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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended SEPTEMBER 30, 2000
( ) Transition report pursuant of Section 13 or 15(d) of the Securities
Exchange Act of 1939 for the transition period ____ to______
COMMISSION FILE NUMBER 0-29185
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SAVE THE WORLD AIR INC.
(Exact name of registrant as specified in its charter)
Nevada 52-2088326
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1285 Avenue of the Americas, 35th Floor New York, NY 10019-6028 212 554 4197
--------------------------------------------------------------- ------------
(Address of Principal Executive Offices, including Registrant's zip code and
telephone number)
Mandalay Capital Corp.
----------------------
Former name, former address and former fiscal year, if changed
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.
Yes [X] No [ ]
The number of shares of the registrant's common stock as of September 30, 2000:
15,579,222 shares.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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TABLE OF CONTENTS PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheet 3
(b) Statement of Operations 4
(c) Statement of Changes in Financial Position 5
(d) Statement of Stockholders' Equity 6
(e) Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION 10
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6
(a) Exhibits
(b) Reports on Form 8K
SIGNATURES 11
FINANCIAL DATA SCHEDULE 12
2
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<TABLE>
SAVE THE WORLD AIR INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(UNAUDITED)
<CAPTION>
September 30, December 31,
2000 1999
---------- ----------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ - $ 595
---------- ----------
Total current assets - 595
Intangible assets
Marketing and manufacturing rights to Zero Pollution
Fuel Saving Device 505,000 505,000
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Total assets $ 505,000 $ 505,595
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Payable to shareholder $ 760,812 $ 500,000
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Total current liabilities 760,812 500,000
Shareholders' equity
Common stock (par value $0.001) 200,000,000 shares authorized;
September 30, 2000-15,579,222 issued; December 31,
1999-15,297,125 issued 15,579 15,297
Paid in capital 14,270 14,270
Deficit accumulated during development stage (285,661) (23,972)
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Total shareholders' equity (255,812) 5,595
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Total liabilities and shareholders' equity $ 505,000 $ 505,595
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
SAVE THE WORLD AIR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2000
AND SEPTEMBER 30, 1999
(UNAUDITED)
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCOME
Sales of licenses for distributorships $ - $ - $ - $ 125,000
Consultancy fees 9,980 - 9,980 -
GENERAL AND ADMINISTRATIVE EXPENSES
Accommodation 9,007 - 49,818 -
Accounting and auditing 3,500 - 8,375 -
Bank charges 3,022 - 3,895 144
Car hire 2,254 - 7,119 -
Computer service 6,811 - 9,408 -
Consulting 23,250 309 88,277 3,867
Filing fees - - 1,581 -
Internet services 2,906 - 6,243 -
Legal expenses 68 - 68 -
Mineral claims written off - 1,955 1,955 -
Miscellaneous 1,077 - 1,077 -
Printing and postage 144 - 365 1,053
Professional fees - - 1,021 62,500
Radio and PR services - - 13,594 -
Rent - - 1,216 -
Secretarial fees - 506 866 11,164
Telephone 3,236 - 7,629 -
Transfer agent's fees - - 13,018 -
Travel 17,591 98 58,099 46,982
-------------- -------------- -------------- --------------
Total expenses 72,866 2,868 271,669 127,665
-------------- -------------- -------------- --------------
Loss from operations before income taxes (72,866) (2,868) (261,689) (2,665)
Income taxes - - - -
-------------- -------------- -------------- --------------
Net (loss) $ (72,866) $ (2,868) $ (261,689) $ (2,665)
============== ============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
SAVE THE WORLD AIR INC.
(DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
AND SEPTEMEBER 30, 1999
(UNAUDITED)
<CAPTION>
Nine months Nine months
ended ended
September 30, September 30,
2000 1999
-------------- --------------
<S> <C> <C>
Funds provided from (used for) operations
Net (loss) during development stage $ (261,689) $ (2,665)
Funds provided by (used for) working capital
Prepaid expenses - 1,000
Payable to shareholder 260,812 500,000
Funds provided (used for) disposition or purchase of intangible assets
Rights to Zero Pollution Fuel Saving Device - (505,000)
Mineral property - 1,955
Funds provided from (used for) financing activities
Proceeds from issuance of stock 282 5,267
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Net funds provided from (used for) all activities (595) 557
Cash balance at year end 595 38
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Cash balance at September 30 $ - $ 595
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
SAVE THE WORLD AIR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30 1999
(UNAUDITED)
<CAPTION>
Common Stock
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Number of Issued at par Paid in Deficiency
shares capital
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<S> <C> <C> <C> <C>
Balance at December 31, 1998 10,030,000 $ 10,030 $ 14,270 $ (21,307)
Common stock issued after acquisition of
rights to Zero Pollution Fuel Saving Device 5,000,000 5,000 - -
Common stock issued for services rendered 267,125 267 - -
Net(Loss) for the nine months (2,665)
-------------- ---------------- ------------- -------------
Balance at September 30, 1999 15,297,125 $ 15,297 $ 14,270 $ (23,972)
============== ================ ============= =============
Common Stock
---------------------------------------------------
Number of Issued at par Paid in Deficiency
shares capital
-------------- ---------------- ------------- -------------
Balance at December 31, 1999 15,297,125 $ 15,297 $ 14,270 $ (23,972)
Common stock issued for services rendered 282,097 282 - -
Net (Loss) for the nine months - - - (261,689)
-------------- ---------------- ------------- -------------
Balance at September 30, 1999 15,579,222 $ 15,579 $ 14,270 $ (285,661)
============== ================ ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
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SAVE THE WORLD AIR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
AND SEPTEMBER 30, 1999
(UNAUDITED)
1. DESCRIPTION OF THE BUSINESS
The Company was incorporated on February 18, 1998 under the name "Mandalay
Capital Corp.". The Company changed its name to "Save the World Air, Inc." on
February 11, 1999 following the signing of the agreement by and between the
Company and Jeffrey Muller with respect to the Company's purchase of "Zero
Pollution Emission Device" . Under the terms of the agreement, the Company
issued 5,000,000 shares of its common stock to Mr. Muller and agreed to pay
$500,000 and $10 royalty for every unit of the device sold.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with generally
accepted accounting principles and include the following policies.
