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 Quarter Ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________
Commission File Number 33-20582
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2276137
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1050 Chinoe Road, Suite 304, Lexington, Kentucky 40502
(Address of principal executive offices, including zip code)
(859) 268-4446
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant has: (1) 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) been subject to such
filing requirements for the past 90 days. Yes X No
Number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of September 30, 2000
Class A Common Stock, par value $.001 7,771,907
<PAGE>
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL STATEMENTS
Item 1. Balance Sheets - September 30, 2000 5
Statements of Operations and Accumulated Deficit Three
months ended September 30, 2000. 6
Statements of Stockholders Equity (Deficit)--January 1,
1994 (Inception of Development Stage) through September 30,
2000 7-10
Statements of Cash Flows - September 30, 2000 11-12
Notes to Financial Statements 13
2
<PAGE>
PART I
Item 1. Financial Statements
The following, reviewed Financial Statements for the three month period
ended September 30, 2000 include all adjustments which management believes are
necessary for the financial statements to be presented in conformity with
generally accepted accounting principals. The independent accounting firm of HJ
& Associates (formerly Jones, Jensen & Company), Salt Lake City, Utah reviewed
these Financial Statements.
(THIS SPACE INTENTIONALLY LEFT BLANK)
3
<PAGE>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999
4
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Balance Sheets
ASSETS
September 30 December 31,
2000 1999
------------------ ------------------
(Unaudited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 4,272 $ 1,011
------------------ ------------------
Total Current Assets 4,272 1,011
--------------------------------------
TOTAL ASSETS $ 4,272 $ 1,011
======================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 31,407 $ 19,424
Accrued expenses (Note 2) 95,873 80,422
Dividends payable (Note 4) 28,750 25,000
Notes payable (Note 3) 132,700 32,000
Notes payable - related party (Note 3) 179,400 165,500
------------------ ------------------
Total Current Liabilities 468,130 322,346
------------------ ------------------
Total Liabilities 468,130 322,346
------------------ ------------------
CONTINGENCIES AND COMMITMENTS (Note 2)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, Class A, $1.00 par value, 2,000,000 shares
authorized, 50,000 shares issued and outstanding 50,000 50,000
Preferred stock, Class B, $1.00 par value, 300,000 shares
authorized, -0- shares issued and outstanding - -
Preferred stock, Class C, $1.00 par value, 100,000 shares
authorized, -0- shares issued and outstanding - -
Common stock, Class A, $0.001 par value, 99,900,000 shares
authorized, 7,771,907 shares issued and outstanding 7,771 9,972
Common stock, Class B, $0.01 par value, 100,000 shares
authorized, 100,000 shares issued and outstanding 1,000 1,000
Additional paid-in capital 12,343,189 12,324,191
Accumulated deficit (12,865,818) (12,706,498)
------------------ ------------------
Total Stockholders' Equity (Deficit) (463,858) (321,335)
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 4,272 $ 1,011
================== ==================
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
Inception of the
Development
Stage on
For the For the January 1,
Three Months Ended Nine Months Ended 1994 Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
-------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
-------------- -------------- ------------- -------------- -------------
EXPENSES
General and administrative 92,517 8,434 144,412 51,163 558,785
-------------- -------------- ------------- -------------- -------------
Total Expenses 92,517 8,434 144,412 51,163 558,785
-------------- -------------- ------------- -------------- -------------
LOSS FROM OPERATIONS 92,517 (8,434) (144,412) (51,163) (558,785)
