-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SHEPyCmGttpAU0KSzrYcTs4au31DcjYllmGdYP4DH5y/pHqCrZpeGXpyAVQk9v2m wAIrNm6ubbOjk5C7xG5TRw== 0000950147-00-000380.txt : 20000310 0000950147-00-000380.hdr.sgml : 20000310 ACCESSION NUMBER: 0000950147-00-000380 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 20000309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOLPOWER CORP CENTRAL INDEX KEY: 0001068618 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 870384678 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-29780 FILM NUMBER: 564226 BUSINESS ADDRESS: STREET 1: 7309 EAST STETSON DRIVE STREET 2: STE 102 CITY: SCOTTSDALE STATE: AZ ZIP: 85251 BUSINESS PHONE: 6029476366 MAIL ADDRESS: STREET 1: 7309 EAST STETSON DR STREET 2: STE 102 CITY: SCOTTSDALE STATE: AZ ZIP: 85251 10QSB 1 QTRLY REPORT FOR THE PERIOD ENDED 09/30/1999 ================================================================================ U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 10-QSB ---------- (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the transition period from _____________ to _______________ Commission File Number 001-14439 SOLPOWER CORPORATION (Exact name of small business issuer as specified in its charter) Nevada 87-0384678 (State or other jurisdiction of (IRS Employer Incorporation or organization) Identification No.) 7309 East Stetson Drive, Suite 102 Scottsdale, Arizona 85251 (Address of principal executive offices) (480) 947-6366 (Issuer's telephone number) Check whether the issuer (1) 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 [ ] The number of shares outstanding of each of the issuer's classes of common equity was 23,471,560 shares of common stock, par value $.01, as of September 30, 1999. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] ================================================================================ SOLPOWER CORPORATION INDEX TO FORM 10-QSB FILING FOR THE QUARTER ENDED SEPTEMBER 30, 1999 TABLE OF CONTENTS PART I FINANCIAL INFORMATION Page ---- Item 1. Financial Statements................................................ 2 Balance Sheet September 30, 1999 (unaudited) and March 31, 1999................. 2 Statements of Operations Three and Six Months Ended September 30, 1999 (unaudited) and 1998 (unaudited).............................................. 4 Statement of Cash Flows Six Months Ended September 30, 1999 (unaudited) and 1998 (unaudited).............................................. 5 Notes to the Financial Statements................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................... 6 PART II. OTHER INFORMATION Item 2. Changes in Securities............................................... 8 SIGNATURES PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SOLPOWER CORPORATION BALANCE SHEET SEPTEMBER 30, 1999 (UNAUDITED) AND MARCH 31, 1999 ASSETS Sept. 30, 1999 March 31, 1999 ---------- ---------- (unaudited) (audited) Current Assets Cash and Cash Equivalents $ 115,906 $ 2,228 Accounts Receivables 63,959 50,145 Inventory 72,032 92,178 ---------- ---------- Total Current Assets 251,897 144,551 ---------- ---------- Property & Equipment, net 364,883 399,262 ---------- ---------- Other Assets Marketing Rights 2,608,333 2,658,333 Security Deposits 13,922 13,922 License Fee Receivable -- 2,400,000 ---------- ---------- Total Other Assets 2,622,255 5,072,255 ---------- ---------- Total Assets $3,239,035 $5,616,068 ========== ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2 SOLPOWER CORPORATION BALANCE SHEET SEPTEMBER 30, 1999 (UNAUDITED) AND MARCH 31, 1999 LIABILITIES AND STOCKHOLDERS' EQUITY Sept. 30, 1999 March 31, 1999 ----------- ----------- (unaudited) (audited) Current Liabilities Lease Payable - Current $ 1,662 $ 4,060 Loans Payable - Related Parties 51,440 13,500 Accounts Payable 390,824 429,409 Accrued Expenses 348,685 213,792 Convertible Notes Payable 1,500,000 -- ----------- ----------- Total Current Liabilities 2,292,611 660,761 ----------- ----------- Long Term Liabilities Loans Payable - Related Parties 15,218 407,219 Accrued Expenses Noncurrent 70,000 70,000 Deferred Revenue -- 2,400,000 ----------- ----------- Total Long Term Liabilities 85,218 2,877,219 ----------- ----------- Total Liabilities 2,377,829 3,537,980 ----------- ----------- Commitments and Contingencies Stockholders' Equity Preferred Stock; $0.001 Par Value, 5,000,000 Shares Authorized; Issued and Outstanding, None -- -- Common Stock; $0.01 Par Value, 30,000,000 Shares Authorized; Issued and Outstanding 23,471,560 Shares at September 30, 1999 and 23,456,560 Shares at March 31, 1999 234,716 234,566 Additional Paid in Capital 6,747,625 6,736,525 Accumulated Deficit (6,121,135) (4,893,003) ----------- ----------- Total Stockholders' Equity 861,206 2,078,088 ----------- ----------- Total Liabilities and Stockholders' Equity $ 3,239,035 $ 5,616,068 =========== =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 3 SOLPOWER CORPORATION STATEMENT OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 1999 (UNAUDITED) AND 1998 (UNAUDITED)
