UNITED STATES 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 September 30, 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: 000-30577
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TEQ - 1 Corporation
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(Name of Small Business Issuer in its charter)
Nevada 87-0569747
--------------------------------- --------------------------
(State or Other Jurisdiction of (IRS Employer ID Number)
Incorporation or Organization)
3434 East 7800 South, #237, Salt Lake City, Utah 84121
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(Address of Principal Executive Offices and Zip Code)
Issuer's telephone number: (801) 274-6415
-----------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required to
be filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to 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:
As of November 10, 2000, there were 1,100,000 shares of common stock
issued and outstanding.
Total of Sequentially Numbered Pages: 16
Index to Exhibits on Page: 16
<PAGE>
FORM 10-QSB
TEQ - 1 CORPORATION
TABLE OF CONTENTS
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PAGE
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PART I
ITEM 1. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION . . .13
PART II
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . .14
ITEM 2. CHANGES IN SECURITIES . . . . . . . . . . . . . . . . . . . . .15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . .15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . .15
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . . . . . . .15
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
2
<PAGE>
PART I
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ITEM 1. FINANCIAL STATEMENTS
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In the opinion of management, the accompanying unaudited financial
statements included in this Form 10-QSB reflect all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation of the
results of operations for the periods presented. The results of operations
for the periods presented are not necessarily indicative of the results to be
expected for the full year.
[THIS SPACE INTENTIONALLY LEFT BLANK]
3
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2000
4
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
CONTENTS
----------
PAGE
------
Unaudited Condensed Balance Sheets,
September 30, 2000 and December 31, 1999 2
Unaudited Condensed Statements of Operations,
for the three and nine months ended September 30,
2000 and 1999 and from inception on November 19,
1997 through September 30, 2000 3
Unaudited Condensed Statements of Cash Flows,
for the nine months ended September 30, 2000
and 1999 and from inception on November 19, 1997
through September 30, 2000 4 - 5
Notes to Unaudited Condensed Financial Statements 6 - 8
5
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
--------
September 30, December 31,
2000 1999
------------- -------------
CURRENT ASSETS:
Cash in bank $ 1,085 $ --
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Total Current Assets 1,085 --
------------- -------------
$ 1,085 $ --
============= =============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
---------------------------------------
CURRENT LIABILITIES:
Accrued interest payable - related party $ 181 $ 80
Note payable - related party 3,715 635
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Total Current Liabilities $ 3,896 $ 715
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STOCKHOLDERS' (DEFICIT):
Preferred stock, $.001 par value,
5,000,000 shares authorized,
0 shares issued and outstanding -- --
Common stock, $.001 par value,
20,000,000 shares authorized,
1,100,000 shares issued and
outstanding 1,100 1,100
Additional paid in capital -- --
Deficit accumulated during the
development stage (3,911) (1,815)
------------- -------------
Total Stockholders' (Deficit) (2,811) (715)
------------- -------------
$ 1,085 $ --
============= =============
Note: The balance sheet at December 31, 1999 was taken from the audited
financial statements at the date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-2-
6
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
<TABLE>
<CAPTION>
For the Three For the Nine From Inception
Months Ended Months Ended on November 19,
September 30, September 30, 1997 Through
------------------------ ------------------------ September 30,
2000 1999 2000 1999 2000
----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
REVENUE:
Sales $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- ----------------
EXPENSES:
General and administrative 675 -- 1,915 -- 3,650
----------- ----------- ----------- ----------- ----------------
LOSS FROM OPERATIONS (675) -- (1,915) -- (3,650)
OTHER EXPENSE:
Interest expense (93) -- (181) -- (261)
----------- ----------- ----------- ----------- ----------------
LOSS BEFORE INCOME TAXES (768) -- (2,096) -- (3,911)
CURRENT INCOME TAXES -- -- -- -- --
DEFERRED INCOME TAXES -- -- -- -- --
----------- ----------- --------- ----------- ----------------
NET LOSS $ (768) $ -- $ (2,096) $ -- $ (3,911)
----------- ----------- ----------- ----------- ----------------
LOSS PER SHARE $ (.00) $ -- $ (.00) $ -- $ (.00)
----------- ----------- ----------- ----------- ----------------
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
financial statements
-3-
7
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
From
For the Nine Inception on
Months Ended November 19,
September 30, 1997 through
---------------------- September 30,
2000 1999 2000
---------- ---------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,096) $ - $ (3,911)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Stock issued for services rendered - - 1,100
Changes is assets and liabilities:
Increase in interest payable -
related party 181 - 261
---------- ---------- --------------
Net Cash (Used) by
Operating Activities (1,915) - (2,550)
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CASH FLOWS FROM INVESTING ACTIVITIES: - - -
---------- ---------- --------------
Net Cash (Used) by
Investing Activities - - -
---------- ---------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in notes payable - related
party 3,000 - 3,635
---------- ---------- --------------
Net Cash Provided by
Financing Activities 3,000 - 3,635
---------- ---------- --------------
NET INCREASE IN CASH 1,085 - 1,085
CASH AT BEGINNING OF THE PERIOD - - -
---------- ---------- --------------
CASH AT END OF THE PERIOD $ 1,085 $ - $ 1,085
---------- ---------- --------------
[Continued]
-4-
8
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
[Continued]
From
For the Nine Inception on
Months Ended November 19,
September 30, 1997 through
---------------------- September 30,
2000 1999 2000
---------- ---------- --------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
For the nine months ended September 30, 2000:
None
For the nine months ended September 30, 1999:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-5-
9
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - TEQ-1 Corporation (the Company) was organized under the laws of
the State of Nevada on November 19, 1997. The Company has not commenced
planned principal operations and is considered a development stage company as
defined in SFAS No. 7. The Company is seeking potential business ventures.
