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: June 30, 1998
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 June
30, 1998: 1,018,900
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
ASSETS
June 30, December
1998 31, 1997
________ ________
(Unaudited)
CURRENT ASSETS
Cash in bank $12,319 $16,777
Inventory 1,054 1,113
________ ________
Total Current Assets 13,373 17,890
________ ________
EQUIPMENT
Office equipment and displays, less depreciation of 7,451 8,380
$1,860 and $930 ________ ________
OTHER ASSETS
Organization costs, net amortization of $502 498 598
and $402 ________ ________
Total Other Assets 498 598
________ ________
TOTAL ASSETS $21,322 $26,868
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $282 $542
State franchise tax payable 100 100
________ ________
Total Current Liabilities 382 642
________ ________
NONCURRENT LIABILITIES
Deferred taxes payable 86 86
________ ________
STOCKHOLDERS' EQUITY
Preferred stock; $.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding 0 0
Common stock; $.001 par value, 50,000,000 shares
authorized, 1,018,900 and 1,018,900 shares issued
and outstanding respectively 1,019 1,019
Capital in excess of par value 47,193 47,193
Earnings (deficit) accumulated during the (27,358) (22,072)
development stage ________ ________
Total Stockholders' Equity 20,854 26,140
________ ________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $21,322 $26,868
======== ========
See notes to Condensed Financial Statements
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three For the Six Cumulative
Months Ended Months Ended During the
June 30, June 30, Development
1998 1997 1998 1997 Stage
_______ _______ _______ _______ _______
SALES
Sales - net $73 $0 $143 $0 $797
Less cost of Sales (36) 0 (59) 0 (417)
_______ _______ _______ _______ _______
Gross Margin 37 0 84 0 380
_______ _______ _______ _______ _______
SELLING, GENERAL AND ADMINISTRATIVE
Accounting and legal 2,405 1,157 2,405 1,232 5,300
Amortization 50 50 100 100 502
Travel 0 1,704 108 1,704 1,981
Wages 0 0 90 0 2,107
Marketing 181 0 231 0 5,538
Equipment rental 0 296 0 394 2,171
Administrative 0 0 259 338 2,296
Office expense 412 916 749 2,116 3,840
Utilities 0 0 42 0 785
Meals and entertainment 0 0 0 0 721
Depreciation 465 259 930 350 1,860
Taxes 0 0 0 0 200
Equipment repairs 0 0 674 0 957
Miscellaneous 0 283 0 283 137
_______ _______ _______ _______ _______
Total Selling, General and 3,513 4,665 5,588 6,517 28,395
Administrative _______ _______ _______ _______ _______
NET INCOME FROM OPERATIONS (3,476) (4,665) (5,504) (6,517) (28,015)
OTHER INCOME (EXPENSE)
Interest income 106 173 229 206 770
Interest expense (6) 0 (11) 0 (26)
_______ _______ _______ _______ _______
NET INCOME BEFORE TAXES (3,376) (4,492) (5,286) (6,311) (27,271)
PROVISIONS FOR INCOME TAXES 0 0 0 0 (87)
_______ _______ _______ _______ ________
NET INCOME (LOSS) $(3,376) $(4,492) $(5,286) $(6,311) $(27,358)
======= ======= ======= ======= ========
EARNINGS (LOSS) PER SHARE $0.00 $0.00 $0.01 $0.01 $0.03
======= ======= ======= ======= ========
See notes to Condensed Financial Statements
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three For the Six Cumulative
Months Ended Months Ended During the
June 30, June 30, Development
1998 1997 1998 1997 Stage
_______ _______ _______ _______ ________
CASH FLOWS FROM OPERATING ACTIVITIES
Cash from sales $73 $0 $143 $0 $797
Cash paid for organization costs 0 0 0 0 (1,000)
Cash from interest 106 173 229 206 770
Cash paid for interest (6) 0 (11) 0 (26)
Cash paid for taxes 0 0 (100) 0 (200)
Cash paid for supplies (2,969) (5,265) (4,719) (6,186) (26,924)
and employee services _______ _______ _______ _______ ________
Net Cash (Used) by (2,796) (5,092) (4,458) (5,980) (26,583)
Operating Activities _______ _______ _______ _______ ________
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment 0 198 0 (5,256) (9,310)
_______ _______ _______ _______ ________
Net cash provided (Used) 0 198 0 (5,256) (9,310)
by Investing Activities _______ _______ _______ _______ ________
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 0 0 0 54,725 62,725
Direct offering costs 0 0 0 (8,714) (14,533)
Contributed capital 0 0 0 0 20
_______ _______ _______ _______ ________
Net Cash Provided (Used) 0 0 0 46,011 48,212
By Financing Activities _______ _______ _______ _______ ________
NET INCREASE(DECREASE) IN CASH (2,796) (4,894) (4,458) 34,775 12,319
CASH - BEGINNING OF PERIOD 15,115 40,705 16,777 1,036 0
_______ _______ _______ _______ ________
CASH - END OF PERIOD $12,319 $35,811 $12,319 $35,811 $ 12,319
======= ======= ======= ======= ========
RECONCILIATION OF NET INCOME
TO NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
NET INCOME (LOSS) $(3,376) $(4,492) $(5,286) $(6,311) $(27,358)
_______ _______ _______ _______ ________
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities
Amortization of organization costs 50 50 100 100 502
Depreciation 465 259 930 350 1,860
Loss on equipment return 0 283 0 283 0
Deferred taxes 0 0 0 0 86
Change in assets and liabilities
Organization costs 0 0 0 0 (1,000)
Inventory 36 (402) 59 (402) (1,054)
Accounts payable 29 (790) (261) 0 281
Franchise taxes payable 0 0 0 0 100
_______ _______ _______ _______ ________
Total Adjustments 580 (600) 828 331 775
_______ _______ _______ _______ ________
NET CASH PROVIDED (USED) $(2,796) $(5,092) $(4,458) $(5,980) $(26,583)
BY OPERATING ACTIVITIES ======= ======= ======= ======= ========
See notes to Condensed Financial Statements
<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 June 30, 1998 and 1997 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, 1997 audited financial
statements. The results of operations for the periods ended June
30, 1998 and 1997 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 fax machine, a laser
printer, a color 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: August 20, 1998 by: /s/Michelle Barlow
Michelle Barlow, Chairman
<PAGE>
<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 STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 12,319
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<ALLOWANCES> 0
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<CURRENT-ASSETS> 13,373
<PP&E> 9,311
<DEPRECIATION> 1,860
<TOTAL-ASSETS> 21,322
<CURRENT-LIABILITIES> 382
<BONDS> 0
0
0
<COMMON> 1,019
<OTHER-SE> 47,193
<TOTAL-LIABILITY-AND-EQUITY> 21,322
<SALES> 143
<TOTAL-REVENUES> 143
<CGS> 59
<TOTAL-COSTS> 5,588
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11
<INCOME-PRETAX> (5,286)
<INCOME-TAX> (5,286)
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<NET-INCOME> (5,286)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> 0
</TABLE>
