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, 2004
[ ] 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 November 15, 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 SHEET AS OF SEPTEMBER 30, 2004 (UNAUDITED)
PAGE(S) 5 CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)
PAGE(S) 6-7 CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)
PAGE(S) 8 NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF
SEPTEMBER 30, 2004 (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
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, 2004 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 year ended December 31, 2003. 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 nine months ended September 30, 2004 are not
necessarily indicative of results that may be expected for the year ended
December 31, 2004. The financial statements are presented on the accrual basis.
3
POWER SAVE INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
SEPTEMBER 30, 2004
(UNAUDITED)
ASSETS
CURRENT ASSETS $ --
-----------
TOTAL ASSETS $ --
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $ 92,207
-----------
Total Current Liabilities 92,207
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock; 50,000,000 shares authorized; $.001 Par Value; 296,300 shares
issued and outstanding at September 30, 2004 296
Capital stock, $.001 Par Value; 50,000,000 shares authorized; 6,414,149 shares issued and
outstanding at September 30, 2004 6,414
Additional paid-in capital 1,868,503
Deficit accumulated during the development stage (1,967,420)
-----------
Total Stockholders' Deficit (92,207)
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 nception
Ended Ended Ended Ended through
September September September September September
30, 2004 30, 2003 30, 2004 30, 2003 30, 2004
--------- --------- --------- --------- -----------
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 -- 750 550,510
General and Administrative Expenses 7,967 13,077 38,592 38,494 1,043,342
--------- --------- --------- --------- -----------
TOTAL OPERATING EXPENSES 7,967 13,327 38,592 39,244 1,957,406
--------- --------- --------- --------- -----------
NET LOSS FROM OPERATIONS (7,967) (13,327) (38,592) (39,244) (1,717,957)
--------- --------- --------- --------- -----------
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) -- (950) (115,134)
Dividend and Interest Income -- 26 -- 34 13,004
Other Income -- 1,684 -- 1,684 1,684
Forgiveness of Debt -- 25,103 -- 25,103 25,103
--------- --------- --------- --------- -----------
TOTAL OTHER LOSS -- 20,866 -- 16,039 (249,463)
--------- --------- --------- --------- -----------
NET LOSS BEFORE INCOME TAXES (7,967) 7,539 (38,591) (23,205) (1,967,420)
PROVISION FOR INCOME TAXES -- -- -- -- --
--------- --------- --------- --------- -----------
NET INCOME (LOSS) (7,967) $ 7,539 $ (38,591) $ (23,205) $(1,967,420)
--------- --------- --------- --------- -----------
BASIC AND DILUTED
LOSS PER SHARE -- $ -- $ -- $ -- $ (0.31)
--------- --------- --------- --------- -----------
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 For the
Nine Nie
Months Months Inception
Ended Ended Through
September September September
30, 2004 30, 2003 30, 2004
--------- --------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(38,592) $(23,205) (1,967,420)
Adjustments to reconcile net loss from net cash
used in operating activities:
Depreciation and amortization -- 750 550,510
Common Stock Issued for Lease -- -- 225,000
(Gain) Loss on Sale of Securities -- 9,832 (167,206)
Write down of Marketable Securities -- -- 364,326
Contributed Interest -- -- 70,018
Contributed Rent and Officer Compensation -- -- 110,000
Reserve against Assets and Liabilities -- -- 244,000
Changes in Assets and Liabilities:
Increase (Decrease) in Accounts Payable 38,592 3,923 91,551
Increase (Decrease) in Accrued Interest -- (8,708) 32,382
Increase (Decrease) in Advances from Shareholder -- 12,645 (19,079)
-------- -------- ----------
Net Cash Used By Operating Activities -- (4,763) (465,918)
-------- -------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Product Rights, Development Costs and Intangibles -- -- (244,000)
Purchase of Fixed Assets -- -- (15,478)
Increase in Organization Costs -- -- (36,408)
Purchase of Marketable Securities -- -- (20,056)
Proceeds from Sale of Marketable Securities -- 182 404,266
-------- -------- ----------
Net Cash Provided By Investing Activities -- 182 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) --
CASH - BEGINNING OF PERIOD -- 4,581 --
-------- -------- ----------
CASH - END OF PERIOD $ -- -- --
======== ======== ==========
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, 2004 30, 2003 30, 2004
--------------- -------------- ----------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Stock Issued In Exchange for Goods and Services and Marketable
Securities $ -- $ -- $ 601,200
=============== ============== ================
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
POWER SAVE INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 BASIS OF PRESENTATION
The interim financial statements at September 30, 2004 and for the nine
month and three month periods ended September 30, 2004 and 2003 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, 2003. The accompanying unaudited interim
financial statements for the three month and nine month periods ended
September 30, 2004 and 2003, 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 2004, 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 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 $38,592, and
negative working capital of $92,207, and a stockholders' deficit of
$92,207 at September 30, 2004. 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
9
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, 2004 or
the three and nine months ended September 30, 2003.
General and administrative expenses increased for the three and nine months
ended September 30, 2004 compared to the same periods in 2003. These expenses
were $7,967 and $38,592 for the three and nine months ended September 30, 2004
and $13,077 and $38,494 for the same periods in 2003, respectively. The decrease
for the three months ended September 30, 2004 over the same period in 2003 came
from a decrease in compensation of $8,000 and an increase in management fees of
$3,000.
9
10
For the three and nine months ended September 30, 2004 we recorded net income
(loss) (7,967) and $(38,592), respectively. This compares with net income (loss)
of $7,539 and $(23,205) during the corresponding prior periods in 2003. 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, 2004, the Company's working capital
decreased. This was due to the accrual of additional expenses and the lack of
any infusion of capital. 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 2004 and 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, 2004.
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.
---------
31.01 President and CFO certification Pursuant to 18 USC
Section 1350, as adopted pursuant to Section 302 of
Sarbanes-Oxley Act of 2003
32.01 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 15th day of November 2004
12