Period
from April 24, 1997 (Inception) to
September 30, 2000
Notes to Financial Statements 8
Item 2. Management's Discussion and
Analysis of Financial Condition 11
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
(Inapplicable items have been omitted)
2
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PART I.
Financial Information
Item 1. Financial Statements (unaudited)
In the opinion of management, the accompanying unaudited financial
statements included in this Form 10-QSB reflect all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of the results of operations for the periods presented.
The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full
year.
3
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Board of Directors
Water Petroleum and Environmental Technologies Company
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have compiled the accompanying balance sheets of Water Petroleum and
Environmental Technologies Company (development stage Company) at
September 30, 2000 and December 31, 1999 and the related statements
of operations, stockholders= equity, and cash flows for the nine months
ended September 30, 2000 and the years ended December 31, 1999 and 1998
the period April 24, 1997 (date of inception) to September 30, 2000
in accordance with standards for Accounting and Review Services issued by
the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not
express an opinion or any other form of assurance on them.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company does not have the
working capital necessary for its planned activity, which raises substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are described in Note 7. These financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/
October 23, 2000
Salt Lake City, Utah
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WATER PETROLEUM AND ENVIRONMENTAL TECHNOLOGIES COMPANY
(Development Stage Company)
BALANCE SHEETS
September 30, 2000 and December 31, 1999
Sept 30, Dec 31,
2000 1999
ASSETS
CURRENT ASSETS
Cash $ - $ -
Total Current Assets $ - $ -
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 4,530 2,730
Total Current Liabilities 4,530 2,730
CONTINGENT LIABILITIES - Note 6 - -
STOCKHOLDERS' EQUITY
Preferred stock
25,000,000 shares authorized, at $0.0001 par value
none out - -
Common stock
75,000,000 shares authorized, at $0.0001 par value
5,292,924 shares issued and outstanding on September 30;
5,242,924 on December 31 529 524
Capital in excess of par value 321,614 321,119
Accumulated deficit during
development stage (326,673) (324,373)
Total Stockholders' Deficiency (4,530) (2,730)
$ - $ -
The accompanying notes are an integral part of these financial statements.
5
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WATER PETROLEUM AND ENVIRONMENTAL TECHNOLOGIES COMPANY
(Development Stage Company)
STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2000 and 1999 and the
Period April 24, 1997 (Date of Inception ) to September 30, 2000
Three Months Nine Months
Sept 30, Sept 30, Sept 30,Sept 30, Apr 24, 1997 to
2000 1999 2000 1999 Sept 30, 2000
REVENUES $ - $ - $ - $ - $ -
EXPENSES 2,300 17,338 2,300 22,223 554,264
NET LOSS -
before other income (2,300) (17,338) (2,300) (22,223) (554,264)
GAIN ON SALE OF ASSETS
- note 3 - 227,591 - 227,591 227,591
NET INCOME (LOSS) $(2,300)$ 210,253 $ (2,300) $ 205,368 $ (326,673)
NET LOSS PER COMMON
SHARE
Basic $ - $ .68 $ - $ .66
AVERAGE OUTSTANDING
SHARES
Basic 5,258,924 310,731 5,258,924 310,731
The accompanying notes are an integral part of these financial statements.
6
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WATER PETROLEUM AND ENVIRONMENTAL TECHNOLOGIES
COMPANY
(Development Stage Company)
STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2000 and 1999 and the
Period April 24, 1997 (Date of Inception) to September 30, 2000
Sept 30, Sept 30, April 24, 1997
2000 1999 to Sept 30, 2000
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit (loss) $ (2,300) $ 205,368 $(326,673)
Adjustments to reconcile net profit (loss) to net
cash provided by operating activities
Depreciation and amortization - 7,435 33,462
Bad debts - - 10,100
Issuance of common stock for
expenses 500 - 97,822
Changes in accounts payable 1,800 (10,525) 219,311
Gain on sale of assets - note 3 - (227,591) (227,591)
Net Cash Used by Operations - (25,313) (193,569)
CASH FLOWS FROM INVESTING
ACTIVITIES
- - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from loans - 13,625 25,880
Contributions to capital
- cash - related parties - - 13,625
Proceeds from issuance of
common stock - - 154,064
____ _____ _______
Net Increase (Decrease) in Cash - (11,688) -
Cash at Beginning of Period - 11,688 -
Cash at End of Period $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
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WATER PETROLEUM AND ENVIRONMENTAL TECHNOLOGIES COMPANY
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the state of Nevada on April
24, 1997 with 75,000,000 authorized common shares at a par value of $.0001
and 25,000,000 authorized preferred shares at a par value of $.0001. The Company
was organized for the purpose of developing a patent to be used in the field of
water petroleum separation.
On December 8, 1999 the shareholders of the Company approved a reverse stock
split to be effective December 20, 1999 of one share for 50 shares outstanding
and on June 15, 2000 a forward stock split of four shares for each outstanding
share. This report has been prepared showing after stock split shares from
inception.
The Company is in the development stage and became inactive after 1998.
During June and December 1997 the company completed two regulation D stock
offerings of 23,381 after stock split shares of its common capital stock for
cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On September 30, 2000, the Company had a cumulative net operating loss carry
forward of $326,673. The tax benefit from the loss carry forward has been fully
offset by a valuation reserve because the use of the future tax benefit is
doubtful since the Company has no operations. The loss carryforward will expire
beginning in years 2013 through 2021.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding, after the stock split. Diluted
net income (loss) per share amounts are computed using the weighted average
number of common shares and common equivalent shares outstanding as if shares
had been issued on theexercise of the preferred share rights unless the exercise
becomes antidilutive and then only the basic per share amounts are shown in the
report.
