-----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, UuyVILtuwyuEfpIpT2KHsaiQWACgW74sRcSSqlRwpf6k5mCyj02xhD9ij/KYL2xs TWwY3ZHgszwGgGatxMTIPw== 0001015402-99-000555.txt : 19990524 0001015402-99-000555.hdr.sgml : 19990524 ACCESSION NUMBER: 0001015402-99-000555 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990521 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLDWIDE PETROMOLY INC CENTRAL INDEX KEY: 0000928375 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 847125214 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 333-72163 FILM NUMBER: 99631614 BUSINESS ADDRESS: STREET 1: 1300 POST OAK BOULEVARD STREET 2: SUITE 1985 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7138925823 MAIL ADDRESS: STREET 1: 1300 POST OAK BOULEVARD STREET 2: SUITE 1985 CITY: HOUSTON STATE: TX ZIP: 77085 FORMER COMPANY: FORMER CONFORMED NAME: OGDEN MCDONALD & CO DATE OF NAME CHANGE: 19940812 10QSB 1 - -------------------------------------------------------------------------------- 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: MARCH 31, 1999 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 0-24682 WORLDWIDE PETROMOLY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) COLORADO 84-1125214 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1300 POST OAK BOULEVARD, SUITE 1985 HOUSTON, TEXAS 77056 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE) (713) 892-5823 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) _________________ CHECK WHETHER THE ISSUER (1) HAS 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. YES [X] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS AT MAY 15, 1999, 20,484,249 SHARES OF COMMON STOCK, NO PAR VALUE, WERE OUTSTANDING. TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE); YES [ ] NO [X] - --------------------------------------------------------------------------------
WORLDWIDE PETROMOLY, INC. CONTENTS -------- PAGE(S) ------- PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1999 (UNAUDITED) AND JUNE 30, 1998 3 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 ( BOTH UNAUDITED) 4 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND 1998 ( BOTH UNAUDITED) 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6 - 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 - 12 PART II - OTHER INFORMATION - --------------------------- ITEM 2. CHANGES IN SECURITIES 13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13 (A) EXHIBITS (B) REPORTS ON FORM 8-K SIGNATURES 14 - ----------
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WORLDWIDE PETROMOLY, INC. CONSOLIDATED BALANCE SHEETS March 31, June 30, 1999 1998 -------------- ------------ (Unaudited) ASSETS - ----------------------------------------------------- Current Assets: Cash and Cash Equivalents . . . . . . . . . . . . . . . $ 515,182 $ 34,375 Certificates of Deposit-Restricted. . . . . . . . . . . - 276,579 Investments in equity securities. . . . . . . . . . . . 99,151 - Accounts Receivable: Trade . . . . . . . . . . . . . . . . . . . . . . . . 132,284 107,720 Affiliated Companies. . . . . . . . . . . . . . . . . 34,472 38,807 Notes Receivable-Related Parties. . . . . . . . . . . . - 111,151 Inventories . . . . . . . . . . . . . . . . . . . . . . 54,463 45,394 Prepaid Expense and Other . . . . . . . . . . . . . . 295,544 10,840 -------------- ------------ Total Current Assets. . . . . . . . . . . . . . . . . . 1,131,096 624,866 -------------- ------------ Property and Equipment, Net (Note 3). . . . . . . . . . 105,062 121,419 -------------- ------------ Total Assets. . . . . . . . . . . . . . . . . . . . . . $ 1,236,158 $ 746,285 ============== ============ LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------------------------ Current Liabilities: Accounts Payable and Accrued Expenses . . . . . . . . . $ 426,960 $ 173,592 Notes Payable . . . . . . . . . . . . . . . . . . . . . - 160,000 -------------- ------------ Total Current Liabilities . . . . . . . . . . . . . . . 426,960 333,592 Advances From Stockholder . . . . . . . . . . . . . . . 