10QSB: Optional form for quarterly and transition reports of small business issuers
Published on August 23, 2001
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended JUNE 30, 2001
( ) Transition report pursuant of Section 13 or 15(d) of the Securities
Exchange Act of 1939 for the transition period ____ to______
COMMISSION FILE NUMBER 0-29185
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SAVE THE WORLD AIR INC.
(Exact name of registrant as specified in its charter)
Nevada 52-2088326
- ---------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1285 Avenue of the Americas, 35th Floor New York, NY 10019-6028 (212) 554 4197
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices, including Registrant's zip code and
telephone number)
- ----------------------
Former name, former address and former fiscal year, if changed
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports,), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares of the registrant's common stock as of June 30, 2001:
16,007,058 shares.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
TABLE OF CONTENTS PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheet 3
(b) Statement of Operations 4
(c) Statement of Cash Flows 5
(d) Statement of Stockholders' Equity 6
(e) Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION 10
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6
(a) Exhibits
(b) Reports on Form 8K
SIGNATURES 11
2
SAVE THE WORLD AIR INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AS OF JUNE 30, 2001 AND DECEMBER 31, 2000
(UNAUDITED)
June 30, December 31,
2001 2000
---------- ----------
ASSETS
CURRENT ASSETS
Cash at Bank $ - $ -
---------- ----------
- -
FIXED ASSETS
Marketing and Manufacturing Rights
Zero Pollution Fuel Device 505,000 505,000
---------- ----------
TOTAL ASSETS $ 505,000 $ 505,000
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 943 $ 4,354
Shareholder payable 989,619 857,555
---------- ----------
TOTAL LIABILITIES 990,562 861,909
STOCKHOLDERS' EQUITY
Common stock 200,000,000 shares authorized
at $.001 par value 15,825,434 and 16,007,058
issued and outstanding at December 31, 2000 and
June 30, 2001 respectively 16,007 15,645
Capital in excess of par 102,120 14,270
Accumulated Deficit (603,689) (386,824)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (485,562) (356,909)
---------- ----------
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $ 505,000 $ 505,000
========== ==========
The accompanying notes are an integral part of these financial accounts.
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SAVE THE WORLD AIR INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND FOR THE PERIOD FROM INCEPTION TO JUNE 30, 2001
(UNAUDITED)
For the Three Months Ended
------------------------------------
June 30, June 30,
2001 2000
---------------- ----------------
INCOME
Sale of Licenses for Distributorships $ - $ -
Consultancy Fees - -
---------------- ----------------
- -
================ ================
GENERAL AND ADMINISTRATIVE EXPENSES
Accommodation and international expenses 11,111 40,811
Accounting and Auditing 1,760 4,875
Automotive testing expenses 6,800 -
Bank Charges 30 873
Car Hire 4,850 4,865
Computer Services 180 2,597
Consulting Fees - 65,027
Filing Fees 308 616
Internet Services - 3,337
Legal Fees 43,200 -
Mineral Claims Written Off - -
Miscellaneous 223 -
Office Expense 500 -
Printing and Postage 550 221
Professional Fees 1,200 601
Radio and PR Fees - 7,594
Rent 1,000 1,216
Secretarial Fees 2,400 -
Telephone Fees 2,304 4,393
Transfer Agents Fees 7,200 12,233
Travel, airline, and other travel
related costs 10,912 39,722
Compensatory Element of Stock Issuances
Legal Fees 7,730 -
Charitable Contributions 25,000 -
Public Relations 2,458 -
Consulting Fees 6,900 -
---------------- ----------------
TOTAL COSTS 136,615 188,981
---------------- ----------------
Profit (Loss) for Period $ (136,615) $ (188,981)
================ ================
Shares outstanding 16,007,058 15,579,222
================ ================
Gain (Loss) per Common Share $ (0.14) $ (0.12)
================ ================
The accompanying notes are an integral part of these financial statements.
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SAVE THE WORLD AIR INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(UNAUDITED)
1. DESCRIPTION OF THE BUSINESS
The Company was incorporated on February 18, 1998 under the name "Mandalay
Capital Corp.". The Company changed its name to "Save the World Air, Inc." on
February 11, 1999 following the signing of the agreement by and between the
Company and Jeffrey Muller with respect to the Company's purchase of "Zero
Emissions Fuel Saver Device (ZEFS)". Under the terms of the agreement, the
Company issued 5,000,000 shares of its common stock to Mr. Muller and agreed to
pay $500,000 and $10 royalty for every unit of the device sold.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with generally
accepted accounting principles and include the following policies.