-------------- -------------- ------------- -------------- -------------
OTHER EXPENSE
Interest expense (5,115) - (14,908) - (45,741)
-------------- -------------- ------------- -------------- -------------
Total Other Expense (5,115) - (14,908) - (45,741)
-------------- -------------- ------------- -------------- -------------
LOSS BEFORE DISCONTINUED
OPERATIONS (97,632) (8,434) (159,320) (59,597) (604,526)
LOSS ON DISCONTINUED OPERATIONS - - - - (3,870,504)
-------------- -------------- ------------- -------------- -------------
NET LOSS $ (97,632) $ (8,434) $ (159,320) $ (59,597) $ (4,475,030)
============== ============== ============= ============== =============
BASIC LOSS PER SHARE $ (0.01) $ (0.00) $ (0.02) $ (0.00)
============== ============== ============= ==============
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
From Inception of the Development Stage on January 1, 1994 to September 30, 2000
Preferred Stock - A Preferred Stock - B Preferred Stock - C
Shares Amount Shares Amount Shares Amount
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1994 148,000 $ 148,000 78,500 $ 78,500 - $ -
Preferred stock issued for
cash at $1.00 per share - - 203,500 203,500 6,000 6,000
Preferred stock issued for
services at $1.00 per share - - 6,200 6,200 4,200 4,200
------------ ------------ ------------ ------------ ----------- -------------
Balance
December 31, 1994 148,000 148,000 288,200 288,200 10,200 10,200
------------ ------------ ------------ ------------ ----------- -------------
Balance
December 31, 1995 148,000 148,000 288,200 288,200 10,200 10,200
------------ ------------ ------------ ------------ ----------- -------------
Balance
December 31, 1996 148,000 148,000 288,200 288,200 10,200 10,200
Shares converted to
Class A common stock - - (5,000) (5,000) - -
Shares converted to
Class A common stock - - (11,000) (11,000) - -
Canceled shares (98,000) (98,000) (272,200) (272,200) (10,200) (10,200)
------------ ------------ ------------ ------------ ----------- -------------
Balance
December 31, 1997 50,000 50,000 - - - -
------------ ------------ ------------ ------------ ----------- -------------
Balance,
December 31, 1998 50,000 50,000 - - - -
------------ ------------ ------------ ------------ ----------- -------------
Balance,
December 31, 1999 50,000 50,000 - - - -
------------ ------------ ------------ ------------ ----------- -------------
Balance,
September 30, 2000 (unaudited) 50,000 $ 50,000 - $ - - $ -
============ ============ ============ ============ =========== =============
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
From Inception of the Development Stage on January 1, 1994 to September 30, 2000
Preferred Stock - A Preferred Stock - B Preferred Stock - C
Shares Amount Shares Amount Shares Amount
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance
January 1, 1994 571,254 $ 570 100,000 $ 1,000 $ 11,216,634 $ (8,390,740)
Common stock issued for
services at $0.10 per share 35,000 35 - - 95,071 -
Common stock issued for
services at $0.10 per share 4,598 5 - - 45,974 -
Common stock issued for
dividends at $0.11 per share 1,619 2 - - 17,715 -
Net loss for the year ended
December 31, 1994 - - - - - (3,563,526)
------------ ------------ ------------ ------------ ------------- -------------
Balance,
December 31, 1994 612,471 612 100,000 1,000 11,375,394 (11,954,266)
Common stock issued for
cash at $0.01 per share 270,789 271 - - 184,029 -
Common stock issued for
services at $1.05 per share 25,000 25 - - 26,225 -
Common stock issued for
dividends at $10.94 per share 1,619 2 - - 17,715 (17,717)
Common stock issued for
dividends at $10.93 per
share 1,353 1 - - 14,799 (14,800)
Net loss for the year ended
December 31, 1995 - - - - - (212,633)
------------ ------------ ------------ ------------ ------------- -------------
Balance,
December 31, 1995 911,232 911 100,000 1,000 11,618,162 (12,199,416)
Net loss for the year ended
December 31, 1996 - - - - - (61,828)
------------ ------------ ------------ ------------ ------------- -------------
Balance
December 31, 1996 911,232 $ 911 100,000 $ 1,000 $ 11,618,162 $ (12,261,244)
