UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number: 000-32249
ARMOR ELECTRIC INC.
(Exact name of small business issuer as specified in its charter)
Nevada 65-0853784
(State or other jurisdiction of (IRS Employee Identification No.)
incorporation or organization)
201 Lomas Santa Fe, Suite #420, Solana Beach, CA 92075
(Address of principal executive offices)
(858) 720-0123
(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 practicable date:
Common Stock, $0.001 par value 35,219,333
(Class) (Outstanding as of October 29, 2004)
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
ARMOR ELECTRIC INC.
FORM 10-QSB
INDEX
Page
----
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Balance Sheets September 30, 2004 (unaudited)
and June 30, 2004 .................................................F-1
Unaudited Condensed Statements of Operations for the
three months ended September 30, 2004 and 2003.....................F-2
Unaudited Condensed Statements of Cash Flows for the
three months ended September 30, 2004 and 2003.....................F-3
Consolidated Statement of Stockholders' equity for the period from
June 5, 1998 (Inception) to September 30, 2004 (unaudited).........F-4
Notes to Financial Statements (unaudited)..........................F-5
Item 2. Management's Discussion and Analysis or Plan of Operation..........3
Item 3. Controls and Procedures............................................4
Part II OTHER INFORMATION
Item 1. Legal Proceedings..................................................5
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds........5
Item 3. Defaults upon Senior Securities....................................5
Item 4. Submission of Matters to a Vote of Security Holders................5
Item 5. Other Information..................................................5
Item 6. Exhibits and Reports on Form 8-K...................................5
Signatures..................................................................6
2
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
ARMOR ELECTRIC, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
JUNE 30, 2004
SEPTEMBER 30, JUNE 30,
2004 2004
------------- -------------
(unaudited)
ASSETS
------
CURRENT ASSETS
Funds held in trust by related party $ 553 $ 553
------------- -------------
Total Current Assets 553 553
Deferred charge 69,276
------------- -------------
$ 69,829 $ 553
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 527 $ 527
Accounts payable-related parties 15,867 15,867
Accrued payroll 14,625 11,000
------------- -------------
Total Current Liabilities 31,019 27,394
------------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, par value $.001, 10,000,000 shares
authorized, none issued
Common stock, par value $.001, 100,000,000 shares
authorized,34,717,333 issued and outstanding 35,219 34,717
Paid-in capital 125,761 6,873
(Deficit) accumulated during development stage (122,170) (68,431)
------------- -------------
Total Stockholders' Equity (Deficit) 38,810 (26,841)
------------- -------------
$ 69,829 $ 553
============= =============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
2
ARMOR ELECTRIC, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
CUMULATIVE
FROM
THREE MONTHS ENDED JUNE 5, 1998
SEPTEMBER 30, (INCEPTION) TO
------------------------------- SEPTEMBER 30,
2004 2003 2004
-------------- -------------- --------------
OPERATING ACTIVITIES:
Net (loss) from operations $ (53,739) $ (996) $ (122,170)
Contributions to capital 3,930 300 8,730
Capital issued for services 115,460 130,470
Adjustments to reconcile net (loss) to net
cash used by operating activities:
Changes in:
Trust funds (553)
Accounts payable 71 527
Accrued payroll 3,625 625 14,625
-------------- -------------- --------------
Net Cash (Used) in Operating Activities 69,276 -- 31,629
-------------- -------------- --------------
FINANCING ACTIVITIES:
Proceeds from sale of common stock 15,240
Increase in deferred charge (69,276) (69,276)
Accounts payable - related parties 22,407
-------------- -------------- --------------
