U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 2002
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[ ] Transition Report under Section 13 or 15(d)of the Exchange Act For the
Transition Period from ________ to ___________
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Commission File Number: 0-29087
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NUTEK, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 87-0374623
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6340 McLeod Drive, Suite 3, Las Vegas, NV 89120
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(Address of principal executive offices) (zip code)
702-262-2061 (Telephone) 702-262-0033 (Fax)
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Issuer's Telephone Number
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months
(or 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 [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the Registrant 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 [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
1
The Registrant has 86,786,442 shares of Common stock issued and outstanding,
par value $.001 per share as of September 30, 2002. The Registrant has
596,408 shares of Preferred Stock Series A issued and outstanding and
508,500 shares of Preferred Stock Series B issued and outstanding as of
September 30, 2002.
Traditional Small Business Disclosure Format (check one) Yes [ ] No [X]
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements................................. 4
Balance Sheet (unaudited)............................ 5-6
Statements of Operations (unaudited)................. 7
Statements of Cash Flows (unaudited)................. 8
Notes to Financial Statements........................ 9
Item 2. Management's Discussion and Analysis of Plan
of Operation........................................ 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 20
Item 2. Changes in Securities and Use of Proceeds............ 20
Item 3. Defaults upon Senior Securities...................... 20
Item 4. Submission of Matters to a Vote
of Security Holders................................. 20
Item 5. Other Information..................................... 20
Item 6. Exhibits and Reports on Form 8-K...................... 21
Signatures...................................................... 23
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
The unaudited financial statements of registrant for the three
months ended September 30, 2002, follow. As prescribed by item 310 of
Regulation S-B, the independent auditor has reviewed these
unaudited interim financial statements of the registrant for the
nine months ended September 30, 2002. The financial statements reflect
all adjustments which are, in the opinion of management, necessary
to a fair statement of the results for the interim period presented.
4
Nutek, Inc.
CONSOLIDATED
BALANCE SHEET
AS AT
September 30, 2002 and December 31, 2001
ASSETS
September 30 December 31
2002 2001
CURRENT ASSETS
Cash 63,244.00 60,610.00
Accounts Receivable 1,544,363.00 681,042.00
Note Receivable 750,000.00 0.00
Loan to Officer 37,500.00 0.00
Other Current Assets 312,218.00 413,815.00
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Total Current Assets 2,707,325.00 1,155,467.00
PROPERTY AND EQUIPMENT
Property and Equipment
(net of depreciation) 2,871,321.00 2,994,776.00
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Total Property and Equipment 2,871,321.00 2,994,776.00
OTHER ASSETS
Patent Rights Acquired
(net of amortization) 529,387.00 561,262.00
Goodwill 1,692,782.00 1,462,782.00
Other Assets 266,534.00 433,166.00
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Total Other Assets 2,488,703.00 2,457,210.00
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TOTAL ASSETS 8,067,349.00 6,607,453.00
============ ============
See accompanying notes to financial statements
5
Nutek, Inc.
CONSOLIDATED
BALANCE SHEET
AS OF
September 30, 2002 and December 31, 2001
LIABILITIES & EQUITY
September 30 December 31
2002 2001
CURRENT LIABILITIES
Accounts Payable 253,484.00 233,270.00
Accrued Expenses 93,316.00 105,867.00
Other Current Liabilities 320,268.00 140,605.00
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Total Current Liabilities 667,068.00 479,742.00
OTHER LIABILITIES
Long Term Notes Payable 907,352.00 636,767.00
Bonds Payable 170,411.00 170,411.00
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Total Other Liabilities 1,077,763.00 807,178.00
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TOTAL LIABILITIES 1,744,831.00 1,286,920.00
EQUITY
Common Stock 87,410.00 71,392.00
Common Stock, $0.001 par value,
authorized 200,000,000; 86,786,442
common shares issued and outstanding
at September 30, 2002; 71,392,535 common
shares issued and outstanding at
December 31, 2001
Additional Paid in Capital 11,251,859.00 10,505,593.00
Preferred Stock 1,105.00 1,390.00
Preferred Stock, $.001 par value,
20,000,000 shares authorized; 508,500
Series B shares issued and outstanding
as of September 30, 2002 and 793,500
shares as of December 31, 2001; 596,408
Series A shares issued and outstanding
as of September 30, 2002 and 596,408 shares
as of December 31, 2001.
