UNITED STATES 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 quarterly period ended March 31, 2001.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from ______ to ______.
Separate
Commission File Number: 000-30577
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TEQ - 1 Corporation
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(Name of Small Business Issuer in its charter)
Nevada 87-0569747
--------------------------------- --------------------------
(State or Other Jurisdiction of (IRS Employer ID Number)
Incorporation or Organization)
8542 South Coachman Way, West Jordan, Utah 84088
-------------------------------------------------------------
(Address of Principal Executive Offices and Zip Code)
Issuer's telephone number: (801) 280-6984
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required to
be filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] 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:
As of May 1, 2001, there were 1,100,000 shares of common stock issued and
outstanding.
Total of Sequentially Numbered Pages: 26
Index to Exhibits on Page: 20
FORWARD-LOOKING STATEMENTS
Various forward-looking statements have been made in this Form 10-QSB.
Forward-looking statements may also be in the Company's other reports filed
under the Securities Exchange Act of 1934, in its press releases and in other
documents. In addition, from time to time, the Company, through its
management, may make oral forward-looking statements.
Forward-looking statements are only expectations, and involve known and
unknown risks and uncertainties, which may cause actual results in future
periods and other future events to differ materially from what is currently
anticipated. Certain statements in this Form 10-QSB, including those relating
to the Company's expected results, the accuracy of data relating to, and
anticipated levels of, its future inventory and gross margins, its anticipated
cash requirements and sources, are forward-looking statements. Such
statements involve risks and uncertainties, which may cause results to differ
materially from those set forth in these statements. Factors which may cause
actual results in future periods to differ from its current expectations
include, among other things, the continued availability of sufficient working
capital, the availability of adequate sources of capital, the successful
integration of new employees into existing operations, the continued
desirability and customer acceptance of existing and future services, possible
cancellations of orders, the success of competitive services, the success of
the Company's programs to strengthen its operational and accounting controls
and procedures. In addition to these factors, the economic and other factors
identified in this Form 10-QSB, including but not limited to the risk factors
discussed herein and in the Company's previously filed public documents could
affect the forward-looking statements contained in herein and therein.
Forward-looking statements generally refer to future plans and
performance, and are identified by the words "believe", "expect",
"anticipate", "optimistic", "intend", "aim", "will" or the negative thereof
and similar expressions. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of which
they are made. The Company undertakes no obligation to update publicly or
revise any forward-looking statements.
2
FORM 10-QSB
TEQ - 1 CORPORATION
TABLE OF CONTENTS
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PAGE
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION . . .14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . .17
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS . . . . . . . . . . .17
ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . .17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . .17
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . . . . . . .18
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
3
PART I - FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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In the opinion of management, the accompanying unaudited financial
statements included in this Form 10-QSB reflect all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation of the
results of operations for the periods presented. The results of operations
for the periods presented are not necessarily indicative of the results to be
expected for the full year.
[THIS SPACE INTENTIONALLY LEFT BLANK]
4
TEQ-1 CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2001
5
TEQ-1 CORPORATION
[A Development Stage Company]
CONTENTS
PAGE
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- - Unaudited Condensed Balance Sheets, March 31,
2001 and December 31, 2000 2
- - Unaudited Condensed Statements of Operations,
for the three months ended March 31, 2001 and
2000 and for the period from inception on November 19,
1997 through March 31, 2001 3
- - Unaudited Condensed Statements of Cash Flows,
for the three months ended March 31, 2001 and
2000 and for the period from inception on November 19,
1997 through March 31, 2001 4
- - Notes to Unaudited Condensed Financial Statements 5 - 8
6
TEQ-1 CORPORATION
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
March 31, December 31,
2001 2000
___________ ___________
CURRENT ASSETS:
Cash in bank $ 1,080 $ 565
Accounts receivable - 334
___________ ___________
Total Current Assets 1,080 899
___________ ___________
$ 1,080 $ 899
___________ ___________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 1,100 $ -
Accrued expenses - related party 3,967 274
Notes payable - related party 3,715 3,715
___________ ___________
Total Current Liabilities 8,782 3,989
