U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
Amendment No. 1
General form for registration of securities of small business issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Power Fluids, Inc.
(Name of Small Business Issuer in its charter)
Florida
(State or other jurisdiction of incorporation or organization)
Applied For
(I.R.S. Employer Identification No.)
10125 W. Colonial Drive, Suite 212, Ocoee, Florida 34761
(Address of principal executive offices) (Zip Code)
(407) 822-3664
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act:
Securities to be registered under Section 12(g) of the Act: X
Title of each class to be so registered: Common Stock,
$0.001 par value per share
Name of each exchange on which each class is to be
registered:
National Quotation Bureau Pink Sheets
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
Part I
Item 1. Description of Business.............................................................................Page 3
Item 2. Plan of Operation...................................................................................Page 4
Item 3. Description of Property.............................................................................Page 6
Item 4. Security Ownership of Certain Beneficial
Owners and Management...............................................................................Page 7
Item 5. Directors, Executive Officers, Promoters
And Control Persons.................................................................................Page 7
Item 6. Executive Compensation..............................................................................Page 8
Item 7. Certain Relationships and Related Transactions......................................................Page 8
Item 8. Description of Securities...........................................................................Page 9
Part II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters........................................................Page 10
Item 2. Legal Proceedings..................................................................................Page 11
Item 3. Changes in and Disagreements with Accountants......................................................Page 11
Item 4. Recent Sales of Unregistered Securities............................................................Page 11
Item 5. Indemnification of Directors and Officers..........................................................Page 12
Part F/S
Financial Statements........................................................................................Page 13
Part III
Item 1. Index to Exhibits..................................................................................Page 14
Item 2. Description of Exhibits............................................................................Page 14
Signatures................................................................................................. Page 15
</TABLE>
2
<PAGE>
Item 1. Description of Business.
Business Development.
We were incorporated in the State of Florida on August 19, 1997. We have not
been involved in any bankruptcy, receivership or similar proceeding. We have not
been involved in any material reclassification, merger consolidation, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
Business of Issuer.
We are a development stage company. Our activities have been limited to capital
formation and corporate organizational matters. To date, we have conducted no
business, research or developmental activities. We have never had or offered any
specific products or services.
Upon our inception, we intended to develop and operate a lubricating processing
plant; however, we were unsuccessful in raising sufficient funds or obtaining
financing for to implement this business plan. Accordingly, in approximately
April 2000, we reformulated our business plan to be a distributor of lubricating
devices.
We have not developed any distribution methods for our products. We have no
sources and availability of raw materials or principal suppliers. We have no
agreements with suppliers, manufacturers, or distributors. Due to the
developmental nature of our business, there is no assurance that we may not
become dependent upon one or a few major customers; especially in the initial
stages of our development. However, we have no intention of becoming dependent
upon one or a few major customers.
Competition.
We will face competition from several fronts. Lubricating and pump technology
manufacturers are highly competitive and often sell their products directly to
the public or other industrial concerns. Many of the competitors have financial
resources of hundreds of millions of dollars and revenue sources that
continually fund research and development in the lubricating device area. These
companies not only carry a diversified product line, but also a broad service
network, thereby enhancing their reputation for customer service leading to
repeat business. These companies also have the competitive advantage of being
able to design and develop new and improved products, by maintaining
strategically located parts distribution centers and by promoting the efforts of
its sales force in the world market. Moreover, many of these companies have a
worldwide presence, leading to an enhanced reputation as a "big player" in thee
markets.
Intellectual Property.
We have no patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
3
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Government Regulation.
Our operations will be subject to extensive and ever-changing federal,
state and local laws and regulation by government agencies, such as the United
States Occupational Safety and Health Administration ("OSHA"). We are subject to
significant compliance burdens from this extensive regulatory framework that may
substantially increase our operational costs. OSHA to ensure that devices are
maintained and constructed in a safe manner regulates the lubrication device
industry in the U.S..
Research and development
We have spent no time or money on research or development since our inception.
Environmental Compliance
We do not expect that we will incur any costs or be responsible for any
environmental compliance because:
o We will act as a secondary distributor of lubricating devices
o We will not act in the capacity of a manufacturer of
lubricating devices
o Our business will not involve the emitting of environmental pollutants
Accordingly, we are not aware of any other environmental matters that would have
a material impact on our future recurring costs, capital expenditures or
mandated expenditures.
Employees.
