-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BuePPTpmZe5YyWw5/80tV47TdngqCpZACXp4YRxUMFUgISkdbXpyaRHCPgCS9Yuk x9q12r3ZXlmO4QQ29IUhxg== 0001078782-01-500022.txt : 20010815 0001078782-01-500022.hdr.sgml : 20010815 ACCESSION NUMBER: 0001078782-01-500022 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMISSION CONTROL DEVICES INC CENTRAL INDEX KEY: 0001114977 STANDARD INDUSTRIAL CLASSIFICATION: [9995] IRS NUMBER: 84098940 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-30689 FILM NUMBER: 1710167 BUSINESS ADDRESS: STREET 1: 8632 WILKINSON BLVD STREET 2: SUITE CITY: CHARLOTTE STATE: NC ZIP: 28214 BUSINESS PHONE: 7043929190 MAIL ADDRESS: STREET 1: 8632 WILKINSON BLVD STREET 2: SUITE CITY: CHARLOTTE STATE: NC ZIP: 28214 FORMER COMPANY: FORMER CONFORMED NAME: HOLOGRAPHIC SYSTEMS INC DATE OF NAME CHANGE: 20000522 10QSB 1 ecd601q.txt SECOND QUARTER 10QSB EMISSION CONTROL DEVICES, INC. U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-QSB (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2001 ( ) 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: 0-30689 EMISSION CONTROL DEVICES, INC. (Exact name of registrant as specified in charter) Nevada 84-0989940 (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 8632 Wilkinson Blvd., Charlotte. NC 28214 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: 704-392-9190 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. (1) Yes [X] No [ ] (2) Yes [X] No [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d)of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] (APPLICABLE ONLY TO CORPORATE REGISTRANTS) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as os the last practicable date. Class Outstanding as of June 30, 2001 Common Stock, $0.001 11,486,964 Transitional Small Business Format: Yes [ ] No [X] Documents incorporated by reference: None FORWARD-LOOKING INFORMATION THIS FORM 10QSB AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY THE COMPANY OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, 15 U.S.C.A. SECTIONS 77Z-2 AND 78U-5. THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY AND MEMBERS OF ITS MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD- LOOKING STATEMENTS ARE SET FORTH HEREIN. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS OVER TIME. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The accompanying balance sheets of Emission Control Devices, Inc. (a development stage company) at June 30, 2001 and December 31, 2000, and the statements of operations for the three and six month periods ended June 30, 2001 and 2000 and the period from January 1, 1997 to June 30, 2001, and the cash flows for the six months ended June 30, 2001 and 2000, and the period from January 1, 1997 to June 30, 2001, have been prepared by the Company's management and they include all information and notes to the financial statements necessary for a complete presentation of the financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the quarter ended June 30, 2001 are not necessarily indicative of the results that can be expected for the year ending December 31, 2001. EMISSION CONTROL DEVICES, INC. AND SUBSIDIARY ( Development Stage Company ) CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 2001 2000 ------- ------- ASSETS CURRENT ASSETS Current Assets $ 471 $ 947 -------- -------- Total Current Assets 471 947 -------- -------- $ 471 $ 947 ======== ======== LIABILITIES AND STOCKHOLDERS' (DEFICIT) CURRENT LIABILITIES Accounts payable $ - $ 2,700 ------- -------- Total Current Liabilities - 2,700 ------- -------- STOCKHOLDERS' (DEFICIT) Common stock 100,000,000 shares authorized, $.001 par value, 11,486,964 shares issued and outstanding 11,487 11,487 Capital in excess of par value (9,487) (12,187) Retained earnings (deficit) accumulated During the development stage (1,529) (1,053) -------- -------- Total Stockholders' (Deficit) $ 471 $ (1,753) -------- -------- $ 471 $ 947 ======== ======== The accompanying notes are an integral part of these unaudited condensed financial statements. EMISSION CONTROL DEVICES, INC. AND SUBSIDIARY (Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Cumulative from the Re-entering of Three Months Six Months Development Stage Ended Ended on November 9 June 30, June 30, 2000 through ------------ ------------- June 30, 2001 2000 2001 2000 2001 ------ ------ ------ ------ --------------- REVENUE $ - $ - $ 1,089 $ - $ 1,089 ----- ----- ------ ----- ------ EXPENSES: General and administrative 1,543 - 1,565 1,150 2,618 ----- ----- ----- ----- ------ Total Expenses 1,543 - 1,565 1,150 2,618 ----- ----- ----- ----- ------ INCOME (LOSS) FROM OPERATIONS $(1,543) $ - $ (476) $(1,150) $(1,529) ======= ====== ======= ====== ======= NET LOSS PER COMMON SHARE Basic $ - $ - $ - $ - ------- ------ ------ ------ AVERAGE OUTSTANDING SHARES Basic 11,487 11,487 11,487 