<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-15379
POWER-CELL, INC.
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Exact name of Registrant as specified in its charter
Colorado 84-1029701
- ---------------------- ----------------------------------
State of Incorporation IRS Employer Identification Number
660 Preston Forest Center Box 200
Dallas, Texas 75230
214/373-1887
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Address and telephone number of principal executive offices
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
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of common stock of the Registrant outstanding at September
30, 1995 was 6,216,875.
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POWER-CELL, INC.
<TABLE>
<CAPTION>
INDEX
<S> <C> <C>
Part I Financial Information PAGE
---------------------
Balance sheet - September 30, 1995 (unaudited) 3
Unaudited condensed statements of operations - three months
ended September 30, 1995 and 1994 and the period from
January 21, 1987 (date of incorporation) to September 30, 1995. 4
Unaudited condensed statements of cash flows - three months
ended September 30, 1995 and 1994 and the period from
January 21, 1987 (date of incorporation) to September 30, 1995. 5-6
Note to condensed financial statements 7
Management's discussion and analysis of financial condition and
results of operations 8-9
Part II Other Information 10
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Signature Page 11
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</TABLE>
2
<PAGE> 3
POWER-CELL, INC.
(a development stage enterprise)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
1995
-------------
(Unaudited)
ASSETS
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 22,686
Other 900
-------------
Total Current Assets 23,586
Investment in partnership 31,787
-------------
Total Assets $ 55,373
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 27,261
ADVANCES PAYABLE 20,000
STOCKHOLDERS' EQUITY:
Common stock, par value $.0001 per share; 750,000,000
shares authorized; 6,216,875 shares issued and
outstanding 622
Additional paid-in capital 1,528,898
Deficit accumulated during the development stage (1,521,408)
-------------
Total Stockholders' Equity 8,112
-------------
Total Liabilities and Stockholders' Equity $ 55,373
=============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
POWER-CELL, INC.
(a development stage enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Period from
January 21, 1987
(date of Incor-
Three Months Ended poration) to
September 30, September 30,
------------- ---------------
1995 1994 1995
---- ---- ----
<S> <C> <C> <C>
REVENUES - interest and other $ 354 $ 283 $ 176,098
EXPENSES:
Product development - - 225,478
General and administrative 4,156 4,775 1,439,322
Interest - - 32,706
--------- --------- -------------
Total expenses 4,156 4,775 1,697,506
--------- --------- -------------
NET LOSS $ (3,802) $ (4,492) $ (1,521,408)
========= ========= =============
NET LOSS PER SHARE OF
COMMON STOCK $ * $ *
========= =========
* Less than $0.01 per share.
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
POWER-CELL, INC.
(a development stage enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Period from
January 21, 1987
Three Months Ended (date of Incor-
September 30, poration) to
------------------- September 30,
1995 1994 1995
-------- --------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (3,802) $ (4,492) $ (1,521,408)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Amortization and depreciation - - 24,644
Other - - 741
Changes in operating asset and
liabilities:
Increase in other current assets - - (900)
Increase in other
assets - - (16,400)
Increase (decrease) in accounts
payable and accrued expenses (800) (7,475) 27,261
-------- --------- ------------
NET CASH USED IN OPERATING
ACTIVITIES (4,602) (11,967) (1,486,062)
INVESTING ACTIVITIES:
Purchase of fixed assets - - (8,985)
Investment in partnership - - (11,787)
-------- --------- ------------
NET CASH USED IN INVESTING
ACTIVITIES - - (20,772)
-------- --------- ------------
FINANCING ACTIVITIES:
Issuance of common stock and
exercise of warrants - 50,000 1,533,020
Stock issuance costs - (3,500) (3,500)
-------- --------- ------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES - 46,500 1,529,520
-------- --------- ------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
POWER-CELL, INC.
(a development stage enterprise)
STATEMENTS OF CASH FLOWS, Continued
(Unaudited)
<TABLE>
<CAPTION>
Period from
January 21, 1987
Three Months Ended (date of Incor-
September 3 poration) to
------------------------ September 30,
1995 1994 1995
--------- ---------- -------------
<S> <C> <C> <C>
INCREASE(DECREASE) IN CASH
AND CASH EQUIVALENTS (4,602) 34,533 22,686
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 27,288 10,537 -
--------- ---------- ------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 22,686 $ 45,070 $ 22,686
========= ========== ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
POWER-CELL, INC.
(a development stage enterprise)
NOTE TO FINANCIAL STATEMENTS
(Unaudited)
A. Basis of Presentation
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations, although management believes the disclosures
are adequate to make the information presented not misleading. These
interim financial statements should be read in conjunction with the
Company's annual report and most recent audited financial statements
included in its report on Form 10-KSB for the year ended June 30, 1995
filed with the Securities and Exchange Commission.
