- --------------------------------------------------------------------------------
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: MARCH 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER: 0-24682
WORLDWIDE PETROMOLY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO 84-1125214
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1300 POST OAK BOULEVARD, SUITE 1985
HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(713) 892-5823
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
_________________
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 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 CORPORATE ISSUERS
AT MAY 15, 1999, 20,484,249 SHARES OF COMMON STOCK, NO PAR VALUE,
WERE
OUTSTANDING.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE); YES [ ] NO [X]
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
WORLDWIDE PETROMOLY, INC.
CONTENTS
--------
PAGE(S)
-------
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1999
(UNAUDITED) AND JUNE 30, 1998 3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1999 AND 1998 ( BOTH UNAUDITED) 4
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS
ENDED MARCH 31, 1999 AND 1998 ( BOTH UNAUDITED) 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6 - 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 8 - 12
PART II - OTHER INFORMATION
- ---------------------------
ITEM 2. CHANGES IN SECURITIES 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
(A) EXHIBITS
(B) REPORTS ON FORM 8-K
SIGNATURES 14
- ----------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
WORLDWIDE PETROMOLY, INC.
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
1999 1998
-------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
- -----------------------------------------------------
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . . . . . . $ 515,182 $ 34,375
Certificates of Deposit-Restricted. . . . . . . . . . . - 276,579
Investments in equity securities. . . . . . . . . . . . 99,151 -
Accounts Receivable:
Trade . . . . . . . . . . . . . . . . . . . . . . . . 132,284 107,720
Affiliated Companies. . . . . . . . . . . . . . . . . 34,472 38,807
Notes Receivable-Related Parties. . . . . . . . . . . . - 111,151
Inventories . . . . . . . . . . . . . . . . . . . . . . 54,463 45,394
Prepaid Expense and Other . . . . . . . . . . . . . . 295,544 10,840
-------------- ------------
Total Current Assets. . . . . . . . . . . . . . . . . . 1,131,096 624,866
-------------- ------------
Property and Equipment, Net (Note 3). . . . . . . . . . 105,062 121,419
-------------- ------------
Total Assets. . . . . . . . . . . . . . . . . . . . . . $ 1,236,158 $ 746,285
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------------------------
Current Liabilities:
Accounts Payable and Accrued Expenses . . . . . . . . . $ 426,960 $ 173,592
Notes Payable . . . . . . . . . . . . . . . . . . . . . - 160,000
-------------- ------------
Total Current Liabilities . . . . . . . . . . . . . . . 426,960 333,592
Advances From Stockholder . . . . . . . . . . . . . . . 348,636 116,263
-------------- ------------
Total Liabilities . . . . . . . . . . . . . . . . . . . 775,596 449,855
-------------- ------------
Stockholders' Equity:
Preferred stock, no par value, 10,000,000 shares
authorized, none issued . . . . . . . . . . . . . . . . -- --
Common stock, no par value, 800,000 shares
authorized; 20,159,250 issued and outstanding;
3,000,000 reserved for stock options. . . . . . . . . . 8,380,192 7,493,228
Accumulated Deficit . . . . . . . . . . . . . . . . . . (7,919,630) (7,196,798)
Total Stockholders' Equity. . . . . . . . . . . . . . . 460,562 296,430
-------------- ------------
Total Liabilities and Stockholders' Equity. . . . . . . $ 1,236,158 $ 746,285
============== ============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
<TABLE>
<CAPTION>
WORLDWIDE PETROMOLY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
NET SALES $ 170,653 $ 52,904 $ 363,474 $ 209,644
COST OF SALES 104,966 38,560 234,427 155,837
------------ ------------ ------------ ------------
GROSS PROFIT 65,687 14,344 129,047 53,807
SELLING, ADMINISTRATIVE
AND GENERAL EXPENSES 451,684 900,420 1,038,194 1,851,018
------------ ------------ ------------ ------------
(LOSS) FROM OPERATIONS (385,997) (888,076) (909,147) (1,797,211)
OTHER INCOME, NET 186,315 (5,809) 186,315 33,112
------------ ------------ ------------ ------------
NET (LOSS) $ (199,682) $ (891,885) $ (722,832) $(1,764,099)
============ ============ ============ ============
NET (LOSS) PER SHARE $ (.01) $ (.05) $ (.04) $ (.10)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 17,537,237 17,247,500 17,925,147 16,914,167
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
<TABLE>
<CAPTION>
WORLDWIDE PETROMOLY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
NINE MONTHS ENDED
MARCH 31,
1999 1998
-------------- ------------
<S> <C> <C>
(UNAUDITED)
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS$ (722,832) $(1,764,099)
ADJUSTMENTS TO RECONCILE
NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
DEPRECIATION 22,633 18,000
COMMON STOCKS ISSUED FOR SERVICES -- 500,000
CHANGES IN ASSETS AND LIABILITIES
ACCOUNTS RECEIVABLE (20,229) (14,317)
INVENTORIES (9,069) 51,954
PREPAID EXPENSE AND OTHER ASSETS (284,704) (2,330)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 253,368 25,227
-------------- ------------
NET CASH USED IN OPERATING ACTIVITIES (760,833) (1,185,565)
-------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
CERTIFICATES OF DEPOSIT 276,579 671,503
CAPITAL EXPENDITURES (6,276) (24,938)
RELATED PARTY LOAN-REPAYMENTS 12,000 161,726
-------------- ------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 282,303 808,291
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM OPTIONS EXERCISED 527,300 --
PROCEEDS FROM SALE OF STOCK 359,664 --
BORROWING/REPAYMENT OF SHAREHOLDER LOANS 232,373 (35,000)
BORROWING OF NOTES PAYABLE (160,000) (265,000)
-------------- ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 959,337 (300,000)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 480,807 (677,274)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34,375 864,555
-------------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 515,182 $ 187,281
============== ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
WORLDWIDE PETROMOLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ORGANIZATION AND BUSINESS
WORLDWIDE PETROMOLY, INC. (THE "COMPANY"), A PUBLICLY-HELD COLORADO
CORPORATION, IS ENGAGED IN THE MARKETING AND DISTRIBUTION OF A LINE OF ENGINE
LUBRICATION PRODUCTS UNDER THE TRADENAME "PETROMOLY". THE COMPANY WAS FORMED AS
A RESULT OF A REVERSE MERGER ON JULY 22, 1996, BETWEEN OGDEN, MCDONALD & COMPANY
("OGDEN MCDONALD" THE FORMER NAME OF THE REGISTRANT WITH THE SECURITIES AND
EXCHANGE COMMISSION) AND WORLDWIDE PETROMOLY CORPORATION ("WPC"). OGDEN MCDONALD
WAS INCORPORATED IN THE STATE OF COLORADO ON OCTOBER 13,1989, AND BECAME A
PUBLIC "SHELL" COMPANY FOR THE PURPOSE OF ENGAGING IN SELECTED MERGERS AND
ACQUISITIONS. WPC WAS INCORPORATED IN THE STATE OF TEXAS ON APRIL 1, 1993, AND
PRIOR TO THE REVERSE ACQUISITION, WAS ENGAGED IN THE SAME LINE OF BUSINESS AS
THE COMPANY. IN CONNECTION WITH THE REVERSE MERGER, OGDEN MCDONALD ACQUIRED ALL
OF THE OUTSTANDING COMMON STOCK OF WPC, AND SUBSEQUENTLY CHANGED ITS NAME TO
WORLDWIDE PETROMOLY, INC. WPC IS NOW A WHOLLY OWNED SUBSIDIARY OF THE COMPANY.
