U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 2005 Commission File No. 333-4066
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
KAYENTA KREATIONS, INC.
(Name of small business issuer in its charter)
Nevada 87-0554463
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
311 South State Street, Suite 460, Salt Lake City, Utah 84111
(Address of principal executive offices) (zip code)
Issuer's telephone number, including area code: (801) 364-9262
(Former name, former address and former fiscal year, if changed since last
report)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
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 Issuer was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of the Issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. (Not applicable) [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes X No
The Issuer's revenues for its most recent fiscal year. $ -0-
As of February 8, 2006, the aggregate market value of voting stock held by
non-affiliates was approximately $221,089. (See Item 5 herein).
The number of shares outstanding of the Issuer's common stock at December 31,
2005: 1,316,292
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(A) BUSINESS DEVELOPMENT.
Kayenta Kreations, Inc. (the "Company") was incorporated under the laws
of the State of Nevada on December 26, 1995. In connection with its
organization, the President and founders of the Company contributed $8,000
cash to initially capitalize the Company in exchange for 800,000 shares of
Common Stock.
The Company then registered a public offering of its securities to raise
funds from such offering with which to commence business operations. The
Company filed with the Securities and Exchange Commission a registration
statement on Form SB-2, Commission File No. 333-4066, which became effective
October 21, 1996. Pursuant thereto the Company sold 218,900 shares of its
common stock to the public at $.25 per share and raised gross proceeds of
$54,725.
The offering was completed in February, 1997. The Company then used the
net proceeds from this offering to provide the working capital necessary to
commence business operations. However, the Company did not generate any
significant revenues from operations and is still considered a development
stage company.
(B) BUSINESS OF COMPANY.
The Company was engaged in the business of producing and marketing
specialty children's coloring art books and art coloring pencils. This
business was not successful and operations were eventually discontinued. The
Company is not presently engaged in any significant business activities and
has no operations. Presently the Company's principal activity has been to
investigate potential acquisitions. However, the Company has not located any
suitable potential business acquisition and has no plans, commitments or
arrangements with respect to any potential business venture. There is no
assurance the Company could become involved with any business venture,
especially any business venture requiring significant capital. There is no
written agreement with respect to any potential business acquisition. If any
suitable potential business acquisition is located and completed, it will in
all likelihood involve a change in management and shareholder control of the
company.
EMPLOYEES
The Company presently has no salaried employees, and does not presently
anticipate the need to hire employees. The sole officer of the Company will
not be employed full time presently and will not receive a regular salary,
wage or other cash compensation for her time, unless and until the Company's
business operations develop to the point where a full time or other extensive
time commitment is required.
ITEM 2. PROPERTIES
The Company presently has no office facilities but for the time being
will use the office address of Ms. Brenda White, its President, in Salt Lake
City, Utah, on a rent free basis as its principal business address.
Management does not intend to seek other office arrangements immediately, but
will seek such arrangements at such time in the future as the Company's
business requires more extensive facilities, which is not anticipated in the
immediate future.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal proceedings
and, to the best of its knowledge, no action has been threatened by or against
the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET INFORMATION.
The Company's public offering closed in February, 1997 and the Common
Stock of the Company was eligible for trading in the over-the-counter market
after that time. The common stock is quoted under the symbol "KKRI", but has
not been traded in the over-the-counter market except on a very limited and
sporadic basis. The following sets forth high and low bid price quotations for
each calendar quarter during the last two fiscal years that trading occurred
or quotations were available. Such quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions.
Quarter Ended High Low
March 31, 2004 .75 .45
June 30, 2004 1.01 .75
September 30, 2004 .72 .15
December 31, 2004 .77 .70
March 31, 2005 .77 .77
June 30, 2005 1.01 .77
September 30, 2005 .95 .95
December 31, 2005 .95 .95
(B) HOLDERS.
As of March 7, 2006, there were approximately 18 record holders of the
Company's Common Stock.
(C) DIVIDENDS.
The Company has not previously paid any cash dividends on common stock
and does not anticipate or contemplate paying dividends on common stock in the
foreseeable future. It is the present intention of management to utilize all
available funds for the development of the Company's business. The only
restrictions that limit the ability to pay dividends on common equity or that
are likely to do so in the future, are those restrictions imposed by law.
