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, 2002.
[ ] 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
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(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:
The number of shares outstanding of the Company's common stock ($0.001
par value), as of May 20, 2002, was 1,369,500 shares.
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]
CONTENTS
PAGE
----
-- Unaudited Condensed Balance Sheets, March 31,
2002 and December 31, 2001 2
-- Unaudited Condensed Statements of Operations,
for the three months ended March 31, 2002 and
2001 and for the period from inception on
November 19, 1997 through March 31, 2002 3
-- Unaudited Condensed Statements of Cash Flows,
for the three months ended March 31, 2002 and
2001 and for the period from inception on
November 19, 1997 through March 31, 2002 4
-- Notes to Unaudited Condensed Financial Statements 5 - 9
-1-
5
TEQ-1 CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
2002 2001
___________ ___________
CURRENT ASSETS:
Cash in bank $ 24,257 $ 24,884
Accounts receivable, net of allowance for doubtful
accounts of $1,323 and $492, respectively 9,076 6,095
___________ ___________
Total Current Assets 33,333 30,979
OTHER ASSETS:
Deposits 144 328
___________ ___________
$ 33,477 $ 31,307
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 270 $ 706
Accrued expenses - related party 16,000 12,000
___________ ___________
Total Current Liabilities 16,270 12,706
___________ ___________
STOCKHOLDERS' EQUITY:
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, 1,369,500 shares issued and
outstanding 1,369 1,369
Capital in excess of par value 25,253 25,253
Deficit accumulated during the development stage (9,415) (8,021)
___________ ___________
Total Stockholders' Equity 17,207 18,601
___________ ___________
$ 33,477 $ 31,307
=========== ===========
Note: The balance sheet at December 31, 2001 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-
6
TEQ-1 CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three From Inception
Months Ended on November 19,
March 31, 1997 Through
_________________________ March 31,
2002 2001 2002
__________ __________ __________
REVENUE:
Sales, net of discounts and allowances $ 3,983 $ 336 $ 19,860
EXPENSES:
General and administrative 5,377 4,855 28,580
__________ __________ __________
LOSS FROM OPERATIONS (1,394) (4,519) (8,720)
OTHER EXPENSE:
Interest expense - (93) (695)
__________ __________ __________
LOSS BEFORE INCOME TAXES (1,394) (4,612) (9,415)
CURRENT INCOME TAXES - - -
DEFERRED INCOME TAXES - - -
__________ __________ __________
NET LOSS $ (1,394) $ (4,612) $ (9,415)
__________ __________ __________
LOSS PER SHARE $ (.00) $ (.00) $ (.01)
__________ __________ __________
The accompanying notes are an integral part of these
unaudited condensed financial statements.
-3-
7
TEQ-1 CORPORATION
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Three From Inception
Months Ended on November 19,
March 31, 1997 through,
_____________________ March 31,
2002 2001 2002
_________ _________ ___________
Cash Flows From Operating Activities:
Net loss $ (1,394) $ (4,612) $ (9,415)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Bad debt expense 831 - 1,323
Stock issued for services rendered - - 1,100
Changes in assets and liabilities:
(Increase) in accounts receivable (3,812) 334 (10,399)
(Increase) decrease in deposits 184 - (144)
Increase (decrease) in accounts payable (436) 1,100 270
Increase in accrued expenses - related party 4,000 3,693 16,080
_________ _________ ___________
Net Cash Provided (Used) by Operating Activities (627) 515 (1,185)
_________ _________ ___________
Cash Flows From Investing Activities - - -
_________ _________ ___________
Net Cash Provided (Used) by Investing Activities - - -
_________ _________ ___________
Cash Flows From Financing Activities:
Proceeds from notes payable - related party - - 3,635
Payments on notes payable - related party - - (3,715)
Proceeds from issuance of common stock - - 26,950
Payments for stock offering costs - - (1,428)
_________ _________ ___________
Net Cash Provided by Financing Activities - - 25,442
_________ _________ ___________
Net Increase (Decrease) in Cash (627) 515 24,257
Cash at Beginning of the Period 24,884 565 -
_________ _________ ___________
Cash at End of the Period $ 24,257 $ 1,080 $ 24,257
_________ _________ ___________
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, 2002:
On February 1, 2000, the Company extended $80 of unpaid accrued interest
owed a related party into a note payable to the related party.