------------ ------------ ------------ ------------ ------------- -------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
From Inception of the Development Stage on January 1, 1994 to September 30, 2000
Preferred Stock - A Preferred Stock - B Preferred Stock - C
Shares Amount Shares Amount Shares Amount
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance
December 31, 1996 911,232 $ 911 100,000 $ 1,000 $ 11,618,162 $ (12,261,244)
Stock issued in exchange
for preferred B stock at
$6.25 per share 800 1 - - 4,999 -
Fractional shares issued 315 - - - 1 -
Stock issued for services
at $0.06 per share 200,000 200 - - 11,800 -
Stock issued for debt
at $0.20 per share 257,500 258 - - 51,242 -
Stock issued for services
at $0.10 per share 1,029,500 1,030 - - 100,970 -
Stock issued for services
at $0.06 per share 20,000 20 - - 1,180 -
Stock issued in exchange
for preferred B stock
at $6.88 per share 1,599 2 - - 10,998 -
Contributed capital on
cancellation of shares (8,402) (9) - - 388,802 -
Net loss for the year ended
December 31, 1997 - - - - - (115,504)
------------ ------------ ------------ ------------ ------------- -------------
Balance
December 31, 1997 2,412,544 $ 2,413 100,000 $ 1,000 $ 12,188,154 $ (12,376,748)
------------ ------------ ------------ ------------ ------------- -------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
From Inception of the Development Stage on January 1, 1994 to September 30, 2000
Preferred Stock - A Preferred Stock - B Preferred Stock - C
Shares Amount Shares Amount Shares Amount
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance
December 31, 1997 2,412,544 $ 2,413 100,000 $ 1,000 $ 12,188,154 $ (12,376,748)
Reversal of cancellation of
common A shares 214,000 214 - - (214) -
Shares issued at $0.063 per
share to repay note payable 86,841 86 - - 5,384 -
Shares issued to officer at
$0.063 per shares for consulting
services rendered 6,836 7 - - 424 -
Shares issued at $0.063 per
share to officer for consulting
services rendered 1,123,984 1,124 - - 70,030 -
Shares issued at $0.063 per
share to officer for consulting
services rendered 128,145 128 - - 7,955 -
Shares issued to officer to
pay off note payable for
consulting services rendered 6,000,000 6,000 - - 52,458 -
Net loss for the year ended
December 31, 1998 - - - - - (150,873)
------------ ------------ ------------ ------------ ------------- -------------
Balance, December 31, 1998 9,972,350 9,972 100,000 1,000 12,324,191 (12,527,621)
Net loss for the year ended
December 31, 1999 - - - - - (178,877)
------------ ------------ ------------ ------------ ------------- -------------
Balance, December 31, 1999 9,972,350 9,972 100,000 1,000 12,324,191 (12,706,498)
Contributed capital (unaudited) - - - - 800 -
Shares issued at $0.001 per
share for services rendered
(unaudited) 8,372,650 $ 8,373 - - - -
============ ============ ============ ============ ============= =============
1:50 reverse stock split (unaudited) (17,978,093) (17,978) - - 17,978 -
Shares Issued At $0.001 per
share for services rendered (unaudited) 7,625,000 $ 7,625 - - - -
Common shares cancelled (unaudited) (220,000) (220) - - 220 -
Net loss for the nine months ended
September 30, 2000 (unaudited) - - - - - (159,320)
------------ ------------ ------------ ------------ ------------- -------------
Balance September 30, 2000
(unaudited) 7,771,907 $ 7,771 100,000 $ 1,000 $ 12,343,189 $ (12,865,818)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception of the
Development
Stage on
For the For the January 1,
Three Months Ended Nine Months Ended 1994 Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
-------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (97,632) $ (8,434) $ (159,320) $ (178,877) $ (4,475,030)
Adjustments to reconcile net loss to
net cash used by operating activities:
Common stock issued for services 15,998 - 15,998 - 300,813
Preferred stock issued for services - - - - 10,400
Depreciation and amortization - - - - 70,532
Bad debt expense - - - - 129,240
Discontinued operations - - - - 2,820,586
Dividend expense - - - - 29,801
Changes in operating assets and liabilities:
Decrease in accounts receivable - - - - 20,921
