10QSB/A 1 a05-2893_410qsba.htm 10QSB/A

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-QSB/A

(Amendment No. 3)

(Mark One)

 

ý        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the period from January 1, 2003 to March 31, 2003

 

o        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

Commission File No. 0-31267

 

IWT TESORO CORPORATION

(Exact Name of Small Business Issuer in Its Charter)

 

Nevada

 

91-2048019

(State or Other Jurisdiction of
Incorporation or Organization)

 

(I.R.S. Employer
Identification Number)

 

5 Wicks Lane, Wilton, CT 06897

(Address of principal executive offices)

 

(203) 858-9951

(Issuer’s Telephone Number, including area code)

 

 

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:  NONE

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $.001 Per Share

 

Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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:

ýYes                                    oNo

 

State the number of shares outstanding of each of the issuer’s class of common equity, as of May 9. 2003:  11,200,502 shares.

 

Transitional Small Business Disclosure Format:     oYes              ýNo

 

 



 

EXPLANATORY NOTE

 

Tesoro has restated the consolidated balance sheets as of March 31, 2003 and December 31, 2002, and the consolidated statements of operations, stockholders’ equity and cash flows for the three month ended March 31, 2003 and 2002, respectively.  In particular, Management determined that Tesoro had been incorrectly calculation the accruals for sales commissions. Management revised this calculation and determined that accrued expenses were understated by approximately $295,000 as of March 31, 2003.  Additionally, management reassessed its methodology for accounting for sample and display boards and determined that this promotional merchandise should have been expensed when distributed rather than capitalized and depreciated. The adjustments resulting from the restatement decreased net income by approximately $148,000 for the three months ended March 31, 2003. This change also reduced property and equipment as of March 31, 2003 by approximately $2,371,000.  In connection with the restatements for accrued expenses and sample and display boards described above, the related tax effect was recorded resulting in a gross deferred tax asset for the three month ended March 31, 2003 of approximately $13,000.  Finally, as part of the recapitalization transaction of IWT effective October 1, 2002 (see Note 1), the Company and each of the three stockholders of International Wholesale Tile, Inc. entered into a repurchase agreement to commence on January 1, 2003. The maximum number of redeemable shares under the repurchase agreement was 450,000. The transaction was accounted for by reducing additional paid in capital to the extent a balance existed with the remaining portion of the transaction applied to accumulated deficit as of December 31, 2002.

 

Other than the financial statements and related notes, and Management’s Discussion and Analysis set forth in Item 1 and 2 of this periodic report, which takes into account the effect of the restatement, all other information is as described in Amendment No. 2 to the 10-QSB for the year ended March 31, 2003, filed with the Securities and Exchange Commission on June 27, 2003.

 

PART I

 

ITEM 1:      FINANCIAL STATEMENTS

 

TABLE OF CONTENTS

 

Consolidated Balance Sheets (as Restated)  (Unaudited)

 

 

 

Consolidated Statements of Operations (as Restated)  (Unaudited)

 

 

 

Consolidated Statements of Changes in Stockholders’ Equity (as Restated)  (Unaudited)

 

 

 

Consolidated Statements of Cash Flows (as Restated)  (Unaudited)

 

 

 

Notes to Consolidated Financial Statements

 

 

1



 

IWT TESORO CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

December 31,

 

 

 

2003

 

2002

 

 

 

(Restated)

 

(Restated)

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash

 

$

664,358

 

$

574,046

 

Accounts receivable, net allowance for doubtful accounts and returns

 

3,486,903

 

2,875,532

 

Inventories

 

8,496,466

 

6,047,876

 

Subscription receivable

 

130,000

 

 

Prepaid expenses

 

325,587

 

286,820

 

Deferred tax asset

 

610,290

 

597,196

 

Total current assets

 

13,713,604

 

10,381,470

 

 

 

 

 

 

 

Property and equipment, net

 

988,140

 

489,502

 

 

 

 

 

 

 

Other assets

 

192,974

 

191,725

 

 

 

$

14,894,718

 

$

11,062,697

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

7,726,994

 

$

5,403,816

 

Accrued expenses

 

705,320

 

354,863

 

Current portion of capital lease obligations

 

54,709

 

47,222

 

Current portion of notes payable, other

 

49,850

 

48,780

 

Total current liabilities

 

8,536,873

 

5,854,681

 

 

 

 

 

 

 

Long-Term Debt:

 

 

 

 

 

Note payable, revolving line of credit

 

5,591,361

 

4,864,778

 

Capital lease obligations

 

138,323

 

108,438

 

Subordinated notes payable, stockholders

 

423,662

 

448,712

 

Notes payable, other

 

51,911

 

64,872

 

Total long-term debt

 

6,205,257

 

5,486,800

 

Total liabilities

 

14,742,130

 

11,341,481

 

 

 

 

 

 

 

Redeemable common stock (450,000 shares issued and outstanding)

 

1,073,160

 

1,073,160

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Preferred stock, $0.001 par value, 25,000,000 authorized; none issued

 

 

 

Common stock, $0.001 par value, 100 million shares authorized; 10,750,502 and 10,587,834 issued and outstanding

 

10,750

 

10,588

 

Additional paid in capital

 

483,198

 

 

Accumulated deficit

 

(1,414,520

)

(1,362,532

)

 

 

(920,572

)

(1,351,944

)

 

 

$

14,894,718

 

$

11,062,697

 

 

See notes to financial statements.

