U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2002
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 002-76219NY
-----------
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
------------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 87-0564472
------ ----------
(State or Other Jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
9005 Cobble Canyon Lane
Sandy, Utah 84093
-----------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 942-0555
Securities Registered under Section 12(b) of the Exchange Act: None.
Securities Registered under Section 12(g) of the Exchange Act: None.
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 No X
--- ---
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: December 31,
2002; None.
State the aggregate market value of the common voting stock held by
non-affiliates computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a specified
date within the past 60 days.
March 19, 2003 - $497.43. There are approximately 497,431 shares of
common voting stock of the Registrant held by non-affiliates. During the
past year, there has been a limited "public market" for shares of common
stock of the Registrant, so the Registrant has arbitrarily valued these
shares on the basis of par value per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
None; not applicable.
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes No
--- ---
None; not applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
March 19, 2003; 2,620,326.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
A description of "Documents Incorporated by Reference" is contained in
Part III, Item 13.
Transitional Small Business Issuer Format Yes X No
--- ---
PART I
Item 1. Description of Business.
------------------------
Business Development.
---------------------
Corporate Developments.
-----------------------
New Environmental Technologies Corporation (our "Company") was
organized under the laws of the State of Nevada on January 7, 1982, under
the name "All Things, Inc." Our Company was formed for the purpose of
engaging in all lawful businesses. Our Company's initial authorized
capital consisted of 100,000,000 shares of $0.001 par value common voting
stock.
On March 21, 1985, Our Company's name was changed to "New Environmental
Technologies Corporation."
Effective November 11, 1995, and in accordance with the Nevada Revised
Statutes, the Board of Directors of our Company, with the written consent of
President and Director, unanimously resolved to reverse split the outstanding
shares of its common stock on a basis of 250 for one while retaining its
authorized capital, with appropriate adjustments in the stated capital and
capital surplus accounts of our Company. All computations hereinafter take
into account this reverse split.
Copies of the initial Articles of Incorporation of our Company and the
foregoing Certificates of Amendment to the Articles of Incorporation were
attached to our Annual Report on Form 10KSB for the year ended December 31,
1999. By this reference our Company's Annual Report on Form 10KSB for the
year ended December 31, 1999, is incorporated herein. See Part III, Item 13.
Public Offering.
----------------
Our Company conducted a public offering of shares of its common stock
pursuant to an S-18 Registration Statement which was filed with the
Securities and Exchange Commission on or about March 2, 1982. By this
reference, our Company's Registration Statement on Form S-18 is incorporated
herein. See Part III, Item 13.
Business.
---------
Our Company has had no material business operations since 1989. Our
Company may begin the search for the acquisition of assets, property or
business that may benefit our Company and its stockholders once the Board of
Directors sets guidelines of industries in which our Company may have an
interest.
Our Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor, and will be unable
to do so until it determines the particular industries of interest to our
Company.
Effect of Existing or Probable Governmental Regulations on
Business.
---------
Sarbanes-Oxley Act.
-------------------
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley
Act of 2002 (the "Sarbanes-Oxley Act"). The Sarbanes-Oxley Act imposes a wide
variety of new regulatory requirements on publicly-held companies and their
insiders. Many of these requirements will affect us. For example:
* Our chief executive officer and chief financial officer must
now certify the accuracy of all of our periodic reports that contain financial
statements;
* Our periodic reports must disclose our conclusions about the
effectiveness of our disclosure controls and procedures; and
* We may not make any loan to any director or executive officer
and we may not materially modify any existing loans.
The Sarbanes-Oxley Act has required us to review our current
procedures and policies to determine whether they comply with the
Sarbanes-Oxley Act and the new regulations promulgated thereunder. We will
continue to monitor our compliance with all future regulations that are
adopted under the Sarbanes-Oxley Act and will take whatever actions are
necessary to ensure that we are in compliance.
Penny Stock.
------------
Our common stock is "penny stock" as defined in Rule 3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks:
* with a price of less than five dollars per share;
* that are not traded on a "recognized" national exchange;
* whose prices are not quoted on the NASDAQ automated quotation
system; or
* in issuers with net tangible assets less than $2,000,000, if
the issuer has been in continuous operation for at least three years, or
$5,000,000, if in continuous operation for less than three years, or with
average revenues of less than $6,000,000 for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the Securities
and Exchange Commission require broker/dealers dealing in penny stocks to
provide potential investors with a document disclosing the risks of penny
stocks and to obtain a manually signed and dated written receipt of the
document before making any transaction in a penny stock for the investor's
account. You are urged to obtain and read this disclosure carefully before
purchasing any of our shares.
