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, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from to
----------- -----------
Commission File Number: 000-33321
Fuel Centers, Inc.
------------------
(Exact name of small business issuer as specified in its charter)
Nevada 33-0967648
------ ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9323 Vista Serena, Cypress, California 90630
-------------------------------------------------------------------------------
(Address of principal executive offices)
(714) 220.1806
--------------
(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 19, 2003, there were
12,550,450 shares of the issuer's $.001 par value common stock issued and
outstanding.
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
-----------------------------
FUEL CENTERS, INC.
FINANCIAL STATEMENTS
MARCH 31, 2003 AND 2002
2
FUEL CENTERS, INC.
CONTENTS
PAGE
----
Financial Statements (Unaudited)
Balance Sheet 4
Statements of Operations 5
Statements of Cash Flows 6
Notes to Financial Statements 7
3
FUEL CENTERS, INC.
BALANCE SHEET
MARCH 31, 2003 AND 2002
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $ 135
Interest receivable 35,308
-------------
Total current assets 35,443
OTHER ASSETS ---
-------------
Total assets $ 35,443
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 34,481
-------------
Total current liabilities 34,481
STOCKHOLDERS' EQUITY
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-- 12,550,450 12,550
Additional paid-in capital 41,560
Accumulated deficit (53,148)
--------------
Total stockholders' equity 962
-------------
Total liabilities and stockholders' equity $ 35,443
=============
See accompanying notes to financial statements.
FUEL CENTERS, INC.
STATEMENTS OF OPERATIONS
MARCH 31, 2003 AND 2002
(UNAUDITED)
March 31,
2003 2002
-------------- --------------
NET REVENUES $ --- $ ---
OPERATING EXPENSES
Consulting services --- 9,087
Legal and professional fees 10,709 1,175
Occupancy 605 605
Office supplies and expense 48 1,086
-------------- --------------
Total operating expenses 11,362 11,953
-------------- --------------
LOSS FROM OPERATIONS (11,362) (11,953)
PROVISION FOR INCOME TAX EXPENSE (BENEFIT) --- ---
-------------- --------------
NET LOSS/COMPREHENSIVE LOSS $ (11,362) $ (11,953)
============== ==============
NET LOSS/COMPREHENSIVE LOSS PER COMMON SHARE-- BASIC AND DILUTED
$ (---) $ (---)
============== ==============
WEIGHTED AVERAGE OF COMMON SHARES-- BASIC AND DILUTED
12,550,450 6,005,000
============== ==============
See accompanying notes to financial statements
4
FUEL CENTERS, INC.
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2003 AND MARCH 31, 2002
(UNAUDITED)
March 31,
2003 2002
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (11,362) $ (11,953)
Adjustments to reconcile net loss to net cash used in operating
activities
Expenses paid by officer --- 35
Occupancy cost contributed by officer 605 605
Changes in operating assets and liabilities
Decrease in prepaid expenses 7,880 ---
Increase (decrease) in accounts payable
and accrued expenses 2,829 (385)
--------------- ---------------
Net cash used in operating activities (48) (11,698)
--------------- --------------
NET DECREASE IN CASH (48) (11,698)
CASH, beginning of period 183 12,637
--------------- ---------------
CASH, end of period 135 $ 939
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid --- $ ---
=============== ===============
Interest paid --- $ ---
=============== ===============
See accompanying notes to financial statements
5
FUEL CENTERS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 AND 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, 2003 and
2002 are not necessarily indicative of the results that may be expected for the
years ended December 31, 2003 and 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, 2002
included in the Company's annual report on Form 10-KSB.
NOTE 3 - COMMON STOCK
On June 17, 2002, the Company's Board of directors declared a two and nine
hundredths to one (2:09:1) forward stock split to the stockholders of record as
of June 21, 2002. The stock dividend was paid on June 24, 2002 and resulted in
an increase of the Company's issued and outstanding common stock to 12,550,450
shares.
NOTE 4 - RELATED PARTY TRANSACTIONS
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.
6
ITEM 2. PLAN OF OPERATION
--------------------------
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.
CRITICAL ACCOUNTING POLICY AND ESTIMATES. Our Management's Discussion and
Analysis of Financial Condition and Results of Operations section discusses our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements 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. On an on-going basis, management evaluates
its estimates and judgments, including those related to revenue recognition,
accrued expenses, financing operations, and contingencies and litigation.
Management bases its estimates and judgments on historical experience and on
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. The most significant accounting estimates inherent in
the preparation of our financial statements include estimates as to the
appropriate carrying value of certain assets and liabilities which are not
readily apparent from other sources. These accounting policies are described at
relevant sections in this discussion and analysis and in the notes to them
consolidated financial statements included in our Quarterly Report on Form
10-QSB for the period ended March 31, 2003.