 

2



 

IWT TESORO CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2003

 

2002

 

 

 

(Restated)

 

(Restated)

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Sales, net of discounts and returns

 

$

6,713,810

 

$

6,014,020

 

Cost of goods sold

 

4,079,608

 

3,612,316

 

 

 

 

 

 

 

Gross profit

 

2,634,202

 

2,401,704

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

Payroll

 

1,177,642

 

771,201

 

Delivery

 

336,045

 

271,518

 

General and administrative

 

210,016

 

79,045

 

Lease expense

 

134,380

 

114,716

 

Depreciation and amortization

 

40,550

 

29,705

 

Insurance

 

74,828

 

82,351

 

Repairs and maintenance

 

82,371

 

34,988

 

Sales expenses

 

114,868

 

39,592

 

Advertising

 

265,567

 

175,232

 

Professional fees

 

124,843

 

20,036

 

Travel and entertainment

 

54,460

 

33,625

 

Bad debts

 

3,247

 

 

 

 

2,618,817

 

1,652,009

 

Income from operations

 

15,385

 

749,695

 

 

 

 

 

 

 

Other income/(expenses)

 

 

 

 

 

Interest expense

 

(75,949

)

(74,631

)

Other income

 

835

 

709

 

Gain (loss) on disposal

 

(5,352

)

5,990

 

 

 

(80,466

)

(67,932

)

 

 

 

 

 

 

Net income before taxes

 

(65,081

)

681,763

 

 

 

 

 

 

 

Income tax benefit

 

13,093

 

 

 

 

 

 

 

 

Net income (Loss)

 

$

(51,988

)

$

681,763

 

 

 

 

 

 

 

Earnings per common share - Basic & diluted

 

$

(0.00

)

$

0.06

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

Basic and diluted

 

11,081,516

 

9,000,000

 

 

3



 

IWT TESORO CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

Common Stock

 

Paid in

 

Subscription

 

Accumulated

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Receivable

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2001, as restated

 

9,000,000

 

$

9,000

 

$

116,400

 

$

(84,000

)

$

(776,789

)

$

(735,389

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2002:

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions, September 30, 2002

 

 

 

 

 

(1,864,020

)

(1,864,020

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment of subscription receivable

 

 

 

 

84,000

 

 

 

84,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income, nine months ended September 30, 2002

 

 

 

 

 

2,214,239

 

2,214,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance September 30, 2002 - Before Recapitalization

 

9,000,000

 

9,000

 

116,400

 

 

(426,570

)

(301,170

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recapitalization, October 1, 2002

 

1,800,000

 

1,800

 

(116,400

)

 

3,542

 

(111,058

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance After Recapitalization on October 1, 2002

 

10,800,000

 

10,800

 

 

 

(423,028

)

(412,228

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification of redeemable stock

 

(450,000

)

(450

)

 

 

 

 

(60,086

)

(60,536

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares in exchange for legal services

 

15,000

 

15

 

40,635

 

 

 

40,650

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares to employees, directors and consultants (SIP)

 

134,500

 

135

 

364,360

 

 

 

364,495

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares - private offering

 

83,334

 

83

 

249,917

 

 

 

250,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of warrants

 

5,000

 

5

 

14,995

 

 

 

15,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss 3 months ended December 31, 2002

 

 

 

 

 

(536,701

)

(536,701

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of redeemable stock

 

 

 

(669,907

)

 

(342,717

)

(1,012,624

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance December 31, 2002, as restated

 

10,587,834

 

$

10,588

 

$

 

$

 

$

(1,362,532

)

$

(1,351,944

)

 

See notes to financial statements.

 

4



 

IWT TESORO CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

 

 

 

 

Additional

 

Accumulated

 

 

 

 

 

Common Stock

 

Paid in

 

Earnings

 

 

 

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2002, as restated

 

10,587,834

 

$

10,588

 

$

 

$

(1,362,532

)

$

(1,351,944

)

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares - private offering

 

136,668

 

136

 

409,864

 

 

410,000

 

Exercise of warrants

 

10,000

 

10

 

29,990

 

 

30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares to employees and directors for services rendered (SIP)

 

16,000

 

16

 

43,344

 

 

43,360

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, three months ended March 21, 3003

 

 

 

 

(51,988

)

(51,988

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2003, as restated

 

10,750,502

 

$

10,750

 

$

483,198

 

$

(1,414,520

)

$

(920,572

)

 

See notes to financial statements.

 

5



 

IWT TESORO CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2003

 

2002

 

 

 

(Restated)

 

(Restated)

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income (loss)

 

$

(51,988

)

$

681,763

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

Depreciation and amortization

 

40,550

 

29,705

 

Deferred income taxes

 

(13,094

)

 

Common stock issued for services and compensation

 

43,360

 

 

Provision for doubtful accounts and reserve for returns

 

24,202

 

 

(Gain) loss on disposal of property and equipment

 

5,352

 

(5,990

)

Changes in operating assets and liabilities:

 

 

 

 

 

(Increase) Decrease in:

 

 

 

 

 

Accounts receivable

 

(635,573

)

(785,763

)

Inventories

 

(2,448,590

)

1,290,938

 

Prepaid expenses and other assets

 

(158,886

)

(28,642

)

Increase in:

 

 

 

 

 

Accounts payable and accrued expenses

 

2,651,145

 

(945,933

)

Other Liabilities

 

15,200

 

5,625

 

Net cash provided by (used in) operating activities

 

(528,322

)

241,703

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Acquisitions of property and equipment

 

(371,267

)

(3,946

)

Proceeds from sale of equipment

 

 

11,000

 