Rule 15g-9 of the Securities and Exchange Commission requires
broker/dealers in penny stocks to approve the account of any investor for
transactions in these stocks before selling any penny stock to that investor.
This procedure requires the broker/dealer to:
* get information about the investor's financial situation,
investment experience and investment goals;
* reasonably determine, based on that information, that
transactions in penny stocks are suitable for the investor and that the
investor can evaluate the risks of penny stock transactions;
* provide the investor with a written statement setting forth
the basis on which the broker/dealer made his or her determination; and
* receive a signed and dated copy of the statement from the
investor, confirming that it accurately reflects the investors' financial
situation, investment experience and investment goals.
Compliance with these requirements may make it harder for our
stockholders to resell their shares.
Reporting Obligations.
----------------------
Section 14(a) of the Exchange Act requires all companies with
securities registered pursuant to Section 12(g) of the Exchange Act to comply
with the rules and regulations of the Securities and Exchange Commission
regarding proxy solicitations, as outlined in Regulation 14A. Matters
submitted to stockholders of our Company at a special or annual meeting
thereof or pursuant to a written consent will require our Company to provide
our stockholders with the information outlined in Schedules 14A or 14C of
Regulation 14; preliminary copies of this information must be submitted to the
Securities and Exchange Commission at least 10 days prior to the date that
definitive copies of this information are forwarded to our stockholders.
We are also required to file annual reports on Form 10-KSB and
quarterly reports on Form 10-QSB with the Securities Exchange Commission on a
regular basis, and will be required to timely disclose certain material
events (e.g., changes in corporate control; acquisitions or dispositions of a
significant amount of assets other than in the ordinary course of business;
and bankruptcy) in a current report on Form 8-K.
Small Business Issuer.
----------------------
The integrated disclosure system for small business issuers adopted
by the Securities and Exchange Commission in Release No. 34-30968 and
effective as of August 13, 1992, substantially modified the information and
financial requirements of a "Small Business Issuer," defined to be an issuer
that has revenues of less than $25,000,000; is a U.S. or Canadian issuer; is
not an investment company; and if a majority-owned subsidiary, the parent is
also a small business issuer; provided, however, an entity is not a small
business issuer if it has a public float (the aggregate market value of the
issuer's outstanding securities held by non-affiliates) of $25,000,000 or
more. We are deemed to be a "small business issuer."
The Securities and Exchange Commission, state securities commissions
and the North American Securities Administrators Association, Inc. ("NASAA")
have expressed an interest in adopting policies that will streamline the
registration process and make it easier for a small business issuer to have
access to the public capital markets.
Number of Employees.
--------------------
None.
Item 2. Description of Property.
---------------------------------
Our Company has no property or assets; its principal executive office
address and telephone number are the business office address and telephone
number of David C. Merrell, our Company's President, which are provided at
$100 per month, which is being treated as contributed capital. See Part I,
Item 1.
Item 3. Legal Proceedings.
---------------------------
Our Company is not the subject of any pending legal proceedings; and
to the knowledge of management, no proceedings are presently contemplated
against our Company by any federal, state or local governmental agency.
Further, to the knowledge of management, no director or executive
officer is party to any action in which any has an interest adverse to our
Company.
Item 4. Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------
No matter was submitted to a vote of our Company's security holders
during the fourth quarter of the period covered by this Annual Report or
during the previous two calendar years.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
------------------------------------------------------------------
Market Information.
-------------------
Pink Sheets LLC provided the following quotations. They do not
represent actual transactions and they do not reflect dealer markups,
markdowns or commissions.
STOCK QUOTATIONS
CLOSING BID
Quarter ended: High Low
-------------- ---- ---
April 2, 2002
through
June 30, 2002 0.03 0.03
September 30, 2002 0.05 0.03
December 31, 2002 0.05 0.05
Since April 2, 2002, our common stock has been quoted on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc. ("NASD"). Our
symbol is "NEVL." However, management does not expect any established
trading market to develop unless and until it has operations. In any event, no
assurance can be given that any market for our Company's common stock will
develop or be maintained. If a public market ever develops in the future,
the sale of "unregistered" and "restricted" shares of common stock pursuant
to Rule 144 of the Securities and Exchange Commission by members of
management or others may have a substantial adverse impact on any such
market; and all of these persons have satisfied the "holding period" under
Rule 144.