We currently have only two employees. Our president and director, Lyle Meyers,
will be responsible for implementing our proposed plan of operations and
directing our operations. Our secretary and treasurer, Joseph Camillo, will be
responsible for back office operations.
Item 2. Plan of Operation.
We plan to distribute lubricating devices that may be used for lubrication,
maintenance, and cleaning purposes of various types of machinery and devices.
These lubricating devices may be used in the following areas:
o Residential
o Chemical
o Commercial
o Pulp and Paper Industries
o General industry
o Sewage and Drainage Uses
o Oil Refining
o Gas Processing
o Agricultural Uses
o Irrigation Uses
o Power Generation
4
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We now have no products that in inventory. Because we now have no distribution
agreements, we do not any products that we are prepared to distribute. We will
attempt to secure distribution agreements with lubricating device distributors
or lubricating manufacturers. Initially, we may distribute lubricating devices
on an order-by-order basis.
The products we will attempt to distribute either through a distribution
agreement or on order-by-order bases are as follows:
Power Remote Grease Pump - A portable solenoid battery powered high-pressure
pump designed to dispense lubricants for industrial usage. This device is
compatible for grease poured into a 35-pound, 5, gallon pail, or a 120-pound,
16-gallon drum. The device has complete control for various grease fittings.
This unit can be equipped with a hand control to lubricate multiple fittings on
large mobile equipment when neither AC current nor compressed air is available.
Typical users of this machine would include:
o Highway and Heavy Equipment Contractors
o Oil Lease Operators
o Drilling Contractors
o Steel Mills
o Paper Mills
o Creosoting Plants
o Brick Plants
o Lumber Mills
o Cement Plants
o Logging
o Excavating
o Mining
o Dredging
o Truck Fleet Operators
Deep Dunker Parts Cleaner - This device acts as a cleaner and is constructed for
single use 55-gallon open-top drums, utilizing two fabricated extended baskets
in the drums bottom and the other to nest parts in the upper portion. The unit
includes an AC (or DC) powered pump to circulate cleaning fluids through control
nozzle and free-flow nozzle. The cleaning fluids to be used in this cleaner
consist of conventional solvents or specially bred bacteria in water. The
bacteria devour the various debris.
Revitalizer Gun - This device dispenses lubricants to free up frozen grease
lines and inoperative or frozen mechanisms often caused by solidified grease,
contamination and/or dirty parts.
Blaster Gun - This device is used to clean clogged plumbing in older automated
grease systems and is capable of pressures of up to 15,000 per square inch.
5
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Electric Powered Lubricant Pump Packages - This device dispenses lubricants and
is an electrical unit that can be used anywhere the appropriate electrical power
source is available. It may be used in the field for mobile service work as well
as fixed in plant applications. Because this unit does not require compressed
air, it emits little noise. This pump is designed to operate directly from
standard household current. These units offer delivery of grease to hose reels
or automatic dispensing systems without the need for compressors and air lines.
Standard configurations are for standard sizes such as 35 pound pails or 120
pound drums. This product is intended to conserve energy while providing needed
lubrication.
Electric Power Remote Grease Kart - The Grease Kart offers:
o Mechanical reaction
o Elimination of energy waste
o Permits less expensive and cleaner grease condition
Used in conjunction with a 35 pound pail or 120 pound drum of heavy-duty,
multipurpose grease.
We may at a later date distribute lubricants and grease products; however, at
this time we have no specific product line in this product area.
We will attempt to purchase these products at wholesale prices from LubeCon
Systems, Inc. located in White Cloud, Michigan. We now have no distribution
agreements with LubeCon Systems, Inc. or with any distributors or manufacturers
of lubricating devices. Initially, we will seek relationships with manufactures
or distributors that will furnish us with lubricating devices. There is no
assurance that we will be able to secure distribution agreements or that we will
be able to obtain distribution agreements on favorable terms to our operations.
During our initial stages of development, we will complete orders only when we
have correspondence orders for such products. If demand for our distributed
products reaches a sufficient level, we will enter into more long-term
agreements and/or arrangements with manufacturers.
We now have no source of revenues to fund our operations. We do not have any
arrangements or proposed arrangements to finance our operations with any
financial institutions or public offerings. We plan to initially fund our
operations through capital contributions from our president.
Item 3. Description of Property.