___________ ___________
STOCKHOLDERS' (DEFICIT):
Preferred stock $.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding - -
Common stock, $.001 par value, 20,000,000
shares authorized, 1,100,000 shares issued
and outstanding 1,100 1,100
Capital in excess of par value - -
Deficit accumulated during the development stage (8,802) (4,190)
___________ ___________
Total Stockholders' (Deficit) (7,702) (3,090)
___________ ___________
$ 1,080 $ 899
___________ ___________
Note: The balance sheet at December 31, 2000 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-2-
7
TEQ-1 CORPORATION
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
For the Three From Inception
Months Ended on November 19,
March 31, 1997 Through
______________________ March 31,
2001 2000 2001
__________ __________ __________
REVENUE $ 336 $ - $ 670
__________ __________ __________
EXPENSES:
General and Administrative 1,255 105 5,425
Rent 300 - 300
Utilities 300 - 300
Salaries and Wages 3,000 - 3,000
__________ __________ __________
Total Expenses 4,855 105 9,025
__________ __________ __________
LOSS BEFORE OTHER
EXPENSES (4,519) (105) (8,355)
OTHER EXPENSES:
Interest Expense (93) (29) (447)
__________ __________ __________
LOSS BEFORE INCOME TAXES (4,612) (134) (8,802)
CURRENT INCOME TAXES - - -
DEFERRED INCOME TAXES - - -
__________ __________ __________
NET LOSS $ (4,612) $ (134) $ (8,802)
__________ __________ __________
LOSS PER SHARE $ (.00) $ (.00) $ (.01)
__________ __________ __________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-3-
8
TEQ-1 CORPORATION
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
For the Three From Inception
Months Ended on November 19,
March 31, 1997 through,
______________________ March 31,
2001 2000 2001
__________ __________ ____________
Cash Flows From Operating
Activities:
Net loss $ (4,612) $ (134) $ (8,802)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Stock issued for services rendered - - 1,100
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 334 - -
Increase (decrease) in interest payable - related party 93 29 447
Increase (decrease) in accounts payable 1,100 - 1,100
Increase (decrease) in accrued expenses 3,600 - 3,600
__________ __________ ____________
Net Cash (Used) by
Operating Activities 515 (105) (2,555)
__________ __________ ____________
Cash Flows From Investing
Activities
Net Cash (Used) by
Investing Activities - - -
__________ __________ ____________
Cash Flows From Financing
Activities:
Proceeds from notes payable - related party - 1,000 3,635
__________ __________ ____________
Net Cash Provided by
Financing Activities - 1,000 3,635
__________ __________ ____________
Net Increase in Cash 515 895 1,080
Cash at Beginning of the Period 565 - -
__________ __________ ____________
Cash at End of the Period $ 1,080 $ 895 $ 1,080
__________ __________ ____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the period from inception on November 19, 1997 through March 31, 2001:
The Company issued 1,100,000 shares of its common stock for services
valued at $1,100.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-4-
9
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - TEQ-1 Corporation (the Company) was organized under the laws
of the State of Nevada on November 19, 1997. The Company has recently
changed its business plan. The primary plan of operations of the Company
is providing electronic filing services for entities/individuals that need
to electronically file reports, registration statements, and other
documents with the Securities and Exchange Commission ("SEC") through the
SEC's electronic system - "Electronic Data Gathering Analysis and
Retrieval" or "EDGAR". The Company has not generated significant revenues
from its planned principal operations and is considered a development stage
company as defined in SFAS No.7. The Company has, at the present time, not
paid any dividends and any dividends that may be paid in the future will
depend upon the financial requirements of the Company and other relevant
factors.
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 of operations and cash
flows at March 31, 2001 and 2000 and for the periods then ended have been
made.
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
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 2000
audited financial statements. The results of operations for the periods
ended March 31, 2001 are not necessarily indicative of the operating
results for the full year.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share". [See Note 6]
Cash and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents.
Accounting 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, the disclosures of contingent assets and
liabilities at the date of the financial statements, and the reported
amount of revenues and expenses during the reported period. Actual results
could differ from those estimated.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 136, "Transfers of Assets to a not for profit
organization or charitable trust that raises or holds contributions for
others", SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - deferral of the effective date of FASB Statement No. 133 (an
amendment of FASB Statement No. 133)", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and Amendment of
SFAS No. 133", SFAS No. 139, "Recission of SFAS No. 53 and Amendment to
SFAS No. 63, 89 and 21", and SFAS No. 140, "Accounting to Transfer and
Servicing of Financial Assets and Extinguishment of Liabilities", were
recently issued. SFAS No. 136, 137, 138, 139 and 140 have no current
applicability to the Company or their effect on the financial statements
would not have been significant.
