10QSB 1 westcott06dec5.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 


FORM 10-QSB


x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2006

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ____________ to____________

Commission File No. 001-10171

WESTCOTT PRODUCTS CORPORATION

(Exact name of small business issuer as specified in its charter)

 

Delaware

80-0000245

(State or Other Jurisdiction of

(I.R.S. Employer I.D. No.)

incorporation or organization)

 

 

8867 South Capella Way

Sandy, Utah 84093

(Address of Principal Executive Offices)

 

(801) 631-7969

(Issuer’s Telephone Number)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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 Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the Issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes x No o

 

 

 

1

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Not applicable.

 

Check whether the Issuer filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes o No o

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the Issuer’s classes of common equity, as of the latest practicable date: February 2, 2007 - 737,800 shares of common stock.

 

Transitional Small Business Disclosure Format (Check one): Yes o No x

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

FINANCIAL STATEMENTS

 

December 31, 2006

C O N T E N T S

 

 

 

2

Westcott Products Corporation

(A Development Stage Company)

Condensed Balance Sheets

(Unaudited)

 

 

 

 

 

December 31,

 

 

September 30,

 

 

 

 

2006

 

 

2006

 

 

 

 

[Unaudited]

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

Cash

 

 

$

3,420

 

 

$

3,665

 

Total Current Assets

 

 

 

3,420

 

 

 

3,665

 

Total Assets

 

 

$

3,420

 

 

$

3,665

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

Related Party Liabilities

 

 

$

 

 

$

600

 

Accrued Liabilities

 

 

 

6,023

 

 

 

 

Payable to Shareholders

 

 

 

28,240

 

 

 

25,063

 

Total Current Liabilities

 

 

 

34,263

 

 

 

25,663

 

Total Liabilities

 

 

 

34,263

 

 

 

25,663

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

 

 

Preferred Stock 50,000,000 shares authorized having

 

 

 

 

 

 

 

 

 

a par value of $.01, $1.00 liquidation value; 378,000

 

 

 

 

 

 

 

 

 

issued and outstanding

 

 

 

3,780

 

 

 

3,780

 

Capital Stock 50,000,000 shares authorized having a

 

 

 

 

 

 

 

 

 

par value of $.001 per share; 737,800 shares issued

 

 

 

 

 

 

 

 

 

and outstanding – See Note 4

 

 

 

738

 

 

 

138

 

Additional Paid-in Capital

 

 

 

2,812,295

 

 

 

2,812,295

 

Accumulated Deficit

 

 

 

(2,867,932

)

 

 

(2,867,932

)

Accumulated earnings in development stage

 

 

 

20,276

 

 

 

29,721

 

Total Stockholders' Deficit

 

 

 

(30,843

)

 

 

(21,998

)

Total Liabilities and Stockholders' Deficit

 

 

$

3,420

 

 

$

3,665

 

 

 

See accompanying notes to financial statements.

 

3

Westcott Products Corporation

(A Development Stage Company)

Condensed Statements of Operations

For the Three Months Ended December 31, 2006 and 2005, and

For the Period from Reactivation (October 1999) through December 31, 2006

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the

 

 

 

 

 

 

 

 

 

 

 

Period from

 

 

 

For the

 

 

 

 

 

 

 

October 1999

 

 

 

Three Months

 

 

 

Three Months

 

 

 

(date of

 

 

 

Ended

 

 

 

Ended

 

 

 

reactivation)

 

 

 

December 31,

 

 

 

December 31,

 

 

 

through

 

 

 

2006

 

 

 

2005

 

 

 

December 31, 2006

 

 

 

[Unaudited]

 

 

 

[Unaudited]

 

 

 

[Unaudited]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

 

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and Administrative Expenses

 

 

9,445

 

 

 

 

7,519

 

 

 

 

36,443

 

Operating Income (Loss)

 

 

(9,445

)

 

 

 

(7,519

)

 

 

 

(36,443

)

Other Income

 

 

 

 

 

 

 

 

 

 

 

56,719

 

Net (Loss) Before Income Taxes

 

 

(9,445

)

 

 

 

(7,519

)

 

 

 

20,276

 

Current Year Provision for Income Taxes

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(9,445

)

 

 

$

(7,519

)

 

 

$

20,276

 

Basic Earnings (Loss) per Common Share

 

$

(0.05

)

 

 

$

(0.05

)

 

 

$

0.15

 

Basic Weighted Average Shares Outstanding

 

 

209,739

 

 

 

 

136,800

 

 

 

 

138,596

 

Diluted Earnings (Loss) per Common Share

 

 

(0.05

)

 

 

 

(0.05

)

 

 

$

0.04

 

Diluted Weighted Average Shares Outstanding

 

 

209,739

 

 

 

 

27,527,980

 

 

 

 

518,754

 

 

 

 

 

See accompanying notes to financial statements.