THE COMPANY CONTRACTS WITH INDEPENDENT PARTIES FOR THE BLENDING OF ITS LUBRICANT
PRODUCTS.
NOTE 2 - BASIS OF PRESENTATION
THE ACCOMPANYING UNAUDITED FINANCIAL STATEMENTS OF THE COMPANY AND ITS
WHOLLY-OWNED SUBSIDIARY WPC HAVE BEEN PREPARED IN ACCORDANCE WITH THE
INSTRUCTIONS AND REQUIREMENTS OF FORM 10-QSB AND, THEREFORE, DO NOT INCLUDE ALL
INFORMATION AND FOOTNOTES NECESSARY FOR A FAIR PRESENTATION OF FINANCIAL
POSITION, RESULTS OF OPERATIONS, AND CASH FLOWS IN CONFORMITY WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES. IN THE OPINION OF MANAGEMENT, SUCH FINANCIAL
STATEMENTS REFLECT ALL ADJUSTMENTS (CONSISTING ONLY OF NORMAL RECURRING
ACCRUALS) NECESSARY FOR A FAIR PRESENTATION OF THE RESULTS OF OPERATIONS AND
FINANCIAL POSITION FOR THE INTERIM PERIODS PRESENTED. OPERATING RESULTS FOR THE
INTERIM PERIODS ARE NOT NECESSARILY INDICATIVE OF THE RESULTS THAT MAY BE
EXPECTED FOR THE FULL YEAR. THESE FINANCIAL STATEMENTS SHOULD BE READ IN
CONJUNCTION WITH THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB.
NOTE 3 - PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT CONSISTS OF THE FOLLOWING AS OF MARCH 31, 1999
AND JUNE 30, 1998:
<TABLE>
<CAPTION>
MARCH 31 JUNE 30
------------ ---------
<S> <C> <C>
OFFICE FURNISHINGS AND EQUIPMENT $ 138,177 $134,536
MACHINERY AND EQUIPMENT 16,370 13,735
VEHICLES 12,062 12,062
------------- ---------
166,609 160,333
LESS ACCUMULATED DEPRECIATION (61,547) (38,914)
------------- ---------
NET PROPERTY AND EQUIPMENT $ 105,062 $121,419
============= =========
</TABLE>
6
<PAGE>
WORLDWIDE PETROMOLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4 - INCOME TAXES
DEFERRED TAXES ARE DETERMINED BASED ON TEMPORARY DIFFERENCES BETWEEN THE
FINANCIAL STATEMENT AND INCOME TAX BASIS OF ASSETS AND LIABILITIES AS MEASURED
BY THE ENACTED TAX RATES WHICH WILL BE IN EFFECT WHEN THESE DIFFERENCES REVERSE.
DEFERRED TAX ASSETS ARE COMPRISED OF THE FOLLOWING AT MARCH 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
NET OPERATING LOSS CARRYFORWARDS $ 2,074,000
STOCK OPTIONS GRANTED TO NON-EMPLOYEES 567,000
AMORTIZATION EXPENSE 25,500
BAD DEBT EXPENSE 7,000
------------
GROSS DEFERRED TAX ASSET 2,673,500
------------
VALUATION ALLOWANCE (2,673,500)
------------
NET DEFERRED TAX ASSET $ -
============
</TABLE>
THE COMPANY HAS RECORDED A FULL VALUATION ALLOWANCE AGAINST ALL DEFERRED
TAX ASSETS BECAUSE IT COULD NOT DETERMINE WHETHER IT WAS MORE LIKELY THAN NOT
THAT THE DEFERRED TAX ASSET WOULD BE REALIZED AGAINST FUTURE INCOME.
AT MARCH 31, 1999 THE COMPANY HAD NET OPERATING LOSS CARRYFORWARDS
TOTALING APPROXIMATELY $6,100,000 AVAILABLE TO REDUCE FUTURE TAXABLE INCOME
THROUGH THE YEAR 2014 (SEE TABLE).