Subscription Receivable (140,000.00) (0.00)
Treasury Stock (133,388.00) (52,388.00)
Retained Earnings (Deficit) (4,744,468.00) (5,205,454.00)
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Total Stockholders' Equity 6,322,518.00 5,320,533.00
------------ ------------
TOTAL LIABILITIES AND OWNERS EQUITY 8,067,349.00 6,607,453.00
============ ============
See accompanying notes to financial statements
6
STATEMENT OF OPERATIONS
Nutek, Inc.
CONSOLIDATED
STATEMENT OF OPERATIONS
FOR 3 AND 9 MONTHS ENDED
September 30, 2002 and September 30, 2001
Unaudited Audited
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Three months ended Nine months ended Jan 1
September 30 September 30 2001
to Dec 31
2002 2001 2002 2001 2001
------- ------ ------- ------ ---------
Revenues 1,880,388 1,032,077 4,946,567 1,644,633 2,915,548
COSTS AND EXPENSES
Cost of Goods Sold 780,036 590,087 2,117,801 816,012 1,089,836
------- ------- ------- ------- ---------
GROSS PROFIT 1,100,352 441,990 2,828,766 828,621 1,825,712
Selling, General and
Administrative 886,892 502,010 2,116,897 853,141 1,811,638
Depreciation Expense 56,005 52,954 161,457 124,951 178,726
Amortization Expense 10,984 -8,366 33,846 29,881 38,651
Interest Expense 30,344 36,752 59,108 51,752 87,878
--------- ------- ------- ------ -------
Total Costs and Expenses 984,225 583,350 2,371,308 1,059,725 2,116,893
--------- ------- ------- ------ -------
Net Ordinary Income or
(Loss) before taxes 116,127 (141,360) 457,458 (231,104) (291,181)
Other Income/Expense 6,856 718 42,213 (1,670) 20,378
Income Tax Expense 0 0 0 0 0
Net Income or (Loss) 122,983 (140,642) 499,671 (232,774) (270,803)
======== ======= ======== ======= =======
Basic weighted average
number of common
shares outstanding 86,217,819 73,884,444 79,137,430 73,884,444 59,140,808
Diluted weighted average
number of common
shares outstanding 146,367,119 73,884,444 139,286,730 73,884,444 119,290,108
Basic Net Income (Loss)
Per Share 0.001 (0.002) 0.006 (0.003) (0.005)
Diluted Net Income (Loss)
Per Share 0.001 (0.002) 0.004 (0.003) (0.002)
See accompanying notes to financial statements
7
Nutek, Inc.
CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR 9 MONTHS ENDED
September 30, 2002 and September 30, 2001
STATEMENT OF CASH FLOWS
Jan 1, 2002 Jan 1, 2001
to to
Sept. 30, 2002 Sept. 30, 2001
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit(loss) from operations 499,670.00 (232,774.00)
Adjustments to reconcile net income
to net cash provided
Non-cash transactions
Services Received for stock 0.00 465,590.00
Depreciation Expense 161,457.00 124,951.00
Amortization Expense 33,846.00 29,881.00
(Gain) / Loss on Disposition of Equipment 715.00 0.00
(Increase)/Decrease in prepaid expenses (16,638.00) (230,338.00)
(Increase)/Decrease in accounts receivable(863,321.00) (421,884.00)
(Increase)/Decrease in deposits (1,705) (48,231.00)
(Increase)/Decrease in investments 0.00 (188,000.00)
(Increase)/Decrease in goodwill 0.00 (1,431,407.00)
(Increase)/Decrease in inventory (95,890.00) (25,751.00)
Increase/(Decrease) in accrued expenses (12,550.00) 0.00
Increase/(Decrease) in accounts payable (22,851.00) 148,044.00
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Net cash provided by (used in)
operating activities (317,267.00) (1,809,919.00)
CASH FLOWS FROM INVESTING ACTIVITIES
(Purchase)/Sale of Equipment (40,190.00) (570,736.00)
(Increase)/Decrease in websites (7,500.00) 98,402.00
(Increase)/Decrease in packaging designs (7,010.00) 0.00
Net cash provided by (used in)
investing activities (54,700.00) (472,334.00)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock 8,352.00 2,526,272.00
Write off Assets 0.00 (265,954.00)
Write down of Patents 0.00 670,000.00
Prior Period Adjustment 0.00 (26,038.00)
Increase/(Decrease) in Short Term
Loans Receivable (37,500.00) 0.00
Increase/(Decrease) in Short Term
Loans Payable 179,644.00 342,843.00
Increase/(Decrease) in Long Term
Loans Payable 233,085.00 (852,000.00)
Increase/(Decrease) in Treasury Stock (9,000.00) 0.00
Increase/(Decrease) in Royalty Investments 0.00 (20,000.00)
Net cash provided by financing activities 374,601.00 2,375,123.00
Balance at beginning of period 60,610.00 48,071.00
Net increase (decrease) in cash 2,634.00 92,870.00
Balance as at end of period 63,244.00 140,941.00
See accompanying notes to financial statements
8
Nutek, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
As of September 30, 2002
NOTE 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and note disclosure
normally included in the annual financial statements, prepared in
accordance with generally accepted accounting principals, have been
omitted pursuant to those rules and regulations, although the Company
believes that the disclosures made are adequate to make information
presented not misleading.
In the opinion of management, the accompanying unaudited consolidated
financial statements reflect all necessary adjustments and
reclassifications (all of which are of a normal, recurring nature) that
are necessary for fair presentation for the period presented. The
results of the three months are not necessarily indicative of the
results to be expected for the full fiscal year. It is suggested that
these unaudited consolidated financial statements be read in conjunction
with the audited consolidated financial statements and the notes thereto
included in the Companys latest annual report to the Securities and
Exchange Commission on Form 10-K for the year ended December 31, 2001.
Certain reclassifications have been made to the prior period financial
statements to conform to the current presentation.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Companys policy is to prepare the financial statements on the
accrual basis of accounting. The fiscal year end is December 31.
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments with
maturities of three months or less when purchased.
Summary of Non-Cash Transactions
There were non-cash transactions that are discussed in Note 3.
Consolidation Policy
The accompanying consolidated financial statements include the
accounts of Nutek Inc., and its different business segments. All
significant inter-company balances and transactions have been eliminated.
Inventory Valuation
Inventories are stated at the lower of cost or market, cost being
determined on the first in, first out (FIFO) basis.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates
and assumptions which affect the reported amounts of assets and
liabilities at the date of the financial statements and revenues and
expenses for the period reported. Actual results may differ from
these estimates.
SOP 98-5
The Company has adopted SOP 98-5, which treats the remaining portion
of organizational costs as an expense. Start-up costs and reorganization
costs were expensed when SOP 98-5 was adopted.
Dividend Policy
The Company has not yet adopted any policy regarding payment of dividends.
The Company has authorized 20,000,000 shares of preferred stock with a
par value of $0.001. 508,500 shares have been issued as Series B shares
for cash at $1.00 a share and 596,408 shares have been issued as Series
A shares.
Preferred shares have the same voting rights as the common shares but
have priority in the event of company liquidation. All of the Series
B shares outstanding were to be redeemed at $1.00 a share plus all
accrued dividends prior to December 31, 1993. This has been extended
by mutual agreement. Series B shares have annual dividends of $.15 per
share that are payable quarterly. They are convertible to common shares
on a one for one basis at the holders' option.
