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Joel Dumaresq
PRESIDENT
Solar Energy Limited
112 C Longview Drive, Los Alamos, New Mexico 87544
(Name and Address of Person Authorized to Receive Notices
and Communications on Behalf of the Person Filing Statement)
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WITH A COPY TO:
William Stocker, ESQ
24843 Del Prado, #318
Dana Point, CA 92629
(949) 248-9561
fax (949) 248-1688
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FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
1934
For the Quarter ended September 30, 2000
Commission File Number: 0-30060
SOLAR ENERGY LIMITED
(formerly Salvage World, Inc. )
(originally Taurus Enterprises, Inc.)
Delaware 76-0418364
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
112 C Longview Drive, Los Alamos, New Mexico 87544
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (505) 672-2000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 13,153,911
Yes[x] No[] (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.)
As of September 30, 2000 the number of shares outstanding of
the Registrant's Common Stock was 13,153,911
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INTRODUCTION
Our 1934 Securities Exchange Act registration of our common stock has
become effective during 1999, but has not yet cleared final comments by the
Staff of the Securities and Exchange Commission.
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Attached hereto and incorporated herein by this reference are consolidated
unaudited financial statements under cover of Exhibit 00QF-3 for the three and
nine months ended September 30, 2000. Please see Item 2, following for a
discussion.
Balance Sheet . . . . . . . . 9/30/00 6/30/00 12/31/99
-----------------------------------------------------------------------
Cash and Equivalents. . . . . $ 41,263 $ 132,961 $ 263,371
Note Receivable (RECO/JADE) . 0 65,000 0
Current Assets. . . . . . . . 41,263 197,961 263,371
Property and Equipment, Net . 46,696 46,696 25,297
============================= ============ ============ ============
Patent Costs. . . . . . . . . 35,666 33,062 33,549
Goodwill. . . . . . . . . . . 400,406 415,573 445,908
Deposits. . . . . . . . . . . 4,837 4,537 4,537
Other Assets. . . . . . . . . 487,605 499,868 509,291
============================= ============ ============ ============
Total Assets. . . . . . . . . 528,868 697,829 772,662
============================= ============ ============ ============
Accounts Payable. . . . . . . 76,937 55,525 58,973
Accrued Expenses. . . . . . . 31,595 40,808 16,183
Notes Payable (Related Party) 617,609 654,609 428,639
Total Current Liabilities . . 726,141 750,942 503,795
============================= ============ ============ ============
Minority Interest . . . . . . 162,800 0 0
Common Stock. . . . . . . . . 1,315 1,315 1,315
Paid in Capital . . . . . . . 1,797,197 1,797,197 1,797,197
Retained Deficit. . . . . . . (2,158,585) (2,014,425) (1,529,645)
============================= ============ ============ ============
Total Liabilities . . . . . . 162,800 0 0
2
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Nine Months
September 30 September 30
2000 1999 2000 1999
----------------------------------------------------------------------------------------------
Sales: . . . . . . . . . . . . . . $ 0.00 $ 0.00 $ 0.00 $ 0.00
Cost of Goods Sold:
Gross Profit:. . . . . . . . . . . 0 0 0 0
Operating Expenses:
General and Administrative . . . . (51,808) (13,551) (197,798) (32,274)
Research and Development . . . . . (192,880) (135,982) (552,353) (361,558)
Operating Loss . . . . . . . . . . (244,688) (149,533) (750,151) (393,832)
Other Income and (Expenses). . . . 0 0 0 0
Gain on sale of Investment . . . . 0 0 17,200 0
Gain on sale of assets . . . . . . 100,000 0 100,000 0
Interest Income. . . . . . . . . . 528 1,872 4,011 5,903
Total Other Income and (Expenses) 100,528 1,872 121,211 5,903
Net Income (Loss). . . . . . . . . (144,160) (147,661) (628,940) (387,929)
Net Income (Loss) per share. . . . (0.01) (0.01) (0.04) (0.03)
============== ============== ============ ============
Weighted Average common shares . . 13,153,911 12,353,911 13,153,911 12,587,244
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
We are a research and development company with no revenues and no immediate
source or expectation of revenue generation. We have had no revenues since
inception. We have been funded by our shareholder investors. Virtually all of
the funding/working capital raised to date has been allocated for research and
development of our several prototype projects. All projects developed by us are
experimental in nature and are recorded as research and development expenses. Of
our total expenses for the nine months ended September 30, 2000 of $750,151,
research and development accounted for $552,353.