348,636 116,263 -------------- ------------ Total Liabilities . . . . . . . . . . . . . . . . . . . 775,596 449,855 -------------- ------------ Stockholders' Equity: Preferred stock, no par value, 10,000,000 shares authorized, none issued . . . . . . . . . . . . . . . . -- -- Common stock, no par value, 800,000 shares authorized; 20,159,250 issued and outstanding; 3,000,000 reserved for stock options. . . . . . . . . . 8,380,192 7,493,228 Accumulated Deficit . . . . . . . . . . . . . . . . . . (7,919,630) (7,196,798) Total Stockholders' Equity. . . . . . . . . . . . . . . 460,562 296,430 -------------- ------------ Total Liabilities and Stockholders' Equity. . . . . . . $ 1,236,158 $ 746,285 ============== ============
See accompanying notes to consolidated financial statements 3
WORLDWIDE PETROMOLY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED NINE MONTHS ENDED MARCH 31, MARCH 31, 1999 1998 1999 1998 ------------ ------------ ------------ ------------ (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) NET SALES $ 170,653 $ 52,904 $ 363,474 $ 209,644 COST OF SALES 104,966 38,560 234,427 155,837 ------------ ------------ ------------ ------------ GROSS PROFIT 65,687 14,344 129,047 53,807 SELLING, ADMINISTRATIVE AND GENERAL EXPENSES 451,684 900,420 1,038,194 1,851,018 ------------ ------------ ------------ ------------ (LOSS) FROM OPERATIONS (385,997) (888,076) (909,147) (1,797,211) OTHER INCOME, NET 186,315 (5,809) 186,315 33,112 ------------ ------------ ------------ ------------ NET (LOSS) $ (199,682) $ (891,885) $ (722,832) $(1,764,099) ============ ============ ============ ============ NET (LOSS) PER SHARE $ (.01) $ (.05) $ (.04) $ (.10) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 17,537,237 17,247,500 17,925,147 16,914,167 ============ ============ ============ ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4
WORLDWIDE PETROMOLY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS NINE MONTHS ENDED MARCH 31, 1999 1998 -------------- ------------ (UNAUDITED) (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: NET LOSS$ (722,832) $(1,764,099) ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES DEPRECIATION 22,633 18,000 COMMON STOCKS ISSUED FOR SERVICES -- 500,000 CHANGES IN ASSETS AND LIABILITIES ACCOUNTS RECEIVABLE (20,229) (14,317) INVENTORIES (9,069) 51,954 PREPAID EXPENSE AND OTHER ASSETS (284,704) (2,330) ACCOUNTS PAYABLE AND ACCRUED EXPENSES 253,368 25,227 -------------- ------------ NET CASH USED IN OPERATING ACTIVITIES (760,833) (1,185,565) -------------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: CERTIFICATES OF DEPOSIT 276,579 671,503 CAPITAL EXPENDITURES (6,276) (24,938) RELATED PARTY LOAN-REPAYMENTS 12,000 161,726 -------------- ------------ NET CASH PROVIDED BY INVESTING ACTIVITIES 282,303 808,291 CASH FLOWS FROM FINANCING ACTIVITIES: PROCEEDS FROM OPTIONS EXERCISED 527,300 -- PROCEEDS FROM SALE OF STOCK 359,664 -- BORROWING/REPAYMENT OF SHAREHOLDER LOANS 232,373 (35,000) BORROWING OF NOTES PAYABLE (160,000) (265,000) -------------- ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 959,337 (300,000) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 480,807 (677,274) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34,375 864,555 -------------- ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 515,182 $ 187,281 ============== ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5 WORLDWIDE PETROMOLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - ORGANIZATION AND BUSINESS WORLDWIDE PETROMOLY, INC. (THE "COMPANY"), A PUBLICLY-HELD COLORADO CORPORATION, IS ENGAGED IN THE MARKETING AND DISTRIBUTION OF A LINE OF ENGINE LUBRICATION PRODUCTS UNDER THE TRADENAME "PETROMOLY". THE COMPANY WAS FORMED AS A RESULT OF A REVERSE MERGER ON JULY 22, 1996, BETWEEN OGDEN, MCDONALD & COMPANY ("OGDEN MCDONALD" THE FORMER NAME OF THE REGISTRANT WITH THE SECURITIES AND EXCHANGE COMMISSION) AND WORLDWIDE PETROMOLY CORPORATION ("WPC"). OGDEN MCDONALD WAS INCORPORATED IN THE STATE OF COLORADO ON OCTOBER 13,1989, AND BECAME A PUBLIC "SHELL" COMPANY FOR THE PURPOSE OF ENGAGING IN SELECTED MERGERS AND ACQUISITIONS. WPC WAS INCORPORATED IN THE STATE OF TEXAS ON APRIL 1, 1993, AND PRIOR TO THE REVERSE ACQUISITION, WAS ENGAGED IN THE SAME LINE OF BUSINESS AS THE COMPANY. IN CONNECTION WITH THE REVERSE MERGER, OGDEN MCDONALD ACQUIRED ALL OF THE OUTSTANDING COMMON STOCK OF WPC, AND SUBSEQUENTLY CHANGED ITS NAME TO WORLDWIDE PETROMOLY, INC. WPC IS NOW A WHOLLY OWNED SUBSIDIARY OF THE COMPANY. THE COMPANY CONTRACTS WITH INDEPENDENT PARTIES FOR THE BLENDING OF ITS LUBRICANT PRODUCTS. NOTE 2 - BASIS OF PRESENTATION THE ACCOMPANYING UNAUDITED FINANCIAL STATEMENTS OF THE COMPANY AND ITS WHOLLY-OWNED SUBSIDIARY WPC HAVE BEEN PREPARED IN ACCORDANCE WITH THE INSTRUCTIONS AND REQUIREMENTS OF FORM 10-QSB AND, THEREFORE, DO NOT INCLUDE ALL INFORMATION AND FOOTNOTES NECESSARY FOR A FAIR PRESENTATION OF FINANCIAL POSITION, RESULTS OF OPERATIONS, AND CASH FLOWS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. IN THE OPINION OF MANAGEMENT, SUCH FINANCIAL STATEMENTS REFLECT ALL ADJUSTMENTS (CONSISTING ONLY OF NORMAL RECURRING ACCRUALS) NECESSARY FOR A FAIR PRESENTATION OF THE RESULTS OF OPERATIONS AND FINANCIAL POSITION FOR THE INTERIM PERIODS PRESENTED. OPERATING RESULTS FOR THE INTERIM PERIODS ARE NOT NECESSARILY INDICATIVE OF THE RESULTS THAT MAY BE EXPECTED FOR THE FULL YEAR. THESE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB. NOTE 3 - PROPERTY AND EQUIPMENT PROPERTY AND EQUIPMENT CONSISTS OF THE FOLLOWING AS OF MARCH 31, 1999 AND JUNE 30, 1998:
MARCH 31 JUNE 30 ------------ --------- OFFICE FURNISHINGS AND EQUIPMENT $ 138,177 $134,536 MACHINERY AND EQUIPMENT 16,370 13,735 VEHICLES 12,062 12,062 ------------- --------- 166,609 160,333 LESS ACCUMULATED DEPRECIATION (61,547) (38,914) ------------- --------- NET PROPERTY AND EQUIPMENT $ 105,062 $121,419 ============= =========
6 WORLDWIDE PETROMOLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 4 - INCOME TAXES DEFERRED TAXES ARE DETERMINED BASED ON TEMPORARY DIFFERENCES BETWEEN THE FINANCIAL STATEMENT AND INCOME TAX BASIS OF ASSETS AND LIABILITIES AS MEASURED BY THE ENACTED TAX RATES WHICH WILL BE IN EFFECT WHEN THESE DIFFERENCES REVERSE. DEFERRED TAX ASSETS ARE COMPRISED OF THE FOLLOWING AT MARCH 31, 1999:
NET OPERATING LOSS CARRYFORWARDS $ 2,074,000 STOCK OPTIONS GRANTED TO NON-EMPLOYEES 567,000 AMORTIZATION EXPENSE 25,500 BAD DEBT EXPENSE 7,000 ------------ GROSS DEFERRED TAX ASSET 2,673,500 ------------ VALUATION ALLOWANCE (2,673,500) ------------ NET DEFERRED TAX ASSET $ - ============
THE COMPANY HAS RECORDED A FULL VALUATION ALLOWANCE AGAINST ALL DEFERRED TAX ASSETS BECAUSE IT COULD NOT DETERMINE WHETHER IT WAS MORE LIKELY THAN NOT THAT THE DEFERRED TAX ASSET WOULD BE REALIZED AGAINST FUTURE INCOME. AT MARCH 31, 1999 THE COMPANY HAD NET OPERATING LOSS CARRYFORWARDS TOTALING APPROXIMATELY $6,100,000 AVAILABLE TO REDUCE FUTURE TAXABLE INCOME THROUGH THE YEAR 2014 (SEE TABLE). THE NET OPERATING LOSS CARRYFORWARDS EXPIRE AS FOLLOWS:
YEARS ENDED DECEMBER 31, AMOUNT - ----------------------------------- ----------- 2008 $ 70,000 2009 263,000 2010 112,000 EIGHTEEN MONTHS ENDED JUNE 30, 2012 2,753,000 YEAR ENDED JUNE 30 2013 2,202,000 YEAR ENDED JUNE 30, 2014 700,000 ----------- TOTAL $ 6,100,000 ===========
7 WORLDWIDE PETROMOLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 5 - LOSS PER SHARE USING THE PRINCIPLES SET FORTH IN SFAS 128, BASIC EARNINGS PER SHARE INCLUDES NO DILUTION AND IS COMPUTED BY DIVIDING INCOME AVAILABLE TO COMMON STOCKHOLDERS BY THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING FOR THE PERIOD. DILUTIVE EARNINGS PER SHARE REFLECTS THE POTENTIAL DILUTION OF SECURITIES THAT COULD SHARE IN THE EARNINGS OF THE COMPANY. THE COMPANY WAS REQUIRED TO ADOPT THIS STANDARD IN THE SECOND FISCAL QUARTER OF 1998. USING THE PRINCIPLES SET FORTH IN SFAS 128, BASIC AND DILUTED EARNINGS PER SHARE ARE IDENTICAL. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS -WORLDWIDE PETROMOLY INC. ("THE COMPANY") THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES. SEE CONSOLIDATED FINANCIAL STATEMENTS. CERTAIN STATEMENTS CONTAINED HEREIN ARE NOT BASED ON HISTORICAL FACTS, BUT ARE FORWARD LOOKING STATEMENTS THAT ARE BASED UPON ASSUMPTIONS ABOUT FUTURE CONDITIONS THAT COULD PROVE NOT TO BE ACCURATE. ACTUAL EVENTS, TRANSACTION AND RESULTS MAY MATERIALLY DIFFER FROM THE ANTICIPATED EVENTS, TRANSACTIONS OR RESULTS DESCRIBED IN SUCH STATEMENTS. THE COMPANY'S ABILITY TO CONSUMMATE SUCH TRANSACTIONS AND ACHIEVE SUCH EVENTS OR RESULTS IS SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THE EXISTENCE OF DEMAND FOR AND ACCEPTANCE OF THE COMPANY'S PRODUCTS AND SERVICES, REGULATORY APPROVALS AND DEVELOPMENTS, ECONOMIC CONDITIONS, THE IMPACT OF COMPETITION AND PRICING, RESULTS OF FINANCING EFFORTS AND OTHER FACTORS AFFECTING THE COMPANY'S BUSINESS THAT ARE BEYOND THE COMPANY'S CONTROL. THE COMPANY UNDERTAKES NO OBLIGATION AND DOES NOT INTEND TO UPDATE, REVISE OR OTHERWISE PUBLICLY RELEASE THE RESULT OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES. RESULTS OF OPERATIONS -GENERAL THE CORPORATE DEVELOPMENTS THIS QUARTER WERE SIGNIFICANT AND SET THE STAGE FOR THE REMAINING CALENDAR YEAR TO BE DYNAMIC AND ENCOURAGING. DURING THE FISCAL QUARTER ENDED MARCH 31, 1999 (ALSO REFERRED TO AS THE THIRD FISCAL QUARTER OR THE FIRST CALENDAR QUARTER), THE COMPANY CONTINUED TO INVESTED IN CUSTOMER FIELD PRODUCT TESTING, ADDITIONAL RESEARCH AND DEVELOPMENT FOR NEW PRODUCTS INCLUDING A HOUSEHOLD LUBRICANT AND A MOTOR-GEAR LUBRICANT, PRINTING RETAIL SALES BROCHURES AND POINT OF PURCHASE DISPLAYS, PURCHASING ADDITIONAL LAB EQUIPMENT, AND WEB SITE REVAMPING. THE COMPANY ALSO CONSUMMATED A TITLE SPONSORSHIP OF AN INDY RACING LEAGUE (IRL) RACECAR IN AN EFFORT TO DEVELOP PRODUCT AWARENESS AND SALES VOLUME. THE RACECAR WILL BE DRIVEN BY THE 1998 IRL "ROOKIE OF THE YEAR" ROBBY UNSER, USING THE COMPANY'S SPECIALLY FORMULATED MOLY RACING-OIL DESIGNED FOR NASCAR AND INDY STYLE MOTORS. MR. UNSER HAS ALREADY BEEN ABLE TO TELL A NOTICEABLE DIFFERENCE IN THE CAR'S PERFORMANCE AND HE ANTICIPATES A TOP FINISH IN SOME OF THIS YEAR'S RACES. THE COMPANY ALSO DID ADDITIONAL EXTENSIVE FIELD-TESTING IN AN EFFORT TO EXPAND THE COMPANY'S INDUSTRIAL CUSTOMER BASE, WHILE CONTINUING TO ASCERTAIN SPECIFIC AVENUES AND ALLIANCES FOR LAUNCHING A RETAIL CAMPAIGN BY CAPITALIZING THE NATIONAL ATTENTION THAT THE AUTO-RACING WILL CREATE AS ALL OF THE RACES ARE TELEVISED NATIONALLY. IN THE PAST, THE TWO AREAS OF FOCUS HAVE BEEN PRIMARILY THE COMMERCIAL AND INDUSTRIAL MARKET, AND SECONDARILY THE RETAIL/PASSENGER CAR MARKET. THE FOCUS SHIFTED LAST QUARTER TO BALANCE ALL MARKETS. DURING THIS QUARTER, THE COMPANY HAS CONTINUED TO ENJOY A GROWING NUMBER OF WEB PURCHASES (APPROXIMATELY $29,000) WITH OUT ADVERTISING ITS WEB SITE. 8 BECAUSE OF THIS, MANAGEMENT ENTERED INTO AN AGREEMENT WITH A PROFESSIONAL INTERNET COMPANY, INTERNET BILLING SOLUTIONS, WHICH NOT ONLY INVESTED $500,000 IN THE COMPANY IN THE FORM OF OPTIONS, BUT ALSO WILL BE PROFESSIONALLY EXPLOITING THE COMMERCE ACTIVITY THAT THE INTERNET CAN OFFER. MANAGEMENT BELIEVES THAT WITH A PROFESSIONAL CAMPAIGN THE COMPANY WILL ENJOY A SIGNIFICANT SALES VOLUME INCREASE AND MAKE THE WEB SITE A FORUM FOR INVESTOR RELATIONS AND INTRA-COMPANY COMMUNICATIONS AND ACCOUNTING. DURING THIS QUARTER, THE COMPANY RECEIVED THE RESULTS FROM AN 11 MONTH EVALUATION BY THE EPA WHICH CONFIRMED AND DOCUMENTED PETROMOLY ENGINE OIL AS ENERGY SAVING AND EMISSIONS REDUCING. THIS ACHIEVEMENT IS UNPRECEDENTED FOR ANY MOTOR OIL AND MANAGEMENT PLANS ON UTILIZING THESE RESULTS TO FURTHER INDUCE PURCHASES FOR BOTH RETAIL AND INDUSTRIAL MARKETS. ALSO DURING THIS QUARTER, THE COMPANY CONSUMMATED A DISTRIBUTOR AGREEMENT WITH ENVIRONMENTAL FLEET SERVICES (EFS) OF CALIFORNIA, A VERY PROGRESSIVE COMPANY IN LOS ANGELES WITH A GROWING CUSTOMER BASE. MANAGEMENT ANTICIPATES SIGNIFICANT ACTIVITY FROM THIS AGREEMENT, AS SOUTHERN CALIFORNIA IS KNOWN TO BE THE "CAR CAPITAL OF THE US". TO DATE EFS HAS ORDERED OVER 34% OF COMMERCIAL SALES THIS QUARTER, AND IS SHOWING PROMISE OF GROWING EVEN