UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period 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:
Finders Keepers, Inc.
(Exact name of registrant as specified in its charter)
Nevada 88-0429812
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
711 Eastern Parkway, Brooklyn, 11213
NY (Zip Code)
(Address of principal executive
offices)
(718) 363-0588
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (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 reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 11,554,416
FINDERS KEEPERS, INC.
(FORMERLY FINDER KEEPERS, INC.)
ITEM 1. FINANCIAL STATEMENTS
STARK TINTER & ASSOCIATES, LLC
Certified Public Accountants
7535 E. Hampden Ave., Ste. 109
Denver, CO 80231
303.694.6700
303.337.8116 fax
ACCOUNTANT'S REVIEW REPORT
Board of Directors
Finders Keepers, Inc.
Las Vegas, NV
We have reviewed the accompanying balance sheet of Finders
Keepers, Inc. (a Nevada corporation) as of June 30, 2000 and
the related statements of operations and cash flows for the
three-month and six-month periods ending June 30, 2000.
These financial statements are the responsibility of the
Company's management.
We conducted our reviews 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, the objective of
which is expressing an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
Another CPA firm has previously audited the balance sheet of
Finders Keepers, Inc. (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
and for the period May 28, 1999 (Inception) to December 31,
1999 (not presented herein) and in their report dated
February 15, 2000, they expressed an unqualified opinion on
those financial statements.
Denver, Colorado
August 11, 2000
Finders Keepers, Inc.
Balance Sheet
(unaudited)
June 30, December 31,
2000 1999
Assets
Current assets:
Cash 3,451 17,631
Total current assets 3,451 17,631
3,451 17,631
Liabilities and Stockholders' Equity
Total liabilities - -
Stockholders' Equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, zero shares issued and
outstanding - -
Common stock, $0.001 par value, 20,000,000
shares authorized, 11,554,416 and 5,777,208 11,554 5,777
shares
Additional paid-in capital 74,777 80,554
Retained earnings (82,880) (68,700)
Total stockholders' equity 3,451 17,631
3,451 17,631
Finders Keepers, Inc.
Statement of Operations
(unaudited)
Three Months Ending June 30, Six Months Ending June 30,
2000 1999 2000 1999
Revenue 126,516 - 136,410 -
Cost of Sales (90,128) - (90,128) -
Gross Profit 36,388 - 46,282 -
Expenses:
General 31,977 - 60,509 -
administrative
expenses
Total expenses 31,977 - 60,509 -
Other income:
Interest income 13 - 47 -
Total other income 13 - 47 -
Net income (loss) 4,424 - (14,180) -
Weighted average
number of
common shares 11,554,416 5,000,000 11,554,416 5,000,000
outstanding
Net income (loss) per - - - -
share
Finders Keepers, Inc.
Statement of Cash Flows
(unaudited)
Three months Six months
ending June 30, ending June 30,
2000 1999 2000 1999
Net income (loss) 4,424 - (14,180) -
Decrease in other liabilities (2,252)
2,172 - (14,180) -
- - - -
- - - -
Issuance of common stock 8,510 - 8,510
- 8,510 - 8,510
2,172 8,510 (14,180) 8,510
1,279 - 17,631 -
3,451 8,510 3,451 8,510
Interest paid - - - -
Income taxes paid - - - -
Finders Keepers, Inc.
Notes to Financial Statements
June 30, 2000
Note 1 - History and Organization of the Company
The Company was organized on May 28, 1999 (Date of Inception) under
the laws of the State of Nevada. The Company is authorized to issue
20,000,000 shares of $0.001 par value common stock and 5,000,000
shares of $0.001 par value preferred stock.
The Company's principal business objective is to provide
confidential, unclaimed property location services to the public and
to leading corporations. The Company seeks to assist clients in
obtaining information regarding lost or forgotten estates, unclaimed
assets, and/or financial belongings anywhere in the United States
which have escheated to the state or federal government and
governmental agencies.
Note 2 - Summary of Significant Accounting Policies
1. 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
revenue and expenses during the reporting period. Actual results
could differ significantly from those estimates.
2. The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are considered
to be cash equivalents. There are no cash equivalents as of June 30,
2000.
3. Earnings per share (EPS) is computed using the weighted average
number of shares of common stock outstanding during the period.
Diluted EPS is computed by dividing net income by the weighted
average shares outstanding, assuming all dilutive potential common
shares were issued. Since the Company has no common shares that are
potentially issuable, such as stock options, convertible preferred
stock and warrants, basic and diluted EPS are the same. The Company
had no dilutive common stock equivalents such as stock options as of
June 30, 2000.