Revenue Recognition - The Company recognizes revenue in the period when the
services are performed.
-5-
10
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock - During November 19, 1997, in connection with its
organization, the Company issued 1,100,000 shares of its previously
authorized, but unissued common stock. The shares were issued for services
rendered at $1,100 (or $.001 per share).
Preferred stock - The Company has authorized 5,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares were issued and outstanding at March 31, 2001.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards.
The Company has available at March 31, 2001, unused operating loss
carryforwards of approximately $8,800 which may be applied against future
taxable income and which expire in various years from 2017 through 2021.
The amount of and ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part, upon the
tax laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards the
Company has established a valuation allowance equal to the amount of the
loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax assets are
approximately $3,000 and $1,400 as of March 31, 2001 and December 31, 2000,
respectively, with an offsetting valuation allowance at each period end of
the same amount resulting in a change in the valuation allowance of
approximately $1,600 during the three months ended March 31, 2001.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - For the years ended December 31, 2000 and 1999
the Company did not pay any compensation to any officer/director of the
Company. On January 1, 2001, the Company entered into a employment
agreement with an officer/director/employee of the Company to pay $1,000
per month. As of March 31, 2001, the Company has accrued $3,000 in salary
expense.
Office Space/Utilities - During the years ended December 31, 2000 and 1999,
the Company did not have a need to rent office space. On January 1, 2001,
the Company entered into a rental/utilities agreement with an
officer/director/employee of the Company allowing the Company to use office
space in her home for the operations of the Company at a base rent of $100
per month. The Company also agreed to pay the officer/director/employee of
the Company a base utilities/miscellaneous expense of $100 per month
designated for but not limited to heat, power, water, sewer, garbage
collection, recycling, phone, fax, Internet, computer, printer and any
other office items needed for the operations of the Company, not currently
being paid by the Company. As of March 31, 2001, the Company had accrued
$300 in rent expense and $300 in utilities/miscellaneous expense.
-6-
11
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS [CONTINUED]
Notes Payable - As of March 31, 2001, the Company has two notes payable due
to an officer/shareholder of the Company. One note for $2,000 is due June
1, 2001. The other note, for $1,715, was due February 1, 2001 but was
extended until February 1, 2002. Both notes accrue interest at 10% per
annum. Accrued interest on the notes payable amounted to $367 at March 31,
2001.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. However, the Company has incurred losses
since its inception and has not yet been successful in establishing
profitable operations. Further, the Company has liabilities in excess of
assets. These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard, management is
proposing to raise any necessary additional funds not provided by
operations through loans or through additional sales of its common stock.
There is no assurance that the Company will be successful in raising this
additional capital or achieving profitable operations. The financial
statements do not include any adjustments that might result from the
outcome of these uncertainties.
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
From Inception on
For the Three November 19,
Months Ended 1997 Through
March 31, March 31,
______________________ ________________
2001 2000 2001
__________ __________ ________________
Loss from continuing operations
available to common shareholders
(numerator) $ (4,612) $ (134) $ (8,802)
__________ __________ ________________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 1,100,000 1,100,000 1,100,000
__________ __________ ________________
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
-7-
12
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7 - COMMITMENTS AND AGREEMENTS
Employment Agreement - The Company has entered into an employment agreement
with its sole officer and director ("employee"). The agreement provides
for a $1,000 per month salary for a period of three years commencing
January 1, 2001. The salary shall accrue until the Company has achieved
net income of $50,000 at which time the Company will pay 50% of its net
income before tax towards reducing the accrued salary liability.
Rental/Utilities Agreement - The Company has entered into a
rental/utilities agreement with its sole officer and director ("landlord").
The agreement provides for payment of $100 per month for rent and $100 per
month for utilities and other incidentals on a month-to-month basis
starting January 1, 2001. The rent shall accrue until the Company has
achieved net income of $50,000 at which time the Company will pay 10% of
its net income before tax towards reducing the accrued rent liability. The
utilities portion shall accrue until the Company elects to make payment.
NOTE 8 - SIGNIFICANT CUSTOMERS
The Company has just recently commenced operations and all of the revenues
received by the Company are from a limited number of clients, the loss of
which could have a material impact on the operations of the Company.
