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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 Securities Exchange Act
of 1934 for the transition period from ____________ to ______________
Commission file number: 000-29139
ESSENTIAL SOLUTIONS INC.
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(Exact name of small business issuer as specified in its charter)
Wyoming 86-0970139
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5505 N. Indian Trail, Tucson, Arizona 85750
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(Address of principal executive office) (Zip Code)
(520) 577-1516
----------------------
(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 XX No
----- -----
The number of outstanding shares of the issuer's common stock, $0.001 par value,
as of May 1, 2000 was 1,000,000.
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<S> <C>
ITEM 1. FINANCIAL STATEMENTS..................................................3
Condensed Balance Sheets as of December 31, 1999
and March 31, 2000..............................................5
Condensed Statements of Operations
for the Three Month Periods Ended
March 31, 2000 and 1999.........................................6
Condensed Statements of Cash Flows
for the Three Month Periods Ended
March 31, 2000 and 1999.........................................7
Notes to Unaudited Condensed Financial Statements......................9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.................................10
<CAPTION>
PART II - OTHER INFORMATION
<S> <C>
ITEM 1 LEGAL PROCEEDINGS......................................................12
ITEM 2 CHANGES IN SECURITIES..................................................12
ITEM 5 OTHER INFORMATION......................................................12
INDEX TO EXHIBITS.............................................................13
</TABLE>
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PART I
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Essential
Solutions Inc., a Wyoming corporation, and its subsidiaries and
predecessors unless otherwise indicated. Unaudited, condensed
interim financial statements including a balance sheet for the
Company as of the quarter ended March 31, 2000 and statements of
operations, statements of shareholders equity and statements of
cash flows for the interim period up to the date of such balance
sheet and the comparable period of the preceding year.
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INDEPENDENT ACCOUNTANTS' REPORT
Essential Solutions Inc.
(A Development Stage Company)
We have reviewed the accompanying balance sheets of
Essential Solutions Inc. (a development stage company) as of
March 31, 2000, and the related statements of operations, and
cash flows for the three month period then ended. These
financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an
opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements for them to be in conformity with generally accepted
accounting principles.
Respectfully submitted
/s/ Robinson, Hill & Co.
---------------------------
Certified Public Accountants
Salt Lake City, Utah
May 11, 2000
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ESSENTIAL SOLUTIONS INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------------- -------------------
<S> <C> <C>
ASSETS: $ - $ -
================ ===================
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ - $ -
================ ===================
Total Liabilities
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 Shares at
March 31, 2000 and December 31, 1999 1,000 1,000
Paid-In Capital 955 75
Retained Deficit (1,050) (1,050)
Deficit Accumulated During the
Development Stage (905) (25)
---------------- -------------------
Total Stockholders' Equity - -
---------------- -------------------
Total Liabilities and
Stockholders' Equity $ - $ -
================ ===================
</TABLE>
See accompanying notes and accountants' report.
5
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ESSENTIAL SOLUTIONS INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative
since
October
For the three months 20, 1999
ended inception
March 31, of
------------------------------- development
2000 1999 stage
------------------------------- ----------------
<S> <C> <C> <C>
Revenues: $ - $ - $ -
Expenses: 880 - 905
--------------- --------------- ----------------
General & Administrative
=============== =============== ================
Net Loss $ (880) $ - $ (905)
=============== =============== ================
Basic & Diluted loss per $ - $ -
=============== ===============
</TABLE>
See accompanying notes and accountants' report.
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ESSENTIAL SOLUTIONS INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
Since
October
For the three months 20, 1999
ended Inception
March 31, of
------------------------------- Development
1999 1998 Stage
--------------- --------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (880) $ - $ (905)
Increase (Decrease) in Accounts - - (50)
Payable
--------------- --------------- --------------
Net Cash Used in operating (880) - (955)
activities
--------------- --------------- --------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by investing activities - - -
--------------- --------------- --------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Capital contributed by 880 - 955
shareholder
--------------- --------------- --------------
Net Cash Provided by
Financing Activities 880 - 955
--------------- --------------- --------------
Net (Decrease) Increase in
Cash and Cash Equivalents - - -
Cash and Cash Equivalents
at Beginning of Period - - -
--------------- --------------- --------------
Cash and Cash Equivalents
at End of Period $ - $ - $ -
=============== =============== ==============
<CAPTION>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<S> <C> <C> <C>
Cash paid during the year for:
Interest $ - $ - $ -
Franchise and income taxes $ - $ - $ 75
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
See accompanying notes and accountants' report.
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ESSENTIAL SOLUTIONS INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Essential Solutions
Inc. is presented to assist in understanding the Company's
financial statements. The accounting policies conform to
generally accepted accounting principles and have been
consistently applied in the preparation of the financial
statements.
The unaudited financial statements as of March 31, 2000 and
for the three months then ended reflect, in the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to fairly state the financial position
and results of operations for the three months. Operating
results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of
Wyoming on April 19, 1997. The Company ceased all operating
activities during the period from April 19, 1997 to October 20,
1999 and was considered dormant. Since October 20, 1999, the
Company is in the development stage, and has not commenced
planned principal operations.