4. The Company recognizes revenue as a client search is completed
and funds are cleared from the escheated account. Cost of goods sold
represents the funds paid to the client net of the Company's finder's
and processing fees.
Note 3 - Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting. Deferred tax
expenses (benefit) results from the net change during the year of
deferred tax assets and liabilities.
There is no provision for income taxes for the year ended June 30,
2000, due to the net loss carryforward and no state income tax in
Nevada. Deferred tax assets have been fully reserved with a
valuation allowance.
Note 4 - Stockholders' Equity
On May 31, 1999, the Company issued 5,000,000 shares of its $0.001
par value common stock for cash of $8,510 to its one director. Of
the total, $5,000 is considered common stock, and $3,510 is
considered additional paid-in capital.
On September 2, 1999, the Company completed an offering that was
registered with the State of Nevada pursuant to NRS 90.490 and was
exempt from federal registration pursuant to a Regulation D, Rule 504
of the Securities Act of 1933, as amended. The Company sold 636,300
shares of its $0.001 par value common stock at a price of $0.10 per
share for total cash of $63,630. In addition, the Company issued
140,908 shares of its $0.001 par value common stock for services
valued at $0.10 per share for a total of $14,091.
On March 24, 2000, the Company effected a 2-for-1 stock split of its
$0.001 par value common stock, increasing the number of shares issued
and outstanding from 5,777,208 shares to 11,554,416 shares.
Note 5 - Warrants and Options
There are no warrants outstanding to acquire any additional shares of
common stock.
Note 6 - Year 2000 Issue
The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems
may recognize the year 2000 as 1900 or some other date, resulting in
errors when information using year 2000 dates is processed. In
addition, similar problems may arise in systems which use certain
dates in 1999 to represent something other than a date. The effects
of the Year 2000 issue may be experienced before, on, or after
January 1, 2000, and if not addressed, the impact on operations and
financial reporting may range from minor errors to significant system
failure which could affect an entity's ability to conduct normal
business operations. It is not possible to be certain that all
aspects of the Year 2000 issue affecting the entity, including those
related to the efforts of customers, suppliers, or other third
parties will be fully resolved.
Note 7 - Subsequent Events
On July 27, 2000 the Company's Board of Directors approved a 7 for 1
forward stock split of its common shares. The Company's Certificate
of Incorporation has been amended to increase the authorized capital
stock of the Company to 250,000,000 shares, all of which will be
common stock. The record date for the forward split is Monday, August
7, 2000 with a distribution date of August 9, 2000.
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about our
business, financial condition and prospects that reflect our assumptions
and beliefs based on information currently available. We can give no
assurance that the expectations indicated by such forward-looking
statements will be realized. If any of our assumptions should prove
incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, our actual results may differ materially
from those indicated by the forward-looking statements.
The key factors that are not within our control and that may have a
direct bearing on operating results include, but are not limited to, the
acceptance of our services, our ability to file and realize claims, our
ability to raise capital in the future, the retention of key employees
and changes in the regulation of our industry.
There may be other risks and circumstances that we are unable to predict.
When used in this Quarterly Report, words such as, "believes,"
"expects," "intends," "plans," "anticipates," "estimates" and similar
expressions are intended to identify forward-looking statements, although
there may be certain forward-looking statements not accompanied
by such expressions. All forward-looking statements are intended to be
covered by the safe harbor created by Section 21E of the Securities
Exchange Act of 1934.
Overview
Finders Keepers, Inc., provides confidential, unclaimed, property
location services to the public and to leading corporations. We assist
clients in obtaining information regarding lost or forgotten estates,
unclaimed assets and/or financial belongings anywhere in the United
States, which have escheated to the state or federal government and
governmental agencies.
We were organized as a Nevada corporation on May 28, 1999. Our principal
source of revenue is derived from the realization of claims filed with
State agencies for the collection of lost or escheated property. To
date, we have recognized material revenue and are working to claim
additional assets for our clients.
Currently, we have thousands of claims outstanding to retrieve lost
assets that are being held by the government as abandoned property. The
realization of the majority of these pending claims is estimated to take
between 12 to 18 months from the date of initial filing with the
respective jurisdiction. We expect an increase in the realization of
claims throughout the next 9 months of operations and have only begun to
realize revenues from our property location services.
Concurrently, we intend to relocate and lease office facilities by the
end of fiscal year 2000 to facilitate our expansion and the hiring of two
additional employees to assist in the processing of claims. In addition,
due to the increase in demand for our services we have upgraded our
computer, database and telephone systems in order to be more competitive
and to handle the volume of calls we are currently and expect to receive.
