<PAGE> 1
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 Quarter Ended: September 30, 2000
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period from _____________ to ____________
Commission File Number 0-25873
-------
POWERBALL INTERNATIONAL, INC.
----------------------------------------------
(Name of Small Business Issuer in its charter)
Utah 84-1431425
------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
7430 South Wasatch Blvd., No. A-2, Salt Lake City, Utah 84121
---------------------------------------------------------------
(Address of principal executive offices and Zip Code)
(801) 947-1455
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, Par Value $0.001 3,216,500
-------------------------------- ----------------------------
Title of Class Number of Shares Outstanding
as of September 30, 2000
<PAGE>
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
POWERBALL INTERNATIONAL, INC. & SUBSIDIARY
(Formerly NATEX CORPORATION)
FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position
and results of operations for the periods presented have been made. These
financial statements should be read in conjunction with the accompanying
notes, and with the historical financial information of the Company.
<PAGE>
<PAGE> 3
POWERBALL INTERNATIONAL, INC. & SUBSIDIARY
(Formerly NATEX CORPORATION)
(A Development Stage Company)
Balance Sheet
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 427,654 $ 79,190
Accounts receivable-stockholder 6,294 -
Inventory 1,547 -
Stock subscription receivable-
related party - 50,000
----------- -----------
TOTAL CURRENT ASSETS 435,495 129,190
----------- -----------
Fixed assets net of depreciation 22,169 -
Patents and license agreements net
of amortization 16,100 -
Receivable-related party - 472,000
----------- -----------
TOTAL OTHER ASSETS 38,269 472,000
----------- -----------
TOTAL ASSETS $ 473,764 $ 601,190
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Account payable $ - $ 807
Accrued liabilities 384 -
Other liabilities 60,000 10,000
----------- -----------
TOTAL CURRENT LIABILITIES 60,384 10,807
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $ .001 par value;
authorized 25,000,000 shares
Issued and outstanding 3,216,500
and 1,399,000 shares in
2000 and 1999, respectively 3,216 1,399
Additional paid in capital 1,236,988 988,963
(Deficit) accumulated during
the development stage (826,824) (540,144)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 413,380 450,218
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 473,764 $ 601,190
=========== ===========
See accompanying notes.
<PAGE>
<PAGE> 4
POWERBALL INTERNATIONAL, INC. & SUBSIDIARY
(Formerly NATEX CORPORATION)
(A Development Stage Company)
STATEMENT OF OPERATIONS
Three and Nine Months ended September 30, 2000 and 1999,
and the Period from
July 9, 1997 (Date of Inception) to September 30, 2000
<TABLE>
<CAPTION>
Three months Nine months Three Months Nine Months July, 1997
ended ended ended ended (Inception)
Sept 30, 2000 Sept 30, 2000 Sept 30, 1999 Sept 30, 1999 Sept 30,2000
(unaudited) (Unaudited) (Unaudited) (Unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0 $ 0 $ 0
Equity in loss
from LLC - 56,384 7,884 44,822 446,549
General and
administrative 20,258 41,701 77,701 83,778 53,984
Professional fees 16,660 39,576 6,197 8,677 136,931
Filing Fees 0 2,975 - 2,515 17,966
Research and
development 89,913 152,390 - - 152,390
--------- ----------- ----------- --------- --------
TOTAL OPERATING EXPENSES 126,831 293,026 91,782 139,792 807,820
--------- ----------- ----------- --------- --------
OPERATING (LOSS) (126,831) (293,026) (91,782) (139,792) (807,820)
Other income and expense
Interest income 3,171 3,444 332 968 5,520
Limited sales of tanks
net of direct
production costs of
$1,046 48 3,002 - - 3,002
--------- ----------- ----------- --------- --------
(Loss) before provision
for income taxes (123,612) (286,580) (91,450) (138,824) (799,298)
Provision for
income taxes - 100 - 100 300
--------- ----------- ----------- --------- --------
NET (LOSS) BEFORE
CUMULATIVE EFFECT
OF ACCOUNTING CHANGE (123,612) (286,680) (91,450) (138,924) (799,598)
Cumulative effect of
accounting change for
organization costs - - - - (27,226)
--------- ----------- ----------- --------- ---------
NET (LOSS) $ (123,612) $ (286,680) $ (91,450) $(138,924) $(826,824)
========= =========== =========== ========= =========
NET (LOSS) PER
COMMON SHARE BEFORE
ACCOUNTING CHANGE $ (0.04) $ (0.13) $ (0.08) $ (0.15) $ (1.11)
========= =========== =========== ========= =========
CUMULATED EFFECT OF
ACCOUNTING CHANGE $ (0.00) $ (0.00) $ (0.00) $ (0.00) $ (0.04)
========= =========== =========== ========= =========
NET (LOSS) PER
COMMON SHARE $ (0.04) $ (0.13) $ (0.08) $ (0.15) $ (1.15)
========= =========== =========== ========= =========
Weighted average
number of common shares 3,086,337 2,127,193 1,181,957 909,963 717,522
========= =========== =========== ========== ========
</TABLE>
The footnotes hereto are an integral part of these financial statements.