(a) BASIS OF PRESENTATION - GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The
company has been engaged in the development of its zero emissions fuel
saving device (ZEFS). 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 ZEFS and obtaining additional financing from either
third parties or its present stockholders. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
amounts reported in the financials statements and accompanying notes.
Actual results could differ from those estimates.
(b) ACCOUNTING METHODS
The Company recognizes income and expenses based on the accrual method
of accounting.
(c) DIVIDEND POLICY
The Company has not yet adopted any policy regarding the payment of
dividends.
(d) 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.
(e) INCOME TAXES
The Company has a operating loss carry-forward incurred from inception
to December 31, 1999 in the amount of $23,972. No tax benefit from the
operating loss carried forward has been recorded because the future tax
benefit is uncertain.
The net operating loss carryover will expire beginning in the year 1999
through 2013.
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(g) FOREIGN CURRENCY TRANSLATION
The transactions of the Company completed in foreign currencies 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) START UP EXPENSES
The Company has expensed all start up expenses in accordance with AICPA
Statements of Position 98-5.
(i) STOCK ISSUED IN EXCHANGE FOR SERVICES
Stock issued in exchange for services were valued at $.25 per share.
3. RELATED PARTY TRANSACTIONS
All of the marketing and manufacturing rights for the Zero Pollution Fuel Saving
Device were acquired from Jeffrey Muller, the Company's officer and sole
director for 5,000,000 shares, $500,000 and a $10 royalty for each unit sold,
pursuant to the agreement entered into in December 1998, by and between
the Company and Mr. Muller.
Mr. Muller, the majority stockholder, is active in running the business of the
Company. No compensation is paid and the Company has reflected no expense in the
Statement of Operations.
In January 2000, the Company entered into an agreement offering Jeffrey Muller
and Lyn Muller, Mr. Muller's wife, the rights to purchase five million shares
each at $0.10 per share (current market price as of the date of grant) as
consideration for work done for the Company.
4. LEASES
The Company has no leases with respect to any property. The Company presently
rents an office for $250 per month at 1285 Avenue of the Americas, 35th Floor,
New York, N.Y. 10019-6029 and also the office of one of its shareholders in
Australia at no cost to the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE
COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 THE 1995 ACT SHAREHOLDERS AND
PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER
ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY
ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED HEREIN. THESE FORWARD-LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES
OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO
THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS
RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS,
FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS,
AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS,
ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH
ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE
ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE
REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE,
THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL
EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING,
CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE
COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES
INHERENT IN THE FORWARD-LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF
ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR
ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.
The Company was incorporated in February 1998 and the sole purpose of the
Company is the manufacture and distribution of the device commonly referred to
as the Zero Emission Fuel Saving Device ("ZEFS").
The Company has yet to make a profit and the Board of Directors believe that the
Company will not make a profit in the immediate future.
The purpose of the Company is to develop the technology and then to sell
licenses world wide for the distribution of the device. At the same time, the
Company continues to research and develop the product for increasing
technological efficiency. It is also examining the market capabilities of other
new environmentally friendly technologies.
Obviously the Company does not have sufficient liquidity or the funding surplus
to continue without help either its research and development or its day-to-day
operations. These costs are being met from the personal resources of the
majority shareholder, officer and director. Once the Company reaches a level of
profitability, the shareholder's loans will be expected to be repaid by the
Company.
This shareholder has not placed an upper limit on the Company expenditure, but
the Company anticipates that its reliance on this shareholder will diminish
within the next two fiscal quarters as distribution licenses are sold within
mainland America and other countries.
The comparison of the six month quarter ended June 30, 2000 and the six months
ended June 30, 2001 indicates that the Company has maintained its level of
spending on Company operations. Marketing efforts will be stepped up as finances
allow.
The Company will continue in its efforts to raise capital. There can be no
assurance that the Company will be able to obtain capital.
QUARTERLY REVIEWS
The Company's 10-QSB filing for the period ended June 30, 2001 was not reviewed
by its independent certified public accountants in accordance with Statement of
Auditing Standards No. 71, "Interim Financial Information", as required by the
Securities and Exchange Commission. Management intends to file an amended 10-QSB
in the near term that has been reviewed by its current independent certified
public accountants.
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PART II. OTHER INFORMATION
Item 1. Legal proceedings NONE
Item 2. Changes in securities and use of proceeds NONE
Item 3. Defaults on senior securities NONE
Item 4. Submission of items to a vote NONE
Item 5. Other information NONE
Item 6.
a) Exhibits
b) Reports on 8K NONE
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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
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/s/ Jeffrey A. Muller Chairman and President August 22, 2001
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(Jeffrey A. Muller)
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