Net cash used in investing activities

 

(371,267

)

7,054

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from revolving line of credit

 

6,788,000

 

5,350,000

 

Payments on revolving line of credit

 

(6,060,817

)

(5,107,797

)

Proceeds from issuance of stock

 

440,000

 

 

Collection on notes receivable arising from sale of stock

 

(130,000

)

 

Payments on capital leases and notes payable

 

(22,232

)

(10,287

)

Repayment of related party loan

 

(25,050

)

 

Distribution to stockholders

 

 

(531,458

)

Proceeds from related party note

 

 

10,650

 

Net cash provided by (used in) financing activities

 

989,901

 

(288,892

)

 

 

 

 

 

 

Net Increase (Decrease) in Cash

 

90,312

 

(40,135

)

 

 

 

 

 

 

Cash, Beginning

 

574,046

 

402,500

 

Cash, Ending

 

$

664,358

 

$

362,365

 

 

 

 

 

 

 

Cash Paid (Received) During the Period for:

 

 

 

 

 

Interest expense

 

$

75,949

 

$

74,631

 

 

See notes to financial statements.

 

6



 

IWT TESORO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2003

 

NOTE 1                 BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, International Wholesale Tile, Inc. (IWT), IWT Tesoro International, Inc. (International) and IWT Tesoro Transport, Inc. (Transport).  All significant inter-company balances and transactions have been eliminated.

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-QSB and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with generally accepted accounting principles.  It is suggested that these condensed financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s audited financial statements on Form 10-KSB for the fiscal year ended December 31, 2002.

 

The accounting policies followed for interim financial reporting are the same as those disclosed in Note 1 of the Notes to Financial Statements included in the Company’s audited financial statements for the fiscal year ended December 31, 2002, which are included in Form 10-KSB.

 

In the opinion of management, the unaudited financial statements include all necessary adjustments (consisting of normal, recurring accruals) for a fair presentation of the financial position, results of operations and cash flow for the interim periods presented.  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.  Actual results may differ from these estimates.  Interim results are not necessarily indicative of results for a full year.  The results of operations for the three-month period ended March 31, 2003 are not necessarily indicative of operating results to be expected for a full year.

 

NOTE 2                 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Stock Options

The Company elected to account for stock options issued to employees in accordance with Accounting Principles Board Opinion No. 25 (APB Opinion No. 25) Accounting For Stock Issued to Employees and related interpretations, which established financial accounting and reporting for compensation cost of stock issued to employees through non-variable plans, variable plans, and non-compensatory plans, and accounts for stock options and warrants issued to non-employees in accordance with SFAS 123, Accounting for Stock-Based Compensation, which established a fair value method of accounting for stock compensation plans with employees and others.

 

7



 

No options were granted during the three months ended March 31, 2003 and 2002.

 

Had compensation costs for the Company’s stock option granted during the year ended December 31, 2002, been determined on the fair market value at the grant dates for the options, consistent with Statement of Accounting Standards No. 123, Accounting for Stock Based Compensation (Statement No. 123), the Company’s results of operations for the year ended December 31, 2002 would have changed to the pro-forma amounts indicated.

 

 

 

2002

 

 

 

 

 

Net income as reported

 

$

1,677,538

 

Add: Total stock based employee compensation expense determined under fair value based method for all awards, net of related tax effects

 

(2,697

)

Pro-forma net income

 

$

1,674,841

 

 

 

 

 

Net income per share basic – diluted

 

 

 

As reported

 

$

0.15

 

Pro-forma

 

$

0.15

 

 

Accounting Pronouncements

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, which amended SFAS No. 123, Accounting for Stock-Based Compensation.  The new standard provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  Additionally, the statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in the annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used in reported results.  This statement is effective for financial statements for fiscal years ending after December 15, 2002.  In compliance with SFAS No. 148, the Company has elected to continue to follow the intrinsic value method in accounting for its stock-based employee compensation arrangement as defined by APB No. 25.

 

Earnings per Share

Basic earnings per share for each year is computed by dividing income for the year by the weighted average number of common shares outstanding during the year.  Diluted earnings per share include the effects of common stock equivalents to the extent they are dilutive. At March 31, 2003 all common stock equivalents were antidilutive and therefore diluted earnings per share equaled basic earnings per share.

 

Basic and diluted weighted average number of shares outstanding at March 31st is as follows:

 

 

 

 

2003

 

2002

 

 

 

 

 

 

 

Basic and diluted weighted average number of shares outstanding

 

11,081,516

 

9,000,000

 

 

NOTE 3                 CONCENTRATION OF CREDIT RISK

 

Financial instruments that potentially subject the Company to credit risk include cash on deposit with two financial institutions amounting to $664,358 at March 31, 2003, which was insured for up to $100,000 per financial institution by the U.S. Federal Deposit Insurance Corporation.

 

The Company obtains detailed credit evaluations of customers and establishes credit limits as required and routinely assesses the financial strength of its customers.  The Company competes primarily in the sale of ceramic tile and marble markets and sells its products to a multitude of customers.  There is no disproportionate concentration of credit risk.

 

8



 

NOTE 4                 ACCOUNTS RECEIVABLE

 

Accounts receivable consisted of the following:

 

 

 

March 31,
2003

 

December 31,
2002

 

 

 

 

 

 

 

Accounts receivable

 

$

3,547,858

 

$

2,958,777

 

Less allowance for doubtful accounts and returns

 

(60,955

)

(83,245

)

 

 

 

 

 

 

 

 

$

3,486,903

 

$

2,875,532

 

 

Bad debt expense for the three months ended March 31, 2003 was $3,247. There was no bad debt expense for the three months ended March 31, 2002.

