SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2000
Commission File Number 33-3385
EARTH PRODUCTS AND TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Nevada 87-0430816
(State of incorporation) (I.R.S. Employer
Identification Number)
525 South 300 East
Salt Lake City, Utah 84111
(801) 323-2395
(Address and telephone number of principal executive
offices and principal place of business)
Indicate by 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 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 [ ]
As of October 23, 2000, Earth Products and Technologies, Inc. had a total
of 27,381,004 shares of common stock issued and outstanding.
<PAGE>
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements...............................................3
Item 2. Management's Discussion and Analysis or Plan of Operations........10
PART II: OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.........................11
Item 6. Exhibits and Reports Filed on Form 8-K............................11
Signatures.................................................................12
<PAGE> 2
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
<PAGE> 3
Earth Products and Technologies, Inc.
(A Development Stage Company)
Financial Statements
September 30, 2000
<PAGE> 4
Earth Products and Technologies, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
September 30, December 31,
2000 1999
------------- -------------
(Unaudited)
CURRENT ASSETS
Cash $ 27,008 $ 13,168
------------- -------------
TOTAL ASSETS $ 27,008 $ 13,168
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ - $ 250
------------- -------------
Total Liabilities - 250
------------- -------------
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; 50,000,000 shares
authorized; 27,381,004 and 26,281,004 shares
issued and outstanding, respectively 27,381 26,281
Additional Paid-In Capital 3,927,026 3,866,126
Retained Earnings (3,927,399) (3,879,489)
------------- -------------
Total Stockholders' Equity 27,008 12,918
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 27,008 $ 13,168
============= =============
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<TABLE>
<CAPTION>
Earth Products and Technologies, Inc.
(A Development Stage Company)
Statement of Operations
(Unaudited)
From
For the three For the three For the nine For the nine Inception on
months ended months ended months ended months ended February 10,1986
September 30, September 30, September 30, September 30, Through
2000 1999 2000 1999 September 30,2000
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ 50,000
------------- ------------- ------------- ------------- --------------
EXPENSES
Selling Expenses - - - - 109,489
Depreciation &
Amortization - - - - 67,187
Research & Development - - - - 153,773
General & Administrative 584,864 561 647,810 5,860 2,661,711
------------- ------------- ------------- ------------- --------------
TOTAL EXPENSES 584,864 561 647,810 5,860 2,992,160
------------- ------------- ------------- ------------- --------------
OTHER INCOME(EXPENSE)
Bad Debt - - - - (894,326)
Collection of Bad Debt
Previously Written Off - - 600,000 - 600,000
Gain on Disposition
of Debt - - - - 103,284
Interest Expense - - - - (94,008)
Loss on Disposal
of Assets - - - - (525,281)
Discontinued Operations - - - - (689,191)
Income Taxes (100) - (100) - (1,341)
Minority Interest - - - - 89,595
------------- ------------- ------------- ------------- --------------
Total Other Income
(Expense) (100) - 599,900 - (1,411,268)
------------- ------------- ------------- ------------- --------------
NET INCOME(LOSS) $ (584,964) $ (561) $ (47,910) $ (5,860) $ (4,353,428)
============= ============= ============= ============= ==============
WEIGHTED AVERAGE INCOME
(LOSS)PER SHARE $ (0.022) $ (0.000) $ (0.002) $ (0.000)
------------- ------------- ------------- -------------
WEIGHTED AVERAGE SHARES
OUTSTANDING 27,067,671 26,281,004 26,294,413 26,281,004
============= ============= ============= =============
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</TABLE>
<TABLE>
<CAPTION>
Earth Products and Technologies, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
From
For the nine months ended Inception on
September 30 February 10, 1986
----------------------------- Through
2000 1999 September 30,2000
-------------- -------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income(Loss) $ (47,910) $ (5,860) $ (4,291,428)
Adjustments to Reconcile Net Income(Loss) to
Net Cash Provided(Used) in Operating Actvities:
Bad Debt - - 894,326
Depreciation & Amortization - - 93,309
Loss on Disposal of Assets - - 246,997
Stock Issued for Services 62,000 - 318,945
Minority Interest - - (89,595)
Change in Assets and Liabilities(Net of Effects
of Purchase/Spin-Off of EWSI)
(Increase) Decrease in:
Accounts Receivable - - (98,803)
Inventory - - 22,842
Shareholder Advances - - 9,176
Increase (Decrease) in:
Accounts Payable and Accrued Expenses (250) (1,909) 583,580
-------------- -------------- --------------
Net Cash Provided(Used) by Operating Activities 13,840 (7,769) (2,310,651)
-------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Acquired(Spin-Off) in Acquisition of EWSI - - 6,241
Payment for Notes Receivable - (16,049) (6,049)
Investment in Inventory - - (381,143)
Payment of Organization Costs - - (110)
Purchase of Fixed Assets - - (121,743)
Cash Advanced to Subsidiary Prior to Acquisition - - (200,000)
Proceeds from Sale of Assets - - 1,970
-------------- -------------- --------------
Net Cash Provided(Used) by Investing Activities - (16,049) (700,834)
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Contribution by Stockholders - - 996,375
Payment to Stockholders - - (13,202)
Proceeds from Issuance of Stock - 30,000 1,295,685
Proceeds from Debt Financing - 13,000 1,581,384
Principal Payments of Debt Financing - (18,000) (759,749)
-------------- -------------- --------------
Net Cash Provided(Used) by Financing Activities - 25,000 3,100,493
-------------- -------------- --------------
Increase in Cash 13,840 1,182 89,008
Cash and Cash Equivalents at Beginning of Period 13,168 2,483 -
-------------- -------------- --------------
Cash and Cash Equivalents at End of Period $ 27,008 $ 3,665 $ 89,008
============== ============== ==============
</TABLE>
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<TABLE>
<CAPTION>
Earth Products and Technologies, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
SUPPLEMENTAL CASH FLOW INFORMATION
<S> <C> <C> <C>
Cash Paid for:
Interest $ - $ - $ 19,972
============== ============== ==============
Income Taxes $ - $ - $ 502
============== ============== ==============
Non Cash Financing Activities:
Issuance of Stock in Settlement of Debt $ - $ - $ 1,446,858
============== ============== ==============
Capital Contributed by Shareholders $ - $ - $ 639,230
============== ============== ==============
Issuance of Stock for Services $ 62,000 $ - $ 318,945
============== ============== ==============
</TABLE>
<PAGE> 8
Earth Products & Technologies, Inc.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
GENERAL
-------
Earth Products and Technologies, Inc. (the Company) has elected to omit
substantially all footnotes to the financial statements for the six months
ended June 30, 2000 since there have been no material changes (other than
indicated in other footnotes) to the information previously reported by the
Company in their Annual Report filed on the Form 10-KSB for the fiscal year
ended December 31, 1999.