Net Cash provided by Financing Activities -- (31,629)
-------------- -------------- --------------
NET INCREASE IN CASH -- -- --
CASH, beginning of period -- -- --
-------------- -------------- --------------
CASH, end of period $ -- $ -- $ --
============== ============== ==============
NON-CASH FINANCING ACTIVITIES
Shareholder loans converted to common stock $ 6,540
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
ARMOR ENTERPRISES, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
CUMULATIVE
FROM
THREE MONTHS ENDED JUNE 5, 1998
SEPTEMBER 30, (INCEPTION) TO
----------------------------- SEPTEMBER 30,
2004 2003 2004
------------- ------------- -------------
REVENUE $ -- $ -- $ --
EXPENSES:
General and administrative 53,739 996 122,170
------------- ------------- -------------
Total Expenses 53,739 996 122,170
------------- ------------- -------------
NET (LOSS) $ (53,739) $ (996) $ (122,170)
============= ============= =============
NET INCOME PER COMMON SHARE-BASIC * *
============= =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 35,052,000 13,717,333
============= =============
* less than $.01 per share
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
ARMOR ELECTRIC, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(DEFICIT)
ACCUMULATED
COMMON STOCK DURING THE
--------------------------- PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------------ ------------ ------------ ------------ ------------
Balances, inception -- $ -- $ -- $ -- $ --
(UNAUDITED)
Shares issued January 10, 1998,
for services at $.001 per share 10,500,000 10,500 (5,250) 5,250
Net (loss) for the year (5,250) (5,250)
------------ ------------ ------------ ------------ ------------
BALANCES, JUNE 30, 1998 (UNAUDITED) 10,500,000 10,500 (5,250) (5,250) --
Shares issued August 31, 1998,
for cash at $.001 per share 42,000 42 168 210
Shares issued August 31, 1998,
for services at $.001 per share 1,952,000 1,952 7,808 9,760
Shares issued September 30,1998,
for cash at $.001 per share 2,000 2 8 10
Shares issued October 12,1998,
for cash at $.001 per share 4,000 4 16 20
Net( loss) for the year (10,000) (10,000)
------------ ------------ ------------ ------------ ------------
BALANCES, JUNE 30, 1999 (UNAUDITED) 12,500,000 12,500 2,750 (15,250) --
Shares issued February 8, 2000
for cash at $.001 per share 150,000 150 14,850 15,000
Net (loss) for the year (5,275) (5,275)
------------ ------------ ------------ ------------ ------------
BALANCES, JUNE 30, 2000 (UNAUDITED) 12,650,000 12,650 17,600 (20,525) 9,725
(AUDITED)
Contributed capital-office overhead 1,200 1,200
Net (loss) for the year (14,155) (14,155)
------------ ------------ ------------ ------------ ------------
BALANCES, JUNE 30, 2001 12,650,000 12,650 18,800 (34,680) (3,230)
Contributed capital-office
overhead 1,200 1,200
Net (loss) for the year (4,272) (4,272)
------------ ------------ ------------ ------------ ------------
BALANCES, JUNE 30, 2002 12,650,000 12,650 20,000 (38,952) (6,302)
Contributed capital-office
overhead 1,200 1,200
Shares issued December 18, 2002
@ $.001 per share for
shareholder loan 1,067,333 1,067 5,473 6,540
Net (loss) for the year (11,110) (11,110)
------------ ------------ ------------ ------------ ------------
BALANCES, JUNE 30, 2003 13,717,333 13,717 26,673 (50,062) (9,672)
Contributed capital-office
overhead 1,200 1,200
Shares issued April 27, 2004
@ $.001 per share to acquire
marketing 21,000,000 21,000 (21,000) --
Net (loss) for the year (18,369) (18,369)
------------ ------------ ------------ ------------ ------------
BALANCES, JUNE 30, 2004 34,717,333 34,717 6,873 (68,431) (26,841)
Contributed capital-office
overhead 3,930 3,930
Shares issued August 2, 2004
@ $.23 for marketing services 502,000 502 114,958 115,460
Net (loss) for the quarter (53,739) (53,739)
------------ ------------ ------------ ------------ ------------
BALANCES, SEPTEMBER 30, 2004 35,219,333 $ 35,219 $ 125,761 $ (122,170) $ 38,810
============ ============ ============ ============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
ARMOR ELECTRIC, INC.