 

NOTE 5                 INVENTORY

 

Inventory consisted of the following:

 

 

 

March 31,
2003

 

December 31,
2002

 

 

 

 

 

 

 

Tiles

 

$

7,022,025

 

$

4,692,974

 

Inventory in transit

 

1,474,441

 

1,354,902

 

 

 

 

 

 

 

 

 

$

8,496,466

 

$

6,047,876

 

 

9



 

NOTE 6                 PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following:

 

 

 

March 31,
2003

 

December 31,
2002

 

Depreciation
Period
in Years

 

 

 

 

 

 

 

 

 

Furniture and fixtures

 

$

199,585

 

$

89,238

 

5-10

 

Machinery and equipment

 

381,347

 

326,165

 

7-10

 

Vehicles

 

214,571

 

207,071

 

5

 

Computer equipment

 

274,176

 

131,407

 

3-5

 

Leasehold improvements

 

314,740

 

108,220

 

7

 

 

 

 

 

 

 

 

 

 

 

1,384,419

 

862,101

 

 

 

Less accumulated depreciation

 

(396,279

)

(372,599

)

 

 

 

 

 

 

 

 

 

 

 

 

$

988,140

 

$

489,502

 

 

 

 

Depreciation expense for the three months ended March 31, 2003 and 2002 was $40,550 and $29,705, respectively. (See Note 9)

 

NOTE 7                 NOTES PAYABLE

 

The Company has outstanding notes payable as follows:

 

 

 

March 31,
2003

 

December 31,
2002

 

 

 

 

 

 

 

Notes Payable – Related Parties

 

$

423,662

 

$

448,712

 

Notes Payable – Unrelated Parties

 

101,761

 

113,652

 

 

 

 

 

 

 

 

 

525,423

 

562,364

 

Less current portion

 

(49,850

)

(48,780

)

 

 

 

 

 

 

 

 

$

475,573

 

$

513,584

 

 

Interest expense related to these notes for the three months ended March 31, 2003 and 2002 was $13,531 and $16,209, respectively.

 

10



 

Long-term debt maturities for all notes payable for the next five years and thereafter are as follows:

 

2003

 

$

36,889

 

2004

 

46,456

 

2005

 

18,416

 

2006

 

0

 

2007

 

0

 

2008 & thereafter

 

423,662

 

 

 

 

 

 

 

$

525,423

 

 

NOTE 8                 LOAN PAYABLE

 

On November 13, 2002, the subsidiary (IWT) renegotiated its existing line of credit to increase the amount of the maximum credit to $7,500,000.  The average interest rate was about 5% for the three months ended March 31, 2003.  IWT owed $5,591,361 at March 31, 2003, and $4,864,778 at December 31, 2002 against these revolving loans.

 

IWT is subject to a number of restricted covenants under the debt agreement.  IWT is in compliance with all covenants during the three months ended March 31, 2003.

 

Interest expense related to these loans for the three months ended March 31, 2003 and 2002 was $59,151 and $72,051, respectively.

 

NOTE 9                 LEASES

 

Capital Leases

The Company’s property under capital leases is included in property and equipment (See Note 6) and is summarized as follows:

 

 

 

March 31,
2003

 

December 31,
2002

 

 

 

 

 

 

 

Equipment

 

$

316,855

 

$

266,672

 

Less:  Accumulated depreciation

 

(66,332

)

(58,724

)

 

 

 

 

 

 

Net assets under capital leases

 

$

250,523

 

$

207,948

 

 

11



 

Operating Leases

The Company leases office and warehouse space under a non-cancelable operating lease, which has an initial term in excess of one year.  In May 2003, the Company took occupancy of a new warehouse and office facility in Palm City, Florida.   The Company also leases office space in Westport, Connecticut for its corporate headquarters.

 

At March 31, 2003, future minimum annual lease payments under operating and capital leases are as follows:

 

 

 

Operating
Lease

 

Capital
Leases

 

 

 

 

 

 

 

2003

 

$

454,427

 

$

41,807

 

2004

 

634,550

 

51,611

 

2005

 

649,250

 

46,746

 

2006

 

663,950

 

34,977

 

2007

 

678,650

 

15,976

 

2008 and thereafter

 

3,866,100

 

1,915

 

 

 

 

 

 

 

 

 

$

6,946,927

 

$

193,032

 

 

Total lease expense under operating leases was $134,380 and $114,716 for the three months ended March 31, 2003 and 2002, respectively.

 

Total interest expense under capital leases was $2,146 and $2,350 for the three months ended March 31, 2003 and 2002, respectively.

 

NOTE 10               INCOME TAXES

 

At March 31, 2003 the Company had useable net operating loss carryforwards of approximately $610,290 for income tax purposes, available to offset future taxable income of the U.S. entity, expiring through 2022.  No valuation allowance has been recorded due to the certainty of the Company’s ability to generate future taxable income.

 

12



 

NOTE 11               STOCKHOLDERS’ EQUITY

 

The Articles of Incorporation provide for the authorization of 25,000,000 shares of convertible preferred stock at $0.001, and 100,000,000 shares of common stock at $0.001 par value.  Each share of preferred stock is convertible into 1 share of common stock.

