--------------------------------------------------------------------------------
Joel S. 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)
--------------------------------------------------------------------------------
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-A
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 June 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: 3/30/99 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 June 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-2 for the three and
six months ended June 30, 2000.
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 six months ended June 30, 2000 of $505,463, research
and development accounted for $359,473.
(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.
SUNSPRING will produce fresh water using only seawater and our unique solar
energy collectors (SOLAWATT) in a reverse osmosis ("RO") desalination process
that will require no electric motors or outside power source. Osmosis is the
result of placement of fresh water on one side and seawater on the other side of
a semi-permeable membrane. The result is fresh water flowing through to the
seawater side. Reverse Osmosis is the application of a significant pressure on
the salt water side, forcing water through the membrane and leaving the salt
behind.
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.
We have effected a reorganization, by which we sold our subsidiary RECO to
Jade Electronic, Inc., a Nevada corporation, ("JADE") in a related-party
transaction, by which, we initially own 63% control of Jade Electronic, Inc., as
another corporate asset, before any further placements. By agreement of about
April 10, 2000 we sold RECO to JADE, in exchange for 8,500,000 shares of JADE
common stock, and $180,000 cash.
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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.
This is a related-party transaction, for the reason that one or more
officers, affiliates or promoters of JADE are believed to be shareholders or
affiliates of shareholders of this parent corporation.
The Projects of RECO going to JADE 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.
HEAD OFFICE/LAB COSTS:
rent 30,000
utilities (heat, electricity, water, etc.) 16,000
office supplies 12,000
phone, fax, courier, web-site maintenance 28,000
office equipment (computers, etc.) 30,000
insurance (business, medical, etc.) 10,000
travel, entertainment 36,000
outside consultants 35,000
legal (including patent costs,
public company filings,etc.) 90,000
accounting, audit 75,000
======
362,000
SALARIES:
Chief Scientist (SOLAREC) 65,000
Chief Scientist (SUNSPRING) 65,000
Interim CEO 25,000
Process Development Engineer (SOLAREC) 63,000
Project Manager, Mechanical Engineer 140,000
Optical/Electrical Engineer 61,000
Technical Staff 150,000
Clerical 50,000
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Marketing/Investor Relations Team 90,000
Miscellaneous support, casual labor 150,000
Comptroller 30,000
=======
889,000
PROJECT PROTOTYPES:
SOLAREC PHASE III (hardware, equipment, tests) 175,000
SUNSPRING PHASES III & IV (parts, assembly,testing) 550,000
SOLAWATT PHASES II & III 200,000
MECH PHASES II & III
(parts, expander, engine,and manufacture prototypes) 200,000
1,125,000
=========
SUBTOTAL 2,376,000
Research & Development 20% Contingency 470,200
=========
TOTAL $2,846,200
The sources of these funds may include further advances by our Shareholders,
further bridge financing from other accredited and sophisticated investors,
and/or proceeds from the $180,000 note from JADE. They may include successful
governmental grant applications. They may include packaging other projects for
sale in transactions similar to RECO/JADE, for stock and cash, in which we
retain control and receive some cash or notes.
We have enjoyed no revenues since our inception as a research and development
company. We have been supported by our circle of sophisticated shareholders, who
are committed to continue supporting our development, as needed, and to see our
program through to successful profitability. Our principal shareholders as
listed in Item 11 are entrepreneurial investors committed to meet any short-fall
in our funding. Since there is no legally binding agreement by these
shareholders to advance further funds, no firm assurance can be given that
required funding will continue to be secured on a timely basis. If this
contingency fails we may not be able to continue as a going concern.
There are other intended sources of funding.
On June 30, 2000, we transferred our 100% interest of our RECO subsidiary to
Renewable Energy, Limited."REEL" (formerly incorporated as Jade Electronic,
Inc.) for 63% of the outstanding stock of REEL, and for cash of $115,0000, and
for a note receivable of $65,000. At that point in time, REEL had no assets and
no liabilities and RECO became the only asset, liabilities and operations of
REEL as of June 30, 2000. We effectively sold only 37% of RECO (since we own 63%
of REEL). Accordingly that sale equates to cash and notes of $180,000. This
acquisition was recorded by REEL as a reverse acquisition in which RECO was the
acquirer for accounting purposes. We consolidated our books with HAT and REEL at
June 30, 2000. We caused the name-change of Jade Electronic, Inc. to Renewable
Energy, Limited.
