U.S. 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 TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-26059
COMET TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0430322
(State or other jurisdicition of (IRS Employer Identification No.)
incorporation or organization)
10 West 100 South, Suite 610, Salt Lake City, Utah 84101
(Address of principal executive offices)
(801) 532-7851
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
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 September 30, 2000: 3,598,000
shares of common stock.
Transitional Small Business Format: Yes [ ] No [ X ]
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FORM 10-QSB
COMET TECHNOLOGIES, INC.
INDEX
Page
PART I. Financial Information 3
Balance Sheets as of September 30, 2000 and December 31, 1999 3
Statements of Operations for the Three Months and
Nine Months Ended September 30, 2000 and 1999 and
From Inception on February 7, 1986 Through June 30, 1999 4
Statements of Cash Flows for the Three Months and
Nine Months Ended September 30, 2000 and 1999 and
From Inception on February 7, 1986 Through June 30, 1999 5
Notes to the Financial Statements 6
Management's Discussion and Analysis of Financial Condition 8
PART II. Other Information 9
Exhibits and Reports on Form 8-K 9
Signatures 9
2
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PART I.
Financial Information
COMET TECHNOLOGIES, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
September 30, December 31,
2000 1999
(Unaudited)
CURRENT ASSETS
Cash $ 198,904 $ 199,075
Total Current Assets 198,904 199,075
TOTAL ASSETS $ 198,904 $ 199,075
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Taxes payable $ 100 $ 100
Total Current Liabilities 100 100
TOTAL LIABILITIES 100 100
STOCKHOLDERS' EQUITY
Common stock: 20,000,000 shares authorized
of $0.001 par value, 3,598,000 shares issued
and outstanding 3,598 3,598
Additional paid-in capital 238,561 238,561
Deficit accumulated during the development stage (43,355) (43,184)
Total Stockholders' Equity 198,804 198,975
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 198,904 $ 199,075
3
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COMET TECHNOLOGIES, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception on
For the For the February 7, 1986
Three Months Ended Nine Months Ended Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
REVENUES $ - $ - $ - $ - $ -
EXPENSES
General and administrative 2,044 1,150 7,191 4,135 178,885
Total Expenses 2,044 1,150 7,191 4,135 178,885
LOSS FROM
OPERATIONS (2,044) (1,150) (7,191) (4,135) (178,885)
OTHER INCOME
Dividend income - - - - 5,493
Interest income 2,390 2,113 7,020 4,854 136,687
Unrealized loss from
marketable securities - - - - (6,650)
Total Other Income 2,390 2,113 7,020 4,854 135,530
NET INCOME (LOSS) $ 346 $ 963 $ (171) $ 719 $ (43,355)
BASIC INCOME (LOSS) PER
SHARE $ 0.00 $ 0.00 $ (0.00) $ 0.00
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 3,598,000 3,598,000 3,598,000 3,598,000
4
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COMET TECHNOLOGIES, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the Three For the Nine February 7, 1986
Months Ended Months Ended Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S> <C> <C> <C> <C> <C>
Net income (loss) $ 346 $ 963 $ (171) $ 719 $ (43,355)
Adjustments to reconcile net loss to
net cash used by operating activities:
Amortization - - - - 301
Changes in operating assets and
liabilities:
Increase in prepaid expenses - - - (1,899) -
Increase in taxes payable - (100) - (100) 300
Increase (decrease) in accounts
payable - (2,643) - (1,321) (201)
Net Cash Provided (Used) by
Operating Activities 346 (1,780) (171) (2,601) (42,955)
CASH FLOWS FROM INVESTING
ACTIVITIES: - - - - 301
CASH FLOWS FROM FINANCING
ACTIVITIES:
Organizational costs - - - - (300)
Net stock offering proceeds - - - - 242,159
Net Cash Provided by Financing
Activities - - - - 241,859
NET INCREASE (DECREASE)
IN CASH 346 (1,780) (171) (2,601) 198,904
CASH AT BEGINNING OF PERIOD 198,558 200,254 199,075 201,075 -
CASH AT END OF PERIOD $198,904 $198,474 $198,904 $198,474 $198,904
CASH PAID FOR:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
</TABLE>
5
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COMET TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Comet
Technologies, Inc. The Company was incorporated in the State of
Nevada on February 7, 1986. The Company was incorporated for the
purpose of providing a vehicle which could be used to raise
capital and seek business opportunities believed to hold a
potential for profit. The Company has not presently identified a
specific business area or direction that it will follow.
Therefore, no principal operations have yet begun.
b. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has adopted a
calendar year end.
c. Basic Earnings Per Share
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Income (loss)
(numerator) $ 346 $ 963 $ (171) $ 719
Shares (denominator) 3,598,000 3,598,000 3,598,000 3,598,000
Per Share Amount $ 0.00 $ 0.00 $ (0.00) $ 0.00
The computation of basic earnings per share of common
stock is based on the weighted standard average number of
shares outstanding during the period of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with
a maturity of three months or less when purchased to be
cash equivalents.
e. Income Taxes
No provision for income taxes has been accrued because
the Company has net operating losses from inception. The
net operating loss carryforwards of approximately $43,400
at September 30, 2000 expire in 2020. No tax benefit has
been reported in the financial statements because the
Company is uncertain if the carryforwards will expire
unused. Accordingly, the potential tax benefits are
offset by a valuation account of the same amount.
f. Unaudited Financial Statements
The accompanying unaudited financial statements include
all of the adjustments which, in the opinion of
management, are necessary for a fair presentation. Such
adjustments are of a normal recurring nature.