 

Common Stock

During the three months ended March 31, 2003, the Company issued 136,668 shares of common stock and 205,002 warrants for $3.00 per unit, or a total of $410,000, to accredited investors pursuant to the private offering. (See Note 14)

 

On March 3, 2003, the Company issued 1,000 shares of common stock valued at $2.71 per share, based on the contemporaneous offering price, or a total of $2,710 to employees under the Stock Incentive Plan for services rendered resulting in an immediate charge to operations.

 

On February 18th and February 25th, 2003, the Company issued 15,000 shares of common stock valued at $2.71 per share, based on the contemporaneous offering price, or a total of $40,650 to directors under the Stock Incentive Plan for services rendered resulting in an immediate charge to operations.

 

On February 26, 2003, 10,000 warrants were exercised for 10,000 shares of common stock at $3.00 per share, or a total of $30,000.

 

NOTE 12               STOCK OPTIONS AND COMPENSATION PLAN

 

Stock Compensation Plan

On December 27, 2001, IWT Tesoro Corporation adopted the “Stock Incentive Plan.”  The Company’s Stock Incentive Plan provides that eligible employees, consultants, and affiliates may be granted shares of common stock.  Under the plan, the options granted are non-qualified stock options, incentive stock options, and restricted stock.  The aggregate total common stock that may be issued is 4,000,000 shares.  For the three months ended March 31, 2003, 16,000 restricted shares were issued to employees and directors for services rendered.  The total number of restricted shares issued under the Stock Incentive Plan is 140,500 through March 31, 2003.

 

In accordance with SFAS No. 123, for options issued to employees, the Company has elected to account for these stock options under APB No. 25 and related interpretations in accounting for its plan.  Accordingly, no compensation costs have been recognized for options issued under the plan as of December 31, 2002.  Had compensation costs for the Company’s stock option been determined on the fair market value at the grant dates for the options, consistent with Statement of Accounting Standards No. 123, Accounting for Stock Based Compensation (Statement No. 123), the Company’s results of operations for the year ended December 31, 2002 would have changed to the pro-forma amounts indicated.  No options were issued during the three months ended March 31, 2003.

 

13



 

The following illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123.

 

 

 

 

 

March 31,
2003

 

December 31,
2002

 

 

 

 

 

(Restated)

 

(Restated)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

As reported

 

$

(51,988

)

$

1,677,538

 

 

 

Pro-forma

 

$

(51,988

)

$

1,674,841

 

 

 

 

 

 

 

 

 

Net income per share basic

 

As reported

 

$

0.00

 

$

0.15

 

 

 

Pro-forma

 

$

0.00

 

$

0.15

 

 

NOTE 13               ACQUISITION

 

On October 1, 2002, the Company acquired International Wholesale Tile, Inc. In connection with the legal form of this transaction, International Wholesale Tile, Inc. became a wholly owned subsidiary of IWT Tesoro Corporation.  A total of 9,000,000 shares of common stock were issued for the acquisition.  For accounting purposes, the acquisition has been treated as a capital transaction and as a recapitalization of International Wholesale Tile, Inc.

 

As part of the transaction, the Company and each of the three shareholders of International Wholesale Tile, Inc. entered into a repurchase agreement by which the three shareholders may sell a certain amount of the Company’s common stock back to the Company for a price based on an amount equal to 88% of the average trading price of the Company’s common stock so long as the stock is trading.  The amount of stock is generally up to 25,000 shares for the first year, up to 50,000 shares for the second year, and up to 75,000 shares for the third year.

 

NOTE 14               PRIVATE OFFERING

 

The Company adopted a subscription agreement on October 1, 2002 to commence a private offering of its common stock to accredited investors only for up to 1.0 million units at $3.00 per unit; each consisting of one (1) share of common stock and warrants to purchase 1½ shares initially at $3.00 per share.  The price of the warrants will increase by $.25 per share at the beginning of each calendar quarter following the first public sale of the common stock of IWT Tesoro Corporation pursuant to the Company’s form 211 to be filed with the National Association of Securities Dealers (NASD).

 

From adoption of the subscription agreement on October 1, 2002 through March 31, 2003, the Company sold 220,002 units for a total of $660,000.  In addition, 15,000 warrants were exercised for a total of $45,000.

 

14



 

NOTE 15               SEGMENT INFORMATION

 

The Company manages its operations as one segment and all revenue is derived from customers in the United States.

 

NOTE 16               NEW SUBSIDIARIES

 

On January 8, 2003, the Company incorporated a subsidiary, IWT Tesoro International, Ltd. (ITIL).  This subsidiary was set up as a foreign subsidiary, to be based in Bermuda to handle future operations of foreign subsidiaries.  Organizational costs related to the incorporation totaling $8,311 were capitalized and are being amortized over 5 years.  Amortization expense for the three months ended March 31, 2003 was $416.

 

On January 24, 2003, the Company set up IWT Tesoro Transport, Inc. (ITTI).  Initially, this corporation will be a transport broker, but future plans include overland transport of tile from Florida to destinations within the United States and return shipments of other freight back to Florida.

 

NOTE 17               SUBSEQUENT EVENT

 

On April 11, 2003, the Company filed a registration statement with the Securities and Exchange Commission to register 250,000 units to be sold to the public at $5.50 per unit.  Each unit consists of one share of common stock and one warrant to purchase one share at $7.00 per share for three years.

 

NOTE 18               RESTATEMENT

 

The Company has restated the consolidated balance sheet as of March 31, 2003, and the consolidated statements of operations, stockholders’ equity and cash flows for the three months then ended as described below:

 

Accounts Receivable

 

Management determined that the Company had been incorrectly calculating the allowances for product returns.  Management revised this calculation and determined that accounts receivable and net sales were overstated by approximately $21,000 as of and for the period ended March 31, 2003.

