U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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, 2002
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ---- to ----
Commission File number 0-22954
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SEALANT SOLUTIONS, INC.
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(Name of Small Business Issuer in its Charter)
Delaware 65-0952186
- --------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
29 Abbey Lane, Middleboro, Massachusetts 02346
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(Address of principal executive offices, including zip code)
(508) 880-6969
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(Issuer's telephone number)
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(Former name, former address, and former fiscal year,
if changed since last report)
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 filing requirements for
the past 90 days. Yes [X] No [ ]
The number of shares of Common Stock, par value $ .01 per share,
issued and outstanding as of June 30, 2002 is 50,714,058.
SEALANT SOLUTIONS, INC.
INDEX TO FORM 10-QSB
June 30, 2002
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - Six months ended June 30, 2002
(Unaudited) and December 31, 2001 (Audited).
Statement of Operations - Three months and six
months ended June 30, 2002 and 2001 (Unaudited) and
July 8, 1998 (inception) to June 30, 2002.
Statement of Cash Flows - Six months ended June 30,
2002 and 2001 (Unaudited) and July 8, 1998
(inception) to June 30, 2002.
Statement of Stockholder's Equity - Six Months
ended June 30, 2001.
Notes to Financial Statements.
Item 2. Management's Discussion and Analysis of Financial
Condition or Plan of Operation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security-Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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SEALANT SOLUTIONS, INC.
(A Development Stage Enterprise)
BALANCE SHEET
June 30, December 31,
2002 2001
----------- ------------
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,325 $ 1,706
Marketable securities available for sale 5,100 21,400
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TOTAL CURRENT ASSETS 7,425 23,106
EQUIPMENT, net 885 3,617
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OTHER ASSETS
Intangible asset, net 250,000 32,775
Security deposits 801 899
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TOTAL OTHER ASSETS 250,801 33,674
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$ 259,111 $ 60,397
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Account payable and accrued liabilities $ 25,723 $ 26,517
Due to related parties 23,343 70,991
----------- ------------
TOTAL CURRENT LIABILITIES 49,066 97,508
LONG TERM LIABILITIES:
Convertible debenture - officer 14,500 -
Note payable-officer 10,872 -
----------- ------------
25,372 -
STOCKHOLDER'S EQUITY:
Common stock, $.01 par value, 60,000,000
shares authorized, 50,714,058 issued
and outstanding 507,141 343,038
Additional paid in capital 763,472 589,367
Retained earnings (1,077,880) (977,756)
Other comprehensive income(loss) (8,060) 8,240
----------- ------------
TOTAL STOCKHOLDER'S EQUITY 184,673 (37,111)
----------- ------------
$ 259,111 $ 60,397
============ ============
See accompanying notes to financial statements
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SEALANT SOLUTIONS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Period
Six Months Six Months July 8, 1998
Ended Ended (inception) to
June 30, June 30, June 30,
2002 2001 2002
---------- ---------- --------------
SALES $ 4,431 $ - $ 55,269
EXPENSES:
Selling general and administrative 71,758 35,106 818,858
Write-down of long-lived assets 29,799 - 124,799
Stock-based compensation - 16,250 162,500
Advertising 3,000 1,046 47,680
---------- ---------- --------------
TOTAL EXPENSES 104,557 52,402 1,153,837
---------- ---------- --------------
OTHER INCOME:
Interest income - - 532
Other income - 12,191 20,156
---------- ---------- --------------
TOTAL OTHER INCOME - 12,191 20,688
---------- ---------- --------------
NET LOSS $ (100,126) $ (40,211) $ (1,077,880)
========== ========== ==============
NET LOSS PER SHARE: $ (0.00) $ (0.00)
========== ==========
Number of shares used in computation 46,196,783 31,068,815
========== ==========
See accompanying notes to financial statements
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SEALANT SOLUTIONS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
Three months Three months
Ended Ended
June 30, June 30,
2002 2001
------------ ------------
(unaudited) (unaudited)
SALES $ 785 $ -
EXPENSES:
Selling general and administrative 15,682 28,851
Write-down of equipment 8,799 -
Stock based compensation - 16,250
Advertising - 1,046
------------ ------------
TOTAL EXPENSES 24,481 46,147
------------ ------------
OTHER INCOME 12,191
NET LOSS $ (23,696) $ (33,956)
============ ============
NET LOSS PER SHARE: $ (.00) $ (.00)
============ ============
Number of shares used in computation 50,851,558 32,297,777
============ ============
See accompanying notes to financial statements
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SEALANT SOLUTIONS, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDER'S EQUITY
Additional Other
Common Stock Paid-in Accumulated Comprehensive
Shares Amount Capital Deficit Income(loss) * Total
---------- ---------- ---------- ----------- ------------- -----------
BALANCE AT DECEMBER 31, 2001
(audited) 34,303,591 $ 343,038 $ 589,367 $ (977,754) $ 8,240 $ (37,109)
Stock issued for services 150,000 $ 1,500 $ 5,500 $ 7,000
Stock issued for debt 4,360,467 $ 43,604 $ 43,605 $ 87,209
Sale of common stock 12,500,000 $ 125,000 $ 125,000 $ 250,000
Cancelled stock (600,000) $ (6,001) $ - $ (6,001)
Unrealized gain(loss) on
marketable securities
available for sale $ (16,300) $ (16,300)
Net loss $ (100,126) $ (100,126)
----------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2002
(unaudited) 50,714,058 507,141 763,472 (1,077,880) (8,060) 184,673
==================================================================================
* Comprehensive income, i.e., net income (loss), plus, or less,
other comprehensive income, totaled $(108,186) for the three
months ended June 30, 2002.