11,487 (stated in 1000's) ------- ------ ------ ------ The accompanying notes are an integral part of these unaudited condensed financial statements. EMISSION CONTROL DEVICES, INC. AND SUBSIDIARY (Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Cumulative from the Re-entering of Development Stage For the Six Months on November 9, Ended June 30, 2000 through ------------------- June 30, 2001 2000 2001 ------- ------- ----------------- Cash Flows From Operating Activities: Net income (loss) $ (476) $(1,150) $ (1,529) Adjustments to reconcile net loss to net cash used by operating activities: Changes in accounts payable - (2,000) - Issuance of capital stock for expenses - 2,667 - ------- ------- ------ Net Cash (Used) by Operating Activities (476) (483) (1,529) ------- ------- ------ Cash Flows From Investing Activities - - - Net Cash (Used) ------- ------- ------ by Investing Activities - - - ------- ------- ------ Cash Flows From Financing Activities Proceeds from issuance of common capital stock - - 2,000 Net Cash (Used) ------- ------- ------ by Financing Activities - - 2,000 ------- ------- ------ Net Increase in Cash (476) (483) 471 Cash at Beginning of Period 947 483 - ------- ------- ------ Cash at End of Period $ 471 $ - $ 471 ======= ======= ====== Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - $ - Income taxes $ - $ - $ - The accompanying notes are an integral part of these unaudited condensed financial statements. EMISSION CONTROL DEVICES, INC. AND SUBSIDIARY NOTES TO FINANCIAL STATEMENTS ========================================================================== 1. ORGANIZATION The Company was incorporated under the laws of the State of Colorado on May 16, 1985 with the name of "Mountain Ashe, Inc." with authorized common stock of 100,000,000 shares with a par value of $0.0001. On September 23, 1987 the name was changed to "Holographic Systems, Inc." and on February 7, 2000 the domicile was changed to the state of Nevada in connection with a change in par value to $0.001. On January 22, 2001 the Company changed its name to Emission Control Devices, Inc. as a part of the acquisition of all of the outstanding stock of Emission Control Devices, Inc. (a North Carolina corporation). Note 3 On February 7, 2000 the Company completed a reverse common stock split of one share for 20 outstanding shares. This report has been prepared showing after stock split shares with a par value of $.001 from inception. After 1996 the Company is considered to be a development stage company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Methods The Company recognizes income and expenses based on the accrual method of accounting. Dividend Policy The Company has not adopted a policy regarding payment of dividends. Income Taxes At June 30, 2001 the Company had a net operating loss carry forward of $1,529. The income tax benefit of $459 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is undeterminable since the Company has no operations. The loss carryover will expire in 2022. Earnings (Loss) Per Share Earnings (loss) per share amounts are computed based on the weighted average number of common shares actually outstanding, after stock splits. Financial Instruments The carrying amounts of financial instruments, including cash and accounts payable, are considered by management to be their estimated fair values. Estimates and Assumptions Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements. Principals of Consolidation The consolidated financial statements shown in this report exclude the historical operating information of the parent before December 31, 2000, and include the operating information of the subsidiary from its inception. All intercompany transactions have been eliminated. Comprehensive Income The Company adopted Statement of Financial Accounting Standards No. 130. The adoption of this standard had no impact on the total stockholder's equity. Recent Accounting Pronouncements The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements. 3. ACQUISITION OF ALL OUTSTANDING STOCK OF EMISSION CONTROL DEVICES, INC. On December 31, 2000 the Company (parent) completed the acquisition of all the outstanding stock of Emission Control Devices, Inc. (subsidiary), by a stock for stock exchange in which the stockholders of the subsidiary received 10,000,000 shares of the parent representing 91% of the outstanding stock of the parent. For reporting purposes, the acquisition is treated as an acquisition of the parent by the subsidiary (reverse acquisition) and a recapitalization of the subsidiary. The historical operating information prior to December 31, 2000 is that of the subsidiary. The only asset owned by the subsidiary is a license agreement described below, therefore, no value was recognized from the acquisition. The subsidiary was organized in the state of North Carolina on November 9, 2000 for the purpose of developing and marketing an exclusive licensing agreement, obtained from a related party, covering an emission control device. 