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UNITED STATES
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 Quarter Ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-24633
RAKO CORPORATION
(Exact name of small business issuer as specified in its charter)
Idaho 91-0853320
------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3256 Agate Court, Boise, Idaho 83705
--------------------------------------
(Address of principal executive offices)
Registrant's telephone no., including area code: (208) 336-3036
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Class Outstanding as of June 30, 2000.
Common Stock, $.001 par value 1,025,030
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 2000 and December 31, 1999
C O N T E N T S
PART I
Independent Auditors' Report 3
Balance Sheets 4
Statements of Operations 5
Statements of Stockholders' Equity (Deficit) 5
Statements of Cash Flows 8
Notes to the Financial Statements 8
PART II
Item 1 Legal Proceedings 11
Item 2 Changes in Securities 11
Item 3 Defaults in Senior Securities 11
Item 4 Submission of Matters to a Vote of Security Holders 11
Item 5 Other Information 11
Item 6 Exhibits and Reports on Form 8-K 12
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors
Rako Corporation
(A Development Stage Company)
Salt Lake City, Utah
We have reviewed the accompanying balance sheet of Rako Corporation (a
development stage company) as of June 30, 2000 and the related statements
of operations, stockholders' equity (deficit) and cash flows for the three
months and six months ended June 30, 2000 and 1999.These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet of Rako Corporation (a
development stage company) as of December 31, 1999, and the related
statements of operations, stockholders' equity, and cash flows for the year
then ended (not presented herein) and in our report dated April 13, 2000,
we expressed an unqualified opinion on those financial statements.
HJ & Associates, LLC
Salt Lake City, Utah
July 28, 2000
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Balance Sheets
ASSETS
<TABLE>
June 30, December 31,
2000 1999
CURRENT ASSETS
<S> <C> <C>
Cash $ - $ -
---------- ----------
Total Current Assets - -
---------- ----------
TOTAL ASSETS $ - $ -
=========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,814 $ 88
----------- --------
Total Current Liabilities 1,814 88
----------- --------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock at $0.001 par value; authorized
50,000,000 common shares and 20,000,000
preferred shares; 1,025,030 common shares
issued and outstanding 1,025 1,025
Additional paid-in capital 97,084 95,466
Deficit accumulated during the development stage (99,923) (96,579)
----------- --------
Total Stockholders' Equity (Deficit) (1,814) (88)
----------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ - $ -
=========== ==========
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Statements of Operations
<TABLE>
From
Inception on
October 9,
For the Three Months Ended For the Six Months Ended 1968 Through
June 30, June 30 June 30,
2000 1999 2000 1999 2000
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUE $ - $ - $ - $ - $
EXPENSES 1,814 1,220 3,344 2,720 99,923
---------- ---------- ---------- ---------- --------
NET LOSS $ (1,814) $ (1,220) $ (3,344) $ (2,720) (99,923)
========== ========== ========== ========== ========
BASIC LOSS PER SHARE$ (0.00) $ (0.00) $ (0.00) $ (0.01)
========== ========== =========== ===========
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
From Inception on October 9, 1968 Through June 30, 2000
<TABLE>
Deficit
Acumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
-----------------------------------------------------
<S> <C> <C> <C> <C>
Inception on October 9, 1968 - $ - $ - $ -
Common stock issued for mining
claims recorded at predecessor
cost of $0.00 per share 400,000 400 (400) -
Common stock issued for services
at $0.15 per share 400,000 400 59,600 -
Common stock issued for cash
at $0.45 per share 14,734 15 6,615 -
Costs associated with stock offering - - (994) -
Common stock issued for mining
claims recorded at predecessor
cost of $0.075 per share 333,334 333 24,667 -
Net loss for the period from inception
on October 9, 1968 through
December 31, 1995 - - - (90,636)
--------- ---------- ---------- ---------
Balance, December 31, 1995 1,148,068 1,148 89,488 (90,636)
