SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-29989
GREAT BASIN WATER COMPANY
(Exact name of small business issuer as specified in its charter)
Nevada 86-0889096
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
2950 E. Flamingo Rd., Suite F
Las Vegas, NV 89121
(Address of principal executive offices)
(702) 214-8440
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
past 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. Yes [X] No [ ]
As of August 11, 2000, 9,924,773 shares of Common Stock and 7,500
shares of Series B Preferred Stock were outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [X]
1
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GREAT BASIN WATER COMPANY
Form 10-QSB
INDEX
Page
Number
------
Part I Financial Information
Item 1 Financial Statements
Condensed Consolidated Balance Sheet
as of June 30, 2000 3
Condensed Consolidated Statements of
Operations for the three and six
months ended June 30, 2000 and 1999 4
Condensed Consolidated Statements of
Cash Flows for the six months ended
June 30, 2000 and 1999 5
Notes to Condensed Consolidated
Financial Statements 6
Item 2 Management's Discussion and Analysis
or Plan of Operation 7
Part II Other Information 8
Item 1 Legal Proceedings 8
Item 2 Changes in Securities and Use of
Proceeds 8
Item 3 Defaults upon Senior Securities 8
Item 4 Submission of Matters to a Vote of
Security Holders 8
Item 5 Other Information 8
Item 6 Exhibits and Reports on Form 8-K 8
Signatures 9
2
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GREAT BASIN WATER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2000
(Unaudited)
ASSETS
Current assets
Cash and cash equipvalents $ 16,578
Accounts receivable 2,300
Land Escrow 5,000
Other Receivables 2,500
-----------
Total current assets 26,378
Fixed Assets
Property and equipment, net 15,748
Wells including water rights 750,000
Capitalized costs 249,046
Land 55,000
-----------
Total fixed assets 1,069,794
Total assets $ 1,096,172
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities $ 60,038
Other payables 25
-----------
Total current liabilities 60,063
Long-Term Liabilities
Notes Payable 49,401
Loans from shareholders 210,457
-----------
Total long-term liabilities 259,858
Total liabilities 319,921
Stockholders' equity
Common Stock, $.001 par value -
25,000,000 shares authorized; 9,643,540
shares issued and outstanding 9,644
Preferred stock, $100 par value -
1,000,000 shares authorized; 7,500 shares
issued and outstanding 750,000
Paid-in capital 422,537
Accumulated deficit (405,930)
-----------
Total stockholders' equity 776,251
-----------
Total liabilities and stockholders' equity $ 1,096,172
===========
The accompanying notes are an integral part of this statement
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GREAT BASIN WATER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six months Ended
June 30 June 30
-------------------------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ - $ - $ - $ -
Operating expenses:
Rents 2,180 1,755 4,580 5,296
Payroll and payroll related 1,320 13,781 1,320 21,651
Taxes, licenses and fees 3,132 70 3,257 2,900
Services 34,150 1,999 44,021 8,920
Administrative and general expenses 14,597 18,243 24,857 34,622
Depreciation 915 1,209 1,830 2,109
-------------------------------------------------
Total operating expenses 56,294 37,057 79,865 75,498
Loss from operations (56,294) (37,057) (79,865) (75,498)
Other income (expense):
Interest income - - - -
Interest expense (560) - (1,060) -
-------------------------------------------------
Total other expense (560) - (1,060) -
-------------------------------------------------
Net Loss $ (56,854) $ (37,057) $ (80,925) $ (75,498)
=================================================
Basic and diluted net loss per common share $ (0.01) $ (0.01) $ (0.01) $ (0.01)
-------------------------------------------------
Weighted average shares outstanding 7,571,340 5,183,713 7,183,184 5,183,713
-------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements
4
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GREAT BASIN WATER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30
---------------------------
2000 1999
---- ----
Cash flows from operating activities:
Net cash used in operating activities $ (117,835) $ (3,166)
Cash flows from investing activities:
Capital Expenditures - -
Costs related to acquisition - -
Net cash used in investing activities - -
---------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock 148,780 -
Short-term borrowings - -
Long-term borrowings (16,000) -
---------------------------
Net cash provided by (used in)
financing activities 132,780 -
---------------------------
Net decrease in cash and cash equivalents 14,945 (3,166)
Cash and cash equivalents, beginning of period 1,633 4,799
---------------------------
Cash and cash equivalents, end of period $ 16,578 $ 1,633
===========================
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 1,060 $ -
Income taxes $ - $ -
The accompanying notes are an integral part of these statements
5
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GREAT BASIN WATER COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited condensed consolidated financial
statements of the Company for the three and six months
ended June 30, 2000 and 1999 have been prepared on the same
basis as the audited financial statements. In the opinion
of management, such unaudited information includes all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of this interim
information. Operating results and cash flows for interim
periods are not necessarily indicative of results for the
entire year. Certain prior period amounts have been
reclassified to conform to the current period presentation.
