U.S. Securities and Exchange Commission Washington, D.C. 20549 Amendment No. 2 to Form 10-SB GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS Under Section 12(b) or (g) of the Securities Exchange Act of 1934 ................................................................................ SAVE THE WORLD AIR INC. (Name of Small Business Issuer in its charter) ................................................................................ Nevada 52-2088326 ------ ---------- (State of incorporation) (I.R.S. Employer Identification No.) ................................................................................ 1285 Avenue of the Americas, 35th Floor New York, NY 10019-6028 (Address of principal executive offices) Phone 212 - 554 4197 (Issuer's telephone number) ................................................................................ Securities to be registered under Section 12(b) of the Act: Title of each class to be so registered: Name of each exchange on which each class is to be registered: ................................................................................ Securities to be registered under Section 12(g) of the Act: COMMON STOCK, $.001 PAR VALUE ................................................................................ (Title of class) TABLE OF CONTENTS ----------------- PART I Item 1. Description of Business Item 2. Management's Plan of Operation Item 3. Description of Property Item 4. Security Ownership of Certain Beneficial Owners and Management Item 5. Directors, Executive Officers, Promoters and Control Persons Item 6. Executive Compensation Item 7. Certain Relationships and Related Transactions Item 8. Description of Securities PART II Item 1. Market Price of and Dividends on the Registrant's Common Equity and Other Shareholder Matters Item 2. Legal Proceedings Item 3. Changes in or Disagreements with Accountants on Accounting and Financial Disclosure Item 4. Indemnification of Directors and Officers PART F/S Financial Statements PART III Item 1. Index to Exhibits Signatures PART I ITEM 1. DESCRIPTION OF BUSINESS Mandalay Capital Corporation Inc. (the "Company") was incorporated under the laws of the State of Nevada on February 18, 1998. An application was approved in February, 1999, to change the name of the company to "Save The World" Air Inc. The Company's primary business involves A Zero Pollution-Fuel Saving Device for motor vehicles or petrol driven engines. ZERO POLLUTION-FUEL SAVING DEVICE On Tuesday the 15th December, 1998 the Company announced that it had begun negotiations to purchase the worldwide exclusive manufacturing, marketing and distribution rights for the Zero Pollution Fuel Saving Device, an attachment that when fitted to an internal combustion engine reduces the toxicity of exhaust gas emissions. The device works on the inlet manifold before the harmful gases are created and an improvement in fuel economy for the engine may also be achieved. On Tuesday 29th December, 1998 the Company announced that it had purchased all rights to this device and this prompted the application for a name change to "Save The World" Air Inc. The Company's main focus has been on the implementation of a business plan with the Zero Pollution Fuel Saving Device as it's flagship product. While the Company is confident of the claims made in relation to the performance of the device, there can be no assurances that this will be the case. The Company's executive offices are located in both the United States and Australia. The Australian address is 19-21 Garden Grove, Carrara, Queensland, Australia 4211 and its telephone number is 011-61-7-55945556. Additionally, the Company's principal office in the United States is located at 1285 Avenue of the Americas, 35th Floor, New York, NY 10019-6028. GOVERNMENT REGULATIONS The Company's goal is to sell licenses to manufacture and market its environmentally safe product throughout the world. As such, importation and exportation regulations may impact its activities, to some degree. A breach of such laws or regulations may result in the imposition of penalties, fines, suspension or revocation of licenses. The Company is not currently involved in any judicial or administrative proceedings and believes that it is in compliance with all applicable regulations. Although it is impossible to predict, with certainty, the effect that additional importation and exportation requirements may have on future earnings and operations, the Company is presently unaware of any future regulations that may have a material effect on the Company's financial position, but cannot rule out the possibility. ITEM 