4. GOING CONCERN The Company will need additional working capital to service its debt and for its planned activity. Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding and long term financing which will enable the Company to operate for the coming year. 5. RELATED PARTY TRANSACTIONS Related parties have acquired 67% of the outstanding common capital stock. ITEM 2. PLAN OF OPERATIONS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION Plan of Operation We hold two licenses that have been assigned from Unlimited Technologies International, Inc. covering motorcycle emission control devices and industrial forklift emission control devices. At this time, the license covering industrial fork lifts (South Industrial Equipment d/b/a/ Envirolift) is the only license resulting in sales, and this license is currently being expanded to cover OEM's of forklifts in addition to retrofits, and is expected to generate sales of approximately 300 units per month and revenues in excess of $30,000 per month. To date, however, the sales that have been generated pursuant to the fork lift application have been booked by Unlimited Technologies International, Inc., a private company, with which we share office and manufacturing space, as well as employees. We are presently working to transition operations and sales from the private company to our public company. We originally expected this process to take up to six months. However, we presently anticipate that this process will not be completed until the end of the year. Until that time, our sales, as indicated in the attached financial statements, will be negligible. Conversely, our expenses will continue to be negligible as well, as Unlimited Technologies International, Inc. is presently solely responsible for all expenses of operations. Liquidity, Capital Resources and Need for Additional Financing We have depleted our cash resources, and do not presently have the funds or capital resources to fully develop our technology or to sustain our operations to the point that our operating cash flow is positive, or to pay for the costs of transitioning our business from Unlimited Technologies International, Inc. The expected costs to meet these objectives is in excess of $100,000.00. If we are unable to secure debt or equity financing, we may be forced to cease operations, or we may continue to have negligible operations. Results of Operations During the period from January 1, 2001 through June 30, 2001, we have engaged in no significant operations other than maintaining our reporting status and booking isolated, limited revenues from one of our license agreements. For the current year, we anticipate incurring a loss as a result of legal and accounting expenses, and the expenses associated with the transition from Unlimited Technologies International, Inc. Need for Additional Financing Based upon current management's willingness to extend credit to the Company and/or invest in the Company until a business combination is completed, the Company believes that its existing capital will be sufficient to meet the Company's cash needs required for the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934, as amended, and for the costs of accomplishing its goal of completing a business combination, for an indefinite period of time. Accordingly, in the event the Company is able to complete a business combination during this period, it anticipates that its existing capital will be sufficient to allow it to accomplish the goal of completing a business combination. There is no assurance, however, that the available funds will ultimately prove to be adequate to allow it to complete a business combination, and once a business combination is completed, the Company's needs for additional financing are likely to increase substantially. In addition, as current management is under no obligation to continue to extend credit to the Company and/or invest in the Company, there is no assurance that such credit or investment will continue or that it will continue to be sufficient for future periods. Part II - Other Information Item 1. Legal Proceedings None; not applicable. Item 2. Changes in Securities. None; not applicable. Item 3. Defaults Upon Senior Securities. None; not applicable. Item 4. Submission of Matters to a Vote of Security Holders. None; not applicable. Item 5. Other Information. None; not applicable. Item 6. Exhibits and Reports on Form 8-K. No other exhibits were filed on Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Emission Control Devices, Inc. Date: August 14, 2001 By /s/ Russell A. Masters ---------------------- Russell A. Masters, President -----END PRIVACY-ENHANCED MESSAGE-----