We have upgraded and improved the format of our website design and
content, www.moneychest.com, because we believe that it will offer our
clients a more thorough resource to learn about our services and to have
the ease of use to request the process of claims online. We experience
approximately 9,000 hits on our website a month. As of the three months
ended, June 30, 2000, we have not allocated any capital commitments to
the execution of our plan of operation. Our officer and director has
agreed to the advancement of capital on an "as needed" basis until such
time that we realize substantive revenue and cash flows. Though
obtaining substantial debt financing is not imperative, we reserve the
right to pursue such an avenue in case we are not able to realize an
increase in our working capital budget. In addition, we may elect to
obtain private financing from certain individuals interested in funding
our current operations.
Results of Operation
Due to our limited operating history, we believe that period-to-period
comparisons of our results of operations are not fully meaningful and
should not be relied upon as an indication of future performance.
Comparison of the three-month periods ended June 30, 2000 and 1999.
Revenue. Our revenues have increased since June 30, 1999, when no
revenue was realized. For the three months ending June 30, 2000, we have
incurred revenue of $126,516. All revenue is attributable to the
realization of the collection of our fees related to the collection of
claims previously filed with various state agencies.
Cost of Sales. We are in the business of providing unclaimed property
location services. We locate assets that have escheated to the state or
federal government and governmental agencies that are holding monies and
assets. Upon realization of a claim, we typically collect the assets in
our name and disperse the monies to our clients, less our fees. Our fees
are dependent upon the agency the assets were received from. Our cost of
sales for the three months ended June 30, 2000 was $90,128. This
represent the amount of monies dispersed from us to our clients, after
taking our fees.
General and Administrative. We incurred expenses of $31,997 for the
second quarter of fiscal 2000. These expenses are attributable to the
daily operations of our company and consist of expenses for personnel,
facilities, professional services and general corporate activities.
General and administrative costs increased to $31,977 in the second
quarter from zero in the second quarter of 1999. The increase was solely
due to the commencing of operations. Due to the growth of our business
and continuing expansion of our staff, we expect these expenses to
increase. In addition, the costs associated with being a publicly traded
company and future strategic acquisitions will also be a contributing
factor to increases in this expense.
Other Income (Loss). Other income (loss) consists of interest income.
Interest income increased to $13 in the second quarter of 2000 from
nothing in the second quarter of 1999. This increase was attributable to
an increase in our net cash balance over the second quarter of 1999.
Liquidity and Capital Resources
Since inception, we have funded our primary operations primarily through
sales of our equity securities. On September 2, 1999, we completed an
offering of our securities whereby we sold 777,208 shares at a price of
$0.10 for total cash of $63,630 and in lieu of services rendered in the
amount of $14,091.
During the quarter ended June 30, 2000, $14,180 was used in general
operations.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) A list of the exhibits included as part of this quarterly report is
set forth in the Exhibit Index which immediately precedes such exhibits
and is incorporated herein by this reference.
(b) The following report on Form 8-K was filed during the quarter ended
June 30, 2000:
We filed a report on Form 8-K with the Securities and Exchange
Commission on August 3, 2000. The date of the Form 8-K was August 3,
2000. The item reported in the Form 8-K was a change in our principal
accountant, due to recent health problems with our former accountant.
There were no disagreements with the former accountant on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of the former accountant, would have caused him to make
reference to the subject matter of the disagreements in connection with
his report.
Exhibit Name and/or Identification of Exhibit
Number
3 Articles of Incorporation & By-Laws
(a)Articles of Incorporation of the Company filed
May 28, 1999. Incorporated by reference to the
exhibits to the Company's General Form For
Registration Of Securities Of Small Business
Issuers on Form 10 - SB, previously filed with the
Commission.
(b)By-Laws of the Company adopted May 31, 1999.
Incorporated by reference to the exhibits to the
Company's General Form For Registration Of
Securities Of Small Business Issuers on Form 10 -
SB, previously filed with the Commission.
13 Annual or Quarterly Reports
(a) Form 10-KSB for the year ended December 31, 1999.
Incorporated by reference to the Company's Annual Report for
Small Business Issuers, previously filed with the Commission.
(b) Form 10-QSB for the three months ended March 31, 2000.
Incorporated by reference to the Company's Quarterly Report for
Small Business Issuers, previously filed with the Commission.
23 Consent of Experts and Counsel
Consents of independent public accountants
27 Financial Data Schedule
Financial Data Schedule of Finders Keepers, Inc.,
ending June 30, 2000
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Finders Keepers, Inc.
(Registrant)
Date: August 9, 2000
By:/s/ Devorah Zirkind
Devorah Zirkind,
President, Chief Executive Officer and Director
