UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2002
Or
[ ] TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File Number: 000-33297
Marine Jet Technology Corporation
(Exact name of registrant as specified in its charter)
Nevada 88-0450923
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
500 N. Rainbow Blvd., Suite 300 89107
Las Vegas, NV (Zip Code)
(Address of principal executive
offices)
(425) 869-2723
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
20,732,570
PAGE-1-
MARINE JET TECHNOLOGY CORPORATION
(A Development Stage Company)
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Independent Accountant's Review Report 5
Balance Sheets 6
Statements of Operations and Accumulated Deficit 7
Statement of Changes in Stockholders' Equity 8
Statements of Cash Flows 9
Notes to Financial Statements 10
Item 2. Management's Discussion and Plan of Operation 17
PART II - OTHER INFORMATION
Item 6. Exhibits 19
SIGNATURES 20
PAGE-2-
MARINE JET TECHNOLOGY, CORP.
REVIEWED FINANCIAL STATEMENTS
FOR THE THREE PERIODS ENDED MARCH 31, 2002 AND MARCH 31,
2001
(UNAUDITED)
PAGE-3-
CONTENTS
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
FINANCIAL STATEMENTS
Balance Sheets 1
Statements of Operations and Accumulated Deficit 2
Statement of Changes in Stockholders' Equity 3
Statements of Cash Flows 4
NOTES TO FINANCIAL STATEMENTS 5-11
PAGE-4-
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
To the Board of Directors of
Marine Jet Technology, Corp:
We have reviewed the accompanying balance sheet of Marine Jet
Technology, Corp. (a development Stage Company) (a Nevada
corporation) as of March 31, 2002 and 2001, the related statements
of operations and accumulated deficit and cash flows for the
periods then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these
financial statements is the representation of the management of
Marine Jet Technology, Corp. (a development Stage Company) (a
Nevada corporation)
A review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements in
order for them to be in conformity with generally accepted
accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As disclosed in Note
9 to these financial statements, the Company has had limited
operations and has not established a long-term source of revenue.
This raises substantial doubt about its ability to continue as a
going concern. Management's plan in regards to this issue is also
described in Note 9. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Chavez & Koch, CPA's, Ltd.
April 17, 2002
Henderson, Nevada
PAGE-5-
PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
BALANCE SHEETS
AS OF MARCH 31, 2002 & 2001
ASSETS
3/31/02 3/31/01
---------------------
ASSETS
CURRENT ASSETS:
Cash $ 25,173 $ -
Prepaid expenses 405 -
---------------------
Total current assets 25,578 -
---------------------
FIXED ASSETS:
Office equipment 689 -
Equipment and machinery 30,000 -
Accumulated depreciation (3,539) -
---------------------
Total fixed assets 27,150 -
---------------------
OTHER ASSETS:
Amortized Intangible Assets:
Property rights agreements, net of 867 938
amortization
Patents, net of amortization 48,105 47,880
---------------------
Total other assets 48,972 48,818
---------------------
TOTAL ASSETS $ 101,700 $ 48,818
=====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,500 $ 8,271
Notes payable - shareholder - 8,785
---------------------
Total current liabilities 1,500 17,056
---------------------
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value,
45,000,000 shares
authorized 20,732,570 and 20,205,000
shares
issued and outstanding as of 3/31/02
and 3/31/01,
respectively 20,733 20,205
Preferred stock, $0.001 par value,
5,000,000 shares
authorized, not shares issued and
outstanding
as of 3/31/02 and 3/31/01, - -
respectively
Additional paid in capital 158,436 38,696
Accumulated deficit in development (78,969) (27,139)
stage ---------------------
Total stockholders' equity 100,200 31,762
---------------------
TOTAL LIABILITIES AND STOCKHOLDERS' $ 101,700 $ 48,818
EQUITY =====================
The accompanying independent accountants' review report and notes
to financial statements should be
read in conjunction with these Balance Sheets.
PAGE-6-F1
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FROM JANUARY 1, 2002 TO MARCH 31, 2002 AND JANUARY 1, 2001
TO MARCH 31, 2002
1/1/02 1/1/01
to to
3/31/02 3/31/01
---------------------
REVENUES $ - $ -
EXPENSES:
General and administrative (8,099) (7,541)
Depreciation expense (1,504) -
Amortization expense (998) (880)
---------------------
TOTAL EXPENSES (10,601) (8,421)
NET INCOME (LOSS) (10,601) (8,421)
---------------------
Accumulated Deficit, (68,368) (18,718)
beginning of period
Accumulated Deficit, $(78,969) $(27,139)
end of period =====================
Weighted average number of shares
outstanding
of shares outstanding 18,189,401 20,205,000
=====================
Net income (loss) per basic shares $(0.00) $(0.00)
=====================
Net income (loss) per diluted $(0.00) $(0.00)
shares =====================
The accompanying independent accountants' review report and the
notes to financial statements should be read in conjunction with
these Statements of Operations and Accumulated Deficit.
