EXHIBIT 99.1 - FINANCIAL STATEMENTS - KRISTI AND COMPANY, INC.
Kristi and Co, Inc.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 1999
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TABLE OF CONTENTS
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PAGE
INDEPENDENT AUDITORS' REPORT.....................F-1
BALANCE SHEET....................................F-2
STATEMENT OF OPERATIONS..........................F-3
STATEMENT OF STOCKHOLDERS' EQUITY................F-4
STATEMENT OF CASH FLOWS..........................F-5
NOTES TO FINANCIAL STATEMENTS....................F-6-7
James E. Slayton, CPA
2858 WEST MARKET STREET
SUITE C
FAIRLAWN, OHIO 44333
1-330-864-3553
INDEPENDENT AUDITORS' REPORT
Board of Directors May 4, 2000
Kristi and Co, Inc. (the Company)
Las Vegas, Nevada 89102
I have audited the Balance Sheet of Kristi and Co, Inc. (A Development Stage
Company), as of December 31, 1999, and the related Statements of Operations,
Stockholders' Equity and Cash Flows for the period September 13, 1999 (Date of
Inception) to December 31, 1999 and the year ending December 31, 1999. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement presentation.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Kristi and Co, Inc., (A
Development Stage Company), as of December 31, 1999, and the results of its
operations and cash flows for the period September 13, 1999 (Date of Inception)
to December 31, 1999, and year ending December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has had limited operations and have not commenced
planned principal operations. This raises substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters
are also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ James E. Slayton
----------------------------
James E. Slayton, CPA
Ohio License ID# 04-1-15582
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Kristi and Co, Inc.
(A Development Stage Company)
BALANCE SHEET
AS AT
December 31, 1999
<TABLE>
<CAPTION>
BALANCE SHEET
December 31, 1999
ASSETS
<S> <C>
CURRENT ASSETS
Cash 0.00
------------
Total Current Assets 0.00
PROPERTY AND EQUIPMENT
Property & Equipment 0.00
------------
Total Property and Equipment 0.00
OTHER ASSETS
Other Assets 0.00
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TOTAL ASSETS 0.00
===========
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts Payable 0.00
-----------
Total Current Liabilities 0.00
OTHER LIABILITIES
Other liabilities 0.00
-------------
Total Other Liabilities 0.00
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Total Liabilities 0.00
EQUITY
Capital Stock 0.00
Additional Paid in Capital 0.00
Donated Capital 125.00
Retained Earnings or (Deficit
accumulated during development stage) (125.00)
-----------
Total Stockholders' Equity 0.00
TOTAL LIABILITIES & OWNER'S EQUITY 0.00
==========
</TABLE>
See accompanying notes to financial statements
F-2
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Kristi and Co, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR PERIOD
September 13, 1999 (Date of Inception) to December 31, 1999
and the year ending December 31, 1999
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
September 13, 1999
Year Ending (Date of Inception)
Dec. 31, 1999 to December 31, 1999
REVENUE
<S> <C> <C>
Services 0.00 0
COSTS AND EXPENSES
Selling, General and Administrative 0.00 0.00
Expense of Organization Costs 125.00 125.00
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Total Costs and Expenses 125.00 125.00
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Net Ordinary Income or (Loss) (125.00) (125.00)
============== =============
Weighted average
number of common
shares outstanding 0 0
Net Loss
Per Share 0.000 0.000
</TABLE>
See accompanying notes to financial statements
F-3
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Kristi and Co, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR PERIOD
September 13, 1999 (Date of Inception) to December 31, 1999
and the year ending December 31, 1999
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Additional During Total
Common Stock paid-in Donated Development Stockholder's
Shares Amount Capital Capital Stage Equity
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
September 13,
1999 Donated
Capital from
Stockholders 125.00 125.00
Net loss
September 13,
1999 (Inception)
to December 31,
1999 (125.00) (125.00)
------------------------------------------------------
Balances as at
December 31, 1999 0 $0.00 $0.00 $125.00 ($125.00) $ 0.00
========================================================================
</TABLE>
See accompanying notes to financial statements
F-4
Kristi and Co, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR PERIOD
September 13, 1999 (Date of Inception) to December 31, 1999
and the year ending December 31, 1999
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
September 13, 1999
(date of Inception)
to
December. 31, 1999
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income or (loss) from operations (125.00)
Adjustments to reconcile net income
to net cash provided
Amortization of organization costs 0.00
Services in exchange for stock 0.00
Decrease (Increase) in current assets 0.00
---------------------------------
Net Cash provided by Operating Activities (125.00)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land 0.00
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Net Cash used by investing activities 0.00
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock 0.00
Advances from Shareholders 125.00
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Net cash provided by financing activities 125.00
Balance at beginning of period 0.00
Net increase (decrease) in cash 0.00
Balance as at end of period 0.00
</TABLE>
See accompanying notes to financial statements
F-5
Kristi and Co, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized September 13, 1999 (Date of Inception) under the laws
of the State of Nevada, Kristi and Co, Inc. The Company has no operations and
in accordance with SFAS #7, the Company is considered a development stage
company.
On September 13, 1999, the company donated capital in the amount of $125.00.
No stock was issued in 1999.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined except as follows:
1. The Company uses the accrual method of accounting.
2. The cost of organization, $125.00, was expensed when incurred.
3. Basic earnings per share is computed using the weighted average number of
shares of common stock outstanding.
4. The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid since inception.
5. The Company has adopted FASB 109 and reports tax expense and deferrals
as incurred for each period an income statement is issued. There was zero
income tax expense for the year ended 1999.
6. The Company's Statement of Cash Flows is reported utilizing cash (currency
on hand and demand deposits) and cash equivalents (short-term, highly liquid
investments). The Company did not have any cash equivalents at the balance
sheet dates or during the period, September 13, 1999 (Date of Inception) to
December 31, 1999.
7. The company reports its property and equipment at historical cost The
Company has adopted FASB 121 in the accounting for the impairment of Long-Lived
Assets. The Company evaluates whether a review of impairment for recoverable
costs on long-lived assets, each operating period.
F-6
Kristi and Co, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the 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. However, the Company has not commenced its planned principal
operations. Without the realization of additional capital, it would be
unlikely for the Company to continue as a going concern. It is management's
plan to seek additional capital through a private offering of its securities.
NOTE 4 - RELATED PARTY TRANSACTION
The Company neither owns or leases any real or personal property. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts. Kristi Hough, founder of Kristi & Co.
contributed designs, patents and client lists to start the Company. Since
his was a related party transaction, the assets were booked at her basis
which was zero. When, the Company was sold to Nutek Inc. (See Note 6 -
Subsequent Events), the Company's assets were evaluated and recorded at
their fair market value of $100,000.00 as the transaction was recorded
under the purchase method of recording business combinations per APB 16.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 6 - SUBSEQUENT EVENTS
The company was purchased January 6, 2000, by Nutek, Inc. The purchase was for
Cash of $50,000 and 250,000 shares of the Company's stock was exchanged for
250,000 shares of Nutek stock. As part of the purchase, the Company received
designs, client lists and patterns which were valued at $100,000.00
Nutek stock 250,000 @.20(approximate market value on 01/06/2000. $ 50,000.00
Cash to be paid within 18 months $ 50,000.00
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$100,000.00
F-7
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