(a) BASIS OF PRESENTATION - GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The
company has been engaged in the development of its zero pollution fuel
saving device. The Company's ability to meet its obligations and
successfully develop its project and, ultimately, to attain profitable
operations is dependent upon further developing and marketing the
device known as Zero Pollution and obtaining additional
financing from either third parties or its present stockholders.
(b) ACCOUNTING METHODS
The Company recognizes income and expenses based on the accrual method
of accounting.
(c) DIVIDEND POLICY
The Company has not yet adopted any policy regarding the payment of
dividends.
(d) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments purchased with
maturity, at the time of purchase, of less than three months, to be
cash equivalents.
(e) LOSS PER SHARE
Primary loss per share amount is computed based on the weighted average
number of shares actually outstanding during the period reported on.
Fully diluted loss per share is computed under the same basis since
there are not warrants or share subscriptions outstanding.
(f) INCOME TAXES
The Company has a operating loss carry-forward incurred from inception
to December 31 1999 in the amount of $23,972. No tax benefit from the
operating loss carried forward has been recorded because the future tax
benefit is uncertain.
The net operating loss carryover will expire beginning in the year 1999
through 2013.
(g) FOREIGN CURRENCY TRANSLATION
The transactions of the Company completed in foreign currencies have
been translated to US dollars. Assets and liabilities are translated at
the year-end exchange rates and the income and expenses at the average
rates of exchange prevailing during the period reported on. Any gains
or loss resulting from the translations would be shown in the Statement
of Operations.
(h) START UP COSTS
The Company has expensed all start up expenses in accordance with AICPA
Statements of Position 98-5.
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3. RELATED PARTY TRANSACTIONS
All of the marketing and manufacturing rights for the Zero Pollution Fuel Saving
Device were acquired from Jeffrey Muller, the Company's officer and sole
director for 5,000,000 shares, $500,000 and a $10 royalty for each unit sold,
pursuant to the agreement entered into in December, 1998, by and between
the Company and Mr. Muller.
Mr. Muller, the majority stockholder, is active in running the business of the
Company. No compensation is paid and the Company has reflected no expense in the
Statement of Operations.
In January, 2000 the Company entered into an agreement offering Jeffrey Muller
and Lynne Muller, Mr. Muller's wife, the rights to purchase five million shares
each at $0.10 per share (current market price as of the date of grant) as
consideration for work done for the Company.
4. LEASES
The Company has no leases of any property. The Company presently uses the
offices of its attorney at 1285 Avenue of the Americas, 35th Floor, New York,
N.Y. 10019-6029, the offices of one of its shareholders in Australia and another
office in San Diego, all such arrangements are at no cost to the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE
COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 THE 1995 ACT SHAREHOLDERS AND
PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER
ANY FORWARD - LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY
ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED HEREIN. THESE FORWARD - LOOKING STATEMENTS INCLUDE PLANS AND
OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES
RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY.
ASSUMPTIONS RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG
OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE
BUSINESS DECISIONS, AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE
DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT
ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE
COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD - LOOKING
STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE
INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE RESULTS
CONTEMPLATED IN ANY OF THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN WILL BE
REALIZED. BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY
ALTER ITS MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN
TURN AFFECT THE COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT
UNCERTAINTIES INHERENT IN THE FORWARD - LOOKING STATEMENTS INCLUDED THEREIN, THE
INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY
THE COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL
BE ACHIEVED.
The Company was incorporated in February 1998 and the sole purpose of the
Company is the manufacture and distribution of the device commonly referred to
as the Zero Emission Fuel Saving Device ("ZEFS").
The Company has yet to make a profit and the Board of Directors believe that the
Company will not make a profit in the immediate future.
The purpose of the Company is to develop the technology and then to sell
Country, Regional and Area licenses world wide for the distribution of the
device. At the same time, the Company continues to research and develop the
product for increasing technological efficiency. It is also examining the market
capabilities of other new environmentally friendly technologies.
The Company does not have the liquidity or the funding surplus to continue
either its research and development or its day-to-day operations. These costs
are being met from the personal resources of the majority shareholder. Once the
Company reaches a level of profitability, the shareholder's loans will be
expected to be repaid by the Company together with any deferred compensation due
to the shareholder.
This shareholder has not placed an upper limit on the Company expenditure, but
the Company anticipates that its reliance on this shareholder will diminish
within the next two fiscal quarters as distribution licenses are sold within
mainland America and other countries.
The comparison of the third quarter and first nine months of 2000 with the third
quarter and first nine months of 1999 indicates that the Company has increased
its level of spending on company operations. Marketing efforts will be stepped
up as finances allow.
The Company will continue in its efforts to raise capital. There can be no
assurance that the Company will be able to obtain capital.
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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 on senior securities NONE
Item 4. Submission of items to a vote NONE
Item 5. Other information NONE
Item 6.
a) Exhibits NONE
b) Reports on 8K NONE
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
SAVE THE WORLD AIR, INC.
(REGISTRANT)
Signature Title Date
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/s/ Jeffrey A. Muller Chairman and President November 20, 2000
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(Jeffrey A. Muller)
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