See accompanying notes to financial statements
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SEALANT SOLUTIONS, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
(Unaudited)
Period
Six Months Six Months July 8, 1998
Ended Ended (inception) to
June 30, June 30, June 30,
2002 2001 2002
---------- ----------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (100,126) $ (40,211) $ (1,077,880)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 1,009 2,732 41,388
Write-down of assets 28,499 - 123,499
Forgiveness of debt 87,209 12,191 99,400
Stock based on compensation 7,000 26,616 212,040
Changes in assets and liabilities:
Security deposits 98 - (801)
Accounts payable and accrued liabilities (794) (55,827) 25,723
Due to officers and employees (36,776) (10,795) 263,101
---------- ----------- -------------
Net cash (used in) provided by
operating activites (13,881) (65,294) (313,530)
---------- ----------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Marketable securities available for sale 16,300 - (5,100)
Unrealized gain/(loss) on securities (16,300) - (8,060)
Intangible asset purchase (250,000) - (254,500)
Equipment purchases - - (137,271)
---------- ----------- -------------
Net cash used in investing activies (250,000) - (404,931)
---------- ----------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt converted to equity - - 66,153
Convertible debenture issued 14,500 - 14,500
Common stock 250,000 105,000 640,133
---------- ----------- -------------
Net cash provided by financing activies 264,500 105,000 720,786
---------- ----------- -------------
NET (DECREASE) INCREASE IN CASH 619 39,706 2,325
CASH AT BEGINNING OF THE YEAR 1,706 5,658 -
---------- ----------- -------------
CASH AT THE END OF THE YEAR $ 2,325 $ 45,364 $ 2,325
========== =========== =============
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest $ - $ - $ -
========== =========== =============
Taxes $ - $ - $ -
========== =========== =============
NON-CASH FINANCING ACTIVITIES:
Common stock issued for debt $ - $ 228,807 $ 241,076
========== =========== =============
Common stock issued for services $ - $ 26,616 $ 162,116
========== =========== =============
Common stock issued for acquistion of
intangible assets $ - $ - $ 30,000
========== =========== =============
See accompanying notes to financial statements
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SEALANT SOLUTIONS, INC.
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited consolidated financial
statements of Sealant Solutions, Inc. (the "Company")
have been prepared in accordance with generally accepted
accounting principles for interim financial information
and with the instructions to Form 10-QSB and Regulation
S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, all adjustments considered
necessary for a fair presentation (consisting of normal
recurring accruals) have been included. The preparation
of financial statements in conformity with generally
accepted accounting principles requires 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. Operating results
expected for the six months ended June 30, 2002 are not
necessarily indicative of the results that may be
expected for the year ending December 31, 2002. For
further information, refer to the financial statements
and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31,
2001. Per share data for the periods are based upon the
weighted average number of shares of common stock
outstanding during such periods, plus net additional
shares issued upon exercise of options and warrants.
NOTE 2. INVESTMENT
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In February 2002, the Company used $250,000 to enter into
a territorial agreement with IFG Goldstar Cement Company
whereby the Company would receive a royalty from the
import of concrete estimated to start in September of
2002.
NOTE 3. IMPAIRMENT
----------
In March 2002, based on the Company's review, the Company
reduced $21,000 from the carrying value of long-lived
assets to adjust to its fair market value.
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SEALANT SOLUTIONS, INC.
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4. EQUITY TRANSACTIONS
-------------------
In January 2002, the Company issued 50,000 shares of
common stock at $.02 per share to a member of the board
of directors. The Company also issued 50,000 shares of
common stock at $.02 per share for services rendered.
In February 2002, the Company issued 4,360,467 shares of
common stock at $02 per share to an officer of the
Company in exchange for $87,209 of indebtedness.
In February 2002, the Company issued 12,500,000 shares of
common stock for $250,000 pursuant to a private placement
memorandum.
In April 2002, the Company issued 50,000 shares as a
result of the settlement of all claims relating to the
Company's rescission of the purchase of The Lady Ole.
In May 2002, 600,000 shares of the Company's common stock
were returned to treasury as a result of the rescission
of the purchase of The Lady Ole. Such shares redeemed
were recorded at par value.
NOTE 5. GOING CONCERN
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The accompanying financial statements have been prepared
assuming the Company will continue as a going concern.
