SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
(Filed on November 9, 2001)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
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OR
( ) 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 0-33135
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ZENITH TECHNOLOGY, INC.
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(exact name of small business issuer as specified in its charter)
Nevada 68-0448219
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
409 Center Street, Yuba City, CA 95991
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (530) 790-0246
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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 during the past 12 months (or for 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 X No
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As of September 30, 2001, 28,693,683 shares of Common Stock, $.0001 par value,
were outstanding.
INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheet
as of September 30, 2001 3
Statements of Operations for the
Three and Nine Months ended September 30, 2001 and 2000 4
Statements of Cash Flows for the
Nine Months ended September 30, 2001 and 2000 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and use of proceeds 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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Balance Sheet
Zenith Technology, Inc.
A Development Stage Enterprise
ASSETS 30-Sep-01
(unaudited)
Current Assets
Cash and cash equivalents $ --
Accounts receivable, net 14
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Total Current Assets 14
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TOTAL ASSETS $ 14
========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable
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Total Current Liabilities --
Due to Prime Companies, Inc. 10,496
Stockholders' Equity
Common Stock, $.0001 par value, 100,000,000 authorized
28,693,683 issued and outstanding 2,869
Additional paid-in capital 47,131
Accumulated Deficit (60,482)
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Total Stockholders' Deficit (10,482)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14
========
The accompanying notes are an integral part of these financial statements.
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Statements of Operations
Zenith Technology, Inc.
A Development Stage Enterprise
Three months Three months Nine months Nine months
ended ended ended ended
30-Sep-01 30-Sep-00 30-Sep-01 30-Sep-00
------------ ---------- ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Sales revenues $ 85 $ -- $ 85 $ --
Cost of sales 71 -- 71 --
------------ ---------- ------------ ------------
Gross profit 14 -- 14 --
Selling, general & administrative expenses 4,943 -- 4,943 --
------------ ---------- ------------ ------------
Loss from operations (4,929) -- (4,929) --
Interest income -- -- -- --
Interest expense -- -- -- --
------------ ---------- ------------ ------------
Loss before taxes and extraordinary item (4,929) -- (4,929) --
------------ ---------- ------------ ------------
Income taxes -- -- -- --
------------ ---------- ------------ ------------
Net loss $ (4,929) $ -- $ (4,929) $ --
============ ========== ============ ============
Basic & diluted per share information:
Net Loss $ (0.000) $ -- $ (0.000) $ --
============ ========== ============ ============
Weighted Average Shares, basic and diluted 28,693,683 28,693,683 28,693,683 28,693,683
============ ========== ============ ============
The accompanying notes are an integral part of these financial statements.
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Statements of Cash Flows
Zenith Technology, Inc.
A Development Stage Enterprise
Nine months ended Nine months ended
30-Sep-01 30-Sep-00
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(unaudited) (unaudited)
Cash Flows from Operating Activities
Net loss $ (4,929) $ --
Change in Accounts Receivable $ (14)
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Net Cash provided by (used in) operating activities (4,943) --
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Cash Flows from Investing Activities
Purchases of Property and Equipment -- --
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Net Cash used in investing activities -- --
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Cash Flows from Financing Activities
Advances from Parent Company 4,943 --
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Net Cash provided by financing activities 4,943 --
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS -- --
CASH AND CASH EQUIVALENTS, beginning of period $ -- $ --
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CASH AND CASH EQUIVALENTS, end of period $ -- $ --
========= =========
The accompanying notes are an integral part of these financial statements.
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Zenith Technology, Inc.
A Development Stage Enterprise
Notes to Financial Statements
1. FINANCIAL STATEMENTS
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The Company is a development stage company as defined in the Statement of
Financial Accounting Standards No. 7 and had no operations through June 30,
2001.
The balance sheet as of September 30, 2001, the related statements of operations
for the three and nine months ended September 30, 2001 and 2000, and cash flows
for the nine months ended September 30, 2001 and 2000 have been prepared by the
Company without audit. In the opinion of management, the financial statements
contain all adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position of Zenith Technology, Inc. as of September
30, 2001, the results of their operations for the three and nine months ended
September 30, 2001 and 2000, and their cash flows for the nine months ended
September 30, 2001 and 2000. The results of operations for the three and nine
months ended September 30, 2001 are not necessarily indicative of the results to
be expected for the entire fiscal year ending December 31, 2001.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the financial statements from inception through June
30, 2001 and the notes thereto included in the Company's Form 10SB12GA filed on
September 10, 2001.
The company adopted Statement of Financial Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" during the fourth quarter of
2001, which did not have an impact on the financial statements due to its
limited use of derivative instruments.
2. Subsequent Events
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On or about October 23, 2001 NevWest Securities Corporation filed NASD Form
15c211 with th e National Association of Securities Dealers, to initiate
quotations of the Company's common stock on the OTC Bulletin Board.
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Item 2. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
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Certain statements made herein or elsewhere by, or on behalf of, the Company
that are not historical facts are intended to be forward-looking statements
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are based on
assumptions about future events and are therefore inherently uncertain.
