Securities and Exchange Commission Washington, D. C. 20549 Form 10-QSB (Mark One) [X] Quarterly Report Under Section 13 or 15(d) Of The Securities Exchange Act Of 1934 For The Quarter Ended June 30, 2003. [ ] Transition Report Under Section 13 or 15(d) off the Securities Exchange Act of 1934 For The Transition Period From _____ To ______ Commission File No. 000-31883 BENTLEYCAPITALCORP.COM INC. (Name of Small Business Issuer in Its Charter) Washington 91-2022700 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 1150 Marina Village Parkway, Suite 103 Alameda, Ca 94501 (510) 865-6412 (Address Of Principal Executive Offices, Telephone Number) As of August 14, 2003, there were 11,250,000 shares of common stock outstanding. Transitional Small Business Disclosure Format | | Yes |X| No PART I FINANCIAL INFORMATION Item 1. Financial Statements BENTLEYCAPITALCORP.COM INC TABLE OF CONTENTS PAGE Condensed Consolidated Balance Sheets - June 30, 2003 and December 31, 2002 F-1 Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2003 and 2002 F-2 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002 F-3 Notes to Condensed Consolidated Financial Statements F-4 BENTLEYCAPITALCORP.COM INC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) JUNE 30, DECEMBER 31, 2003 2002 --------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 7,054 $ 1,385 Accounts receivable, less allowance of $2,442 27,711 32,755 Inventory, net of reserve for obsolescence of $5,572 16,735 20,661 --------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 51,500 54,801 --------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT Furniture and fixtures 4,670 4,670 Equipment and machinery 42,784 42,784 Leasehold improvements 1,886 1,886 Less: accumulated depreciation (9,640) (5,884) --------------------------------------------------------------------------------- NET PROPERTY AND EQUIPMENT 39,700 43,456 --------------------------------------------------------------------------------- TOTAL ASSETS $ 91,200 $ 98,257 --------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable $ 145,309 $ 127,638 Accrued expenses - 183 --------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 145,309 127,821 --------------------------------------------------------------------------------- STOCKHOLDERS' DEFICIT Preferred stock, 20,000,000 shares authorized with a par value of $0.0001; no shares issued or outstanding. - - Common stock, 100,000,000 common shares authorized with a par value of $0.0001; 11,250,000 shares issued and outstanding, 1,126 1,126 Additional paid in capital 521,350 491,440 Accumulated deficit (576,585) (522,130) --------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' DEFICIT (54,109) (29,564) --------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 91,200 $ 98,257 --------------------------------------------------------------------------------- The accompanying notes are an integral part of these condensed consolidated financial statements. F-1 BENTLEYCAPITALCORP.COM INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------------- ------------------------- 2003 2002 2003 2002 -------------------------------------------------------------- ------------------------- SALES $ 63,674 $ 78,020 $ 127,400 $ 157,546 COST OF GOODS SOLD 20,424 45,945 56,352 118,973 ----------------------------------------------------------------------------------------- GROSS MARGIN 43,250 32,075 71,048 38,573 ----------------------------------------------------------------------------------------- OPERATING EXPENSES General and administrative expenses 42,614 85,802 95,503 127,057 Fair value of officer services 15,000 15,000 30,000 30,000 ----------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 57,614 100,802 125,503 157,057 ----------------------------------------------------------------------------------------- NET LOSS $ (14,364) $ (68,727) $ (54,455) $ (118,484) ----------------------------------------------------------------------------------------- BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.00) $ (0.02) $ (0.00) $ (0.04) ----------------------------------------------------------------------------------------- BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 11,250,000 3,389,017 11,250,000 2,992,651 ----------------------------------------------------------------------------------------- The accompanying notes are an integral part of these condensed consolidated financial statements. F-2 BENTLEYCAPITALCORP.COM INC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, --------------------- 2003 2002 ---------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(54,455) $(118,484) Adjustments to reconcile net loss to cash used in operating activities: Depreciation 3,756 1,766 Fair value of officer services 30,000 30,000 Changes in operating assets and liabilities Accounts receivable 4,954 2,256 Inventory 3,926 5,268 Accounts payable 17,671 15,558 Accrued expenses (183) - ---------------------------------------------------------------------------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 5,669 (63,636) ---------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment - (2,345) ---------------------------------------------------------------------------- NET CASH USED IN INVESTING ACTIVITIES - (2,345) ---------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Capital contributions - 58,218 ---------------------------------------------------------------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES - 58,218 ---------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH 5,669 (7,763) CASH AT BEGINNING OF PERIOD 1,385 12,618 ---------------------------------------------------------------------------- CASH AT END OF PERIOD $ 7,054 $ 4,855 ---------------------------------------------------------------------------- The accompanying notes are an integral part of