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| PRBL.OB > SEC Filings for PRBL.OB > Form 10KSB on 6-Apr-2004 | All Recent SEC Filings |
6-Apr-2004
Annual Report
Cautionary Statement Regarding Forward-looking Statements - This report may contain "forward-looking" statements. Examples of forward- looking statements include, but are not limited to: (a) projections of revenues, capital expenditures, growth, prospects, dividends, capital structure and other financial matters; (b) statements of plans and objectives of our management or Board of Directors; (c) statements of our future economic performance; (d) statements of assumptions underlying other statements and statements about us and our business relating to the future; and (e) any statements using the words "anticipate," "expect," "may," "project," "intend" or similar expressions.
We have completed the construction of our pilot sodium plant in Salt Lake City, Utah. The pilot plant has successfully produced small quantities of metallic sodium. Plans for demonstration projects for our Hydrogen On Demand generators are on hold pending funding. We are engaged in discussions with a fuel cell manufacturer regarding a possible joint venture arrangement but such discussions having been in process for some time with no results to date due to funding problems and no agreements have been reached. We are considering looking for alternative business combinations with entities who may not be involved in related industries but have not identified any prospects to date.
Results of Operations - Year ended December 31, 2003 compared to year ended December 31, 2002 - Revenues. We expect that our initial revenues will be generated primarily by the production of sodium. Additional revenues may be derived from the licensing of the Technology and/or manufacturing and sale of hydrogen generation systems. We had no revenues for the years ended December 31, 2003 and 2002, respectively, and have had no revenues since July 9, 1997 ("Inception").
Operating Expenses. Our operating expenses decreased to $438,239 in 2003 from $928,489 2002. The decrease in operating expenses in 2003 is attributable to significant decreases in general and administrative expenses and professional fees, and a substantial decrease in research and development expenses due to the completion of our planned research and development activities. Total operating expenses from inception through December 31, 2003 have been $3,184,654. Effective in September 2003, we have reduced operating expenses to a minimum in order to preserve assets and maintain the company until a project develops and funding is available. We anticipate that we may be required to further reduce operating expenses over the remainder of fiscal 2004 unless additional funding is obtained.
We experienced a net loss of $437,644 in 2003, with a loss per share of $0.10,
compared to a 2002 net loss of $922,380, with a loss per share of $0.21. The
net loss since inception has been $3,183,497, with a $1.25 loss per share.
PAGE> 10
Liquidity and Capital Resources - Our working capital has come mainly through the sale of our securities. Proceeds generated from the sale of our securities have funded the our operations, including continued research and development activities.
In August 2003, we issued 100,000 shares of common stock valued at $46,000 to our president, Robert K. Ipson, and 50,000 shares of common stock valued at $23,000 to our secretary/treasurer, Phillip McStotts.
At December 31, 2003, we had current assets of $43,559, and current liabilities of $15,599, for working capital of $27,960. At December 31, 2003, we had property and equipment, net of depreciation, of $5,210, and other assets of $38,595, consisting of patents and assigned technology, net of amortization, of $12,608.
Our cash used in operations for the year ended December 31, 2003 was $309,008 compared to $611,156 for the same period ended December 31, 2002. We have continued to issue stock for services to certain officers. Since inception, our operations have been funded primarily by cash received from capital contributions and the issuance of common stock for cash.
Our investing activities for the year ended December 31, 2003 consisted of $11,500 for additional patent costs. Our cash used in investing activities during the year ended December 31, 2002, was $16,360, for the purchase of equipment and leasehold improvements and additional patent costs.
Cash flows from financing activities during the year ended December 31, 2003 totaled $309,000, all from the sale of common stock.
Because no definitive agreements to utilize our technology have been reached, management is considering all options for developing revenues, including joint ventures, licensing arrangements and business combinations, although no potential business partners have been identified to date.
We expect that during the next year our primary expenditures will be for maintaining existing operations and for exploring projects and possibilities for the commercialization of our hydrogen generation equipment and powerball production, as well as expenses and professional and related fees associated with our ongoing reporting obligations. We hope to raise additional capital in fiscal 2004 through a private placement of our securities and/or through a licensing of our technology to an industrial partner. However, at this filing date we do not have any agreements for funding through such a private placement or any immediate prospects for a licensing agreement.
Impact of Inflation - We do not anticipate that inflation will have a material impact on our current or proposed operations.
Seasonality - We do not know of any seasonal aspects relating to the nature of our business operations that have had or might have a material effect on our financial condition or results of operation.
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