(A) PLAN OF OPERATION: NEXT TWELVE MONTHS. First, in general terms we intend
to continue the development of our prototypes SOLAWATT, SUNSPRING and MECH
ourselves, through this reporting corporation; and we intend to pursue the
development of our prototypes SOLAREC and HTWO through Jade Electronic, Inc., a
Nevada corporation.
SOLAWATT will be the production of electricity estimated by us to be
one-third the current conventional cost. SOLAWATT is the name for our unique
plastic-film solar collectors, which are placed directly on the ground. Our
patent application for SOLAWATT (filed under its original and former name
SPAESS) is S.N. 09/396,653.
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MECH will be designed as an internal combustion engine having one-third the
size of a conventional engine with the same power and 25% greater efficiency.
The MECH engine could have a wide variety of applications from vehicles and
propeller driven aircraft, to lawn mowers and chain saws.
Effective June 30, 2000, we sold 100% of our interest in Renewable Energy
Corporation (RECO), formerly a wholly-owned subsidiary, to Jade Electronic, Inc.
(Jade), which changed its name to Renewable Energy Limited (REEL). We received
63% of REEL's outstanding stock and cash of $180,000. At the point of sale REEL
had no assets and no liabilities. Accordingly, RECO became the only assets,
liabilities and operations of REEL, at June 30, 2000.
The authorized capital of JADE is two hundred million shares of common
stock, of par value $0.001 per share, of which 5,000,000 shares are issued and
outstanding, immediately before the transaction. The issuance to us of 8,500,000
shares results in our initial 63% ownership of the resulting 13,500,000 shares,
immediately after the transaction. This transaction may be viewed as an
acquisition by us of JADE as a controlled subsidiary. This transaction is deemed
by management to better position our assets for both future funding programs and
more focused development of both SOLAREC technology and a marketing strategy for
it. Although we owned RECO 100% immediately before the transaction and now own
only 63% of Jade Electronics, Inc. immediately afterwards, we have sold 37% of
RECO for $180,000, which we can apply to our own funding requirements. We
believe that, so positioned, the resulting RECO/JADE corporation could seek its
financing independently of us, on its own merits, and with its own management
(to be determined) to the mutual benefit of both corporations.
No affiliation has been found between or among the previous shareholders of
JADE and our shareholders (immediately preceding the transaction).
The Projects of RECO/REEL are as follows:
SOLAREC will use only solar energy plus carbon dioxide (CO2) from the
atmosphere to produce a clean usable fuel (gasoline, diesel, etc.) with
electricity and oxygen as byproducts.
HTWO is the concept to produce from coal, economical, pure hydrogen (while
dramatically reducing CO2 emissions) for use in the growing fuel cell business.
Existing fossil fuel-based industrial production of hydrogen generates nearly as
much CO2 as the normal operation of an internal combustion engine. This project
is currently at a computer concept, research and feasibility stage and will
greatly depend upon the success of the next twelve month phase of SOLAREC.
(1) CASH REQUIREMENTS AND OUR NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS.
We have depended and do depend on continued support from our principal
shareholders to cover any shortfall. There is no binding agreement by which
these or any shareholders are committed to continue funding our research and
development. While our shareholders have indicated no lack of continuing
support, if our required funding is not provided, we may not be able to continue
as a going concern. We require approximately $3,000,000 to meet our budgetary
requirements for the next 12 months. The agreement with REEL provided needed
capital and we intend to raise additional funds through public and private
offerings, as needed to support our continuing operations.
RISK FACTORS. Note 2 of our Auditor's report for the previous year end states:
"The Company has had recurring operational losses for the past several years and
is dependent upon financing to continue operations. The financial statements do
not include any adjustments that might result from this uncertainty.
