<PAGE>
U.S. 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 quarterly period ended March 31, 2000
------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to ___________
Commission file number
GEOTEC THERMAL GENERATORS, INC
(Name of Small Business Issuer in Its Charter)
FLORIDA 59-3357040
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1615 S. Federal Highway, Suite 101, Boca Raton, Florida 33432
(Address of Principal Executive Offices)(Zip Code)
(561) 447-7370
(Issuer's Telephone Number, Including Area Code)
Check mark whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 20,748,025 shares of Common
Stock as of March 31, 2000.
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Geotec Thermal Generators
INDEX
Page
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 2000 1
Statements of Operations (unaudited) for the
Three Months Ended March 31, 2000 and 1999
and February 2, 1998 (inception) through March 31, 2000 2
Statements of Cash Flows (unaudited) for the
three Months Ended March 31, 2000 and 1999
and February 2, 1998(inception) through March 31, 2000 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis and Plan of
Operation 5-6
Signatures 7
2
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GEOTEC THERMAL GENERATORS, INC.
(A Development Stage Enterprise)
BALANCE SHEET
March 31,
2000
-------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash ........................................................ $ 155,603
Inventories ................................................. 129,960
----------
TOTAL CURRENT ASSETS .................................... 285,563
----------
PROPERTY AND EQUIPMENT, net ...................................... 49,046
ORGANIZATION COSTS, net .......................................... 560
DEPOSITS ......................................................... 16,879
-----------
$ 352,048
==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses ..........................$ 64,106
Note Payable ................................................ 362,500
-----------
TOTAL CURRENT LIABILITES ................................ 426,606
-----------
NOTE PAYABLE ...................................................... 119,500
-----------
SHAREHOLDERS' DEFICIT:
Common stock, $.001 par value, 50,000,000
shares authorized; 20,748,025 shares
issued and outstanding, .................... 20,748
Additional paid-in capital ................................... 1,242,105
Accumulated deficit .......................................... (1,456,911)
-----------
TOTAL SHAREHOLDERS' DEFICIT ............................ (194,058)
-----------
$ 352,048
==========
See notes to financial statements
1
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GEOTEC THERMAL GENERATORS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative
For the Three Months February 2, 1998
Ended March 31, (Inception) through
2000 1999 March 31, 2000
----------------- --------------- --------------------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
REVENUES $ - $ - $ -
COSTS AND EXPENSES:
General and administrative 645,194 34,920 1,446,045
----------------- --------------- ------------
OPERATING LOSS
(645,194) (34,920) (1,446,045)
----------------- --------------- -------------
OTHER EXPENSES
Interest expense (8,181) - (10,866)
----------------- --------------- ---------------
NET LOSS $ (653,375) $ (34,920) $ (1,456,911)
================= =============== ===================
BASIC AND DILUTED NET LOSS PER SHARE $ (0.03) $ (0.00) $ (0.07)
-------------- ------------ ------------
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 20,741,666 20,714,775 20,741,666
============== ============== ============
</TABLE>
See notes to financial statements
2
<PAGE>
GEOTEC THERMAL GENERATORS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
For the Three Months February 2, 1998
Ended March 31, (Inception) through
2000 1999 March 31 2000
--------------------- ---------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
Net loss $ (653,375) $ (34,920) $ (1,456,911)
----------------- -------------- ---------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 1,678 878 6,999
Deferred Compensation 110,250 - 110,250
Stock issued for compensation 388,840 - 421,378
Changes in assets and liabilities:
Increase in inventories - - (129,960)
Increase in organizational costs - - (1,242)
Increase in deposits - - (16,879)
Increase in accounts
payable and accrued expenses 54,367 81 64,106
----------------- -------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (98,240) (33,961) (1,002,259)
----------------- -------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and equipment (43,050) - (55,363)
----------------- -------------- ---------------
NET CASH USED IN INVESTING ACTIVITIES (43,050) - (55,363)
----------------- -------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 242,500 - 482,000
Proceeds from issuance of common stock 30,000 37,600 731,225
----------------- -------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 272,500 37,600 1,213,225
----------------- -------------- ---------------
NET INCREASE IN CASH 131,210 3,639 155,603
CASH, beginning of period 24,393 21 -
----------------- -------------- ---------------
CASH, end of period $ 155,603 $ 3,660 $ 155,603
----------------- -------------- ---------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Income taxes $ - $ - $ -
----------------- -------------- ---------------
Interest $ 4,038 $ - $ 43
----------------- -------------- ---------------
Non-cash investing and financing activity:
Common stock issued for services $ 388,840 $ - $ 421,378
----------------- -------------- ---------------
</TABLE>
See notes to financial statements
3
<PAGE>
Geotec Thermal Generators
Notes to Condensed Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The
results of operations for the three-month period ended March 31, 2000 are not
necessarily indicative of the results to be expected for the year ended December
31, 2000. The condensed interim financial statements should be read in
conjunction with the audited financial statements and notes, contained in the
Company's Annual Report on Form 10-KSB for the year-ended December 31, 1999.
2.PROPERTY AND EQUIPMENT
Property and equipment consisted of the following as of March 31,
2000:
Furniture and Fixtures 5 Years $ 30,677
Data processing equipment 3 Years 24,685
---------------
55,362
Less: accumulated depreciation (6,316)
------------
$ 49,046
=============
3. NOTES PAYABLE
In November 1999, the Company borrowed $120,000 from a Bahamian
Company. The terms of the loan are for the monthly interest payments
at an annualized rate of 12.50%. The principal of the loan is to be
paid one year from the date of issuance. The Company has pledged .42%
of all common stock outstanding on the date of the note's issuance.
