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 MARCH 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from to
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Commission File Number: 000-33321
Fuel Centers, Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 33-0967648
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9323 Vista Serena, Cypress, California 90630
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(Address of principal executive offices)
(714) 220.1806
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(Issuer's Telephone Number)
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 practical date. As of May 13, 2001, there were
6,005,000 shares of the issuer's $.001 par value common stock issued and
outstanding.
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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FUEL CENTERS, INC.
FINANCIAL STATEMENTS
MARCH 31, 2002
2
FUEL CENTERS, INC.
CONTENTS
PAGE
----
Financial Statements (Unaudited)
Balance Sheet 4
Statement of Operations 5
Statement of Changes in Stockholders' Deficit 6
Statement of Cash Flows 7
Notes to Financial Statements 8
3
FUEL CENTERS, INC.
BALANCE SHEET
MARCH 31, 2002
(UNAUDITED)
ASSETS
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Current assets
Cash $ 939
Other current assets ---
-----------
Total current assets 939
Other assets ---
-----------
Total assets $ 939
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities
Accounts payable and accrued expenses $ 2,150
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Total current liabilities 2,150
Stockholders' Deficit
Preferred stock, $.001 par value;
Authorized shares -- 5,000,000
Issued and outstanding share -- 0 ---
Common stock, $.001 par value;
Authorized shares-- 50,000,000
Issued and outstanding shares-- 6,005,000 6,005
Additional paid-in capital 25,204
Accumulated deficit (32,420)
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Total stockholders' deficit (1,211)
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Total liabilities and stockholders' deficit $ 939
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See accompanying notes to financial statements.
4
FUEL CENTERS, INC.
STATEMENT OF OPERATIONS
MARCH 31, 2002
(UNAUDITED)
Net revenues $ ---
Operating expenses
Consulting services 9,087
Legal and professional fees
1,175
Occupancy
605
Office supplies and expense 1,086
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Total operating expenses 11,953
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Loss from operations (11,953)
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Provision for income tax expense (benefit) ---
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Net loss/Comprehensive loss $ (11,953)
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Net loss/comprehensive loss per common share --- basic
and diluted $ ---
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Weighted average of common shares --- basic and diluted 6,005,000
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See accompanying notes to financial statements.
5
FUEL CENTERS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
APRIL 9, 2001 (INCEPTION) THROUGH MARCH 31, 2002
(UNAUDITED)
Common Stock Additional
---------------------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
------------- ----------- ----------- ----------- -------------
Balance, April 9, 2001 --- $ --- $ --- $ --- $ ---
Issuance of common stock,
April 10, 2001 5,050,000 5,050 --- --- 5,050
Issuance of common stock,
June 17, 2001 25,000 25 475 --- 500
Issuance of common stock,
June 28, 2001 930,000 930 17,670 --- 18,600
Cost of occupancy
contributed by officer --- --- 1,755 --- 1,755
Cost of legal fees
contributed by officer --- --- 4,664 --- 4,664
Net loss/comprehensive loss --- --- --- (20,467) (20,467)
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Balance, December 31, 2001 6,005,000 6,005 24,564 (20,467) 10,102
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Cost of occupancy
contributed by officer --- --- 605 --- 605
Cost of office supplies
contributed by officer --- --- 35 --- 35
Net loss/comprehensive loss --- --- --- (11,953) (11,953)
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Balance, March 31, 2002 6,005,000 $ 6,005 $ 25,204 $ (32,420) $ (1,211)
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See accompanying notes to financial statements.
6
FUEL CENTERS, INC.
STATEMENT OF CASH FLOWS
MARCH 31, 2002
(UNAUDITED)
Cash flows from operating activities
Net loss $ (11,953)
Adjustments to reconcile net loss to net cash
used in operating activities
Expenses paid by officer 35
Occupancy cost contributed by officer 605
Changes in operating assets and liabilities
Decrease in accounts payable and accrued expenses (385)
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Net cash used by operating activities (11,698)
Cash flows from investing activities ---
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Net cash used by investing activities ---
Cash flows from financing activities ---
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Net cash provided by financing activities ---
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Net decrease in cash (11,698)
Cash, beginning of period 12,637
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Cash, end of period $ 939
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Supplemental disclosure of cash flow information
Income taxes paid $ ---
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Interest paid $ ---
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See accompanying notes to financial statements.
7
FUEL CENTERS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002
(UNAUDITED)
NOTE 1 - NATURE OF OPERATIONS
Fuel Centers, Inc. (the "Company") is a business consulting firm that
specializes in strategy and development of high-volume, multi-revenue source,
and retail fuel service stations for the oil and petroleum industry. The Company
was incorporated in the state of Nevada on April 9, 2001 and is headquartered in
Cypress, California.