these condensed consolidated financial statements. F-3 BENTLEYCAPITALCORP.COM INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATIONS ORGANIZATION- Proton Laboratories, LLC. (Proton) was incorporated on February 16, 2000 in the State of California. Proton did not begin its operations until January 1, 2001. On January 1, 2001, Proton's sole owner contributed inventory and property and equipment to the Company. BentleyCapitalCorp.com Inc. (Bentley) was incorporated in the State of Washington on March 14, 2000. The Company acquired a license to market and distribute vitamins, minerals, nutritional supplements, and other health and fitness products in the Province of British Columbia, Canada. The Company was in the development stage. On November 15, 2002, Proton entered into an Agreement and Plan of Reorganization with Bentley whereby the Company merged with and into VWO I Inc. (VWO), a wholly owned subsidiary of Bentley (the "Merger"). As a result of the Merger, Proton's sole owner, Edward Alexander, exchanged 100% of his ownership for 8,750,000 shares of Bentley common stock, par value $0.0001 per share. Prior to the Merger, Proton's sole owner (Mr. Alexander) entered into a Stock Purchase Agreement with certain shareholders of Bentley. Under the Stock Purchase Agreement, Mr. Alexander purchased 8,750,000 shares of common stock of Bentley from certain Bentley shareholders for $170,000. The 8,750,000 shares Mr. Alexander acquired were canceled as part of the Merger. VWO I Inc. changed its name to Proton Laboratories, Inc. (Proton) as part of the Merger. The Merger has been accounted for as the reorganization of Proton and the acquisition of Bentley's assets using the purchase method of accounting. For financial statement purposes Proton is considered the parent corporation but maintains BentleyCapitalCorp.com Inc as its business name and hereafter is collectively referred to as the "Company". BASIS OF PRESENTATION- Proton changed from an LLC to a corporation on November 15, 2002. The effect of the corporate status of the Company has been reflected in the accompanying consolidated financial statements. The accompanying financial statements have been restated to reflect the shares of common stock acquired through the merger as though they had been issued on the dates capital contributions were received from the majority owner of the Company, including the fair value of services rendered and the acquisition of Bentley. CONSOLIDATION POLICY- The accompanying consolidated financial statements reflect the financial position of Proton as of June 30, 2003 and December 31, 2002. The results of its operations include the activity of Proton for the three months ended June 30, 2003 and 2002 and the activity of Proton and Bentley for the six months ended June 30, 2003. All significant intercompany transactions have been eliminated in consolidation. CONDENSED FINANCIAL STATEMENTS - The accompanying unaudited condensed consolidated financial statements include the accounts of BentleyCapitalCorp.com and its subsidiary (the "Company"). These financial statements are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company's annual financial F-4 BENTLEYCAPITALCORP.COM INC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATIONS (CONTINUED) statements included in the Company's December 31, 2002 Annual Report on Form 10-KSB. In particular, the Company's significant accounting principles were presented as Note 1 to the consolidated financial statements in that report. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed consolidated financial statements for the six months ended June 30, 2003 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2003. NOTE 2 - BUSINESS CONDITION The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The company has incurred net losses of $54,455 and $118,484 for the six months ended June 30, 2003 and 2002, respectively. Cash provided by operations for the six months ended June 30, 2003 was $5,669. The Company's revenues decreased during 2003 and capital contributions were required from the Company's president to fund operations. The Company is currently in a start-up phase and working towards raising public funds to expand its marketing and revenues. The Company has spent considerable time in contracting with several major overseas corporations for the co-development of enhanced antioxidant beverages for distribution into the overseas markets. In addition, the Company is working with its Canadian business associates to identify institutional businesses to market various disinfection applications based upon functional water, pending government approval. The Company's ability to continue as a going concern is dependent upon its ability to generate sufficient cash flows to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future. NOTE 3 - CONTRIBUTED CAPITAL During the six months ended June 30, 2003, the president did not receive any amounts related to his salary. Thus the Company recorded a salary expense and contributed capital for the fair value the president's services. During the six months ended June 30, 2003 the president contributed $29,911 in the form of his salary and cash. F-5 Item 2. Management's Discussion and Analysis FORWARD-LOOKING STATEMENT Certain statements contained in this report, including, without limitation, statements containing the words, "believes," "anticipates," "expects," and other words of similar import, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, of to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revision of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments. In addition to the forward-looking statements contained in this Form 10-QSB, the following forward-looking factors could cause our future results to differ materially our forward-looking statements: competition, funding, government compliance and market acceptance of our products. INTRODUCTION The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements and accompanying notes and the other financial information appearing elsewhere in this Form 10-QSB. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern. Our independent auditors made a going concern qualification in their report dated March 20, 2003, which raises substantial doubt about our ability to continue as a going concern. Our revenue decreased during 2002 and capital contributions were required from our president to fund operations. These conditions raise a substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles. The preparation of these financial statements requires the us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. These estimates and assumptions provide a 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, and these differences may be material. We recognize revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is both fixed and determinable and; (iv) collectibility is reasonably probable. Our revenues are derived from sales of industrial, environmental and residential systems which alter the properties of water to produce functional water. We believe that this critical accounting policy affects our more significant judgments and estimates used in the preparation of our consolidated financial statements. Our fiscal year end is December 31. RESULTS OF OPERATIONS-QUARTERS ENDED JUNE 30, 2003 AND 2002. We had revenue of $63,674 for the quarter ended June 30, 2003, compared to revenue of $78,020 for the quarter ended June 30, 2002. We had a net loss of $14,364 for the quarter ended June 30, 2003, compared to a net loss of $68,727 for the quarter ended June 30, 2002. RESULTS OF OPERATIONS-SIX MONTHS ENDED JUNE 30, 2003 AND 2002. We had revenue of $127,400 for the six months ended June 30, 2003, compared to revenue of $157,546 for the six months ended June 30, 2002. We had a net loss of $54,455 for the six months ended June 30, 2003, compared to a net loss of $118,484 for the six months ended June 30, 2002. Cash provided by operating activities was $5,669 for the six months ended June 30, 2003, compared to cash used in operating activities $63,636 for the six months ended June 30, 2002. We devoted a significant amount of time during year ended December 31, 2002, the six months ended June 30, 2003 and the quarter ended June 30, 2003 to completing our acquisition of Proton Laboratories. A substantial amount of legal and accounting fees were incurred in the acquisition and merger of Proton into our subsidiary and the required filings with the Securities and Exchange Commission related to the merger. The merger activity significantly contributed to our net loss in the quarter ended June 30, 2003. We are currently seeking funds to expand our marketing and revenues. We have spent considerable time in contracting with several major overseas corporations for the co-development of enhanced antioxidant beverages for distribution into the overseas markets. We are working with Canadian business associates to identify institutional businesses to market various disinfection applications based upon functional water, pending government approval. PLAN OF OPERATION During the period from March 14, 2000 through November 15, 2002, we did not engage in significant operations other than organizational activities, acquisition of the rights to market the products of Vitamineralherb.com, Inc., the preparation for registration of our securities under the Securities Act of 1933, as amended, and capital raising. No revenues were received by us during that period. Since our acquisition of Proton Laboratories in November 2002, our business has been focused on marketing functional water equipment and systems. Alkaline-concentrated functional water may have health-beneficial properties and may be used for drinking and cooking purposes. Acidic-concentrated functional water may be used as a topical, astringent medium. We may become active in marketing Vitamineralherb.com products in the future if the licensor, Vitamineralherb.com, Inc., establishes an active e-business web site LIQUIDITY As of June 30, 2003, we had cash on hand of $7,054. Our growth is dependent on attaining profit from our operations, or our raising additional capital either through the sale of stock or borrowing. There is no assurance that we will be able to raise any equity financing or sell any our products at a profit. During the six months ended June 30, 2003, our President did not receive any amounts related to his salary. During the six months ended June 30, 2003, our President contributed his services and capital contributions to us. We determined that the fair value of our President's services and capital contributions during the six months ended June 30, 2003 was $29,911. We recorded a salary expense and contributed capital of $29,911 during the six months ended June 30, 2003. Item 3. Controls and Procedures. Edward Alexander, our Chief Executive Officer and Chief Accounting Officer, has concluded that our disclosure controls and procedures are appropriate and effective. He has evaluated these controls and procedures as of a date within 90 days of the filing date of this report on Form 10-QSB. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. PART II OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Exhibit 31.1 Certification. Exhibit 31.2 Certification. Exhibit 32.1 Certification. Exhibit 32.2 Certification. (b) Reports on Form 8-K. On April 1, 2003, we filed a Form 8-K Amendment Number 1 reporting Item 7 Financial Statements. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BENTLEYCAPITALCORP.COM INC. Date: August 14, 2003 (signed) __________________________ By: /s/ Edward Alexander Edward Alexander Chief Executive Officer, Director, President, and Chief Accounting Officer