Under Nevada corporate law, no dividends or other distributions may be made
which would render the Company insolvent or reduce assets to less than the sum
of its liabilities plus the amount needed to satisfy any outstanding
liquidation preferences.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company was incorporated on December 26, 1995. The Company has not
yet generated any significant revenues from operations and is considered a
development stage company. Management's plan of operation for the next twelve
months is to continue to receive shareholder advances to provide general
working capital. The Company's current operating plan is to (i) handle the
administrative and reporting requirements of a public company, and (ii) search
for potential businesses, products, technologies and companies for
acquisition. The Company has experienced losses from its inception. The
Company was engaged in the business of producing and marketing specialty
children's coloring art books and art coloring pencils. This business was not
successful and operations were eventually discontinued. The Company is not
presently engaged in any significant business activities and has no
operations. Presently the Company's principal activity has been to investigate
potential acquisitions. However, the Company has not located any suitable
potential business acquisition and has no plans, commitments or arrangements
with respect to any potential business venture. There is no assurance the
Company could become involved with any business venture, especially any
business venture requiring significant capital. There is no written agreement
with respect to any potential business acquisition. If any suitable potential
business acquisition is located and completed, it will in all likelihood
involve a change in management and shareholder control of the company. At
December 31, 2004, indebtedness of the Company to certain shareholders in the
amount of $9,242 was forgiven and contributed to capital. The Company has no
operating capital or income producing assets. In light of these circumstances,
the ability of the Company to continue as a going concern is substantially in
doubt. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Management believes their plans
will provide the corporation with the ability to continue in existence.
Management plans to maintain its filings and curtail operations and activities
to keep it in existence. This may require additional advances from
stockholders to pay accounting and legal fees associated with its filings.
ITEM 7. FINANCIAL STATEMENTS.
See attached Financial Statements and Schedules.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There are not and have not been any disagreements between the Company
and its accountants on any matter of accounting principles or practices or
financial statement disclosure.
ITEM 8A. CONTROLS AND PROCEDURES.
The issuer's principal executive officer or officers and principal
financial officer or officers, or persons performing similar functions, are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the issuer and have:
designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under their supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to them by others within those
entities, particularly during the period in which the periodic reports are
being prepared;
designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under their
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the issuer's disclosure controls and
procedures as of the end of the fiscal year (the "Evaluation Date").
Based on their evaluation as of the Evaluation Date, their conclusions
about the effectiveness of the disclosure controls and procedures were that
nothing indicated:
any significant deficiencies in the design or operation of internal
controls which could adversely affect the issuer's ability to record, process,
summarize and report financial data;
any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal controls; or
any material weaknesses in internal controls that have been or should be
identified for the issuer's auditors and disclosed to the issuer's auditors
and the audit committee of the board of directors (or persons fulfilling the
equivalent function).
Changes in internal control over financial reporting. There was no
significant change in the issuer's internal control over financial reporting
that occurred during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the issuer's internal
control over financial reporting.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
(A) IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS.
The following table sets forth the sole director and executive officer
of the Company, her age, and all offices and positions with the Company. A
director is elected for a period of one year and thereafter serves until his
or her successor is duly elected by the stockholders and qualifies. Officers
and other employees serve at the will of the Board of Directors.
Term Served As Positions
Name of Director Age Director/Officer With Company
Brenda White 46 Since February President &
15, 2002 Secretary/Treasurer
Michelle Barlow resigned February 15, 2002, as the sole director and
executive officer of the Company, and appointed Brenda White to replace her.
Brenda White now serves as management of the Company. A brief description of
her background and business experience is as follows:
Brenda White serves as President, Secretary/Treasurer and Director of
the Company. She has been employed since 1995 as the secretary of Lynn Dixon,
a principal shareholder of the Company, and serves at his request. Ms. White
holds no directorships in any other company subject to the reporting
requirements of the Securities Exchange Act of 1934.
(B) IDENTIFY SIGNIFICANT EMPLOYEES.
None other than the person previously identified.
(C) FAMILY RELATIONSHIPS.