Recent Sales of "Restricted Securities".
----------------------------------------
There have been no sales of "restricted securities" or other securities
by us during the past three years.
Holders.
--------
The number of record holders of our Company's common stock as of the
calendar year ended December 31, 2002 was approximately 864; these numbers
do not include an indeterminate number of stockholders whose shares are held
by brokers in street name. As of March 19, 2003 there were approximately
864 stockholders.
Dividends.
----------
There are no present material restrictions that limit the ability of
our Company to pay dividends on common stock or that are likely to do so in
the future. Our Company has not paid any dividends with respect to its
common stock, and does not intend to pay dividends in the foreseeable
future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
-------------------------------------------------------------------
Plan of Operation.
------------------
Our Company has not engaged in any material operations during the year
end December 31, 2002 or since 1989.
Our Company's plan of operation for the next 12 months is to:(i)
consider guidelines of industries in which our Company may have an interest;
(ii) adopt a business plan regarding engaging in business in any selected
industry; and (iii) to commence such operations through funding and/or the
acquisition of a "going concern" engaged in any industry selected.
Our Company's only foreseeable cash requirements during the next 12
months will relate to maintaining our Company in good standing in the State
of Nevada, as well as legal and accounting fees. Management does not
anticipate that our Company will have to raise additional funds during the
next 12 months.
Item 7. Financial Statements.
------------------------------
For the periods ended December 31, 2002 and 2001
Independent Auditors' Report
Balance Sheet
Statements of Operations
Statements of Stockholders' Equity (Deficit)
Statements of Cash Flows
Notes to the Financial Statements
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 2002
CONTENTS
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . 3
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Stockholders' Equity (Deficit) . . . . . . . . . . . . . . 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . 9
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . 10
F-2
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
New Environmental Technologies Corporation
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of New Environmental
Technologies Corporation (a development stage company) as of December 31, 2002
and the related statements of operations, stockholders' equity (deficit) and
cash flows for the years ended December 31, 2002 and 2001 and from inception
on January 7, 1982 through December 31, 2002. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Environmental
Technologies Corporation (a development stage company) as of December 31, 2002
and the results of its operations and its cash flows for the years ended
December 31, 2002 and 2001 and from inception on January 7, 1982 through
December 31, 2002 in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company is a development stage company and has a deficit
working capital and stockholders' deficit along with no significant
operating revenues to date which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters
are also described in Note 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/HJ & Associates, LLC
HJ & Associates, LLC
Salt Lake City, Utah
March 17, 2003
F-3
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
2002
CURRENT ASSETS
Cash $ -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 40,590
Accounts payable - related party (Note 2) 23,311
Accrued interest payable - related party (Note 2) 4,000
----------
Total Liabilities 67,901
----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized 100,000,000 shares at
$0.001 par value; 2,620,326 shares issued and
outstanding 2,620
Additional paid-in capital 152,642
Deficit accumulated during the development stage (223,163)
----------
Total Stockholders' Equity (Deficit) (67,901)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ -
==========
The accompanying notes are an integral part of these financial statements.
F-4
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Statements of Operations
From
Inception on
January 7,
For the Years Ended 1982 Through
December 31, December 31,
2002 2001 2002
REVENUES $ - $ - $ -
EXPENSES 13,960 19,461 223,163
--------- --------- ---------
NET LOSS $ (13,960) $ (19,461) $(223,163)
========= ========= =========
BASIC LOSS PER SHARE $ (0.01) $ (0.01)
========= =========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 2,620,326 2,620,326
========= =========
The accompanying notes are an integral part of these financial statements.