 

Accrued Expenses

 

Management determined that the Company had been incorrectly calculating the accruals for sales commissions. Management revised this calculation and determined that accrued expenses were understated by approximately $295,000 as of March 31, 2003.

 

Sample and Display Boards

 

Management reassessed its methodology for accounting for sample and display boards and determined that this promotional merchandise should have been expensed when distributed rather than capitalized and depreciated. The adjustments resulting from the restatement decreased net income by approximately $148,000 for the three months ended March 31, 2003. This change also reduced property and equipment as of March 31, 2003 by approximately $2,371,000.

 

Deferred Taxes

 

In connection with the restatements for accounts receivable, accrued expenses and sample and display boards described above, the related tax effect was recorded resulting in a net deferred tax assets for the three month period ended March 31, 2003 of approximately $610,000, an approximate $13,000 increase over the three month period.

 

Stockholders Equity

 

As part of the recapitalization transaction of IWT effective October 1, 2002 (see Note 1), the Company and each of the three stockholders of International Wholesale Tile, Inc. entered into a repurchase agreement to commence on January 1, 2003. The maximum number of redeemable shares under the repurchase agreement was 450,000. The transaction was accounted for by reducing additional paid in capital to the extent a balance existed with the remaining portion of the transaction applied to accumulated deficit as of December 31, 2002.

 

15



 

The effects of these changes are summarized as follows:

 

 

 

March 31, 2003

 

 

 

As

 

 

 

 

 

 

 

Previously

 

 

 

As

 

 

 

Reported

 

Adjustments

 

Restated

 

Consolidated Balance Sheet:

 

 

 

 

 

 

 

Accounts receivable

 

$

3,507,858

 

$

(20,955

)

$

3,486,903

 

Property and equipment, net

 

3,358,786

 

(2,370,646

)

988,140

 

Deferred tax assets

 

2,480

 

607,810

 

610,290

 

Accrued expenses

 

410,467

 

294,853

 

705,320

 

Deferred tax liability

 

 

 

 

Additional paid in capital

 

1,169,266

 

(686,068

)

483,198

 

Retained deficit

 

$

(21,944

)

$

(1,392,576

)

$

(1,414,520

)

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended March 31, 2003

 

 

 

As

 

 

 

 

 

 

 

Previously

 

 

 

As

 

 

 

Reported

 

Adjustments

 

Restated

 

Consolidated Statement of Operations:

 

 

 

 

 

 

 

Net Sales

 

$

6,734,765

 

$

(20,955

)

$

6,713,810

 

Gross profit

 

2,655,157

 

(20,955

)

2,634,202

 

Operating expenses

 

2,380,026

 

238,791

 

2,618,817

 

Income (loss) before income taxes

 

194,665

 

(259,746

)

(65,081

)

Income tax benefit (expense)

 

(31,869

)

44,962

 

13,093

 

Net Income (loss)

 

$

162,796

 

$

(214,784

)

$

(51,988

)

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

Basic & diluted

 

$

0.01

 

$

(0.02

)

$

(0.00

)

 

ITEM 2:          MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

The following discussion should be read along with our financial statements, which are included in another section of this prospectus. This discussion contains forward-looking statements about our expectations for our business and financial needs. These expectations are subject to a variety of uncertainties and risks that may cause actual results to vary significantly from our expectations. The cautionary statements made in this prospectus should be read as applying to all forward-looking statements in any part of this prospectus.

 

We were incorporated on May 5, 2000 as a Nevada corporation. Our principal office is located at 191 Post Road West, Suite 10, Westport, CT 06880. Any reference in this “Management’s Discussion and Analysis or Plan of Operations” discussion to “the company,” “our,” “we” or “us” refers to Tesoro.

 

Effective October 1, 2002, we acquired International Wholesale Tile, Inc. (IWT) through a share exchange and IWT became our wholly owned subsidiary. We issued a total of 9 million shares of our common stock in exchange for all of the IWT shares. As part of the transaction, Tesoro and each of the three IWT stockholders entered into a repurchase agreement by which the three stockholders may each sell a total of 150,000 shares of Tesoro’s common stock over a three-year period back to us for a price based on an amount equal to 88% of its then weighted average trading price.

 

Through IWT, we provide hard floor and wall covering materials primarily ceramic, porcelain and granite tiles to the new construction and remodeling industries for the commercial and residential marketplaces. We distribute our products through a network of independently owned dealers and distributors, buying groups and home center retailers. We currently purchase our products predominately from foreign manufacturers.

 

Our primary source of revenue is the sale of hard flooring and wall covering materials and our primary costs relate to the acquisition, warehousing and delivery of those products. While sales are made throughout the United States, the majority of our sales are in the southeastern quadrant of the country. The primary sources of working capital are a $7.5 million (US) revolving line of credit from a

 

16



 

division of a large US commercial bank, stockholders’ equity and our suppliers who have extended us terms. Specifically, the terms we have negotiated with our international suppliers are more advantageous than those we extend to our customers. This allows us, in some instances, to collect our receivables prior to paying our suppliers. During 2003, we expect to begin trading our stock on the OTC-BB and to raise equity through the public market. Any new equity raised will be used to strengthen our balance sheet and to provide capital for continued growth.

 

In the first quarter of 2003, we have created two new wholly owned subsidiary companies. The first is IWT Tesoro International Ltd, a Bermuda based exempt company. A Bermuda exempt company is a company domiciled in Bermuda that is not actively involved in trade or business on the island and is therefore exempt from certain licensing requirements. International will serve as the holding company for any international based ventures we need to support expanding our sales effort. The other subsidiary is IWT Tesoro Transport, Inc., a Florida corporation, and a licensed freight broker that will handle our in and out bound freight operations.

