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, 2002
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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0-49632
Commission file number
SOLANEX MANAGEMENT CORP.
(Exact name of small business issuer as specified in its charter)
Nevada #98-0361151
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(State of Incorporation) (I.R.S. Employer
Identification No.)
Suite 440, 1555 E. Flamingo Road
Las Vegas, Nevada 89119
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(Address of principal executive offices)
(604) 681-7806
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(Issuer's telephone number)
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 issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. (1) Yes [X] No [ ]
(2) 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 November 01, 2002, the Issuer
had 5,000,000 shares of common stock, par value $0.001, issued and outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
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The Financial Statements of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together with related Notes. In the opinion of management, the Financial
Statements fairly present the financial condition of the Company. The
Company's auditors have expressed a going concern qualification with respect to
the Company's audited financial statements at December 31, 2001.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Statement of Stockholder's Deficiency 6
Notes to the Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 8
Plan of Operations 8
Liquidity and Capital Resources 8
Special Note Regarding Forward Looking Statements 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 9
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 9
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
ITEM 5. OTHER INFORMATION 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURES
2
Solanex Management Corp.
(A Development Stage Company)
Balance Sheets
As at September 30, 2002 and December 31, 2001
(Unaudited)
(expressed in U.S. dollars)
September 30, December 31,
2002 2001
$
Assets 0 0
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Liabilities and Stockholders' Deficiency
Current Liabilities
Accounts payable 24,054 6,228
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Contingent Liability (Note 1)
Stockholders' Deficiency
Common Stock:
100,000,000 shares authorized with a par value of $.001;
Preferred Stock:
20,000,000 shares authorized with a par value of $.001;
5,000,000 shares of common stock issued and outstanding 5,000 5,000
Additional Paid-in Capital 0 0
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5,000 5,000
Deficit Accumulated During the Development Stage (29,054) (11,228)
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(24,054) (6,228)
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0 0
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3
Solanex Management Corp.
(A Development Stage Company)
Statements of Operations
(unaudited)
(expressed in U.S. dollars)
From
October 12,
Three Three Nine Nine 2000
Months Months Months Months (Date of
Ended Ended Ended Ended Inception
Sept 30, Sept 30, Sept 30, Sept 30, to Sept 30,
2002 2001 2002 2001 2002
$ $ $ $ $
Expenses
Organization expenses 0 0 0 0 5,728
Technology cost 0 0 0 0 5,500
Administration 3,000 0 3,000 0 3,000
Consulting 3,000 0 3,000 0 3,000
Professional fees 3,874 0 7,474 0 7,474
Office 4,000 0 4,352 0 4,352
------ -- ------ -- ------
13,874 0 17,826 0 29,054
------ -- ------ -- ------
Net Loss (13,874) 0 (17,826) 0 (29,054)
Net Loss Per Share (0.00) (0.00) (0.00) (0.00) (0.00)
Weighted Average Shares Outstanding 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
4
Solanex Management Corp.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)
(expressed in U.S. dollars)
October 12, 2000
(Inception) to
Three Months Nine Months September 30
2002 2001 2002 2001 2002
---- ---- ---- ---- ----
Operating Activities
Net income (loss) $(13,874) $(0) $(17,826) $(0) $(29,054)
Adjustments to reconcile net income (loss) to net
cash used by operating activities
Expenses not paid with cash 0 0 0 0 5,000
Changes in operating assets and liabilities 13,874 0 17,826 0 24,054
------ -- ------ -- ------
Net cash provided by (used by) operating activities 0 0 0 0 0
-- -- -- -- --
Investing Activities
Financing Activities
Inflow (outflow) of cash 0 0 0 0 0
Cash, beginning of period 0 0 0 0 0
-- -- -- -- --
Cash, end of period $0 $0 $0 $0 $0
-- -- -- -- --
Supplemental information
Interest paid $0 $0 $0 $0 $0
Shares issued for services $0 $0 $0 $0 $0
Corporate income taxes paid $0 $0 $0 $0 $0
Shares issued for technology $0 $0 $0 $0 $3,500
5
Solanex Management Corp.
