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 quarter ended October 31, 2001
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File No. 000-32093
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SLW ENTERPRISES INC.
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(Name of Small Business Issuer in its Charter)
Washington 91-2022980
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(State or Other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)
Suite 210, 580 Hornby Street
Vancouver, British Columbia, Canada V6C 3B6
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(Address of Principal Executive Offices)
(604) 687-6991
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Issuer's Telephone Number
N/A
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(Former Name or Former Address, if changed since last Report)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable
(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 practicable date:
December 4, 2001
Common - 2,600,000 common shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is contained in Item
6 of this Report.
Transitional Small Business Issuer Format Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together with related Notes. In the opinion of management, the Financial
Statements fairly present the financial condition of the Company.
SLW ENTERPRISES INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
OCTOBER 31, 2001
(Unaudited)
SLW Enterprises Inc.
(A Development Stage Company)
Interim Balance Sheet
October 31, April 30,
2001 2001
$ $
(unaudited) (audited)
ASSETS
Current Assets
Cash 769 2,255
Prepaid expenses 7,500 -
- ---------------------------------------------------------------------------------------------------
Total Assets 8,269 2,255
===================================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable 4,870 4,338
Accrued liabilities 1,124 750
Due to related party (Note 5) 13,000 -
Note payable (Note 4) 35,000 35,000
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Total Liabilities 53,994 40,088
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Contingency (Note 1)
Stockholders' Deficit
Common Stock: $0.0001 par value; authorized 100,000,000 common shares;
2,600,000 shares issued and outstanding respectively 260 260
Additional Paid-in Capital 25,740 25,740
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26,000 26,000
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Preferred Stock: $.0001 par value; authorized 20,000,000 preferred shares;
none issued - -
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Deficit Accumulated During the Development Stage (71,725) (63,833)
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Total Stockholders' Deficit (45,725) (37,833)
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Total Liabilities and Stockholders' Deficit 8,269 2,255
===================================================================================================
(See Accompanying Notes to the Interim Financial Statements)
F-1
SLW Enterprises Inc.
(A Development Stage Company)
Interim Statements of Operations
(unaudited)
Accumulated From
March 24, 2000
(Date of Inception) Three months ended Six months ended
to October 31, October 31, October 31,
2001 2001 2000 2001 2000
$ $ $ $ $
Revenue - - - - -
- -----------------------------------------------------------------------------------------------------------
Expenses
Accounting and legal 25,392 1,662 - 4,386 -
Bank charges 74 30 - 40 -
Consulting fees 7,500 2,500 - 2,500 -
License written-off 35,000 - - - -
Office 439 (89) 500 - 500
Transfer agent and filing fees 3,320 150 - 966 -
- -----------------------------------------------------------------------------------------------------------
Net loss (71,725) (4,253) (500) (7,892) (500)
===========================================================================================================
Net Loss Per Share (Basic and diluted) - - - -
===========================================================================================================
Weighted Average Number of Shares
Outstanding 2,600,000 1,600,000 2,600,000 1,600,000
===========================================================================================================
(See Accompanying Notes to the Interim Financial Statements)
F-2
SLW Enterprises Inc.
(A Development Stage Company)
Interim Statements of Cash Flows
(unaudited)
Six months ended
October 31,
2001 2000
$ $
Cash Flows From Operating Activities
Net loss (7,892) (500)
Changes in operating assets and liabilities:
Prepaid expenses (7,500) -
Accounts payable and accrued liabilities 13,906 500
- --------------------------------------------------------------
Net Cash Used by Operating Activities (1,486) -
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Cash Flows From Financing Activities - -
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Decrease In Cash (1,486) -
Cash at Beginning of Period 2,255 -
- --------------------------------------------------------------
Cash at End of Period 769 -
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Non-Cash Financing Activities - -
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Supplemental Disclosures
Interest paid - -
Income tax paid - -
(See accompanying Notes to the Interim Financial Statements)
F-3
SLW Enterprises Inc.
A Development Stage Company)
Notes to the Interim Financial Statements
October 31, 2001
(unaudited)
1. Development Stage Company
SLW Enterprises Inc. herein (the "Company") was incorporated in the State
of Washington, U.S.A. on March 24, 2000. The Company acquired a license to
market and distribute vitamins, minerals, nutritional supplements, and
other health and fitness products in which the grantor of the license
offers these products for sale from various suppliers on their Web Site.