THE NET OPERATING LOSS CARRYFORWARDS EXPIRE AS FOLLOWS:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, AMOUNT
- ----------------------------------- -----------
<S> <C>
2008 $ 70,000
2009 263,000
2010 112,000
EIGHTEEN MONTHS ENDED JUNE 30, 2012 2,753,000
YEAR ENDED JUNE 30 2013 2,202,000
YEAR ENDED JUNE 30, 2014 700,000
-----------
TOTAL $ 6,100,000
===========
</TABLE>
7
<PAGE>
WORLDWIDE PETROMOLY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 5 - LOSS PER SHARE
USING THE PRINCIPLES SET FORTH IN SFAS 128, BASIC EARNINGS PER SHARE
INCLUDES NO DILUTION AND IS COMPUTED BY DIVIDING INCOME AVAILABLE TO COMMON
STOCKHOLDERS BY THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING FOR THE
PERIOD. DILUTIVE EARNINGS PER SHARE REFLECTS THE POTENTIAL DILUTION OF
SECURITIES THAT COULD SHARE IN THE EARNINGS OF THE COMPANY. THE COMPANY WAS
REQUIRED TO ADOPT THIS STANDARD IN THE SECOND FISCAL QUARTER OF 1998. USING THE
PRINCIPLES SET FORTH IN SFAS 128, BASIC AND DILUTED EARNINGS PER SHARE ARE
IDENTICAL.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
RESULTS OF OPERATIONS -WORLDWIDE PETROMOLY INC. ("THE COMPANY")
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES. SEE CONSOLIDATED FINANCIAL
STATEMENTS. CERTAIN STATEMENTS CONTAINED HEREIN ARE NOT BASED ON HISTORICAL
FACTS, BUT ARE FORWARD LOOKING STATEMENTS THAT ARE BASED UPON ASSUMPTIONS ABOUT
FUTURE CONDITIONS THAT COULD PROVE NOT TO BE ACCURATE. ACTUAL EVENTS,
TRANSACTION AND RESULTS MAY MATERIALLY DIFFER FROM THE ANTICIPATED EVENTS,
TRANSACTIONS OR RESULTS DESCRIBED IN SUCH STATEMENTS. THE COMPANY'S ABILITY TO
CONSUMMATE SUCH TRANSACTIONS AND ACHIEVE SUCH EVENTS OR RESULTS IS SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE
NOT LIMITED TO, THE EXISTENCE OF DEMAND FOR AND ACCEPTANCE OF THE COMPANY'S
PRODUCTS AND SERVICES, REGULATORY APPROVALS AND DEVELOPMENTS, ECONOMIC
CONDITIONS, THE IMPACT OF COMPETITION AND PRICING, RESULTS OF FINANCING EFFORTS
AND OTHER FACTORS AFFECTING THE COMPANY'S BUSINESS THAT ARE BEYOND THE COMPANY'S
CONTROL. THE COMPANY UNDERTAKES NO OBLIGATION AND DOES NOT INTEND TO UPDATE,
REVISE OR OTHERWISE PUBLICLY RELEASE THE RESULT OF ANY REVISIONS TO THESE
FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES.
RESULTS OF OPERATIONS -GENERAL
THE CORPORATE DEVELOPMENTS THIS QUARTER WERE SIGNIFICANT AND SET THE STAGE FOR
THE REMAINING CALENDAR YEAR TO BE DYNAMIC AND ENCOURAGING. DURING THE FISCAL
QUARTER ENDED MARCH 31, 1999 (ALSO REFERRED TO AS THE THIRD FISCAL QUARTER OR
THE FIRST CALENDAR QUARTER), THE COMPANY CONTINUED TO INVESTED IN CUSTOMER
FIELD PRODUCT TESTING, ADDITIONAL RESEARCH AND DEVELOPMENT FOR NEW PRODUCTS
INCLUDING A HOUSEHOLD LUBRICANT AND A MOTOR-GEAR LUBRICANT, PRINTING RETAIL
SALES BROCHURES AND POINT OF PURCHASE DISPLAYS, PURCHASING ADDITIONAL LAB
EQUIPMENT, AND WEB SITE REVAMPING. THE COMPANY ALSO CONSUMMATED A TITLE
SPONSORSHIP OF AN INDY RACING LEAGUE (IRL) RACECAR IN AN EFFORT TO DEVELOP
PRODUCT AWARENESS AND SALES VOLUME. THE RACECAR WILL BE DRIVEN BY THE 1998 IRL
"ROOKIE OF THE YEAR" ROBBY UNSER, USING THE COMPANY'S SPECIALLY FORMULATED MOLY
RACING-OIL DESIGNED FOR NASCAR AND INDY STYLE MOTORS. MR. UNSER HAS ALREADY BEEN
ABLE TO TELL A NOTICEABLE DIFFERENCE IN THE CAR'S PERFORMANCE AND HE ANTICIPATES
A TOP FINISH IN SOME OF THIS YEAR'S RACES. THE COMPANY ALSO DID ADDITIONAL
EXTENSIVE FIELD-TESTING IN AN EFFORT TO EXPAND THE COMPANY'S INDUSTRIAL CUSTOMER
BASE, WHILE CONTINUING TO ASCERTAIN SPECIFIC AVENUES AND ALLIANCES FOR LAUNCHING
A RETAIL CAMPAIGN BY CAPITALIZING THE NATIONAL ATTENTION THAT THE AUTO-RACING
WILL CREATE AS ALL OF THE RACES ARE TELEVISED NATIONALLY. IN THE PAST, THE TWO
AREAS OF FOCUS HAVE BEEN PRIMARILY THE COMMERCIAL AND INDUSTRIAL MARKET, AND
SECONDARILY THE RETAIL/PASSENGER CAR MARKET. THE FOCUS SHIFTED LAST QUARTER TO
BALANCE ALL MARKETS. DURING THIS QUARTER, THE COMPANY HAS CONTINUED TO ENJOY A
GROWING NUMBER OF WEB PURCHASES (APPROXIMATELY $29,000) WITH OUT ADVERTISING ITS
WEB SITE.