The Company has suffered recurring losses amounting to
approximately $1,100,000, since inception. The Company
intends to raise additional debt or equity financing to
continue its operations if they are unsuccessful they may
be required to cease operations and/or file for
bankruptcy.
-9-
ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be viewed in
conjunction with the accompanying financial statements including
the notes thereto.
General
The Company was incorporated in Delaware in 1995 under the
name UC'NWIN Systems, Inc. In August, 1999, the Company changed
its name to The Winners Edge.com, Inc. During 1999, as a result of
a Chapter 11 Bankruptcy Plan of Reorganization, the Company
acquired the assets of The Winners Edge Licensing Corporation. In
addition to the assets, the Company also acquired a ten-year
exclusive right to market the Winners Edge handicapping product
renewable for a second ten years. The Company did not acquire the
ownership of the handicapping program. In September 2000, the
Company stopped marketing the Winners Edge handicapping product due
to insufficient income. The Company may reintroduce the Winners
Edge product at some time in the future once another revenue stream
has been secured that will provide sufficient resources for the
proper marketing of the product. On March 30, 2001, the Company
acquired a roofing sealant product, Roof Shield, which the company
intends to market worldwide. In July 2001, the Company changed its
name to Sealant Solutions, Inc. In September 2001, the Company
acquired the rights to sell and distribute in the United States the
Lady Ole' line of cosmetics products. In February 2002, the
Company entered into a joint venture agreement with IFG Goldstar
Cement Company for the entitlement to a royalty payment based upon
the sale of certain concrete products. In April of 2002 the
Company sold its rights to the Lady Ole line of cosmetic products
and is no longer in that business. The Company is currently
attempting to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination with an operating
or development stage business that the Company may consider to have
significant growth potential. The Company is not restricting its
search to any particular industry.
Financial Condition
At June 30, 2002, the Company had total assets of $ 259,111,
as compared to total assets of $60,397 at December 31, 2001. This
represents an increase in assets of $198,714 due to the sale of the
Company's securities to accredited investors.
At June 30, 2002, The Company had total liabilities of
$74,438, as compared to total liabilities of $97,508 at December
31, 2002. This represents a decrease in liabilities of $23,070 due
to the conversion of certain debt to shares of the Company's common
stock.
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At June 30, 2002, the company had a stockholders equity of
$184,673, as compared to a deficiency of assets of ($37,111) at
December 31, 2001. This represents an increase in stockholders
equity of $221,784 due to the sale of the Company's securities to
accredited investors.
Liquidity and Capital Resources
For the 6 months ending June 30, 2002, the Company's cash
totaled $2,325 as compared to $45,364 for the same 6 month period
in 2001, a decrease of $43,039. Net cash used in operations for
the 6 months ending June 30, 2002 was $13,881 compared to $65,294
used in operations for the 6 months ended June 30, 2001. At the
current time the company has limited sources of revenue and may
become dependent on contributions by its officers as well as
private placements of its common stock to generate the required
cash flows to remain solvent. The company's current cash
requirements may exceed its income and no assurances can be made
that it will remain a going concern.
Results of Operations
REVENUES - Sales for the quarter ended June 30, 2002, were
$785 compared to sales of $-0- in the year earlier quarter.
NET OPERATING LOSS The net operating loss for the quarter
ended June 30, 2002 was $23,696 compared to net loss of $33,956 in
the year earlier quarter. The decrease in the net operating loss
is due to the company reducing its expenditures to be more in line
with income.
DEPRECIATION AND AMORTIZATION - Depreciation for the quarter
ending June 30, 2002 was $1,366 as compared to $-0- in the year
earlier quarter.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - Selling,
general and administrative expenses were $15,682 for the quarter
ending June 30, 2002, as compared to $28,851 for the year earlier
quarter.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
-----------------
Not Applicable.
Item 2. CHANGE IN SECURITIES
--------------------
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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Not Applicable
Item 5. OTHER INFORMATION
-----------------
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) There are no exhibits required to be filed for the
period covered by this Report.
(b) There were no reports filed on Form 8-K for the
period covered by this Report.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SEALANT SOLUTIONS, INC.
Dated: August 14, 2002 By:/s/Michael E. Fasci
-------------------------------
Michael E. Fasci, President,
Chief Executive Officer and
Chief Financial Officer
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the accompanying quarterly Report on Form
10-QSB of Sealant Solutions, Inc. for the period ended June 30,
2002, Michael E. Fasci, President, Chief Executive Officer and
Chief Financial Officer of Sealant Solutions, Inc. hereby certify
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge
and belief, that:
(a) such quarterly Report on Form 10-QSB for the period ended June
30, 2001, fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(b) the information contained in such quarterly Report on Form 10-
QSB for the period ended June 30, 2002, fairly presents, in
all material respects, the financial condition and results of
operations of Sealant Solutions, Inc.
SEALANT SOLUTIONS, INC.
Dated: August 14, 2002 By:/s/Michael E. Fasci
-----------------------------
Michael E. Fasci, President,
Chief Executive Officer and
Chief Financial Officer
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