None
(D) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
Except as described herein above, no present officer or director of the
Company; 1) has had any petition filed, within the past five years, in Federal
Bankruptcy or state insolvency proceedings on such person's behalf or on
behalf of any entity of which such person was an officer or general partner
within two years of filing; or 2) has been convicted in a criminal proceeding
within the past five years or is currently a named subject of a pending
criminal proceeding; or 3) has been the subject, within the past five years,
of any order, judgment, decree or finding (not subsequently reversed,
suspended or vacated) of any court or regulatory authority involving violation
of securities or commodities laws, or barring, suspending, enjoining or
limiting any activity relating to securities, commodities or other business
practice.
(E) AUDIT COMMITTEE FINANCIAL EXPERT. The issuer does not have an
audit committee financial expert serving on its audit committee, due to lack
of funds. The Company is not presently engaged in any significant business
activities and has no operations or assets.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. Section 16(a) is
inapplicable.
CODE OF ETHICS. The issuer has adopted a code of ethics that applies to
the issuer's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. For purposes of this Item, the term code of ethics means written
standards that are reasonably designed to deter wrongdoing and to promote:
Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional
relationships; Full, fair, accurate, timely, and understandable disclosure in
reports and documents that the issuer files with, or submits to, the
Commission and in other public communications made by the issuer; Compliance
with applicable governmental laws, rules and regulations; The prompt internal
reporting of violations of the code to the board of directors or another
appropriate person or persons; and Accountability for adherence to the code.
The issuer hereby undertakes to provide to any person without charge, upon
request, a copy of such code of ethics. Such request may be made in writing to
the board of directors at the address of the issuer.
ITEM 10. EXECUTIVE COMPENSATION.
The sole officer/director is entitled to reimbursement of any out of
pocket expenses reasonably and actually incurred on behalf of the Company.
Presently, the officer only devotes a portion of her time to the affairs of
the Company. She is not employed full time and does not receive a regular
salary, wage for her time, and will not unless and until the Company's
business operations develop to the point where a full time or other extensive
time commitment is required. The Company presently has no formal employment
agreements or other arrangements or understandings with the officer regarding
the commitment of time or the payment of salaries or other compensation.
However, the officer is prepared to devote such time as may be necessary to
the development of the Company's business. The amounts of compensation and
other terms of any full time employment arrangements with Ms. White would be
determined if and when such arrangements become necessary.
COMPENSATION OF DIRECTORS None
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has not entered into any contracts or arrangements with any
named executive officer which would provide such individual with a form of
compensation resulting from such individual's resignation, retirement or any
other termination of such executive officer's employment with the Company or
its subsidiary, or from a change-in-control of the Company or a change in the
named executive officer's responsibilities following a change-in-control.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock with respect to each
director of the Company, each person known to the Company to be the beneficial
owner of more than five percent (5%) of said securities, and all directors and
executive officers of the Company as a group:
Title of Amount and Nature of Percent
Name and Address Class Beneficial Ownership of Class
Brenda White Common 10,000 shares 0.8%
311 S. State, #460
Salt Lake City, UT 84111
Lynn Dixon Common 577,392 shares 43.9%
311 S. State, #460
Salt Lake City, UT 84111
Thomas G. Kimble Common 500,000 shares 38%
311 S. State, #460
Salt Lake City, UT 84111
All officers and directors Common 10,000 shares 0.8%
as a group (1 person)
The foregoing amounts include all shares these persons are deemed to
beneficially own regardless of the form of ownership. All shares are owned
beneficially and of record except 275,000 shares owned beneficially by Lynn
Dixon in the name of Elvena, Inc., a corporation solely owned by him. On April
12, 2005, Lynn Dixon sold 500,000 of the shares registered in his name to
Thomas G. Kimble and 10,000 shares to Van Butler.
CHANGES IN CONTROL
Presently the Company's principal activity has been to investigate
potential acquisitions as referred to in item 1 of this Form 10-KSB. However,
the Company has not located any suitable potential business acquisition and
has no plans, commitments or arrangements with respect to any potential
business venture. There is no assurance the Company could become involved with
any business venture, especially any business venture requiring significant
capital.