 

4

Westcott Products Corporation

(A Development Stage Company)

Condensed Statements of Cash Flows

For the Three Months Ended December 31, 2006 and 2005, and

For the Period from Reactivation (October 1999) through December 31, 2006

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the

 

 

 

 

 

 

 

 

 

Period from

 

 

 

For the

 

 

For the

 

 

October 1999

 

 

 

Three Months

 

 

Three Months

 

 

(date of

 

 

 

Ended

 

 

Ended

 

 

reactivation)

 

 

 

December 31,

 

 

December 31,

 

 

through

 

 

 

2006

 

 

2005

 

 

December 31, 2006

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows Used For Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(9,445

)

 

$

(7,519

)

 

$

20,276

 

Adjustments to reconcile net loss to net cash

 

 

 

 

 

 

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in current assets

 

 

 

 

 

 

160

 

 

 

 

 

Increase (decrease) in current liabilities

 

 

9,200

 

 

 

7,359

 

 

 

(21,856

)

Net Cash (used in) Operating Activities

 

 

(245

)

 

 

 

 

 

(1,580

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activity

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

 

 

 

15,000

 

Principal payments on loans

 

 

 

 

 

 

 

 

(10,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Financing Activities

 

 

 

 

 

 

 

 

5,000

 

Net Increase/(Decrease) in Cash

 

 

(245

)

 

 

 

 

 

3,420

 

Beginning Cash Balance

 

 

3,665

 

 

 

3,684

 

 

 

 

Ending Cash Balance

 

$

3,420

 

 

$

3,684

 

 

$

3,420

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the year for interest

 

$

 

 

$

 

 

$

 

Cash paid during the year for income taxes

 

 

 

 

 

 

 

 

 

Stock issued for services

 

$

600

 

 

 

 

 

$

600

 

 

 

 

See accompanying notes to financial statements.

 

5

Westcott Products Corporation

(A Development Stage Company)

Condensed Notes to Financial Statements

December 31, 2006

(Unaudited)

 

NOTE 1 BASIS OF PRESENTATION

 

The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary to present a fair statement of the results for the period.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10KSB for the year ended September 30, 2006. The results of operation for the period ended December 31, 2006 are not necessarily indicative of the operating results for the full year.

 

NOTE 2 LIQUIDITY/GOING CONCERN

 

The Company does not have significant assets, nor has it established operations and has accumulated losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. It is the intent of the Company to seek a merger with an existing, well-capitalized operating company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 3 RELATED PARTY TRANSACTIONS

 

The Company has recorded a liability of $28,240 to a shareholder as of December 31, 2006. The unsecured loan bears no interest and is due on demand. For the three months ended December 31, 2006 and 2005, a shareholder paid $9,445 and $579 in expenses on behalf of the Company, respectively.

 

NOTE 4 EQUITY

 

On or about November 28, 2006, the Company filed a Definitive Information Statement on Form 14C, whereby the Company amended its Articles of Incorporation with the State of Delaware and issued common stock to the members of our Board of Directors for compensation of services. The Amended Articles of Incorporation were unanimously adopted by our Board of Directors and certain shareholders owning 17,211,000 shares of our common stock or approximately 59.7% of our outstanding voting securities to effect a re-capitalization of our outstanding common stock in the form of a pro rata 250,000 for one reverse split and an immediate 200 for one pro rata dividend of our outstanding common stock.

 

On or about December 7, 2006, the Board of Directors authorized the issuance of a total of 29,601 pre- capitalization shares (2,800 post-split/dividend shares) of our common stock to reconcile our transfer records with certificates presented by The Depository Trust Co. (DTC). Subsequently, 200 shares were returned to the treasury resulting in only 2,600 shares being held by DTC.

 

On December 20, 2006, a total of 600,000 post-re-capitalization shares of our common stock that are “restricted securities” as defined in Rule 144 of the Securities and Exchange Commission were issued to the members of our Board of Directors contemporaneously with the dividend. Because there has been no “established public market” and the shares are restricted, the Company has estimated the fair value of these shares to be $0.001. The Company accrued $600 in executive compensation for these shares during the year ended September 30, 2006.

 

 

6

Item 2. Management’s Discussion and Analysis or Plan of Operation

 

Plan of Operation

 

Our Company’s plan of operation for the next 12 months is to:(i) consider guidelines of industries in which our Company may have an interest; (ii) adopt a business plan regarding engaging in business in any selected industry; and (iii) to commence such operations through funding and/or the acquisition of a “going concern” engaged in any industry selected.