The interim financial information included herein is unaudited;
however, such information reflects all the adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results of operations
and cash flows for the interim periods. The results of operations for
the three months ended September 30, 1995 are not necessarily
indicative of the results to be expected for the full year.
7
<PAGE> 8
POWER-CELL, INC.
(a development stage enterprise)
Management's Discussion and Analysis of Financial Condition and
Results ofOperations Liquidity and Capital Resources
On October 21, 1992, the company entered into a limited partnership
agreement with several other limited partners and a sole general
partner to provide for management, funding, manufacturing and
marketing of the Power Cell reserve battery unit on a worldwide basis.
The company initially owned an 11% interest in the limited
partnership, which may increase or decrease due to the occurance of
certain events. The interest decreased to 9.47% during fiscal 1995
due to the addition of outside investors, resulting in a pro rata
dilution. In addition, a separate license royalty agreement between
the Company and the limited partnership provides that the Company will
receive royalty payments on all Power Cell units produced and sold in
the Untied States and its territories. Royalty payments on
international sales of Power Cell units will be paid to individual
rights holders, some of which are affiliates of the Company, and all
of which are limited partners in the Partnership.
The production model Phase I initially required the general partner to
fund $800,000 for this purpose, which was subsequently amended to
$1,000,000. As of June 30, 1994, the general partner had met this
requirement. Subject to satisfactory test results, the general
partner was required to provide a minimum of $1,250,000 to implement
Phase II, which is the manufacturing and marketing of the reserve
battery unit. On June 20, 1995, the general partner had completed
this funding requirement.
The contract agreement has no provision for direct funding by Power
Cell, Inc. Its earnings, if any, will be derived from an interest in
the limited partnership together with royalties, if any, from the
license royalty agreement.
The Company had working capital (deficit) of $(4,575) at September 30,
1995. Management is currently evaluating its future course of action.
It is anticipated that the general partner will soon announce a
manufacturing program for the reserve battery unit and a comprehensive
marketing plan. This development would assist management in evaluating
various alternates for improvement in its financial condition. The
Company is currently reviewing the possibility of affiliating with
other companies through acquisition or merger combinations that would
provide a financial basis for a public or private placement of debt or
equity. There are ongoing discussions and analysis of several
potential candidates that could provide a solution to the financial
requirements of Power Cell, Inc. to proceed as a viable entity and or
an integral part of an existing operation.
The general partner has informed the Company that limited production
of the unit will commence in November 1995; and it expects the product
will be introduced to the T.V. and print media market in January 1996,
followed by introduction to the retail market in May 1996.
The potential for the general partner to withdraw from the limited
partnership is considered to be a negligible possibility. Based upon
the recent funding on June 20, 1995, the production and marketing
plans all indicate a very positive position. However, in the event
such action did occur management believes a replacement funding
partner could be obtained from industry sources and or investors.
8
<PAGE> 9
POWER-CELL, INC.
(a development stage enterprise)
Results of Operation
The company has been engaged in organizational and capital raising
activities since inception through September 30, 1995. It has not
incurred major operational expenditures. The losses incurred since
inception primarily reflect legal, accounting, and administrative
expenses associated with the preparation of the merger documents and
registration statement, product development and arranging for the
manufacture of its battery charger product for test marketing
purposes.
9
<PAGE> 10
POWER-CELL, INC.
(a development stage enterprise)
PART II - OTHER INFORMATION
<TABLE>
<S> <C>
Item 1. Legal Proceedings - Not applicable
Item 2. Changes in Securities - Not applicable
Item 3. Default Upon Senior Securities - Not applicable
Item 4. Submission of Matters to a Vote of Security Holders - Not applicable
Item 5. Other Information - Not applicable
The Company believes the potential market for the Product includes every operator of a car,
truck or boat that uses a battery for starting purposes. The Company intends to develop,
manufacture and market the Product through one or more third-party companies specializing in
the manufacture and national distribution of batteries.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
</TABLE>
10
<PAGE> 11
POWER-CELL, INC.
(a development stage enterprise)
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POWER-CELL, INC.
----------------
(Registrant)
Date: November 8, 1995 /S/ James C. Rambin
---------------- -----------------------------------
James C. Rambin, President
and Principal Financial Officer
11
<PAGE> 12
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEPTEMBER
30, 1995 10QSB
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 22,686
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,586
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 55,373
<CURRENT-LIABILITIES> 27,261
<BONDS> 20,000
<COMMON> 622
0
0
<OTHER-SE> 7,490
<TOTAL-LIABILITY-AND-EQUITY> 55,373
<SALES> 0
<TOTAL-REVENUES> 354
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,156
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,802)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,802)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,802)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