On November 19, 1997, the Company issued 1,100,000 shares of its common
stock for services rendered valued at $1,100.
The accompanying notes are an integral part of these
unaudited condensed financial statements.
-4-
8
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 primary plan of
operations of the Company is providing electronic filing services 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 Statement of Financial Accounting Standards 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, 2002 and 2001 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 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, 2001 audited financial statements. The results of
operations for the periods ended March 31, 2002 and 2001 are not
necessarily indicative of the operating results for the full year.
Revenue Recognition - The Company recognizes revenue in the period when the
services are performed.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting for Income
Taxes".
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".
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 in the United
States of America 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.
-5-
9
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations", SFAS No. 142,
"Goodwill and Other Intangible Assets", SFAS No. 143, "Accounting for Asset
Retirement Obligations", and SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets", were recently issued. SFAS No. 141,
142, 143 and 144 have no current applicability to the Company or their
effect on the financial statements would not have been significant.
Reclassification - The financial statements for periods prior to March 31,
2002 have been reclassified to conform to the headings and classifications
used in the March 31, 2002 financial statements.
NOTE 2 - CAPITAL STOCK
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, 2002 and December 31, 2001.
Common Stock - The Company has authorized 20,000,000 shares of common
stock. On 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 valued at
$1,100 (or $.001 per share).
From July through December 2001, the Company made a private offering of
269,500 shares of its previously authorized but unissued common stock. The
shares were issued for cash of $26,950 (or $.10 per share). Stock offering
costs of $1,428 were offset against the proceeds in capital in excess of
par value.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". SFAS
No. 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, 2002, unused operating loss
carryforwards of approximately $9,400 which may be applied against future
taxable income and which expire in various years through 2022. 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 tax effect of
the loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax assets are
approximately $3,200 and $2,700 as of March 31, 2002 and December 31, 2001,
respectively, with an offsetting valuation allowance of the same amount,
resulting in a change in the valuation allowance of approximately $500
during the three months ended March 31, 2002.
-6-
10
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS
Notes Payable - The Company had two notes payable due to an
officer/shareholder of the Company. One note for $2,000 was due on demand.
The other note, for $1,715, was due February 1, 2002. Both notes accrued
interest at 10% per annum. On November 30, 2001, the Company repaid the
notes payable with accrued interest of $614.
Management Compensation - For the year ended December 31, 2000, the Company
did not pay any compensation to any officer/director of the Company. On
January 1, 2001, the Company entered into an employment agreement with an
officer/director/employee of the Company to pay $1,000 per month. On
February 1, 2002, the Company agreed to increase the salary to $1,500 per
month for one year. As of March 31, 2002, the Company has accrued $16,000
in unpaid salary. Salary expense for the three months ended March 31, 2002
and 2001 amounted to $4,000 and $3,000, respectively.
Office Space/Utilities - During the year ended December 31, 2000, 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. During the three months ended March 31, 2002
and 2001, the Company paid rent and utilities/miscellaneous expenses
totaling $300 and $300, respectively.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America,
which contemplate continuation of the Company as a going concern. However,
the Company has recently commenced operations and has incurred losses since
its inception, raising 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.
-7-
11
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
For the Three From Inception
Months Ended on November 19,
March 31, 1997 through,
_____________________ March 31,
2002 2001 2002
__________ __________ _____________
Loss from continuing operations
available to common shareholders
(numerator) $ (1,394) $ (4,612) $ (9,415)
__________ __________ _____________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 1,369,500 1,100,000 1,133,234
__________ __________ _____________
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all period presented that would affect the
computation of diluted loss per share.
NOTE 7 - COMMITMENTS AND AGREEMENTS
Employment Agreement - The Company has entered into an employment agreement
with its sole officer and director. The agreement provided for a $1,000
per month salary for a period of three years commencing January 1, 2001.
The salary was to accrue until the Company had achieved net income of
$50,000 at which time the Company would pay 50% of its net income before
tax towards reducing the accrued salary liability. On February 1, 2002,
the Company agreed to increase the salary to $1,500 per month for one year
and to pay the salary as funds are available. As of March 31, 2002, the
Company has accrued $16,000 in unpaid salary.
