UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

IWT TESORO CORPORATION

(Exact Name of Small Business Issuer in Its Charter)

 

 

101 Post Road West, Suite 10, Westport, CT  06880

(Address of principal executive offices)

 

(203) 221-2770

(Issuer’s Telephone Number, including area code)

 

 

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

 

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

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

 

Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

 

Indicate by check mark whether the registrant is an accelerated files (as defined in Rule 12b-2 of the Exchange Act)    oYes    ýNo

 

State the number of shares outstanding of each of the issuer’s class of common equity, as of May 13, 2004:  11,683.102 shares

 

Transitional Small Business Disclosure Format:    oYes          ýNo

 

 

PART I

 

ITEM 1:                                                     FINANCIAL STATEMENTS

 

IWT TESORO CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2004

 

TABLE OF CONTENTS

 

Report of Independent Accountants
Consolidated Balance Sheets March 31, 2004 (unaudited) and December 31, 2003
Consolidated Statements of Operations for the Three Months Ended March 31, 2004 and 2003 (unaudited)
Consolidated Statements of Stockholders’ Equity for the Three Months ended March 31, 2004 and 2003 (unaudited)
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 (unaudited)
Notes to Consolidated Financial Statements (unaudited)

 

1

 

REPORT OF INDEPENDENT ACCOUNTANTS

 

 

To the Board of Directors

IWT Tesoro Corporation

Westport, Connecticut

 

We have reviewed the accompanying consolidated balance sheet of IWT Tesoro Corporation and its wholly-owned subsidiaries as of March 31, 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the three-month periods ended March 31, 2004 and 2003.  These financial statements are the responsibility of the Company’s management.

 

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants.  A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted 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 reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

 

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of December 31, 2003, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated January 23, 2004, we expressed an unqualified opinion on those financial statements.  In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2003, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

 

 

KANTOR, SEWELL & OPPENHEIMER, PA

Certified Public Accountants

 

Hollywood, Florida

April 27, 2004

 

2

 

IWT TESORO CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

		March 31, 2004			December 31, 2003
		(Unaudited)
Assets
Current assets
Cash		$	609,682		$	867,361
Accounts receivable, net		5,755,937			4,907,705
Inventory		14,279,540			13,058,839
Subscription receivable		—			550,000
Deferred tax asset		26,671			146,192
Advance to supplier		550,000			—
Prepaid expenses		681,426			754,289
Total current assets		21,903,256			20,284,386
Property and equipment, net		4,677,048			4,283,518
Other assets
Deposits		100,020			59,609
Other receivables		84,400			69,370
Other assets		256,036			253,120
		440,456			382,099
		$	27,020,760		$	24,950,003

 

See accompanying notes to financial statements.

 

3

 

IWT TESORO CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

Liabilities and Stockholders’ Equity

 

		March 31, 2004			December 31, 2003
		(Unaudited)
Current liabilities
Accounts payable		$	11,453,496		$	9,859,161
Accrued expenses and other liabilities		102,362			137,292
Current portion of leases payable		49,065			63,151
Current portion of notes payable - unrelated parties		38,512			42,719
Total current liabilities		11,643,435			10,102,323
Deferred tax liability - non current		149,072			148,594
Long term leases payable		153,895			149,183
Long term notes payable - related parties		338,662			338,662
Long term notes payable - unrelated parties		36,107			42,560
Long term loan payable		10,170,284			9,599,340
		10,848,020			10,278,339
Stockholders’ equity
Preferred stock, $0.001 par value, 25,000,000 authorized; none issued		—			—
Common stock, $0.001 par value, 100 million shares authorized, 11,675,702 and 11,622,702  issued and outstanding		11,676			11,623
Additional paid in capital		4,519,450			4,306,153
Retained earnings (deficit)		(1,821		)	251,565
		4,529,305			4,569,341
		$	27,020,760		$	24,950,003

 

See accompanying notes to financial statements.

 

4

 

IWT TESORO CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

		Three months ended March 31,
		2004			2003
Revenue
Sales, net of discounts and returns		$	9,556,147		$	6,734,765
Cost of goods sold		5,810,414			4,079,608
Gross profit		3,745,733			2,655,157
Expenses
Payroll expense		1,608,045			1,132,831
Delivery expense		558,622			336,045
General and administrative		287,623			210,016
Depreciation		214,500			136,524
Lease expense		362,928			134,380
Professional fees		83,105			124,843
Repairs and maintenance		100,685			82,371
Insurance		160,598			74,828
Sales expenses		199,562			68,606
Travel and entertainment		88,607			54,460
Advertising		76,420