U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB/A
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended September 30, 2003
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ------------ to
------------.
Commission file number 000-33499
Fidelis Energy, Inc.
(Exact name of small business issuer as
specified in its charter)
Nevada 16-1599721
------ -----------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2980 N. Swan Rd., Suite 207 Tucson, AZ 85712
(Address of principal executive offices)
(877) 241-6100
Issuer's telephone number
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date: September 30, 2003 18,962,000
Transitional Small Business Disclosure Format (check one). Yes ; No X
PART I
Item 1. Financial Statements
INDEPENDENT ACCOUNTANT'S REPORT
Fidelis Energy, Inc.
(A Development Stage Company)
We have reviewed the accompanying balance sheets of Fidelis Energy,
Inc. (A Development Stage Company) as of September 30, 2003, and the related
statement of operations for the three and nine months ended September 30, 2003
and 2002 and the statement of cash flows for the nine month periods ended
September 30, 2003 and 2002. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for them to be
in conformity with accounting principles generally accepted in the United States
of America.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance sheet of Fidelis
Energy, Inc.(A Development Stage Company) as of December 31, 2002, and the
related statements of operations, cash flows, and stockholders' equity for the
year then ended (not presented herein); and in our report dated May 16, 2003, we
expressed an unqualified opinion on those financial statements. In our opinion,
the information set forth in the accompanying balance sheet as of December 31,
2002, is fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.
Note 3 of the Company's audited financial statements as of December 31,
2002, and for the year then ended discloses that the Company has suffered
recurring losses from operations and has no established source of revenue at
December 31, 2002. Our auditors' report on those financial statements includes
an explanatory paragraph referring to the matters in Note 3 of those financial
statements and indicating that these matters raised substantial doubt about the
Company's ability to continue as a going concern. As indicated in Note 3 of the
Company's unaudited interim financial statements as of September 30, 2003, and
for the three and nine months then ended, the Company has continued to suffer
recurring losses from operations and still has no established source of
revenue at September 30, 2003. The accompanying interim consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Respectfully Submitted,
\s\ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
March 11, 2004
FIDELIS ENERGY, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
September 30, December 31,
2003 2002
----------------- ------------------
Assets:
Current Assets - Cash $ - $ 16,024
----------------- ------------------
Intangible Assets 12,000 12,000
Accumulated Amortization (12,000) (12,000)
----------------- ------------------
Net Intangible Assets - -
----------------- ------------------
Total Assets $ - $ 16,024
================= ==================
Liabilities:
Accounts Payable $ 1,340 $ 1,930
Note Payable to Shareholder 55,479 49,915
----------------- ------------------
Total Liabilities 56,819 51,845
----------------- ------------------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares, Issued 18,962,000 and
17,442,000 shares at September 30, 2003 and December 31, 2002 18,962 17,442
Paid-In Capital 25,568 27,048
Deficit Accumulated During the
Development Stage (101,349) (80,311)
----------------- ------------------
Total Stockholders' Equity (56,819) (35,821)
----------------- ------------------
Total Liabilities and
Stockholders' Equity $ - $ 16,024
================= ==================
See accompanying notes and accountants' report
FIDELIS ENERGY, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
Cumulative
since
November 6,
2000
For the Three Months Ended For the Nine Months Ended Inception of
September 30, September 30, Development
2003 2002 2003 2002 Stage
---------------- ----------------- ---------------- ----------------- ------------------
Revenues: $ - $ - $ - $ - $ -
Expenses:
General & Admin. 13,674 3,066 17,204 19,256 91,836
---------------- ----------------- ---------------- ----------------- ------------------
Operating Loss (13,674) (3,066) (17,204) (19,256) (91,836)
---------------- ----------------- ---------------- ----------------- ------------------
Other Expense
Interest (1,323) (1,208) (3,834) (3,036) (9,513)
---------------- ----------------- ---------------- ----------------- ------------------
Net Income (Loss) $ (14,997)$ (4,274)$ (21,038) $ (22,292) $ (101,349)
================ ================= ================ ================= ==================
Basic & Diluted Loss $ - $ - $ - $ -
================ ================= ================ =================
Weighted Average
Shares 18,962,000 17,442,000 18,004,400 17,442,000
================ ================= ================ =================
See accompanying notes and accountants' report
FIDELIS ENERGY, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
Cumulative
Since
November
6, 2000
For the Nine Months Ended Inception of
September 30, Development
2003 2002 Stage
----------------- ----------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (21,038)$ (22,292)$ (101,349)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Depreciation and Amortization - 2,750 12,000
Shares Issued for Services 40 - 40
