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 June 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 Small Business Issuer in its Charter) Nevada 88-0227424 ------------------------------- ------------------------------------ (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 5800 NW 64 Avenue, Bldg. 26, #109, Tamarac, FL 33319 ------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (954)722-1615 -------------- (Issuer's Telephone Number, Including Area Code) Check whether the issuer: (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: As of August 18, 2003, 6,414,149 shares of common stock were outstanding. Transitional Small Business Disclosure Format (Check one): Yes( ) No (X) 2 POWER SAVE INTERNATIONAL, INC. TABLE OF CONTENTS PART I - FINANCIAL INFORMATION PAGE ------- Item 1. Financial Statements Condensed Balance Sheets June 30, 2003 and December 31, 2002 F-1 Condensed Statements of Operations and Comprehensive Income for the Six and Three Months Ended June 30, 2003 and 2002 and Inception through June 30, 2003. F-2 Condensed Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2002 and Inception through June 30, 2003. F-3 Notes to Condensed Financial Statements F-4 Item 2. Management's Discussion and Analysis or Plan of Operation 4 Item 3. Controls and Procedures 4 PART II- OTHER INFORMATION Item 1. Legal Proceedings 5 Item 2. Changes in Securities and Use of Proceeds 5 Item 3 Defaults upon Senior Securities 5 Item 6. Exhibits and Reports on Form 8-K 5 Certification 6 3 PART I - FINANCIAL INFORMATION 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 June 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 as Pages F-1 through F-5 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 and December 31, 2001. 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 June 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. 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 June 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 as Pages 4 through 8 and are incorporated herein by this reference. 4 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations LIQUIDITY During the three months ended June 30, 2003, the Company's working capital decreased. This was due to administrative and financing costs incurred as carrying costs of the Company's assets and to maintain its operations. 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 seeking of the capital it needs to carry on its planned operations. There is no assurance that any of the 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 vendors and shareholders. The shareholders have agreed to roll over any existing loans until the company has stronger liquidity. The Company has received additional capital through the expansion of vendor financing and loans from its directors and shareholders during previous quarters and expects such financing will be its only source of capital in the near future. 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. OPERATIONS The previous operations of the Company are currently dormant. Until the Company obtains the capital required to developed any properties or businesses and obtains the revenues needed from its future operations to meet its obligations, the Company will be dependent upon sources other than operating revenues to meet its operating and capital needs. Operating revenues may never satisfy these needs. Until the capital is obtained to enter into its planned operations discussed above, the Company will need additional capital. ITEM 3. CONTROLS AND PROCEDURES Based on the evaluation by Mr. Balmer, the chief financial officer of the company, the effectiveness of the company's disclosure controls and procedures conducted as of a date within 90 days of the filing date of this quarterly report, Mr. Balmer 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 5 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. The Company had no revenue during the first two 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 2. Legal Proceedings None Item 2. Change of Securities No changes in securities have occurred since the Company's last report as of March 31, 2003. Item 3. Defaults Upon Senior Securities. No changes in securities have occurred since the Company's last report as of March 31, 2003. 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. ---------- Item 4 Instruments Defining the Rights of Security Holders - ------- --------------------------------------------------- 4.01 4 Specimen Stock Certificate Incorporated by reference* 31.01 31 CEO certification Pursuant to 18 USC Section 1350, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 This Filing 31.02 31 CFO certification Pursuant to 18 USC Section 1350, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 See 31.01 32.01 32 CEO Certification pursuant to section 906 This Filing 32.02 32 CFO Certification pursuant to Section 906 See 32.02 6 * Incorporated by reference from the Company's registration statement on form SB-2 filed with the Commission, SEC file no. 333-33890. (b) Reports on From 8-K. -------------------- None Signatures Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed in its behalf by the undersigned, thereunto duly authorized, on August 18, 2003. Power Save International, Inc. Registrant /s/ Scott Balmer - ------------------------------ Scott Balmer Director and CEO F-1 POWER SAVE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS JUNE 30, 2003 AND DECEMBER 31, 2002 ASSETS June 30, December 31, 2003 2002 ---------- ------------ Unaudited Audited CURRENT ASSETS: Cash $ 1,669 $ 4,581 Receivables, net - - Marketable securities-available-for-sale 235 11,451 Prepaid expenses - - ---------- ----------- Total Current Assets 1,904 16,032 ---------- ----------- PROPERTY, PLANT AND EQUIPMENT, NET, at