<PAGE>
<PAGE> 5
POWERBALL INTERNATIONAL, INC. & SUBSIDIARY
(Formerly NATEX CORPORATION)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months ended September 30, 2000 and 1999,
and the Period from
July 9, 1997 (Date of Inception) to September 30, 2000
<TABLE>
<CAPTION>
Nine Months Nine Months July 9, 1997
ended ended (inception) to
September 30, 2000 September 30, 1999 September 30, 2000
------------ ------------ --------------
(unaudited) (Unaudited) (unaudited)
<S> <C> <C> <C>
CASH FLOW FROM
OPEATING ACTIVITIES
Net (loss) $ (286,680) $ (138,924) $ (826,824)
Adjustments to reconcile
net (loss) to net cash
provided by operating
activities
Cumulative change in
accounting principle - - 27,226
Stock issued for services - 75,000 75,000
Decrease in investment in LLC 56,384 44,822 446,549
Amortization prior to change
in accounting principle - 3,361 1,239
Depreciation and amortization
from acquired business 2,408 - 2,408
Changes in assets and liabilities
Increase in accounts receivable-
stockholder (6,294) - (6,294)
Increase in inventory (1,547) - (1,547)
(Decrease) increase in accounts
payable (807) - (807)
Increase in accrued liabilities 384 - 384
Increase in organization costs - (11,524) (28,465)
----------- ---------- -----------
Net cash (used) by
operating activities (236,152) (27,265) (310,324)
CASH FLOW FROM
INVESTING ACTIVITIES
Related party loans 50,000 (261,000) 60,000
Purchase of equipment (1,058) - (1,058)
Purchase of business, net of cash
acquired and equity adjustment
from related party transactions
due to merger (71,826) - (706,826)
----------- ---------- -----------
Net cash provided (used)
by investing activities (22,884) (261,000) (647,884)
CASH FLOW FROM
FINANCING ACTIVITIES
Proceeds from issuance of
common stock 607,500 340,000 1,427,500
Direct costs of stock sale - - (41,638)
----------- ---------- -----------
Net cash provided by
financing activities 607,500 340,000 1,385,862
----------- ---------- -----------
Increase in cash 348,464 51,735 427,654
Cash and cash equivalents
beginning of period 79,190 65,664 -
----------- ---------- -----------
Cash and cash equivalents
end of period $ 427,654 $ 117,399 $ 427,654
=========== ========== ===========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Interest paid during
the period $ - $ - $ -
=========== ========== ===========
Income taxes paid during
the period $ 100 $ 100 $ 300
=========== ========== ===========
Stock issued to pay royalties
and expenses of related entity $ - $ - $ 97,000
=========== ========== ===========
</TABLE>
See accompanying footnotes.