Financial instruments
The carrying amounts of financial instruments, including accounts payable, are
considered by management to be their estimated fair values.
8
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WATER PETROLEUM AND ENVIRONMENTAL TECHNOLOGIES COMPANY
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. SALE OF ASSETS
During September 1999 the Company sold its remaining assets to a related party
in exchange for the assumption of $175,695 of its liabilities. $34,376 f the
liabilities had not been satisfied by the purchaser at the report date and the
creditors may make claims against the Company if they are not settled or
satisfied in the future.
4. WARRANTS ISSUED
During December 1997 the Company issued 63,550 (pre split) shares for cash and
services. Each share included one A warrant and one B warrant exercisable within
60 months after October 15, 1997. Each A warrant can be converted to one share
of common stock at $2.25 per share. Each B warrant can be converted to one
share of common stock at $4.00 per share. No value was assigned to the warrants
on the issue date.
The Company can redeem the warrants after a 30 day notice at $.02 each.
9
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WATER PETROLEUM AND ENVIRONMENTAL TECHNOLOGIES COMPANY
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
5. RELATED PARTY TRANSACTIONS
Related parties have acquired 80% of the outstanding stock of the Company.
6. CONTINGENT LIABILITIES
See note 3
7. GOING CONCERN
The Company does not have sufficient working capital to pay its liabilities and
for any future planned activity.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through additional
equity funding and long term debt which will enable the Company to continue
operations for the next year.
10
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
Forward-Looking Statement Notice
When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," and similar expressions are
intended to identify forward-looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934 regarding events, conditions, and financial trends that may affect the
Company's future plans of operations, business strategy, operating results,
and financial position. Persons reviewing this report are cautioned that any
forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may differ materially
from those included within the forward-looking statements as a result of various
factors. Such factors are discussed under the "Item 6. Management's Discussion
and Analysis of Financial Condition or Plan of Operations," and also include
general economic factors and conditions that may directly or indirectly impact
the Company's financial condition or results of operations.
Three Month periods Ended September 30, 2000 and 1999
The Company had no revenue from continuing operations for the three-month period
ended September 30, 2000 and 1999.
General and administrative expenses for the three month periods ended September
30, 2000 and 1999, consisted of general corporate administration, legal and
professional expenses, and accounting and auditing costs. These expenses were
$2,300 and $17,338 for the three-month periods ended September 30, 2000 and
1999, respectively.
As a result of the foregoing factors, the Company realized a net loss of $2,300
for the three months ended September 30, 2000, as compared to a net gain of
$210,253 for the same period in 1999. The gain in 1999 is due to the sale of the
Company's assets.
Six Month periods Ended September 30, 2000 and 1999
The Company had no revenue from continuing operations for the nine-month period
ended September 30, 2000 and 1999.
General and administrative expenses for the nine month periods ended September
30, 2000 and 1999, consisted of general corporate administration, legal and
professional expenses, and accounting and auditing costs. These expenses were
$2,300 and $22,223 for the nine month periods ended September 30, 2000 and 1999,
respectively.
As a result of the foregoing factors, the Company realized a net loss of
$2,300 for the nine months ended September 30, 2000, as compared to a net gain
of $205,368 for the same period in 1999. The gain in 1999 is due to the sale of
the Company's assets.
11
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Liquidity and Capital Resources
At September 30, 2000 and at December 31, 1999, the Company had no working
capital. The Company believes that its current cash needs can be met with the
cash on hand or from loans from officers and directors for at least the next
twelve months.However, should the Company obtain a business opportunity, it may
be necessary to raise additional capital. This may be accomplished by selling
common stock of the Company or debt financing.
The Company's current operating plan is to (i) handle the administrative and
reporting requirements of a pubic company, and (ii) search for potential
businesses, products, technologies and companies for acquisition. There can be
no assurance that the Company would be successful in consummating any
acquisition on favorable terms or that it will be able to profitably manage any
business venture it acquires.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Shareholder action was taken pursuant to Nevada Revised Statutes 78.320 which
provides that any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior notice, if a
written consent setting forth the actions taken shall be signed by the holders
of outstanding shares having not less than the minimum number of votes that
would be necessary to authorize or take the action at a meeting at which all
shares entitled to vote thereon were present and voted.
On June 15, 2000, the Company received written consent from a majority of the
Company's shareholders to effect a one for four forward split of the Company's
issued and outstanding stock. Of the 1,310,731 shares outstanding and entitled
to vote, 1,080,000 shares consented to the action with an effective date of June
15, 2000.
Item 6. Exhibits and Reports on Form 8-K.
Reports on Form 8-K: No reports on Form 8-K were filed by the Company during
the quarter ended September 30, 2000.
Exhibits: Included only with the electronic filing of this report is the
Financial Data Schedule for the nine month period ended September 30, 2000
(Exhibit ref. No. 27).
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SIGNATURES
In accordance with the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
WATER PETROLEUM AND ENVIRONMENTAL
TECHNOLOGIES COMPANY
Date: October 26, 2000 By:/s/ Curtis Olsen
Curtis Olsen
President
Date: October 26, 2000 By: /s/ Allison Olsen
Allison Olsen
Secretary and Treasurer
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