U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-4066
KAYENTA KREATIONS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 87-0554463
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1020 Belmont Avenue
Salt Lake City, Utah 84105
(Address of principal executive offices)
(801) 521-4128
(Registrant's telephone number, including area code)
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 report(s), and (2)
has been subject to such filing requirements for the past 90
days.
YES [X] NO [ ]
The number of $.001 par value common shares outstanding at
September 30, 1997: 1,018,900
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
See attached.
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
ASSETS
September 30, December 31,
1997 1996
(Unaudited)
CURRENT ASSETS:
Cash in bank $ 20,042 $ 1,036
Inventory 2,833 -
Deferred offering costs - 5,819
----------- ----------
Total Current Assets 22,875 6,855
----------- ----------
EQUIPMENT
Office equipment and displays, less
depreciation of $721 8,664 -
----------- ----------
OTHER ASSETS:
Organization costs, net of amortization of
$352 and $202 648 798
----------- ----------
Total Other Assets 648 798
----------- ----------
TOTAL ASSETS $ 32,187 $ 7,653
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,081 $ -
Accrued expenses 15 -
----------- ----------
Total Current Liabilities 1,096 -
----------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock; $.001 par value, 5,000,000
shares authorized, no shares issued and
outstanding - -
Common stock; $.001 par value, 50,000,000
shares authorized, 1,018,900 and 800,000
shares issued and outstanding respectively 1,019 800
Capital in excess of par value 47,194 7,220
Earnings (deficit) accumulated during the
development stage (17,122) (367)
----------- ----------
Total Stockholders' Equity 31,091 7,653
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,187 $ 7,653
----------- ----------
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the For the
Three Months Nine Months Cumulative
Ended Ended During the
September 30, September 30, Development
1997 1996 1997 1996 Stage
REVENUE
Sales, net of
costs of sales of $332 $ 497 $ - $ 497 $ - $ 497
Interest 182 13 388 34 394
------- ------ ------- ----- --------
Total revenue 679 13 885 34 891
------- ------ ------- ----- --------
EXPENSES
Selling and marketing
expenses 5,174 - 5,174 - 5,174
Amortization 50 37 150 75 352
Contract labor 1,696 - 1,696 - 1,696
Bank charges 17 13 39 46 61
Depreciation 371 - 721 - 721
Dues and subscriptions 99 - 198 - 198
Equipment rental 1,776 - 2,171 - 2,170
Insurance - - 255 - 255
License and permits - - 337 - 357
Office expense 493 - 2,234 - 2,364
Travel and entertainment 940 - 2,644 - 2,644
Professional fees 243 - 1,475 - 1,475
Miscellaneous 163 - 163 - 163
Loss on equipment return - - 283 - 283
Franchise tax 100 - 100 - 100
------- ------ ------- ----- --------
Total expenses 11,122 50 17,640 121 18,013
------- ------ ------- ----- --------
NET INCOME (LOSS) $(10,443) $ (37) $(16,755) $ (87) $ (17,122)
------- ------ ------- ----- --------
EARNINGS (LOSS) PER SHARE $ (0.01) $ (0.00) $ (0.02) $(0.00) $ (0.02)
------- ------ ------- ----- --------
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the For the
Three Months Nine Months Cumulative
Ended Ended During the
September 30, September 30, Development
1997 1996 1997 1996 Stage
INCREASE (DECREASE) IN CASH
CASH FLOWS FROM OPERATING
ACTIVITIES
Sales $ 829 $ - $ 829 $ - $ 829
Cash from interest 182 - 388 21 394
Cash paid for organization
costs - - - - (1,000)
Bank charges - - (22) (33) (44)
Cash paid for organization
expense, supplies and
services (12,368) - (18,532) - (18,682)
------- ------ ------- ------ -------
Net Cash (Used) by
Operating Activities (11,357) - (17,337) (12) (18,503)
------- ------ ------- ------ -------
CASH FLOWS FROM INVESTING
ACTIVITIES
Equipment refund - - 1,729 - 1,729
Purchase office equipment
and displays (4,412) - (11,397) - (11,397)
------- ------ ------- ------ -------
Net Cash (Used) by
Investing Activities (4,412) - (9,668) - (9,668)
------- ------ ------- ------ -------
CASH FLOWS FROM FINANCING
ACTIVITIES
Sale of common stock - - 54,725 3,000 62,725
Direct costs of offering - (3,495) (8,714) (3,495) (14,532)
Contributed capital - - - - 20
------- ------ ------- ------ -------
Net Cash Provided by
Financing - (3,495) 46,011 (495) 48,213
------- ------ ------- ------ -------
NET INCREASE (DECREASE) IN
CASH (15,769) (3,495) 19,006 (507) 20,042
CASH - BEGINNING OF PERIOD 35,811 6,988 1,036 4,000 -
------- ------ ------- ------ -------
CASH - END OF PERIOD $ 20,042 $ 3,493 $ 20,042 $ 3,493 $ 20,042
------- ------ ------- ------ -------
RECONCILIATION OF NET INCOME
TO NET CASH PROVIDED(USED)
BY OPERATING ACTIVITIES
NET INCOME (LOSS) $(10,443) $ (37) $(16,755) $ (87) $(17,122)
------- ------ ------- ------ -------
Adjustments to reconcile net
income (loss) to net cash
provided (used) by
operating activities
Amortization 50 37 150 75 352
Depreciation 371 - 721 - 721
Loss on equipment return - - 283 - 283
Change in assets and