<PAGE>
<PAGE> 6
POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
(Formerly NATEX CORPORATION)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
From Inception on July 9, 1997 to September 30, 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
----------------
The Company was incorporated on July 9, 1997 under the laws of the State of
Utah. At the present time, the Company is in the development stage. The
Company was formed for the purpose of raising capital to invest in a joint
venture which acquired a license for certain technology relating to the
production of hydrogen, to generate hydrogen for sale, and to market hydrogen
generating equipment and products. The Company, through its investment in a
joint venture, is involved in research and development efforts of
commercializing the technology. During the beginning of the second quarter
ended June 30, 2000, the Company acquired the remaining 50% interest in
Powerball Technologies, LLC, for 1,500,000 shares of the Company's common
stock.
b. Investment in Limited Liability Company
-------------------------------------------
Prior to the acquisition, the Company accounted for its investment in the
Limited Liability Company using the equity method. The acquisition has been
accounted for using the purchase method of accounting. The consolidated
balance sheets at September 30, 2000 include the accounts of Powerball
International, Inc. (the Company) and its wholly-owned operating subsidiary,
Powerball Technologies, LLC. The consolidated balance sheet at December 31,
1999 and consolidated statement of operations for 1999 excludes the Powerball
Technologies, LLC, because the acquisition was consummated in the second
quarter of 2000. All significant intercompany balances and transactions have
been eliminated in consolidation.
c. Amortization of Organization Costs
--------------------------------------
The Company was amortizing the organization cost over a 60 month period using
the straight-line method. In 1998, the Accounting Standards Executive
Committee of the American Institute of Certifies Public Accountants issued
Statement of Position (SOP) 98-5. The SOP requires the start-up cost to be
expensed as incurred. During 1999, the Company adopted the SOP and recognized
a charge for the cumulative effect of the accounting change of $27,226.
d. Income Taxes
----------------
The Company provides for income taxes based on the liability method, which
requires recognition of deferred tax assets and liabilities based on
differences between financial reporting and tax bases of assets and
liabilities measured using enacted tax rates and laws that are expected to be
in effect when the differences are expected to reverse.
e. Use of Estimates
--------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
f. Cash and Cash Equivalent
----------------------------
For purposes of the statement of cash flows, the Company considers all
investment instruments purchased with a maturity of three months or less to be
cash equivalents.
<PAGE>
<PAGE> 7
POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
(Formerly NATEX CORPORATION)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
From Inception on July 9, 1997 to September 30, 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
g. Net Income (Loss) Per Common Share
--------------------------------------
Primary earnings (loss) per common share is calculated by dividing net income
(loss) for the period by the weighted average number of the Company's common
shares outstanding and dilutive common equivalent shares from stock options
and warrants, as calculated using the treasury stock method.
Fully diluted earnings (loss) per common share reflect the calculation of the
number of common equivalent shares based on the stock price at the end of the
period. Fully diluted per common share amounts are not reported due to
negative dilution.
h. New Accounting Pronouncements
---------------------------------
In 1997 the FASB issued SFAS No. 128, Earnings Per Share, SFAS No. 130,
Reporting Comprehensive Income, and SFAS No. 131, Disclosures about Segments
of an Enterprise and Related Information. The Company believes the new
standards will not have a material impact on the Company's financial
statements presented herein or in the future.
(2) EXECUTIVE STOCK OPTION PLAN
The Company's president agreed to perform services on behalf of the Company
for no compensation through December 31, 1998. To provide incentive for such
services, the Board of Directors agreed on August 1, 1997 to grant an option
to purchase 100,000 shares of the Company's common stock at $1 per share. No
options have been exercised as of September 30, 2000. The Company's president
also agreed to perform services on behalf of the Company for no compensation
through December 31, 1999. The Board of Directors agreed on July 7, 1999 to
grant warrants to purchase 150,000 shares of the Company's common stock at $1
per share. 30,000 warrants have been exercised as of September 30, 2000.
(3) RECEIVABLE - RELATED PARTY
The receivable from related entity was an unsecured non-interest bearing loan
which has no repayment terms. The Company now accounts for the related party
loan as an intercompany transfer which is eliminated in consolidation.