2. MANAGEMENT'S PLAN OF OPERATION During the period from the Company's inception in February of 1998 to December 31, 1999. The company had revenue of $125,000 from sale of Licenses. Over the next year, the Company intends to focus on the business development and marketing of its Zero Pollution Fuel Saving Device. In addition, the Company will endeavour to seek opportunities to acquire and develop other ecologically sound technologies that meet its requirements. ITEM 3. DESCRIPTION OF PROPERTY The Zero Pollution Fuel Saving Device is a product which is fitted to an internal combustion engine and results in a reduction of carbon monoxide, hydrocarbons and toxic exhaust emissions. The device works on the inlet manifold before the harmful gases are created and may also improve fuel economy. ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following tables contain information, as of December 31, 1999, of all holders who, to the knowledge of the Company, were the beneficial owners of five percent (5%) or more of the outstanding shares of the Common Stock of the Company and of all Directors and Officers. 5% SHAREHOLDERS' LIST Persons or entities owning more than 5% of the outstanding shares of the company are : Jeffrey A. Muller ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS Set forth below are the names and ages of and the positions and offices held by each of the Directors and Executive Officers of the Company. Positions and Officer --------------------- Name Age With The Company ---- --- ---------------- Jeffrey A. Muller 48 Director; President *Jeffrey A. Muller, the Company's founder, is a Director of the Company and also serves as its President. In addition to Mr. Muller's involvement with the Company, Mr. Muller also serves as Chairman of several companies in the Muller Group in Australia. Mr. Muller has been the co-owner and managing director of several private real estate investment companies, since 1984. EMPLOYEES The Company has no employees (only expert consultants). ITEM 6. EXECUTIVE COMPENSATION There has been Nil compensation paid to date to Company's Directors and Executive Officers. ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 100 % of the marketing and manufacturing rights for the Zero Pollution Fuel Saving Device was acquired from Mr. Jeffrey Muller on 29th December, 1998 for 5,000,000 shares and $500,000 cash(yet to be paid). The forgoing transactions between the Company and the members of management are, and any future transactions will be, on terms no less favorable to the Company than which could be obtained from unaffiliated third parties. In addition, any future transactions entered into between the Company and members of management or principal shareholders regarding such transactions are to be approved by the Board of Directors. ITEM 8. DESCRIPTION OF SECURITIES The following description is qualified in all respects by reference to the Company's Certificate of Incorporation and all amendments thereto and the Company's By laws, copies of which are attached hereto as exhibits. The Company's Certificate of Incorporation, as amended, currently authorizes 200,000,000 shares of Common Stock, $.001 par value. As of September 30, 1999, 15,297,125 shares of the Company's Common Stock were issued and are outstanding. DIVIDENDS. The Company has not declared any dividends since its inception. Because the Company intends to retain future earnings to fund the development and growth of its business it does not anticipate paying cash dividends on the Common Stock in its foreseeable future. Any payment of dividends in the future is at the sole discretion of the Board of Directors of the Company. The Company's decision will be dependent upon the Company's financial condition, results of operations and other factors the Board deems relevant. VOTING RIGHTS. Holders of shares of Common Stock will vote as a single class together on all matters submitted to a vote of stockholders, with each share of Common Stock entitled to one vote, except as otherwise provided by law. PREEMPTIVE RIGHTS. The holders of Common Stock are not entitled to preemptive or subscription rights. TRANSFER AGENT The transfer agent for the shares of Common Stock of the Company is Nevada Agency and Trust Company The address of the transfer agent is 50 West Liberty Street, Reno, Nevada. 89501. PART II ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS The Company is authorized to issue 200,000,000 shares of Common Stock at $.001 par value per share, of which 15,297,125 shares of Common Stock were issued and outstanding as of September 30, 1999. ITEM 2. LEGAL PROCEEDINGS There are currently no material pending legal proceedings as defined in Item 103 of Regulation S-B. ITEM 3. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no changes in or disagreements with accountants on accounting and financial disclosure. ITEM 4. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 78.751 of the General Corporation Law of the State of Nevada contains provisions entitling directors and officers of the Company to indemnification from judgments, fines, amounts paid in settlement, and reasonable expenses, including attorney's fees, as the result of an action or proceeding in which they may be involved by reason of being or having been a director or officer of the Company, provided such officers or directors acted in good faith. There is provision in the by laws or the Certificate of Incorporation of the Company for indemnification of Officers and Directors. PART F/S For information regarding this item, reference is made to the "Index of Financial Statements." Index of Financial Statements PART III Item 1. Index to Exhibits For information regarding this item, reference is made to the "Index of Exhibits." Index of Exhibits Exhibit Description Articles of Incorporation By-Laws December 1998 Agreement with Mr. Jeffrey A. Muller for 100% ownership of the international marketing and manufacturing rights for the Zero Pollution Fuel Saving Device SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. SAVE THE WORLD AIR, INC. (REGISTRANT) Signature Title Date /s/ Jeffrey A. Muller Chairman and President January 26, 2000 - --------------------------- (Jeffrey A. Muller) HBG Logo HOIBERG BUSINESS GROUP ACCOUNTANTS & ADVISERS Tel. +61 07 5443 7600 Fax. +61 07 5443 2435 Email. admin@HBG.com.au Web. www.HBG.com.au INDEPENDENT AUDITORS REPORT The Board of Directors Save the World Air, Inc. Suite 3660 120 Broadway New York NEW YORK 10271 We have audited the accompanying balance sheet of Save The World Air, Inc. as at December 31, 1999 and the related statements of operations, stockholder's equity and cash flows for the period January 1, 1999 to December 31, 1999. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Save The World Air, Inc. as of December 31, 1999 and the results of its operations and its cash flows for the period January 1, 1999 to December 31, 1999, in conformity with generally accepted principles. /s/ Kevin Hoiberg .......................................... AUDITOR January 16, 2000 SAVE THE WORLD AIR, INC. BALANCE SHEET AS AT DECEMBER 31, 1999
Dec 31, 1999 Dec 31, 1998 ASSETS - ------ CURRENT ASSETS Bank 595 38 Deposit 0 0 Prepaid Expenses 0 1,000 ---------------- ---------------- 595 1,038 Marketing and Manufacturing Rights to Zero Pollution Fuel Saving Device 5,000 MINERAL PROPERTY 0 1,955 ---------------- ---------------- $ 5,595 $ 2,993 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable and accrued charges 36,200 STOCKHOLDERS EQUITY - ------------------- Common stock 200,000,000 shares authorised at $0.001 par value 15,297,125 issued and outstanding 15,297 10,030 Capital in excess of par 14,270 14,270 Deficit accumulated from inception -23,972 -21,307 ---------------- ---------------- $ 5,595 $ 2,993 ================ ================ Related Party Transactions Approved by the board:
The accompanying notes are an integral part of these financial statements. SAVE THE WORLD AIR, INC. STATEMENT OF OPERATIONS FOR THE PERIOD ENDED DECEMBER 31, 1999
Dec 31, 1999 Dec 31, 1998 INCOME Sale of Licences for Distributorships 125,000 0 ================ ================ GENERAL AND ADMINISTRATIVE EXPENSES: Accounting and auditing 1,400 Bank charges 144 73 Consulting 3,867 1,000 Delivery 20 Fax 47 Filing fees 3,109 Geology report 1,196 Incorporation costs written off 640 Mineral Claims written off 1,955 Miscellaneous 127 Photocopying 115 Printing 1,053 1,250 Professional Fees 62,500 Secretarial Fees 11,164 11,441 Transfer agent's fees 200 Travel 46,982 689 ---------------- ---------------- TOTAL COSTS 127,665 21,307 ---------------- ---------------- LOSS AND DEFICIT, END OF PERIOD $ (2,665) $ (21,307) ================ ================ LOSS PER COMMON SHARE Primary 0 0
The accompanying notes are an integral part of these financial statements. SAVE THE WORLD AIR, INC. STATEMENT OF CASH FLOWS JANUARY 1 1999 TO DECEMBER 31, 1999