Increase (decrease) in accounts payable 1,983 - 11,983 23,027 14,859
Increase (decrease) in accrued
expenses and dividends payable 6,365 - 19,200 21,541 80,215
------------ ----------- ------------ ------------ ---------------
Net Cash Used by Operating Activities $ (73,286) (8,434) (112,139) (134,309) (997,663)
------------ ----------- ------------ ------------ ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of equipment - - - - (3,200)
Sale of land - - - - 64,000
------------ ----------- ------------ ------------ ---------------
Net Cash Provided by Investing
Activities - - - - 60,800
------------ ----------- ------------ ------------ ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Sale of common stock - - - - 287,800
Sale of preferred stock - - - - 209,500
Proceeds from long-term debt 76,000 9,316 114,600 130,500 448,535
Contributed capital 800 - 800 - 800
Principle payments on long-term debt - - - (5,500)
------------ ----------- ------------ ------------ ---------------
Net Cash Provided by Financing
Activities 76,800 9,316 115,400 130,500 941,135
------------ ----------- ------------ ------------ ---------------
NET INCREASE (DECREASE) IN CASH 3,514 882 3,261 (3,809) 4,272
CASH AT BEGINNING OF PERIOD 758 3,855 1,011 4,820 -
------------ ----------- ------------ ------------ ---------------
CASH AT END OF PERIOD $ 4,272 $ 5,750 $ 4,272 $ 1,011 $ 4,272
============ ============ ============ ============ ===============
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Statements of Cash Flows (Continued)
(Unaudited)
From
Inception of the
Development
Stage on
For the For the January 1,
Three Months Ended Nine Months Ended 1994 Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
-------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Cash paid during the year for:
Interest $ - $ - $ - $ - $ 8,509
Income taxes $ - $ - $ - $ - $ -
NON-CASH FINANCING:
Common stock issued for
services $ - $ - $ - $ - $ 284,815
Preferred stock issued for
services $ - $ - $ - $ - $ 10,400
Common stock issued for
dividends $ - $ - $ - $ - $ 50,234
Paid-in capital through
cancellation of preferred
stock $ - $ - $ - $ - $ 380,400
Paid-in capital through
cancellation of
common stock $ - $ - $ - $ - $ 8,394
Common stock issued
for debt $ - $ - $ - $ - $ 115,428
</TABLE>
12
<PAGE>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 December 31, 1999
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. History
The Company was organized on March 4, 1988 as a Delaware corporation
under the name Sherry Lynn Corporation. The Company was organized as a
public company for the purpose of finding a suitable combination
partner.
On December 6, 1988, the Company changed its name to Equity Gold, Inc.
The number of shares of common stock authorized to be issued changed
from 50,000,000 to 150,000,000 with a par value of $0.001 per share of
common stock.
On December 14, 1989, the Company merged with Gold Equity, Inc., a
Delaware corporation. The surviving corporation was Equity Gold, Inc.
On February 7, 1989, the Company changed its name to Equity AU, Inc.
On April 14, 1989, the Company changed the number of authorized shares
of common stock to 99,900,000.
On November 7, 1991, the Company authorized 2,000,000 shares of
preferred stock with a par value of $1.00 each.
On February 19, 1992, the Company authorized 99,900,000 shares of Class
A common shares with a par value of $0.001 per share. The Company
authorized 100,000 shares of Class B common shares with a par value of
$0.01 per share.
In January, 2000, the Company elected to change its official name from
Equity AU, Inc. to Equity Technologies & Resources, Inc.
The Company engaged in research and development of a process to extract
gold and other precious metals on various real properties located in
Arkansas. Partnerships were formed prior to 1994 by the Company or by
affiliates of the Company to raise working capital, acquire mineral
claims, rights, facilities and equipment and to explore for precious
metals. In 1994, the Company was notified by general partners of the
partnerships that they were terminated and dissolved.