-8-
13
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- ---------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
The Company remains in the development stage and, since inception, has
had $670 in revenues. At March 31, 2001, the Company had working capital of
($7,702) and cash in the amount of $1,080. All other cash held by the Company
to date has come from two notes payable to the Company's president, Tammy
Gehring. The first note payable is for $1,715 and the second note payable is
for $2,000. These notes are payable on February 1, 2002 and June 1, 2000
respectively, and accrue interest at 10% per annum and were executed to obtain
capital to pay the costs of becoming a reporting company under the Securities
Exchange Act of 1934 and general administrative expenses.
Management believes that the Company does not have sufficient cash to
meet its anticipated needs through the calendar year ending 2001. However,
management believes the Company has enough cash to meet its anticipated needs
through at least the second calendar quarter of 2001. In the event the
Company requires additional funds, the Company will have to seek loans or
equity placements to cover such cash needs. There is no assurance additional
capital will be available to the Company on acceptable terms.
Further, the Company believes that by positioning itself as a publicly
traded and listed entity, it will secure a more appealing position in the view
of the investing public because of the theoretical increase in the liquidity
of an investment in the Company's securities. Additionally, management
believes that should the Company need additional capitalization, it would most
likely obtain capital from investors through private placements of the
Company's equity securities. Notwithstanding such an evaluation, the Company
is not presently aware of any specific interest from potential investors, nor
is management certain that such capital will be available or that the Company
will in fact be successful in securing additional capital. If or when the
Company can establish a positive cash flow for a period of time and therefore
can demonstrate to potential private investors that it can generate profits,
then this factor, combined with a publicly traded and listed status, is
expected to be utilized to market the Company as an attractive investment for
private placement purposes. Management prefers to pursue such a strategy
sometime during 2001. If the Company cannot succeed in implementing such a
strategy, then its chances for growth are substantially undermined. Without
additional capitalization the Company's ability to survive as a going concern
is substantially confined.
PLAN OF OPERATIONS
Recently, the Company turned to its new business plan of providing
electronic filing services. The Company will provide electronic filing
services for clients that need to electronically file reports, prospectuses,
registration statements, and other documents with the Securities and Exchange
Commission ("SEC") through the SEC's electronic system - Electronic Data
Gathering Analysis and Retrieval ("EDGAR").
14
During the calendar year ended December 31, 2000, the Company's only
employee did not receive any type of compensation. On January 1, 2001, the
Company entered into an Employment Agreement with Tammy Gehring, the Company's
sole officer/director/employee ("Employment Agreement"). Ms. Gehring shall
receive a salary in the amount of $1,000 per month for services related to the
electronic filings she prepares for the Company's clients and files
through the SEC's electronic filing system, EDGAR. As of the date of this
report, the Company had no funds available to pay this salary. The Company
and Ms. Gehring have agreed to accrue the monthly salary until the Company has
sufficient net income to pay the expense. A copy of the Employment Agreement
is attached as an exhibit and is incorporated herein by this reference. At
March 31, 2001, the Company had accrued $3,000 in salary expense.
Additionally, on January 1, 2001 the Company entered into a
Rental/Utilities Agreement with Tammy Gehring ("Rental/Utilities Agreement").
The Rental/Utilities Agreement allows the Company to use office space in the
home of Ms. Gehring for the operations of the Company at a base rent of $100
per month. The Company also agreed to pay a base utilities/miscellaneous
expense of $100 per month designated for but not limited to heat, power,
water, sewer, garbage collection, recycling, phone, fax, Internet, computer
use, printer use, and any other office items needed for the operations of the
Company, not currently being paid by the Company. The Company and Ms.
Gehring have agreed to accrue the monthly rent and utilities/miscellaneous
expenses until the Company has sufficient net income to pay the expenses. A
copy of the Rental/Utilities Agreement is attached as an exhibit and is
incorporated herein by this reference. At March 31, 2001, the Company had
accrued $300 in rent expense and $300 in utilities/miscellaneous expense. The
Company will continue to maintain operations at this location until management
believes that the Company's revenues and financial resources justify a move to
an alternative location. If such a move is required, the Company believes
that there is an adequate supply of office/warehouse/retail space in Salt
Lake County, Utah meeting the Company's anticipated needs for the foreseeable
future. Initially, the Company expects that it will lease rather than
purchase such property in order to allocate its resources specifically to its
operations. The Company does not own any property.
