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SECURITIES & EXCHANGE COMMISSION
WASHINGTON DC 20549
Form 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 or (15) D OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 or 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ____________ to ____________
Commission file number 000-25875
EXHAUST TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
Washington 91-1970433
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
230 North Division Street
Spokane, Washington 99220-2822
(Address of principal executive office, including zip code.)
(509) 838-4401
(Registrant's telephone number)
As of July 21, 1999; there were 4,692,750 shares of the Registrant's
common stock outstanding.
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PART I
ITEM 1. FINANCIAL STATEMENTS.
EXHAUST TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
APRIL 30, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENT:
Cash $ 12,803
Supplies inventory 9,021
---------
TOTAL CURRENT ASSETS 21,824
OTHER ASSETS:
Licenses, net of accumulated
amortization of $2,134 20,307
---------
$ 42,131
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT:
Accounts payable $ 7,516
Accrued interest 1,235
Line of credit-related party (Note 3) 22,509
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TOTAL CURRENT LIABILITIES 31,260
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COMMITMENTS AND CONTINGENCIES
(Notes 1,3 and 4)
STOCKHOLDERS' EQUITY:
Common stock, $.00001 par value;
100,000,000 shares authorized;
4,692,750 shares issued and
outstanding 47
Additional paid-in capital 72,088
Deficit accumulated during the
development stage (61,264)
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TOTAL STOCKHOLDERS' EQUITY 10,871
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$ 42,131
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</TABLE>
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EXHAUST TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF LOSS
<TABLE>
<CAPTION>
Three months Date of Inception
Ended (July 21, 1998
April 30, 1999 Through
April 30, 1999)
<S> <C> <C>
REVENUES $ - $ -
OPERATING EXPENSES:
Professional services 22,173 22,173
Advertising 1,300 1,300
Office expense 925 1,584
Amortization 550 2,134
Travel - 2,838
Director's fees - 30,000
---------- ---------
TOTAL OPERATING EXPENSES 24,948 60,029
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LOSS FROM OPERATIONS (24,948) (60,029)
OTHER EXPENSE:
Interest expense (450) (1,235)
---------- ---------
NET LOSS $ (25,398) $ (61,264)
---------- ---------
NET LOSS PER SHARE - BASIC
AND DILUTED $ (0.01)
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WEIGHTED AVERAGE NUMBER OF
SHARES - BASIC AND DILUTED 4,682,385
----------
</TABLE>
2
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EXHAUST TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash
THREE MONTHS ENDED APRIL 30, 1999
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $ (25,398)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 550
Changes in assets and liabilities:
Accounts payable 7,516
Inventory and supplies (1,030)
Accrued interest 450
---------
Net cash used in operating activities (17,912)
---------
Cash flows from investing activities:
Cash paid for licenses (6,600)
---------
Net cash used in investing activities (6,600)
---------
Cash flows from financing activities:
Net proceeds from sale of common stock 10,050
---------
Net cash provided by financing activities 10,050
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Net decrease in cash (14,462)
Cash, beginning of period 27,265
---------
Cash, end of period $ 12,803
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Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ -
---------
Income taxes $ -
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</TABLE>
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EXHAUST TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO INTERIM FINANCIAL STATEMENTS
1. Basis of Presentation
The foregoing unaudited interim financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-QSB and Article 10 of Regulation S-X as promulgated by the Securities
and Exchange Commission. Accordingly, these financial statements do
not include all of the disclosures required by generally accepted
accounting principles for complete financial statements. These
unaudited interim financial statements should be read in conjunction
with the audited financial statements for the period ended January 31,
1999. In the opinion of management, the unaudited interim financial
statements furnished herein include all adjustments, all of which are
of a normal recurring nature, necessary for a fair statement of the
results for the interim period presented.
The preparation of financial statements in accordance with
generally accepted accounting principles requires the use of estimates
and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities known to
exist as of the date the financial statements are published, and the
reported amounts of revenues and expenses during the reporting period.