We intend to pursue a similar pattern of reorganization whereby certain
groups of our more promising wholly owned products are placed into subsidiaries
for the purpose of selling them to new partially controlled corporations, for
cash and notes. The intention is then to engage in fund raising specific to
those projects which are closest to success. Our shareholders may or may not be
among the initial private investors in these new corporations, such as JADE. We
believe that capital formation will be more orderly and successful, in this way,
than attempting general limited offerings by us as the parent company. Following
the initial bridge financing of JADE and such similar programs as we may pursue,
such partially owned subsidiaries would engage in initial public offerings
pursuant to section 5 of the Securities Act of 1933.
RISK FACTORS. Note 2 of our Auditor's report states: "The Company has had
recurring operational losses for the past several years and is dependent upon
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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 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 SIX MONTHS. We have
been entirely devoted to research and development for the past two and one-half
years, 1998 and 1999, and the six months ended June 30, 2000. We continue to be
so devoted.
The following table summarizes the information contained in our financial
statements.
The Remainder of this Page is Intentionally left Blank
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Six Months
June 30 June 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 . . . . -121,649 -10,318 -145,990 -18,723
Research and Development . . . . . -151,953 -111,558 -359,473 -225,576
Operating Loss . . . . . . . . . . (273,602) (121,876) (505,463) (244,299)
Other Income and (Expenses)
Gain on sale of Investment . . . . 17,200 0 17,200 0
Interest Income. . . . . . . . . . 1,975 1,981 3,483 4,031
Total Other Income and (Expenses) 19,175 1,981 20,683 4,031
Net Income (Loss). . . . . . . . . (254,427) (119,895) (484,780) (240,268)
Net Income (Loss) per share. . . . (0.02) (0.01) (0.4) (0.2)
============== ============ ============ ============
Weighted Average common shares . . 13,153,911 12,353,911 13,153,911 12,303,911
</TABLE>
Our research and development had accelerated in year 2000 over comparable
periods in 1999. This is due in part to our identification of additional
projects inspired from our earlier work. In addition we are engaged in
completing the comment and analysis phase of our 1934 Act registration, with
considerable legal and professional expenses, which are not expected to be
normal or continuing.
We booked a gain on the sale in connection with our RECO/JADE transaction.
The following table summarizes our Balance Sheet information.
The Remainder of this Page is Intentionally left Blank
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Balance Sheet. . . . . . . . 6/30/00 12/31/99
-------------------------------------------------
Cash and Equivalents . . . . $132,961 $ 263,371
Note Receivable (RECO/JADE). 65,000 0
Current Assets . . . . . . . 197,961 263,371
=================================================
Property and Equipment, Net. 46,696 25,297
Patent Costs . . . . . . . . 33,062 33,549
Goodwill . . . . . . . . . . 415,573 445,908
Deposits . . . . . . . . . . 4,537 4,537
Other Assets . . . . . . . . 499,868 509,291
=================================================
Total Assets . . . . . . . . 697,829 772,662
=================================================
Accounts Payable . . . . . . 55,525 58,973
Accrued Expenses . . . . . . 40,808 16,183
Notes Payable (Baycove). . . 654,609 428,639
=================================================
Total Liabilities. . . . . . 750,942 503,795
[/TABLE]
Our condition does not amount to a substantial change for the first half of
2000. The significant new items relate to our RECO/JADE transaction.
(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.