Fixed Assets
Fixed assets are stated at cost. Expenditures that materially increase
the life of the assets are capitalized. Ordinary maintenance and
repairs are charged to expense as incurred. When assets are sold or
otherwise disposed of, the cost and the related accumulated depreciation
and amortization are removed from the accounts and any resulting gain or
loss is recognized at that time. Depreciation is computed primarily on
the straight-line method for financial statement purposes over the
following estimated useful lives:
Computer Equipment 5 Years
Drilling Equipment 20 Years
Factory Equipment 7 Years
Furniture & Fixtures 7 Years
Office Equipment 5 Years
Equipment and Machinery 20 Years
Molds and Tooling 20 Years
Depreciation expense was $124,951 and $161,457 for the nine months
ended September 30, 2001 and 2002, respectively.
Intangible Assets
Under guidance of SFAS 142, Net assets of companies acquired in
purchase transactions are recorded at fair value at the date of
acquisition, as such, the historical cost basis of individual
assets and liabilities are adjusted to reflect their fair value.
Identified intangibles are amortized on an accelerated or
straight-line basis over the period benefited. Goodwill is not
amortized, but is reviewed for potential impairment on an annual
basis at the reporting unit level. The impairment test is performed
in two phases. The first step of the goodwill impairment test,
used to identify potential impairment, compares the fair value of
the reporting unit with its carrying amount, including goodwill.
If the fair value of the reporting unit exceeds its carrying amount,
goodwill of the reporting unit is considered not impaired; however,
if the carrying amount of the reporting unit exceeds its fair value,
an additional procedure must be performed. That additional procedure
compares the implied fair value of the reporting units goodwill (as
defined in SFAS 142) with the carrying amount of that goodwill. An
impairment loss is recorded to the extent that the carrying amount of
goodwill exceeds its implied fair value. Other intangible assets are
evaluated for impairment if events and circumstances indicate a
possible impairment. Such evaluation of other intangible assets is
based on undiscounted cash flow projections.
Identifiable intangibles, with the exception of patents, are amortized
over five years. All patents are amortized over 17 years. The amount
of amortization recorded for the year ended 2001 and the nine months
ended September 30, 2002 was $38,651 and $33,846, respectively.
The Company has adopted SFAS 142. Under its guidance, Management has
determined that as the major intangible asset, the value of the
electric light switch, purchased late in 1999, has not significantly
decreased and there has been no reduction in the usefulness
of the asset as of September 30, 2002. Additionally, this asset will
not be amortized and will be tested for impairment at least annually,
in accordance with SFAS 142.
As of May 13, 2002, the Company expanded its operations by acquiring a
data processing center in Costa Rica that is currently fully operational
in exchange for 13,517,241 shares of its common stock. As a result of
this transaction, the Company recognized $230,000 of goodwill in its
books. This asset will not be amortized and will be tested for impairment
at least annually, in accordance with SFAS 142.
Earnings Per Share Calculations
Basic earnings per common share (EPS) is computed by dividing income
available to common stockholders by the weighed-average number of
common shares outstanding for the period. The weighed-average number
of common shares outstanding for computing basic EPS was 79,137,430 and
73,884,444 for the period ended September 30, 2002 and 2001, respectively.
Diluted EPS reflects the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or converted into
common stock. The weighed-average number of common shares outstanding
for computing diluted EPS was 139,286,730 and 73,884,444 for the period
ended September 30, 2002 and 2001, respectively.
Income Taxes
The Company experienced losses during the previous fiscal tax year
reported. The Company will review its need for a provision for federal
income tax after each operating quarter. The Company has adopted FASB
109, as discussed in Note 3.
Advertising
Advertising costs are expensed when incurred. Advertising expense for
the three months ended September 30, 2002 and December 31, 2001 was
$596 and $3,239, respectively.
Depletion
Oil well leases are depleted over the units of production, or 12 years,
whichever is shorter.
Research and Development
The Company expenses its research and development in the periods incurred.
NOTE 3 - INCOME TAXES
Nutek, Inc. and its business segments available net operating loss
carry forwards to offset future federal taxable income of approximately
$5,205,453. The carry forwards start expiring in 2004. The Company
has deemed it less than likely that this benefit will be utilized.