There is no written agreement with respect to any potential business
acquisition. If any suitable potential business acquisition is located and
completed, it will in all likelihood involve a change in management and
shareholder control of the company. In the event of completion of an
acquisition, it is likely that shareholders of the Company, listed above, will
sell a substantial portion of their shares of the Company's stock at or about
the time of closing the acquisition at prices which may be less than prices
quoted in the OTC market place, if any. There is no written agreement with
respect to any such sales.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has entered into certain transactions with officers,
directors or affiliates of the Company which include the following:
In connection with the organization of the Company, its founding
shareholders paid an aggregate of $8,000 cash to purchase 800,000 shares of
Common Stock of the Company. Upon incorporation, $5,000 was initially
contributed in exchange for 500,000 shares of Common Stock. Subsequently in
March of 1996, an additional $3,000 was contributed in exchange for 300,000
shares of Common Stock.
On February 27, 2002, additional common stock was issued to Lynn Dixon;
100,000 shares in exchange for $10,000 cash, and 130,142 shares in
cancellation of indebtedness totaling $13,014.17 of principal and accrued
interest. Also, 67,250 shares were issued to an entity controlled by Eslie
Barlow in cancellation of indebtedness totaling $6,179.64 of principal and
accrued interest. This increased the total issued and outstanding common stock
to 1,316,292 shares.
The Company presently has no office facilities but for the time being
will use as its business address the office address of Ms. Brenda White on a
rent free basis, until such time as the Company may require more extensive
facilities and the Company has the financial ability to rent commercial office
space. There is presently no formal written agreement for the use of such
facilities, and no assurance that such facilities will be available to the
Company on such a basis for any specific length of time.
Except as disclosed in this item, in notes to the financial statements
or elsewhere in this report, the Company is not aware of any indebtedness or
other transaction in which the amount involved exceeds $60,000 between the
Company and any officer, director, nominee for director, or 5% or greater
beneficial owner of the Company or an immediate family member of such person;
nor is the Company aware of any relationship in which a director or nominee
for director of the Company was also an officer, director, nominee for
director, greater than 10% equity owner, partner, or member of any firm or
other entity which received from or paid the Company, for property or
services, amounts exceeding 5% of the gross annual revenues or total assets of
the Company or such other firm or entity.
ITEM 13. EXHIBITS.
EXHIBITS to this report are all documents previously filed which are
incorporated herein as exhibits to this report by reference to registration
statements and other reports previously filed by the Company pursuant to the
Securities Act of 1933 and the Securities Exchange Act of 1934.
Exhibits required by Item 601 of Regulation S-B.
31. Certifications required by Rules 13a-14(a) or 15d-14(a).
32. Section 1350 Certifications
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(1) AUDIT FEES
The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the audit of
the Company's annual financial statements and review of financial statements
included in the Company's Form 10-Q (17 CFR 249.308a) or 10-QSB (17 CFR
249.308b) or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those
fiscal years was $4,340 for the fiscal year ended December 31, 2004, and
$3,840 for the fiscal year ended December 31, 2005.
(2) AUDIT-RELATED FEES
The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are reasonably
related to the performance of the audit or review of the Company's financial
statements was $-0- for the fiscal year ended December 31, 2004 and $-0- for
the fiscal year ended December 31, 2005.
(3) TAX FEES
The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax compliance,
tax advice, and tax planning was $250 for the fiscal year ended December 31,
2004 and $250 for the fiscal year ended December 31, 2005.
(4) ALL OTHER FEES
The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than the
services reported above was $-0- for the fiscal year ended December 31, 2003
and $-0- for the fiscal year ended December 31, 2005.
(5) PRE-APPROVAL POLICIES AND PROCEDURES
Before the accountant is engaged by the issuer to render audit or non-
audit services, the engagement is approved by the company's board of
directors acting as the audit committee.
KAYENTA KREATIONS, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
DECEMBER 31, 2005
KAYENTA KREATIONS, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Report of Independent Registered Public
Accounting Firm 1
- Balance Sheet, December 31, 2005 2
- Statements of Operations, for the years
ended December 31, 2005 and 2004
and from inception on December 26,
1995 through December 31, 2005 3
- Statement of Stockholders' Equity (Deficit),
from inception on December 26, 1995
through December 31, 2005 4 - 6
- Statements of Cash Flows, for the years
ended December 31, 2005 and 2004
and from inception on December 26,
1995 through December 31, 2005 7
- Notes to Financial Statements 8 - 12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
KAYENTA KREATIONS, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Kayenta Kreations, Inc.