(A Development Stage Company)
Statement of Stockholders' Deficiency
From October 12, 2000 (Date of Inception) to September 30, 2002
(unaudited)
(expressed in U.S. dollars)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Total Stage
# $ $ $ $
Balance - October 12, 2000
(Date of Inception) 0 0 0 0 0
Stock issued for $1,500 of
organization expenses 1,500,000 1,500 0 1,500 0
Stock issued for technology 3,500,000 3,500 0 3,500 0
Net loss for the period 0 0 0 0 (11,228)
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Balance - December 31, 2001 5,000,000 5,000 0 5,000 (11,228)
Net loss for the period 0 0 0 0 (17,826)
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Balance - September 30, 2002 5,000,000 5,000 0 5,000 (29,054)
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6
Solanex Management Corp.
(a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 30, 2002
(unaudited)
1. Nature of Operations
a) Development Stage Company
Solanex Management Corp. herein (the "Company") was incorporated in the State
of Nevada on October 12, 2000, under the name EcoSoil Management Inc., and is
in its early developmental stage. The Company changed its name to Solanex
Management Corp. on December 6, 2001. To date, the Company's only
activities have been organizational, directed at acquiring its principal
asset, raising its initial capital and developing its business plan.
On October 12, 2000, Solanex acquired a license to certain technology and
intellectual property from Colin V. Hall, the developer of the technology, and a
group of investors. The license grants a non-exclusive right to manufacture,
market and sell a thermal destructor for site remediation to industrial,
petrochemical and site remediation organizations. The intellectual property
assets acquired include all licensing, modification, marketing, distribution and
sales rights worldwide in perpetuity. Under the terms of the Agreement and
Assignment of Intellectual Property Rights, a cash payment of two thousand
($2,000) dollars was made on behalf of the Company and the Company issued
seventeen thousand five hundred (17,500) shares of common stock, now three
million five hundred thousand (3,500,000) shares following a forward stock
split that was authorized by the Board of Directors on December 7, 2001.
b) Going Concern
Since inception, the Company has suffered recurring losses, net cash outflows
from operations and at September 30, 2002 has a working capital deficiency of
$24,054. The company expects to continue to incur substantial losses to complete
the manufacture and marketing of its Thermal Destructor. Since its inception,
the company has funded operations through common stock issuances and accounts
payable in order to meet its strategic objectives. Management believes that
sufficient funding will be available to meet its business objectives including
anticipated cash needs for working capital and is currently evaluating several
financing options. However, there can be no assurance that the Company will be
able to obtain sufficient funds to continue the development of, and if
successful, to commence the sale of its products under development. As a result
of the foregoing, there exists substantial doubt about the company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
2. Basis of Accounting Presentation
These unaudited financial statements have been prepared by management in
accordance with accounting principles generally accepted in the United States of
America for interim financial information, are condensed and do not include all
disclosures required for annual financial statements. The organization and
business of the Company, accounting policies followed by the Company and other
information are contained in the notes to the Company's audited financial
statements filed as part of the Company's Form 10-SB for the year ended December
31, 2001.
In the opinion of the Company's management, these financial statements reflect
all adjustments necessary to present fairly the Company's financial position at
September 30, 2002 and the results of its operations for the nine months then
ended. The results of operations for the nine months ended September 30, 2002
are not necessarily indicative of the results to be expected for the entire
fiscal year.
3. Summary of Significant Accounting Policies
a) Year end
The Company's fiscal year end is December 31.
b) Technology Development Costs
Technology development costs will be expensed as incurred.
c) Use of Estimates
7
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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the periods. Actual results
could differ from those estimates.
d) Net Loss Per Share
Net loss per share is calculated using the weighted average number of common
shares outstanding during the period. Fully diluted loss per share is not
presented as the impact of the exercise of options is anti-dilutive
(There are no options granted at September 30, 2002).
4. Related Party Transaction
An individual who became a director of the Company received $2,000 and 1,500,000
(post-split) common shares pursuant to the acquisition of technology
(see note 1 (a)).
Item 2. Management's Discussion and Analysis or Plan of Operation
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The following discussion should be read in conjunction with the accompanying
unaudited interim financial statements.