On August 4, 2000 the Company effected a 1:50 reverse stock split in
anticipation of finding a suitable combination partner or another
company to acquire.
The Company has had no significant operations since August 1993 and
entered the development stage on January 1, 1994. During September
1996, the Company resumed operations and again suspended operations in
December 1996. The Company can make no assumptions as to if and when
operations will resume again.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year end.
13
<PAGE>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 December 31, 1999
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
c. Use of Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
d. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the
weighted average number of shares issued and outstanding during the
periods of the financial statements as follows. Fully diluted loss per
share is not presented because of the antidilutive nature of the common
stock equivalents.
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Numerator - loss $ (97,632) $ (8,434) $ (159,320) $ (78,877)
Denominator - weighted
average number of
shares outstanding 7,771,907 9,972,350 7,771,907 9,972,350
---------------- --------------- --------------- ----------------
Loss per share $ (0.01) $ (0.00) $ (0.02) $ (0.02)
================ =============== =============== ================
</TABLE>
e. Income Taxes
The Company is subject to the greater of federal income taxes computed
under the regular system or the alternative minimum tax system. The
Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income taxes." The statement requires the use of an
asset and liability approach for the accounting and financial reporting
of income tax. No deferred tax asset has been recognized for the
operating loss carryforward as it is more likely than not that all or a
portion of the net operating loss will not be realized and any
valuation allowance would reduce the benefit to zero.
f. Cash and Cash Equivalents
For purposes of financial statement presentation, the Company considers
all highly liquid investments with a maturity of three months or less,
from the date of purchase to be cash equivalents.
NOTE 2 - CONTINGENCIES AND COMMITMENTS
The Company owed $58,830 as of September 30, 2000 and December 31, 1999
in federal taxes. Penalties and interest continue to accrue. Management
has determined that this will have no significant or material adverse
effect on the results of operations.
14
<PAGE>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 December 31, 1999
NOTE 2 - CONTINGENCIES AND COMMITMENTS (Continued)
On December 31, 1997, the Company canceled 8,402 Class A shares of
common stock. These shares had been authorized for issue during prior
years. No details were available as to whom the shares should be issued
to. Management canceled these shares which resulted in contributed
capital of $8,394.
On December 31, 1997, the Company canceled 98,000 shares of Class A
preferred stock, 272,200 shares of Class B preferred stock, and 10,200
shares of Class C preferred stock. No record of owners of these shares
could be determined. The results of the cancellation of these shares
was contributed capital of $380,400. All dividends associated with the
canceled shares were also canceled. The Company may be liable to the
owners of these shares, should the owners of these shares be
identified.
At December 31, 1998, a creditor made a claim for approximately
$20,000. Management contends the amount is not owed due to
non-performance by the Lessor. The amount has been due since February
1994.
At December 31, 1998, a creditor made a claim for approximately
$19,000. Management contends the amount is not owed due to
non-performance by the creditor. The amount has been due since June
1996.