Notwithstanding our confidence in our sophisticated shareholders, and soundness
of these reorganizational plans, we remain dependent on investor confidence in
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our future. There can be no assurance offered to the public by these
disclosures, or otherwise, that we will be successful, or that we will
ultimately succeed as a going concern. To the extent that existing resources and
any future earnings prove insufficient to fund our activities, we will need to
raise additional funds through debt or equity financing. We cannot assure that
such additional financing will be available or that, if available, it can be
obtained on terms favorable to us and our stockholders. In addition, any equity
financing could result in dilution to our stockholders. Our inability to obtain
adequate funds could adversely affect our operations and ability to implement
our business strategy. Even if we are successful in raising capital through the
sources specified, there can be no assurances that any such financing would be
available in a timely manner or on terms acceptable to us and our current
shareholders. Also, any additional equity financing could be dilutive to our
then existing shareholders, and any debt financing could involve restrictive
covenants with respect to future capital raising activities and other financial
and operational matters.
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We are a development stage company. Our activities to date consist entirely of
research and development.
(1) OPERATIONS AND RESULTS FOR THE PAST THREE AND NINE MONTHS. We have
been entirely devoted to research and development for the past two and one-half
years, 1998 and 1999, and the nine months ended September 30, 2000. We continue
to be so devoted. We have enjoyed no revenues since inception.
Our research and development has accelerated slightly in the last quarter:
$192,880/$151,953. Comparison with 1999 is not meaningful, as our development
continues to accelerate as our projects near operational status. Our General and
Administrative expenses remain consistently comparable; however, recent quarters
have reflected non-recurring expenses for legal and professional expenses in
connection with our 1934 Act Registration, and continuing comments and responses
by and to the Staff of the Commission. Our Form 10-SB is effective but has not
cleared comments as of the date of this report.
Because we essentially sold 37% of our interest in RECO for cash of
$180,000, we recorded minority interest of $162,500 and a gain of $17,200.
During August 2000, we sold all intellectual property relating to the SUNSPRING
project to Holisticom.com Limited (HCL) for cash of $100,000, and 3,500 shares
of HCL common stock. We recorded a gain on the sale of $100,000 and recorded
stock received at a value of $0. There was no recorded basis for the
intellectual property sold.
(2) FUTURE PROSPECTS. No efforts have been made to date to identify
other companies to manufacture our products or to identify probable or targeted
licensees. We have determined to await commercially viable prototype readiness
before addressing manufacturing and marketing issues. We do not expect to
achieve significant sales, if any, in the next twelve to eighteen months.
HARPS and ACES projects have been deferred for the future. We expect to
turn our attention to these projects in 18 months to two years. These were our
original programs which inspired our current product development projects.
Another future project is H20NOW. The mission of H20NOW is "to produce
water that is not only clean enough to drink but inexpensive enough to be used
for irrigation purposes (i.e., less than 50 cents/1000 gallons)." This is
arguably one of the globe's most pressing problems. Recent tests, by the company
in Los Alamos, of the H20NOW "proof-of-theory" prototype produced potable water
from saltwater using only solar energy. The unit produced water quantities in
accordance with previous computer calculations. The H20NOW project uses "solar
collectors" to collect solar energy to operate the reverse osmosis system under
its patent pending concept. Three different "solar collectors" are under design,
each to be used in different locations. H20NOW is now refining the system with a
view to building a half-scale working prototype to be used in further testing
which, if successful, will lead to marketing and licensing this concept to the
many parts of the world that need "water clean enough to drink yet inexpensive
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enough to be used for irrigation purposes." The company is seeking a
joint-venture partner for the H20NOW concept in order to arrange funds to
complete the project and for subsequent marketing.
SUMMARY. We do not expect to achieve profitability in the next twelve
months. We are making significant progress in developing and proving our
technologies. We are dependent for funding on the support of our shareholders.
There is no assurance that funding will not run out. There is no assurance that
we will succeed in our various efforts. While no guarantee can be given as to
when or whether we will achieve significant revenues and profitability, a
reasonable estimate is believed to be eighteen months to two years from the
date of this Amended Report.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None
ITEM 2. CHANGE IN SECURITIES. None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS. None
ITEM 5. OTHER INFORMATION. None
ITEM 6. REPORTS ON FORM 8-K. None
EXHIBITS
Attached hereto and incorporated herein by this reference are consolidated
unaudited financial statements under cover of Exhibit 00QF-3 for the three and
nine months ended September 30, 2000.