MORE SUBSTANTIALLY IN THE NEXT QUARTER. ADDITIONALLY, DURING THIS QUARTER THE COMPANY WAS WRITTEN UP IN THE FEBRUARY 22, 1999 ISSUE BUSINESS WEEK MAGAZINE IN THE "DEVELOPMENTS TO WATCH" SECTION. IT WAS A VERY POSITIVE ARTICLE AND IT HAS CREATED A LOT OF ATTENTION FOR THE COMPANY AND ITS PRODUCTS. A SIGNIFICANT AMOUNT OF THE WEB PURCHASES WERE ATTRIBUTABLE TO EXPOSURE THAT THE ARTICLE PROVIDED. IT ALSO VALIDATED TO MANAGEMENT THE DEMAND POTENTIAL FOR THE COMPANY'S PRODUCTS. QUARTER ENDED MARCH 31, 1999 COMPARED TO QUARTER ENDED MARCH 31, 1998 TOTAL NET SALES FOR THE QUARTER ENDED MARCH 31, 1999, WAS $170,653 COMPARED TO $52,904 FOR THE QUARTER ENDED MARCH 31, 1998, A 223% INCREASE. THIS INCREASE BY COMPARISON IS DUE TO EXPANDED PURCHASING OF THE COMPANY'S CUSTOMER BASE AS WELL AS NEW INCENTIVE PROGRAMS DESIGNED TO ENHANCE HIGHER VOLUME ORDERS AND INCREASED WEB PURCHASES. ADDITIONALLY, THE POSITIVE CHANGE IN COST OF SALES IS ALSO NOTABLE. COST OF SALES AS A PERCENTAGE OF NET SALES DECREASED FROM 73% FOR THE QUARTER ENDED MARCH 31, 1998, TO 61% FOR THE YEAR ENDED MARCH 31, 1999. THIS PERCENTAGE CHANGE RESULTED FROM IMPROVED AGREEMENTS WITH SUPPLIERS, FREIGHT CARRIERS AND TOLL BLENDERS, ALONG WITH CONTINUAL STREAMLINING PROCEDURES IN MANUFACTURING. YEAR TO DATE ENDED MARCH 31, 1999 COMPARED TO YEAR TO DATE ENDED MARCH 31, 1998 TOTAL NET SALES FOR THE YEAR TO DATE ENDED MARCH 31, 1999, WAS $363,474 COMPARED TO $209,644 FOR THE YEAR TO DATE ENDED MARCH 31, 1998, A 73% INCREASE. THIS INCREASE BY COMPARISON IS DUE TO EXPANDED PURCHASING OF THE COMPANY'S CUSTOMER BASE, AS WELL AS THIS QUARTER'S INCENTIVE PROGRAMS DESIGNED TO ENHANCE HIGHER VOLUME ORDERS. ADDITIONALLY, THE IMPROVEMENT IN COST OF SALES IS ALSO NOTABLE. COST OF SALES AS A PERCENTAGE OF NET SALES DECREASED FROM 74% FOR THE YEAR TO DATE ENDED MARCH 31, 1998, TO 65% FOR THE YEAR TO DATE ENDED MARCH 31, 1999. THE COMPANY IS CONTINUING ITS TESTING OF VARIOUS NEW PRODUCTS AND INTERVIEWING VARIOUS VENDORS TO SEE IF THE PRODUCTS CAN BE MADE MORE COST EFFECTIVELY, THUS REDUCING THE COST OF SALES IN THE FUTURE. ADDITIONALLY, THE PROJECTED INCREASE IN SALES VOLUME WILL ALSO REDUCE COST OF SALES DUE TO ECONOMIES OF SCALE. MANAGEMENT EXPECTS THE FOLLOWING QUARTERS TO CONTINUE A GREATER TREND THAT REFLECTS THE RETAIL CAMPAIGN SALES, ALONG WITH THE MATURING MARKETING EFFORTS, SCHEDULED TO BEGIN SOMETIME IN THE FORTH FISCAL QUARTER OF 1999. IN THE PAST, THE SALES FOCUS HAS BEEN ON SECURING COMMITMENTS AND ENDORSEMENTS FROM SEVERAL LARGE NATIONAL AND MULTINATIONAL CORPORATIONS THAT ARE CONSIDERED LEADERS IN THEIR VARIOUS INDUSTRIES. AS THE ANALYSIS OF THE PRODUCT UTILIZATION BY THESE VARIOUS CUSTOMERS CONTINUES TO BE EXTREMELY POSITIVE AND RESOLUTE, THE SALES VOLUME AND RELATIVE MARGINS REMAIN LOW DUE TO THE PROMOTIONAL PRICES AND PRACTICES ALLOWED BY MANAGEMENT. 9 THE COMPANY EXPECTS SALES VOLUME TO INCREASE SIGNIFICANTLY DURING IN THE SECOND OR THIRD CALENDAR QUARTER OF 1999 AS THE PROMOTIONAL ACTIVITIES AND ADVERTISING CAMPAIGNS COME TO FRUITION. SELLING, GENERAL AND ADMINISTRATIVE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES DECREASED FROM $900,420 FOR THE QUARTER ENDED MARCH 31, 1998, AND FOR THE YEAR TO DATE ENDED MARCH 31, 1998 AT $1,851,018 TO $451,684 FOR THE QUARTER ENDED MARCH 31, 1999 AND $1,038,194 FOR THE YEAR TO DATE ENDED MARCH 31, 1999; A 50% AND 55% DECREASE RESPECTIVELY FROM QUARTER, TO YEAR TO DATE ACCOUNTING. THE PRIMARY REASON FOR THE DECREASES IN EXPENSES FOR THE COMPARED QUARTERS AND YEAR TO DATE ENDINGS WERE THE DOWNSIZING OF THE CORPORATE STRUCTURE, AND RELOCATING OF THE SOME OF THE COMPANY'S OFFICES IN BOTH HOUSTON AND FLORIDA. MANAGEMENT EXPECTS THAT NEXT QUARTER SELLING, GENERAL AND ADMINISTRATIVE WILL CONTINUE TO SHOW THE BENEFITS OF THE CONTINUED PRACTICES OF EXPENSE CUTTING WHERE EVER POSSIBLE, WITH OUT SACRIFICING QUALITY OR THE COMPANY'S IMAGE. LIQUIDITY AND CAPITAL RESOURCES ON MARCH 31, 1999, THE COMPANY HAD BOOKED A WORKING CAPITAL OF $704,136, COMPARED TO $291,274 AT JUNE 30,1998. THE CHANGE IN WORKING