The receivable was due from Powerball Technologies, LLC (A Development Stage
Company). Natex Corporation was a 50% owner of Powerball Technologies, LLC,
until the second quarter 2000 merger.
(4) INVESTMENT IN LIMITED LIABILITY COMPANY
The Company and Powerball Industries, Inc. had agreed to form a limited
liability company (the "Joint Venture") to license the Technology; to further
develop the Technology; to build a sodium hydride pellet recycling plant; to
manufacture tanks in which hydrogen is generated; to demonstrate the
commercial viability of the Technology; and to commercialize the Technology.
Powerball Industries, Inc., sub-licensed the Technology to the Joint Venture
for a 50% ownership interest in the Joint Venture. The Company invested
$250,000 in the Joint Venture for a 50% ownership interest in the Limited
Liability Company Powerball Technologies, LLC (A Developmental Stage Company).
The Company completed its plan of merger with Powerball Industries, Inc. in
the second quarter ended June 30, 2000. The Company acquired the remaining
50% interest in Powerball Technologies, LLC for 1,500,000 shares of the
Company's common stock.
<PAGE>
<PAGE> 8
POWERBALL INTERNATIONAL, INC. AND SUBSIDIARY
(Formerly NATEX CORPORATION)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
From Inception on July 9, 1997 to September 30, 2000
(5) STOCK OFFERING
On December 31, 1997, the Company successfully completed a public offering of
400,000 shares of its $.001 par value common stock for $400,000 less offering
costs of $40,000. In April 1999, the Company successfully completed a private
placement offering of 400,000 shares of its $.001 par value common stock for
$200,000, also in June 1999, the Company exchanged services for 10,000 shares
of the its $.001 par value stock of which was valued at $40,000. In December
1999, the Company successfully completed a private placement offering of
120,000 shares of its $.001 par value common stock for $120,000. In July
2000, the Company successfully completed a private placement offering of
110,000 units consisting of one common share and one common share warrant of
its $.001 par value common stock for $440,000, less offering costs of $40,000,
for a net of $400,000.
(6) INCOME TAXES
At December 31, 1999, the Company has a net operating loss carryforward of
approximately $552,700 which will begin to expire between the year 2012 and
2019.
(7) PROFORMA CONSOLIDATED REVENUE, EARNINGS, AND EARNINGS PER SHARE
The following table sets for revenue, earnings and earnings per share as if
the Company had operated Powerball Technologies, LLC. as a wholly owned
subsidiary from the beginning of the periods presented.
<TABLE>
<CAPTION>
Three months Nine months Three months Nine months July, 1997
ended ended ended ended (Inception)
Sept 30, 2000 Sept 30, 2000 Sept 30, 1999 Sept 30, 1999 Sept 30, 2000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
============ ========== ========= =========== ===========
NET (LOSS) $ (126,612) $ (343,063) $ (99,334) $ (637,225) $(1,273,372)
============ ========== ========= =========== ===========
NET (LOSS) PER COMMON
SHARE $ (0.04) $ (0.11) $ (0.04) $ (0.27) $ (0.52)
============ ========== ========= =========== ===========
</TABLE>
See accompanying notes
<PAGE>
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Regarding Forward-looking Statements
---------------------------------------------------------
This report may contain "forward-looking" statements. Examples of forward-
looking statements include, but are not limited to: (a) projections of
revenues, capital expenditures, growth, prospects, dividends, capital
structure and other financial matters; (b) statements of plans and objectives
of the Company or its management or Board of Directors; (c) statements of
future economic performance; (d) statements of assumptions underlying other
statements and statements about the Company and its business relating to the
future; and (e) any statements using the words "anticipate," "expect," "may,"
"project," "intend" or similar expressions.
Year 2000 Disclosure
--------------------
The Company did not experience any Year 2000 problems and does not anticipate
any problems at this time.