Dec 31, 1999 Dec 31, 1998 CASH FLOWS FROM OPERATING ACTIVITIES Cashflow Arising from Trading Activities -2,665 -21,307 Adjustments to reconcile net loss to net cash provided by operating activities: Write off of Mineral Claims 1,955 Consultancy paid in shares 267 (Increase) in prepaid expenses -1,000 ---------------- ---------------- Net Cash Provided by Operations -443 -22,307 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of mineral property -1,955 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of capital stock 24,030 ---------------- ---------------- Net increase in cash -443 -232 Cash at beginning of period 38 270 ---------------- ---------------- CASH AT END OF PERIOD $ (405) $ 38 ================ ================
The accompanying notes are an integral part of these financial statements. SAVE THE WORLD AIR, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FEBRUARY 18, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1999
Capital in Common Stock Excess of Accumulated Shares Par Value Deficit BALANCE FEBRUARY 18, 1998 (date of inception) Issuance of Common Stock for cash - at $0.015 - March 3, 1998 4,000,000 2,000 0 Issuance of common stock for cash - at $0.003 - March 5, 1998 6,000,000 12,000 0 Issuance of common stock for cash - at $0.01 per share 30,000 270 Issuance of common stock for services rendered at $0.001 per share 267,125 Issuance of common stock for exchange of marketing rights 5,000,000 Net Loss from operations for the period from February 18 1998 to December 31, 1999 0 0 -23,972 --------------------------------------------------------- Balance as at December 31, 1999 $ 15,297,125 $ 14,270 $ (23,972) =========================================================
The accompanying notes are an integral part of these financial statements. [Hoiberg & Co. Logo Here] CHARTERED ACCOUNTANTS BUSINESS ADVISORS Suite 19, First Floor, Plaza Home Centre, 27 Evans Street P.O. Box 701 Maroochydore Q 4558 Tel: 61 07 5443 7600 Fax: 07 5443 2435 Email:KPH.HOIBERG@m140.aone.net.au INDEPENDENT AUDITORS REPORT The Board of Directors Save the World Air, Inc. 1285 Ave of the Americas, 35th Flr, New York NEW YORK 10019-6028 We have audited the accompanying balance sheet of Save The World Air, Inc. as at September 30, 1999 and the related statements of operations, stockholder's equity and cash flows for the period January 1, 1999 to September 30, 1999. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Save The World Air, Inc. as of September 30, 1999 and the results of its operations and its cash flows for the period January 1, 1999 to September 30, 1999, in conformity with generally accepted principles. /s/ Hoiberg & Co .......................................... AUDITOR November 18, 1999 SAVE THE WORLD AIR, INC. BALANCE SHEET AS AT 30 SEPTEMBER 1999
Sept 30 , 1999 Dec 31, 1998 ASSETS - ------ CURRENT ASSETS Bank 595 38 Deposit 0 0 Prepaid Expenses 0 1,000 --------------- --------------- 595 1,038 Marketing and Manufacturing Rights to Zero Pollution Fuel Saving Device 5,000 MINERAL PROPERTY 0 1,955 --------------- --------------- 5,595 2,993 =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable and accrued charges 36,200 STOCKHOLDERS EQUITY - ------------------- Common stock 200,000,000 shares authorised at $0.001 par value 15,297,125 issued and outstanding 15,297 10,030 Capital in excess of par 14,270 14,270 Deficit accumulated from inception -23,972 -21,307 --------------- --------------- 5,595 2,993 =============== =============== Related Party Transactions Approved by the board:
The accompanying notes are an integral part of these financial statements. SAVE THE WORLD AIR, INC. STATEMENT OF OPERATIONS FOR THE PERIOD ENDED 30 SEPTEMBER 1999
Sept 30, 1999 Dec 31, 1998 INCOME Sale of Licences for Distributorships 125,000 0 =============== =============== GENERAL AND ADMINISTRATIVE EXPENSES: Accounting and auditing 1,400 Bank charges 144 73 Consulting 3,867 1,000 Delivery 20 Fax 47 Filing fees 3,109 Geology report 1,196 Incorporation costs written off 640 Mineral Claims written off 1,955 Miscellaneous 127 Photocopying 115 Printing 1,053 1,250 Professional Fees 62,500 Secretarial Fees 11,164 11,441 Transfer agent's fees 200 Travel 46,982 689 --------------- --------------- TOTAL COSTS 127,665 21,307 --------------- --------------- LOSS AND DEFICIT, END OF PERIOD (2,665) (21,307) =============== =============== LOSS PER COMMON SHARE Primary 0 0
The accompanying notes are an integral part of these financial statements. SAVE THE WORLD AIR, INC. STATEMENT OF CASH FLOWS JANUARY 1 1999 TO 30 SEPTEMBER 1999