PAGE-7-F2
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM FEBRUARY 9, 2000 (DATE OF INCEPTION) TO MARCH 31, 2002
Additional Accumulated Total
Paid-in Deficit During Stockholders'
Shares Amount Capital Dev. Stage Equity
Issued for cash
February 11, 2000 105,000 $105 $- $- $105
Issued for cash
February 12, 2000 3,125,000 3,125 - - 3,125
Issued for cash
May 18, 2000 100,000 100 - - 100
Issued for
proprietary
rights agreement
May 19, 2000 1,000,000 1,000 - - 1,000
Issued for
patents
May 19, 2000 15,875,000 15,875 7,552,125 - 7,568,000
Expenses paid for
by an officer &
director
December 31, 2000 - - 4,790 - 4,790
Net income (loss)
December 31, 2000 - - - (310,575) (310,575)
----------------------------------------------------------
Balance at
December 31, 20,205,000 $20,205 7,556,915 (310,575) 7,266,545
2000
Prior Period - - 291,857 291,857
Adjustment
(Amortization)
Prior Period - - (7,518,219) (7,518,219)
Adjustment
(Patents
valuation)
504 Offering
July 31, 2001 527,570 528 104,986 - 105,514
Expenses paid for
by an officer &
director
September 30, - - 11,575 - 11,575
2001
Expenses paid for
by an officer &
director
December 31, 2001 - - 3,179 - 3,179
Net income (loss)
December 31, 2001 (49,650) (49,650)
----------------------------------------------------------
Balance
December 31, 20,732,570 20,733 158,436 (68,368) 110,801
2001
Net income (loss)
March 31, 2002 (10,601) (10,601)
The accompanying independent accountants' review report and the
notes to financial statements should be read in conjunction with
this Statement of Changes in Stockholders' Equity.
PAGE-8-F3
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FORM JANUARY 1, 2002 TO MARCH 31, 2002 AND JANUARY 1, 2001 TO MARCH
31, 2001
1/1/02 1/1/01
- -
3/31/02 3/31/01
---------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $(10,601) $ (8,421)
Adjustment to reconcile net (loss)
to net cash (used in)
provided by operating activities:
Depreciation and amortization 2,502 880
(Increase) decrease in prepaid 405 -
expenses
(Increase) Decrease in accounts 1,500 7,326
payable ---------------------
NET CASH USED IN OPERATING (6,194) (215)
ACTIVITIES ---------------------
NET INCREASE IN CASH (6,194) (215)
CASH - beginning of period 31,367 215
---------------------
CASH - end of period $25,173 $ -
=====================
Supplemental information:
Interest paid $ 590 $ 590
=====================
Taxes paid $ - $ -
=====================
The accompanying independent accountants' review report and the
notes to financial statements should be read in conjunction with
these Statements of Cash Flows.
PAGE-9-F4
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2002
NOTE 1 - ORGANIZATION AND BACKGROUND
Marine Jet Technology, Corp. (a U.S. Operating Company and Nevada
corporation) incorporated on February 9, 2000. The company was
formed to develop and market a boat propulsion technology developed
by the President of the Company. The Company currently has minimal
operations and in accordance with SFAS #7, the Company is
considered a development stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The financial statements of Marine Jet Technology, Corp. have been
prepared on the accrual basis. Revenues are recognized when earned
and expenses are recognized in the period incurred. The fiscal
year end is December 31.
Cash and cash equivalents
The Company considers short-term investments with an original
maturity of three months or less to be cash equivalents.
Prepaid expenses
The Company amortizes prepaid expenses over a period equivalent to
the term of commitment. Prepaid expenses for the periods ended
March 31, 2002 and March 31, 2001 were $405 and $0, respectively.
Fixed assets
Fixed assets are recorded at cost. Ordinary maintenance and
repairs are charged to expense as incurred and costs that
materially increase the life of the assets are capitalized.