NOTE 2 - BASIS OF PRESENTATION
The unaudited financial statements included herein have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 2002 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2002. For further information, these financial statements and
the related notes should be read in conjunction with the Company's audited
financial statements for the period ended December 31, 2001 included in the
Company's annual report on Form 10-KSB.
NOTE 3 - COMMON STOCK
On April 10, 2001, the Company issued 3,550,000 shares of its common
stock to an officer and founder for consulting services and 1,500,000 shares of
its common stock to various individuals for legal services rendered in
connection with the initial organization costs incurred. Since there was no
readily available market value at the time the services were rendered, par value
of $0.001 per share was considered as a reasonable estimate of fair value by all
parties. These amounts are shown in the accompanying statement of operations for
the period April 9, 2001 (inception) through June 30, 2001 and the consulting
services performed by the officer and founder are considered additional
contributions of capital by the Company.
On June 30, 2001, the Company completed a "best efforts" offering of
its common stock pursuant to the provisions of Section 4(2) of the Securities
Act of 1933 and Rule 506 of Regulation D promulgated by the Securities and
Exchange Commission. In accordance with the Private Placement Memorandum
Offering, which was initiated on June 11, 2001, the Company issued 955,000
shares of its common stock at $0.02 per share for a total of $19,100 from June
17th - June 30th 2001.
8
FUEL CENTERS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002
(UNAUDITED)
NOTE 4 - RELATED PARTY TRANSACTIONS
On April 10, 2001, the Company issued 3,550,000 shares of its common
stock to a current officer for services as described in Note 3.
The Company occupies office space provided by its officer. Accordingly,
occupancy costs have been allocated to the Company based on the square foot
percentage assumed multiplied by the officer's total monthly costs. These
amounts are shown in the accompanying statements of operations for the three
months ended March 31, 2002 and are considered additional contributions of
capital by the officer and the Company.
9
Item 2. Plan of Operation
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This following information specifies certain forward-looking statements of
management of the company. Forward-looking statements are statements that
estimate the happening of future events and are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as "may", "shall", "will", "could", "expect", "estimate",
"anticipate", "predict", "probable", "possible", "should", "continue", or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in
the following information represent estimates of future events and are subject
to uncertainty as to possible changes in economic, legislative, industry, and
other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and, accordingly, no opinion is expressed
on the achievability of those forward-looking statements. We cannot guaranty
that any of the assumptions relating to the forward-looking statements specified
in the following information are accurate, and we assume no obligation to update
any such forward-looking statements.
We are a new business that has generated only $9,000 in revenues to date. We
intend to offer a full range of business consulting services in the retail
automobile fueling industry. We anticipate that we will offer advice and
assistance on issues of business strategy and development of high-volume,
multi-revenue source, retail automobile fueling centers or "Superstations".
Superstations typically include retail fueling facilities, quick service
restaurants, car wash facilities and a convenience store. We intend to provide
services to owners of existing fueling stations who desire to convert their
facilities into a Superstation, as well as to parties who are not currently
engaged in the retail sale of motor fuel but wish to establish fueling
facilities. Many newly established retail fueling centers are being developed as
Superstations due to external and internal pressures to meet the competitive
demands of the marketplace, increase profitability and comply with increasing
government regulation. For example, underground fuel storage tanks and lines
face significant regulation by the state of California to reduce the soil and
groundwater contamination caused by leaks. To eliminate the cost of continuing
to adapt to increasing and changing regulation, we propose entombment of the
underground systems in concrete, which will cost at least $200,000 per location.
We believe that such additional cost can only be accommodated by high revenue
fuel centers such as a Superstation. In addition, California and other states
have mandated that the fuels sold in each particular state be formulated
differently. Producing those unique formulations limits the supply to the
production capacity of the refineries in those states. As a result, when the
refineries are temporarily closed for maintenance procedures, shortages occur
because refined product cannot be shipped from other states. Such closures
strains industry production and results in shortages at retail fuel centers. We
believe that Superstations's high revenues and volume can justify the cost of
adding additional underground fuel storage tanks and fuel inventory, which will
reduce the likelihood of those shortages at the consumer level.
A majority of our revenue will be derived from fees paid by clients for our
advice, services and business development products. We intend to consult with
clients and assist them in understanding customer dynamics, optimizing the
economics of their business, and structuring their organizations, processes and
systems to achieve their strategic goals and maximize their value.
