MICRO FUEL CELL SYSTEMS, INC.
(a development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FORM INCEPTION ON JANUARY 14, 2000 TO DECEMBER 31, 2000
Common Stock Common Stock Additional Accumulated
Shares Amount Shares Amount Paid in Capital Deficit Total
------ ------ ------ ------ --------------- ------- -----
Issuance of Founders' Common Stock at 55,687,500 $ 55,668 $ $ $ $ 55,688
$.001
Issuance of Common Stock at $1.00 25,000 25 24,975 25,000
Issuance of Preferred A Stock at $.50 1,000,000 1,000 499,000 500,000
Issuance of Preferred B Stock at $1.00 50,000 50 49,950 50,000
Commissions paid on stock sales (37,500) (37,500)
Net loss 2000 (532,634) (532,634)
------------ -------- ------------ -------- ------------ ----------- ---------
Balance, December 31, 2000 55,712,500 55,713 1,050,000 $ 1,050 $ 536,425 $(532,634) $ 60,554
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The accompanying notes are an integral part of the financial statements
MICRO FUEL CELL SYSTEMS, INC.
(a development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FORM INCEPTION ON JANUARY 14, 2000 TO DECEMBER 31, 2000
COST FLOWS FROM OPERATING ACTIVITIES
Net Loss (532,634)
Adjustment to reconcile net loss to net cash used in operating activities:
Issuance of common stock for founders $ 55,688
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Net Cash Used in Operating Activities (476,947)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of other assets 14,775
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan payable - stockholders 55,000
Proceeds from stock issued 537,500
-----------
592,500
Net cash $ 100,779
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Supplemental disclosure of non cash investing and financing activities:
Issuance of common stock for founders $ 55,688
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MICRO FUEL CELL SYSTEMS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| | Micro Fuel Cell Systems, Inc. (the "Company") was organized on January 14, 2000 under the name of Clean Energy Technologies, Inc. The name was changed to Micro Fuel Cell Systems, Inc. on December 8, 2000. Since July 31, 2001, Micro Fuel Cell Systems, Inc., is owned 82% by TechSys, Inc. The Company was previously a subsidiary of Fuel Cell Companies, Inc. Fuel Cell Companies, Inc. transferred its ownership of the Company and its other subsidiaries to TechSys in exchange for TechSys' purchase and cancellation of $700,000 notes payable and 780,000 shares of TechSys' common stock. The Company develops fuel cell technologies related to powering portable computers, cell phones and other small communication devices. |
| | The accompanying financial statements include the accounts of the Company from inception on January 14, 2000 to December 31, 2000. The Company is a development stage company. No revenues have been earned by the Company since its inception and no revenues are anticipated for the next year. The Company’s ability to continue as a going concern is dependent upon its successfully raising additional capital through equity or debt financing. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. |
| | Cash includes cash on hand, demand deposits and money market accounts with banks and other financial institutions. |
| | The Company expenses start-up costs as incurred. |
| | Research and Development Expenditures |
| | Research and development expenditures are expensed as incurred. |
| | Income taxes are accounted for under the asset and liability method. Deferred taxes and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryovers. Deferred tax assets and liabilities are measured using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
| | The Company has elected to expense Research and Development costs for income tax purposes. |
| | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
MICRO FUEL CELL SYSTEMS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
| | The Company computes net loss per share in conformity with the Statement of Financial Accounting Standards No. 128 “Earnings per Share”. Basic and diluted net loss per share were calculated by dividing net loss by the weighted average number of common shares outstanding. |
NOTE 2- INCOME TAXES
| | There was no provision for federal or state income taxes for the period ended December 31, 2000. |
| | The credit for income taxes at statutory rates consists of: |
Federal $ 146,360
State 42,574
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188,934
Valuation allowance for deferred tax assets (188,934)
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$ 0
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| | Realization of deferred tax assets is dependent upon future earnings, ifany, the timing and amount of which are uncertain. Accordingly, a valuation allowance in an amount equal to the net deferred tax assets has been established to reflect these uncertainties. |
NOTE 3- LOANS PAYABLE TO STOCKHOLDERS
| | Loans payable to stockholders of $55,000 are payable on demand with interest at 8%. |
NOTE 4- OTHER OPERATING AGREEMENTS OF SUBSIDIARIES
| | On April 20, 2000 Micro Fuel Cell Systems, Inc. entered into operating agreements with Jet Propulsion Laboratory and California Institute of Technology which provide an exclusive option to license all developed and patents pending, for specific technology under Jet Propulsion Laboratory’s Technology Affiliates Program. The agreements can be terminated at any time. Funding requirements for the projects are based on periodic costs as incurred. |
NOTE 5- CONTINGENCIES
| | The Company and its’ former parent sold common stock in the prior 12 months that was not registered with the Securities and Exchange Commission. This may create a contingent liability in connection with the sale of unregistered securities. The entities may choose to make a rescission offer to these shareholders. The liability could be $ 1.7 million plus statutory interest. The entities believe that the complete rescission offer will probably terminate future liability. The entities do not know how many, if any, shareholders will accept a rescission offer if made. |