Therefore, the Company recognized no income tax benefit from the losses
generated during the years ended December 31, 2000 and 2001.
The Company has adopted the Statement of Financial Accounting Standards
No. 109 - "Accounting for Income Taxes."
Deferred tax asset
Net operating loss carry forwards $5,205,453
Valuation allowance ($5,205,453)
Net deferred tax asset -
NOTE 4 - SEGMENT INFORMATION
The Company has adopted FASB 131. The adoption of FASB 131 did not
affect results of the companys statement of income and accumulated
deficit or financial position, but did affect the disclosure of segment
information. The consolidated financial statements include the accounts
of Nutek Inc., and its different business segments. All significant
inter-company balances and transactions have been eliminated.
NOTE 5 - PRIOR PERIOD ADJUSTMENT
Prior management owned a company called Vac-U-Lift Production Company
Inc., which went bankrupt and was closed down. Management had formed
a partnership called the Vac-U-Lift partnership, which was formed to
drill a single oil well. This was previously reported on the books
as "Drilling equipment" for $260,604. This amount was removed, along
with a $97,173 adjustment for inventory of Kristi & Co., reported on
the prior financial statements.
For the period ended June 30, 2002 the Company recorded a prior period
adjustment of $38,685 due to an error in expensing inventory that
should have been capitalized.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
The following is a discussion of certain factors affecting Registrant's
results of operations, liquidity and capital resources. You should read
the following discussion and analysis in conjunction with the Registrant's
consolidated financial statements and related notes that are included
herein under Item 1 above.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
The statements contained in the section captioned Management's Discussion
and Analysis of Financial Condition and Results of Operations which are
historical are "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements represent the Registrants present expectations or beliefs
concerning future events. The Registrant cautions that such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the
Registrant to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Such factors include, among other things, the uncertainty as to the
Registrants future profitability; the uncertainty as to the demand for
Registrants services; increasing competition in the markets that Registrant
conducts business; the Registrant's ability to hire, train and retain
sufficient qualified personnel; the Registrant's ability to obtain financing
on acceptable terms to finance its growth strategy; and the Registrant's
ability to develop and implement operational and financial systems to
manage its growth.
1) Plan of Operation
The Companys websites can be found at: www.nutk.com; www.tekplate.com
and www.datascension.com
(i) Short-term Objectives:
Moving into 2003, the Company plans to accomplish the following:
- Increase the Board to 7 members which will include 2 independent
directors.
- Introduce an audit committee
- Introduce a compensation committee comprised of a majority of
independent members
1) During the Third Quarter ended September 30, 2002 the Company had a net
profit of $122,983 from operations against revenues of $1,880,388 as
compared to a net loss from operations of $104,608 against revenues of
$1,032,077 for the same quarter last year. The Company has increased its
selling, general and administration costs from $502,010 for the same
period last year to $886,892 for the Second Quarter this year.
Depreciation costs for the Third Quarter this year were $56,005 as
compared to $52,954 for the same period last year.
As of September 30, 2002, the Company has eighty-six million seven hundred
eighty-six thousand four hundred forty two (86,786,442) shares of
its $0.001 par value common voting stock issued and outstanding which
are held by approximately five hundred and sixteen (516) shareholders
of record. The Company also has five hundred and eight thousand five
hundred (508,500) shares of its $0.001 par value Preferred Stock Series
B issued and outstanding, as of September 30, 2002. All Series B Preferred
shares which have been issued were issued for cash at $1.00 a share.
Series B Preferred shares have the same voting rights as the common
shares but have priority in the event of Company liquidation. All of
the shares outstanding were to be redeemed at $1.00 a share plus all
accrued dividends prior to December 31, 1993. This has been extended
by mutual agreement. Series B shares have annual dividends of $.15 a
share payable quarterly. They are convertible to common shares on a
one for one basis at the holders' option. The Company also has five
hundred and ninety-six thousand four hundred and eight (596,408) shares
of its $0.001 par value Preferred Stock Series A issued and outstanding,
as of September 30, 2002.