Rental/Utilities Agreement - The Company has entered into a
rental/utilities agreement with its sole officer and director. 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. During the three months ended March 31, 2002 and
2001, the Company paid rent and utilities/miscellaneous expenses totaling
$300 and $300, respectively.
-8-
12
TEQ-1 CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 8 - CONCENTRATION
During the three months ended March 31, 2002, a significant percentage of
the Company's total sales were made to four clients. The following table
lists the total sales made to clients that accounted for 10% or more of
total sales during the three months ended March 31, 2002:
Client A 34%
Client B 19%
Client C 12%
Client D 11%
The loss of these significant customers could adversely affect the
Company's business and financial condition.
-9-
13
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- ------------------------------------------------------------------------------
THREE MONTH PERIODS ENDED MARCH 31, 2002 AND 2001
AND FROM INCEPTION ON NOVEMBER 19, 1997 THROUGH MARCH 31, 2002
RESULTS OF OPERATIONS
TEQ-1 Corporation is a service company which provides 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"). We began this business in
December 2000.
The Company had $3,983 in revenues from operations for the three month
period ended March 31, 2002, $336 in revenues from operations for the three
month period ended March 31, 2001 and $19,860 in revenues from operations from
inception on November 19, 1997 through March 31, 2002. The Company incurred
$1,394 in net operating losses for the three month period ended March 31,
2002, as compared to $4,612 in net operating losses for the three month period
ended March 31, 2001 and $9,415 from inception on November 19, 1997 through
March 31, 2002.
The net operating loss for all periods resulted primarily from general
and administrative expenses and interest expense. The net loss per share for
each of the three month periods ended March 31, 2002 and 2001 was $0.00 per
share and from inception was $0.01.
General and administrative expenses for all periods ended consisted of
accrued salary for our employee, office expenses, outside services and
professional fees, and accounting and auditing costs. These expenses were
$5,377 for the three month period ended March 31, 2002, $4,855 for the three
month period ended March 31, 2001 and $28,580 from inception on November 19,
1997 through March 31, 2002.
Interest expense for the three month periods ended March 31, 2002 and
2001 and from inception on November 19, 1997 through March 31, 2002 was $0,
$93 and $695 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. In February 2000, our president loaned us $1,715 for a term of one
year at the interest rate of 10% per annum for various administrative
expenses. Further, in June 2000, our president loaned us $2,000 for a term of
one year at the interest rate of 10% for working capital. On November 30,
2001, we paid off the two loans including interest.
The accrued salary payable to Tammy Gehring, our president and sole
employee, was $16,000 at March 31, 2002. On January 1, 2001, we entered
into an Employment Agreement with Tammy Gehring, our sole
officer/director/employee, which provided for a $1,000 per month salary for
Ms. Gehring, which was terminated with a new Employment Agreement dated
February 1, 2002 entered into with Ms. Gehring to pay a salary of $1,500 per
month, payable Monthly. Ms. Gehring's salary will be paid as funds are
available. This February 1, 2002 Employment Agreement also entitles Ms.
Gehring to a bonus compensation, which may be awarded at our calendar year end
and will be based on, but not limited to, her performance and our income from
operations. Such bonus compensation, if awarded, will be treated as a salary
increment. In addition, all amounts owed to Ms. Gehring under her prior
employment agreement shall be due and payable upon request of Ms. Gehring and
shall continue to accrue in our books and records until paid in full.
14
Rent and utilities/miscellaneous expenses for the three month periods
ended March 31, 2002 and 2001, and from inception on November 19, 1997 through
March 31, 2002 were $600, $600 and $3,000 respectively.
As a result of the foregoing factors the Company realized a net losses of
$1,394 for the three month period ended March 31, 2002, $4,612 for the three
month period ended March 31, 2001 and $9,415 from inception on November 19,
1997 through March 31, 2002.
We emphasize that it is management's belief alone regarding the potential
market for our electronic filing services that serves as the basis for
pursuing this business. If we are wrong, then our revenues will likely
stagnate and our ability to grow and develop the business will be
substantially impaired. In these circumstances our operations will be limited
to what we can afford with limited revenue and resources, and it is unlikely
TEQ-1 Corporation will generate any meaningful value for its stockholders.