Our business is to offer a full range of business consulting services in the
retail automobile fueling industry. Our plan has been to 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 intended 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. We anticipated that a majority of our revenue would be derived from
fees paid by clients for our advice, services and business development products.
We have also contemplated acquiring a third party, merging with a third party or
pursuing a joint venture with a third party in order to support our development.
In that regard, we had previously entered into a Letter of Intent with Linsang
Manufacturing, Inc., a Delaware corporation ("LMI") and certain of its
shareholders wherein we would acquire LMI in exchange for shares of our common
stock, and as part of the same transaction we would conduct a private placement
of our equity securities, and LMI would acquire contracts other business
entities that would bring a certain net value in revenues. In November 2002, we
concluded that we would not be able to complete the transaction to acquire LMI
as described herein.
We continue to contemplate acquiring a third party, merging with a third party
or pursuing a joint venture with a third party in order to support our
development. However, we cannot guaranty that we will acquire any other third
party in lieu of LMI, or that in the event that we acquire another entity, this
acquisition will increase the value of our common stock. We intend to continue
providing our business consulting services to the retail automotive fueling
industry.
7
LIQUIDITY AND CAPITAL RESOURCES. We had cash of $135 as of March 31, 2003. Our
total current assets as of March 31, 2003 were $35,443, of which $35,308 was
represented by interest receivable. Our total assets were $35,443 as of March
31, 2003. We have no other property or assets. Our total current liabilities
were $34,481 as of March 31, 2003, which was represented by accounts payable and
accrued expenses.
RESULTS OF OPERATIONS.
Revenues. For the three month period ending March 31, 2003, we realized no
revenues from providing consulting services. We will attempt to generate
revenues by engaging clients to utilize our consulting services.
Operating Expenses. For three month period ending March 31, 2003, our total
operating expenses were $11,362. Those expenses were represented by $10,709 in
legal and professional fees, and $605 in occupancy expenses and $48 in office
supplies expenses. For the three month period ending March 31, 2003, we
experienced a net loss of $11,362. This is in comparison to the three month
period ending March 31, 2002, where our total operating expenses were $11,953.
That amount was 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. During 2002, we entereed into an agreement to acquire another
company, Linsang Manufacturing, Inc., or LMI. However, the transaction was never
consummated. Our operation expenses were slightly lower for the three month
period ending March 31, 2003, as compared to the same period ending March 31,
2002 because we were in the process of making arrangements to acquire LMI, for
which we incurred significant general and administrative expenses. In order to
either continue operations or enter into a similar agreement with another
entity, we anticipate we will continue to incur significant general and
administrative expenses.
OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. We continue to contemplate
acquiring a third party, merging with a third party or pursuing a joint venture
with a third party in order to support our development. Accordingly, we have
been researching potential acquisitions or other suitable business partners
which will assist us in realizing our business objectives. We cannot guarantee
that in the event we acquire or merge with a third party, such acquisition or
merger will increase the value of our common stock. In the interim, we intend to
continue providing our business consulting services to the retail automotive
fueling industry.
We had cash of $135 as of March 31, 2003. In the opinion of management,
available funds will not satisfy our working capital requirements through the
next twelve months. 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.
Because we were not able to complete the proposed acquisition of LMI as
described, we anticipate that we may need to raise additional capital to
continue 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 anticipate that
our officers and directors will contribute funds to pay for our expenses,
although they are under no guaranty to do so.
We are not currently conducting any research and development activities and do
not anticipate conducting such activities in the near future. We do not
anticipate hiring additional employees or independent contractors unless we are
able to expand our current operations. Until recently, we had been focusing our
efforts on completing the acquisition of LMI. We do not anticipate that we will
purchase or sell any significant equipment.
ITEM 3. CONTROLS AND PROCEDURES
-------------------------------
(a) Evaluation of disclosure controls and procedures. We maintain controls and
procedures designed to ensure that information required to be disclosed in the
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission. Based upon
their evaluation of those controls and procedures performed within 90 days of
the filing date of this report, our chief executive officer and the principal
financial officer concluded that our disclosure controls and procedures were
adequate.
8
(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the chief
executive officer and principal financial officer.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
--------------------------
None.
ITEM 2. CHANGES IN SECURITIES.
------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
----------------------------------------------------------
None.
ITEM 5. OTHER INFORMATION
--------------------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
None.
9
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 19, 2003 By: /s/ John R. Muellerleile
-----------------------------------
John R. Muellerleile
Chief Executive Officer, President,
Secretary, Director
10
CERTIFICATIONS
--------------
I, John R. Muellerleile, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Fuel Centers, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 19, 2003
/s/ John R. Muellerleile
------------------------
John R. Muellerleile
Chief Executive Officer
11
CERTIFICATIONS
--------------
I, K. John Shukur, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Fuel Centers, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 19, 2003
/s/ K. John Shukur
------------------------
K. John Shukur
Chief Financial Officer