We do not own or lease any real or personal property. We will utilize a 10,000
square foot facility owned by our president to distribute our products. The
facility is located in 201 N. Webster Street, White Cloud, Michigan 49349. The
facility is in excellent condition and does not require any capitol
improvements. Our president and director own this facility; and are furnishing
it to us at no charge. Office services will also be conducted from this location
and will be provided without charge to us by our president. We have not occupied
the facility premises to date but plan to occupy the facility in approximately
September 2000. We do not intend upon leasing any other portion of the facility
to any other business or person.
6
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Item 4. Security Ownership of Certain Beneficial Owners and Management.
As of June 6, 2000, there were 4,050,500 shares of our common stock, $.001 par
value outstanding. The following tabulates holdings of our shares by each person
who, subject to the above, at the date of this registration, holds of record or
is known by our management to own beneficially more than 5.0% of the common
shares and, in addition, by all of our directors and officers individually and
as a group. To the best of our knowledge, each named beneficial owner (1) has
sole voting and investment power with respect to the shares set forth opposite
his name.
<TABLE>
<CAPTION>
Security Ownership of Beneficial Owners
----------------------- --------------------------------------- ---------------------- ---------------- --------------
Title of Class Beneficial Owner Amount of Ownership Nature of Percent of
Ownership Class
----------------------- --------------------------------------- ---------------------- ---------------- --------------
<S> <C> <C> <C>
Common Stock Lyle G. Meyers 4,000,000 Shares Direct 99%
10125 West Colonial Drive
Suite 212
Ocoee, Florida 34761
----------------------- --------------------------------------- ---------------------- ---------------- --------------
Security Ownership of Management(2):
----------------------- --------------------------------------- ---------------------- ---------------- --------------
TOTAL Officers and Directors (1) 4,000,000 Shares Direct 99%
----------------------- --------------------------------------- ---------------------- ---------------- --------------
</TABLE>
(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, each person indicated
above has sole power to vote, or dispose or direct the disposition of all shares
beneficially owned. We are unaware of any shareholders whose voting rights would
be affected by unity property laws.
(2) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above tables and subject to
community property laws where applicable, we believe that each shareholder named
in the above table has sole or shared voting and investment power with respect
to the shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements that would result in a change of our
control.
Item 5. Directors, Executive Officers, Promoters and Control Persons. Mr. L.G.
Myers, 72 years of age, is our president and director. Mr. Myers has served as
Director of the Company since our inception. His current term as Director
expires, subject to re-election, on December 1, 2000. In 1976, Mr. Meyers formed
LubeCon Systems, Inc., a private company in the business of conveyor lubrication
7
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by offering an integrated program of lubricants, lubrication application
equipment and service. Mr. Meyers was responsible for directing the operations
of Lube Con Systems for approximately 25 years. Mr. Meyers owned 35% of LubeCon
Systems until he sold his interest in approximately February 1999 to Castrol Oil
Company. Mr. Myers now holds no directorships in any reporting companies.
Mr. Joseph Camillo, 53 years of age, is our secretary and director. From 1991 to
1996, Mr. Camillo was employed as a registered representative with Kober
Financial, a securities broker-dealer. From 1996 to present, Mr. Camillo has
been a consultant to private and public corporations. Mr. Camillo has served as
one or our Directors since inception. His current term as Director expires,
subject to re-election, on December 1, 2000. Mr. Camillo was Secretary of
Asphalt Paving International, Inc. from July 14, 1998 to present
Other than those mentioned above, we have no employees. We do not anticipate
hiring any additional employees until our revenues or demand for our products
reaches a sufficient level to mandate hiring additional employees. There are no
family relationships among our officers, directors, or nominees for such
positions. None of our directors, executive officers, promoters or control
persons has been involved in any legal proceedings material to the evaluation of
the ability or integrity of any of the aforementioned persons.
Item 6. Executive Compensation.
<TABLE>
<CAPTION>
----------------------------------------- ------------------------------ ---------------------------------------------
Summary Compensation Chart Annual Compensation Long Term Compensation
----------------------------------------- ------------------------------ ---------------------------------------------
Name & Position Year Salary Bonus Other Restricted Options L/Tip All
($) ($) ($) Stock Awards ($) ($) Other
---------------------------------- ------ --------- --------- ---------- ----------------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
L.G. Myers, President & Director 1998 0 0 0 0 0 0 0
1999 0 0 0 0 0 0 0
---------------------------------- ------ --------- --------- ---------- ----------------- --------- -------- --------
</TABLE>
Item 7. Certain Relationships and Related Transactions.
