UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2003
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 000-26067
NANOSCIENCE TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 87-0571300
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
253 Ontario #1, P.O. Box 3303, Park City, Utah 84060
(Address of principal executive offices)
(435) 649-5060
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
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.
Class Outstanding as of June 30, 2003
Common Stock, $.001 par value 17,658,750
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheets June 30, 2003 (unaudited) and September 30, 2002 4
Statements of Operations - three and nine months ended June 30, 2003
and 2002 and the period from inception on September 14, 1987
to June 30, 2003 (unaudited) 6
Statements in Changes in Stockholders' Equity (Deficit) - for the
period September 14, 1987 to June 30, 2003 (unaudited) 7
Statements of Cash Flows - nine months ended June 30, 2003 and 2002
and the period from inception on September 14, 1987 to June 30,
2003 (unaudited) 9
Notes to Financial Statements 11
Item 2. Management's Discussion and Analysis and Results of Operations 12
Item 3. Controls and Procedures 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Securities Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 14
<page> 2
PART I
Item 1. Financial Statements
The accompanying balance sheet of Nanoscience Technologies, Inc. at
June 30, 2003, related statements of operations, changes in stockholders'
equity (deficit) and cash flows for the three and nine months ended June 30,
2003 and 2002 and the period September 14, 1987 (date of inception) to June
30, 2003, have been prepared by management in conformity with accounting
principles generally accepted in the United States of America. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature. Operating
results for the period ended June 30, 2003, are not necessarily indicative
of the results that can be expected for the fiscal year ending September 30,
2003.
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 2003 and September 30, 2002
<page> 3
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Balance Sheets
<table>
ASSETS
------
June 30, September 30,
2003 2002
---------- ----------
(Unaudited)
CURRENT ASSETS
<s> <c> <c>
Cash $ 250 $ 250
---------- ----------
Total Current Assets 250 250
---------- ----------
TOTAL ASSETS $ 250 $ 250
========== ==========
The accompanying notes are an integral part of these financial statements.
</table>
<page> 4
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Balance Sheets (Continued)
<table>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
June 30, September 30,
2003 2002
---------- ----------
(Unaudited)
<s> <c> <c>
CURRENT LIABILITIES
Accounts payable $ 2,288 $ 446
Payable - related party 29,566 20,741
---------- ----------
Total Current Liabilities 31,854 21,187
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock at: $0.001 par value;
100,000,000 shares authorized
17,658,750 shares issued and outstanding 17,659 17,659
Additional paid-in capital 18,311 18,311
Deficit accumulated during the development stage (67,574) (56,907)
---------- ----------
Total Stockholders' Equity (Deficit) (31,604) (20,937)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 250 $ 250
========== ==========
The accompanying notes are an integral part of these financial statements.
</table>
<page> 5
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<table>
From
For the For Inception of the
Three Months Nine Months Development Stage
Ended Ended on September 14,
June 30, June 30, 1987 Through
----------------------- ----------------------- June 30,
2003 2002 2003 2002 2003
---------- ---------- ---------- ---------- ----------
<s> <c> <c> <c> <c> <c>
REVENUES $ - $ - $ - $ - $ -
EXPENSES 992 764 8,917 7,134 (65,824)
---------- ---------- ---------- ---------- ----------
LOSS FROM OPERATIONS (992) (764) (8,917) (7,134) (65,824)
---------- ---------- ---------- ---------- ----------
OTHER EXPENSES
Interest expense (617) - (1,750) - (1,750)
---------- ---------- ---------- ---------- ----------
Total Other Expenses (617) - (1,750) - (1,750)
---------- ---------- ---------- ---------- ----------
NET LOSS $ (1,609) $ (764) $ (10,667) $ (7,134) $ (67,574)
========== ========== ========== ========== ==========
BASIC NET LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 17,658,750 17,408,750 17,658,750 17,408,750
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</table>
<page> 6
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
From Inception on September 14, 1987 through June 30, 2003
<table>
Common Stock Additional
------------------------ Paid-In Accumulated
Shares Amount Capital Deficit
---------- ---------- ---------- ----------
<s> <c> <c> <c> <c>
Balance at inception of the
development stage on
September 14, 1987 - $ - $ - $ -
Common stock issued to
directors, for services , on
September 17, 1987 at
$0.008 per share 3,750,000 3,750 26,250 -
Common stock issued for
cash on September 17, 1987
at $0.008 per share 27,500 28 192 -
Common stock issued for
cash on January 12, 1988
at $0.008 per share 6,250 6 44 -
Common stock issued to
a director, for cash, on
October 10, 1997 at $0.0004
per share 12,500,000 12,500 (7,500) -
Common stock issued to
directors, for services, on
November 12, 1997 at $0.0004
per share 1,125,000 1,125 (675) -
Net loss for the period from
inception on September 14, 1987
to September 30, 1999 - - - (37,470)
---------- ---------- ---------- ----------
Balance, September 30,
1999 17,408,750 17,409 18,311 (37,470)
Net Loss for the year ended
September 30, 2000 - - - (3,200)
---------- ---------- ---------- ----------
Balance, September 30,
2000 17,408,750 $ 17,409 $ 18,311 $ (40,670)
---------- ---------- ---------- ----------
The accompanying notes are an integral part of these financial statements.