Depreciation is recorded using the straight-line method over the
estimated useful life of the assets, which are as follows:
Office equipment 7 years
Equipment and machinery 5 years
Computer equipment 5 years
Software 5 years
Office furniture 7 years
Depreciation for the periods ended March 31, 2002, and March 31,
2001 was $1,504 and $0, respectively.
PAGE-10-F5
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2002
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Earnings Per Share Calculations
Basic earnings per common share ("EPS") is computed by dividing
income available to common stockholders by the weighed-average
number of common shares outstanding for the period. The weighed-
average number of common shares outstanding for computing basic EPS
was 18,189,401 and 20,205,000 for the periods ended March 31, 2002
and 2000, respectively. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock. As of
March 31, 2002 and 2000, the Company had no outstanding securities
that could have a dilutive effect on the outstanding common stock,
respectively.
Amortized Intangible assets
Intangible Assets are recorded at their historical cost.
Amortization is recorded using the straight-line method over the
estimated useful life of the assets, which are as follows:
Proprietary rights 14 years
agreement
Patents 13-14 years
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions. These estimates and assumptions
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 reported period. Actual results could differ
from those estimates.
Income taxes
The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109 (SFAS #109) "Accounting for Income
Taxes" ("SFAS No. 109"), which require the use of the liability
method. SFAS No. 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes, referred to as temporary differences.
Deferred tax assets and liabilities at the end of each period are
determined using the currently enacted tax rates applied to taxable
income in periods in which the deferred tax assets and liabilities
are expected to be settled or realized.
PAGE-11-F6
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2002
NOTE 3 - COMMITMENTS
The Company entered into a two-year lease agreement for office
space and mail forwarding services for $135 per month that ends on
May 31, 2002. On July 18, 2001, the Company paid the lease in
full. The resulting prepaid balance as of March 31, 2002 is $405.
NOTE 4 - AMORTIZED INTANGIBLE ASSETS
Proprietary Rights Agreement (non-cash transaction)
The Company has recorded the purchase of a proprietary rights
agreement on May 18, 2000 from David Lyman, co-developer of the
boat propulsion technology. The Company recorded the agreement for
a consideration of 1,000,000 shares of $0.001 par value stock of
the Company, valued at $1,000.
The Company has adopted SFAS 142. Under guidance from SFAS 142,
Management has determined that the value of the proprietary rights
agreement, purchased in May of 2000, has not significantly
decreased and there has been no reduction in the usefulness of the
asset for the periods ended March 31, 2002 and March 31, 2001.
Patent Licensing Agreement
The Company has recorded the purchase of a patent licensing
agreement using the seller's historical cost of $55,238. The
licensing agreement provides the company with proprietary,
licensing, patent, marketing and other intellectual property rights
related to the patents. The patents secure the rights to the
development of marine jet propulsion technology used to provide
more efficient inlet ducts, power transfer, and jet pump operation.
The Company has adopted SFAS 142. Under guidance from SFAS 142,
Management has determined that as the major intangible asset, the
value of the patent licensing agreement, purchased in April of
2000, has not significantly decreased and there has been no
reduction in the usefulness of the asset for the periods ended
March 31, 2002 and March 31, 2001.
Because the patents have not demonstrated their technological or
commercial feasibility as March 31, 2002 and March 31, 2001, and
since significant risks exist because of uncertainties the Company
may face in the form of time and costs necessary to produce
technological and commercial feasibility, there is uncertainty that
the Company will be able to realize any value from the intangible
asset should the technology fail to become viable.
PAGE-12-F7
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2002
NOTE 4 - AMORTIZED INTANGIBLE ASSETS (CONTINUED)
Amortized Intangible Assets
Amortization expense for the periods ended March 31, 2002, and
March 31, 2001 was $2,502 and $880, respectively.
For the periods ended March 31:
-------------------------------
2002 2001
-------------------------------
Proprietary rights agreement $1,000 $1,000
Patents 55,238 51,230
-------------------------------
Gross Carrying Amounts 56,238 52,230
Less: Accumulated Amortization 7,266 3,412
-------------------------------
Net Amortized Intangible Assets $48,972 $48,818
===============================
Scheduled amortization expense for each of the next five fiscal
years are as follows:
Period ended March 31,
2003 $ 3,992
2004 3,992
2005 3,992
2006 3,992
2007 3,992
Thereafter 29,012
---------
$ 48,972
=========
NOTE 5 - STOCKHOLDER'S EQUITY
On February 11, 2000, the Company issued 105,000 of its $0.001 par
value common stock to an officer and director of the Company for
cash in the amount of $105. Of the total amount received, $105 is
considered common stock and $0 is considered additional paid-in
capital.