We have not and do not intend to enter into any transactions with our management
or any nominees for such positions. We have not and do not intend to enter into
any transactions with our beneficial owners. We are not a subsidiary of any
parent company. We issued 4,000,000 shares of our common stock to Lyle G.
Meyers, our founder, president and director for reimbursement of amounts paid by
him for legal services incurred in our formation and for services performed in
conjunction with the private placement of our common stock. The value assigned
to the stock issued is based on the fair value of the legal services provided to
us. (See Item 10. Recent Sales of Unregistered Securities). We have not entered
into any transactions with any promoters.
Our president/director and treasurer/director are involved in other business
activities and may, in the future, become involved in other business
opportunities. Such business activities may conflict with our activities. We
have not formulated a policy for the resolution of any such conflicts that may
arise.
8
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Item 8. Description of Securities.
Qualification.
The following statements constitute brief summaries of the material information
in our Articles of Incorporation and Bylaws, as amended.
Common Stock.
Our Articles of Incorporation authorize us to issue up to 50,000,000 common
shares, $.001 par value per common share. There are currently 4,050,500 shares
of common stock outstanding. All outstanding common shares are legally issued,
fully paid and non-assessable. We have no authorized or issued preferred shares.
Liquidation Rights.
Upon liquidation or dissolution, each outstanding common share will be entitled
to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
There are no limitations or restrictions upon the rights of the Board of
Directors to declare dividends, and we may pay dividends on our shares in cash,
property, or our own shares, except when we are insolvent or when the payment
thereof would render us insolvent subject to the provisions of the Florida
Statutes. We have not paid dividends to date, and it is not anticipated that any
dividends will be paid in the foreseeable future.
Voting Rights.
Holders of our common shares are entitled to cast one vote for each share held
at all shareholders meetings for all purposes.
Other Rights.
Common shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional common shares
in the event of a subsequent offering.
There is no other material rights of the common or preferred shareholders not
included herein. There is no provision in our charter or by-laws that would
delay, defer or prevent a change in control of our Company. We have not issued
debt securities.
9
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PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
On August 19, 1997, we were formed to operate a lubricating processing plant. On
December 29, 1997, we filed a Form D with the Securities and Exchange Commission
to fund our operations; however we only raised $10,300.
In March 20, 1998 we applied to get listed on the Over the Counter Bulletin
Board. On May 28, 1998 we were approved for a listing on the Over the Counter
Bulletin Board. During approximately the period from March to April 1999 our
market makers dropped the listing of our common stock. As a result, we lost our
listing on the bulletin board and the National Quotation Bureau's pink sheets.
On April 26, 2000, we were cleared for an unpriced quotation on the National
Quotation Service's pink sheets. Other than involvement by our initial market
maker, Solomon Gray Financial Corporation, of submitting our application for
listing on the National Quotation Bureau pink sheets; we have had no market
maker involvement in our securities. We have not had discussions or
understandings with any market maker and do not plan to encourage and request
any other parties to make a market in our common stock. There has been no bid or
ask for our securities since they have been quoted on the bulletin board and the
pink sheets. None of our common stock is subject to outstanding options or
warrants to purchase our shares. We currently have no shares of preferred stock
authorized or outstanding.
There are no shares of our common stock held by non-affiliates that are
available to be sold pursuant to Rule 144 under the Securities Act without any
volume limitations. There are 4,000,000 shares of our common stock held by Lyle
Myers, our President. There is no common equity of our Company being offered
subject to an employee benefit plan.
Blue Sky Considerations
We have no plans to sell our securities. Therefore, we now have no Blue Sky
considerations.
Penny Stock Considerations.
Broker-dealer practices in connection with transactions in penny stocks are
regulated by the penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
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the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares will likely be subject to such penny stock rules
and our shareholders will, in all likelihood, find it difficult to sell their
securities.
No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed, will be sustained. A shareholder
in all likelihood, therefore, will not be able to resell the securities referred
to herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged collateral for loans
unless a regular trading market develops. There are no plans, proposals,
arrangements or understandings with any person with regard to the development of
a trading market in any of our securities.
As of the date of this registration, we had 102 holders of record of our common
stock. There is currently one class of common stock outstanding.
Item 2. Legal Proceedings.
We are not a party to any pending legal proceeding and are not aware of any
contemplated legal proceeding by a governmental authority or any other person or
entity involving our Company.
