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:

ýYes             oNo

 

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 August 12, 2004:  11,695,612 shares

 

Transitional Small Business Disclosure Format:   oYes                  ýNo

 

 

PART 1

 

ITEM 1:                             FINANCIAL STATEMENTS

 

IWT TESORO CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2004

 

 

 

TABLE OF CONTENTS

 

 

Report of Independent Accountants
Consolidated Balance Sheets June 30, 2004 (unaudited) and December 31, 2003
Consolidated Statements of Operations for the Six months ended June 30, 2004 and 2003 (unaudited)
Consolidated Statements of Stockholders’ Equity for the Six months ended June 30, 2004 and 2003 (unaudited)
Consolidated Statements of Cash Flows for the Six months ended June 30, 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 June 30, 2004 and 2003, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the three month and six-month periods then ended.  These financial statements are the responsibility of the Company’s management.

 

We conducted our review in accordance with standards established by the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, 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 interim consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.

 

 

KANTOR, SEWELL & OPPENHEIMER, PA

Certified Public Accountants

 

Hollywood, Florida

July 23, 2004

 

2

 

IWT TESORO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 

Assets

 

		June 30, 2004			December 31, 2003 Restated
		(Unaudited)			(Audited)
Current assets
Cash		$	661,144		$	867,361
Accounts receivable, net		7,322,910			4,907,705
Inventory		15,427,926			13,058,839
Due from shareholder		—			550,000
Deferred tax asset		—			146,193
Prepaid expenses		1,059,825			754,289
Total current assets		24,471,805			20,284,387
Property and equipment, net		5,271,853			4,217,268
Other assets
Deposits		120,145			59,609
Deferred tax assets		76,972			101,205
Other receivables		113,473			69,370
Other assets		354,103			253,120
		664,693			483,304
		$	30,408,351		$	24,984,959

 

See notes to financial statements.

 

3

 

IWT TESORO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 

Liabilities and Stockholders’ Equity

 

		June 30, 2004			December 31, 2003 Restated
		(Unaudited)			(Audited)
Current liabilities
Accounts payable		$	12,092,307		$	9,859,161
Accrued expenses		209,644			137,292
Deferred tax liability		13,768			—
Current portion of lease payable		34,106			63,151
Current portion of notes payable - unrelated parties		34,458			42,719
Total current liabilities		12,384,283			10,102,323
Deferred tax liability - non current		—			148,594
Long term lease payable		156,835			149,183
Long term notes payable - related parties		338,662			338,662
Long term notes payable - unrelated parties		47,959			42,560
Long term loan payable		12,411,294			9,599,340
		12,954,750			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, 11,695,102 and 11,622,702 issued and outstanding		11,695			11,623
Additional paid in capital		4,594,256			4,306,153
Additional paid in capital - outstanding options		666,667			666,667
Accumulated deficit		(203,300		)	(380,146		)
		5,069,318			4,604,297
		$	30,408,351		$	24,984,959

 

See notes to financial statements.

 

4

 

IWT TESORO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 

		For the period ended June 30,
		Three months ended						Six months ended
		2004			2003			2004			2003
Revenue
Sales, net of discounts and returns		$	11,616,257		$	8,504,860		$	21,172,404		$	15,239,624
Cost of goods sold		7,144,406			5,012,000			12,954,820			9,091,608
Gross profit