F-5
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
Balance, January 7, 1982 - $ - $ - $ -
Common stock issued for cash
at $7.50 per share 6,000 6 45,000 -
Common stock issued for cash
at $0.39 per share 168,503 169 65,819 -
Net loss from inception on
January 7, 1982 through
December 31, 1982 - - - (39,597)
--------- ----- ------- -------
Balance, December 31, 1982 174,503 175 110,819 (39,597)
Net loss for the year ended
December 31, 1983 - - - (71,397)
--------- ----- ------- -------
Balance, December 31, 1983 174,503 175 110,819 (110,994)
Common stock issued for cash
at $25.00 per share 57 - 1,425 -
Common stock issued for cash
at $25.00 per share 3 - 75 -
Common stock issued for cash
at $0.25 per share 1,580,000 1,580 38,373 -
Net loss for the year ended
December 31, 1984 - - - -
---------- ------ ------- --------
Balance, December 31, 1984 1,754,563 1,755 150,692 (110,994)
Retired common stock, (1,296,132) (1,297) - -
Net loss for the year ended
December 31, 1985 - - - -
---------- ------ -------- --------
Balance, December 31, 1985 458,431 458 150,692 (110,994)
---------- ------ -------- --------
Net loss for the year ended
December 31, 1986 - - - -
Balance, December 31, 1986 458,431 $ 458 $150,692 $(110,994)
---------- ------ -------- --------
The accompanying notes are an integral part of these financial statements.
F-6
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)(Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
Balance, December 31, 1986 458,431 $ 458 $150,692 $(110,994)
Net loss for the year ended
December 31, 1987 - - - -
---------- ----- -------- ---------
Balance, December 31, 1987 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1988 - - - -
---------- ----- -------- ---------
Balance, December 31, 1988 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1989 - - - -
---------- ----- -------- ---------
Balance, December 31, 1989 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1990 - - - -
---------- ----- -------- ---------
Balance, December 31, 1990 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1991 - - - -
---------- ----- -------- ---------
Balance, December 31, 1991 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1992 - - - -
---------- ----- -------- ---------
Balance, December 31, 1992 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1993 - - - -
----------- ----- --------- ---------
Balance, December 31, 1993 458,431 458 150,692 (110,994)
Canceled common stock (316,000) (316) - -
Net loss for the year ended
December 31, 1994 - - - (6,656)
----------- ----- --------- ---------
Balance, December 31, 1994 142,431 $ 142 $ 150,692 $(117,650)
----------- ----- --------- ---------
The accompanying notes are an integral part of these financial statements.
F-7
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)(Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
Balance, December 31, 1994 142,431 $ 142 $ 150,692 $(117,650)
Common stock issued for
services at $0.001 per
share 2,357,895 2,358 - -
Net loss for the year ended
December 31, 1995 - - - (49,097)
--------- ------ -------- ---------
Balance, December 31, 1995 2,500,326 2,500 150,692 (166,747)
Common stock issued for
services at $0.001 per
share 120,000 120 - -
Net loss for the year ended
December 31, 1996 - - - (1,681)
--------- ------ -------- ---------
Balance, December 31, 1996 2,620,326 2,620 150,692 (168,428)
Net loss for the year ended
December 31, 1997 - - - (3,517)
--------- ------ -------- ---------
Balance, December 31, 1997 2,620,326 2,620 150,692 (171,945)
Net loss for the year ended
December 31, 1998 - - - (2,479)
--------- ------ -------- ---------
Balance, December 31, 1998 2,620,326 $2,620 $150,692 $(174,424)
Net loss for the year ended
December 31, 1999 - - - (6,307)
--------- ------ -------- ---------
Balance, December 31, 1999 2,620,326 $2,620 $150,692 $(180,731)
Net loss for the year
ended December 31, 2000 - - - (9,011)
--------- ------ -------- ---------
Balance, December 31, 2000 2,620,326 $2,620 $150,692 $(189,742)
Net loss for the year
ended December 31, 2001 - - - (19,461)
--------- ------ -------- ---------
Balance, December 31, 2001 2,620,326 $2,620 $150,692 $(209,203)
Contributed capital for
rent and officer
compensation - - 1,950 -
Net loss for the year
ended December 31, 2002 - - - (13,960)
--------- ------ -------- ---------
Balance, December 31, 2002 2,620,326 $2,620 $152,692 $(223,163)
========= ====== ======== =========
The accompanying notes are an integral part of these financial statements.
F-8
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
January 7,
For the Years Ended 1982 Through
December 31, December 31,
2002 2001 2002
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss $ (13,960) $ (19,461) $ (223,163)
Adjustments to reconcile net
(loss) to net cash used by
operating activities:
Stock issued for services - - 2,538
Contributed capital for rent
and officer compensation 1,950 - 1,950
Increase in accounts payable,
accounts payable-related, and
accrued interest 12,010 19,451 67,902
---------- ----------- -------------
Net Cash Used by Operating
Activities - (10) (150,773)
---------- ----------- -------------
CASH FLOWS FROM INVESTING
ACTIVITIES: - - -
---------- ----------- -------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock - - 150,773
---------- ----------- -------------
Net Cash Provided by
Financing Activities - - 150,773
---------- ----------- -------------
NET DECREASE IN CASH - (10) -
CASH AT BEGINNING OF PERIOD - 10 -
---------- ----------- -------------
CASH AT END OF PERIOD $ - $ - $ -
========== =========== =============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
SCHEDULE OF NON CASH FINANCING
ACTIVITIES
Stock issued for services $ - $ - $ 2,538
Contributed capital for rent
and officer compensation $ 1,950 $ - $ 1,950
The accompanying notes are an integral part of these financial statement.