The Company is currently spending approximately $100 or less each month
on general operating expenses including but not limiting to office supplies,
postage and marketing. Management intends to keep costs to a minimum until
such time in its discretion it believes expansion would be reasonable.
Management expects that the Company will continue generating small
amounts of revenue during the next three calendar quarters of 2001 from the
Company's current clients. As the Company attracts more clientele, revenues
are expected to increase.
The Company may attempt to employ additional personnel if it is able to
generate sufficient revenues. However, there is no assurance that the
services of such persons will be available or that they can be obtained upon
terms favorable to the Company. If and when the Company is successful in
achieving a positive cash flow, it is likely that the Company will consider
expanding, which will also increase costs.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses as they may be incurred.
Irrespective of whether the Company's cash assets prove to be adequate
to meet the Company's operational needs, the Company might seek to compensate
providers of services by issuances of stock in lieu of cash.
15
RESULTS OF OPERATIONS
********************************************************************
THREE MONTH PERIODS ENDED MARCH 31, 2001 AND 2000
AND FROM INCEPTION ON NOVEMBER 19, 1997 THROUGH MARCH 31, 2001
(UNAUDITED)
********************************************************************
The Company had $336 revenues from operations for the three month period
ended March 31, 2001, $0 revenues from operations for the three month period
ended March 31, 2000 and $670 revenues from operations from inception on
November 19, 1997 through March 31, 2001.
General and administrative expenses for all periods ended consisted of
general corporate administration, legal and professional expenses, and
accounting and auditing costs. These expenses were $1,255 for the three month
period ended March 31, 2001, $105 for the three month period ended March 31,
2000 and $5,425 from inception on November 19, 1997 through March 31, 2001.
Rent and utilities/miscellaneous expenses for the three month periods
ended March 31, 2001 and 2000, and from inception on November 19, 1997 through
March 31, 2001 were $600, $0 and $600 respectively. These expenses are being
accrued on a monthly basis until such time the Company has sufficient net
income to pay the expenses.
Salaries and wages expense for the three month periods ended March 31,
2001 and 2000, and from inception on November 19, 1997 through March 31, 2001
were $3,000, $0 and $3,000 respectively. This expense is being accrued on a
monthly basis until such time the Company has sufficient net income to pay the
expense.
Interest expense for the three month periods ended March 31, 2001 and
2000 and from inception on November 19, 1997 through March 31, 2001 was $93,
$29 and $447 respectively. The Company's president has advanced $3,715 to the
Company through the date of this report. This amount is made up of two notes
payable, one for $1,715 and the other for $2,000. These notes are payable
within the next year and accrue interest at 10% per annum. Interest was
accrued on the two notes payable in the principal amount of $367 at March 31,
2001.
As a result of the foregoing factors, the Company realized a net loss of
$4,612 for the three month period ended March 31, 2001, $134 for the three
month period ended March 31, 2000 and $8,802 from inception on November 19,
1997 through March 31, 2001.
********************************************************************
CALENDAR YEARS ENDED DECEMBER 31, 2000 AND 1999
AND FROM INCEPTION ON NOVEMBER 19, 1997 THROUGH DECEMBER 31, 2000
(AUDITED)
********************************************************************
The Company had $334 in revenues for the calendar year ended December
31, 2000, $0 revenues for the calendar year ended December 31, 1999 and $334
in revenues from inception on November 19, 1997 through December 31, 2000.
The Company incurred $2,375 in net operating losses for the calendar year
ended December 31, 2000 as compared to $257 in net operating losses for the
calendar year ended December 31, 1999 and $4,190 from inception on November
19, 1997 through December 31, 2000.
16
The net operating loss for all periods resulted primarily from general
and administrative expenses and interest expense. The net loss per share for
each period was $0.00 per share.
General and administrative expenses for all periods ended consisted of
general corporate administration, legal and professional expenses, and
accounting and auditing costs. These expenses were $2,435 for the calendar
year ended December 31, 2000, $210 for the calendar year ended December 31,
1999 and $4,170 from inception on November 19, 1997 through December 31,
2000.
Interest expense for the calendar year ended December 31, 2000 and 1999
and from inception on November 19, 1997 through December 31, 2000 was $274,
$47, and $354 respectively. The Company's president has advanced $3,715 to
the Company through the date of this report. This amount is made up of two
notes payable, one for $1,715 and the other for $2,000. These notes are
payable within the next year and accrue interest at 10% per annum. Unpaid
accrued interest on the two notes amounted to $274 at December 31, 2000.
