UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ____ to _____ Commission file no. 333-33890 POWER SAVE INTERNATIONAL, INC. ------------------------------------------------------- (Name of Registrant as specified in its charter) Nevada 333-33890 88-0227424 - ------------------------------- ----------------- -------------------- (State or other jurisdiction of (Commission File No.) (IRS Employer incorporation or organization) Identification No.) 5800 NW 64 Avenue, Bldg. 26, #109, Tamarac, FL 33319 (954)722-1615 ------------------------------------------------------- (Address and Telephone Number of Principal Executive Offices) Check whether the issuer has (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] 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 at October 22, 2004 - ---------------------------- --------------------------------- Common Stock $.001 Par Value 6,414,149 Item 1: Financial Statements POWER SAVE INTERNATIONAL, INC. TABLE OF CONTENTS PAGE(S) 3 ITEM 1. FINANACIAL STATEMENTS PAGE(S) 4 CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 2003 (UNAUDITED) PAGE(S) 5 CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (UNAUDITED) PAGE(S) 6-7 CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (UNAUDITED) PAGE(S) 8 NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2003 (UNAUDITED) PAGE(S) 9-11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION PAGE(S) 11 ITEM 3. CONTROLS AND PROCEDURES PAGE(S) 11 PART II- OTHER INFORMATION PAGE(S) 11 ITEM 1. LEGAL PROCEEDINGS PAGE(S) 11 ITEM 2. CHANGES IN SECURITIES PAGE(S) 11 ITEM 3. DEFAULTS UPON SENIOR SECURITIES PAGE(S) 11 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS PAGE(S) 11 ITEM 5. OTHER INFORMATION PAGE(S) 11 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits PAGE(S) CERTIFICATION 2 Item 1. Financial Statements As used herein, the term "Company" refers to Power Save International, Inc., a Nevada corporation, and predecessors unless otherwise indicated. Unaudited, condensed interim financial statements including a balance sheet for the Company as of the quarter ended September 30, 2003 and statements of operations, and statements of cash flows for the interim period up to the date of such balance sheet and the comparable period of the preceding year are attached hereto and are incorporated herein by this reference. BASIS OF PRESENTATION The accompanying unaudited financial statements are presented in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions for Form 10-QSB and Item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements for the years ended December 31, 2002. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading have been included. Operating results for the quarter ended September 30, 2003 are not necessarily indicative of results that may be expected for the year ended December 31, 2003. The financial statements are presented on the accrual basis. 3 POWER SAVE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED BALANCE SHEET SEPTEMBER 30, 2003 (UNAUDITED) ASSETS ------ CURRENT ASSETS $ -- ----------- TOTAL ASSETS $ -- =========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ---------------------------------------------- CURRENT LIABILITIES Accounts Payable $ 8,668 ----------- Total Current Liabilities 8,668 STOCKHOLDERS' EQUITY (DEFICIT) Preferred stock; 50,000,000 shares authorized; $.001 Par Value; 296,300 shares issued and outstanding at September 30, 2003 296 Capital stock, $.001 Par Value; 50,000,000 shares authorized; 6,414,149 shares issued and outstanding at September 30, 2003 6,414 Additional paid-in capital 1,868,503 Deficit accumulated during the development stage (1,883,881) ----------- Total Stockholders' Deficit (8,668) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -- =========== See accompanying notes to the unaudited condensed financial statements 4 POWER SAVE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) ---------------------------------------------- For the For the For the For the Three Three Nine Nine Months Months Months Months Inception Ended Ended Ended Ended through September September September September September 30, 2003 30, 2002 30, 2003 30, 2002 30, 2003 ----------- ----------- ----------- ----------- ----------- NET SALES $ -- $ -- $ -- $ -- $ 591,656 COST OF SALES -- -- -- -- 352,207 ----------- ----------- ----------- ----------- ----------- GROSS MARGIN -- -- -- -- 239,449 ----------- ----------- ----------- ----------- ----------- EXPENSES Research and Development -- -- -- -- 119,554 Reserve Against Product Rights -- -- -- -- 244,000 Depreciation and Amortization 250 162 750 412 550,510 General and Administrative Expenses 13,077 10,817 38,494 37,673 959,803 ----------- ----------- ----------- ----------- ----------- TOTAL OPERATING EXPENSES 13,327 10,979 39,244 38,085 1,873,867 ----------- ----------- ----------- ----------- ----------- NET LOSS FROM OPERATIONS (13,327) (10,979) (39,244) (38,085) (1,634,418) ----------- ----------- ----------- ----------- ----------- OTHER INCOME (EXPENSE) Gain(loss) on Sale of Marketable Securities (5,497) -- (9,832) -- 167,206 Write down of Marketable Securities -- -- -- -- (364,326) Nonrefundable Option Income -- -- -- -- 23,000 Interest Expense (450) (174) (950) (879) (115,134) Dividend and Interest Income 26 58 34 483 13,004 Other Income 1,684 -- 1,684 -- 1,684 Forgiveness of Debt 25,103 -- 25,103 -- 25,103 ----------- ----------- ----------- ----------- ----------- TOTAL OTHER INCOME (LOSS) 20,866 (116) 16,039 (396) (249,463) ----------- ----------- ----------- ----------- ----------- NET INCOME (LOSS) BEFORE INCOME TAXES 7,539 (11,095) (23,205) (38,481) (1,883,881) PROVISION FOR INCOME TAXES -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 7,539 $ (11,095) $ (23,205) $ (38,481) $(1,883,881) ----------- ----------- ----------- ----------- ----------- EARNINGS (LOSS) PER SHARE $ -- $ -- $ -- $ (0.01) $ (0.29) ----------- ----------- ----------- ----------- ----------- WEIGHTED AVERAGE SHARES OUTSTANDING 6,414,149 6,414,149 6,414,149 6,414,149 6,414,149 =========== =========== =========== =========== =========== See accompanying notes to the unaudited condensed financial statements. 