F-9
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2002 and 2001
NOTE 1 - ORGANIZATION
The financial statements presented are those of New Environmental
Technologies Corporation (the Company). The Company was incorporated as
All Things, Inc. under the laws of the State of Nevada on January 7,
1982. On March 21, 1985, the Company changed its name to New
Environmental Technologies Corporation. The Company was organized for
the purpose of engaging in any activity or business not in conflict with
the laws of the State of Nevada or of the United States of America.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting. The Company has elected a December 31 year end.
b. Basic Loss Per Share
Loss per share has been calculated based on the weighted average number
of shares of common stock outstanding during the period.
For the Years Ended
December 31,
2002 2001
Loss per share:
Numerator - net loss (13,960) (19,461)
Denominator - weighted average
number of shares outstanding 2,620,326 2,620,326
----------- ---------
Loss per share $ (0.01) $ (0.01)
=========== =========
F-10
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2002 and 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Provision for Taxes
Deferred taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible temporary differences and
operating loss and tax credit carryforwards and deferred tax
liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
Net deferred tax assets consist of the following components as of
December 31, 2002 and 2001:
2002 2001
Deferred tax assets:
NOL Carryover $ 43,200 $ 37,426
Deferred tax liabilities: - -
Valuation allowance $ (43,200) $ (37,426)
--------- ----------
Net deferred tax asset $ - $ -
========= ==========
The income tax provision differs from the amount of income tax
determined by applying the U.S. federal and state income tax rates of
39% to pretax income from continuing operations for the years ended
December 31, 2002 and 2001 due to the following:
2002 2001
Book loss $ (5,445) $ (7,395)
State tax (100) (100)
Other 69 69
Valuation allowance 5,414 7,426
-------- ----------
$ - $ -
======== ==========
At December 31, 2002, the Company had net operating loss
carryforwards of approximately $110,900 that may be offset against
future taxable income from the year 2002 through 2022. No tax
benefit has been reported in the December 31, 2002 financial
statements since the potential tax benefit is offset by a valuation
allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of
1986, net operating loss carryforwards for Federal income tax
reporting purposes are subject to annual limitations. Should a
change in ownership occur, net operating loss carryforwards may be
limited as to use in future years.
F-11
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2002 and 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Related Party Transactions
A related party has loaned the Company $23,311 through December 31,
2002 for operating working capital. This amount is unsecured and due
upon demand. Interest has been imputed at 8%, resulting in accrued
interest of $4,000 at December 31, 2002.
During the year ended December 31, 2002, management determined that it
contributed to the Company services valued at $750 and rent
valued at $1,200. Contributions for prior years were determined to be
minimal and have not been recorded.
e. Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
f. Change in Accounting Principles
The Company adopted the provisions of FASB Statement No.145,
"Rescission of FASB Statements No. 4, 44, and 62, Amendment of FASB
Statement No. 13, and Technical Corrections," FASB Statement No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities,"
FIN 44, "Accounting for Certain Transactions Involving Stock
Compensation (an interpretation of APB Opinion No. 25)," and FASB
Statement No. 147, "Acquisitions of Certain Financial Institutions
an amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9." The effect of these adopted provisions on the
Company's financial statements was not significant.
In December 2002, the FASB issued Statement No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure - an amendment
of FASB Statement No. 123" (SFAS 148). SFAS 148 is effective for
fiscal years beginning after December 15, 2003. The Company is
currently reviewing SFAS 148.
NOTE 3 - STOCK SPLITS
On August 10, 1984, the Company authorized a 1-for-10 stock split of
common stock.
On July 16, 1984, the Company authorized a 1-for-10 stock split of
legend stock.
On September 21, 1984, the Company authorized a 1-for-60 stock split
of legend stock.
On January 11, 1985, the Company authorized a 1-for-60 stock split of
legend stock.