CAPITAL WAS PRIMARILY DUE TO THE CASH PROCEEDS FROM THE EXERCISING OF OPTIONS GRANTED TO INTERNET BILLING SOLUTIONS INC., AS WELL AS EMPLOYEE OPTIONS THAT WERE EXERCISED. ALSO INCLUDED IN THE CURRENT ASSETS ARE THE CASH PROCEEDS FROM THE SELLING OF STOCK OWNED BY THE COMPANY AS PART OF A RELATED PARTY TRANSACTION. IN ADDITION TO INVENTORY ORDERS INCLUDED IN THE YEAR-END LIABILITIES THERE ALSO ARE THE NORMAL GENERAL AND ADMINISTRATIVE EXPENSES, YEAR END PAYROLL TAX LIABILITIES. NET CASH USED IN OPERATING ACTIVITIES FOR YEARLY COMPARED QUARTERS WAS $760,833 FOR ENDED MARCH 31, 1999, A SIGNIFICANT DROP COMPARED TO $1,185,565 FOR ENDED MARCH 31, 1998, BEING A 35% DECREASE. FROM TIME TO TIME, THE COMPANY'S CHAIRMAN, GILBERT GERTNER, HAS LOANED MONEY AND CONTINUES TO PROVIDE CAPITAL TO THE COMPANY AS NEEDED. AT THIS TIME THERE HAS NOT BEEN A FORMAL AGREEMENT ON HOW MR. GERTNER WILL BE REIMBURSED AND AWARDED FOR HIS CONTRIBUTION, BUT IT IS UNDERSTOOD THAT WHEN THE COMPANY HAS THE ABILITY TO PAY HIM BACK AND AWARD HIS SUPPORT, IT WILL DO SO; HOWEVER, THERE ARE NO DEMANDS FOR REPAYMENT AT THIS TIME. ADDITIONALLY, SINCE OCTOBER 1998, MR. GERTNER AND AND LANCE J. ROSMARIN THE COMPANY PRESIDENT HAVE ELECTED TO TEMPORARILY DEFER THE CASH PAYMENTS OF THEIR EMPLOYMENT AGREEMENTS, UNTIL THE COMPANY IS IN A BETTER POSITION TO PAY THEM FOR SERVING THEIR POSITIONS. AT FISCAL YEAR END, MR. ROSMARIN HAS AGREED, WITH BOARD APPROVAL TO RECEIVE PAYMENTS IN THE FORM OF COMPANY COMMON STOCK THAT IS CALCULATED AT FAIR MARKET VALUE PLUS A 25% PREMIUM AT THE BEGINNING OF EACH QUARTER THAT HE HAS DEFERED. THIS LIABILITY HAS NOT YET BEEN CALCULATED IN TO THE COMPANY'S FINANCIAL STATEMENTS, BUT IS PROJECTED TO BE APPROXIMATELY 125,000-200,000 SHARES DEPENDING ON MARKET CONDITIONS. MR. GERTNER HAS THE OPTION TO DO THE SAME, OR GET REIMBURSED WITH CASH. ALSO, AT MARCH 31,1999, THE COMPANY POSSESSED 50,000 SHARES OF CITADEL TECHNOLOGY INC. THAT WERE PAID THROUGH A RELATED PARTY TRANSACTION IN 1996. THESE SHARES WERE VALUED AT $2.22 AT QUARTER-END. MANAGEMENT EXPECTS TO LIQUIDATE THESE SHARES AT A VALUE WELL OVER $100,000. AT MARCH 31, 1998, THE COMPANY HAD NET OPERATING LOSS CARRYFORWARDS TOTALING APPROXIMATELY $6,100,000 AVAILABLE TO REDUCE FUTURE INCOME THROUGH THE YEAR 2014 AS DESCRIBED IN NOTE 4 TO THE CONSOLIDATED FINANCIAL STATEMENTS. MANAGEMENT HAS BEEN REVIEWING VARIOUS FINANCIAL VEHICLES AND THE POSSIBILITIES FOR A CAPITAL INFUSION THROUGH EQUITY OR DEBT FINANCING AND EXPECTS TO CONSUMMATE AN AGREEMENT BY THE FIRST QUARTER OF 2000. THE COMPANY MAY CONSUMMATE A SERIES OF FINANCIAL ARRANGEMENTS IN THE NEXT QUARTER FOR ADDITIONAL EXPANSION. SOME STRUCTURES THAT HAVE BEEN PRESENTED BY OUTSIDE PARTIES ARE MORE ATTRACTIVE THAN OTHERS, AND MANAGEMENT WANTS TO ENSURE THAT THE CHOSEN VEHICLE IS THE MOST BENEFICIAL ONE FOR THE COMPANY'S LONG AND SHORT TERM GOALS. 10 THESE GOALS CONSIDER THE NEED FOR CORPORATE DEVELOPMENTS THROUGH IMPLEMENTATION OF ITS BUSINESS PLAN AS WELL AS SHAREHOLDER BENEFITS AND MARKET CONDITIONS. ASSUMING THE COMPANY DOES NOT FIND AGREEABLE FINANCING IN THE FORESEEABLE FUTURE, THE COMPANY'S SIGNIFICANT OPERATING LOSSES AND WORKING CAPITAL DEFICIT RAISE SUBSTANTIAL DOUBT ABOUT ITS ABILITY TO CONTINUE AS A GOING CONCERN. THE FINANCIAL STATEMENTS DO NOT INCLUDE ANY ADJUSTMENTS THAT MIGHT RESULT FROM THE OUTCOME OF THIS UNCERTAINTY. YEAR 2000 COMPLIANCE MANY CURRENTLY INSTALLED COMPUTER SYSTEMS AND SOFTWARE PRODUCTS ARE CODED TO ACCEPT ONLY TWO DIGIT ENTRIES IN THE DATE CODE FIELD. THESE DATE CODE FIELDS WILL NEED TO ACCEPT FOUR DIGIT ENTRIES TO DISTINGUISH 21ST CENTURY DATES FROM 20TH CENTURY DATES. AS A RESULT, IN LESS THAN ONE YEAR, COMPUTER SYSTEMS AND/OR SOFTWARE USED BY MANY COMPANIES WILL NEED TO BE UPGRADED TO COMPLY WITH SUCH "YEAR 2000" REQUIREMENTS. SYSTEMS THAT DO NOT PROPERLY RECOGNIZE SUCH INFORMATION COULD GENERATE ERRONEOUS DATA OR CAUSE A SYSTEM TO FAIL. SIGNIFICANT UNCERTAINTY EXISTS IN MOST INDUSTRIES CONCERNING THE POTENTIAL EFFECTS ASSOCIATED WITH SUCH COMPLIANCE. MANAGEMENT DOES NOT