</table>
<page> 7
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
From Inception on September 14, 1987 through June 30, 2003
<table>
Common Stock Additional
------------------------ Paid-In Accumulated
Shares Amount Capital Deficit
---------- ---------- ---------- ----------
<s> <c> <c> <c> <c>
Balance, September 30,
2000 17,408,750 $ 17,409 $ 18,311 $ (40,670)
Net loss for the year ended
September 30, 2001 - - - (7,097)
---------- ---------- ---------- ----------
Balance, September 30,
2001 17,408,750 17,409 18,311 (47,767)
Common stock issued for
cash on October 2, 2001
at $0.001 per share 250,000 250 - -
Net loss for the year
ended September 30, 2002 - - - (9,140)
---------- ---------- ---------- ----------
Balance September 30,
2002 17,658,750 17,659 18,311 (56,907)
Net loss for the nine
months ended June 30,
2003 (Unaudited) - - - (10,667)
---------- ---------- ---------- ----------
Balance June 30,
2003 (Unaudited) 17,658,750 $ 17,659 $ 18,311 $ (67,574)
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</table>
<page> 8
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<table>
From
Inception of the
Development Stage
For the Nine Months ended on September 14,
June 30, 1987 Through
------------------------ June 30,
2003 2002 2003
---------- ---------- ----------
<s> <c> <c> <c>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income loss $ (10,667) $ (7,134) $ (67,574)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Stock issued for services - - 30,450
Changes in assets and
liabilities:
Increase (decrease) in accounts
payable 1,842 (1,321) 2,288
Increase in payable-related
party 8,825 8,455 29,566
---------- ---------- ----------
Net Cash Used in
Operating Activities - - (5,270)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock
for cash - - 5,520
---------- ---------- ----------
Net Cash Provided by
Financing Activities - - 5,520
---------- ---------- ----------
NET INCREASE IN CASH - - 250
CASH AT BEGINNING OF PERIOD 250 - -
---------- ---------- ----------
CASH AT END OF PERIOD $ 250 $ - $ 250
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</table>
<page> 9
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Statements of Cash Flows (continued)
(Unaudited)
<table>
From
Inception of the
Development Stage
For the Nine Months ended on September 14,
June 30, 1987 Through
------------------------ June 30,
2003 2002 2003
---------- ---------- ----------
<s> <c> <c> <c>
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ - $ - $ -
Income Taxes $ - $ - $ -
NON CASH FINANCING ACTIVITIES
Common stock issued for services $ - $ - $ 30,450
The accompanying notes are an integral part of these financial statements.
</table>
<page> 10
NANOSCIENCE TECHNOLOGIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2003 and September 30, 2002
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to
present fairly the financial position, results and cash flows at June
30, 2003 and 2002 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have
been condensed or omitted. It is suggested that these condensed
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31,
2002 audited financial statements. The results of operations for the
periods ended June 30, 2003 and 2002 are not necessarily indicative
of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting
principles generally accepted in the United States of America
applicable to a going concern which contemplates the realization of
assets and liquidation of liabilities in the normal course of
business. The Company has not yet established an ongoing source of
revenues sufficient to cover its operating costs and allow it to
continue as a going concern. The ability of the Company to continue
as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the
Company is unable to obtain adequate capital, it could be forced to
cease operations.
In order to continue as a going concern, the Company will need, among
other things, additional capital resources. Management's plans to
obtain such resources for the Company include (1) obtaining capital
from management and significant shareholders sufficient to meet its
minimal operating expenses, and (2) seeking out and completing a
merger with an existing operating company. However, management
cannot provide any assurances that the Company will be successful in
accomplishing any of its plans.
The ability of the Company to continue as a going concern is
dependent upon its ability to successfully accomplish the plans
described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The
accompanying financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going
concern.