Additionally, certain information and footnote disclosures
normally included in a full set of financial statements
have been condensed or omitted pursuant to the Securities
and Exchange Commission rules and regulations. The
information included in this report should be read in
conjunction with the Company's audited financial statements
and notes thereto included in the Company's Report on Form
10SB12(g) for the year ended December 31, 1999 previously
filed with the Securities and Exchange Commission.
2. The Company currently has no operating revenue, and is
showing a loss for the current year of $80,925.
3. Cash for operations was received this period through sales
of stock to various private investors. Through these
sales, the Company raised $148,780. The majority of the
proceeds were used to pay accounts payable, and current
operating expenses. The Company increased outstanding
stock to 9,643,540 shares, and the additional paid in
capital increased from $301,190 to $422,537.
4. The Company has 7,500 shares of Preferred Series B Stock
valued at $100 per share, paying dividends at 8% per annum,
due on or before the first day of November. The first
dividend payment is due by November 1, 2000.
5. The Company currently has $210,457 in notes outstanding to
Darryl Shutteloffel. These notes are due to the
shareholder, and will be paid when the Company begins to
collect revenues.
6. The Company has a note outstanding in the amount of
$49,401, to Darrel Christensen. The note is for the land
that holds Well #1. No payments have been made on this
note in the current year.
7. The Company had a purchase contract for land on which the
Company was to construct a waste treatment plant. The
land, and the corresponding note were valued at $80,000 on
the balance sheet. The seller could not deliver title of
the land, therefore, the contract was cancelled. As a
result thereof, the asset, and the corresponding note have
been removed from the books in this period.
8. At December 31, 1999, the Company showed an investment of
$40,000 in HDB Telemetry Systems-Canada. Due to an
inability of HDB to finish the design and delivery of its
product, HDB and the Company agreed to end their business
relationship through the return of the original
consideration provided by both parties. Consequently HDB
returned the Company's 25,000 shares of Common Stock that
was issued to HDB, and the Company has returned HDB's stock
to HDB. As a result thereof, the original transaction
entered on the books has been reversed thereby removing the
HDB asset from the books and offsetting shareholder's
equity.
6
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Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RECENT EVENTS
-------------
The following information should be read in conjunction with
the interim financial statements and the notes thereto included
in Part 1, Item 1 of this Quarterly Report and the financial
statements and notes thereto contained in the Company's Form
10SB12(g)/A Amended Registration Statement. The Plan of
Operation has not materially changed from that filing with the
exception of the matters discussed below.
The Company's original plan of operation forecasted a
construction start for housing developments in the franchise area
of the Company's subsidiary, Shadow Ridge Water Company
(hereinafter "Shadow Ridge"), for March of 2000. Construction of
the housing developments has not occurred. Due to a disagreement
between the developers and the City of Mesquite, Nevada
(hereinafter the "City of Mesquite"), the City of Mesquite
refused to allow refuse from the planned developments to be
deposited in the land fill operated by the City of Mesquite.
This dispute precluded the issuance of building permits from
Mohave County, Arizona for the proposed developments. This
dispute has now been resolved and the Company expects the
developers construction permits to be issued by the end of
October of 2000. Once those permits are issued the Company
expects to begin construction of the proposed Shadow Ridge water
and waste water facilities more fully described in the Company's
previously filed Form 10SB12(g).