NOTE 3 - NOTES PAYABLE
<TABLE>
<CAPTION>
Notes payable of the Company are as follows:
September 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Unsecured notes payable to a related party, past due, bearing 12%
interest. $ 165,500 $ 165,500
Unsecured promissory notes bearing interest at 10%. Interest payable
annually in either stock or cash, or both. The lenders may earn bonus
distributions based on the productivity of mining operations. Due on
demand. 6,000 6,000
Non-interest bearing notes payable to various parties, secured by
guarantees of common stock. Due on demand. 26,000 26,000
Non-interest bearing notes payable to related parties, secured by
guarantees of common stock. Due on demand. 12,900 -
Unsecured promissory note bearing 18% interest due December 31, 2000. 75,000 -
------------ ------------
Balance forward $ 285,400 $ 197,500
15
<PAGE>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 December 31, 1999
NOTE 3 - NOTES PAYABLE (Continued)
<CAPTION>
September 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Balance forward $ 285,400 $ 197,500
Unsecured, non-interest bearing notes payable to
various parties. Due on demand 26,700 -
Less related party notes (254,400) (165,500)
------------ ------------
Total notes payable 57,700 32,000
Less current portion (57,700) (32,000)
------------ ------------
Total Long-Term Debt $ - $ -
============ ============
Scheduled maturities of notes payable are as follows:
2000 $ 312,100 $ 197,500
============ ===========
</TABLE>
NOTE 4 - CAPITAL STOCK
a. Preferred Stock - Series A
The Company is authorized to issue 2,000,000 shares of non-voting
preferred shares, at a par value of $1.00 per share. These shares
accrue a 10% dividend annually. The cumulative amount of dividend was
$28,750 and $25,000 at September 30, 2000 and December 31, 1999,
respectively. These preferred shares are convertible into Class A
common stock at a conversion rate of 5.5 common shares for each
preferred share. There were 50,000 shares issued and outstanding at
September 30, 2000 and December 31, 1999.
Dividends paid during 1995 amounted to $17,717 for 1993 and $14,800 for
1994. No dividends have been paid since 1995.
b. Preferred Stock - Class B
The company is authorized to issue 300,000 shares of non-voting
preferred shares, at a par value of $1.00 per share. These shares
accrue a 10% dividend payable annually on September 30 of each year.
The cumulative amount of dividend was $-0- at September 30, 2000 and
December 31, 1999. These preferred shares are convertible into Class A
common stock at a conversion rate of 16 common shares for each
preferred share. There were no shares issued and outstanding at
September 30, 2000 or December 31, 1999. Management canceled all
outstanding shares and related dividends payable in 1997.
16
<PAGE>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 December 31, 1999
NOTE 4 - CAPITAL STOCK (Continued)
c. Preferred Stock - Class C
The Company is authorized to issue 100,000 shares of non-voting
preferred shares at a par value of $1.00 per share. These shares accrue
a 10% dividend annually. The cumulative amount of dividend was $-0- at
September 30, 2000 and December 31, 1999 and 1998. These preferred
shares are convertible into Class A common stock at a conversion rate
of 12 common shares for each preferred share. There were $-0- shares
issued and outstanding at September 30, 2000 and December 31, 1999.
Management canceled all outstanding shares and related dividends
payable in 1997.
d. Preferred Stock
The Company is authorized to issue 1,400,000 shares of its non-voting
preferred stock at a par value of $1.00 per share. There were no shares
issued and outstanding at September 30, 2000 and December 31, 1999.
e. Common Stock - Class A
The Company is authorized to issue 99,900,000 Class A common shares, at
a par value of $0.001 per share. These shares have full voting rights.
There were 7,771,907 shares outstanding as of September 30, 2000.
In October 1997, the Company issued 9,150,000 post-split shares of
Class A common stock for cash and mining rights. These shares were
canceled due to non-performance of the terms of the agreements. 25,000
shares were returned in October 1997. 1,487,000 of these shares were
used to settle debt of the Company. At September 30, 2000 and December
31, 1999, 145,000 remained outstanding.
In September 1997, the Company authorized a reverse stock split of
100-for-1. Shares outstanding have retroactively been restated.
The Company issued 161,944 and 135,284 shares as dividends in 1995 for
1993 and 1994 dividends accrued.
In May 1995, the Company issued in error 9,617,000 shares to a related
party that were returned to the Company and canceled during 1996. There
was no consideration exchanged in the issuance or cancellation of these
shares.
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EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 December 31, 1999
NOTE 4 - CAPITAL STOCK (Continued)
f. Common Stock - Class B
The Company is authorized to issue 100,000 shares of its Class B common
shares at a par value of $0.01 per share. The Class B shares have the
right to elect a majority of the Board of Directors of the Company.
There were 100,000 shares issued and outstanding as of September 30,
2000 and December 31, 1999. All Class B shares of common stock are held
by a director at September 30, 2000 and December 31, 1999.