On January 22, 1985, the Company authorized a 60-for-1 stock split of
legend stock.
On August 27, 1985, the Company authorized a 1-for-250 stock split of
all stock.
The financial statements reflect these stock splits on a retroactive
basis.
F-12
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2002 and 2001
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using accounting
principles generally accepted in the United States of America
applicable to a going concern which contemplates the realization of
assets and liquidation of liabilities in the normal course of
business. The Company has not yet established an ongoing source of
revenues sufficient to cover its operating costs and allow it to
continue as a going concern. In addition, the Company has a deficit in
working capital and stockholders' deficit at December 31, 2002. The
ability of the Company to continue as a going concern is dependent on
the Company obtaining adequate capital to fund operating losses until
it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease development of operations.
In order to continue as a going concern, develop a reliable source of
revenues, and achieve a profitable level of operations the Company
will need, among other things, additional capital resources.
Management's plans to continue as a going concern include raising
additional capital through sales of common stock. It is the intent
of the Company to seek a merger with an existing, operating company.
In the interim, shareholders of the Company are committed to meeting
its minimal operating expenses. However, management cannot provide
any assurances that the Company will be successful in accomplishing
any of its plans.
The ability of the Company to continue as a going concern is
dependent upon its ability to successfully accomplish the plans
described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The
accompanying financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going
concern.
F-13
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------
No independent accountant of our Company has resigned, declined
to stand for re-election or was dismissed during our Company's two most
recent fiscal years or any interim period.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
Identification of Directors and Executive Officers.
---------------------------------------------------
The following table sets forth the names and the nature of all
positions and offices held by all directors and executive officers of our
Company for the calendar years ending December 31, 2002 and 2001, and to the
date hereof, and the period or periods during which each such director or
executive officer served in his or her respective positions.
Date of Date of
Positions Election or Termination
Name Held Designation Resignation
---- ---- ----------- -----------
Corie Merrell Director 1/95 *
Secretary/ 1/95 *
Treasurer
David C. Merrell President 8/94 *
Director
Secretary/ 8/94 1/95
Treasurer
* These persons presently serve in the capacities
indicated opposite their respective names.
Term of Office.
---------------
The term of office of the current directors shall continue until the
annual meeting of stockholders, which has been scheduled by the Board of
Directors to be held in May of each year. The annual meeting of the Board
of Directors immediately follows the annual meeting of stockholders, at
which officers for the coming year are elected.
Business Experience.
--------------------
David C. Merrell, Director and President. Since 1989, he has been the
owner of DCM Finance, a Salt Lake City based finance company which makes and
brokers real estate loans. Mr. Merrell received his Bachelor of Science
degree in Economics from the University of Utah in 1981.
Corie Merrell, Director and Secretary/Treasurer. Since 1989, she has
been part owner of DCM Finance and is currently a part time student at
Westminster College majoring in Psychology.
Family Relationships.
---------------------
David C. Merrell and Corie Merrell were formerly husband and wife.
Involvement in Certain Legal Proceedings.
-----------------------------------------
Except as indicated below and to the knowledge of management,
during the past five years, no present or former director, person nominated
to become a director, executive officer, promoter or control person of our
Company:
(1) Was a general partner or executive officer of any business
by or against which any bankruptcy petition was filed,
whether at the time of such filing or two years prior
thereto;
(2) Was convicted in a criminal proceeding or named the
subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court
of competent jurisdiction, permanently or temporarily
enjoining him from or otherwise limiting, the following
activities:
(i) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction
merchant, associated person of any of the foregoing,
or as an investment adviser, underwriter, broker or
dealer in securities, or as an affiliated person,
director or employee of any investment company,
bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or
practice in connection with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the
purchase or sale of any security or commodity or in
connection with any violation of federal or state
securities laws or federal commodities laws;
(4) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any
federal or state authority barring, suspending or
otherwise limiting for more than 60 days the right of such
person to engage in any activity described above under
this Item, or to be associated with persons engaged in any
such activity;
(5) Was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to
have violated any federal or state securities law, and the
judgment in such civil action or finding by the Securities
and Exchange Commission has not been subsequently
reversed, suspended, or vacated; or
(6) Was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to
have violated any federal commodities law, and the
judgment in such civil action or finding by the Commodity
Futures Trading Commission has not been subsequently
reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
No securities of our Company are registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934, and our Company files reports under
Section 15(d) of the Securities Exchange Act of 1934; accordingly,
directors, executive officers and 10 percent stockholders are not required
to make filings under Section 16 of the Securities Exchange Act of 1934.