Plan of Operations
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To date, Solanex's only activities have been organizational, directed at
acquiring its principal asset, raising its initial capital and developing its
business plan. The Company has generated no revenues to date, has no assets and
has part-time management.
No revenue was recorded for the nine month period ended September 30, 2002 and
no revenue has been generated since inception.
The Company has found raising money in the current market to be a challenge. As
a result, the focus is to raise money for milestone 2 in its business plan - a
market survey, rather than for milestone 1 which requires a substantially
greater investment. The Company continues to look to acquire a business with
positive cash flow which would assist in pursuing its business plan.
Liquidity and Capital Resources
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No material commitments for capital expenditures were made during the quarter
ended September 30, 2002.
Solanex remains in the development stage and, since inception, has experienced
no significant change in liquidity or capital resources or stockholders' equity.
Consequently, Solanex's balance sheet of September 30, 2002, reflects total
assets of $nil. Organizational expenses of $5,728 were paid for by the initial
stockholders and expensed to operations.
Based on the Company's business plan, Solanex believes that during its first
operational quarter, it will need a capital infusion of approximately $850,000
to achieve a sustainable sales level, where ongoing operations can be funded out
of revenues. This capital infusion is intended to cover costs of completing and
readying equipment, advertising, hiring and paying two to three sales people,
and administrative expenses.
The Company plans to utilize debt and/or equity financings to fund its
short-term and long-term growth. The availability of future financings will
depend on market conditions. A portion of any funds so raised may be used to
grow the business through acquisitions of other businesses.
Solanex will need additional capital to carry out its business plan or to engage
in a combination with another business. 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 on terms
acceptable to Solanex or at all. Solanex has no commitments for capital
expenditures and has not entered any agreements for potential funding.
8
The forecast of the period of time through which the Company's financial
resources will be adequate to support operations is a forward-looking statement
that involves risks and uncertainties. The actual funding requirements may
differ materially from this as a result of a number of factors, including plans
to rapidly expand its new operations. The Company's auditors caution that there
can be no assurance that the Company will be able to continue as a going concern
or achieve material revenues or profitable operations.
Special Note Regarding Forward Looking Statements
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Certain statements in this report and elsewhere (such as in other filings by the
Company with the Securities and Exchange Commission ("SEC"), press releases,
presentations by the Company of its management and oral statements) may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," and
"should," and variations of these words and similar expressions, are intended to
identify these forward-looking statements. Actual results may materially differ
from any forward-looking statements. Factors that might cause or contribute to
such differences include, among others, competitive pressures and constantly
changing technology and market acceptance of the Company's products and
services. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements, which may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
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To the knowledge of Solanex's directors, the Company is not a party to any legal
proceeding or litigation and none of its property is the subject of a pending
legal proceeding and the directors know of no other threatened or contemplated
legal proceedings or litigation. To the Company's knowledge, there are no
lawsuits nor were any lawsuits commenced against the Company during the quarter
ended September 30, 2002, nor did the Company commence any lawsuits during the
same period.
Item 2. Changes in Securities and Use of Proceeds.
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Changes in Securities
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There were no changes during the nine months ended September 30, 2002 in the
securities issued by the Company.
Use of Proceeds
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Not applicable.
Item 3. Defaults Upon Senior Securities.
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Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
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No matters were put forward to a vote of the security holders of the Company
this quarter.
Item 5. Other Information.
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Colin Hall resigned as a director effective November 01, 2002.
Item 6. Exhibits and Reports on form 8-K.
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9
Exhibits
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None.
Reports on Form 8-K
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None.
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.
Solanex Management Corp.
Date: October 31, 2002 By: /s/ Piers VanZiffle
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Name: Piers VanZiffle
Title: President and Director
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 W.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002,
the undersigned Chief Executive Officer and chief Financial Officer, or persons
fulfilling similar functions, each certify:
(i) That the financial information included in this Quarterly Report fairly
presents in all material respects the financial condition and results of
operations of the Company as of September 30, 2002 and for the periods
presented in the report; and
(ii) That the Quarterly Report fully complies with the requirements of Sections
13(a) or 15(d) of the Securities exchange Act of 1934
By: /s/ Piers VanZiffle
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Title: Chief Executive Officer and
Chief Financial Officer
Date: October 31, 2002