Cancellation of common stock (123,024) (123) 123 -
Fractional shares adjustment (14) - - -
Capital contributed for payment of
expenses - - 2,461 -
Net loss for the year ended
December 31, 1996 - - - (2,461)
---------- ---------- ---------- ---------
Balance, December 31, 1996 1,025,030 1,025 92,072 (93,097)
Net loss for the year ended
December 31, 1997 - - - -
---------- ---------- ---------- --------
Balance, December 31, 1997 1,025,030 1,025 92,072 (93,097)
Capital contributed for payment of
expenses - - 1,574 -
Net loss for the year ended
December 31, 1998 - - (1,574)
----------- ---------- ----------- -------
Balance, December 31, 1998 1,025,030 $ 1,025 $ 93,646 $94,671)
----------- ---------- ----------- --------
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
From Inception on October 9, 1968 Through June 30, 2000
<TABLE>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
-----------------------------------------------------
---
<S> <C> <C> <C> <C>
Balance, December 31, 1998 1,025,030 $1,025 $ 93,646 (94,671)
Capital contributed for payment of
expenses - - 1,820 -
Net loss for the year ended
December 31, 1999 - - - (1,908)
--------- ------- ---------- --------
--
Balance, December 31, 1999 1,025,030 1,025 95,466 (96,579)
Capital contributed for payment of
expenses (unaudited) - - 1,618 -
Net loss for the six months ended
June 30, 2000 (unaudited) - - - (3,344)
---------- --------- ---------- --------
Balance, June 30, 2000 1,025,030 $ 1,025 $ 97,084 (99,923)
(unaudited) ========== ========== ========= ==========
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Statements of Cash Flows
<TABLE> (Unaudited)
From
Inception on
October 9,
For the Three Months For the Six Months 1968 through
Ended June 30, June 30,
2000 1999 2000 1999 2000
----------------------------------------------------
CASH FLOWS FROM
OPERATING ACTIVITIES
<S> <C> <C> <C> <C> <C>
Net loss $ (1,814) $ (1,220) $ (3,344) $ (2,720) $ (99,109)
Adjustments to reconcile net
loss to net cash (used) by
operating activities:
Stock issued for services - -
60,000
Increase in accounts payable 314 1,220 1,726 2,720 26,814
---------- ---------- --------- -------- --------
-Net Cash (Used) by Operating
Activities (1,500) - (1,618) - (13,109)
---------- ---------- --------- -------- ---------
CASH FLOWS FROM - - - - -
INVESTING ACTIVITIES ---------- ---------- --------- -------- ---------
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock - - - - 5,636
For cash
Expenses paid on
Company's behalf 1,500 - 1,618 - 7,473
---------- ---------- --------- -------- --------
Net Cash Provided by
Financing Activities 1,500 - 1,618 - 13,109
---------- ---------- ---------- -------- --------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS - - - - -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD - - - - -
---------- ---------- ---------- --------- --------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ - $ - $ - $ - $ -
=========== ========= ========== ========= ========
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Statements of Cash Flows (Continued)
From
Inception on
October 9,
For the Three Months For the Six Months 1968 through
Ended June 30, June 30, June 30
2000 1999 2000 1999 2000
TABLE>
<S> <C> <C> <C> <C> <C>
Cash Paid For:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
SUPPLEMENTAL SCHEDULE OF
NON-CASH FINANCING ACTIVITIES
Stock issued for services $ - $ - $ - $ - $
$60,000
Stock issued for mining claims $ - $ - $ - $ - $
$25,000
</TABLE>
See Accountants' Review Report and the accompanying notes to the
reviewed financial statements.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000 and December 31, 1999
NOTE 1 ORGANIZATION AND DESCRIPTION OF BUSINESS
On October 9, 1968, Bell Silver Mining and Milling Corporation was
incorporated under the Laws of Idaho with the purpose of developing mining
claims. On the date of incorporation, 10,000,000 shares of $0.10 par value
common stock were authorized.
On March 3, 1969, Bell Silver Mining and Milling Corporation changed its
name to Silver Strike Mining Co. Inc. The number of shares of common stock
authorized was changed from 10,000,000 shares of $0.10 par value common
stock to 5,000,000 shares of $0.10 par value common stock.
On May 17, 1973, Silver Strike Mining and Milling Co. Inc, changed its name
to Rako Corporation.