 

Results of Operations for the Quarter ending March 31, 2003.

 

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto that appear elsewhere in this document. The table below sets forth certain operating data as a percentage of total revenue for the periods indicated.

 

 

 

Quarter Ending March 31,

 

 

 

2001

 

2002

 

2003

 

 

 

 

 

 

 

 

 

Revenues

 

4,513,755

 

6,014,020

 

6,713,810

 

Cost of Goods Sold

 

2,995,589

 

3,612,316

 

4,079,608

 

Gross Margin Percentage

 

33.6

%

39.9

%

39.2

%

Operating Expenses

 

1,301,252

 

1,652,009

 

2,618,817

 

 

March 31, 2003 Compared to March 31, 2002

 

Sales for the quarter ended March 31, 2003 were $6,713,810 a 12% increase over sales for the quarter ended March 31, 2002. This growth follows a 33% growth from 2001 to 2002. We are a relatively small player in a growing market. We are entering new markets and adding new products; therefore, we expect to be able to grow faster than the market as a whole for the next several years. Our

 

17



 

share of this market is approximately 1%. The tile market in the United States is approximately $2.1 billion and is growing at a five to seven percent rate.

 

As we grow, we have been able to purchase product at lower prices and have consequently lowered our cost of goods to 60% in 2002 from 64% in 2001 and 68% in 2000. While there are certainly finite limits to improving our gross margin percentage, it is imperative that we maintain these ratios as we grow.

 

We have included reconciliation from our net income to EBITDA:

 

 

 

2002

 

2001

 

 

 

 

 

 

 

Net income

 

$

1,677,538

 

$

822,391

 

Interest expense

 

328,920

 

424,527

 

Income taxes (deferred)

 

(597,174

)

0

 

Depreciation

 

129,732

 

120,371

 

Amortization

 

0

 

0

 

EBITDA

 

$

1,539,016

 

$

1,367,289

 

 

              The major causes of the increased EBITDA were (a) an increase of 29% in sales and (b) an increase of 4% on the gross margin.

 

              EBIDTA is not a GAAP concept and should not be used as the only measure of a company’s financial performance. Investors should refer to our financial statements before making any investment decisions.

 

              Our earnings before interest, taxes, depreciation and amortization (EBITDA) grew from $1.3 million in 2001 to $1.5 million in 2002, a 12% growth rate. EBITDA is a concept used by financial managers to compare businesses that operate in different industries with different capital needs, tax circumstances and debt structure.

 

In early April 2003, we moved into a new warehouse facility of nearly 147,000 square feet, an increase of nearly 50% over the previous facility. 5,000 square feet of the new facility is for office space. This new facility will allow us to increase our inventory and better serve our customers who rely upon us to meet the short lead times and limited inventory capacity that exist in their markets. We hope to improve the efficiency of our warehouse operations by simplifying the receiving and shipping functions. We currently maintain between four and five million square feet of product in our facility and expect that this will increase to between six and seven million square feet. Our inventory turns, in 2002, were approximately 3.8 times. We expect to lower those turns to about 3.2 during 2003 and to 3.0 in 2004, however we cannot assure anyone that we will be successful in attaining these expectations. Availability of product is a key success factor for us and is a good use of our capital.

 

Operating expenses for the quarters ended March 31, 2003 and 2002 were $2,618,817 and $1,652,009, respectively. This increase of 58.5% was a result of investments being made in people, infrastructure and corporate organization for future growth. With the acquisition of IWT in October 2002, we began to incur certain professional and operating expenses that are not reflected in the comparable period for 2002. In addition, we began to issue common stock to non-executive employees, outside directors and suppliers under the incentive stock plan. Generally Accepted Accounting Principles require that these shares be expensed in the period they are issued at the fair market value of these shares. We expect these expenses to continue.

 

The first quarter of fiscal year 2003 also saw the increase in our sales staff at IWT in anticipation of its expansion of the buying group and home center store channels. We expect these increased expenses to generate proportionate sales growth in the future.

 

18



 

Liquidity and Capital Resources

 

We had cash balances of $664,358 and $574,046 at the end of March 31, 2003 and December 31, 2002, respectively. We have generated positive cash flow from operations for the last three years.

 

In October 2002, we commenced a private offering of our common stock to accredited investors for up to one million units at $3.00 per unit. Each unit consists of one share of common stock and warrants to purchase 1 1/2 shares initially at $3.00 per share for five years from the date the warrant was issued. The price of the warrants will increase by $.25 per share at the beginning of each calendar quarter following the first public sale of Tesoro’s common stock and continuing until the warrant expires.

 

Through its closing as of March 31, 2003, we raised $660,000 from units sales. We also raised an additional $45,000 from 15,000 warrants that were exercised. All of the investors were provided with, or otherwise had access to, information about the Company and its subsidiaries, including financial information. The proceeds from the offering and the warrant exercises were used for general corporate purposes, including paying fees to outside professionals and working capital.

 

On November 21, 2000, our subsidiary, IWT, entered into a new loan and security agreement with a financial institution totaling $5 million as a revolving loan, for a period of three years, with an option to renew for one additional year. This was amended and restated effective November 13, 2002 and the amount of the maximum credit was increased from $5 million to $7.5 million. The interest rate on this loan is the Wachovia announced prime rate plus .75% per year. Additionally, at the lender’s option, we also pay prime plus 2.75% with respect to any non-contingent obligations

 

              on all outstanding obligations following termination or non-renewal of the credit facility;

 

              form and after the date of an event of default occurs and for so long as such event is continuing, as determined by lender;

 

              during any time the amounts available to us are made or arise without our lender’s knowledge or consent.