8
<PAGE>
BECAUSE OF THIS, MANAGEMENT ENTERED INTO AN AGREEMENT WITH A PROFESSIONAL
INTERNET COMPANY, INTERNET BILLING SOLUTIONS, WHICH NOT ONLY INVESTED $500,000
IN THE COMPANY IN THE FORM OF OPTIONS, BUT ALSO WILL BE PROFESSIONALLY
EXPLOITING THE COMMERCE ACTIVITY THAT THE INTERNET CAN OFFER. MANAGEMENT
BELIEVES THAT WITH A PROFESSIONAL CAMPAIGN THE COMPANY WILL ENJOY A SIGNIFICANT
SALES VOLUME INCREASE AND MAKE THE WEB SITE A FORUM FOR INVESTOR RELATIONS AND
INTRA-COMPANY COMMUNICATIONS AND ACCOUNTING.
DURING THIS QUARTER, THE COMPANY RECEIVED THE RESULTS FROM AN 11 MONTH
EVALUATION BY THE EPA WHICH CONFIRMED AND DOCUMENTED PETROMOLY ENGINE OIL AS
ENERGY SAVING AND EMISSIONS REDUCING. THIS ACHIEVEMENT IS UNPRECEDENTED FOR ANY
MOTOR OIL AND MANAGEMENT PLANS ON UTILIZING THESE RESULTS TO FURTHER INDUCE
PURCHASES FOR BOTH RETAIL AND INDUSTRIAL MARKETS.
ALSO DURING THIS QUARTER, THE COMPANY CONSUMMATED A DISTRIBUTOR AGREEMENT WITH
ENVIRONMENTAL FLEET SERVICES (EFS) OF CALIFORNIA, A VERY PROGRESSIVE COMPANY IN
LOS ANGELES WITH A GROWING CUSTOMER BASE. MANAGEMENT ANTICIPATES SIGNIFICANT
ACTIVITY FROM THIS AGREEMENT, AS SOUTHERN CALIFORNIA IS KNOWN TO BE THE "CAR
CAPITAL OF THE US". TO DATE EFS HAS ORDERED OVER 34% OF COMMERCIAL SALES THIS
QUARTER, AND IS SHOWING PROMISE OF GROWING EVEN MORE SUBSTANTIALLY IN THE NEXT
QUARTER.
ADDITIONALLY, DURING THIS QUARTER THE COMPANY WAS WRITTEN UP IN THE FEBRUARY 22,
1999 ISSUE BUSINESS WEEK MAGAZINE IN THE "DEVELOPMENTS TO WATCH" SECTION. IT
WAS A VERY POSITIVE ARTICLE AND IT HAS CREATED A LOT OF ATTENTION FOR THE
COMPANY AND ITS PRODUCTS. A SIGNIFICANT AMOUNT OF THE WEB PURCHASES WERE
ATTRIBUTABLE TO EXPOSURE THAT THE ARTICLE PROVIDED. IT ALSO VALIDATED TO
MANAGEMENT THE DEMAND POTENTIAL FOR THE COMPANY'S PRODUCTS.
QUARTER ENDED MARCH 31, 1999 COMPARED TO QUARTER ENDED MARCH 31, 1998
TOTAL NET SALES FOR THE QUARTER ENDED MARCH 31, 1999, WAS $170,653 COMPARED TO
$52,904 FOR THE QUARTER ENDED MARCH 31, 1998, A 223% INCREASE. THIS
INCREASE BY COMPARISON IS DUE TO EXPANDED PURCHASING OF THE COMPANY'S CUSTOMER
BASE AS WELL AS NEW INCENTIVE PROGRAMS DESIGNED TO ENHANCE HIGHER VOLUME ORDERS
AND INCREASED WEB PURCHASES. ADDITIONALLY, THE POSITIVE CHANGE IN COST OF
SALES IS ALSO NOTABLE. COST OF SALES AS A PERCENTAGE OF NET SALES DECREASED
FROM 73% FOR THE QUARTER ENDED MARCH 31, 1998, TO 61% FOR THE YEAR ENDED MARCH
31, 1999. THIS PERCENTAGE CHANGE RESULTED FROM IMPROVED AGREEMENTS WITH
SUPPLIERS, FREIGHT CARRIERS AND TOLL BLENDERS, ALONG WITH CONTINUAL STREAMLINING
PROCEDURES IN MANUFACTURING.
YEAR TO DATE ENDED MARCH 31, 1999 COMPARED TO YEAR TO DATE ENDED MARCH 31, 1998
TOTAL NET SALES FOR THE YEAR TO DATE ENDED MARCH 31, 1999, WAS $363,474 COMPARED
TO $209,644 FOR THE YEAR TO DATE ENDED MARCH 31, 1998, A 73% INCREASE. THIS
INCREASE BY COMPARISON IS DUE TO EXPANDED PURCHASING OF THE COMPANY'S
CUSTOMER BASE, AS WELL AS THIS QUARTER'S INCENTIVE PROGRAMS DESIGNED TO ENHANCE
HIGHER VOLUME ORDERS. ADDITIONALLY, THE IMPROVEMENT IN COST OF SALES IS ALSO
NOTABLE. COST OF SALES AS A PERCENTAGE OF NET SALES DECREASED FROM 74% FOR THE
YEAR TO DATE ENDED MARCH 31, 1998, TO 65% FOR THE YEAR TO DATE ENDED MARCH 31,
1999.
THE COMPANY IS CONTINUING ITS TESTING OF VARIOUS NEW PRODUCTS AND INTERVIEWING
VARIOUS VENDORS TO SEE IF THE PRODUCTS CAN BE MADE MORE COST EFFECTIVELY, THUS
REDUCING THE COST OF SALES IN THE FUTURE. ADDITIONALLY, THE PROJECTED INCREASE
IN SALES VOLUME WILL ALSO REDUCE COST OF SALES DUE TO ECONOMIES OF SCALE.