UNAUDITED INFORMATION
---------------------
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments
which are of a normal recurring nature and are, in the opinion of management,
necessary to properly reflect the results of the interim period presented.
The information presented is not necessarily indicative of the results from
operations expected for the full fiscal year.
Collection of Bad Debt
----------------------
During the three months ended June 30, 2000, $600,000 was received in a
settlement with EWS Services, Inc. This settlement was for a note which was
written off in a prior year.
<PAGE> 9
In this quarterly report references to "Earth Products," "we," "us," and
"our" refer to Earth Products and Technologies, Inc.
FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-QSB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within
Earth Products's control. These factors include but are not limited to
economic conditions generally and in the industries in which Earth Products
may participate; competition within Earth Product's chosen industry,
including competition from much larger competitors; technological advances and
failure by Earth Products to successfully develop business relationships.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Since inception, we have had no revenues and have experienced losses. We
have financed our operations primarily through the sale of our common stock or
by loans from shareholders. As of September 30, 2000, we had an accumulated
deficit of $3,927,399 with $27,008 cash on hand and no liabilities. We have
no material commitments for the next twelve months. We believe that our
current cash needs for at least the next twelve months can be met by loans
from our directors, officers and shareholders.
Our management intends to actively pursue business opportunities during
the next twelve months. Currently, management has not identified a business
opportunity. All risks inherent in new and inexperienced enterprises are
inherent in our business. We have not made a formal study of the economic
potential of any business. At the present, we have not identified any assets
or business opportunities for acquisition.
Based on current economic and regulatory conditions, management believes
that it is possible, if not probable, for a company like ours, without many
assets or liabilities, to negotiate a merger or acquisition with a viable
private company. The opportunity arises principally because of the high legal
and accounting fees and the length of time associated with the registration
process of "going public". However, should any of these conditions change, it
is very possible that there would be little or no economic value for anyone
taking over control of Earth Products.
Potential investors must recognize that because of our limited capital
available for investigation and management's limited experience in business
analysis we may not discover or adequately evaluate adverse facts about the
business opportunity to be acquired. Also, we intend to concentrate our
acquisition efforts on properties or businesses that we believe to be
undervalued or that we believe may realize a substantial benefit from being
publicly owned. Investors should expect that any acquisition candidate may
have little or no operating history, or a history of losses or low
profitability.
It is emphasized that our management may effect transactions having a
potentially adverse impact upon our shareholders pursuant to the authority and
discretion of our management to complete
<PAGE> 10
acquisitions without submitting any proposal to the stockholders for their
consideration.
Should a merger or acquisition prove unsuccessful, it is possible that
we may decide not to pursue further acquisition activities and management may
abandon its activities and our shares would become worthless.
PART II: OTHER INFORMATION
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
The following discussion describes all securities sold without
registration by Earth Products for the nine month period ended September 30,
2000.
On July 6, 2000 we issued 200,000 shares valued at $12,000 to The Oxford
Group for investment banking services. We relied on an exemption from the
registration requirements of the Securities Act of 1933 by reason of Section
4(2) as a private transaction not involving a public distribution.
On July 9, 2000 we issued 300,000 shares valued at $20,000 to Principal
Holdings, Inc. In consideration for investment banking services. We relied on
an exemption from the registration requirements of the Securities Act of 1933
by reason of Section 4(2) as a private transaction not involving a public
distribution.
On August 9, 2000 we issued 600,000 shares valued at $30,000 to Columbia
Financial Group for public relations consulting services provided by Columbia
Financial Group. We relied on an exemption from the registration requirements
of the Securities Act of 1933 by reason of Section 4(2) as a private
transaction not involving a public distribution.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Part I Exhibits.
Exhibit Description
27 Financial Data Schedule
(b) Reports on Form 8-K.
On September 5, 2000, we filed a current report on Form 8-K under Item 4
concerning the replacement of our auditor, Crouch, Bierwolf & Chisholm, with
Chisholm & Associates. No financial statements were filed.
<PAGE> 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report be signed on its behalf by the undersigned, who are duly
authorized.
11/10/00
DATE __________________________
EARTH PRODUCTS AND TECHNOLOGIES, INC.
/s/ John W. Peters
By:_______________________________________
John W. Peters, President and Director
12