The Company cautions readers that the following important factors, among others,
could affect the Company's consolidated results:
1 Whether acquired businesses perform at pro forma levels used by management
in the valuation process and whether, and the rate at which, management is
able to increase the profitability of acquired businesses.
2. The ability of the Company to manage its growth in terms of implementing
internal controls and information gathering systems, and retaining or
attracting key personnel, among other things.
3. The amount and rate of growth in the Company's corporate general and
administrative expenses.
4. Changes in interest rates, which can increase or decrease the amount the
Company pays on borrowings.
5. Changes in government regulation, including tax rates and structures.
6. Changes in accounting policies and practices adopted voluntarily or
required to be adopted by generally accepted accounting principles.
The Company cautions readers that it assumes no obligation to update or publicly
release any revisions to forward-looking statements made herein or any other
forward-looking statements made by, or on behalf of, the Company.
Background
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Zenith Technology, Inc. (the "Company" or "Zenith") is a Nevada corporation
organized on December 2, 1998 to engage in the research and commercial
development of a flat plane antenna with applications in the telecommunications
industry. After extensive due diligence it was determined in 1999 that the
commercial development of the proposed antenna technology would not be
commercially viable. In June 2001 the Company became aware of a commercial
opportunity to offer "One Plus" voice long distance service to consumers
throughout the United States as a reseller utilizing the infrastructure of a
Competitive Local Exchange Carrier. The Company entered into a Reseller
Agreement with that carrier in June 2001 and received its first order for
services in July 2001.
Results of Operations
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During the three month period ended September 30, 2001, total sales revenue
increased to $85 from $-0- for the corresponding period of the prior year. The
increase in revenue is attributed to the initiation of operations in July 2001.
During the nine month period ended September 30, 2001, sales revenue decreased
to $85 from $-0- for the corresponding period of the prior year. The increase in
revenue is attributed to the initiation of operations in July 2001.
The gross margin as a percent of revenues was 16% for the three month period
ended September 30, 2001. There is no comparable figure for the corresponding
period of the prior year. The gross margin as a percent of revenues was 16% for
the nine month period ended September 30, 2001. There was no comparable figure
for the corresponding period of the prior year.
The Company's selling, general and administrative expenses for the three month
period ended September 30, 2001 increased to $4,943 from $-0- for the
corresponding period of the prior year. This increase is due primarily to legal
and accounting expenses related to the filing of our Form 10SB12G and Form
10SB12G/A. The Company's selling, general and administrative expenses for the
nine month period ended September 30, 2001 increased to $4,943 from $-0- for the
corresponding period of the prior year. This increase is due primarily to legal
and accounting expenses related to the filing of our Form 10SB12G and Form
10SB12G/A with the Securities and Exchange Commission.
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Interest expense for the three month periods ended September 30, 2001 and
September 30, 2000 was $-0-. Interest expense for the nine month periods ended
September 30, 2001 and September 30, 2000 was $-0-.
Interest income for the three month periods ended September 30, 2001 and
September 30, 2000 was $-0-. Interest income for the nine month periods ended
September 30, 2001 and September 30, 2000 was $-0-.
Income taxes for the three month periods ending September 30, 2001 and September
30, 2000 was $-0-. Income taxes for the nine month periods ending September 30,
2001 and September 30, 2000 was $-0-.
Liquidity and Capital Resources
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At September 30, 2001, the Company had cash of $-0- and working capital of $14.
The Company had cash of $-0- on September 30, 2000 and working capital of $-0-.
Cash used in operations was $4,929 for the nine months ended September 30, 2001
compared to cash used in operations of $-0- for the corresponding period of the
prior year. The cash used in operations was due primarily to legal and
accounting expenses related to the filing of our Form 10SB12G and Form
10SB12G/A.
Cash used in investing activities for the nine months ended September 30, 2001
was $-0- compared to cash used in investing activities of $-0- for the
corresponding period of the prior year.
Funds provided by financing activities for the nine months ended September 30,
2001 were $4,929 compared to funds provided by financing activities of $-0- for
the corresponding period of the prior year. The cash provided in 2001 was a
result of cash advances from our parent company.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
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See the Company's Form 10SB12G/A filed with the SEC on September 10, 2001.
Item 2. Changes in Securities and Use of Proceeds
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None
Item 3. Defaults Upon Senior Securities
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None
Item 4. Submission of Matters to Vote of Security Holders
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None
Item 5. Other Information
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None
Item 6. Exhibits and Reports on Form 8-K
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a) Exhibits
1) Articles of Incorporation, as amended.
2) By-Laws
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Signatures
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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.
ZENITH TECHNOLOGY, INC.
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(Registrant)
Date: November 9, 2001 By: /S/Norbert J. Lima
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Norbert J. Lima
Chief Executive Officer
Date: November 9, 2001 By: /S/Stephen Goodman
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Stephen Goodman
Chief Financial Officer
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