6
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report for the Quarter ended September 30, 2000, has been signed
below by the following persons on behalf of the Registrant and in the capacity
and on the date indicated.
Dated: November 30, 2000
SOLAR ENERGY LIMITED
(formerly Salvage World, Inc. )
(originally Taurus Enterprises, Inc.)
/s/ Dr. Melvin L. Prueitt /s/Joel S. Dumaresq
Dr. Melvin L. Prueitt Joel S. Dumaresq
Chairman/Director President/Director
/s/Norman Wareham /s/David M. Jones
Norman Wareham Director David M. Jones
Secretary/Treasurer Director
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--------------------------------------------------------------------------------
EXHIBIT EXHIBIT 00QF-3
UN-AUDITED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
8
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--------------------------------------------------------------------------------
SOLAR ENERGY LIMITED
Consolidated Financial Statements
September 30, 2000
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9
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SOLAR ENERGY LIMITED
Consolidated Balance Sheets
ASSETS
September 30 December 31
2000 1999
(Unaudited)
--------------------------------------------------------------------------------
Current Assets
Cash and Cash Equivalents $ 41,263 $ 263,371
----------------------------------
Total Current Assets 41,263 263,371
----------------------------------
Property and Equipment, net 46,696 25,297
----------------------------------
Other Assets
Patent Costs 35,666 33,549
Goodwill 400,406 445,908
Investments Available for Sale (Note 5) 0 0
Deposits 4,837 4,537
----------------------------------
Total Other Assets 440,909 483,994
----------------------------------
Total Assets $ 528,868 $ 772,662
==================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 76,937 $ 58,973
Accrued Expenses 31,595 16,183
Notes Payable - Related Party 617,609 428,639
----------------------------------
Total Current Liabilities 726,141 503,795
----------------------------------
Minority Interest (Note 3) $ 162,800 $ 0
----------------------------------
Stockholders' Equity
Common Stock, authorized 50,000,000 shares of $.0001
par value, issued and outstanding
13,153,911 shares 1,315 1,315
Paid in Capital 1,797,197 1,797,197
Retained Deficit (2,158,585) (1,529,645)
----------------------------------
Total Stockholders' Equity (360,073) 268,867
----------------------------------
Total Liabilities and Stockholders' Equity $ 528,868 $ 772,662
==================================
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SOLAR ENERGY LIMITED
Consolidated Statements of Operations
For the three For the three For the nine For the nine
months ended months ended months ended months ended
September 30 September 30 September 30 September 30
2000 1999 2000 1999
--------------------------------------------------------------------------------
SALES $ 0 $ 0 $ 0 $ 0
COST OF GOODS SOLD 0 0 0 0
--------------------------------------------------------------------------------
GROSS PROFIT 0 0 0 0
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OPERATING EXPENSES
General And Administrative
Expenses 51,808 13,551 197,798 32,274
Research and Development 192,880 135,982 552,353 361,558
--------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 244,688 149,533 (750,151) 393,832
--------------------------------------------------------------------------------
OPERATING INCOME (LOSS) (244,688) (149,533) (750,151) (393,832)
--------------------------------------------------------------------------------
OTHER INCOME AND (EXPENSES)
Gain on sale of investment 0 0 17,200 0
Gain on sale of assets 100,000 0 100,000 0
Interest Income 528 1,872 4,011 5,903
--------------------------------------------------------------------------------
Total Other
Income and (Expenses) 100,528 1,872 121,211 5,903
--------------------------------------------------------------------------------
NET INCOME (LOSS) $ ( 144,160) $ (147,661) $ (628,940) $ (387,929)
================================================================================
NET INCOME (LOSS)
PER SHARE $ (.01) $ (.01) $ (.04) $ (.03)
================================================================================
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 13,153,911 12,353,911 13,153,911 12,587,244
================================================================================
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SOLAR ENERGY LIMITED
Consolidated Statements of Cash Flows
For the nine For the nine
months ended months ended
September 30 September 30
2000 1999
--------------------------------------------------------------------------------
Cash Flows From Operating Activities