The Company has, at the present time, not paid any dividends and any dividends
that may be paid in the future will depend upon the financial requirements of
the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
September 30, 2000 and 1999 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1999
audited financial statements. The results of operations for the periods ended
September 30, 2000 are not necessarily indicative of the operating results for
the full year.
Organization Costs - Organization costs, which reflect amounts expended to
organize the Company, amounted to $1,100 and were expensed during the period
ended December 31, 1997.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in accordance
with Statement of Financial Accounting Standards No. 128, "Earnings Per
Share". [See Note 6]
Cash and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents.
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from those estimated.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 136, "Transfers of Assets to a not for profit
organization or charitable trust that raises or holds contributions for
others", SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - deferral of the effective date of FASB Statement No. 133 (an
amendment of FASB Statement No. 133.),", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and Amendment of SFAS
No. 133", SFAS No. 139, "Recission of SFAS No. 53 and Amendment to SFAS No 63,
89 and 21", and SFAS No. 140, "Accounting to Transfer and Servicing of
Financial Assets and Extinguishment of Liabilities", were recently issued SFAS
No. 136, 137, 138, 139 and 140 have no current applicability to the Company or
their effect on the financial statements would not have been significant.
-6-
10
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock - During November 1997, in connection with its organization, the
Company issued 1,100,000 shares of its previously authorized, but unissued
common stock. The shares were issued for services rendered at $1,100 (or
$.001 per share).
Preferred stock - The Company has authorized 5,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and to
be issued in such series as determined by the Board of Directors. No shares
were issued and outstanding at September 30, 2000 and December 31, 1999.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary reporting differences
between book and tax accounting methods and any available operating loss or
tax credit carryforwards.
The Company has available at September 30, 2000, unused operating loss
carryforwards of approximately $3,000 which may be applied against future
taxable income and which expire in various years from 2018 through 2020. The
amount of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the uncertainty surrounding
the realization of the loss carryforwards the Company has established a
valuation allowance equal to the amount of the loss carryforwards and,
therefore, no deferred tax asset has been recognized for the loss
carryforwards. The net deferred tax assets are approximately $1,100 and $600
as of September 30, 2000 and December 31, 1999, respectively, with an
offsetting valuation allowance of the same amount resulting in a change in the
valuation allowance of approximately $500 during the nine months ended
September 30, 2000.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of September 30, 2000, the Company has not paid
any compensation to any officer/director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use her office
as a mailing address, as needed, at no expense to the Company.
Notes Payable - As of September 30, 2000, an officer/shareholder of the
Company has advanced $3,715 to the Company. This amount is made up of two
notes, one for $1,715 and the other for $2,000. These notes are payable upon
demand and accrue interest at 10% per annum. Accrued interest amounted to
$181 at September 30, 2000.
-7-
11
<PAGE>
TEQ - 1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. However, the Company has incurred losses
since its inception and has not yet been successful in establishing profitable
operations. Further, the Company has liabilities in excess of assets. These
factors raise substantial doubt about the ability of the Company to continue
as a going concern. In this regard, management is proposing to raise any
necessary additional funds not provided by operations through loans or through
additional sales of its common stock. There is no assurance that the Company
will be successful in raising this additional capital or achieving profitable
operations. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
<TABLE>
<CAPTION>
For the Three For the Nine From Inception
Months Ended Months Ended on November 19,
September 30, September 30, 1997 Through
------------------------ ------------------------ September 30,
2000 1999 2000 1999 2000
----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Loss from continuing operations
available to common shareholders
(numerator) $ (1,195) $ - $ (1,328) $ - $ (3,143)
----------- ----------- ----------- ----------- ----------------
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 1,100,000 1,100,000 1,100,000 1,100,000 1,100,000
----------- ----------- ----------- ----------- ----------------
</TABLE>
Dilutive loss per share was not presented, as the Company had no common stock
equivalent shares for all periods presented that would affect the computation
of diluted loss per share.
-8-
12
<PAGE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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********************************************************************
Nine Month Periods Ended September 30, 2000 and 1999,
Three Month Periods Ended September 30, 2000 and 1999
and from Inception on November 19, 1997 through September 30, 2000
********************************************************************
Results of Operations
---------------------
The Company had no revenue from continuing operations for the nine month
periods ended September 30, 2000 and 1999, for the three month periods ended
June 30, 2000 and 1999 or from inception on November 19, 1997 through
September 30, 2000.