Item 10. Executive Compensation.
--------------------------------
Cash Compensation.
------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Years or other all
principal periods Annual restricted option/ LTIP other
position Ended $ $ Compen- Stock SAR's PayoutsCompen-
Salary Bonus sation awards$ # $ sation$
----------------------------------------------------------------------------
Corie Merrell 12/31/02 0 0 0 0 0 0 0
Sec/Tres 12/31/01 0 0 0 0 0 0 0
Director
David C. 12/31/02 0 0 * 0 0 0 0
Merrell 12/31/01 0 0 0 0 0 0 0
President
Director
* Mr. Merrell provided 15 hours of services valued at an aggregate of $750
and rental space in his home valued at an aggregate of $1,200 during fiscal
2002; he contributed these sums to our capital and does not expect repayment
for them.
Stock Option Plans.
-------------------
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to our Company's management during the
calendar years ending December 31, 2002 and 2000, or the period ending
on the date of this Annual Report. Further, no member of our Company's
management has been granted any option or stock appreciation right;
accordingly, no tables relating to such items have been included within this
Item.
Compensation of Directors.
--------------------------
There are no standard arrangements pursuant to which our Company's
directors are compensated for any services provided as director. No
additional amounts are payable to our Company's directors for committee
participation or special assignments.
There are no arrangements pursuant to which any of our Company's
directors was compensated during our Company's last completed calendar year
or the previous two calendar years for any service provided as director.
See the Summary Compensation Table of this Item.
Termination of Employment and Change of Control Arrangement.
------------------------------------------------------------
There are no compensatory plans or arrangements, including payments to
be received from our Company, with respect to any person named in the
Summary Compensation Table set out above which would in any way result in
payments to any such person because of his or her resignation, retirement or
other termination of such person's employment with our Company or its
subsidiaries, or any change in control of our Company, or a change in the
person's responsibilities following a change in control of our Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
------------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
------------------------------------------------
The following table sets forth the shareholdings of those persons who
own more than five percent of our Company's common stock as of December 31,
2002 and 2001, and to the date hereof:
Number and Percentage
of Shares Beneficially Owned
----------------------------
Name and Address 12/31/01 12/31/02 and Currently
---------------- -------- ----------------------
Chiricahua Company* 2,002,895 76.4% 2,002,895 76.4%
9005 Cobble Lane
Sandy, Utah 84093
TOTALS 2,002,895 76.4% 2,002,895 76.4%
* David C. Merrell is the sole owner of Chiricahua Company, and is
deemed to be the beneficial owner of these shares.
Security Ownership of Management.
---------------------------------
The following table sets forth the share holdings of our Company's
directors and executive officers as of December 31, 2001 and 2002, and to
the date hereof:
Number and Percentage
of Shares Beneficially Owned
----------------------------
Name and Address 12/31/01 12/31/02 and currently
---------------- -------- ----------------------
David C. Merrell* 2,002,895 76.4% 2,002,895 76.4%
9005 Cobble Lane
Sandy, Utah 84093
Corie Merrell 120,000 4.6% 120,000 4.6%
9005 Cobble Lane
Sandy, Utah 84093
TOTALS 2,122,895 81% 2,122,895 81%
* David C. Merrell is the sole owner of Chiricahua Company, and is
deemed to be the beneficial owner of these shares.
Changes in Control.
-------------------
To the knowledge of management, there are no present arrangements or
pledges of our Company's securities which may result in a change in control.
Item 12. Certain Relationships and Related Transactions.
--------------------------------------------------------
Transactions with Management and Others.
----------------------------------------
There were no material transactions, or series of similar transactions,
during our Company's last three calendar years, or any currently proposed
transactions, or series of similar transactions, to which our Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director, executive officer or any security
holder who is known to our Company to own of record or beneficially more than
five percent of any class of our Company's common stock, or any member of the
immediate family of any of the foregoing persons, had an interest.
Certain Business Relationships.
-------------------------------
There were no material transactions, or series of similar transactions,
during our Company's last three calendar years, or any currently proposed
transactions, or series of similar transactions, to which it or any of its
subsidiaries was or is to be a party, in which the amount involved exceeded
$60,000 and in which any director, executive officer or any security holder
who is known to our Company to own of record or beneficially more than five
percent of any class of its common stock, or any member of the immediate
family of any of the foregoing persons, had an interest.