[a development stage company] as of December 31, 2005 and the related
statements of operations, stockholders' equity (deficit) and cash flows
for the years ended December 31, 2005 and 2004 and for the period from
inception on December 26, 1995 through December 31, 2005. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits 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 statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Kayenta Kreations,
Inc. [a development stage company] as of December 31, 2005 and the results
of its operations and its cash flows for the years ended December 31, 2005
and 2004 and for the period from inception on December 26, 1995 through
December 31, 2005, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company has incurred losses since its inception
and has no on-going operations. Further, the Company has current
liabilities in excess of current assets. These factors raise substantial
doubt about the ability of the Company to continue as a going concern.
Management's plans in regards to these matters are also described in Note
5. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
March 14, 2006
KAYENTA KREATIONS, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
December 31,
2005
___________
CURRENT ASSETS:
Cash $ -
___________
Total Current Assets -
___________
$ -
___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 1,293
Advances from related party -
Accrued interest - related party -
___________
Total Current Liabilities 1,293
___________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,316,292 shares issued and
outstanding 1,316
Capital in excess of par value 95,006
Deficit accumulated during the
development stage (97,615)
___________
Total Stockholders' Equity (Deficit) (1,293)
___________
$ -
___________
The accompanying notes are an integral part of these financial statements.
- 2 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
For the From Inception
Year Ended on December 26,
December 31, 1995 Through
______________________ December 31,
2005 2004 2005
__________ __________ ______________
REVENUE $ - $ - $ -
EXPENSES:
General and administrative 7,803 7,383 28,322
__________ __________ ______________
LOSS BEFORE OTHER INCOME (EXPENSE) (7,803) (7,383) (28,322)
OTHER INCOME (EXPENSE)
Interest expense (456) (423) (3,971)
__________ __________ ______________
LOSS BEFORE INCOME TAXES (8,259) (7,806) (32,293)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
__________ __________ ______________
LOSS FROM CONTINUING OPERATIONS (8,259) (7,806) (32,293)
__________ __________ ______________
DISCONTINUED OPERATIONS:
Loss from operations of discontinued
coloring art book business
(including gain on disposal of
$0, $0, and $0 respectively) - - (64,924)
Income tax benefit - - -
__________ __________ ______________
LOSS FROM DISCONTINUED OPERATIONS - - (64,924)
__________ __________ ______________
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE - - (398)
__________ __________ ______________
NET LOSS $ (8,259) $ (7,806) $ (97,615)
__________ __________ ______________
LOSS PER COMMON SHARE:
Continuing operations $ (.01) $ (.01)
Discontinued operations - -
Cumulative effect of change in
accounting principle - -
__________ __________
Net Loss Per Common Share $ (.01) $ (.01)
__________ __________
.
The accompanying notes are an integral part of these financial statements.
- 3 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM THE DATE OF INCEPTION ON DECEMBER 26, 1995
THROUGH DECEMBER 31, 2005
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
_______________ _________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
_______ _______ _________ _______ _________ ___________
BALANCE, December 26,
1995 - $ - - $ - $ - $ -
Issuance of 500,000
shares of common
stock for cash of
$5,000, or $.01 per
share, December 1995 - - 500,000 500 4,500 -
Net loss for the
period ended
December 31, 1995 - - - - - (2)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
1995 - - 500,000 500 4,500 (2)
Issuance of 300,000
shares of common
stock for cash of
$3,000, or $.01 per
share, March 1996 - - 300,000 300 2,700 -
Capital contribution - - - - 20 -
Net loss for the year
ended December 31,
1996 - - - - - (365)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
1996 - - 800,000 800 7,220 (367)
Issuance of 218,900
shares of common
stock for cash of
$54,725, or $.25
per share, net of
stock offering
costs of $14,533,
February 1997 - - 218,900 219 39,973 -
Net loss for the year
ended December 31,
1997 - - - - - (21,705)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
1997 - - 1,018,900 1,019 47,193 (22,072)
Net loss for the year
ended December 31,
1998 - - - - - (10,755)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
1998 - - 1,018,900 1,019 47,193 (32,827)