MANAGEMENT EXPECTS THE FOLLOWING QUARTERS TO CONTINUE A GREATER TREND THAT
REFLECTS THE RETAIL CAMPAIGN SALES, ALONG WITH THE MATURING MARKETING EFFORTS,
SCHEDULED TO BEGIN SOMETIME IN THE FORTH FISCAL QUARTER OF 1999. IN THE PAST,
THE SALES FOCUS HAS BEEN ON SECURING COMMITMENTS AND ENDORSEMENTS FROM SEVERAL
LARGE NATIONAL AND MULTINATIONAL CORPORATIONS THAT ARE CONSIDERED LEADERS IN
THEIR VARIOUS INDUSTRIES. AS THE ANALYSIS OF THE PRODUCT UTILIZATION BY THESE
VARIOUS CUSTOMERS CONTINUES TO BE EXTREMELY POSITIVE AND RESOLUTE, THE SALES
VOLUME AND RELATIVE MARGINS REMAIN LOW DUE TO THE PROMOTIONAL PRICES AND
PRACTICES ALLOWED BY MANAGEMENT.
9
<PAGE>
THE COMPANY EXPECTS SALES VOLUME TO INCREASE SIGNIFICANTLY DURING IN THE SECOND
OR THIRD CALENDAR QUARTER OF 1999 AS THE PROMOTIONAL ACTIVITIES AND ADVERTISING
CAMPAIGNS COME TO FRUITION.
SELLING, GENERAL AND ADMINISTRATIVE
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES DECREASED FROM $900,420 FOR THE
QUARTER ENDED MARCH 31, 1998, AND FOR THE YEAR TO DATE ENDED MARCH 31, 1998
AT $1,851,018 TO $451,684 FOR THE QUARTER ENDED MARCH 31, 1999 AND
$1,038,194 FOR THE YEAR TO DATE ENDED MARCH 31, 1999; A 50% AND 55% DECREASE
RESPECTIVELY FROM QUARTER, TO YEAR TO DATE ACCOUNTING. THE PRIMARY REASON FOR
THE DECREASES IN EXPENSES FOR THE COMPARED QUARTERS AND YEAR TO DATE ENDINGS
WERE THE DOWNSIZING OF THE CORPORATE STRUCTURE, AND RELOCATING OF THE SOME OF
THE COMPANY'S OFFICES IN BOTH HOUSTON AND FLORIDA. MANAGEMENT EXPECTS THAT NEXT
QUARTER SELLING, GENERAL AND ADMINISTRATIVE WILL CONTINUE TO SHOW THE BENEFITS
OF THE CONTINUED PRACTICES OF EXPENSE CUTTING WHERE EVER POSSIBLE, WITH OUT
SACRIFICING QUALITY OR THE COMPANY'S IMAGE.
LIQUIDITY AND CAPITAL RESOURCES
ON MARCH 31, 1999, THE COMPANY HAD BOOKED A WORKING CAPITAL OF $704,136,
COMPARED TO $291,274 AT JUNE 30,1998. THE CHANGE IN WORKING CAPITAL WAS
PRIMARILY DUE TO THE CASH PROCEEDS FROM THE EXERCISING OF OPTIONS GRANTED TO
INTERNET BILLING SOLUTIONS INC., AS WELL AS EMPLOYEE OPTIONS THAT WERE
EXERCISED. ALSO INCLUDED IN THE CURRENT ASSETS ARE THE CASH PROCEEDS FROM THE
SELLING OF STOCK OWNED BY THE COMPANY AS PART OF A RELATED PARTY TRANSACTION.
IN ADDITION TO INVENTORY ORDERS INCLUDED IN THE YEAR-END LIABILITIES THERE ALSO
ARE THE NORMAL GENERAL AND ADMINISTRATIVE EXPENSES, YEAR END PAYROLL TAX
LIABILITIES. NET CASH USED IN OPERATING ACTIVITIES FOR YEARLY COMPARED QUARTERS
WAS $760,833 FOR ENDED MARCH 31, 1999, A SIGNIFICANT DROP COMPARED TO $1,185,565
FOR ENDED MARCH 31, 1998, BEING A 35% DECREASE. FROM TIME TO TIME, THE
COMPANY'S CHAIRMAN, GILBERT GERTNER, HAS LOANED MONEY AND CONTINUES TO
PROVIDE CAPITAL TO THE COMPANY AS NEEDED. AT THIS TIME THERE HAS NOT BEEN A
FORMAL AGREEMENT ON HOW MR. GERTNER WILL BE REIMBURSED AND AWARDED FOR HIS
CONTRIBUTION, BUT IT IS UNDERSTOOD THAT WHEN THE COMPANY HAS THE ABILITY TO PAY
HIM BACK AND AWARD HIS SUPPORT, IT WILL DO SO; HOWEVER, THERE ARE NO DEMANDS FOR
REPAYMENT AT THIS TIME. ADDITIONALLY, SINCE OCTOBER 1998, MR. GERTNER AND
AND LANCE J. ROSMARIN THE COMPANY PRESIDENT HAVE ELECTED TO TEMPORARILY DEFER
THE CASH PAYMENTS OF THEIR EMPLOYMENT AGREEMENTS, UNTIL THE COMPANY IS IN A
BETTER POSITION TO PAY THEM FOR SERVING THEIR POSITIONS. AT FISCAL YEAR END,
MR. ROSMARIN HAS AGREED, WITH BOARD APPROVAL TO RECEIVE PAYMENTS IN THE FORM OF
COMPANY COMMON STOCK THAT IS CALCULATED AT FAIR MARKET VALUE PLUS A 25% PREMIUM
AT THE BEGINNING OF EACH QUARTER THAT HE HAS DEFERED. THIS LIABILITY HAS NOT
YET BEEN CALCULATED IN TO THE COMPANY'S FINANCIAL STATEMENTS, BUT IS PROJECTED
TO BE APPROXIMATELY 125,000-200,000 SHARES DEPENDING ON MARKET CONDITIONS. MR.