The Company is in the development stage. In a development stage company,
management devotes most of its activities in developing a market for its
products. Planned principal activities have not yet begun. The ability of
the Company to emerge from the development stage with respect to any
planned principal business activity is dependent upon its successful
efforts to raise additional equity financing and/or attain profitable
operations. There is no guarantee that the Company will be able to raise
any equity financing or sell any of its products at a profit. There is
substantial doubt regarding the Company's ability to continue as a going
concern.
The Company filed an SB-2 Registration Statement with the U.S. Securities
Exchange Commission which was declared effective on December 7, 2000. The
Company sold and issued 1,000,000 common shares at $0.01 per share for cash
proceeds of $10,000. The Company is listed on the OTC Bulletin Board under
the symbol SLWE.
2. Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is April 30.
(b) License
The cost to acquire the License was initially capitalized. The
carrying value of the License was evaluated in each reporting period
to determine if there were events or circumstances which would
indicate a possible inability to recover the carrying amount. Such
evaluation is based on various analyses including assessing the
Company's ability to bring the commercial applications to market,
related profitability projections and undiscounted cash flows relating
to each application which necessarily involves significant management
judgment. Where an impairment loss has been determined the carrying
amount is written-down to fair market value. Fair market value is
determined as the amount at which the license could be sold in a
current transaction between willing parties. The License was
written-off to operations due to the lack of historical cash flow of
the license and lack of a market to resell the license.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.
(d) Revenue Recognition
The Company will receive from the Grantor of the license, commissions
of one-half of all the profit on all sales made through the Grantor's
Web Site. The commission revenue will be recognized in the period the
sales have occurred. The Company will report the commission revenue on
a net basis as the Company is acting as an Agent for the Grantor and
does not assume any risks or rewards of the ownership of the products.
This policy is prospective in nature as the Company has not yet
generated any revenue.
F-4
2. Summary of Significant Accounting Policies (continued)
(e) Use of Estimates
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 periods. Actual results could differ from
those estimates.
(f) Interim Financial Statements
These interim unaudited financial statements have been prepared on the
same basis as the annual financial statements and in the opinion of
management, reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the Company's
financial position, results of operations and cash flows for the
periods shown. The results of operations for such periods are not
necessarily indicative of the results expected for a full year or for
any future period.
3. License
The Company's asset is a license to market vitamins, minerals, nutritional
supplements and other health and fitness products through the Grantor's Web
Site. The Company desires to market these products to medical
practitioners, alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and fitness
practitioners, school and other fund raising programs and other similar
types of customers in Montana, North Dakota, South Dakota and Wyoming. The
license was acquired on April 13, 2000 for a term of three years. The
Company must pay an annual fee of $500 for maintenance of the Grantor's Web
Site commencing on the anniversary date. The Grantor of the license retains
50% of the profits.
The Company paid total consideration of $35,000 for the license with a note
payable of $35,000. See Note 5.
The License was written-off to operations due to the lack of historical
cash flow and lack of a market to resell the license. However, it is the
Company's intention to conduct a survey to determine its core target market
from amongst the potential clients under its Vitamineralherb.com license,
hire commissioned sales staff, establish an office, advertise, and begin
making sales.
4. Note Payable
The note payable is unsecured, non-interest bearing and is repayable upon
the successful completion of an Initial Public Offering of the common stock
of the Company and sale of all registered shares pursuant to such offering.
As the proceeds from this offering are not sufficient to repay this loan
the President of the Company does not intend to demand repayment until
sufficient funds are in place.
5. Related Party Transaction
The License referred to in Note 4 was assigned to the Company by the sole
director and President of the Company for consideration of the assumption
of a note payable of $35,000. The License was recorded at the transferors
cost of $35,000 which was also fair market value at the time.
The Grantor of the License is not related to the Company.
The advance owing to a Company controlled by the President is non-interest
bearing, unsecured and due on demand.
F-5
6. Commitment
The Company entered into a Business Agreement with Magnum Financial Corp.
("Magnum") whereby Magnum was to assist the Company with the approval of
trading on the OTC Bulletin Board. The Company has paid $5,000 upon
acceptance of this agreement and was to pay $5,000 upon listing for trading
on the OTC BB and a further $5,000 three weeks after listing for trading on
the OTC BB. This agreement was cancelled and the amount owing was waived.