Change in Operating Assets and Liabilities:
Increase (Decrease) in Accounts Payable (590) 620 1,340
----------------- ----------------- ------------------
Net Cash Used in operating activities (21,588) (18,922) (87,969)
----------------- ----------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Intangible Assets - (12,000) (12,000)
----------------- ----------------- ------------------
Net cash provided by investing activities - (12,000) (12,000)
----------------- ----------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Shares - - 44,395
Increase in Notes Payable 5,564 17,422 55,479
Capital Contributed by Shareholder - - 95
----------------- ----------------- ------------------
Net Cash Provided by Financing Activities 5,564 17,422 99,969
----------------- ----------------- ------------------
Net (Decrease) Increase in Cash and Cash Equivalents (16,024) (13,500) -
Cash and Cash Equivalents at Beginning of Period 16,024 29,524 -
----------------- ----------------- ------------------
Cash and Cash Equivalents at End of Period $ - $ 16,024 $ -
================= ================= ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 534 $ - $ 1,016
Franchise and income taxes $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
See accompanying notes and accountants' report
FIDELIS ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Fidelis Energy, Inc. is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Interim Reporting
The unaudited financial statements as of September 30, 2003, and for
the three and nine month period then ended reflect, in the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to fairly state the financial position and results of operations for
the three and nine months. Operating results for interim periods are not
necessarily indicative of the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
November 6, 2000. Since November 6, 2000, the Company is in the development
stage, and has not commenced planned principal operations. On June 10, 2003, the
Company changed its name to Eagle Star Energy, Inc. to reflect the current
direction of the company. On February 24, 2004, the Company changed its name to
Fidelis Energy, Inc.
Nature of Business
The Company was originally formed to engage primarily in the business
of providing comparative automobile information via the Internet and printed
materials. The Company was not successful in its plans and during the 2nd
quarter of 2003 changed the business plan.
The Company now plans to enter into the oil and gas industry. The
Company's primary objective will be to identify, acquire and develop working
interest percentages in smaller, underdeveloped oil and gas projects in
California and Canada that do not meet the requirements of the larger producers
and developers. The Company intends to acquire smaller, underdeveloped producers
generally under control of small family-owned operators who are interested in
selling out. Through the use of modern development techniques such as horizontal
drilling and 3-D seismic, production from these under developed and under
utilized projects can be greatly increased.
FIDELIS ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Reclassification
Certain reclassifications have been made in the 2002 financial
statements to conform with the September 30, 2003 presentation.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The Company maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.
Loss per Share
Basic loss per share has been computed by dividing the loss for the
year applicable to the common stockholders by the weighted average number of
common shares outstanding during the years. There were no common equivalent
shares outstanding at September 30, 2003 and 2002.
FIDELIS ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Intangible Assets
Intangible assets are valued at cost and are being amortized on the
straight-line basis over a period of three years. The amortization period is
management's estimate of useful economic life of the asset.
The Company identifies and records impairment losses on intangible
assets when events and circumstances indicate that such assets might be
impaired. The Company considers factors such as significant changes in the
regulatory or business climate and projected future cash flows from the
respective asset. Impairment losses are measured as the amount by which the
carrying amount of intangible asset exceeds its fair value.
NOTE 2 - INCOME TAXES
As of September 30, 2003, the Company had a net operating loss
carryforward for income tax reporting purposes of approximately $101,000 that
may be offset against future taxable income through 2022. Current tax laws limit
the amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance of the
same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY/GOING CONCERN
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage. The Company's financial statements are prepared using
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company does not have significant cash
or other material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a going
concern. In the interim, shareholders of the Company have committed to meeting
its minimal operating expenses.
FIDELIS ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Unaudited)
NOTE 4 - COMMITMENTS
As of September 30, 2003, all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the facilities.
NOTE 5- NOTE PAYABLE FROM SHAREHOLDER
The Company has borrowed money from a shareholder in order to pay
general and administrative expenses. For purposes of these financial statements,
interest has been calculated at an imputed interest rate of 4.00 to 10 percent.