Forward-looking Statements
In addition to the historical information contained herein,
this Form 10-QSB contains forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
are subject to risks and uncertainties, including risks and
uncertainties set forth in this Form 10-QSB that may cause actual
results to differ materially. These forward-looking statements
speak only as of the date hereof. The Company disclaims any
intent or obligation to update these forward-looking statements.
RESULTS OF OPERATIONS
---------------------
Three months ended June 30, 2000
as compared to three months ended June 30, 1999
The Company is still in the development stage and has not
had any revenues for the three months ended June 30, 2000. This
represents no change from the prior period. The Company's loss
from operations has shown an increase to $56,294 for the three
months ended June 30, 2000, from $37,057 for the three months
ended June 30, 1999. This increase is consistent with the
Company's activities in conjunction with the preparation of plans
for construction of the Shadow Ridge water and wastewater
facilities. The primary increase in expenses is associated with
outside services which increased to $34,150 for the three months
ended June 30, 2000, from $1,999 for the three months ended June
30, 1999. This increase in expenses was partially offset by a
decrease in payroll related costs to $1,320 from $13,781 for the
respective periods ending June 30, 2000 and 1999.
Six months ended June 30, 2000
as compared to six months ended June 30, 1999
The Company is still in the development stage and has not
had any revenues for the six months ended June 30, 2000. This
represents no change from the prior period. The Company's loss
from operations has shown an increase to $79,865 for the six
months ended June 30, 2000 from $75,498 for the six months ended
June 30, 1999. This increase is consistent with the Company's
increased activities with the preparation of plans for
construction of the Shadow Ridge water and wastewater facilities.
The primary increase in expenses is associated with outside
services which increased to $44,021 for the three months ended
June 30, 2000 from $8,920 for the three months ended June 30,
1999. This increase in expenses was offset by a decrease in
payroll related costs to $1,320 from $21,651 for the respective
periods ending June 30, 2000 and 1999.
7
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LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company's operating activities used cash of $117,835 for
the six months ended June 30, 1999 as compared to a use of $3,166
for the same period in 1999. The financing activities during the
six months ended June 30, 2000 consisted of $148,780 for stock
sold by the Company in private placements.
The Company's current operations are cash flow negative and
as of June 30, 2000 the Company had $33,685 of working capital.
In order for the Company to construct the water and wastewater
facilities, estimated to be $1,200,000, necessary to provide
service to the proposed developments in the Shadow Ridge
franchise area, the Company will have to acquire additional
financing. The Company expects the developers to provide an
advance payment of "tap fees" in the amount of $350,000. The
Company would then be responsible for acquiring the additional
$850,000 needed for construction. The Company is actively
engaged in seeking out additional equity funding. However, there
can be no assurance that equity funding will be available, or
that, if available, capital can be obtained on terms favorable to
the Company. If adequate funds are not available, the Company's
ability to continue as a going concern would be impaired.
Part II. Other Information
-----------------
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
During the three months ended June 30, 2000 the Company
issued 3,801,200 shares of Common Stock. Of that amount,
1,500,800 shares were issued in a private placement for an
aggregate consideration of $148,780. For services rendered by
consultants or vendors, 300,200 shares of common stock were
issued. The remaining 2,000,000 shares of common stock were
issued to Darryl Schuttloffel, 1,000,000, and Ray Warren,
1,000,000, for services rendered as officers of the Company in
lieu of salaries.
As of August 11, 2000 the Company had issued an additional
281,233 shares of Common Stock. Of that amount, 278,233 shares
were issued in a private placement for an aggregate consideration
of $26,000. The remaining shares were issued for services
rendered by a consultant.
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
27 Financial Data Schedule - June 30, 2000
(b) Reports on Form 8-K
None.
8
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: August 18, 2000
Great Basin Water Company
/s/ Thomas R. Warren
Thomas R. Warren
Vice President of Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
9