 

On June 17, 2003, the Securities and Exchange Commission declared IWT Tesoro Corporation’s registration statement on Form SB-2 effective.  In connection with the Registration Statement, two offerings are occurring.  The first is the offer and sale of 250,000 units at $5.50 per unit.  Each unit consists of one share of Tesoro common stock and a warrant to purchase one share at $7.00 per share through June 17, 2006.  The second is an offer by certain Tesoro’s stockholders to sell an aggregate of 1,243,502 registered shares.

 

The unit offering is being sold on an exclusive basis through July 7, 2003 to Tesoro’s current stockholders.  Thereafter, the units will be offered and sold by Tesoro’s officers and directors, or by certain registered broker-dealers who have entered into a Selected Dealer Agreement with Tesoro and who have been approved by the National Association of Securities Dealers (NASD).

 

ITEM 3: CONTROLS AND PROCEDURES

 

(a)                Within the 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) that is required to be included in our periodic SEC reports. There have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date we carried out this evaluation.

 

(b)               There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation described in the preceding paragraph.

 

19



 

PART II — OTHER INFORMATION

 

ITEM 1.      LEGAL PROCEEDINGS

 

There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.

 

ITEM 2.      CHANGES IN SECURITIES

 

Not applicable.

 

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4.      SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

 

Not applicable.

 

ITEM 5.      OTHER INFORMATION

 

Not applicable.

 

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K

 

(a)                Exhibits

 

Exhibit
Number

 

Description

 

 

 

1.1

 

Selected Dealers Agreement (9)

3.1

 

Articles of Incorporation (1)

3.1.1

 

Articles of Amendment to Articles of Incorporation dated September 23, 2002(3)

3.2.1

 

Bylaws (1)

3.2.2

 

Amended and Restated Bylaws (8)

3.3.1

 

Specimen Stock Certificate (1)

3.3.2

 

Audit Committee Charter (8)

3.3.3

 

Compensation Committee Charter (8)

3.3.4

 

Nominating And Governing Committee Charter (8)

3.4.1

 

Code of Ethics for Senior Financial Officers (9)

4.1.1

 

Form of Warrant Agreement (9)

4.1.2

 

Form of Stock Certificate (9)

4.1.3

 

Form of Lock-Up Agreement (9)

10.1

 

Agreement With Peter Goss (1)

10.2

 

Stockholders Agreement (1)

10.3

 

2001 Ponca Acquisition Corporation Stock Incentive Plan. (2)

10.4

 

Employment Agreement Between Ponca Acquisition Corporation And Henry Jr. Boucher, Jr. Dated As Of December 29, 2002. (2)

10.5

 

Memorandum Of Understanding Between Ponca Acquisition Corporation And The Stockholders Of International Wholesale Tile, Inc. (2)

 

20



 

10.6

 

Stock Purchase Agreement Among The Stockholders Of International Wholesale Tile, Inc., And IWT Tesoro Corporation, Effective October 1, 2002. (5)

10.7

 

Termination Of Stockholders Agreement (6)

10.8

 

Repurchase Agreement (7)

10.9

 

Form of Indemnity Agreement (9)

21.

 

Subsidiaries of Registrant (9)

31.1

 

Certification of CEO

31.2

 

Certification of CFO

32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. sec. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. sec. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

99.1

 

MRS’ Letter To The Securities and Exchange Commission. (4)

99.2

 

Letter from Peter Goss regarding fiscal year end (5)

 


(1)

 

Filed as an Exhibit to the Company’s Form 10-SB, filed with the Securities and Exchange Commission on August 7, 2000.

 

 

 

(2)

 

Filed as an Exhibit to the Company’s Report on Form 8-K, filed with the Securities and Exchange Commission on September 11, 2002.

 

 

 

(3)

 

Filed as an Exhibit to the Company’s Report on Form 8-K, filed with the Securities and Exchange Commission on October 1, 2002.

 

 

 

(4)

 

Filed as an Exhibit to the Company’s Report on Form 8-K/A, filed with the Securities and Exchange Commission on October 8, 2002.

 

 

 

(5)

 

Filed as an Exhibit to the Company’s Report on Form 8-K, filed with the Securities and Exchange Commission on October 15, 2002.

 

 

 

(6)

 

Filed as an Exhibit to the Company’s Report on Form 8-K/A, filed with the Securities and Exchange Commission on February 4, 2003.

 

 

 

(7)

 

Filed as an Exhibit to the Company’s Report on Form 8-K/A, filed with the Securities and Exchange Commission on February 4, 2003.

 

 

 

(8)

 

Filed as an Exhibit to the Company’s Report on Form 8-K, filed with the Securities and Exchange Commission on February 4, 2003.

 

 

 

(9)

 

Filed as an Exhibit to the Company’s Registration Statement on Form SB-2, filed with the Securities and Exchange Commission on April 11, 2003.

 

21



 

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.

 

 

 

IWT TESORO CORPORATION

 

 

 

 

August 22, 2005

/s/ Henry J. Boucher, Jr.

 

 

Henry J. Boucher, Jr., President

 

 

August 22, 2005

/s/ Forrest Jordan

 

 

Forrest Jordan, Chief Financial Officer

 

22