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.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2002, we had cash in the amount of $24,257. All cash held
by the Company at March 31, 2002 has come from two notes payable to the
Company's president Tammy Gehring, income from operations and the Company's
July 1, 2001 offering under Rule 506 of Regulation D.
For the three month period ended March 31, 2002, we had $3,983 in
revenues and a net loss of $1,394, as compared to $336 in revenues and a net
loss of $4,612 for the three month period ended March 31, 2001. We had
$19,860 in revenues and a net loss of $9,415 from inception on November 19,
1997 through March 31, 2002.
We have no plans or arrangements for raising additional capital for our
business and have no need to raise additional capital over the next 12 months
to fund our current operations. Nevertheless, we may explore the possibility
of obtaining outside financing if we believe we can use that financing to
substantially expand our operations. There is no assurance additional capital
will be available to us and on acceptable terms.
PLAN OF OPERATIONS
During December 2000, we turned to our new business plan of providing
electronic filing services. The Company provides 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").
15
On June 22, 2001, we authorized a private offering under Rule 506 of
Regulation D (the "Offering") to raise additional working capital for the
Company. The Company offered three hundred thousand (300,000) shares of its
$0.001 par value common stock at a price of $0.10 per share in the Offering
(the "Shares"). This Offering commenced July 1, 2001 and was to continue
through September 30, 2001. On September 30, 2001, we extended the Offering
through November 30, 2001, an additional sixty (60) days. Upon closing on
November 30, 2001, the Company sold 269,500 Shares under the Offering.
We may attempt to employ additional personnel if we are 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 we are successful in achieving a positive cash flow,
it is likely that we will consider expanding, which will also increase costs.
Management expects that the Company will continue generating small
amounts of revenue from the Company's current clients during the remaining
calendar quarters of 2002. As we attracts more clientele, revenues are
expected to increase.
PART II - OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS
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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.
- ------------------------------------------------------------------------------
ITEM 5. OTHER INFORMATION
- ------------------------------------------------------------------------------
Not Applicable
16
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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.
- ------------------------------------------------------------------------------
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 20, 2002 By: Tammy Gehring, President, Secretary
Treasurer, Director
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INDEX TO EXHIBITS
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SEC Ref Page
No. No. Description
- ------- ---- -----------
3.1(i) *1* Articles of Incorporation of the Company, filed with the
State of Nevada on November 19, 1997.
3.1(ii) *1* Bylaws of the Company.
5.1 *5* Opinion and consent of Gerald Einhorn, Esq., dated
December 14, 2001.
10.1 *2* Promissory Note dated February 1, 2000 executed by the
Company.
10.2 *2* Promissory Note dated June 1, 2000 executed by the
Company.
10.3 *3* Employment Agreement by and between the Company and Tammy
Gehring dated January 1, 2001.
10.4 *3* Rental/Utilities Agreement by and between the Company and
Tammy Gehring dated January 1, 2001.
10.5 *4* Rental/Utilities Agreement by and between the Company and
Tammy Gehring dated October 1, 2001.
10.6 *5* Employment Agreement by and between the Company and Tammy
Gehring dated February 1, 2002.
23.1 *5* Consent of Pritchett, Siler & Hardy, P.C., dated
March 8, 2002.
99.1 *4* Board of Directors resolution dated October 1, 2001,
authorizing termination of the Rental/Utilities Agreement
effective January 1, 2001.
*1* 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.
*2* 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.
*3* The listed exhibits are incorporated herein by this reference to the
Quarterly Report on Form 10-QSB for the quarter ended March 31, 2001,
filed by the Company with the Securities and Exchange Commission on May
14, 2001.
*4* The listed exhibits are incorporated herein by this reference to the
Quarterly Report on Form 10-QSB for the quarter ended September 30,
2001, filed by the Company with the Securities and Exchange Commission
on November 13, 2001.
*5* The listed exhibits are incorporated herein by this reference to the
Registration Statement on Form SB-2, filed by the Company with the
Securities and Exchange Commission on March 12, 2002.
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