As of September 30, 2003 and December 31, 2002, the Company owed $55,479 and
$49,915, respectively, relating to these notes.
NOTE 6- SUBSEQUENT EVENTS
On October 31, 2003, the Company structured a deal with the previous
president and treasurer, wherein the Company will repurchase and subsequently
retire to treasury the 400,000 shares outstanding. The Company will pay $150,000
for the return of these shares and for payment of a $52,638 note payable.
On December 15, 2003, the Company approved a 1 to 38 stock split. All
references to common stock reflect the split.
Item 2. Management's Discussion and Analysis or Plan of Operation
This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Company's annual report on Form 10-KSB for the year ended December 31, 2002.
Plan of Operation
The Company was originally formed to engage primarily in the business
of providing comparative automobile information via the Internet and printed
materials. The Company was not successful in its plans and during the 2nd
quarter of 2003 changed the business plan.
The Company now plans to enter into the oil and gas industry. The
Company's primary objective will be to identify, acquire and develop working
interest percentages in smaller, underdeveloped oil and gas projects in
California and Canada that do not meet the requirements of the larger producers
and developers. The Company intends to acquire smaller, underdeveloped producers
generally under control of small family-owned operators who are interested in
selling out. Through the use of modern development techniques such as horizontal
drilling and 3-D seismic, production from these under developed and under
utilized projects can be greatly increased. The Company plans to acquire
projects following due diligence necessary to fully evaluate the projects
potential.
Results of Operations
As the Company is in the developmental stage and has commenced only
limited operations, it has yet to realize any revenue. The Company has realized
a net loss from operations of $101,349 since inception due primarily to legal
and accounting fees necessary to bring the Company through the development
stage.
Liquidity and Capital Resources
Cash and cash equivalents from inception to date have been insufficient
to provide the operating capital necessary to operate the Company. The necessary
capital to operate the Company has been provided by the principals and founders
of the Company in the form of both debt and capital stock issuances as set forth
in the financial statements incorporated herein. In summary, there has been, and
will continue to be, an absence of liquidity and capital resources to operate
the Company self-sufficiently unless and until an offering of the Company's
stock can be made to provide the necessary cash for operations. The current cash
position of the Company is insufficient to provide for the needs of the Company.
Therefore, management of the Company has committed to providing the necessary
funding for the Company until the Company can generate ample revenues to offset
the expenses or until an appropriate offering of the Company's capital stock or
via third party bridge loans can be made to raise cash.
Employees
As of November 6, 2003, the Company had no employees.
Item 3. Controls and Procedures
The Company's Chief Executive Officer have concluded, based on an
evaluation conducted within 90 days prior to the filing date of this Quarterly
Report on Form 10-QSB/A, that the Company's disclosure controls and procedures
have functioned effectively so as to provide those officers the information
necessary whether:
(i) this Quarterly Report on Form 10-QSB/A contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this
Quarterly Report on Form 10-QSB/A, and
(ii) the financial statements, and other financial information
included in this Quarterly Report on Form 10-QSB/A, fairly
present in all material respects the financial condition,
results of operations and cash flows of the Company as of, and
for, the periods presented in this Quarterly Report on Form
10-QSB/A.
There have been no significant changes in the Company's internal
controls or in other factors since the date of the Chief Executive Officer's
evaluation that could significantly affect these internal controls, including
any corrective actions with regards to significant deficiencies and material
weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
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
(a) Exhibits
Exhibit
Number Title of Document
3i Articles of Incorporation (1)
3ii Bylaws (1)
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(1) Incorporated by reference to the Registrant's registration statement on
Form 10-SB filed on January 14, 2002
(b) Reports on Form 8-K filed.
No reports on Form 8-K were filed during the prior quarter.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 this March 12, 2004
Fidelis Energy, Inc.
(Registrant)
DATE: March 23, 2004 By: /s/ Frank N. Anjakos, III
---------------------------- -----------------------------
Frank N. Anjakos, III
President and Chairman of Board
(Principal Executive Officer)
DATE: March 23, 2004 By: /s/ Julianne DeGrendele
---------------------------- -----------------------------
Julianne DeGrendele
Secretary / Treasurer
(Principal Financial Officer)