Uncertainties with respect to such estimates and assumptions are
inherent in the preparation of the Company's financial statements;
accordingly, it is possible that the actual results could differ from
these estimates and assumptions which could have a material effect on
the reported amounts of the Company's financial position and results of
operations.
Operating results for the three-month period ended April 30, 1999
are not necessarily indicative of the results that may be expected for
the year ending January 31, 2000.
2. Development Stage Operations and Going Concern
The Company has been in the development stage since its inception.
The Company has no recurring source of revenue and has incurred losses
since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The financial
statements do not include any adjustments that may be necessary if the
Company is unable to continue as a going concern.
Management of the Company has undertaken certain actions to
address these conditions. Management currently plans to commence
production in fiscal 2000. To this end, management is currently in
negotiations with manufacturers to produce the Company's products and
with marketing representatives to establish a product channel. Funds
required to carry out management's plans are expected to be derived from
future stock sales or borrowings from the Company's shareholders. There
can be no assurances that the Company will be successful in executing
its plans.
<PAGE> 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
General
These discussions contain forward-looking statements containing words
such as "will continue to be," "will be," "continue to," "anticipates
that," "to be," or "can impact." Management cautions that forward-
looking statements are subject to risks and uncertainties that could
cause the Company's actual results to differ materially from those
projected in forward-looking statements.
Three Months Ended April 30, 1999
For the three months ended April 30, 1999 the Company reported a net
loss of $25,398. The Company is in the development stage and has been
since inception. The operating expenses that were incurred were for
professional costs related to Securities and Exchange Commission filing
fees and preliminary costs advanced towards future product production.
The Company is in the process of obtaining manufacturers for its
products and sales outlets. There have been no revenues received since
inception and no revenues are expected until management receives the
necessary funds to begin production.
Financial Condition and Liquidity
At April 30, 1999, the Company had $12,803 of cash. The Company's
sources of cash have been from short-term borrowings from a related
party and from sales of the Company's common stock. Future funds
required to carry out management's plans are expected to be derived from
future stock sales or borrowings from the Company's shareholders. There
can be no assurances that the Company will be successful in executing
its plans.
Impact of Year 2000
The Company is aware of the issues associated with the programming code
in existing computer systems as the millennium (year 2000) approaches.
The "year 2000" problem is pervasive and complex as virtually every
computer operation will be affected in some way by the rollover of the
two digit year value to 00. The issue is whether computer systems will
properly recognize date sensitive information when the year changes to
2000. Systems that do not properly recognize such information could
generate erroneous data or cause a system to fail. Since the company
is not producing or maintaining time sensitive operations at present,
the year 2000 problem is not anticipated to have a significant impact
on the Company's operations. However, it may have a significant impact
on key suppliers and customers with whom the Company may conduct
business in the future.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company knows of no litigation present, threatened or contemplated
or unsatisfied judgment against the Company, its officers or directors
or any proceedings in which the Company, its officers or directors are
a party.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The rights of the holders of the Company's securities have not been
modified nor have the rights evidenced by the securities been limited
or qualified by the issuance or modification of any other class of
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There are no senior securities issued by the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters presented to the shareholders for vote during the
first quarter ended April 30, 1999.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed for the quarter ended April 30, 1999.
Exhibits
Exhibit
No. Description
27 Financial Data Schedule.
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated this 10th day of August, 1999.
EXHAUST TECHNOLOGIES, INC.
BY: /s/ Robert E. Sterling
Robert E. Sterling, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at April 30, 199 (Unaudited) and
the Consolidated Statement of Incomee for the three months ended April 30, 1999
(Unaudited) and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> APR-30-1999
<CASH> 12,803
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 9,021
<CURRENT-ASSETS> 21,824
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 42,131
<CURRENT-LIABILITIES> 31,260
<BONDS> 0
0
0
<COMMON> 47
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,871
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 24,948
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 450
<INCOME-PRETAX> (25,398)
<INCOME-TAX> 0
<INCOME-CONTINUING> (25,398)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25,398)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