GERTNER HAS THE OPTION TO DO THE SAME, OR GET REIMBURSED WITH CASH.
ALSO, AT MARCH 31,1999, THE COMPANY POSSESSED 50,000 SHARES OF CITADEL
TECHNOLOGY INC. THAT WERE PAID THROUGH A RELATED PARTY TRANSACTION IN 1996.
THESE SHARES WERE VALUED AT $2.22 AT QUARTER-END. MANAGEMENT EXPECTS TO
LIQUIDATE THESE SHARES AT A VALUE WELL OVER $100,000.
AT MARCH 31, 1998, THE COMPANY HAD NET OPERATING LOSS CARRYFORWARDS TOTALING
APPROXIMATELY $6,100,000 AVAILABLE TO REDUCE FUTURE INCOME THROUGH THE YEAR 2014
AS DESCRIBED IN NOTE 4 TO THE CONSOLIDATED FINANCIAL STATEMENTS.
MANAGEMENT HAS BEEN REVIEWING VARIOUS FINANCIAL VEHICLES AND THE POSSIBILITIES
FOR A CAPITAL INFUSION THROUGH EQUITY OR DEBT FINANCING AND EXPECTS TO
CONSUMMATE AN AGREEMENT BY THE FIRST QUARTER OF 2000. THE COMPANY MAY
CONSUMMATE A SERIES OF FINANCIAL ARRANGEMENTS IN THE NEXT QUARTER FOR ADDITIONAL
EXPANSION. SOME STRUCTURES THAT HAVE BEEN PRESENTED BY OUTSIDE PARTIES ARE MORE
ATTRACTIVE THAN OTHERS, AND MANAGEMENT WANTS TO ENSURE THAT THE CHOSEN VEHICLE
IS THE MOST BENEFICIAL ONE FOR THE COMPANY'S LONG AND SHORT TERM GOALS.
10
<PAGE>
THESE GOALS CONSIDER THE NEED FOR CORPORATE DEVELOPMENTS THROUGH IMPLEMENTATION
OF ITS BUSINESS PLAN AS WELL AS SHAREHOLDER BENEFITS AND MARKET CONDITIONS.
ASSUMING THE COMPANY DOES NOT FIND AGREEABLE FINANCING IN THE FORESEEABLE
FUTURE, THE COMPANY'S SIGNIFICANT OPERATING LOSSES AND WORKING CAPITAL
DEFICIT RAISE SUBSTANTIAL DOUBT ABOUT ITS ABILITY TO CONTINUE AS A
GOING CONCERN. THE FINANCIAL STATEMENTS DO NOT INCLUDE ANY ADJUSTMENTS THAT
MIGHT RESULT FROM THE OUTCOME OF THIS UNCERTAINTY.
YEAR 2000 COMPLIANCE
MANY CURRENTLY INSTALLED COMPUTER SYSTEMS AND SOFTWARE PRODUCTS ARE CODED TO
ACCEPT ONLY TWO DIGIT ENTRIES IN THE DATE CODE FIELD. THESE DATE CODE FIELDS
WILL NEED TO ACCEPT FOUR DIGIT ENTRIES TO DISTINGUISH 21ST CENTURY DATES FROM
20TH CENTURY DATES. AS A RESULT, IN LESS THAN ONE YEAR, COMPUTER SYSTEMS AND/OR
SOFTWARE USED BY MANY COMPANIES WILL NEED TO BE UPGRADED TO COMPLY WITH SUCH
"YEAR 2000" REQUIREMENTS. SYSTEMS THAT DO NOT PROPERLY RECOGNIZE SUCH
INFORMATION COULD GENERATE ERRONEOUS DATA OR CAUSE A SYSTEM TO FAIL. SIGNIFICANT
UNCERTAINTY EXISTS IN MOST INDUSTRIES CONCERNING THE POTENTIAL EFFECTS
ASSOCIATED WITH SUCH COMPLIANCE. MANAGEMENT DOES NOT ANTICIPATE THAT THE COMPANY
WILL INCUR SIGNIFICANT OPERATING EXPENSES OR BE REQUIRED TO INVEST
HEAVILY IN COMPUTER SYSTEMS IMPROVEMENTS TO BE YEAR 2000 COMPLIANT.
ALTHOUGH THE COMPANY BELIEVES THE SOFTWARE AND HARDWARE IT UTILIZES FOR
OPERATIONS COMPLY WITH YEAR 2000 REQUIREMENTS, THERE CAN BE NO ASSURANCES THAT
THE COMPANY WILL NOT EXPERIENCE SERIOUS, UNANTICIPATED NEGATIVE CONSEQUENCES
AND/OR MATERIAL COSTS CAUSED BY UNDETECTED ERRORS OR DEFECTS IN THE TECHNOLOGY
USED IN ITS INTERNAL SYSTEMS. THE OCCURRENCE OF ANY OF THE FOREGOING COULD HAVE
A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS, OPERATING RESULTS OR
FINANCIAL CONDITION. THE COMPANY HAS TAKEN ADDITIONAL STEPS IN SENDING OUT
QUESTIONNAIRES TO ITS VENDORS AND MAJOR CUSTOMERS CONCERNING THEIR RESPECTIVE
YEAR 2000 COMPLIANCE STATUS. SO FAR ALL MAJOR ACCOUNTS, BOTH VENDORS AND
CUSTOMERS HAVE REPORTED THAT THEY ARE ALL WITHIN ACCEPTABLE AREAS, AND THEY DO
NOT ANTICIPATE ANY MATERIAL ADVERSE EFFECT ON THE COMPANY'S ON-GOING SERVICING
RELATIONSHIPS. THERE CAN BE NO ASSURANCES THAT THE COMPANY WILL NOT EXPERIENCE
SERIOUS, UNANTICIPATED NEGATIVE CONSEQUENCES AND/OR MATERIAL COSTS CAUSED BY
UNDETECTED ERRORS OR DEFECTS IN THE TECHNOLOGY USED BY ITS VENDERS OR CUSTOMERS.