General
-------
During the beginning of the second quarter ended June 30, 2000, the Company's
shareholders approved the an Agreement and Plan of Merger in with which the
Company acquired of all of the issued and outstanding shares of Powerball
Industries, Inc. ("PIC"), a privately-held Utah corporation. Under the
Agreement and Plan of Merger, the Company acquired all the issued and
outstanding stock of PIC in exchange for the issuance of one million five
hundred thousand (1,500,000) shares of the Company's common stock. In
connection with the acquisition, the Company's shareholders elected new
directors and voted in favor of a proposal to change the Company's name to
Powerball International, Inc.
PIC was the owner of all rights, title and interest in certain technology
relating to a Hydrogen Generation System and Fuel Pellet for a Hydrogen
Generation System and all present and future patents and patent applications
as are or later filed relating to the above invention in the United States,
and any and all foreign countries, if any (hereinafter the "Technology"). PIC
was the Company's joint venture partner in Powerball Technologies, LLC ("PT").
PT holds an Assignment for the Technology subject to certain royalty payments
to Jed Checketts, the inventor of the Technology. The Technology forms the
basis for the operations of PT, and is the essential reason the Company was
invested in PT.
By effecting the merger, the Company and its shareholders obtained direct
ownership of the Technology. The merger also consolidated ownership of PT,
with PT becoming a wholly-owned subsidiary of the Company.
Results of Operations
---------------------
Three and Nine Months Ended September 30, 2000 compared with
September 30, 1999
------------------------------------------------------------
Revenues. The Company's expects that initial revenues will be generated
primarily through its wholly-owned operating subsidiary, Powerball
Technologies, LLC ("PT"), and those profits, if any that will be derived
through the licensing of the PT's technology and/or manufacturing and sale of
hydrogen generation systems by PT. The Company had no revenues for the three
and nine month periods ended September 30, 2000 and 1999, respectively, and
has had no revenues since July 9, 1997 ("Inception").
<PAGE>
<PAGE> 10
Operating Expenses. For the three and nine month period ended September 30,
2000, the Company had total operating expenses of $126,831 and $293,026,
compared to $91,782 and $139,792 for the same periods ending September 30,
1999. The increase in operating expenses is attributable primarily to an
increase in research and development costs related to PT of $89,913 and
$152,390, respectively, and increases of $10,463 and $30,899 in professional
fees, respectively, offset by decreases in general and administrative expenses
of $57,443 and $42,077, respectively, for the nine month period. The increase
in research and development costs reflects the Company's acquisition of 100%
ownership of PT and consequent responsibility for all the costs associated
with PT. The increase in professional fees reflects the accounting, legal and
other costs associated with consummating the merger with Powerball Industries,
Inc. described above. The decrease in general and administrative expenses is
primarily attributable to the fact that Robert Ipson, the Company's CEO, has
been providing his services to the Company since January 2000 without
compensation. No compensation arrangement has been reached and no expense for
such compensation has been accrued in the accompanying financial statements.
In the next twelve months, the Company anticipates that operating costs will
increase due to additional research and development expenses and the
implementation of some as yet undetermined compensation arrangement with Mr.
Ipson.
Other Income. Other income for the three and nine month period ended
September 30, 2000 consisted of $3,171 and $3,444 of interest income and $48
and $3,002 (net)from limited sales of tanks, compared with $332 and $968 of
interest income for the respective periods ended September 30, 1999.
The Company experienced a net loss of $123,612 and $286,680 for the three and
nine month period ended September 30, 2000 compared with a net loss of $91,450
and $138,924 for the three and nine month period ended September 30, 1999.
The Company's net loss since inception has been $826,824. The net loss per
share for the three and nine month period ended September 30, 2000 was $0.04
and $0.13, based on the weighted average number of shares outstanding of
3,086,337 and 2,127,193 shares, compared to $0.08 and $0.15 based on weighted
average number of shares outstanding of 1,181,957 and 909,963 at September 30,
1999. The net loss per share since Inception has been $1.15, based on the
weighted average number of shares outstanding of 717,522.
Liquidity and Capital Resources
-------------------------------
In connection with the Company's organization the founding shareholders
acquired 200,000 shares of the Company's common stock for $40,000 cash.