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
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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-2 for the three and
six months ended June 30, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report for the Quarter ended June 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 7, 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/ Dr. Reed Jensen /s/ David M. Jones
Norman Wareham Dr. Reed Jensen David M. Jones
Secretary/Treasurer Director Director
Director
8
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--------------------------------------------------------------------------------
EXHIBIT EXHIBIT 00QF-2
UN-AUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000
--------------------------------------------------------------------------------
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SOLAR ENERGY LIMITED
Consolidated Financial Statements
June 30, 2000
10
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SOLAR ENERGY LIMITED
Consolidated Balance Sheets
ASSETS
June 30 December 31
2000 1999
(Unaudited)
--------------------------------------------------------------------------------
Current Assets
Cash and Cash Equivalents $ 132,961 $ 263,371
Note Receivable 65,000 0
------------- -------------
Total Current Assets 197,961 263,371
------------- -------------
Property and Equipment, net 46,696 25,297
------------- -------------
Other Assets
Patent Costs 33,062 33,549
Goodwill 415,573 445,908
Deposits 4,537 4,537
------------- -------------
Total Other Assets 453,172 483,994
------------- -------------
Total Assets $ 697,829 $ 772,662
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 55,525 $ 58,973
Accrued Expenses 40,808 16,183
Notes Payable - Related Party 654,609 428,639
------------- -------------
Total Current Liabilities 750,942 503,795
------------- -------------
Minority Interest $ 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 (2,014,425) (1,529,645)
------------- -------------
Total Stockholders' Equity (215,913) 268,867
------------- -------------
Total Liabilities and Stockholders' Equity $ 697,829 $ 772,662
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SOLAR ENERGY LIMITED
Consolidated Statements of Operations
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30 June 30 June 30 June 30
2000 1999 2000 1999
--------------------------------------------------------------------------------
SALES $ 0 $ 0 $ 0 $ 0
COST OF GOODS SOLD 0 0 0 0
---------- ------------- ------------- ------------
GROSS PROFIT 0 0 0 0
---------- ------------- ------------- ------------
OPERATING EXPENSES
General And
Administrative Expenses 121,649 10,318 145,990 18,723
Research and Development 151,953 111,558 359,473 225,576
---------- ------------- ------------- ------------
TOTAL OPERATING EXPENSES 273,602 121,876 (505,463) 244,299
---------- ------------- ------------- ------------
OPERATING INCOME (LOSS) (273,602) (121,876) (505,463) (244,299)
---------- ------------- ------------- ------------
OTHER INCOME AND (EXPENSES)
Gain on sale of
investment 17,200 0 17,200 0
Interest Income 1,975 1,981 3,483 4,031
---------- ------------- ------------- ------------
Total Other Income and
(Expenses) 19,175 1,981 20,683 4,031
---------- ------------- ------------- ------------
NET INCOME (LOSS) $ (254,427) $ (119,895) $ (484,780) $ (240,268)
========== ============= ============= ============
NET INCOME
(LOSS) PER SHARE $ (.02) $ (.01) $ (.04) $ (.02)
========== ============= ============= ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 13,153,911 12,353,911 13,153,911 12,303,911
========== ============= ============= ============
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SOLAR ENERGY LIMITED
Consolidated Statements of Cash Flows
For the six For the six
months ended months ended
June 30 June 30
2000 1999
--------------------------------------------------------------------------------
Cash Flows From Operating Activities
Net income (loss) $ (484,780) $ (240,268)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Used in Operating Activities:
Depreciation & Amortization 39,096 0
Gain on sale of investment (17,200) 0
Change in Assets and Liabilities
Increase/(decrease) in:
Accounts Payable (3,448) (4,965)
Accrued Expenses 24,625 4,867
--------------------------------------------------------------------------------
Net Cash Provided (Used)
by Operating Activities (441,707) (240,366)
--------------------------------------------------------------------------------
Cash Flows from Investing Activities
Purchase of Property and Equipment (27,761) (6,812)
Cash paid for patent costs (1,912) (14,347)
Cash received on sale of subsidiary 115,000 0
Cash acquired in acquisition 0 42,733
Net Cash Provided (Used) by
Investing Activities 85,327 21,574
--------------------------------------------------------------------------------
Cash Flows from Financing Activities
Common stock issued for cash 0 100,000
Proceeds from debt financing 225,970 230,849
Principal payments on debt financing 0 (110,000)
--------------------------------------------------------------------------------
Net Cash Provided (Used) by
Financing Activities 225,970 220,849
--------------------------------------------------------------------------------
Net Increase (Decrease) in
Cash and Cash Equivalents (130,410) 2,057
Cash and Cash Equivalents
Beginning 263,371 286,627
--------------------------------------------------------------------------------
Ending $ 132,961 $ 288,684
================================================================================
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
================================================================================
Sale of investment in RECO for
Note Receivable $ 65,000 $ 0
================================================================================
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SOLAR ENERGY LIMITED
June 30, 2000
NOTES TO FINANCIAL STATEMENTS
Solar Energy Limited (the "Company") has elected to omit substantially all
footnotes to the financial statements for the six months ended June 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.
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.
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, cash of $115,000 and a Note Receivable of $65,000. 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 and notes 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 Air Technologies, Inc. (HAT)
at June 30, 2000.
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.
14
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