Six Months Ended Three Months Ended September 30, September 30, ---------------------------- ---------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ (unaudited) (unaudited) (unaudited) (unaudited) Revenue Sales - Product $ 73,257 $ 45,307 $ 47,818 $ 19,505 License Fees -- -- -- -- ------------ ------------ ------------ ------------ Total Revenues 73,257 45,307 47,818 19,505 Cost of Sales 209,634 -- 76,668 -- ------------ ------------ ------------ ------------ Gross Profit (136,377) 45,307 (28,851) 19,505 Expenses General and Administrative 1,091,615 1,054,875 755,687 596,096 ------------ ------------ ------------ ------------ Operating Income (Loss) (1,227,992) (1,009,508) (784,538) (576,591) ------------ ------------ ------------ ------------ Other Income (Expense) Interest Income 0 2,189 0 1,880 Interest Expense (140) (925) 0 (463) ------------ ------------ ------------ ------------ Total Other Income (Expense) (140) 1,264 0 1,417 ------------ ------------ ------------ ------------ Net Loss Before Provision (1,228,132) (1,008,304) (784,538) (575,174) for Income Taxes Provision for Income Taxes -- -- -- -- ------------ ------------ ------------ ------------ Net Loss $ (1,228,132) $ (1,008,304) $ (784,538) $ (575,174) ============ ============ ============ ============ Basic (Loss) Per Share $ (0.05) $ (0.05) $ (0.03) $ (0.03) ============ ============ ============ ============ Weighted Average Number of Shares Outstanding 23,456,560 19,391,560 23,456,560 19,391,560 ============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 4 SOLPOWER CORPORATION STATEMENT OF CASH FLOWS FOR THE SIX MONTH PERIODS ENDED SEPTEMBER 30, 1999 (UNAUDITED) AND 1998 (UNAUDITED) Six Months Ended September 30, -------------------------- 1999 1998 ----------- ----------- (unaudited) (unaudited) Cash Flows From Operating Activities: Net Loss $(1,228,132) $(1,008,304) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 100,486 18,739 Non-cash Transactions 11,250 -- Changes in operating assets and liabilities Accounts receivables (13,814) 43,228 Inventory 20,146 10,461 License fee receivable 2,400,000 (2,397,761) Prepaid expense -- 2,917 Accounts payable (38,585) (2,432) Accrued expense 134,893 -- Deferred revenue (2,400,000) 2,400,000 ----------- ----------- Toal Adjustments 214,376 193,696 ----------- ----------- Net cash used by operating activities (1,013,756) (814,608) ----------- ----------- Cash Flows from Investing Activities: Capital Expenditures (16,107) (120,480) ----------- ----------- Net cash used by Investing Activities: (16,107) (120,480) ----------- ----------- Cash Flows from Financing Activities: Proceeds From Issuance of Common Stock -- 600,000 Capital Lease Obligations (2,398) (2,116) Convertible Notes Payable 1,500,000 -- Loans and Advances from related parties (354,061) 201,178 ----------- ----------- Net cash provided by financing activities 1,143,541 799,062 ----------- ----------- Increase (Decrease) in Cash and Cash Equivalents $ 113,678 $ (136,026) Cash and Cash Equivalents, Beginning of Period 2,228 183,842 ----------- ----------- Cash and Cash Equivalents, End of Period $ 115,906 $ 47,816 ----------- ----------- Supplemental Information Cash Paid For: Interest $ 0 $ 925 =========== =========== Income Taxes $ 0 $ 0 =========== =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 5 SOLPOWER CORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDING SEPTEMBER 30, 1999 NOTE 1 - BASIS OF PREPARATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and Article 10 of Regulation S-X. These statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended September 30, 1999 are not necessarily indicative of the results that may be expected for the year ended March 31, 2000. The unaudited condensed financial statements should be read in conjunction with the financial statements and footnotes thereto for the year ended March 31, 1999 included in the Company's report on form 10-KSB. NOTE 2 - LICENSE FEE RECEIVABLES On November 7, 1999, the Company terminated its Master License Agreement with Houston Mercantile Exchange, Inc., holder of the South (Texas, Oklahoma and New Mexico) and Mexico licenses. The Company regains the right to operate these territories as corporate sales territories in exchange for 30,000 shares of stock yet to be issued and cancellations of Promissory Notes totaling $2,160,000 and unpaid license fee deposits of $240,000. This transaction is reflected in the financial statements as of September 30, 1999. NOTE 3 - REAL ESTATE LEASE On November 8, 1999, the Company negotiated an early termination of the lease from its Stetson Drive offices to January 31, 2000 from June 30, 2000 in exchange for issuance of 15,000 shares of stock and a cash payment of $1,000. NOTE 4 - CONVERTIBLE NOTES The Company has issued $1,5000,000 in 6% Convertible Notes Payable. The notes mature on September 30, 2000, and are convertible into common shares of the Company at the issue price of $1.00 per share for each $1.00 of principal owed. The notes automatically convert in the event the Company's shares trade at $1.75 or higher for ten consecutive trading days. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS SIX MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30, 1998 Revenues from the sale of Soltron for the six months ended September 30, 1999 were $73,257 as compared to revenues of $45,307 for the three months ended September 30, 1998. The Company recovered the Territorial Licenses previously sold to Masters Marketing Group, Solpower Southeast Corporation and Houston Mercantile Exchange, Inc. and is operating those areas as Company territories. The increase in revenues resulted primarily from improved sales in several expanding regional markets during the six month period ended September 30, 1999 compared to the six month period ended September 30, 1998. General and administrative costs were $1,091,615 for the six month period ended September 30, 1999 compared to $1,054,875 for the six month period ended September 30, 1998. The slight increase (3%) in costs was due to additional expenses incurred in relation to the territorial license repurchase agreements. Cash flows of $1,145,939 were provided by convertible notes payable and advances from related parties for the six months ended September 30, 1999 as compared with $801,178 received from related party advances and stock subscription payments for the six months ended September 30, 1998. The Company experienced a net loss of $1,228,132 for the six months ended September 30, 1999 as compared with a loss of $1,008,304 for the six months ended September 30, 1998 due in part to expenses incurred for the repurchase of all outstanding territorial licenses, debt restructuring costs and other liabilities. THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1998 Revenues from the sales of Soltron for the three months ended September 30, 1999 were $47,818 as compared to revenues of $19,505 for the three months ended September 30, 1998. The increase in revenues resulted primarily from improved 6 sales in several expanding regional markets during the three months ended September 30, 1999 compared to the three month period ended September 30, 1998. General and administrative costs were $755,687 for the three months ended September 30, 1999 compared to $596,096 for the three months ended September 30, 1998. This 27% increase in costs was due to increases in regional sales and marketing efforts, debt restructuring charges and other liabilities. The Company experienced a net loss of $784,538 for the three months ended September 30, 1999 as compared with $575,174 for the three months ended September 30, 1998 due primarily from the one-time costs related to the repurchase of all outstanding territorial licenses. LIQUIDITY AND CAPITAL RESOURCES The Company anticipates future liquidity needs will continue to be met through equity and debt financings primarily from its major shareholder, Dominion Capital Pty Ltd., until such time as cash flow from operations are sufficient to meet the Company's capital requirements for product production and operations. 7 PART II OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES On September 24, 1999, the Company sold a total of $1,500,000 of its 6% Convertible Notes Payable (the "Notes") for a total purchase price of $1,500,000. No placement agent was utilized and no commissions were paid with respect to the sale of the Notes. The Notes were sold to Dominion Capital Pty Ltd., the Company's largest shareholder, and certain other entities and individuals affiliated with the Company and with Dominion Capital Pty Ltd. The Notes mature on September 30, 2000 and are convertible into 1,500,000 shares of the Company's common stock at a rate of 1 share for each $1.00 of principal owed under the Notes. The Notes will automatically convert in the event the Company's common stock trades at $1.75 or higher for ten consecutive trading days. The Notes were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended. The Company has used the proceeds from the sale of the Notes for general corporate and development purposes. Effective December 31, 1999, the Company and the purchasers of the Notes entered into an agreement changing the conversion rate to one (1) share of the Company's common stock for each $0.50 of principal owed under the Notes. Accordingly, the number of common shares into which the Notes are convertible was increased to 3,000,000. The Notes were unchanged in all other respects. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed by the undersigned, thereunto duly authorized. SOLPOWER CORPORATION (Registrant) Dated: March 8, 2000 By /s/ James H. Hirst ------------------------------------- James H. Hirst Chief Executive Officer 8 EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS MAR-31-2000 APR-01-1999 SEP-30-1999 115,906 0 63,959 0 72,032 251,897 511,600 146,717 3,239,035 2,291,611 0 0 0 234,716 626,490 3,239,035 73,257 73,257 209,634 0 1,091,615 0 140 (1,228,132) 0 (1,228,132) 0 0 0 (1,228,132) (0.02) 0
-----END PRIVACY-ENHANCED MESSAGE-----