<page> 11
Item 2. Management's Discussion and Analysis or Plan of Operations
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-QSB.
We are considered a development stage company and presently have only
nominal assets and capital and no significant operations or income. The costs
and expenses associated with the preparation and filing of our registration
statement in 1999 and subsequent quarterly and annual reports have been paid
for by a shareholder. It is anticipated that we will require only nominal
capital to maintain our corporate viability and necessary funds will most
likely be provided by our officers and directors in the immediate future.
However, unless we are able to facilitate an acquisition of or merger with an
operating business or to obtain significant outside financing, there is
substantial doubt about our ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on our operations until such time as we successfully complete
an acquisition or merger. At that time, management will evaluate the possible
effects of inflation on our business and operations.
Plan of Operation
During the next 12 months, we intend to actively seek out and investigate
possible business opportunities for the purpose of possibly acquiring or
merging with one or more business ventures. We do not intend to limit our
search to any particular industry or type of business.
Because we lack funds, it may be necessary for our officers and directors
to either advance funds or to accrue expenses until such time as a successful
business consolidation can be made. Management intends to hold expenses to a
minimum and to obtain services on a contingency basis when possible. Further,
our directors will defer any compensation until such time as an acquisition or
merger can be accomplished and will strive to have the business opportunity
provide their remuneration. However, if we engage outside advisors or
consultants in its search for business opportunities, it may be necessary to
attempt to raise additional funds. As of the date hereof, we have not made
any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital.
In the event we need to raise capital, most likely the only method
available to us would be the private sale of our securities. Because we are a
development stage company, it is unlikely that we could make a public sale of
securities or be able to borrow any significant sum from either a commercial
or private lender. There can be no assurance that we will be able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on acceptable terms.
We do not intend to use any employees, with the possible exception of
part-time clerical assistance on an as-needed basis. Outside advisors or
consultants will be used only if they can be obtained for minimal cost or on a
deferred payment basis. Management is confident that it will be able to
operate in this manner and to continue its search for business opportunities
during the next twelve months. Management further believes that we will not
have to make any equipment purchases in the immediate future.
Forward-Looking and Cautionary Statements
<page> 12
This report contains certain forward-looking statements. These statements
relate to future events or our future performance and involve known and
unknown risks and uncertainties. Actual results may differ substantially from
such forward-looking statements, including, but not limited to, the following:
* our ability to search for an appropriate business opportunity and to
subsequently acquire or merge with such entity;
* to meet our cash and working capital needs;
* our ability to maintain our corporate existence as a viable entity;
and
* other risks detailed in our periodic report filings with the SEC.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will" "should," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue," or the negative
of these terms or other comparable terminology.
These statements are only predictions. Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements.
Item 3. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures. Based on their
evaluation, as of a date within 90 days prior to the date of the filing of
this Form 10-QSB, of the effectiveness of our disclosure controls and
procedures, as defined in Rules 13a-14(c) and 15d-14(c) of the Securities
Exchange Act of 1934, our principal executive officer and principal financial
officer have each concluded that such disclosure controls and procedures are
effective and sufficient to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act, is
recorded, processed, summarized and reported within the time periods specified
by the SEC's rules and forms.
Changes in Internal Controls. Subsequent to the date of their evaluation,
there have not been any significant changes in our internal controls or in
other factors that could significantly affect these controls, including any
corrective action with regard to significant deficiencies and material
weaknesses.
PART II
Item 1. Legal Proceedings
There are no material pending legal proceedings to which we are a party or
to which any of our property is subject and, to the best of our knowledge, no
such actions against us are contemplated or threatened.
Item 2. Changes In Securities and Use of Proceeds
This Item is not applicable.
Item 3. Defaults Upon Senior Securities
<page> 13
This Item is not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
This Item is not applicable.
Item 5. Other Information
This Item is not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 31.1 Certification of C.E.O. Pursuant to Section 302 of
the Sarbanses-Oxley Act of 2002.
Exhibit 31.2 Certification of Principal Accounting Officer Pursuant
to Section 302 of the Sarbanses-Oxley Act of 2002.
Exhibit 32.1 Certification of C.E.O. Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
Exhibit 32.2 Certification of Principal Accounting Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the three
month period ended June 30, 2003.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NANOSCIENCE TECHNOLOGIES, INC.
Date: August 14, 2003 By: /S/ J. ROCKWELL SMITH
J. Rockwell Smith
President, C.E.O. and Director
Date: August 14, 2003 By: /S/ JIM RUZICKA
Jim Ruzicka
Secretary/Treasurer, and Director
(Principal Accounting Officer)
<page> 14