General and administrative expenses for all periods ended consisted of
general corporate administration, legal and professional expenses, and
accounting and auditing costs. These expenses were $1,915 for the nine month
period ended September 30, 2000, $0 for the nine month period ended September
30, 1999, $675 for the three month period ended September 30, 2000, $0 for the
three month period ended September 30, 1999 and $3,650 from inception on
November 19, 1997 through September 30, 2000.
Interest expense for the nine month periods ended September 30, 2000 and
1999, the three month periods ended September 30, 2000 and 1999 and from
inception on November 19, 1997 through September 30, 2000 was $181, $0, $93,
$0 and $261 respectively. The Company's president has advanced $3,715 to the
Company through the date of this report. This amount is made up of two notes
payable, one for $1,715 and the other for $2,000. These notes are payable
upon demand and accrue interest at 10% per annum. Interest was accrued on the
two notes payable in the principal amount of $181 at September 30, 2000.
As a result of the foregoing factors, the Company realized a net loss of
$2,096 for the nine month period ended September 30, 2000, $0 for the nine
month period ended September 30, 1999, $768 for the three month period ended
September 30, 2000, $0 for the three month period ended September 30, 1999 and
$3,911 from inception on November 19, 1997 through September 30, 2000.
Liquidity and Capital Resources
-------------------------------
The Company remains in the development stage and, since inception, has
had no revenues. At September 30, 2000, the Company had working capital of
($2,811) and cash in the amount of $1,085. All cash held by the Company to
date has come from two notes payable to the Company's president, Tammy
Gehring. The first note payable is for $1,715 and the second note payable is
for $2,000. These notes are payable upon demand and accrue interest at 10%
per annum and were executed to obtain capital to pay the costs of becoming a
reporting company under the Securities Exchange Act of 1934 and general
administrative expenses.
13
<PAGE>
Management believes that the Company has sufficient cash to meet its
anticipated needs through at least the first calendar quarter of 2001.
However, there can be no assurances to that effect, as the Company has no
revenues through the date of this report and its need for capital may change
dramatically if it acquires an interest in a business opportunity during that
period. In the event the Company requires additional funds, the Company will
have to seek loans or equity placements to cover such cash needs. There is no
assurance additional capital will be available to the Company on acceptable
terms.
Plan of Operations
------------------
The Company's plan of operations centers around its search for potential
businesses, products, technologies and companies for acquisition.
The Company has no property. The Company president is allowing the
Company to use her office as a mailing address, as needed, at no expense to
the Company. The Company will continue to maintain operations at this
location until management believes that the Company's revenues and financial
resources justify a move to an alternative location. If such a move is
required, the Company believes that there is an inadequate supply of
office/warehouse/retail space in Salt Lake County, Utah meeting the Company's
anticipated needs for the foreseeable future. Initially, the Company expects
that it will lease rather then purchase such property in order to allocate its
resources specifically to its operations.
The Company may attempt to employ additional personnel if it is able to
generate revenues or obtain additional financing. However, there is no
assurance that the services of such persons will be available or that they can
be obtained upon terms favorable to the Company.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses as they may be incurred.
Irrespective of whether the Company's cash assets prove to be adequate
to meet the Company's operational needs, the Company might seek to compensate
providers of services by issuances of stock in lieu of cash.
PART II
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ITEM 1. LEGAL PROCEEDINGS
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The Company is not a party to any material pending legal proceedings,
and to the best of its knowledge, no such proceedings by or against the
Company have been threatened.
14
<PAGE>
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ITEM 2. CHANGES IN SECURITIES
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Not Applicable.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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Not Applicable.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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Not Applicable.
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ITEM 5. OTHER INFORMATION
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Not Applicable.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibits: Exhibits required to be attached by Item 601 of Regulation
S-B are listed in the Index to Exhibits of this Form 10-QSB, which is
incorporated herein by reference.
(b) Reports on Form 8-K: No reports on Form 8-K have been filed during the
last quarter of the period covered by this report.
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SIGNATURES
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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.
TEQ - 1 Corporation
/s/ Tammy Gehring
-----------------------------------
Date: November 10, 2000 By: Tammy Gehring, President, Secretary
Treasurer, Director
15
<PAGE>
INDEX TO EXHIBITS
---------------------
SEC Ref Page
No. No. Description
------- ---- -----------
Ex-3(i) ** Articles of Incorporation of the Company, filed
with the State of Nevada on November 19, 1997.
Ex-3(ii) ** Bylaws of the Company.
Ex-10(i) *** Promissory Note dated February 1, 2000 executed
by the Company.
Ex-10(ii) *** Promissory Note dated June 1, 2000 executed by
the Company.
Ex-27 * Financial Data Schedule for the nine month
period ended September 30, 2000.
*** The listed exhibits are incorporated herein by this reference to
the Quarterly Report on Form 10-QSB for the quarter ended June 30,
2000, filed by the Company with the Securities and Exchange
Commission on August 11, 2000.
** The listed exhibits are incorporated herein by this reference to
the Registration Statement on Form 10-SB, filed by the Company
with the Securities and Exchange Commission on May 9, 2000.
* The Financial Data Schedule is presented only in the electronic
filing with the Securities and Exchange Commission.
16