Sept 30, 1999 Dec 31, 1998 CASH FLOWS FROM OPERATING ACTIVITIES Cashflow Arising from Trading Activities -2,665 -21,307 Adjustments to reconcile net loss to net cash provided by operating activities: Write off of Mineral Claims 1,955 Consultancy paid in shares 267 (Increase) in prepaid expenses -1,000 --------------- --------------- Net Cash Provided by Operations -443 -22,307 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of mineral property -1,955 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of capital stock 24,030 --------------- --------------- Net increase in cash -443 -232 Cash at beginning of period 38 270 --------------- --------------- CASH AT END OF PERIOD (405) 38 =============== ===============
The accompanying notes are an integral part of these financial statements. SAVE THE WORLD AIR, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FEBRUARY 18, 1998 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999
Capital in Common Stock Excess of Accumulated Shares Par Value Deficit BALANCE FEBRUARY 18, 1998 (date of inception) Issuance of Common Stock for cash - at $0.015 - March 3, 1998 4,000,000 2,000 0 Issuance of common stock for cash - at $0.003 - March 5, 1998 6,000,000 12,000 0 Issuance of common stock for cash - at $0.01 per share 30,000 270 Issuance of common stock for services rendered at $0.001 per share 267,125 Issuance of common stock for exchange of marketing rights 5,000,000 Net Loss from operations for the period from February 18 1998 to June 30, 1999 0 0 (23,972) ----------------------------------------------------------- Balance as at June 30, 1999 15,297,125 14,270 (23,972) ===========================================================
The accompanying notes are an integral part of these financial statements. SAVE THE WORLD AIR, INC. NOTES TO THE FINANCIAL STATEMENTS December 31 1999 1. DESCRIPTION OF THE BUSINESS The Company was incorporated under the Corporate Charter issued by the Secretary of State of Nevada in the United States on February 18, 1998. The Company is deemed to be an investment company. The company holds the rights to manufacture and market a device that decreases the carbon dioxide output on internal combustion engines. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared in accordance with accounting principles generally accepted and include the following accounting principles. (a) BASIS OF PRESENTATION - GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realisation of assets and satisfaction of liabilities in the normal course of business. The company has been engaged in the identification and development of its zero pollution device. The Company's ability to meet its obligations and successfully develop its project and, ultimately, to attain profitable operations is dependent upon further developing and marketing the device known as Zero Pollution and obtaining additional financing from either third parties or its present shareholders. (b) ACCOUNTING METHODS The Company recognises income and expenses based on the accrual method of accounting. SAVE THE WORLD AIR, INC. NOTES TO THE FINANCIAL STATEMENTS December 31 1999 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED (c) DIVIDEND POLICY The Company has not yet adopted any policy regarding the payment of dividends. (d) CASH AND CASH EQUIVALENTS The Company considers all highly liquid instruments purchased with a maturity, at the time of purchase, of less than three months, to be cash equivalents. (e) LOSS PER SHARE Primary loss per share amount is computed based on the weighted average number of shares actually outstanding during the period reported on. Fully diluted loss per share is computed under the same basis since there are not warrants or share subscriptions outstanding. (f) INCOME TAXES For the period ended December 31 1999 (the date of these financial statements), the Company had a net operating loss of $23,972. The tax SAVE THE WORLD AIR, INC. NOTES TO THE FINANCIAL STATEMENTS December 31, 1999 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED (f) INCOME TAXES - CONTINUED benefits from the loss carried forward is offset by a valuation reserve because the future tax benefit is indeterminable. The net operating loss carryover will expire beginning in the year 1999 through 2013. (g) FOREIGN CURRENCY TRANSLATION The translations of the Company completed in foreign dollars have been translated to US dollars. Assets and liabilities are translated at the year end exchange rates and the income and expenses at the average rates of exchange prevailing during the period reported on. Any gains or loss resulting from the translations would be shown in the Statement of Operations. (h) FINANCIAL INSTRUMENTS For cash, deposit and accounts payable and accrued liabilities, the carrying amount of these financial instruments approximates their fair value due to their short-term maturity capacity of prompt liquidation or settlement. The account payable does not bear any interest thereon.