On March 25, 1996, the Articles of Incorporation were amended to change the
par value of the common stock to $0.005 and the number of authorized shares
to 100,000,000.
On May 15, 1996, the Articles of Incorporation were amended to change the
par value of the common stock to $0.001 and the number of authorized shares
to 50,000,000 common and 20,000,000 preferred.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end.
b. Provision for Taxes
No provision for income taxes has been made due to the inactive status of
the Company. The Company has net operating loss carryovers of
approximately $6,000 which expire in 2019. The potential tax benefit of
the loss carryovers has been offset in full by a valuation allowance.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000 and December 31, 1999
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Basic Loss Per Common Share
Basic loss per common share has been calculated based on the weighted
average number of shares of common stock outstanding during the period.
<TABLE>
For the Three Months Ended
June 30,
<S> <C> <C> <C> <C>
2000 1999 2000 1999
Numerator loss $(1,814) $(1,220) $(3,344) $(4,715)
Denominator - weighted
average number of
shares outstanding 1,025,030 1,025,030 1,025,030 1,025,030
------------ ------------ ------------ ------------
Loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.01)
============ ============ ============ ============
</TABLE>
f. Unaudited Financial Statements
NOTE 3 GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. The Company is
seeking a merger with an existing, operating Company. Currently management
has committed to covering all operating and other costs until a merger is
completed.
NOTE 4 STOCK TRANSACTIONS
On October 10, 1968, the Board of Directors issued 400,000 shares of common
stock for mining claims received from the founder of the Company. The
claims were recorded at predecessor cost of $-0-.
On October 10, 1968, the Board of Directors issued 400,000 shares of common
stock for services rendered during the organization of the Company.
On October 28, 1969, the Board of Directors initiated a public offering in
which 14,734 shares of common stock were sold at a gross price of $0.45 per
share.
On September 13, 1984, the Board of Directors issued 333,334 shares of
common stock for mining claims which were recorded at predecessor cost of
$0.075 per share.
On April 10, 1996, the Company canceled 123,024 shares of common stock.
On May 15, 1996, the shareholders effected a 1-for-3 reverse stock split of
all the issued and outstanding common stock.
<PAGE>
RAKO CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2000 and December 31, 1999
NOTE 4 STOCK TRANSACTIONS (Continued)
On April 10, 1996, the Company canceled 123,024 shares of common stock.
On May 15, 1996, the shareholders effected a 1-for-3 reverse stock split of all
the issued and outstanding common stock.
On March 17, 1998, the shareholders effected a 2-for-1 forward stock split
of all the issued and outstanding common stock.
The accompanying financial statements reflect the stock splits on a
retroactive basis.
NOTE 5 FAILED ACQUISITION
On May 9, 1996, the shareholders voted to acquire all of the issued and
outstanding shares of Spencer Entertainment, Inc., a Nevada Corporation, in
exchange for the Company's authorized, but previously unissued common stock.
On June 11, 1996, the Company issued 6,300,000 shares as part of the terms of
this agreement, however, on November 22, 1996, the Company completed a
recission agreement regarding the plan of reorganization and acquisition
agreement between the Company and Spencer Entertainment, Inc. and canceled
the 6,300,000 shares that were issued. The recission has been reflected in
the financial statements on a retroactive basis.
PART II
Item 1. Legal Proceedings
There are presently no other material pending legal
proceedings to which the Company or any of its subsidiaries is a
party or to which any of its property is subject and, to the best
of its knowledge, no such actions against the Company are
contemplated or threatened.
Item 2. Changes In Securities
This Item is not applicable to the Company.
Item 3. Defaults Upon Senior Securities
This Item is not applicable to the Company.
Item 4. Submission of Matters to a Vote of Security Holders
This Item is not applicable to the Company.
Item 5. Other Information
This Item is not applicable to the Company.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the
three month period ended March 31, 2000.
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
RAKO CORPORATION
Date: Aug 09, 2000 By: /S/ Kenneth D. Montee
KENNETH D. MONTEE
C.E.O., C.F.O., President
and Director
Date: Aug 09, 2000 By: /S/ Ray Montee
RAY MONTEE
Secretary/Treasurer, and
Director
(Principal Accounting Officer)
<PAGE>