5 POWER SAVE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ---------------------------------------------- For the Nine For the Nine Inception Months Ended Months Ended Through September September September 30, 2003 30, 2002 30, 2003 ------------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (23,205) $ (38,481) $(1,883,881) Adjustments to reconcile net loss from net cash used in operating activities: Depreciation and amortization 750 412 550,510 Common Stock Issued for Lease -- -- 225,000 (Gain) Loss on Sale of Securities 9,832 -- (167,206) Write down of Marketable Securities -- (9,751) 364,326 Contributed Interest -- -- 70,018 Contributed Rent and Officer Compensation -- 18,000 110,000 Reserve against Assets and Liabilities -- -- 244,000 Changes in Assets and Liabilities: (Increase) Decrease in Other Assets -- 4,127 -- Increase (Decrease) in Accounts Payable 3,923 (3,615) 8,669 Increase (Decrease) in Accrued Interest (8,708) -- 32,382 Increase (Decrease) in Advances from Shareholder 12,645 (11,312) (19,736) ----------- ----------- ----------- Net Cash Used By Operating Activities (4,763) (40,620) (465,918) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Product Rights, Development Costs and Intangibles -- -- (244,000) Purchase of Fixed Assets -- (2,250) (15,478) Increase in Organization Costs -- -- (36,408) Purchase of Marketable Securities -- (13,099) (20,056) Proceeds from Sale of Marketable Securities 182 -- 404,266 ----------- ----------- ----------- Net Cash Provided (Used) By Investing Activities 182 (15,349) 88,324 ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Issuance of Common Stock, net -- -- 366,050 Contributed Capital -- -- 11,544 ----------- ----------- ----------- Net Cash Provided By Financing Activities -- -- 377,594 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH (4,581) (55,969) -- CASH - BEGINNING OF PERIOD 4,581 68,532 -- ----------- ----------- ----------- CASH - END OF PERIOD $ -- $ 12,563 $ -- =========== =========== =========== See accompanying notes to the unaudited condensed financial statements. 6 POWER SAVE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ---------------------------------------------- For the Nine For the Nine Inception Months Ended Months Ended Through September September September 30, 2003 30, 2002 30, 2003 -------------- ------------- --------- SUPPLEMENTAL CASH FLOW INFORMATION: Stock Issued In Exchange for Goods and Services and Marketable Securities $ -- $ -- $601,002 ============== ============ ======== Stock Issued In Exchange for License Fee $ -- $ -- $500,000 ============== ============ ======== Cash Paid for Interest $ 1,302 $ -- $ 1,302 ============== ============ ======== Cash Paid for Income Taxes $ -- $ -- $ -- ============== ============ ======== See accompanying notes to the unaudited condensed financial statements. 7 NOTE 1 BASIS OF PRESENTATION - ------ --------------------- The interim financial statements at September 30, 2003 and for the nine month and three month periods ended September 30, 2003 and 2002 are unaudited, but include all adjustments which the Company considers necessary for a fair presentation. The accompanying unaudited financial statements are for the interim periods and do not include all disclosures normally provided in annual financial statements, and should be read in conjunction with the Company's Form 10-KSB for the year ended December 31, 2002. The accompanying unaudited interim financial statements for the three month and nine month periods ended September 30, 2003 and 2002, are not necessarily indicative of the results which can be expected for the entire year. 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 DISPOSITION OF ASSETS - ------ --------------------- In August 2003, Scott Balmer, the majority shareholder accepted all the assets of the Company as settlement of all the debt owed him. This resulted in the Company recording forgiveness of debt in the amount of $25,103. NOTE 3 GOING CONCERN - ------ ------------- The Company's condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a net loss from operations of $13,327, and negative cash flows from operations of $4,763 for the nine months ended September 30, 2003, and negative working capital of $8,668, and a stockholders' deficit of $8,668 at September 30, 2003. These matters raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management believes that actions presently taken to expand its future operations and raise capital provide the opportunity for the Company to continue as a going concern. 8 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations The following discussion and analysis should be read in conjunction with our financial statements and the accompanying notes. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties in the forward-looking statements. These forward-looking statements may be impacted, either positively or negatively, by various factors. Our actual results may differ significantly from the results, expectations and plans discussed. This Report contains "forward looking statements" relating to our company's current expectations and beliefs. These include statements concerning operations, performance, financial condition, anticipated acquisitions and anticipated growth. Without limiting the generality of the foregoing, words such as "may", "will", "would", "expect", "believe", "anticipate", "intend", "could", "estimate", or "continue", or the negative or other variation thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties which are beyond our company's control. Should one or more of these risks or uncertainties materialize or should our company's underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements. General Management is formulating the basis for acquisitions to complete its previously announced business plan. Additional opportunities have arisen that may allow the Company to expand the scope of business operations and more readily allow it to acquire the capital it requires. No actual operations other than these have been performed and none are anticipated until 2005. Results of Operations There were no revenues for the three and nine months ended September 30, 2003 or the three and nine months ended September 30, 2002. General and administrative expenses increased for the three and nine months ended September 30, 2003 compared to the same periods in 2002. These expenses were $13,077 and $38,494 for the three and nine months ended September 30, 2003 and $10,817 and $37,673 for the same periods in 2002, respectively. The increase for the three months ended September 30, 2003 over the same period in 2002 came from an increase of $1,700 in rental expense and contract expenses of $1,905, these increases were partially offset by the reduction of $3,000 in officers compensation as Scott Balmer agreed to forego any further accruals as an officer. 9 For the three and nine months ended September 30, 2003 we recorded net income (loss) of $7,539 and $(23,205), respectively. This compares with a net loss $11,095 and $38,481 during the corresponding prior periods in 2002. The Company is still in the developmental stage and is expected to continue to have losses until operational businesses are introduced during fiscal year 2005. Liquidity During the three months ended September 30, 2003, the Company's working capital decreased. This was due to the removal of all assets in settlement of Scott Balmer's debt. The Company does not currently have sufficient capital in its accounts, nor sufficient firm commitments for capital to assure its ability to meet its current obligations or to continue its planned operations. The Company is continuing to pursue working capital and additional revenue through the active search for the capital it needs to carry on its planned operations. There is no assurance that any planned activities will be successful. Capital Resources As a result of its limited liquidity, the Company has limited access to additional capital resources. The Company does not have the capital to totally fund the obligations that have matured to any of its creditors and shareholders. Though the obtaining of the additional capital is not guaranteed, the management of the Company believes it will be able to obtain the capital required to meet its current obligations and actively pursue its planned business activities through the sale of its registered securities. Operations The operations of the Company are currently dormant. Until the Company obtains the capital required to develop any properties or businesses and obtains the revenues needed from its future operations in order to meet its obligations, the Company will be dependent upon sources other than operating revenues to meet its operating and capital needs. Item 3. Controls and Procedures Based on an evaluation by Mr. Smith, the chief financial officer of the company, conducted as of a date within 90 days of the filing date of this quarterly report, of the effectiveness of the company's disclosure controls and procedures it has been concluded that, as of the evaluation date, (i) there were no significant deficiencies or material weaknesses of the company's disclosure controls and procedures, (ii) there were no significant changes in the internal controls or in other factors that could significantly affect internal controls subsequent to the evaluation date, and (iii) no corrective actions were required to be taken. 10 The Company had no revenue during the first three quarters of 2003. The Company has been dormant in its operations and is currently pursuing business combinations or the required capital needed to have current operations. PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Change in Securities No changes in securities have occurred since the Company's last report as of June 30, 2003. Item 3. Defaults Upon Senior Securities. None Item 4. Submission of Matters to a Vote of Security Holders. None Item 5. Other information. None. Item 6. Exhibits and reports on Form 8-K. (a) Exhibits. ---------- 31.1 President and CFO certification Pursuant to 18 USC Section 1350, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 32.1 President and CFO certification pursuant to section 906 (b) Reports on From 8-K. -------------------- None 11 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Power Save International, Inc. /s/ Russell L. Smith - ----------------------- BY: Russell L. Smith, President, Chief Financial Officer and Director Dated: This 22nd day of October 2004 12