In November 1999, the Company borrowed $119,500 from a Investment Trust
based in Bermuda. The loan is due in November 2001, two years from the
date of issuance. Interest on the note is 12.50% per annum, payable
upon repayment of the principal.
In March 2000 the Company borrowing a total of $242,500 from four
investors the notes bear interest at 12.5% per annum and payable
one year from date of issuance.
4.COMMON STOCK
The Company has completed a private placement of 10,250 shares of its
common stock at prices ranging from $2.50 to $3.20 per share.
4
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ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
This Quarterly Report on Form 10-QSB contains "forward-looking statements"
within the meaning of section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical facts, included in or incorporated by
reference into this Form 10-QSB, are forward-looking statements. In addition,
when used in this document, the words "anticipate," "estimate," "project" and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements are subject to certain risks, uncertainties and
assumptions including risks relating to our limited operating history and
operations losses; significant capital requirements; development of markets
required for successful performance by the Company as well as other risks
described in the Company's Annual Report on Form 10-KSB as well as in this
report on Form 10-QSB. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated or projected. Although the
Company believes that the expectations we include in such forward-looking
statements are reasonable, we cannot assure you that these expectations will
prove to be correct
The following discussion and analysis should be read in conjunction
with the financial statements of the Company and the notes thereto appearing
elsewhere herein.
OVERVIEW
The Company was incorporated in the state of Florida in February 1998 to provide
services in the energy industry. The Company has plans to begin full operations
in the second quarter of 2000.
The Company has obtained a ten-year exclusive license to market and sell a
unique oil treatment service to customers in North, Central, and South America.
This technology, identified in the industry as Gas Generators (TM) (or the
Generators), is designed to produce a thermo-chemical treatment of oil and gas
wells, in order to restore and increase output capacities, thereby enabling
increased production of oil. The proprietary technology was developed by the
former Soviet Union Military Research and Production Facility, FR&PC ALTAI, for
the USSR Ministry of Geology. This increase in oil production can be measured in
barrels per year, with one barrel of oil valued at approximately US$25.00 as of
March 2000. The Company was granted an exclusive license to import the
Generators for use in the oil and gas exploration industry in August 1997 and
three subsequent contracts comprise the patentability, long-term agreement and
transfer of technology.
RESULTS OF OPERATIONS
The Company is in the development stage. Since February 2, 1998(Inception), the
Company's efforts have been principally devoted to research, development,
initial marketing activities, licensing and raising capital. The Company has
generated no revenue and has incurred substantial operating losses to date,
which losses are continuing. Since inception, the Company has sustained
cumulative losses of ($1,456,911). These losses have resulted primarily from
expenditures for general and administrative activities, including salaries and
professional fees, which have aggregated $1,019,487 since inception. The Company
expects to generate revenues during the second quarter of the fiscal year,
although losses are expected to continue through fiscal year 2000.
5
<PAGE>
General and administrative expenses increased from $34,920 for the quarter ended
March 31, 1999 to $645,194 for the quarter ended March 31, 2000, an increase of
$610,274. The increases were due to additional employees hired, and increased
legal and accounting fees incurred in connection with the Company's expanding
activities and patent applications. The Company also incurred a charge of
$388,840 for stock options issued for public relations.
INVESTING ACTIVITIES
The Company purchased $43,050 of data processing equipment and furniture and
fixtures.
LIQUIDITY AND CAPITAL RESOURCES
In November 1999, the Company borrowed $119,500 from a Investment Trust based in
Bermuda. The loan is due in November 2001, two years from the date of issuance.
Interest on the note is 12.50% per annum, payable upon repayment of the
principal.
In March 2000 the Company borrowing a total of $242,500 from four investors the
notes bear interest at 12.5% per annum and payable one year from date of
issuance.
In March 2000 the Company borrowed a total of $242,500 from four investors the
notes bearing interest at 12.5% per annum and are due in March 2001.
The Company has completed a private placement of 10,250 shares of its common
stock at prices ranging from $2.50 to $3.20 per share.
In April 2000 the Company completed a private placement of 100,000 shares of
common stock at a price of $3.00 per share. The proceeds will be used to fund
the Company's operations while it obtains more permanent financing.
PART II. OTHER INFORMATION
ITEM 1 - 8.
NONE
6
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PART III
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Geotec Thermal Generators, Inc.
DATE:May 12, 2000 By: /s/ Daniel Pepe
---------------
President and COB
In accordance with the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:
DATE:May 12, 2000 /s/ Daniel Pepe
----------------
President and COB
DATE:May 12, 2000 /s/ W. Richard Lueck
---------------------
CEO, Secretary and Treasurer
DATE:May 12, 2000 /s/ Martin P. Scott
-------------------
Chief Financial Officer, Director
7
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001087717
<NAME> GEOTEC THERMAL GENERATORS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 155,603
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 129,960
<CURRENT-ASSETS> 285,563
<PP&E> 55,362
<DEPRECIATION> 6,316
<TOTAL-ASSETS> 352,048
<CURRENT-LIABILITIES> 426,606
<BONDS> 119,500
0
0
<COMMON> 20,748
<OTHER-SE> (214,806)
<TOTAL-LIABILITY-AND-EQUITY> 352,048
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 645,194
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,181
<INCOME-PRETAX> (653,375)
<INCOME-TAX> 0
<INCOME-CONTINUING> (653,375)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (653,375)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