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COMET TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
g. 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 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.
NOTE 2 - PUBLIC OFFERING OF UNITS
In July of 1986, the Company completed a public offering
of 2,500,000 shares of its previously authorized but
unissued common stock to the public. An offering price
of $0.10 per share was arbitrarily determined by the
Company. Offering costs totaled $32,841 and were offset
against capital in excess of par value. The net proceeds
to the Company from the offering were $217,159, which
equals $250,000 minus offering costs of $32,841.
NOTE 3 - PREFERRED STOCK
None of the Company's authorized 5,000,000 shares of
preferred stock is issued and outstanding and the Company
currently has no plans to issue any preferred stock. The
Company's board of directors has authority, without
action by the shareholders, to issue all or any portion
of the authorized but unissued preferred stock in one or
more series and to determine the voting rights,
preferences as to dividends and liquidation, conversion
rights and other rights of such series. The preferred
stock, if and when issued, may carry rights superior to
those of the common stock.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using
generally accepted accounting principles applicable to a
going concern which contemplates the relation of assets
and liquidation of liabilities in the normal course of
business. However, the Company does not have significant
cash or other material assets, nor does it have an
established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going
concern. It is the intent of the Company to complete a
limited offering of its common stock.
7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
Forward-Looking Statement Notice
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking
statements within the meaning of Section 27a of the Securities
Act of 1933 and Section 21e of the Securities Exchange Act of
1934 regarding events, conditions, and financial trends that may
affect the Company's future plans of operations, business
strategy, operating results, and financial position. Persons
reviewing this report are cautioned that any forward-looking
statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may
differ materially from those included within the forward-looking
statements as a result of various factors.
Results of Operations
Three and Nine Months Ended September 30, 2000 and 1999
The Company had no revenue from continuing operations for the
three and nine-month periods that ended September 30, 2000 and
1999.
General and administrative expenses for the three and nine month
periods that ended September 30, 2000 and 1999, consisted of
general corporate administration, legal and professional
expenses, and accounting and auditing costs. These expenses were
$2,044 and $1,150 for the three-month periods, and $7,191 and
$4,135 for the nine-month periods that ended September 30, 2000
and 1999, respectively.
The Company's cash is invested in short-term, liquid cash
equivalents. Interest income was $2,390 and $2,113 for the three-
month periods, and $7,020 and $4,854 for the nine-month periods
that ended September 30, 2000 and 1999, respectively. As a
result of the foregoing factors, the Company realized net income
of $346 for the three months ended, and a net loss of $171 for
the nine months ended September 30, 2000, as compared to net
income of $963 and $719 for the same periods in 1999.
Liquidity and Capital Resources
At September 30, 2000, the Company had working capital of
approximately $198,804, as compared to $198,975 at December 31,
1999. Working capital as of both dates consisted substantially
of short-term investments, and cash and cash equivalents.
Although the Company's most significant assets consist largely of
cash and cash equivalents, the Company has no intent to become,
or hold itself out to be, engaged primarily in the business of
investing, reinvesting, or trading in securities. Accordingly,
the Company does not anticipate being required to register
pursuant to the Investment Company Act of 1940 and expects to be
limited in its ability to invest in securities, other than cash
equivalents and government securities.
Management believes that the Company has sufficient cash and
short-term investments to meet the anticipated needs of the
Company's operations through at least the next 12 months.
However, there can be no assurances to that effect, as the
Company has no significant revenues and the Company's need for
capital may change dramatically if it acquires an interest in a
business opportunity during that period. The Company's current
operating plan is to (i) handle the administrative and reporting
requirements of a public company, and (ii) search for potential
businesses, products, technologies and companies for acquisition.
At present, the Company has no understandings, commitments or
agreements with respect to the acquisition of any business
venture, and there can be no assurance that the Company will
identify a business venture suitable for acquisition in the
future. Further, there can be no assurance that the Company
would be successful in consummating any acquisition on favorable
terms or that it will be able to profitably manage any business
venture it acquires.
8
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PART II. OTHER INFORMATION
Exhibits and Reports on Form 8-K.
Reports on Form 8-K: On September 28, 2000, the Company filed a
report on Form 8-K reporting under Item 5. Other Information that
the Company entered into a letter of intent on September 27,
2000, for the acquisition of SE Global Equities Company Limited.
Exhibits: Included only with the electronic filing of this
report is the Financial Data Schedule for the nine-month period
ended September 30, 2000 (Exhibit ref. No. 27).
SIGNATURES
In accordance with the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
COMET TECHNOLOGIES, INC.
Date: November 3, 2000 By: /s/ Jack Gertino
Jack Gertino, Secretary/Treasurer
9
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