Item 3. Changes in and Disagreements with Accountants.
During the two most recent fiscal years and the subsequent interim period, we
have had no disagreement, resignation or dismissal of our principal independent
accountant. Our principal accountant has been James E. Scheifley and Associates,
Certified Public Accountants.
Item 4. Recent Sales of Unregistered Securities.
On August 21, 1997, we issued 4,000,000 shares of our common stock to our
president, Lyle Myers, for reimbursement of amounts paid by him for legal
services incurred in our formation and for services performed in conjunction
with the completion of a private placement of our common stock. The value
assigned to the stock is based on the fair market of the legal services provided
to us.
During January and February 1998, we sold 50,500 shares of our common stock to a
limited group of investors for total cash of $10,100. These securities were
issued under an exemption from registration provided by Regulation D. Mr. Myers
had a prior relationship with each of our shareholders. In addition, each
investor had the knowledge and experience in financial and business matters to
evaluate the merits and risks of this prospective investment and therefore was
either accredited or sufficiently sophisticated to undertake such an investment.
Further, securities were not offered or sold to more than thirty-five
unaccredited investors
11
<PAGE>
The securities we issued to our president were issued under the exemption from
registration provided by Section 4(2) of the Act, as amended. We believed this
exemption was available because these issuances were transactions not involving
a public offering. We have never utilized an underwriter for an offering of our
securities. Other than the securities mentioned above, we have not issued or
sold any securities.
Item 5. Indemnification of Directors and Officers.
Our Articles of Incorporation provide that we shall have the power, in our
by-laws or in any resolution of our stockholders or directors, to undertake to
indemnify our officers and directors against any contingency or peril as may be
determined to be in our best interests, and in conjunction therewith, to
procure, at our expense, policies of insurance.
At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of a controlling person,
director or officer of our Company, which would affect his or her liability in
that capacity.
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Part F/S
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure The accounting firm of James E. Scheifley and Associates, P.C.,
Certified Public Accountants, audited our financial statements. Since inception
we have had no changes in or disagreements with our accountants.
13
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<TABLE>
<CAPTION>
PART III
INDEX TO EXHIBITS
------------- ------------------------------------------------------------------
Exhibit Description
------------- ------------------------------------------------------------------
<S> <C>
3.1 Articles of Incorporation*
------------- ------------------------------------------------------------------
3.2 Bylaws*
------------- ------------------------------------------------------------------
4 Share Certificate Specimen (To be Filed by Amendment)
------------- ------------------------------------------------------------------
27 Financial Data Schedule**
------------- ------------------------------------------------------------------
</TABLE>
* Previously filed.
** Filed herewith.
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In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
POWER FLUIDS INC.
Date: July 7, 2000
By: /s/ L. G. Meyers
-----------------
President
15
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Power Fluids, Inc.
(A Development Stage Company)
Balance Sheet
March 31, 2000
(Unaudited)
ASSETS
------
March 31,
Current assets: 2000
----
Cash $ 47
--------
Total current assets 47
Organization costs 96
--------
$ 143
========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Total current liabilities $ --
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized, 4,050,500 shares
issued and outstanding 4,050
Additional paid-in capital 8,850
(Deficit) accumulated during
development stage (12,757)
--------
143
--------
$ 143
========
See accompanying notes to financial statements.
F-1
<PAGE>
Power Fluids, Inc.