NOTE 5 - RELATED PARTY TRANSACTIONS
Arkansas American Mining and Exploration, Inc. (AAME) was owned and
controlled by the founders of the Company. In 1988, AAME exchanged
mining claims, milling facility and a core drilling rig, for the
Company's common stock.
In 1994, a related party loaned the Company $152,000 secured by the
Company's land, buildings, and equipment. This note, plus interest, was
due in the fourth quarter of 1996. The Company defaulted on the note.
The property and equipment were claimed by the note holder and written
off by the Company.
During 1995, the Company paid $25,000 for services rendered by related
parties and issued 2,500,000 shares of Class A common stock for
additional services valued at $26,225.
During 1997, the Company issued 1,029,500 shares of common A stock to a
former President of the Company for services valued at $102,000. An
agreement has been made with this former officer for continued
consulting services.
On December 23, 1998, the Company borrowed $61,000 from Kentrust, Inc.,
an entity whose CEO is a director of the Company. The note carried a
10% interest rate, and was due on December 23, 1999. In 1999, the
Company borrowed an additional $104,500 from Kentrust at 10%. During
the year, the entire $165,500 became overdue and began accruing
interest at a rate of 12% per annum. A $16,550 penalty for late payment
was also levied against the Company. In September 2000, the Company
borrowed another $75,000 from Kentrust under the same terms.
In March 2000, the Company borrowed $7,500 from a director of the
Company. The note is non-interest bearing, and is secured by a
guarantee of 150,000 shares of the Company's common stock, payable only
if the Company is unable to repay the note in cash. In May 2000, the
Company borrowed an additional $5,000 from the same director.
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<PAGE>
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Formerly Equity AU, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 December 31, 1999
NOTE 6 - GOING CONCERN
The Company has no capital resources available to meet current
obligations and develop its properties and bring into production a
profitable mining operation. The adverse effect on the Company's
results of operation due to its lack of capital resources can be
expected to continue until such time as the Company is able to generate
additional capital from other sources.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. Management has implemented, or developed
plans to implement, a number of actions to address these conditions
including: maintaining the most attractive mining properties; selling
the precious gems; obtaining additional financing; and, investigating
various joint venture opportunities.
Additional funding will be necessary for the Company's development
plans. There can be no assurance that additional funding will be
available when needed or, if available, that the terms of such
financing will not adversely affect the Company's results from
operations.
The financial statements do not include any adjustment to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result
from the outcome of this uncertainty.
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Item 2. Management's Discussion & Analysis of Financial Condition and Results of
Operations
Three Months ended 9/30/00 compared to Year ended 12/31/99
During each of these periods there were no revenues and the Company Had
no operations. General and administrative expenses consisted primarily of office
rental, equipment leases and salary expenses.
Liquidity and Capital Resources
At September 30, 2000, the Company had $4,272 in assets, total
liabilities of $468,130 and total stockholders deficit of ($463,848) compared
with $1,011 in assets, total liabilities of $322,346 and total stockholders
deficit of $(322,346) at December 31, 1999. The changes in account balances were
from loans of $75,000 from FV Investments, LLC in the 3nd Quarter 2000 for
operating capital. Management is uncertain of when operations will commence and
can give no assurances that operations will continue during the current fiscal
year. For the
present time Kentrust, Inc., certain related parties, and other third parties
are funding the cash requirements of the Company. There is no assurance as to
how long these parties will fund the Company. The Company is now actively
seeking an acquisition or merger candidate. Management can give no assurances as
to when, or if, a candidate will be identified.
PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) This Item is not applicable to the Company.
(b) No Report on Form 8-K was filed by the Company during the three
month period ended September 30, 2000.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
EQUITY TECHNOLOGIES & RESOURCES, INC.
(Registrant)
BY: /s/ Frank G. Dickey
-----------------------
Frank G. Dickey, President
Dated: November 13, 2000
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