OUTLOOK
IN THE YEAR ENDED JUNE 30 1998, THE COMPANY'S STRATEGIC FOCUS WAS ON
BOTH CONSUMMATING RELATIONSHIPS WITH A GROUP OF LEADERS IN THE INDUSTRIAL AND
RETAIL MARKETS, WHICH ARE KNOWN AS OPINION LEADERS OF NEW TECHNOLOGIES OR HAVE
A HIGH VISIBILITY IN THE MARKET. MANAGEMENT FORESEES THE "TESTING PERIODS"
THAT THE COMPANY HAS INVESTED WITH THESE GROUPS COMING TO A NATURAL END
DURING FISCAL 1999, FOLLOWED BY SIGNIFICANT REVENUE PRODUCING CONTRACTS, AND
TESTIMONIALS THAT WILL ATTRACT OTHER COMPANIES IN THE SIMILAR INDUSTRIES
FOR A GREATER MARKET SHARE. ANY ONE OF THE SUBSTANTIAL CUSTOMERS THAT THE
COMPANY IS PRESENTLY WORKING WITH IS CAPABLE OF INCREASING THE VOLUME
PRODUCTION TO A MUCH GREATER ECONOMIES OF SCALE. THESE SAVINGS WILL
DECREASE COST OF SALES, AND POSSIBLY DECREASE THE COST TO THE CUSTOMERS AS
WELL.
IN 1998, THE COMPANY TRADEMARKED THE NAME "MOLYTECH" THAT EMBODIES THE COMPANY'S
PROPRIETARY TECHNOLOGY THAT THE US PATENT OFFICE ACCEPTED AND IS READY TO BE
PATENTED. MANAGEMENT IS ACTIVELY PURSUING LICENSING AGREEMENTS WITH MAJOR OIL
COMPANIES TO UTILIZE MOLYTECH IN THEIR EXISTING LINES, WHERE THE COMPANY WOULD
RECEIVE ROYALTY INCOME WITH PRE-NEGOTIATED MINIMUM VOLUMES.
AT THE TIME OF THIS FILING, THE COMPANY IS NEGOTIATING FOR RETAIL SHELF SPACE IN
THE AUTO AFTER-MARKET STORES AND RETAIL CHAINS. THE RETAIL CAMPAIGN IS DESIGNED
TO CAPITALIZE ON THE RACING SPONSORSHIP WITH TEAM PELFREY AND ROBBY UNSER AS THE
PETROMOLY CAR DRIVER AND COMPANY SPOKESPERSON.
11
<PAGE>
PART OF THE FUNDS FOR THIS CAMPAIGN WILL COME FROM THE CONSUMMATED AGREEMENT
WITH AN INTERNET MARKETING COMPANY THAT HAS COMMITTED OVER $500,000 TO COMPANY,
IN WHICH $250,000 IS RESERVED FOR A MARKETING CAMPAIGN. MANAGEMENT IS
EXTREMELY EAGER TO BEGIN MARKETING THE NEWLY DEVELOPED OIL ADDITIVE, PETROMOLY
OIL TREATMENT, WHICH USES THE SAME PROPRIETARY TECHNOLOGY TO SUSPEND MOLYBDENUM
IN MOTOR OIL FOR CARS AND LIGHT TRUCKS. AN ADVERTISING CAMPAIGN IS PLANNED FOR
THIS PARTICULAR PRODUCT TO CREATE CONSUMER AWARENESS AND EDUCATE THE GENERAL
PUBLIC ABOUT THE COMPANY'S NEW TECHNOLOGY. THIS EXPOSURE WILL BE ON A REGIONAL
BASIS, AND WILL POSSIBLY FACILITATE A DEMAND FOR THE OTHER PETROMOLY PRODUCTS AS
WELL. LATER A FULL-SCALE RETAIL CAMPAIGN IS PLANNED AS THE PRODUCT IS SOLD.
REPORTS TO MANAGEMENT SHOW THIS OIL ADDITIVE PRODUCT, BEING A NEW TECHNOLOGY
IN A PROVEN MARKET, IS PROJECTED TO CARRY AN ENORMOUS DEMAND. WITH A
PROPER FINANCING IN PLACE, ALONG WITH THE PROGRESSING SALES RELATIONSHIPS
MATURING AND THE NEW PRODUCT LINES BEING MARKETED, THE COMPANY EXPECTS OPERATING
MARGINS AND REVENUES TO CONTINUE TO IMPROVE APPRECIABLY DURING FISCAL
1999.
NEW ACCOUNTING PRONOUNCEMENTS
IN JUNE 1997, THE FINANCIAL ACCOUNTING STANDARDS BOARD ISSUED TWO NEW DISCLOSURE
STANDARDS. RESULTS OF OPERATIONS AND FINANCIAL POSITION ARE UNAFFECTED BY
IMPLEMENTATION OF THESE NEW STANDARDS.
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (SFAS) 130, "REPORTING COMPREHENSIVE
INCOME", ESTABLISHES STANDARDS FOR REPORTING AND DISPLAY OF COMPREHENSIVE
INCOME, ITS COMPONENTS AND ACCUMULATED BALANCES. AMONG OTHER DISCLOSURES, SFAS
130 REQUIRES THAT ALL ITEMS THAT ARE REQUIRED TO BE RECOGNIZED UNDER CURRENT
ACCOUNTING AS COMPONENTS OF COMPREHENSIVE INCOME BE REPORTED IN A FINANCIAL
STATEMENT THAT IS DISPLAYED WITH THE SAME PROMINENCE AS OTHER FINANCIAL
STATEMENTS.