On February 12, 2000, the Company issued 3,125,000 shares of its
$0.001 par value common stock as founder's shares to the Company's
officers and directors for cash of
$3,125. Of the total amount received, $3,125 is considered common
stock and $0 is considered additional paid-in capital.
PAGE-13-F8
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2002
NOTE 5 - STOCKHOLDER'S EQUITY (CONTINUED)
On May 18, 2000, the Company issued 100,000 shares of its $0.001
par value common stock to an officer and director of the Company
for cash in the amount of $100. Of the total amount received, $100
is considered common stock and $0 is considered additional paid-in
capital.
On May 19, 2000, the Company issued 1,000,000 shares of its $0.001
par value common stock as consideration for a "Proprietary Rights
Agreement" valued at $1,000 (See Note 4). Of the total amount
received, $1,000 is considered common stock and $0 is considered
additional paid-in capital.
On May 19, 2000, the Company issued 15,875,000 shares of its $0.001
par value common stock as consideration for a "Patent Licensing
Agreement" valued at $55,238 (See Note 8). Of the total amount
received, $15,875 is considered common stock and $33,906 is
considered additional paid-in capital.
During the period ended March 31, 2001, an officer, director and
shareholder of the Company paid for expenses on behalf of the
Company totaling $4,790. Of the total amount received, $0 is
considered common stock and $4,790 is considered additional paid-in
capital.
On July 31, 2000, the Company closed its Rule 504 offering and
issued 527,570 shares of its $0.001 par value common stock for cash
in the amount of $105,514. Of the total amount paid, $528 is
considered common stock and $104,986 is considered additional paid-
in capital.
During the period ended September 30, 2001, an officer, director
and shareholder of the Company paid for expenses on behalf of the
Company totaling $11,575. Of the total amount received, $0 is
considered common stock and $11,575 is considered additional paid-
in capital.
During the period ended March 31, 2002, an officer, director and
shareholder of the Company paid for expenses on behalf of the
Company totaling $3,179. Of the total amount received, $0 is
considered common stock and $3,179 is considered additional paid-in
capital.
For the periods ended March 31, 2002 and March 31, 2001, the
Company had 20,732,570 and 20,205,000 shares of common stock issued
and outstanding, held by 113 shareholders of record for both
periods.
PAGE-14-F9
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2002
NOTE 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional shares of common stock that are not disclosed on the
balance sheets.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company entered into a Patent License Agreement ("Agreement")
with Jeff P. Jordan and Robert J. Tomlinson ("Licensors"), officers
and directors of the Company, to issue rights to all of the
marketing, proprietary, licensing, patent and intellectual rights
to US Patent #5,658,176, "Marine Jet propulsion System, US Patent
#5,679,035, "Marine
Jet Propulsion Nozzle and Method", and US Patent #5,683,276,
"Marine Jet Propulsion Inlet Duct and Method", in exchange for
15,875,000 shares of the company's $0.001 par value common stock
(See Note 6). The Agreement grants to the Company exclusive rights
to the use of the Patents for all applications under 400hp.
The Company also entered into NonCompetition Agreements with the
Licensors whereby for a period of 5 years from the date of the
agreement, Licensors will not engage in or carry on, directly or
indirectly, any business in competition with the business of the
Company relating to the Patents that are the subject of the Patent
License Agreement. No valuable consideration was given for the
NonCompetition Agreements.
The Company purchased equipment from an officer and director of the
Company on August 31, 2001 with cash in the amount of $30,000.
NOTE 8 - INCOME TAXES
As of March 31, 2002, the Company has a net operating loss
carryforward of approximately $78,969 for tax purposes, which will
be available to offset future taxable income. If not used, this
carryforward will expire in 2022. The deferred tax asset relating
to the net operating loss carryforward of approximately $14,742 has
been fully reserved at March 31, 2002.
NOTE 9 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
assumes the realization of assets and liquidation of liabilities in
the normal course of business. Since the Company has not commenced
its planned principal operations, the Company intends to raise
sufficient capital needed to continue operating until its planned
principal operations commence.
PAGE-15-F10
MARINE JET TECHNOLOGY, CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2002
NOTE 9 - GOING CONCERN (CONTINUED)
The Company anticipates the ability to raise additional money
through Private Placement Memorandums. Additionally, the Company
anticipates being listed as an Over-the-Counter Bulletin Board
stock, which will provide an additional source of working capital
for the Company. Finally, the Company plans to curtail expenses so
that the current cash balance will allow the company to continue to
operate.
Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern.
The officers and directors are involved in other business
activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting between
the Company and their other business interests. The Company has
not formulated a policy for the resolution of such conflicts.
PAGE-16-F11
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements
about Marine Jet Technology Corporation's business, financial
condition and prospects that reflect management's assumptions and
beliefs based on information currently available. We can give no
assurance that the expectations indicated by such forward-looking
statements will be realized. If any of our management's
assumptions should prove incorrect, or if any of the risks and
uncertainties underlying such expectations should materialize,
Marine Jet's actual results may differ materially from those
indicated by the forward-looking statements.
The key factors that are not within our control and that may
have a direct bearing on operating results include, but are not
limited to, acceptance of our services, our ability to expand our
customer base, managements' ability to raise capital in the future,
the retention of key employees and changes in the regulation of our
industry.
There may be other risks and circumstances that management may
be unable to predict. When used in this Quarterly Report, words
such as, "believes," "expects," "intends," "plans,"
"anticipates," "estimates" and similar expressions are intended to
identify forward-looking statements, as defined in Section 21E of
the Securities Exchange Act of 1934, although there may be certain
forward-looking statements not accompanied by such expressions.
The safe harbors of forward-looking statements provided by
Section 21E of the Exchange Act are unavailable to issuers of penny
stock. As we issued securities at a price below $5.00 per share,
our shares are considered penny stock and such safe harbors set
forth under the Reform Act are unavailable to us.
General
Marine Jet Technology Corporation is a corporation formed in
the State of Nevada in February 9, 2000. We intend to develop
marine jet propulsion systems for sale and to license the rights to
manufacture these systems and/or boats incorporating our technology
under the name "Quick Jet." We plan to develop and market the
Quick Jet technology to produce a proprietary marine jet propulsion
system that offers the low-speed thrust and acceleration of a
propeller drive, while retaining the safety, convenience and
maneuverability of a traditional jet design.
Our goal is to sell the Quick Jet system in combination with
available marine motors to boat manufacturers, who we expect to
produce boats incorporating our licensed technology. We may also
license one or more manufacturers to sell systems based on the
technology. In return, manufacturers will pay us a royalty on each
boat or engine sold that utilizes our technology. We currently do
not intend to produce the Quick Jet engines in-house. Marine Jet
anticipates that the use of existing production and sales capacity
offers the most rapid market penetration. For this reason, our
strategy centers on developing joint venture and licensing
relationships with boat and motor manufacturers. We have yet to
identify such companies or enter into any manufacturing
relationships or joint ventures.
Our Internet site, "www.marinejettech.com," is available for
industry participants and consumers to learn about our Quick Jet
technology. We believe that our web site is ideal for answering
technical questions, building credibility and creating market
interest.
We have developed a fully-operational prototype propulsion
system. This system has been undergoing test, research and further
development by our management. Our management has been working on
the controls for the system to improve the maneuverability and
convenience of the QuickJet. Although the prototype has generally
met our management's expectations, we have been unable to retain
either an independent firm or the instrumentation to accurately
measure the performance specifications of the prototype.
Plan of Operation
Since our formation on February 9, 2000 through March 31,
2002, we accumulated a deficit of $78,969. Marine Jet's efforts
have focused primarily on the development of our plan of
operations, entering into agreements to utilize proprietary
technology, obtaining assets to further develop a prototype Quick
Jet motor and raising working capital through equity financing.
Our management anticipates the need to recruit a management
team experienced in the marketing of new technology in similar
markets, to generate interest in our Quick Jet technology.
However, due to the limited availability of funds with which to pay
salaries, we intend to make stock options a substantial portion of
the compensation package for such a management team. The
conversion of such securities may dilute your interest in our
company as a shareholder.
PAGE-17-
We have developed controls for the test boat and used it to
produce a promotional video, which we are disseminating to industry
participants. Our management believes that the cash on hand will
limit the progress on these tasks and that failure to obtain
additional financing will delay or prevent the completion of such
promotional material.
To fund our operations for the remaining three quarters of
2002, our management believes that our current financial resources
will not be adequate to provide for our working capital needs.
There are no preliminary loan agreements or understandings between
us, our officers, directors or affiliates or lending institutions.
We have no arrangements or commitments for accounts and accounts
receivable financing. There are no plans or intentions to acquire
a significant plant and/or any equipment, nor to divest any of our
current assets or equipment.
