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, 1999
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)
(Former name, former address and former fiscal year, if changed since last
report)
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, 1999:
1,018,900
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
ASSETS
September 30, December 31,
1999 1998
(Unaudited)
CURRENT ASSETS
Cash in bank $641 $5,052
Accounts receivable 800 0
Inventory 934 1,015
________ ________
Total Current Assets 2,375 6,067
________ ________
EQUIPMENT
Office equipment and displays, less depreciation of 7,774 9,699
$5,072 and $3,146 ________ ________
OTHER ASSETS
Organization costs, net amortization of $752 248 398
and $602 ________ ________
Total Other Assets 248 398
________ ________
TOTAL ASSETS $10,397 $16,164
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $814 $579
Short-term loans payable 2,300 0
State franchise tax payable 0 200
________ ________
Total Current Liabilities 3,114 779
________ ________
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 1,019 1,019
and outstanding respectively
Capital in excess of par value 47,193 47,193
Earnings (deficit) accumulated during the development (40,929) (32,827)
stage ________ ________
Total Stockholders' Equity 7,283 15,385
________ ________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,397 $16,164
======== ========
See notes to Condensed Financial Statements
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three For the Nine Cumulative
Months Ended Months Ended During the
September 30, September 30, Development
1999 1998 1999 1998 Stage
SALES
Sales - net $753 $42 $935 $185 $1,872
Less cost of Sales (364) (13) (445) (72) (957)
____________________________________
Gross Margin 389 29 490 113 915
____________________________________
SELLING, GENERAL AND ADMINISTRATIVE
Accounting and legal 1,150 655 2,600 3,060 9,285
Amortization 50 50 150 150 752
Contract labor 185 0 185 0 185
Travel 0 0 0 108 2,057
Wages 0 126 0 216 2,678
Marketing 125 221 465 452 6,530
Equipment rental 0 0 75 0 2,246
Administrative 976 0 1,923 259 5,292
Office expense 338 577 1,013 1,326 5,242
Utilities 0 0 0 42 743
Meals and entertainment 0 85 0 85 817
Depreciation 642 563 1,926 1,493 5,072
Taxes 0 0 0 0 300
Equipment repairs 0 1,370 275 2,044 1,113
Miscellaneous 0 0 0 0 383
____________________________________
Total Selling, General and 3,466 3,647 8,612 9,235 42,695
Administration ____________________________________
NET INCOME FROM OPERATIONS (3,077)(3,618)(8,122)(9,122) (41,780)
OTHER INCOME (EXPENSE)
Interest income 5 63 36 292 898
Interest expense (7) (5) (16) (16) (47)
____________________________________
NET INCOME BEFORE TAXES (3,079)(3,560)(8,102)(8,846) (40,929)
PROVISIONS FOR INCOME TAXES 0 0 0 0 0
____________________________________
NET INCOME (LOSS) $(3,079)$(3,560)$(8,102)$(8,846)$(40,929)
============= ============= ========
EARNINGS (LOSS) PER SHARE $0.00 $0.00 $0.01 $0.01 $0.04
============= ============= ========
See notes to Condensed Financial Statements
<PAGE>
KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the ThreeFor the Nine Cumulative
Months Ended Months Ended During the
September 30,September 30,Development
1999 1998 1999 1998 Stage
CASH FLOWS FROM OPERATING ACTIVITIES
Cash from sales $753 $42 $936 $185 $1,872
Cash paid for organization costs 0 0 0 0 (1,000)
Cash from interest 5 63 36 292 898
Cash paid for interest (7) (5) (16) (16) (47)
Cash paid for taxes 0 0 (100) (100) (200)
Cash paid for supplies and (3,408)(3,183)(7,567)(7,902)(38,549)
employee services ____________ _______________________
Net Cash (Used) by Operating (2,657)(3,083)(6,711)(7,541)(37,026)
Activities ____________ _______________________
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment 0 (1,953) 0 (1,953)(12,845)
____________ _______________________
Net cash (Used) provided by Investing 0 (1,953) 0 (1,953)(12,845)
Activities ____________ _______________________
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 0 0 0 0 62,725
Direct offering costs 0 0 0 0 (14,533)
Short-term loans payable 2,300 0 2,300 0 2,300
Contributed capital 0 0 0 0 20
____________ _______________________
Net Cash Provided (Used) By 2,300 0 2,300 0 50,512
Financing Activities ____________ _______________________
NET INCREASE (DECREASE) IN CASH (357)(5,036)(4,411)(9,494) 641
CASH - BEGINNING OF PERIOD 998 12,319 5,052 16,777 0
____________ _______________________
CASH - END OF PERIOD $641 $7,283 $641 $7,283 $641
============ =======================
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
NET INCOME (LOSS) $(3,079)$(3,560)$(8,102)$(8,846)$(40,929)
____________ _______________________
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities
Amortization of organization costs 50 50 150 150 752
Depreciation 642 563 1,926 1,493 5,072
Change in assets and liabilities
Organization costs 0 0 0 0 (1,000)
Accounts receivable (800) 0 (800) 0 (800)
Inventory 0 12 81 71 (934)
Accounts payable 530 (148) 234 (409) 813
Franchise taxes payable 0 0 (200) 0 0
____________ _______________________
Total Adjustments 422 477 1,391 1,305 3,903
____________ _______________________
NET CASH PROVIDED (USED) BY $(2,657)$(3,083)$(6,711)$(7,541)$(37,026)
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 September 30, 1999 and 1998 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, 1998 audited financial statements.
The results of operations for the periods ended September 30, 1999
and 1998 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.
The Company used offering proceeds to purchase equipment and make other
capital expenditures for assets used in the business, including a computer
system, digitized scanner software program, fax machine, laser printer, color
printer and photocopy machine. The balance of the proceeds is being used to
provide working capital for operation of the Company's business. Management's
plan of operation for the next twelve months is to continue using net proceeds
from the offering to produce an inventory of products, and attempt to market
such products, primarily via an existing internet website and secondarily with
customized, specialty books for specific clients.
There is absolutely no assurance that the Company will be able to
achieve profitable operations. At this time, no assurance can be given with
respect to the length of time 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 statements) 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
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.
Kayenta Kreations, Inc.
Date: November 10, 1999 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-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 641
<SECURITIES> 0
<RECEIVABLES> 800
<ALLOWANCES> 0
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<CURRENT-ASSETS> 2,375
<PP&E> 12,846
<DEPRECIATION> 5,072
<TOTAL-ASSETS> 10,397
<CURRENT-LIABILITIES> 3,114
<BONDS> 0
0
0
<COMMON> 1,019
<OTHER-SE> 6,264
<TOTAL-LIABILITY-AND-EQUITY> 10,397
<SALES> 935
<TOTAL-REVENUES> 935
<CGS> 445
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,612
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16
<INCOME-PRETAX> (8,102)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,102)
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<NET-INCOME> (8,102)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