2) Results of Operations
For the Third Quarter, ended September 30, 2002, the Company has generated
$1,880,388 in revenues and generated a profit of $122,983 for the same
period. This compares to revenues of $1,032,077 and a loss of $140,642 for
the same period last year. The Company has increased its working capital
position by $235,147 from a positive $1,805,110 at June 30, 2002 to a
positive $2,040,257 on September 30, 2002.
The majority of the Company's expenses for the quarter included selling,
general administrative costs.
The company recently moved its Corporate Head Office to 6340 McLeod Drive,
Suite 3, Las Vegas, NV. This was a direct result of our cost cutting
measures introduced in the first quarter of this year. The Company has
a second warehousing facility located in close proximity to our Corporate
office where the balance of US operations are located. This will result
in significant cost savings moving forward.
The Datascension operations that were being conducted at the Henderson
facility have now been relocated to our Costa Rica facility as an
additional savings to the company.
Although the third quarter showed significant increases in revenues, the
resultant increase in earnings was not proportional. The reason being
is that two waves of the government contract were conducted during this
period and typically these contracts do not carry as large of margins
and require a significant increase in manpower during these waves.
3) Liquidity and Capital Resources
Management is of the opinion that sufficient working capital will be
available from internal operations and from outside sources during the
next twelve months thereby enabling Nutek to meet its obligations and
commitments as they become payable. Historically, Nutek has been
successful in its efforts to secure working capital from private
placements of common stock securities, bank debt, and loans from
private investors. Currently, Mr. Conradie and Mr. Kincer have both
provided significant personal collateral to the Companys bankers in
return for a substantial line of credit and the commitment to fund
purchase orders for the Tekplate product from major wholesalers.
At the end of October 2002, the Company secured a $1 million line of
credit with a private lender. As of the filing date, the Company has
not utilized any of this funding source.
As an on going concern, if the Company needs to raise additional funds
in order to fund expansion, develop new or enhanced services or products,
respond to competitive pressures or acquire complementary products,
businesses or technologies, any additional funds raised through the
issuance of equity or convertible debt securities, the percentage
ownership of the stockholders of the Company will be reduced, stockholders
may experience additional dilution and such securities may have rights,
preferences or privileges senior to those of the Company's Common Stock.
The Company does not currently have any contractual restrictions on its
ability to incur debt and, accordingly, the Company could incur significant
amounts of indebtedness to finance its operations. Any such indebtedness
could contain covenants which would restrict the Company's operations.
As of September 30, 2002, the Company had three hundred and ninety-four (394)
employees of which eight (8) are Officers of the Company. As the Company
continues to grow and develop its product lines it will need to add
employees. The number of employees at September 30, 2002 has decreased from
the number of employees at June 30, 2002 due to the increased use of our
Costa Rica facility and the decreased operations in Nevada and California.
The Company's consolidated financial statements have been prepared on
the assumption the Company will continue as a going concern. Management
believes that current operations will continue to provide sufficient
revenues to meet operating costs and expansion.
Unclassified Balance Sheet - In accordance with the provisions of SFAS
No. 53, the Company has elected to present an unclassified balance sheet.
Basic earnings per share is computed using the weighted average number
of shares of common stock outstanding for the period end. The net income
(loss) for the period end is divided by the weighted average number of
shares outstanding for that period to arrive at earnings per share.
Diluted EPS is calculated to show, on a pro forma basis, per share
earnings for the period available to common shareholders assuming the
exercise or conversion of all securities that are exercisable or
convertible into common stock and which would either dilute or not
affect basic EPS.
18
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of
the Company's business and operations, and other such matters are
forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors
it believes are appropriate in the circumstances. However, whether actual
results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general economic
market and business conditions; the business opportunities (or lack thereof)
that may be presented to and pursued by the Company; changes in laws or
regulation; and other factors, most of which are beyond the control of the
Company.