Indebtedness of Management.
---------------------------
There were no material transactions, or series of similar transactions,
during our Company's last three calendar years, or any currently proposed
transactions, or series of similar transactions, to which it or any of its
subsidiaries was or is to be a party, in which the amount involved exceeded
$60,000 and in which any director, executive officer or any security holder
who is known to our Company to own of record or beneficially more than five
percent of any class of its common stock, or any member of the immediate
family of any of the foregoing persons, had an interest.
Transactions with Promoters.
----------------------------
There were no material transactions, or series of similar transactions,
during our Company's last three calendar years, or any currently proposed
transactions, or series of similar transactions, to which it or any of its
subsidiaries was or is to be a party, in which the amount involved exceeded
$60,000 and in which any promoter or founder or any member of the immediate
family of any of the foregoing persons, had an interest.
Item 13. Exhibits and Reports on Form 8-K.
------------------------------------------
Reports on Form 8-K.
--------------------
None.
Exhibit
Exhibits* Number
Number ------
------
(i)
None.
(ii) Where Incorporated
In This Annual Report
Number --------------
------
Annual Report on Form 10KSB for the year
ended December 31, 1999** Part I
Registration Statement on Form S-18** Part I
* A summary of any Exhibit is modified in its entirety by
reference to the actual Exhibit.
** These documents and related exhibits have previously been filed
with the Securities and Exchange Commission and are incorporated
herein by this reference.
Item 14. Controls and Procedures.
---------------------------------
(a) Evaluation of Disclosure Controls and Procedures
New Environmental's President and Secretary/Treasurer have evaluated
the company's disclosure controls and procedures as of March 20, 2003, and
they concluded that these controls and procedures are effective.
(b) Changes in Internal Controls
There are no significant changes in internal controls or in other
factors that could significantly affect these controls subsequent to March
20, 2003.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
Date: 3/24/03 By/s/David C. Merrell
David C. Merrell, President and
Director
Date: 3/24/03 By/s/Corie Merrell
Corie Merrell, Secretary/Treasurer and
Director
In accordance with the Exchange Act, this Report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated:
NEW ENVIRONMENTAL TECHNOLOGIES CORPORATION
Date: 3/24/03 By/s/David C. Merrell
David C. Merrell, President and
Director
Date: 3/24/03 By/s/Corie Merrell
Corie Merrell, Secretary/Treasurer and
Director
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David C. Merrell, President of New Environmental Technologies
Corporation (the "Registrant"), certify that:
1. I have reviewed this Annual Report on Form 10-KSB ("the Annual
Report") of the Registrant;
2. Based on my knowledge, this Annual Report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Annual Report;
3. Based on my knowledge, the financial statements, and other
financial information included in this Annual Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
Annual Report;
4. The Registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
Annual Report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this Annual Report (the "Evaluation Date"); and
c) presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors and the
audit committee of Registrant's Board of Directors (or persons performing the
equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The Registrant's other certifying officer and I have indicated in
this Annual Report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Dated: March 24, 2003 Signature:/s/David C. Merrell
David C. Merrell
President
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Corie Merrell, Secretary/Treasurer of New Environmental Technologies
Corporation (the "Registrant"), certify that:
1. I have reviewed this Annual Report on Form 10-KSB (the "Annual
Report") of the Registrant;
2. Based on my knowledge, this Annual Report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Annual Report;
3. Based on my knowledge, the financial statements, and other
financial information included in this Annual Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
Annual Report;
4. The Registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
Annual Report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this Annual Report (the "Evaluation Date"); and
c) presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors and the
audit committee of Registrant's Board of Directors (or persons performing the
equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The Registrant's other certifying officer and I have indicated in
this Annual Report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Dated: March 24, 2003 Signature:/s/Corie Merrell
Corie Merrell
Secretary/Treasurer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of New Environmental Technologies
Corporation (the "Registrant") on Form 10-KSB for the year ending December 31,
2002, as filed with the Securities and Exchange Commission on the date hereof
(the "Annual Report"), we, David C. Merrell, President and Corie Merrell,
Secretary/Treasurer of the Registrant, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) The Annual Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Annual Report fairly presents, in
all material respects, the financial condition and result of operations of the
Registrant.
/s/David C. Merrell
President and Director
3/24/03
/s/Corie Merrell
Secretary and Treasurer
3/24/03