cost 1,627 2,127 ---------- ----------- OTHER ASSETS Intangible assets, net of reserve of $244,000 - - ---------- ----------- Total Other Assets - - ---------- ----------- TOTAL ASSETS $ 3,531 $ 18,159 ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) CURRENT LIABILITIES: Accounts payable and accrued expenses $ 1,928 $ 4,746 Shareholder loans and accrued expenses 11,348 8,708 ---------- ----------- Total Current Liabilities 13,276 13,454 ---------- ----------- STOCKHOLDERS' EQUITY/(DEFICIT): Preferred stock; 50,000,000 shares authorized; $.001 par value; 296,300 shares issued and outstanding at June 30, 2003 and December 31, 2002 296 296 Capital stock, $.001 par value; 50,000,000 shares authorized; 6,414,149 shares issued and outstanding at June 30, 2003 and December 31, 2002 6,414 6,414 Additional paid-in capital 1,880,503 1,868,503 Deficit accumulated during the development stage(1,891,420) (1,860,676) Accumulated other comprehensive income (loss) (5,538) (9,832) ---------- ----------- Total Stockholders' Equity/(Deficit) (9,745) 4,705 ---------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)$ 3,531 $ 18,159 ========== =========== The accompanying notes are an integral part of these financial statements. F-2 POWER SAVE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS Six Months Six Months Three Months Three Months Inception Ended Ended Ended Ended Through June 30, June 30, June 30, June 30, June 30, 2003 2002 2003 2002 2003 ----------- ------------- ------------- ------------ ------------- Unaudited Unaudited Unaudited Unaudited Unaudited <s> <c> <c> <c> <c> <c> REVENUES $ - $ - $ - $ - $ 591,656 COST OF SALES - - - - 352,207 --------- ----------- ------------ ----------- ------------ Gross margin - - - - 239,449 --------- ----------- ------------ ----------- ------------ EXPENSES: Research and development costs - - - - 119,554 Depreciation and amortization 500 250 250 125 550,260 Reserve against product rights - - - - 244,000 General and administrative expenses 25,417 26,859 10,838 16,856 946,726 --------- ----------- ------------ ----------- ------------ TOTAL OPERATING EXPENSES 25,917 27,109 11,088 16,981 1,860,540 --------- ----------- ------------ ----------- ------------ Net (loss) before other items (25,917) (27,109) (11,088) (16,981) (1,621,091) --------- ----------- ------------ ----------- ------------ OTHER INCOME (EXPENSE) Nonrefundable option income - - - - 23,000 Gain/(loss) on sale of marketable securities (4,335) - (3,926) - 172,703 Write-down of marketable securities - - - - (364,326) Interest expense (500) (704) (270) (353) (114,684) Dividend and interest income 8 427 2 174 12,978 --------- ----------- ------------ ----------- ------------ TOTAL OTHER INCOME (LOSS) (4,827) (277) (4,194) (179) (270,329) --------- ----------- ------------ ----------- ------------ NET (LOSS) BEFORE INCOME TAXES (30,744) (27,386) (15,282) (17,160) (1,891,420) PROVISIONS FOR INCOME TAXES - - - - - --------- ----------- ------------ ----------- ------------ NET INCOME (LOSS) $(30,744) $ (27,386) $ (15,282) $ (17,160) $(1,891,420) ========= =========== ============= ============ ============= EARNINGS (LOSS) PER SHARE $ - $ - $ - $ - ========= =========== ============ =========== WEIGHTED AVERAGE SHARES OUTSTANDING 6,414,149 6,414,149 6,414,149 6,414,149 ========== =========== ============ =========== The accompanying notes are an integral part of these financial statements. F-3 POWER SAVE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS Six Months Six Months Inception Ended Ended Through June 30, June 30, June 30, 2003 2002 2003 --------- --------- ---------- Unaudited Unaudited Unaudited <s> <c> <c> <c> CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (30,744) $ (27,386) $(1,891,420) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 500 250 550,260 Common stock issued for lease - - 225,000 Gain on sale of securities 4,335 - (172,703) Write down of marketable securities - - 364,326 Contributed interest - - 70,018 Contributed rent and officer compensation 12,000 12,000 122,000 Reserve against assets and liabilities - - 244,000 Changes in assets and liabilities: (Increase) in prepaid expenses - - - (Increase) in accounts receivable - - - Increase in accounts payable (2,818) (2,239) 1,928 Increase in accrued interest 500 - 41,590 Increase (decrease) in advances from shareholder 2,140 (11,312) (30,241) --------- ---------- ---------- Net cash used in operating activities (14,087) (28,687) (475,242) --------- ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of marketable securities - (13,099) (20,056) Product rights, development costs and intangibles - - (244,000) Increase in organization costs - - (36,408) Proceeds from sale of marketable securities 11,175 - 415,259 Acquisition of fixed assets - - (15,478) --------- ---------- ---------- Net cash used in investing activities 11,175 (13,099) 99,317 --------- ---------- ---------- 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 (2,912) (41,786) 1,669 CASH AT BEGINNING PERIOD 4,581 68,532 - --------- ---------- ---------- CASH AT END OF PERIOD $ 1,669 $ 26,746 $ 1,669 ========= ========== ========== 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 $ - $ - $ - ========= ========== ========== Cash paid for income taxes $ - $ - $ - ========= ========== ========== The accompanying notes are an integral part of these financial statements. F-4 POWER SAVE INTERNATIONAL, INC. NOTES TO UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2003 NOTE 1 - BASIS OF PRESENTATION The interim financial statements at June 30, 2003 and for the six and three month periods ended June 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 six and three month periods ended June 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.