Nature of Business
The Company has no products or services as of March 31,
2000. The Company was organized as a vehicle to seek merger or
acquisition candidates. The Company intends to acquire
interests in various business opportunities, which in the
opinion of management will provide a profit to the Company.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents to the
extent the funds are not being held for investment purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles required management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Loss per Share
The reconciliations of the numerators and denominators of
the basic loss per share computations are as follows:
8
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ESSENTIAL SOLUTIONS INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Continued)
<TABLE>
<CAPTION>
Income Shares Per-Share
(Numerator) (Denominator) Amount
For the three months ended March 31, 2000
-----------------------------------------
<S> <C> <C> <C>
Basic Loss per Share
Loss to common
shareholders $ (880) 1,000,000 $ -
======================== ====================== =========================
For the three months ended March 31, 1999
Basic Loss per Share
Loss to common
shareholders $ - 1,000,000 $ -
======================== ====================== =========================
</TABLE>
The effect of outstanding stock equivalents are
anti-dilutive for March 31, 2000 and 1999 and are thus not considered.
Reclassification
Certain reclassifications have been made in the 2000 and
1999 financial statements to conform with the March 31, 2000
presentation.
NOTE 2 - INCOME TAXES
As of March 31, 2000, the Company has a net operating loss
carryforward for income tax reporting purposes of approximately
$2,000 that may be offset against future taxable income through
2011. Current tax laws limit the amount of loss available to be
offset against future taxable income when a substantial change
in ownership occurs. Therefore, the amount available to offset
future taxable income may be limited. No tax benefit has been
reported in the financial statements, because the Company
believes there is a 50% or greater change the carry-forwards
will expire unused. Accordingly, the potential tax benefits of
the loss carry-forwards are offset by a valuation allowance of
the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is
common with a development stage company, the Company has had
recurring losses during its development stage.
NOTE 4 - COMMITMENTS
As of March 31, 2000 all activities of the Company have
been conducted by corporate officers from either their homes or
business offices. Currently, there are no outstanding debts
owed by the Company for the use of these facilities and there
are no commitments for future use of the facilities.
9
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ESSENTIAL SOLUTIONS INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Continued)
NOTE 5 - STOCK SPLIT
On October 20, 1999 the Board of Directors authorized 1,000
to 1 stock split, changed the authorized number of shares to
100,000,000 shares and the par value to $.001 for the Company's
common stock. As a result of the split, 999,000 shares were
issued. All references in the accompanying financial statements
to the number of common shares and per-share amounts for 1999
and 1998 have been restated to reflect the stock split.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report contains certain 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, which are intended to be
covered by the safe harbors created thereby. Investors are
cautioned that all forward-looking statements involve risks and
uncertainty, including without limitation, the ability of the
Company to continue its expansion strategy, changes in costs of
raw materials, labor, and employee benefits, as well as general
market conditions, competition and pricing. Although the
Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no
assurance that the forward-looking statements included in this
Quarterly Report will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking
statements including herein, the inclusion of such information
should not be regarded as are presentation by the Company or any
other person that the objectives and plans of the Company will
be achieved.
As used herein the term "Company" refers to Essential Solutions
Inc., a Wyoming corporation and its predecessors, unless the
context indicates otherwise. The Company is currently a shell
company whose purpose is to acquire operations through an
acquisition or merger or to begin its own start-up business.
The Company is in the process of attempting to identify and
acquire a favorable business opportunity. The Company has
reviewed and evaluated a number of business ventures for
possible acquisition or participation by the Company. The
Company has not entered into any agreement, nor does it have any
commitment or understanding to enter into or become engaged in a
transaction as of the date of this filing. The Company
continues to investigate, review, and evaluate business
opportunities as they become available and will seek to acquire
or become engaged in business opportunities at such time as
specific opportunities warrant.
RESULTS OF OPERATIONS
The Company had no sales or sales revenues for the three months
ended March 31, 2000 or 1999 because it is a shell company that
has not had any business operations for the past three years.
The Company had no costs of sales revenues for the three months
ended March 31, 2000 or 1999 because it is a shell company that
has not had any business operations for the past three years.
The Company had no general and administrative expenses for the
three months period ended December 31, 2000 or for the same
period in 1999.
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The Company recorded net loss of $880 for the three months ended
March 31, 2000 compared to $0 loss for the same period in 1999.
CAPITAL RESOURCES AND LIQUIDITY
At March 31, 2000, the Company had total current assets of $0
and total assets of $0 as compared to $0 current assets and $0
total assets at December 31, 1999. The Company had a net
working capital deficit of $0 at March 31, 2000 and December 31,
1999.
Net stockholders' deficit in the Company was $0 as of March 31,
2000 and December 31, 1999.
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PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None/Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None/Not Applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
(a) Exhibits. Exhibits required to be attached by Item 601 of
Regulation S-B are listed in the Index to Exhibits on page
12 of this Form 10-QSB, and are incorporated herein by
reference.
(b) Reports on Form 8-K. No reports on Form 8-K were filed
during the period covered by this Form 10-QSB.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, this 11th day of
May, 2000.
Essential Solutions Inc.
/s/ Daniel L. Hodges
---------------------------
Daniel L. Hodges May 11, 2000
President/CFO and Director
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EXHIBIT INDEX
Exhibit No. Page No. Description
27 12 Financial Data Schedule "CE"
13
