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, 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 June
30, 1999: 1,018,900
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
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KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
ASSETS
June 30, December 31,
1999 1998
(Unaudited)
CURRENT ASSETS
Cash in bank $998 $5,052
Inventory 934 1,015
________ ________
Total Current Assets 1,932 6,067
________ ________
EQUIPMENT
Office equipment and displays, less depreciation 8,416 9,699
of $4,430 and $3,146 ________ ________
OTHER ASSETS
Organization costs, net amortization of $702 298 398
and $602 ________ ________
Total Other Assets 298 398
________ ________
TOTAL ASSETS $10,646 $16,164
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $283 $579
State franchise tax payable 0 200
________ ________
Total Current Liabilities 283 779
________ ________
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 1,019 1,019
issued and outstanding respectively
Capital in excess of par value 47,193 47,193
Earnings (deficit) accumulated during the (37,849) (32,827)
development stage ________ ________
Total Stockholders' Equity 10,363 15,385
________ ________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,646 $16,164
======== ========
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See notes to Condensed Financial Statements
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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
1999 1998 1999 1998 Stage
SALES
Sales - net $0 $73 $183 $143 $1,119
Less cost of Sales 0 (36) (81) (59) 593
____________________________________
Gross Margin 0 37 102 84 526
____________________________________
SELLING, GENERAL AND ADMINISTRATIVE
Accounting and legal 300 2,405 1,450 2,405 8,135
Amortization 50 50 100 100 702
Travel 0 0 0 108 2,057
Wages 0 0 0 90 2,678
Marketing 40 181 340 231 6,405
Equipment rental 0 0 75 0 2,246
Administrative 372 0 947 259 4,316
Office expense 633 412 675 749 4,904
Utilities 0 0 0 42 743
Meals and entertainment 0 0 0 0 817
Depreciation 642 465 1,284 930 4,430
Taxes 0 0 0 0 300
Equipment repairs 100 0 275 674 1,113
Miscellaneous 0 0 0 0 382
____________________________________
Total Selling, General and 2,137 3,513 5,146 5,588 39,228
Administration ____________________________________
NET INCOME FROM OPERATIONS (2,137)(3,476)(5,044)(5,504) (38,702)
OTHER INCOME (EXPENSE)
Interest income 7 106 31 229 893
Interest expense (7) (6) (9) (11) (40)
____________________________________
NET INCOME BEFORE TAXES (2,137)(3,376)(5,022)(5,286) (37,849)
PROVISIONS FOR INCOME TAXES 0 0 0 0 0
____________________________________
NET INCOME (LOSS) $(2,137)$(3,376)$(5,022)$(5,286)$(37,849)
============= ============= ========
EARNINGS (LOSS) PER SHARE $0.00 $0.00 $0.01 $0.01 $0.04
============= ============= ========
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See notes to Condensed Financial Statements
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KAYENTA KREATIONS, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the ThreeFor the Six Cumulative
Months Ended Months Ended During the
June 30, June 30, Development
1999 1998 1999 1998 Stage
CASH FLOWS FROM OPERATING ACTIVITIES
Cash from sales $0 $73 $183 $143 $1,119
Cash paid for organization costs 0 0 0 0 (1,000)
Cash from interest 7 106 31 229 893
Cash paid for interest (7) (6) (9) (11) (40)
Cash paid for supplies and (1,489)(2,969)(4,159)(4,719) (35,141)
employee services
Cash paid for taxes 0 0 (100) (100) (200)
____________ _______________________
Net Cash (Used) by Operating (1,489)(2,796)(4,054)(4,458) (34,369)
Activities ____________ _______________________
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment 0 0 0 0 (12,845)
____________ _______________________
Net cash (Used) provided by 0 0 0 0 (12,845)
Investing 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)
Contributed capital 0 0 0 0 20
____________ _______________________
Net Cash Provided (Used) By 0 0 0 0 48,212
Financing Activities ____________ _______________________
NET INCREASE (DECREASE) IN CASH (1,489)(2,796)(4,054)(4,458) 998
CASH - BEGINNING OF PERIOD 2,487 15,115 5,052 16,777 0
____________ _______________________
CASH - END OF PERIOD $998$12,319 $998 $12,319 $998
============ =======================
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
NET INCOME (LOSS) $(2,137)$(3,376)$(5,022)$(5,286)$(37,849)
____________ _______________________
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities
Amortization of organization costs 50 50 100 100 702
Depreciation 643 465 1,284 930 4,430
Change in assets and liabilities
Organization costs 0 0 0 0 (1,000)
Inventory 0 36 81 59 (934)
Accounts payable 55 29 (297) (261) 282
Franchise taxes payable (100) 0 (200) 0 0
____________ _______________________
Total Adjustments 648 580 968 828 3,480
____________ _______________________
NET CASH PROVIDED (USED) BY $(1,489)$(2,796)$(4,054)$(4,458)$(34,369)
OPERATING ACTIVITIES ============ =======================
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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, 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 June 30, 1999 and
1998 are not necessarily indicative of the operating results for
the full year.
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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.
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
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 31, 1999 by: /s/ Michelle Barlow
Michelle Barlow, Chairman
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<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>
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 998
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 934
<CURRENT-ASSETS> 1,932
<PP&E> 12,846
<DEPRECIATION> 4,430
<TOTAL-ASSETS> 10,646
<CURRENT-LIABILITIES> 283
<BONDS> 0
0
0
<COMMON> 1,019
<OTHER-SE> 47,193
<TOTAL-LIABILITY-AND-EQUITY> 10,646
<SALES> 183
<TOTAL-REVENUES> 183
<CGS> 81
<TOTAL-COSTS> 81
<OTHER-EXPENSES> 5,146
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9
<INCOME-PRETAX> (5,022)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,022)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