Net loss for the year
ended December 31,
1999 - - - - - (10,993)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
1999 - - 1,018,900 1,019 47,193 (43,820)
Net loss for the year
ended December 31,
2000 - - - - - (13,014)
[Continued]
- 4 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM THE DATE OF INCEPTION ON DECEMBER 26, 1995
THROUGH DECEMBER 31, 2005
[Continued]
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
_______________ _________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
2000 - - 1,018,900 1,019 47,193 (56,834)
Capital distribution
on assets exchanged
for debt - - - - (280) -
Net loss for the year
ended December 31,
2001 - - - - - (10,842)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
2001 - - 1,018,900 1,019 46,913 (67,676)
Issuance of 100,000
shares of common
stock for cash of
$10,000, or $.10 per
share, February 2002 - - 100,000 100 9,900 -
Issuance of 197,392
shares of common
stock to repay debt
and accrued interest
totaling $19,742,
or approximately
$.10 per share,
February 2002 - - 197,392 197 19,545 -
Net loss for the year
ended December 31,
2002 - - - - - (6,559)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
2002 - - 1,316,292 1,316 76,358 (74,235)
Net loss for the year
ended December 31,
2003 - - - - - (7,315)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
2003 - - 1,316,292 1,316 76,358 (81,550)
Forgiveness of Debt
to related party,
December 31, 2004 - - - - 9,762 -
Net loss for the year
ended December 31,
2004 - - - - - (7,806)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
2004 - - 1,316,292 1,316 86,120 (89,356)
_______ _______ _________ _______ _________ ___________
[Continued]
- 5 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM THE DATE OF INCEPTION ON DECEMBER 26, 1995
THROUGH DECEMBER 31, 2005
[Continued]
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
_______________ _________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
_______ _______ _________ _______ _________ ___________
Forgiveness of Debt
to related party,
December 31, 2005 - - - - 8,886 -
Net loss for the year
ended December 31,
2005 - - - - - (8,259)
_______ _______ _________ _______ _________ ___________
BALANCE, December 31,
2005 - $ - 1,316,292 $ 1,316 $ 95,006 $ (97,615)
_______ _______ _________ _______ _________ ___________
The accompanying notes are an integral part of these financial statements.
- 6 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
For the From Inception
Year Ended on December 26,
December 31, 1995 Through
______________________ December 31,
2005 2004 2005
__________ __________ ______________
Cash Flows from Operating Activities:
Net loss $ (8,259) $ (7,806) $ (97,615)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Amortization expense - - 602
Depreciation - - 9,610
Effect of change in accounting
principle - - 398
Loss on disposal of assets - - 4,485
Changes in assets and liabilities:
Increase (decrease) in accounts
payable (627) 1,035 1,293
Increase in accrued interest
- related party 456 423 1,617
__________ __________ ______________
Net Cash (Used) by
Operating Activities (8,430) (6,348) (79,610)
__________ __________ ______________
Cash Flows from Investing Activities:
Payment of organization costs - - (1,000)
Purchase of equipment - - (13,323)
__________ __________ ______________
Net Cash (Used) by
Investing Activities - - (14,323)
__________ __________ ______________
Cash Flows from Financing Activities:
Proceeds from shareholder loans 8,430 4,601 35,721
Proceeds from common stock issuance - - 72,725
Stock offering costs - - (14,533)
Capital contributions - - 20
__________ __________ ______________
Net Cash Provided by
Financing Activities 8,430 4,601 93,933
__________ __________ ______________
Net Increase (Decrease) in Cash - (1,747) -
Cash at Beginning of Period - 1,747 -
__________ __________ ______________
Cash at End of Period $ - $ - $ -
__________ __________ ______________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest $ - $ - $ 80
Income taxes $ - $ - $ -
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the year ended December 31, 2005:
In December 2005, related parties forgave debt totaling $8,886 which is
accounted for as a capital contribution.
For the year ended December 31, 2004:
In December 2004, related parties forgave debt totaling $9,762 which is
accounted for as a capital contribution.
The accompanying notes are an integral part of these financial statements.
- 7 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Kayenta Kreations, Inc. ("the Company") was organized under
the laws of the State of Nevada on December 26, 1995. The Company
previously produced and marketed a children's coloring art book depicting
various aspects of life in the Southwestern and Western United States.