Notes to Financial Statements (unaudited)
Note 1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited condensed financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB. 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 (consisting of normal
recurring accruals) considered necessary for a fair presentation of the
Company's financial position as of September 30, 2004 and the results of its
operations for the three ended September 30, 2004 and 2003 and cash flows for
the three months ended September 30, 2004 and 2003 have been made. Operating
results for the three months ended September 30, 2004 are not necessarily
indicative of the results that may be expected for the year ended June 30, 2005.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Form 10-KSB
for the year ended June 30, 2005.
F-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion contains forward-looking statements that are subject to
significant risks and uncertainties. There are several important factors that
could cause actual results to differ materially from historical results and
percentages and results anticipated by the forward-looking statements. The
Company has sought to identify the most significant risks to its business, but
cannot predict whether or to what extent any of such risks may be realized nor
can there be any assurance that the Company has identified all possible risks
that might arise. Investors should carefully consider all of such risks before
making an investment decision with respect to the Company's stock.
OVERVIEW
- --------
The Company is considered a development stage company in the business of
developing and marketing electronic propulsion and battery power systems for
electric powered vehicles. The costs and expenses associated with the
preparation and filing of this quarterly report and other operations of the
Company have been paid for by private placement financing and loans from
shareholders and officers of the Company.
PLAN OF OPERATION
- -----------------
The Company has been assigned the rights held by Nova Electric Systems Inc.,
(Nova) through an asset purchase agreement.
Through an agreement with NuPow'r LLC, Nova holds the rights for the use of
certain proprietary technology to install electric propulsion systems on a
variety of electric powered vehicles to include, but not limited to, mountain
bikes, regular cycles, children's cycle toys and riding vehicles, recreation ATV
units, scooters, motorcycles, go-karts, NEV (Neighborhood Electric Vehicle)
cars, race cars, regular passenger cars, buses and all other types of two and
three wheeled vehicles, water craft and in addition, a wide variety of other
vehicles and products.
Nova has also acquired the rights from Nu Age Electric Inc., to certain
agreements between Nu Age and the largest bicycle manufacturer in the world,
Hero Cycles in India, for the joint venture to manufacture and distribute many
of the electric powered two and three wheel vehicles in India and for
distribution from the Hero manufacturing facilities worldwide.
The Nova Business Plan details a number of electric powered vehicles built as
proto-type working models at the Las Vegas facility and it is the intent of Nova
to work closely with their strategic partner, NuPow'r LLC to continue to develop
a wide variety of commercially viable vehicles and products there.
Nova will also work closely with their other strategic partner, Nu Age Electric
Inc., who has developed the agreements with Hero Cycles for manufacturing and
sales capabilities but also with other additional sales distributorships for
these electric powered products in Brazil, Mexico, Chile, Germany, Italy, the
Caribbean, Canada, the USA and other locations.
In addition, Nova is currently in discussions with another potential strategic
partner, Turbine Electric Power Inc. who is developing a hydrogen gas burning
turbine generator which will provide continuous power to the lithium-ion
batteries used in all Nova electric powered vehicles. This turbine adaptation to
the Nova electric powered vehicles will preclude the necessity of having to plug
the vehicles in causing significant wasted recharge time.
The hydrogen used to power the turbine will be released from water on board the
vehicles under a very low psi (23 to 28 psi) and allow the driver to travel the
same distance as a gasoline engine powered vehicles but for a cost equivalent of
only $.27 per gallon of gasoline with no emissions, no spark plugs, no oil
changes, no filters, no tune-ups and no environmental damage. The capability as
to speed, torque and distance will be equivalent to a standard fossil fuel
burning vehicle.