F-6
Item 2. Management's Discussion and Analysis or Plan of Operation
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The following discussion and analysis of SLW Enterprises' financial condition
and results of operations should be read in conjunction with the Financial
Statements and accompanying notes and the other financial information appearing
elsewhere in this report.
PLAN OF OPERATION
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During the period from March 24, 2000 through October 31, 2001, SLW Enterprises
has engaged in no significant operations other than organizational activities,
acquisition of the rights to market Vitamineralherb and preparation for
registration of its securities under the Securities Act of 1933, as amended. No
revenues were received by SLW Enterprises during this period.
For the current fiscal year ending April 30, 2002, SLW Enterprises anticipates
incurring a loss as a result of expenses associated with setting up a company
structure to begin implementing its business plan. SLW Enterprises anticipates
that until these procedures are completed, it will not generate revenues, and
may continue to operate at a loss thereafter, depending upon the performance of
the business.
SLW Enterprises remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
shareholders' equity. Consequently, SLW Enterprises' balance sheet as of October
31, 2001, reflects total assets of $8,269. The Company has incurred a loss of
$71,725 to date. During the quarter the Company recorded a prepaid expense which
represents the prepaid portion of a non-refundable fee of $10,000 paid to
Equitrade Securities Corporation (an investment banking firm) pursuant to an
agreement dated August 9, 2001. The Company received $13,000 from a company
controlled by the President which was used to fund the operations. This advance
is non-interest bearing, unsecured and due on demand. The Company has a cash
balance of $769 at October 31, 2001.
The original shareholder paid for legal expenses upon inception in the amount of
$16,000 for which she received 1,600,000 shares of common stock of the Company.
The Company filed an SB-2 Registration Statement with the U.S. Securities
Exchange Commission which was declared effective on December 7, 2000. The
Company sold and issued 1,000,000 common shares at $0.01 per share for cash
proceeds of $10,000. The Company is listed on the OTC Bulletin Board under the
symbol SLWE.
SLW Enterprises' business plan is to determine the feasibility of selling
Vitamineralherb.com products to targeted markets. In order to determine the
feasibility of its business plan, SLW Enterprises plans, during the next six to
twelve months, to conduct research into these various potential target markets.
Should SLW Enterprises determine that the exploitation of the license is
feasible, it will engage salespeople to market the products. Based primarily on
discussions with the licensor, SLW Enterprises believes that during its first
operational quarter, it will need a capital infusion of approximately $85,000 to
achieve a sustainable sales level where ongoing operations can be funded out of
revenues. This capital infusion is intended to cover costs of advertising,
hiring and paying two salespeople, and administrative expenses. In addition, SLW
Enterprises will need approximately $260,000 in the event it determines that its
market will not pay in advance and it will have to extend credit. SLW
Enterprises will have to obtain additional financing through an offering or
capital contributions by current shareholders.
SLW Enterprises will need additional capital to carry out its business plan or
to engage in a business combination. No commitments to provide additional funds
have been made by management or other shareholders. Accordingly, there can be no
assurance that any additional funds will be available on terms acceptable to SLW
Enterprises or at all. SLW Enterprises has no commitments for capital
expenditures.
In addition, SLW Enterprises may engage in a combination with another business.
SLW Enterprises has engaged in discussions concerning potential business
combinations, but has not entered into any agreement for such a combination.
SLW Enterprises' failure to generate revenues and conduct operations since its
inception raises substantial doubt about SLW Enterprises' ability to continue as
a going concern. SLW Enterprises will require substantial working capital, and
currently has inadequate capital to fund its business. SLW Enterprises may be
unable to raise the funds necessary for implementing its business plan, which
could severely limit its operations and cause its stock to be worthless.
F-7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
None.
DOCUMENTS INCORPORATED BY REFERENCE
None.
F-8
SIGNATURES
Pursuant to the requirements 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.
SLW ENTERPRISES INC.
Date: December 4, 2001 By: /s/ Suzanne Wood
--------------------------
Suzanne Wood, President,
Secretary, Treasurer and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this Report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated:
Date: December 4, 2001 By: /s/ Suzanne Wood
--------------------------
Suzanne Wood, President,
Secretary, Treasurer and
Director
F-9