The Company discontinued its coloring art book business effective December
30, 2001 [See Note 2]. The Company is currently seeking other business
opportunities. The Company has not generated significant revenues and is
considered a development stage company as defined in Statement of
Financial Accounting Standards No. 7. The Company has, at the present
time, not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and
other relevant factors.
Cash and Cash Equivalents - The Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be cash
equivalents.
Inventory - Inventory is carried at the lower of cost or market using the
first-in, first-out (FIFO) method.
Revenue Recognition - The Company recognizes revenue from sales upon
delivery of the product.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes." This statement requires an asset and liability approach
for accounting for income taxes [See Note 4].
Discontinued Operations - The Company has adopted Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets". SFAS No. 144 modifies previous disclosures and
requires additional disclosures for discontinued operations and the assets
associated with discontinued operations [See Note 2].
Loss Per Share - The Company computes loss per share in accordance with
Statement of Financial Accounting Standards No. 128 "Earnings Per Share,"
which requires the Company to present basic and dilutive loss per share
when the effect is dilutive [See Note 8].
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the
disclosures 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
estimated by management.
- 8 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 151, "Inventory Costs - an amendment of ARB No. 43,
Chapter 4". SFAS No. 152, "Accounting for Real Estate Time-Sharing
Transactions - an amendment of FASB Statements No. 66 and 67", SFAS No.
153, `Exchanges of Nonmonetary Assets - an amendment of APB Opinion No.
29", SFAS No. 123 (revised 2004), "Share-Based Payment", SFAS No. 154,
"Accounting Changes and Error Corrections - a replacement of APB Opinion
No. 20 and FASB Statement No. 3", and SFAS No. 155, "Accounting for
Certain Hybrid Financial Instruments - an amendment of FASB Statements No.
133 and 140", were recently issued. SFAS No. 151, 152, 153, 123 (revised
2004), 154 and 155 have no current applicability to the Company or their
effect on the financial statements would not have been significant.
Reclassification - The financial statements for periods prior to December
31, 2005 have been reclassified to conform to the headings and
classifications used in the December 31, 2005 financial statements.
NOTE 2 - DISCONTINUED OPERATIONS
On December 30, 2001, the Company discontinued all its existing coloring
art book business and sold its remaining assets to repay debt [See Note
6]. The Company has accounted for this disposal in accordance with
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". At December 31, 2005, the
Company had no assets or liabilities associated with its discontinued
business operations.
The following is a summary of the results of operations of the Company's
discontinued business operations:
From Inception
For the Year Ended on December 26,
December 31, 1995, Through
______________________ December 31,
2005 2004 2005
__________ __________ ______________
Revenue $ - $ - $ 2,814
Cost of goods sold - - (1,518)
General and administrative - - (64,410)
Other income (expense) - - (1,810)
__________ __________ ______________
Net loss $ - $ - $ (64,924)
__________ __________ ______________
NOTE 3 - CAPITAL STOCK
Preferred Stock - The Company has authorized 5,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at December 31, 2005.
- 9 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK [Continued]
Common Stock - In December 1995, in connection with its organization, the
Company issued 500,000 shares of its previously authorized but unissued
common stock. Total proceeds from the sale of stock amounted to $5,000
(or $.01 per share).
In March 1996, the Company issued 300,000 shares of its previously
authorized but unissued common stock. Total proceeds from the sale of
stock amounted to $3,000 (or $.01 per share).
In February 1997, the Company issued 218,900 shares of its previously
authorized, but unissued common stock. Total proceeds from the sale of
stock amounted to $54,725 (or $.25 per share). Stock offering costs of
$14,533 were netted against the proceeds as a reduction to capital in
excess of par value.
In February 2002, the Company issued 197,392 shares of its previously
authorized but unissued common stock to repay loans and accrued interest
totaling $19,742 owed to shareholders of the Company (or approximately
$.10 per share).
In February 2002, the Company issued 100,000 shares of its previously
authorized but unissued common stock to a shareholder of the Company.
Total proceeds from the sale of stock amounted to $10,000 (or $.10 per
share).
Capital Contribution / Distribution - In 1996, an officer/shareholder of
the Company contributed $20 to the Company. In 2001, the Company repaid a
loan and accrued interest totaling $1,219 owed to an officer/shareholder
of the Company by transferring equipment with a net book value of $1,499.