Thereafter, in December 1997, the Company completed a public offering of
400,000 shares of common stock at a price of $1.00 per share for aggregate
offering proceeds of $400,000. In April 1999, the Company successfully
completed a private placement offering of 400,000 shares of its $.001 par
value common stock for $200,000. In December 1999, the Company successfully
completed a private placement offering of 120,000 shares of its $.001 par
value common stock for $120,000.
In June 2000, in order to raise funds for operations of its subsidiary,
management determined that the best source for raising immediate capital was
to approach certain warrant holders regarding the exercise of outstanding
warrants. In order to induce such warrant holders to exercise the warrants,
the Company offered a like number of warrants with an exercise price of $5.00
per share (the then-current market price for the Company's common stock) to
each holder exercising previously issued warrants. Accordingly, the Company
issued 167,500 shares for aggregate proceeds of $167,500 for the exercise of
outstanding warrants and issued 167,500 replacement warrants at $5.00 per
share, exercisable beginning June 26, 2000 for a period of two years.
In July 2000, the Company successfully completed a private placement offering
of 110,000 units consisting of one common share and one common share warrant
of its $.001 par value common stock for $440,000, less offering costs of
$40,000, for a net of $400,000.
<PAGE>
<PAGE> 11
The issuances of common stock have been utilized for working capital, payment
of professional services, the initial capital investment in PT; the loan of
additional working capital to PT, and for the continued development activities
of the Company. Because of the merger with PIC, the Company's balance sheet
at September 30, 2000 no longer reflects the loans to PT as a receivable
because the loans are now treated as an intercompany transaction and
consolidated. All funds loaned to PT were obtained by the Company through the
sale of its equity securities.
At September 30, 2000, the Company had current assets of $435,495 and current
liabilities of $60,384 for working capital of $375,111. At September 30,
2000, the Company had other assets of $38,269, consisting of fixed assets, net
of depreciation, of $22,169 and patents and license agreements, net of
amortization, of $16,100.
Cash used in operations for the nine month period ended September 30, 2000 was
$236,152 compared to $138,924 for the period ended September 30, 1999. Since
inception the Company's operations been funded primarily by cash received from
capital contributions and the issuance of common stock for cash.
As a result of the merger, PT is the wholly-owned subsidiary of the Company,
and all the expenses of PT will be consolidated with those expenses of the
Company. The Company expects that it will continue to incur operational
losses for the next twelve months, primarily as a result of expenditures
related to the operation of the Plant and the general overhead thereto.
Although the Plant is completed, because of the consolidation of operations
such operating expenses are expected to increase. The Company hopes that the
Plant may begin to generate some operating revenues during the next twelve
months, but cannot determine when it will receive revenues or the amount of
such potential revenues, if any, at this time.
The Company anticipates that within the next year additional funds may be
needed to allow the Company to continue its operations and to enter into other
markets for hydrogen technology. If necessary, the Company will most likely
first seek additional debt and equity funding through its existing
shareholders, but the Company has no agreements for such funding in place and
there can be no assurance that such funding will be available to the Company
on acceptable terms. There can be no assurance that any additional funding,
if required, will be available to the Company.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
During the period ended September 30, 2000, the Company issued 167,000 shares
to existing shareholders pursuant to the exercise of outstanding warrants at
$1.00 per share for aggregate proceeds of $167,500. As an inducement for the
exercise, the Company agreed to issue warrants for additional shares at the
current market price of $5.00 per share to the shareholders exercising their
outstanding warrants. Accordingly, the Company issued 167,500 replacement
warrants at $5.00 per share, exercisable beginning June 26, 2000 for a period
of two years.
<PAGE>
<PAGE> 12
In July 2000, the Company successfully completed a private placement offering
to accredited investors of 110,000 units consisting of one common share and
one common share warrant of its $.001 par value common stock for $440,000,
less offering costs of $40,000, for a net of $400,000.
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.
---------
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K.
--------------------
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
POWERBALL INTERNATIONAL, INC.
Dated: November 8, 2000 By/S/Robert K. Ipson, Chairman and
Chief Financial Officer