(A Development Stage Company)
Statements of Operations
Nine Months Ended March 31, 2000 and 1999 and
For the Period From Inception (August 19, 1997) to March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months Inception
Ended Ended To
March 31, March 31, March 31,
2000 1999 2000
---- ---- ----
<S> <C> <C> <C>
Operating expenses 522 385 12,757
----------- ----------- -----------
Net (loss) $ (522) $ (385) $ (12,757)
=========== =========== ===========
Per share information:
Basic (loss) per common share $ (0.00) $ (0.00) $ (0.00)
=========== =========== ===========
Weighted average shares outstanding 4,050,500 4,050,000 4,038,815
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
Power Fluids, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (August 19, 1997) to March 31, 2000
<TABLE>
<CAPTION>
Deficit
Additional Accumulated
Common Stock Paid -in During Develop-
ACTIVITY Shares Amount Capital ment Stage Total
------ ------ ------- --------- -----
<S> <C> <C> <C> <C> <C>
Balance at inception -- $ -- $ -- $ -- $ --
Shares issued to officer
for reimbursement of expenses
September @ $.00257 4,000,000 4,000 6,291 10,291
Shares issued for cash by private placement:
January @ $.20 38,000 38 7,562 7,600
February @ $.20 12,500 12 2,488 2,500
Less expenses of offering (10,141) (10,141)
Net (loss) for the period
ended June 30, 1998 -- -- -- (9,995) (9,995)
-------- ---------- ---------- ---------- ----------
Balance, June 30, 1998 4,050,500 4,050 6,200 (9,995) 255
Contribution of capital by officer 2,100 2,100
Net (loss) for the period
ended June 30, 1999 -- -- -- (2,240) (2,240)
--------- ---------- ---------- ---------- ----------
Balance, June 30, 1999 4,050,500 4,050 8,300 (12,235) 115
The following information is unaudited
Contribution of capital by officer 550 550
Net (loss) for the period
ended March 31, 2000 -- -- -- (522) (522)
--------- ---------- ---------- ---------- ----------
Balance, March 31, 2000 4,050,500 $ 4,050 $ 8,850 $ (12,757) $ 143
========= ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
Power Fluids, Inc.
(A Development Stage Company)
Statements of Cash Flows
Nine Months Ended March 31, 2000 and 1999 and
For the Period From Inception (August 19, 1997) to March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months Inception
Ended Ended To
March 31, March 31, March 31,
2000 1999 2000
-------- -------- --------
<S> <C> <C> <C>
Net income (loss) $ (522) $ (385) $(12,757)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Expenses paid by officer as capital contribution 450 385 2,550
Amortization 24 -- 54
Change in assets and liabilities:
(Decrease) in cash overdraft (5) -- --
-------- -------- --------
Total adjustments 469 385 2,604
Net cash (used in)
operating activities (53) -- (10,153)
Cash flows from financing activities:
Cash contributed by officer 100 -- 100
Common stock sold for cash -- -- 10,100
-------- -------- --------
Net cash provided by (used in)
financing activities 100 -- 10,200
-------- -------- --------
Increase (decrease) in cash 47 -- 47
Cash and cash equivalents,
beginning of period -- -- --
-------- -------- --------
Cash and cash equivalents,
end of period $ 47 $ -- $ 47
======== ======== ========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
Power Fluids, Inc.
Notes to Financial Statements
Basis of presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions incorporated in Regulation 10-SB of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments and accruals) considered necessary for a fair
presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's financial
statements for the year ended June 30, 1999.
Basic loss per share was computed using the weighted average number of common
shares outstanding.
During the nine months ended March 31, 2000, an officer of the Company
contributed an aggregate of $450 to the Company for management services and
office expenses. This amount has been accounted for as a contribution of capital
to the Company. Additionally, the officer advanced the Company $100 in cash as
an additional capital contribution.
F-5
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Power Fluids, Inc.
We have audited the balance sheet of Power Fluids, Inc. as of June 30, 1999 and
the related statements of operations, changes in stockholders' equity, and cash
flows for the years ended June 30, 1999 and 1998. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position Power Fluids, Inc. as of June 30,
1999 and the results of its operations and cash flows for the years ended June
30, 1999 and 1998, in conformity with generally accepted accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
November 16, 1999
F-6
<PAGE>
<TABLE>
<CAPTION>
Power Fluids, Inc.
(A Development Stage Company)
Balance Sheet
June 30, 1999
ASSETS
------ June 30,
Current assets: 1999
--------
<S> <C>
Cash $ --
--------
Total current assets --
Organization costs 120
--------
$ 120
========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Cash overdraft $ 5
--------
Total current liabilities 5
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized, 4,050,500 shares
issued and outstanding 4,050
Additional paid-in capital 8,300
(Deficit) accumulated during
development stage (12,235)
--------
115
--------
$ 120
========
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE>
<TABLE>
<CAPTION>
Power Fluids, Inc.