10
In addition to our consulting services, we may develop, own and operate our own
Superstations. Several retail fuel centers, which have been identified by us,
are available for purchase. In addition, we believe that a significant number of
retail fuel centers will become available due to the current divestiture plans
of Tosco-Phillips, Shell, Chevron-Texaco and Exxon Mobil. However, we do not
have the capital to satisfy the down payment requirements necessary to acquire
those retail fuel centers.
Liquidity and Capital Resources. We had cash of $939 as of March 31, 2002. Our
total assets were $939 as of March 31, 2002. We have no other property or
assets. Our total current liabilities were $2,150 as of March 31, 2002, which is
represented by accounts payable and accrued expenses. As of March 31, 2002, we
had no other commitments or contingencies.
Results of Operations.
Revenues. For the three month period ending March 31, 2002, we realized no
revenues from providing consulting services. We hope to increase our revenues by
increasing our customer base.
Operating Expenses. For three month period ending March 31, 2002, our total
operating expenses were $11,953. Those expenses were represented by $9,087 in
consulting services, $1,175 in legal and professional fees, and $605 in
occupancy expenses and $1,086 in office supplies expenses. For the three month
period ending March 31, 2002, we experienced a net loss of $11,953.
Our Plan of Operation for the Next Twelve Months. We have only generated $9,000
in revenues from our operations. In our management's opinion, to effectuate our
business plan in the next twelve months, the following events should occur or we
should reach the following milestones in order for us to become profitable:
1. We must continue to market our consulting services and obtain
consulting agreements. We have provided proposed consulting service
contracts to several new client candidates, although none of those
agreements have been executed. Based on our meetings and discussions
with potential clients including those to whom we have forwarded
proposed consulting service contracts, we believe that some of those
potential clients will retain us to provide consulting services. Within
three to six months, we should be providing consulting services to
multiple clients.
2. We must continue to attend meetings with petroleum industry
professionals and develop relationships with those professionals. We
believe that major oil company executives can provide lists of
properties considered surplus along with the name of the client
candidate, which they believe may benefit from our services. Within
three to six months, we should have knowledge of several additional
properties considered surplus by major oil companies.
3. We must develop relationships with business brokers who advertise
locations for sale in newspapers and trade journals as well as real
estate brokers who list properties for sale. We believe that those
brokers will become sources of referrals. Within six to nine months, we
should have developed relationships with several brokers who will be
sources of referrals.
4. We must develop our website for use as a marketing tool to inform and
persuade customers to engage our services. Within six to nine months,
we should have developed our website to provide information about our
services as well as our beliefs about the industry.
5. We must seek joint venture partners for our development of
Superstations. We will seek partners who are willing to contribute
capital for the development of Superstations and we will furnish the
deal making and operational expertise. During the next twelve months,
we want to develop relationships with potential joint venture partners.
11
Since our inception, we have marketed our services to owners and operators of
retail fueling stations who we believe are potential clients. After forwarding
consulting service proposals to potential clients, we have obtained some initial
contracts and began generating revenues in the fourth quarter of 2002. Our
belief that we will engage additional clients is based on the discussions that
we have had with petroleum industry professionals. Our plan of operation is
materially dependent on our ability to generate revenues. Any additional
revenues generated will be used to expand our operations.
We have cash of $939 as of March 31, 2002. In the opinion of management,
available funds will satisfy our working capital requirements through May 2002.
Our forecast for the period for which our financial resources will be adequate
to support our operations involves risks and uncertainties and actual results
could fail as a result of a number of factors. We anticipate that we may need to
raise additional capital to expand our operations. Such additional capital may
be raised through public or private financing as well as borrowings and other
sources. We cannot guaranty that additional funding will be available on
favorable terms, if at all. If adequate funds are not available, then our
ability to expand our operations may be adversely affected. If adequate funds
are not available, we believe that our officers and directors will contribute
funds to pay for our expenses. Therefore, we have not contemplated any plan of
liquidation in the event that we do not generate revenues.
We are not currently conducting any research and development activities, other
than the development of our website. We do not anticipate conducting such
activities in the near future. We do not anticipate that we will purchase or
sale of any significant equipment. In the event that we generate significant
revenues and expand our operations, then we may need to hire additional
employees or independent contractors as well as purchase or lease additional
equipment.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
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None.
Item 2. Changes in Securities.
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None.
Item 3. Defaults Upon Senior Securities
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None.
Item 4. Submission of Matters to Vote of Security Holders
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None.
Item 5. Other Information
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None.
Item 6. Exhibits and Reports on Form 8-K
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None.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Fuel Centers, Inc.,
a Nevada corporation
May 13, 2001 By: /s/ John R. Muellerleile
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John R. Muellerleile
Chief Executive Officer, President,
Secretary, Director