3
Nova and Turbine Electric Power Inc. are also in discussions to develop, through
a joint venture, electric powered watercraft. Since the Nova lithium-ion battery
based electric propulsion system will be complimentary to the turbine technology
burning hydrogen as a fuel from water to power the batteries and the electric
motors, this joint project will be a significant compliment for each company and
an exceptional commercial venture for the partnership.
The turbine company also has rights to the newest high tech water pump for
greater water thrust power using less energy than any other water pump on the
market today thus giving greater capability to this joint venture for these
water products.
These silent running, and non polluting water craft can now be reintroduced back
to the large national park recreation lakes, rivers and coastal areas which are
currently being restricted on an increasing basis throughout the USA and
environmental conscious countries worldwide.
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
- ----------------------------------------------
The Company has incurred operating losses since its inception related primarily
to development general administration costs. During the three months ended
September 30, 2004, the Company posted a loss of $7,555 compared to a loss of
$996 for the three months ended September 30, 2003.
The Company's main focus during the three months ended September 30, 2004 has
been continued development of the marketing rights acquired from Nova Electric
Systems Inc.
GENERAL & ADMINISTRATIVE EXPENSES
- ---------------------------------
General and administrative expenses increased to $7,555 during the three months
ended September 30, 2004, compared to $996 for the three months ended September
30, 2003. The increase in 2004 is due to the beginning of increased operations
within the Company.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Since inception, the Company has financed its operations from private financing.
The company has suffered recurring losses from operations and has a working
capital deficiency of $30,466 (current assets less current liabilities).
FINANCING
- ---------
The Company's capital requirements have not been significant in the past but the
Company anticipates it will increase as development and product launch begins.
CASH REQUIREMENTS AND NEED FOR ADDITIONAL FUNDS
To date, the Company has invested approximately $21,000 paid in stock in
acquiring the marketing rights of its product.
In order to develop the Company's marketing strategy and launch its product, the
Company anticipates it will require approximately $100,000 in the coming year.
These funds could be provided through additional financing.
ITEM 3. CONTROLS AND PROCEDURES
The registrant's Principal executive officers and principal financial officer,
based on their evaluation of the registrant's disclosure controls and procedures
(as defined in Rules 13a-14 (c) of the Securities Exchange Act of 1934) as of
September 30, 2004 have concluded that the registrants' disclosure controls and
procedures are adequate and effective to ensure that material information
relating to the registrants and their consolidated subsidiaries is recorded,
processed, summarized and reported within the time periods specified by the
SEC's rules and forms, particularly during the period in which this quarterly
report has been prepared.
4
The registrants' principal executive officers and principal financial officer
have concluded that there were no significant changes in the registrants'
internal controls or in other factors that could significantly affect these
controls subsequent to September 30, 2004 the date of their most recent
evaluation of such controls, and that there was no significant deficiencies or
material weaknesses in the registrant's internal controls.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended September 30, 2004, the Company issued the
following unregistered securities:
The Company issued 502,000 common shares for consulting services valued by the
Board of Directors at $0.20 per share. The shares were issued under Section 4(2)
of the Securities Act of 1933 as amended, and/or Regulation S and bear a Rule
144 restrictive legend.
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
3.1.1(1) Articles of Incorporation dated June 5, 1998
3.1.2(1) Articles of Amendment dated August 31, 1999
3.1.3 (2) Articles of Amendment dated June 4, 2004
3.2(1) Bylaws
31.1 Section 302 Certification
32.1 Section 906 Certification of CEO
32.2 Section 906 Certification of CFO
- ------------------------------------
(1) Previously filed as an exhibit to the Company's Form 10-SB as filed on
January 6, 2003
(2) Previously filed as an exhibit to the Company's Form 10-KSB as filed on
October 15, 2004
(b) Reports on Form 8-K filed during the three months ended September 30,
2004.
No Current Reports on Form 8-K were filed during the three months ended
September 30, 2004
5
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.
Date: November 15, 2004 ARMOR ELECTRIC INC.
/S/ MERRILL MOSES
------------------------------------
Merrill Moses
President