August 14, 2002
EQUITY TECHNOLOGIES & RESOURCES INC (ETCR.OB)
Quarterly Report (SEC form 10QSB)
Item 2. Management's Discussion & Analysis of Financial Condition and Results of Operations
Caution concerning forward-looking statements.
Statements made or incorporated in this report include a number of forward looking statements within the meaning of Section 27(a) of the Securities Exchange Act of 1933 and Section 21(e) of the Securities Exchange Act or 1934. Forward-looking statements include, without limitation, statements containing the words "anticipates," "believes," "expects," "intends," "future," and words of similar import which express management's belief, expectations or intentions regarding the Company's future performance or future events or trends. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressly or implied by such forward-looking statements. In addition, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Critical accounting policies.
The financial statements were prepared in accordance with accounting principles generally accepted in the United States, which requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to intangible assets and base our estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We currently do not feel we have any critical accounting policies.
Recent accounting pronouncements.
In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," effective for exit or disposal activities initiated after December 31, 2002. The standard addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force ("EITF") No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity." SFAS 146 essentially requires a liability to be recognized and measured initially at its fair value in the period in which the liability is incurred for a cost associated with an exit or disposal activity. The implementation of this FASB will not have a significant effect on the Company's financial statements.
Plan of Operation.
Equity Technologies & Resources, Inc. is a development stage company and has no current business operations. In December 2000, the Company acquired all of the common stock in Verified Prescription Safeguards, Inc. with the intention of developing an electronic system to provide solutions for the prescription drug and healthcare industry. The Company has a viable business plan and anticipates the opportunities to obtain favorable funding from sources outside its principal shareholders during the next twelve months.
During the next twelve months, the Company expects to complete the development of the Verified Prescription Safeguards, Inc. system and become operational. In the event, however, that the expectations of management do not materialize, within the next twelve months, we may be forced to deal with customary minimal costs involved in the maintenance of corporate franchise and filing reports and reporting obligations under the Securities Exchange Act of 1934. Should this become necessary, the maximum amount of such advances is estimated not to exceed $30,000. These expenses would involve legal and auditing expenses. The expenses of our audit, legal and professional requirements (including expenses in connection with complying with the Securities Exchange Act of 1934) have been and continue to be advanced by our shareholders and management. It is possible that any advances by management may be paid by issuing shares of the Company's common stock. If further funding is required, such auditing services by the independent accountant may not be the subject of deferred compensation.
Financial Conditions and Results of Operations:
At June 30, 2002, the Company had $10,484 in assets and total stockholders deficit of $932,012 compared with total assets of $612 and total stockholders deficit of $1,501,591 at December 31, 2001. During the six months ended June 30, 2002, the Company had no operations. General and administrative expenses were $1,927,515 and were primarily attributable to common stock issued for services rendered of $1,786,000. The corporation recorded a net loss as of June 30, 2002 of 2,017,931. |