(A Development Stage Company)
Statements of Operations
Years Ended June 30, 1999 and 1998 and
For the Period From Inception (August 19, 1997) to June 30, 1999
Year Ended Year Ended Inception
Ended Ended To
June 30, June 30, June 30,
1999 1998 1999
----- ----- ----
<S> <C> <C> <C>
Operating expenses 2,240 9,995 12,235
----------- ----------- -----------
Net (loss) $ (2,240) $ (9,995) $ (12,235)
=========== =========== ===========
Per share information:
Basic (loss) per common share $ (0.00) $ (0.00) $ (0.00)
=========== =========== ===========
Weighted average shares outstanding 4,050,500 4,024,208 4,037,354
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-8
<PAGE>
<TABLE>
<CAPTION>
Power Fluids, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (August 19, 1997) to June 30, 1999
Deficit
Additional Accumulated
Common Stock Paid -in During Develop-
ACTIVITY Shares Amount Capital ment Stage Total
------ ------ ---------- -------------- -----
<S> <C> <C> <C> <C> <C>
Balance at inception -- $ -- $ -- $ -- $ --
Shares issued to officer
for reimbursement of expenses
September @ $.00257 4,000,000 4,000 6,291 10,291
Shares issued for cash by private placement:
January @ $.20 38,000 38 7,562 7,600
February @ $.20 12,500 12 2,488 2,500
Less expenses of offering (10,141) (10,141)
Net (loss) for the period
ended June 30, 1998 -- -- -- (9,995) (9,995)
---------- ---------- ---------- ---------- ----------
Balance, June 30, 1998 4,050,500 4,050 6,200 (9,995) 255
Contribution of capital by officer 2,100 2,100
Net (loss) for the period
ended June 30, 1999 -- -- -- (2,240) (2,240)
---------- ---------- ---------- ---------- ----------
Balance, June 30, 1999 4,050,500 $ 4,050 $ 8,300 $ (12,235) $ 115
========== ========== ========== ========== ==========
</TABLE>
F-9
<PAGE>
<TABLE>
<CAPTION>
Power Fluids, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended June 30, 1999 and 1998 and
For the Period From Inception (August 19, 1997) to June 30, 1999
Year Ended Year Ended Inception
Ended Ended To
June 30, June 30, June 30,
1999 1998 1999
----- ----- ----
<S> <C> <C> <C>
Net income (loss) $ (2,240) $ (9,995) $(12,235)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Expenses paid by officer as capital contribution 2,100 -- 2,100
Amortization 30 -- 30
Change in assets and liabilities:
Increase in cash overdraft 5 5
-------- -------- --------
Total adjustments 2,135 -- 2,135
Net cash (used in)
operating activities (105) (9,995) (10,100)
Cash flows from financing activities:
Common stock sold for cash -- 10,100 10,100
-------- -------- --------
Net cash provided by (used in)
financing activities -- 10,100 10,100
-------- -------- --------
Increase (decrease) in cash (105) 105 --
Cash and cash equivalents,
beginning of period 105 -- --
-------- -------- --------
Cash and cash equivalents,
end of period $ -- $ 105 $ --
======== ======== ========
</TABLE>
See accompanying notes to financial statements.
F-10
<PAGE>
<TABLE>
<CAPTION>
Power Fluids, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended June 30, 1999 and 1998 and
For the Period From Inception (August 19, 1997) to June 30, 1999
Year Ended Year Ended Inception
Ended Ended To
June 30, June 30, June 30,
1999 1998 1999
----- ----- ----
<S> <C> <C> <C>
Supplemental cash flow information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
</TABLE>
See accompanying notes to financial statements.
F-11
<PAGE>
Power Fluids, Inc.
Notes to Financial Statements
June 30, 1999
Note 1. Organization and Summary of Significant Accounting Policies.
------------------------------------------------------------
The Company was incorporated in Florida on August 19, 1997. The Company is in
its development stage and to date its activities have been limited to
organization and capital formation.
Loss per share:
Basic Earnings per Share ("EPS") is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price during
the period. Loss per share is unchanged on a diluted basis since the Company has
no potentially dilutive securities outstanding.
Intangible Assets:
The Company makes reviews for the impairment of long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Under SFAS No. 121,
an impairment loss would be recognized when estimated future cash flows expected
to result from the use of the asset and its eventual disposition is less than
its carrying amount. No such impairment losses have been identified by the
Company to date.
Cash:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates
F-12
<PAGE>
Fair value of financial instruments
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these financial
instruments approximates fair value because of their short-term maturities.