liabilities
Organization costs - - - - (1,000)
Inventory (2,431) - (2,833) - (2,833)
Accounts payable 1,081 - 1,082 - 1,081
Accrued expenses 15 - 15 - 15
------- ------ ------- ------ -------
Total Adjustments (914) 37 (582) 75 (1,381)
------- ------ ------- ------ -------
NET CASH (USED) BY OPERATING
ACTIVITIES $(11,357) $ - $(17,337) $ (12) $(18,503)
------- ------ ------- ------ -------
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statement have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operation and cash flows at September 30, 1997 and 1996
and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
states and notes thereto included in the Company's December 31, 1996 audited
financial statements. The results of operations for the periods ended
September 30, 1997 and 1996 are not necessarily indicative of the operating
results for the full year.
<PAGE>
Item 2: Management's Discussion & Analysis or Plan of Operations
The Company was incorporated on December 26, 1995. The
Company has not yet generated significant revenues from
operations and is considered a development stage company. To
date, activities have been limited to organizational matters, the
preparation and filing of the registration statement to register
a public offering of its securities, pursuant to which the
Company offered and sold 218,900 shares of common stock and
raised gross proceeds of $54,725, the closing of such offering
and the initial commencement of limited operations. The Company
has no significant assets other than the net proceeds from the
offering and the assets acquired therewith.
Management's plan of operation for the next twelve months is
to continue to use the net proceeds from the offering to produce
an inventory of products, and attempt to market such products.
The Company has also used offering proceeds to make equipment
purchases and other capital expenditures for assets being used in
connection with the business, including a computer system, a
digitized scanner software program, a plain paper laser fax
machine, a laser printer and a photocopy machine. The balance of
the proceeds is being used to provide working capital for the
operation of the Company's proposed business.
There is absolutely no assurance that the Company will be
able, with the proceeds of the offering, to acheive profitable
operations. At this time, no assurances can be given with
respect to the length of time after commencement of operations
that it will be necessary to fund operations from proceeds of the
offering. If the marketing of the initial printing of books is
successful, management intends for the foreseeable future to
reinvest the revenues derived therefrom for additional printings
and editions of the coloring art books, and for development and
marketing costs relating to a line of colored pencils which the
Company also intends to eventually market.
Management believes that the net proceeds of the offering
will be sufficient for initial printing, and to begin marketing
the coloring art books, after which time management anticipates
that the Company will begin generating revenues from sales to
cover ongoing expenses. However, there is absolutely no
assurance of this and the Company has only limited sales thus
far. If the initial marketing of the coloring art books is
unsuccessful, investors will have lost their money and management
will not attempt to pursue further marketing efforts with respect
to such product, and it is unlikely the Company would have the
financial ability to do so in any event. Instead management will
call a shareholders meeting to decide whether to liquidate the
Company or what direction the Company will pursue, if any.
However, the Company presently has no plans, commitments or
arrangements with respect to any other potential business venture
and there is no assurance the Company could become involved with
any other business venture, especially any business venture
requiring significant capital.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
(a) None.
(b) None.
(c) See Part I, Item 1 (financial statments) and Item 2
(management's discussion) for financial information and
a discussion regarding use of proceeds.
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
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Kayenta Kreations, Inc.
Date: November 18, 1997 by: /s/Michelle Barlow
Michelle Barlow, Chairman
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF KAYENTA KREATIONS, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 20,042
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 2,883
<CURRENT-ASSETS> 22,875
<PP&E> 9,385
<DEPRECIATION> 721
<TOTAL-ASSETS> 32,187
<CURRENT-LIABILITIES> 1,096
<BONDS> 0
0
0
<COMMON> 1,019
<OTHER-SE> 30,072
<TOTAL-LIABILITY-AND-EQUITY> 32,187
<SALES> 497
<TOTAL-REVENUES> 885
<CGS> 332
<TOTAL-COSTS> 17,640
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,755)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,755)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,755)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> 0
</TABLE>