This Form 10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
operations for its limited history; (ii) the Company's business and growth
strategies; (iii) the Internet and Internet commerce; and, (iv) the Company's
financing plans. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors. Factors that could adversely affect actual results and performance
include, among others, the Company's limited operating history, dependence
on continued growth in the use of the Internet, the Company's inexperience
with the Internet, potential fluctuations in quarterly operating results and
expenses, security risks of transmitting information over the Internet,
government regulation, technological change and competition.
Consequently, all of the forward-looking statements made in this Form 10-QSB
are qualified by these cautionary statements and there can be no assurance
that the actual results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations. The
Company assumes no obligations to update any such forward-looking statements.
19
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is from time to time involved in litigation incident to the
conduct of its business. Certain litigation with third parties and present
and former employees of the Company is routine and incidental, such
litigation can result in large monetary awards for compensatory or
punitive damages.
The Company is currently involved in the following litigation:
After numerous delays by the inventor of the Electrostatic Light Switch
patent number 5833350 to provide Nutek the information, continuation patents
and schematics which Nutek purchased, Nutek acquired world wide rights to a
significantly enhanced patent and returned the rights to Electro Static
Solutions LLC for patent number 5833350. Electro Static Solutions and its
members are now involved in litigation with Nutek for the return of $150,000.00
in cash and $180,000.00 in Nutek stock paid to Electro Static Solutions.
Electro Static Solutions is claiming the balance of the purchase price.
The Company and legal counsel are very confident that the company will prevail
in this litigation.
The Company feels it has successfully negotiated a settlement in this matter
and currently the settlement is out for signature by all parties.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
EX-99.1
Change of Address
EXHIBIT 99.1
FORM 8-K
CURRENT REPORT
ITEM 1. CHANGE IN ADDRESS
Effective October 30, 2002, the new address for the business is 6340
McLeod Drive, Suite 3, Las Vegas Nevada 89120. The new telephone number
for the business is 702-262-2061.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: October 30, 2002
20
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Nutek, Inc.
------------
(Registrant)
/s/ Murray N. Conradie
- -------------------
Murray N. Conradie,
President, Chairman
Date: November 6, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Nutek, Inc.
/s/ Jason F. Griffith, CPA
- -----------------------------------
Jason F. Griffith
CFO and Corporate Secretary
Date: November 6, 2002
EX-99.2
Certification of Financial Statements
EXHIBIT 99.2
On November 6, 2002, Murray N. Conradie, President and Chief Executive
Officer of Nutek, Inc. (the "Company") and Jason F. Griffith, Chief
Financial Officer of the Company, each furnished to the Securities and
Exchange Commission personal certifications pursuant to 18 U.S.C. Section
1350. The text of each of these certifications is set forth below:
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Nutek, Inc. (the
"Company") on Form 10-Q for the quarter ending September 30, 2002, as
filed with the Securities and Exchange Commission on the date thereof (the
"Report"), I, Murray N. Conradie, the Chief Executive Officer of the
Company, certify, pursuant to and for purposes of 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: November 6, 2002 By: /s/ Murray N. Conradie
-------------------------------------
Murray N. Conradie
President and Chief Executive Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Nutek, Inc. (the
"Company") on Form 10-Q for the quarter ending September 30, 2002, as filed
with the Securities and Exchange Commission on the date thereof (the
"Report"), I, Jason F. Griffith, the Chief Financial Officer of the
Company, certify, pursuant to and for purposes of 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date: November 6, 2002 By: /s/ Jason F. Griffith, CPA
--------------------------------
Jason F. Griffith, CPA
Chief Financial Officer
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET, THE STATEMENT OF OPERATIONS, AND THE STATEMENT OF CASH FLOWS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2002
<PERIOD-START> JUL-01-2002
<PERIOD-END> SEP-30-2002
<CASH> 63,244
<RECEIVABLES> 1,544,363
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<INVENTORY> 220,208
<CURRENT-ASSETS> 2,707,325
<PP&E> 2,927,326
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