For the current fiscal year, the Company anticipates incurring a loss as
a result of legal and accounting expenses, expenses associated with
registration under the Securities Exchange Act of 1934, as amended, and
expenses associated with its new business plan, as described herein.
PART II - OTHER INFORMATION
- ---------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
- ---------------------------------------------------------------------------
The Company is not a party to any material pending legal proceedings,
and to the best of its knowledge, no such proceedings by or against the
Company have been threatened.
- ---------------------------------------------------------------------------
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
- ---------------------------------------------------------------------------
Not Applicable.
- ---------------------------------------------------------------------------
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ---------------------------------------------------------------------------
Not Applicable.
- ---------------------------------------------------------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ---------------------------------------------------------------------------
Not Applicable.
17
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ITEM 5. OTHER INFORMATION
- ---------------------------------------------------------------------------
During the calendar year ended December 31, 2000, the Company's only
employee did not receive any type of compensation. On January 1, 2001, the
Company entered into an Employment Agreement with Tammy Gehring, the Company's
sole officer/director/employee ("Employment Agreement"). Ms. Gehring shall
receive a salary in the amount of $1,000 per month for services related to the
electronic filings she prepares/converts for the Company's clients and files
through the U.S. Securities and Exchange Commissions electronic filing system,
EDGAR. As of the date of this report, the Company had no funds available to
pay this salary. The Company and Ms. Gehring have agreed to accrue the
monthly salary until the Company has sufficient net income to pay the expense.
A copy of the Employment Agreement is attached as an exhibit and is
incorporated herein by this reference. At March 31, 2001, the Company had
accrued $3,000 in salary expense.
Additionally, on January 1, 2001, the Company entered into a
Rental/Utilities Agreement with Tammy Gehring ("Rental/Utilities Agreement").
The Rental/Utilities Agreement allows the Company to use office space in the
home of Ms. Gehring for the operations of the Company at a base rent of $100
per month. The Company also agreed to pay a base utilities/miscellaneous
expense of $100 per month designated for but not limited to heat, power,
water, sewer, garbage collection, recycling, phone, fax, Internet, computer
use, printer use, and any other office items needed for the operations of the
Company, not currently being paid by the Company. The Company and Ms.
Gehring have agreed to accrue the monthly rent and utilities/miscellaneous
expenses until the Company has sufficient net income to pay the expenses. A
copy of the Rental/Utilities Agreement is attached as an exhibit and is
incorporated herein by this reference. At March 31, 2001, the Company had
accrued $300 in rent expense and $300 in utilities/miscellaneous expense.
- ---------------------------------------------------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ---------------------------------------------------------------------------
(a) Exhibits: Exhibits required to be attached by Item 601 of Regulation
S-B are listed in the Index to Exhibits of this Form 10-QSB, which is
incorporated herein by reference.
(b) Reports on Form 8-K: No reports on Form 8-K have been filed during the
last quarter of the period covered by this report.
18
- ---------------------------------------------------------------------------
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.
TEQ - 1 Corporation
/S/ TAMMY GEHRING
-----------------------------------
Date: May 14, 2001 By: Tammy Gehring, President, Secretary
Treasurer, Director
19
INDEX TO EXHIBITS
---------------------
SEC Ref Page
No. No. Description
- ------- ---- -----------
Ex-3(i) * Articles of Incorporation of the Company, filed with
the State of Nevada on November 19, 1997.
Ex-3(ii) * Bylaws of the Company.
Ex-10(i) ** Promissory Note dated February 1, 2000 executed by the
Company.
Ex-10(ii) ** Promissory Note dated June 1, 2000 executed by the
Company.
Ex-10(iii) 21 Employment Agreement by and between the Company and
Tammy Gehring dated January 1, 2001.
Ex-10(iv) 25 Rental/Utilities Agreement by and between the Company
and Tammy Gehring dated January 1, 2001.
** The listed exhibits are incorporated herein by this reference to
the Quarterly Report on Form 10-QSB for the quarter ended June 30,
2000, filed by the Company with the Securities and Exchange
Commission on August 11, 2000.
* The listed exhibits are incorporated herein by this reference to
the Registration Statement on Form 10-SB, filed by the Company
with the Securities and Exchange Commission on May 9, 2000.
20