SFAS 131, "DISCLOSURE ABOUT SEGMENTS OF A BUSINESS ENTERPRISE", ESTABLISHES
STANDARDS FOR THE WAY THAT PUBLIC ENTERPRISES REPORT INFORMATION ABOUT OPERATING
SEGMENTS IN ANNUAL FINANCIAL STATEMENTS AND REQUIRES REPORTING OF SELECTED
INFORMATION ABOUT OPERATING SEGMENTS IN INTERIM FINANCIAL STATEMENTS ISSUED TO
THE PUBLIC. IT ALSO ESTABLISHES STANDARDS FOR DISCLOSURES REGARDING PRODUCTS
AND SERVICES, GEOGRAPHIC AREAS AND MAJOR CUSTOMERS. THE COMPANY ONLY OPERATES IN
ONE SEGMENT OF BUSINESS, THE MARKETING AND DISTRIBUTION OF ENGINE LUBRICATION
PRODUCTS.
IN FEBRUARY 1998, THE FINANCIAL ACCOUNTING STANDARDS BOARD ISSUED SFAS NO. 132,
EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS, WHICH
STANDARDIZES THE DISCLOSURE REQUIREMENTS FOR PENSIONS AND OTHER POSTRETIREMENT
BENEFITS. THE ADOPTION OF SFAS NO. 132 IS NOT EXPECTED TO IMPACT THE COMPANY'S
CURRENT DISCLOSURES.
IN JUNE 1998, THE FINANCIAL ACCOUNTING STANDARDS BOARD ISSUED SFAS NO. 133,
ACCOUNTING FOR DERIVATIVE INVESTMENTS AND HEDGING ACTIVITIES INCOME, WHICH
REQUIRES THE RECORDING OF ALL DERIVATIVE INSTRUMENTS AS ASSETS OR LIABILITIES
MEASURED AT FAIR VALUE. AMONG OTHER DISCLOSURES, SFAS 133 REQUIRES THAT ALL
DERIVATIVES BE RECOGNIZED AND MEASURED AT FAIR VALUE REGARDLESS OF THE PURPOSE
OR INTENT OF HOLDING THE DERIVATIVE.
SFAS 133 IS EFFECTIVE FOR FINANCIAL STATEMENTS FOR PERIODS BEGINNING AFTER JUNE
15, 1999. WORLDWIDE PETROMOLY HAS NO DERIVATIVE INVESTMENTS AND DOES NOT
PARTICIPATE IN HEDGING ACTIVITIES; THEREFORE, ITS FINANCIAL POSITION, RESULTS OF
OPERATIONS AND DISCLOSURES WILL BE UNAFFECTED BY THE ADOPTION OF THIS STANDARD.
12
<PAGE>
PART II
OTHER INFORMATION
PART II
OTHER INFORMATION
ITEM 2.
CHANGES IN SECURITIES
IN JANUARY, FEBRUARY AND MARCH, 1999, TEN EMPLOYEES AND CONSULTANTS OF THE
COMPANY EXERCISED OPTIONS TO ACQUIRE A TOTAL OF 731,250 SHARES OF COMMON STOCK
OF THE COMPANY AT EXERCISE PRICES RANGING FROM $.3125 PER SHARE TO $1.00 PER
SHARE, AND 2 CONSULTANTS AND 1 INVESTOR PURCHASED A TOTAL OF 409,664 SHARES OF
COMMON STOCK OF THE COMPANY AT PRICES RANGING FROM $0.50 TO $1.00 PER SHARE.
THE COMPANY BELIEVES THAT EACH OF THE PERSONS HAD KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS THAT ALLOWED THEM TO EVALUATE THE MERITS AND RISK
OF THE PURCHASE OF THESE SECURITIES OF THE COMPANY. THE COMPANY BELIEVES THAT
EACH OF THESE PERSONS WERE KNOWLEDGEABLE ABOUT THE COMPANY'S OPERATIONS AND
FINANCIAL CONDITION. ALL OF THESE TRANSACTIONS WERE EFFECTED BY THE COMPANY IN
RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS
AMENDED (THE "ACT") AS PROVIDED IN SECTION 4(2) THEREOF. EACH CERTIFICATE
ISSUED FOR UNREGISTERED SECURITIES CONTAINED A LEGEND STATING THAT THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ACT AND SETTING FORTH THE
RESTRICTIONS ON THE TRANSFERABILITY AND THE SALE OF THE SECURITIES. NO
UNDERWRITER PARTICIPATED IN, NOR DID THE COMPANY PAY ANY COMMISSIONS OR FEES TO
ANY UNDERWRITER IN CONNECTION WITH ANY OF THESE TRANSACTIONS. NONE OF THE
TRANSACTIONS INVOLVED A PUBLIC OFFERING.
ITEM 6.
EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS -- FINANCIAL DATA SCHEDULE
(B) REPORTS ON FORM 8-K -- NONE
13
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
WORLDWIDE PETROMOLY, INC.
DATE: MAY 20, 1999 BY: /S/ GILBERT GERTNER
-----------------------
GILBERT GERTNER, CHAIRMAN, AND CHIEF
EXECUTIVE OFFICER
BY: /S/ LANCE ROSMARIN
-------------------------
LANCE ROSMARIN, PRESIDENT, AND CHIEF
FINANCIAL AND ACCOUNTING OFFICER
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<CAPTION>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 515182
<SECURITIES> 99151
<RECEIVABLES> 166756
<ALLOWANCES> 0
<INVENTORY> 54463
<CURRENT-ASSETS> 1131096
<PP&E> 166609
<DEPRECIATION> 61547
<TOTAL-ASSETS> 1236158
<CURRENT-LIABILITIES> 426960
<BONDS> 0
<COMMON> 8380192
0
0
<OTHER-SE> (7919630)
<TOTAL-LIABILITY-AND-EQUITY> 1236158
<SALES> 170653
<TOTAL-REVENUES> 170653
<CGS> 65687
<TOTAL-COSTS> 65687
<OTHER-EXPENSES> 451684
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (199682)
<INCOME-TAX> 0
<INCOME-CONTINUING> (199682)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (199682)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