Net income (loss) $ (628,940) $ (387,929)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Used in Operating Activities:
Depreciation & Amortization 54,468 0
Gain on sale of investment (17,200) 0
Change in Assets and Liabilities
Increase/(decrease) in:
Accounts Payable 17,964 (2,878)
Accrued Expenses 15,412 6,717
-----------------------------------------
Net Cash Provided (Used) by
Operating Activities (558,296) (384,090)
-----------------------------------------
Cash Flows from Investing Activities
Purchase of Property and Equipment (27,761) (6,812)
Cash paid for patent costs (4,721) (14,347)
Cash paid for deposits (300) 0
Cash received on sale of subsidiary 180,000 0
Cash acquired in acquisition 0 42,733
-----------------------------------------
Net Cash Provided (Used) by
Investing Activities 147,218 21,574
-----------------------------------------
Cash Flows from Financing Activities
Common stock issued for cash 0 100,000
Proceeds from debt financing 188,970 288,887
Principal payments on debt financing 0 (110,000)
-----------------------------------------
Net Cash Provided (Used) by
Financing Activities 188,970 278,887
-----------------------------------------
Net Increase (Decrease) in
Cash and Cash Equivalents (222,108) (83,629)
-----------------------------------------
Cash and Cash Equivalents
Beginning 263,371 286,627
-----------------------------------------
Ending $ 41,263 $ 202,998
=========================================
Supplemental Disclosures of Cash Flow Information:
Cash payments for interest $ 0 $ 0
=========================================
Cash payments for income taxes $ 0 $ 0
=========================================
Supplemental Schedule of Noncash Investing and Financing Activities
Common shares issued for services $ 0 $ 0
=========================================
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SOLAR ENERGY LIMITED
September 30, 2000
NOTE 1 - NOTES TO FINANCIAL STATEMENTS
Solar Energy Limited (the "Company") has elected to omit substantially all
footnotes to the financial statements for the nine months ended September 30,
2000, since there have been no material changes (other than indicated in other
footnotes) to the information previously reported by the Company in their Annual
Report filed on Form 10-KSB for the Fiscal year ended December 31, 1999.
NOTE 2 - UNAUDITED INFORMATION
The information furnished herein was taken from the books and records
of the Company without audit. However, such information reflects all
adjustments which are, in the opinion of management, necessary to properly
reflect the results of the period presented. The information presented is not
necessarily indicative of the results from operations expected for the full
fiscal year.
NOTE 3 - SALE OF SUBSIDIARY
On June 30, 2000, Solar Energy Limited sold 100% of it's interest in Renewable
Energy Corporation (RECO), a wholly owned subsidiary, to Jade Electronic, Inc.,
who changed their name to Renewable Energy Limited (REEL) for 63% of the
outstanding stock of REEL and cash of $180,000. At the point of sale REEL had no
assets and no liabilities, thus RECO became its only assets, liabilities and
operations at June 30, 2000. Because the Company essentially sold 37% of its
interest in RECO for cash of $180,000, the Company recorded minority interest of
$162,500 and a gain of $17,200. This acquisition was recorded by Jade as a
reverse acquisition with RECO being the accounting acquirer, therefore no
goodwill was recorded in the acquisition and REEL recorded the assets and
liabilities of RECO at predecessor cost. The Company consolidated its books with
REEL and HYDRO at September 30, 2000.
NOTE 4 - GOING CONCERN
As disclosed in the audited financial statements at December 31, 1999, the
Company is dependent upon financing to continue its operations. Managements plan
was to raise additional funds to continue the development of its process. The
agreement with REEL provided needed capital and the Company intends to raise
additional funds through public and private offerings as needed to support
operations. The Company's ability to continue is contingent upon its ability to
continue to raise funds needed for operations. These financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
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SOLAR ENERGY LIMITED
September 30, 2000
NOTE 5 - SALE OF ASSETS
During August 2000, the Company sold all intellectual property related to the
"Sunspring" project to Holisticom.com Limited for cash of $100,000 and 3,500,000
shares of Holisticom.com Limited's common stock. The Company recorded a gain on
sale of assets of $100,000 and recorded the stock received at a value of $0.
There was no recorded basis for the intellectual property sold.
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