15.11.2002: Meldung: World Water Corp: Quarterly Report (engl.)
Statements in this quarterly Report on Form 10-QSB concerning the Company"s outlook or future economic performance; anticipated profitability, gross billings, commissions and fees, expenses or other financial items; and statements concerning assumptions made or exceptions to any future events, conditions, performance or other matter are "forward looking statements" as that term is defined under the Federal Securities Laws. Forward looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, (1) that there can be no assurance that the Company will grow profitably or manage its growth, (2) risks associated with acquisitions, (3) competition, (4) the Company"s quarterly results have fluctuated in the past and are expected to fluctuate in the future, (5) the loss of services of key individuals which could have a material adverse effect on the Company"s business, financial condition or operating results and (6) risks associated with operating in emerging countries.
WorldWater Corporation is a water and power solutions company providing new and powerful solar technology throughout the world. The Company fills a major infrastructural void by acting as contractor, implementer, key equipment supplier and water/power manager for rural communities in developing nations, delivering clean water from deep wells and rivers for drinking and irrigation. There are literally millions of such targeted communities comprising WorldWater"s international market.
Domestically, WorldWater"s full service water management capabilities include advising and supplying farms, dairies, ranches, and Water Authorities on all phases of the water cycle, from finding to pumping to delivering. In February 2002, WorldWater introduced their AquaMax(TM) and SolGen(TM) technology in California at the world"s largest agricultural show, the WorldAg Expo. The response from farmers has been very positive as the WorldWater system enables them to save considerable money by eliminating the need to buy expensive peak period electrical grid power during the day. The WorldWater system can drive pumps up to 600HP under the sun and automatically switches to grid connection in the evening, when grid electrical costs are reduced. The Company is actively pursuing this market potential and is installing its first domestic systems in the fourth quarter of 2002.
During the early stage of market penetration, marketing and related costs invariably exceed revenues. WorldWater is unique among its competition in that it does not merely solicit and await tendered contracts from emerging market governments or international agencies, but actively initiates projects by proposing rural water and power solutions to key decision-makers at the highest government levels. Management anticipates that as target markets for its solar powered water pumping and electric equipment become more fully developed, operating profits will be achieved.
RESULTS OF OPERATIONS
REVENUE. For the nine months ended September 30, 2002 revenue increased slightly to $224,396 as compared to $153,692 in the same period of 2001. The Company continues to target its sales efforts towards large contracts. In January, the Company began work on a water and power feasibility study for the Government of the Philippines (Department of Agriculture) funded by the U.S. Trade and Development Agency in the amount of $302,500. A nationwide irrigation development project is scheduled to follow on completion of the study. In April the first amount of revenue was recognized for this project. The Company also began work installing its first solar pumping system in Ronda on the island of Cebu, Philippines.
GROSS PROFIT. Gross loss of $15,258 was recognized for the nine months ended September 30, 2002, as compared to a gross profit of $37,237 in the same period of 2001. Gross loss for the three months ended September 30, 2002 was $93,669 as compared to $31,947 in 2001. Cost of sales for the nine month period was $239,654 as compared to $116,455 from the previous period and for the three month period was $112,778 in 2002 as compared to $40,074 in 2001. The operating loss was $1,292,023 for the nine months in 2002 compared to an operating loss of $1,279,197 for the same period in 2001. For the three months ended September 30, 2002 the operating loss was $519,483 as compared to $434,855 for the same period in 2001.
MARKETING, GENERAL AND ADMINISTRATIVE. Marketing, general and administrative expenses increased slightly by $95,200 in the nine month period ending September 30, 2002 to $1,151,707, up from $1,056,507 in the same period of 2001. Marketing, general and administrative expenses increased $56,993 during the three month period to $382,120 as compared to $325,127 in 2001. A portion of the overall slight increase can be attributed to increased consulting expense. The Company is maintaining its current staffing levels but has found it necessary to hire consultants from time to time therefore increasing this expense as compared to the same period in 2001. Assuming that contract negotiations now underway are successfully concluded, it will be necessary to recruit additional staff to implement the contracts.
RESEARCH AND DEVELOPMENT. Research and development expenses decreased by $134,869 for the nine month period to $125,058, down from $259,927 in the same period of 2001. Research and development expenses decreased for the three month period by $34,087 to $43,694 as compared to $77,781 in 2001. The Company has been focusing its efforts on sales proposals for its existing products and the Philippine feasibility study (see REVENUE).
INCOME TAXES. The Company recognized no income tax expense for 2001, and 2002 to date. During 2001 the Company"s application to the New Jersey Division of Taxation and the New Jersey Economic Development Authority to sell its State of New Jersey Corporate Operating Losses was approved. The new law was enacted January 1, 1999 and allows emerging technology companies involved in research and development the opportunity to sell their state loss carry-forwards and research and development credits to profitable companies in the state for not less than 75% of their net tax value. The Company was able to sell its Net Operating Losses for $145,148 in 2001 and $163,887 in 2000 and has been approved to sell its loss carry-forwards again in fiscal year 2002.
LIQUIDITY AND CAPITAL RESOURCES
The Company"s cash and cash equivalents increased by $49,633 to $67,748 from December 31, 2001 to September 30, 2002. The net cash used in operating activities during this nine month period in 2002 was $1,061,454 compared to $815,592 in 2001. The comparative increase in operating cash consumption was primarily used to pay accrued taxes.
In January the Company signed a subscription agreement with a capital management company for the immediate purchase of $250,000 of common stock and an additional $250,000 of Warrants. In addition to the $250,000 of common stock purchased and $175,200 of Warrants exercised through this agreement the Company raised $550,025 through other Private Placements.
SALE OF RESTRICTED SECURITIES DURING THE THIRD QUARTER 2002
The Company issued 2,333,334 restricted common stock shares for cash proceeds totaling $300,000.
The Company also issued shares for consulting services totaling approximately $70,000.
Pennington Bus. Park
55 Rte 31 South
Pennington, NJ 08534