ANTICIPATE THAT THE COMPANY WILL INCUR SIGNIFICANT OPERATING EXPENSES OR BE REQUIRED TO INVEST HEAVILY IN COMPUTER SYSTEMS IMPROVEMENTS TO BE YEAR 2000 COMPLIANT. ALTHOUGH THE COMPANY BELIEVES THE SOFTWARE AND HARDWARE IT UTILIZES FOR OPERATIONS COMPLY WITH YEAR 2000 REQUIREMENTS, THERE CAN BE NO ASSURANCES THAT THE COMPANY WILL NOT EXPERIENCE SERIOUS, UNANTICIPATED NEGATIVE CONSEQUENCES AND/OR MATERIAL COSTS CAUSED BY UNDETECTED ERRORS OR DEFECTS IN THE TECHNOLOGY USED IN ITS INTERNAL SYSTEMS. THE OCCURRENCE OF ANY OF THE FOREGOING COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS, OPERATING RESULTS OR FINANCIAL CONDITION. THE COMPANY HAS TAKEN ADDITIONAL STEPS IN SENDING OUT QUESTIONNAIRES TO ITS VENDORS AND MAJOR CUSTOMERS CONCERNING THEIR RESPECTIVE YEAR 2000 COMPLIANCE STATUS. SO FAR ALL MAJOR ACCOUNTS, BOTH VENDORS AND CUSTOMERS HAVE REPORTED THAT THEY ARE ALL WITHIN ACCEPTABLE AREAS, AND THEY DO NOT ANTICIPATE ANY MATERIAL ADVERSE EFFECT ON THE COMPANY'S ON-GOING SERVICING RELATIONSHIPS. THERE CAN BE NO ASSURANCES THAT THE COMPANY WILL NOT EXPERIENCE SERIOUS, UNANTICIPATED NEGATIVE CONSEQUENCES AND/OR MATERIAL COSTS CAUSED BY UNDETECTED ERRORS OR DEFECTS IN THE TECHNOLOGY USED BY ITS VENDERS OR CUSTOMERS. OUTLOOK IN THE YEAR ENDED JUNE 30 1998, THE COMPANY'S STRATEGIC FOCUS WAS ON BOTH CONSUMMATING RELATIONSHIPS WITH A GROUP OF LEADERS IN THE INDUSTRIAL AND RETAIL MARKETS, WHICH ARE KNOWN AS OPINION LEADERS OF NEW TECHNOLOGIES OR HAVE A HIGH VISIBILITY IN THE MARKET. MANAGEMENT FORESEES THE "TESTING PERIODS" THAT THE COMPANY HAS INVESTED WITH THESE GROUPS COMING TO A NATURAL END DURING FISCAL 1999, FOLLOWED BY SIGNIFICANT REVENUE PRODUCING CONTRACTS, AND TESTIMONIALS THAT WILL ATTRACT OTHER COMPANIES IN THE SIMILAR INDUSTRIES FOR A GREATER MARKET SHARE. ANY ONE OF THE SUBSTANTIAL CUSTOMERS THAT THE COMPANY IS PRESENTLY WORKING WITH IS CAPABLE OF INCREASING THE VOLUME PRODUCTION TO A MUCH GREATER ECONOMIES OF SCALE. THESE SAVINGS WILL DECREASE COST OF SALES, AND POSSIBLY DECREASE THE COST TO THE CUSTOMERS AS WELL. IN 1998, THE COMPANY TRADEMARKED THE NAME "MOLYTECH" THAT EMBODIES THE COMPANY'S PROPRIETARY TECHNOLOGY THAT THE US PATENT OFFICE ACCEPTED AND IS READY TO BE PATENTED. MANAGEMENT IS ACTIVELY PURSUING LICENSING AGREEMENTS WITH MAJOR OIL COMPANIES TO UTILIZE MOLYTECH IN THEIR EXISTING LINES, WHERE THE COMPANY WOULD RECEIVE ROYALTY INCOME WITH PRE-NEGOTIATED MINIMUM VOLUMES. AT THE TIME OF THIS FILING, THE COMPANY IS NEGOTIATING FOR RETAIL SHELF SPACE IN THE AUTO AFTER-MARKET STORES AND RETAIL CHAINS. THE RETAIL CAMPAIGN IS DESIGNED TO CAPITALIZE ON THE RACING SPONSORSHIP WITH TEAM PELFREY AND ROBBY UNSER AS THE PETROMOLY CAR DRIVER AND COMPANY SPOKESPERSON. 11 PART OF THE FUNDS FOR THIS CAMPAIGN WILL COME FROM THE CONSUMMATED AGREEMENT WITH AN INTERNET MARKETING COMPANY THAT HAS COMMITTED OVER $500,000 TO COMPANY, IN WHICH $250,000 IS RESERVED FOR A MARKETING CAMPAIGN. MANAGEMENT IS EXTREMELY EAGER TO BEGIN MARKETING THE NEWLY DEVELOPED OIL ADDITIVE, PETROMOLY OIL TREATMENT, WHICH USES THE SAME PROPRIETARY TECHNOLOGY TO SUSPEND MOLYBDENUM IN MOTOR OIL FOR CARS AND LIGHT TRUCKS. AN ADVERTISING CAMPAIGN IS PLANNED FOR THIS PARTICULAR PRODUCT TO CREATE CONSUMER AWARENESS AND EDUCATE THE GENERAL PUBLIC ABOUT THE COMPANY'S NEW TECHNOLOGY. THIS EXPOSURE WILL BE ON A REGIONAL BASIS, AND WILL POSSIBLY FACILITATE A DEMAND FOR THE OTHER PETROMOLY PRODUCTS AS WELL. LATER A FULL-SCALE RETAIL CAMPAIGN IS PLANNED AS THE PRODUCT IS SOLD. REPORTS TO MANAGEMENT SHOW THIS OIL ADDITIVE PRODUCT, BEING A NEW TECHNOLOGY IN A PROVEN MARKET, IS PROJECTED TO CARRY AN ENORMOUS DEMAND. WITH A PROPER FINANCING IN PLACE, ALONG WITH THE PROGRESSING SALES RELATIONSHIPS MATURING AND THE NEW PRODUCT LINES BEING MARKETED, THE COMPANY EXPECTS OPERATING MARGINS AND REVENUES TO CONTINUE TO IMPROVE APPRECIABLY DURING FISCAL 1999. NEW ACCOUNTING PRONOUNCEMENTS IN JUNE 1997, THE FINANCIAL ACCOUNTING STANDARDS BOARD ISSUED TWO NEW DISCLOSURE STANDARDS. RESULTS OF OPERATIONS AND FINANCIAL POSITION ARE UNAFFECTED