Our management expects the need to raise additional capital
via a public or private offering of equity or debt securities to
provide funding for ongoing operations. There are no formal or
informal agreements to attain such financing. Any capital attained
from the sale of equity or debt securities will be utilized to
manufacture an initial production run of Quick Jet systems to
provide to potential customers for testing in their boats. In
order to be able to begin producing marketable Quick Jet systems,
we intend to use any proceeds from sales of our equity or debt
securities to purchase patterns for castings, tooling for machining
those castings and labor to assemble and test the production Quick
Jet systems that result.
However, we cannot assure you that any financing can be
obtained or, if obtained, that it will be on reasonable terms.
Without realization of additional capital, our management believes
that it would be unlikely for us to continue as a going concern.
To generate revenues, we plan to:
1. Begin selling Quick Jet systems to boat builders;
2. Enter into joint venture marketing agreements with one or more
engine builders to sell a propulsion package to boat builders; or
3. Enter into a joint venture licensing agreement with one or
more manufacturers to build and sell systems and boats based upon
the Quick Jet technology.
Because we are a development stage company with no significant
operating history and a poor financial condition, we may be
unsuccessful in obtaining such financing or the amount of the
financing may be minimal and therefore inadequate to implement our
plan of operations. We have no alternative plan of operations. In
the event that we do not receive financing or our financing is
inadequate or if we do not adequately implement an alternative plan
of operations that enables us to conduct operations without having
received adequate financing, we may have to liquidate our business
and undertake any or all of the following actions:
1. Sell or dispose of our assets;
2. Pay our liabilities in order of priority, if we have available
cash to pay such liabilities;
3. If any cash remains after we satisfy amounts due to our
creditors, distribute any remaining cash to our shareholders in an
amount equal to the net market value of our net assets;
4. File a Certificate of Dissolution with the State of Nevada to
dissolve our corporation and close our business;
5. Make the appropriate filings with the Securities and Exchange
Commission so that we will no longer be required to file periodic
and other required reports with the Securities and Exchange
Commission, if, in fact, we are a reporting company at that time;
and
If we have any liabilities that we are unable to satisfy and
we qualify for protection under the U.S. Bankruptcy Code, we may
voluntarily file for reorganization under Chapter 11 or liquidation
under Chapter 7. Our creditors may also file a Chapter 7 or
Chapter 11 bankruptcy action against us. If our creditors or we
file for Chapter 7 or Chapter 11 bankruptcy, our creditors will
take priority over our shareholders. If we fail to file for
bankruptcy under Chapter 7 or Chapter 11 and we have creditors,
such creditors may institute proceedings against us seeking
forfeiture of our assets, if any. We do not know and cannot
determine which, if any, of these actions we will be forced to
take.
PAGE-18-
PART II - OTHER INFORMATION
Item 6. Exhibits
Item 1. Index to Exhibits
Exhibit Name and/or Identification of Exhibit
Number
2. Plan of acquisition, reorganization, arrangement,
liquidation, or succession
(a) Marine Jet Technology License Agreement (1)
(b) Amendment to Marine Jet Technology License Agreement of
May 22, 2000 (1)
(c) Second Amendment to Marine Jet Technology License
Agreement of May 22, 2000 (1)
(d) Proprietary Rights Agreement (1)
3. Articles of Incorporation & By-laws
(a) Articles of Incorporation of the Company filed February
9, 2000 (1)
(b) Amendment to the Articles of Incorporation filed
December 5, 2000 (1)
(c) Amendment to the Articles of Incorporation filed January
5, 2001 (1)
(d) By-laws of the Company adopted February 12, 2000 (1)
10. Material Contracts
Office lease agreement (1)
(1) Incorporated by reference to the exhibits to the Company's
General Form for Registration of Securities of Small Business
Issuers on Form 10-SB, and amendments thereto, previously filed
with the Commission.
PAGE-19-
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this Report to be
signed on its behalf by the undersigned hereunto duly authorized.
Marine Jet Technology Corporation
(Registrant)
By: /s/ Jeff P. Jordan
------------------------
Jeff P. Jordan
President
In accordance with the requirements of the Securities Act of
1933, this Registration Statement was signed by the following
persons in the capacities and on the dates stated:
Signature Title Date
----------- ------- ------
/s/ Jeff P. Jordan July 31, 2002
Jeff P. Jordan President
/s/ Martha A. Jordan July 31, 2002
Martha A. Jordan Secretary
PAGE-20-