 

Our Company’s only foreseeable cash requirements during the next 12 months will relate to maintaining our Company in good standing in the State of Delaware, as well as legal and accounting fees. Management does not anticipate that our Company will have to raise additional funds during the next 12 months.

 

As of the filing of this Quarterly Report we have not identified any operations nor are we in discussions with any potential operations.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Three Months Ended December 31, 2006 Compared to Three Months Ended December 31, 2005  

 

The Company has had no operations during the quarterly period ended December 31, 2006, nor do we have operations as of the date of this filing. General and administrative expenses were $9,445 for the December 31, 2006, period compared to $7,519 for the December 31, 2005, period. General and administrative expenses for the three months ended December 31, 2006, were comprised mainly of accounting and filing fees. We had net loss of $9,445 for the December 31, 2006, period compared to a net loss of $7,519 for the December 31, 2005, period.

 

Off-balance Sheet Arrangements

 

None; not applicable

 

Item 3(a)T. Controls and Procedures

 

Management’s Annual Report on Internal Control Over Financial Reporting

 

As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our President and Secretary, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our President and Secretary concluded that our disclosure controls and procedures are effective at ensuring that information required to be disclosed or filed by us is recorded, processed or summarized, within the time periods specified in the rules and regulations of the Securities and Exchange Commission. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls over financial reporting, and there have been no changes in our internal controls or in other factors in the last fiscal quarter that has materially affected our internal controls over financial reporting.

 

Changes in Internal Control Over Financial Reporting

 

None; not applicable.

 

7

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None; not applicable.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Recent Sales of Unregistered Securities

 

On or about December 7, 2006, the Board of Directors authorized the issuance of a total of 29,601 pre- capitalization shares (2,800 post-split/dividend shares) of our common stock to reconcile our transfer records with certificates presented by The Depository Trust Co. (DTC). Subsequently, 200 shares were returned to the treasury resulting in only 2,600 shares being held by DTC.

 

On December 20, 2006, a total of 600,000 post-re-capitalization shares of our common stock that are “restricted securities” as defined in Rule 144 of the Securities and Exchange Commission were issued to the members of our Board of Directors contemporaneously with the dividend. See the Exhibit Index for a copy of our Information Statement on Form 14C. Because there has been no “established public market” and the shares are restricted, the Company has estimated the fair value of these shares to be $0.001. The Company accrued $600 in executive compensation for these shares during the year ended September 30, 2006.

 

See also Item 4, Submissions of Matters to a Vote of Security Holders, below.

 

Use of Proceeds of Registered Securities

 

None; not applicable.

 

Purchases of Equity Securities by Us and Affiliated Purchasers

 

None; not applicable.

 

Item 3. Defaults Upon Senior Securities

 

None; not applicable.

 

Item 4. Submission of Matters to a Vote of Security Holders

 

On or about November 28, 2006, the Company filed a Definitive Information Statement on Form 14C, whereby the Company amended its Articles of Incorporation with the State of Delaware and issued common stock to the members of our Board of Directors for compensation of services. The Amended Articles of Incorporation were unanimously adopted by our Board of Directors and certain shareholders owning 17,211,000 shares of our common stock or approximately 59.7% of our outstanding voting securities to effect a re-capitalization of our outstanding common stock in the form of a pro rata 250,000 for one reverse split and an immediate 200 for one pro rata dividend of our outstanding common stock. See Item 6, Exhibits, below.

 

Item 5. Other Information

 

None; not applicable.

 

Nominating Committee

 

There are no established committees because there are currently no material operations.

 

 

8

Item 6. Exhibits and Reports on Form 8-K

 

(a) Exhibits

 

Form DEF14C – Definitive Information Statement filed November 28, 2006, amending the Company’s Articles of Incorporation to effect a re-capitalization of our outstanding common stock and issuing common stock to the members of our Board of Directors for compensation of services.*

 

31.1 302 Certification of Wayne Bassham

 

31.2 302 Certification of Todd Albiston

 

32 906 Certification

 

*Incorporated herein by reference.

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the Registrant has caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

WESTCOTT PRODUCTS CORPORATION

 

Date:

02/12/07

 

By:

/s/Wayne Bassham

 

 

 

 

Wayne Bassham

 

 

 

 

President and Director

 

 

 

 

 

Date:

02/12/07

 

By:

/s/Todd Albiston

 

 

 

 

Todd Albiston

 

 

 

 

Vice President

 

9