Financial instruments that potentially subject the Company to a concentration of
credit risk consist principally of cash. During the year the Company did not
maintain cash deposits at financial institutions in excess of the $100,000 limit
covered by the Federal Deposit Insurance Corporation. The Company does not hold
or issue financial instruments for trading purposes nor does it hold or issue
interest rate or leveraged derivative financial instruments
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996. Upon adoption of FAS 123, the Company continued to measure
compensation expense for its stock-based employee compensation plans using the
intrinsic value method prescribed by APB No. 25, Accounting for Stock Issued to
Employees. The Company did not pay any stock based compensation during any
period presented.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for all
items that are to be recognized under accounting standards as components of
comprehensive income to be reported in the financial statements. The statement
is effective for all periods beginning after December 15, 1997 and
reclassification financial statements for earlier periods will be required for
comparative purposes. To date, the Company has not engaged in transactions which
would result in any significant difference between its reported net loss and
comprehensive net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides
authoritative guidance on when internal-use software costs should be capitalized
and when these costs should be expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company has not
incurred costs to date that would require evaluation in accordance with the SOP.
Effective December 31, 1998, the Company adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information ("SFAS 131"). SFAS 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise. SFAS 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. SFAS 131 also establishes
standards for related disclosures about products and services, geographic areas,
and major customers.
F-13
<PAGE>
The adoption of SFAS 131 did not affect results of operations or financial
position. To date, the Company has not operated in any business activity.
Effective December 31, 1998, the Company adopted the provisions of SFAS No. 132,
Employers' Disclosures about Pensions and Other Post-retirement Benefits ("SFAS
132"). SFAS 132 supersedes the disclosure requirements in SFAS No. 87,
Employers' Accounting for Pensions, and SFAS No. 106, Employers' Accounting for
Post-retirement Benefits Other Than Pensions. The overall objective of SFAS 132
is to improve and standardize disclosures about pensions and other
post-retirement benefits and to make the required information more
understandable. The adoption of SFAS 132 did not affect results of operations or
financial position.
The Company has not initiated benefit plans to date which would require
disclosure under the statement.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), which
is required to be adopted in years beginning after June 15, 1999. SFAS 133 will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The Company has not yet
determined what the effect of SFAS 133 will be on earnings and the financial
position of the Company, however it believes that it has not to date engaged in
significant transactions encompassed by the statement.
Note 2. STOCKHOLDERS' EQUITY
The Company issued 4,000,000 shares of common stock to an officer of the Company
for reimbursement of amounts paid by the officer for legal services incurred in
the formation of the Company and for services performed in conjunction with the
completion of a private placement of the Company's common stock. The value
assigned to the stock issued is based on the fair value of the legal services
provided to the Company.
During January and February 1998 the Company sold 50,500 shares of its common
stock to a limited group of investors for cash aggregating $10,100.
F-14
<PAGE>
Note 3. INCOME TAXES
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classifications of the assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are not related
to an asset or liability are classified as current or non-current depending on
the periods in which the temporary differences are expected to reverse. The
deferred tax asset related to the operating loss carryforward has been fully
reserved.
The Company has not provided current or deferred income taxes for the period
presented due to a loss from operations.
The Company currently has a net operating loss carryforward aggregating
approximately $12,000 that expires beginning in the year 2013. The tax benefit
of the loss, estimated to be approximately $1,800, has been fully reserved as
its realization in future periods is not assured as it is more likely than not
that future earnings will not be available to utilize the loss carryforward.
Note 3. Related Party Transactions.
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer of the Company and certain
expenses of the Company have been paid for by the officer. Such costs and the
fair value of the services provided to the Company for the period ended June 30,
1999 amounted to an aggregate of $2,100 and has been accounted for as a capital
contribution by the Company. The officers and directors of the Company are
involved in other business activities and may become involved in other business
activities in the future. Such business activities may conflict with the
activities of the Company. The Company has not formulated a policy for the
resolution of any such conflicts that may arise.
To date, the Company has engaged in no significant operations and has minimal
expected operating costs forecasted for its next fiscal year. The Company's
officers plan to continue the support the limited operations of the Company as
needed.
F-15
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
------------- ------------------------------------------------------------------
Exhibit Description
------------- ------------------------------------------------------------------
<S> <C>
3.1 Articles of Incorporation*
------------- ------------------------------------------------------------------
3.2 Bylaws*
------------- ------------------------------------------------------------------
4 Share Certificate Specimen (To be Filed by Amendment)
------------- ------------------------------------------------------------------
27 Financial Data Schedule**
------------- ------------------------------------------------------------------
</TABLE>
* Previously filed.
** Filed herewith.