BY IMPLEMENTATION OF THESE NEW STANDARDS. STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (SFAS) 130, "REPORTING COMPREHENSIVE INCOME", ESTABLISHES STANDARDS FOR REPORTING AND DISPLAY OF COMPREHENSIVE INCOME, ITS COMPONENTS AND ACCUMULATED BALANCES. AMONG OTHER DISCLOSURES, SFAS 130 REQUIRES THAT ALL ITEMS THAT ARE REQUIRED TO BE RECOGNIZED UNDER CURRENT ACCOUNTING AS COMPONENTS OF COMPREHENSIVE INCOME BE REPORTED IN A FINANCIAL STATEMENT THAT IS DISPLAYED WITH THE SAME PROMINENCE AS OTHER FINANCIAL STATEMENTS. SFAS 131, "DISCLOSURE ABOUT SEGMENTS OF A BUSINESS ENTERPRISE", ESTABLISHES STANDARDS FOR THE WAY THAT PUBLIC ENTERPRISES REPORT INFORMATION ABOUT OPERATING SEGMENTS IN ANNUAL FINANCIAL STATEMENTS AND REQUIRES REPORTING OF SELECTED INFORMATION ABOUT OPERATING SEGMENTS IN INTERIM FINANCIAL STATEMENTS ISSUED TO THE PUBLIC. IT ALSO ESTABLISHES STANDARDS FOR DISCLOSURES REGARDING PRODUCTS AND SERVICES, GEOGRAPHIC AREAS AND MAJOR CUSTOMERS. THE COMPANY ONLY OPERATES IN ONE SEGMENT OF BUSINESS, THE MARKETING AND DISTRIBUTION OF ENGINE LUBRICATION PRODUCTS. IN FEBRUARY 1998, THE FINANCIAL ACCOUNTING STANDARDS BOARD ISSUED SFAS NO. 132, EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS, WHICH STANDARDIZES THE DISCLOSURE REQUIREMENTS FOR PENSIONS AND OTHER POSTRETIREMENT BENEFITS. THE ADOPTION OF SFAS NO. 132 IS NOT EXPECTED TO IMPACT THE COMPANY'S CURRENT DISCLOSURES. IN JUNE 1998, THE FINANCIAL ACCOUNTING STANDARDS BOARD ISSUED SFAS NO. 133, ACCOUNTING FOR DERIVATIVE INVESTMENTS AND HEDGING ACTIVITIES INCOME, WHICH REQUIRES THE RECORDING OF ALL DERIVATIVE INSTRUMENTS AS ASSETS OR LIABILITIES MEASURED AT FAIR VALUE. AMONG OTHER DISCLOSURES, SFAS 133 REQUIRES THAT ALL DERIVATIVES BE RECOGNIZED AND MEASURED AT FAIR VALUE REGARDLESS OF THE PURPOSE OR INTENT OF HOLDING THE DERIVATIVE. SFAS 133 IS EFFECTIVE FOR FINANCIAL STATEMENTS FOR PERIODS BEGINNING AFTER JUNE 15, 1999. WORLDWIDE PETROMOLY HAS NO DERIVATIVE INVESTMENTS AND DOES NOT PARTICIPATE IN HEDGING ACTIVITIES; THEREFORE, ITS FINANCIAL POSITION, RESULTS OF OPERATIONS AND DISCLOSURES WILL BE UNAFFECTED BY THE ADOPTION OF THIS STANDARD. 12 PART II OTHER INFORMATION PART II OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES IN JANUARY, FEBRUARY AND MARCH, 1999, TEN EMPLOYEES AND CONSULTANTS OF THE COMPANY EXERCISED OPTIONS TO ACQUIRE A TOTAL OF 731,250 SHARES OF COMMON STOCK OF THE COMPANY AT EXERCISE PRICES RANGING FROM $.3125 PER SHARE TO $1.00 PER SHARE, AND 2 CONSULTANTS AND 1 INVESTOR PURCHASED A TOTAL OF 409,664 SHARES OF COMMON STOCK OF THE COMPANY AT PRICES RANGING FROM $0.50 TO $1.00 PER SHARE. THE COMPANY BELIEVES THAT EACH OF THE PERSONS HAD KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ALLOWED THEM TO EVALUATE THE MERITS AND RISK OF THE PURCHASE OF THESE SECURITIES OF THE COMPANY. THE COMPANY BELIEVES THAT EACH OF THESE PERSONS WERE KNOWLEDGEABLE ABOUT THE COMPANY'S OPERATIONS AND FINANCIAL CONDITION. ALL OF THESE TRANSACTIONS WERE EFFECTED BY THE COMPANY IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "ACT") AS PROVIDED IN SECTION 4(2) THEREOF. EACH CERTIFICATE ISSUED FOR UNREGISTERED SECURITIES CONTAINED A LEGEND STATING THAT THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ACT AND SETTING FORTH THE RESTRICTIONS ON THE TRANSFERABILITY AND THE SALE OF THE SECURITIES. NO UNDERWRITER PARTICIPATED IN, NOR DID THE COMPANY PAY ANY COMMISSIONS OR FEES TO ANY UNDERWRITER IN CONNECTION WITH ANY OF THESE TRANSACTIONS. NONE OF THE TRANSACTIONS INVOLVED A PUBLIC OFFERING. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS -- FINANCIAL DATA SCHEDULE (B) REPORTS ON FORM 8-K -- NONE 13 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 HEREUNTO DULY AUTHORIZED. WORLDWIDE PETROMOLY, INC. DATE: MAY 20, 1999 BY: /S/ GILBERT GERTNER ----------------------- GILBERT GERTNER, CHAIRMAN, AND CHIEF EXECUTIVE OFFICER BY: /S/ LANCE ROSMARIN ------------------------- LANCE ROSMARIN, PRESIDENT, AND CHIEF FINANCIAL AND ACCOUNTING OFFICER 14 EX-27 2
5 1000
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