The difference of $280 was recorded as a capital distribution [See Note
6].
In December 2004, an officer of the Company forgave debt and accrued
interest in the amount of $9,762. In accordance with AICPA Technical
Practice Aids, Practice Alert 00-1, "Accounting for Certain Equity
Transactions", Extinguishment of Related Party Debt, the forgiveness has
been charged to Capital in excess of par value.
In December 2005, an officer of the Company forgave debt and accrued
interest in the amount of $8,886. In accordance with AICPA Technical
Practice Aids, Practice Alert 00-1, "Accounting for Certain Equity
Transactions", the forgiveness has been charged to Capital in excess of
par value.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".
SFAS No. 109 requires the Company to provide a net deferred tax
asset/liability equal to the expected future tax benefit/expense of
temporary reporting differences between book and tax accounting methods
and any available operating loss or tax credit carryforwards. The Company
has available at December 31, 2005, an operating loss carryforward of
approximately $94,900, which may be applied against future taxable income
and which expires in various years through 2025.
The amount of and ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part, upon the
tax laws in effect,
- 10 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE - INCOME TAXES [Continued]
the future earnings of the Company, and other future events, the effects
of which cannot be determined. Because of the uncertainty surrounding the
realization of the loss carryforwards, the Company has established a
valuation allowance equal to the tax effect of the loss carryforwards and,
therefore, no deferred tax asset has been recognized for the loss
carryforwards. The net deferred tax asset is approximately $32,300 and
$29,400 as of December 31, 2005 and December 31, 2004, respectively, with
an offsetting valuation allowance of the same amount. The change in the
valuation allowance for the year ended December 31, 2005 is approximately
$2,900.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of
America, which contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and has no on-
going operations. Further, the Company has current liabilities in excess
of current assets. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds not
provided by operations through loans or through additional sales of its
common stock. There is no assurance that the Company will be successful
in raising this additional capital or in achieving profitable operations.
The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any compensation to its
officers and directors, as the services provided by them to date have only
been nominal.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use her
office as a mailing address, as needed, at no expense to the Company.
Shareholder Loans - During the years ended December 31, 2005 and 2004 an
officer/shareholder of the Company loaned a total of $8,430 and $8,601,
respectively, to the Company. The advances are due on demand and bear
interest at 10% per annum. Accrued interest for the years ended December
31, 2005 and 2004 were $456 and $1,161, respectively. In December 2005
and 2004 the shareholder forgave the loans and related interest which was
accounted for as a capital contribution in the amount of $8,886 and
$9,762, respectively [See Note 3].
Stock Issuances - In February 2002, the Company issued 197,392 shares of
common stock to repay loans and accrued interest totaling $19,742 owed to
shareholders of the Company [See Note 3].
In February 2002, the Company issued 100,000 shares of common stock to a
shareholder of the Company for $10,000 [See Note 3].
Capital Distribution - In December 2001, the Company discontinued its
existing business operations and sold its remaining assets, having a net
book value of $1,499,
- 11 -
KAYENTA KREATIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - RELATED PARTY TRANSACTIONS [Continued]
to an officer and stockholder in exchange for cancellation of a loan and
accrued interest owed to the officer and stockholder in the total amount
of $1,219. The assets were assigned, sold and transferred to the officer
in satisfaction of the debt. The difference
between the net book value of the assets and the amount of the debt was
$280 and has been recorded as a capital distribution in the financial
statements [See Note 3].
NOTE 7 - CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
The Company was previously amortizing its organization costs, which
reflect amounts expended to organize the Company, but during 1999, in
accordance with Statement of Position 98-5, the Company expensed the
remaining $398 in organization costs which has been accounted for as a
change in accounting principle.
NOTE 8 - LOSS PER SHARE
The following data show the amounts used in computing loss per share for
the periods presented:
For the
Year Ended
December 31,
__________________________
2005 2004
____________ ____________
Loss from continuing operations (numerator) $ (8,259) $ (7,806)
Loss from discontinued operations (numerator) - -
Cumulative effect of change in accounting
principle (numerator) - -
____________ ____________
Loss available to common shareholders
(numerator) $ (8,259) $ (7,806)
____________ ____________
Weighted average number of common
shares outstanding during the period
used in loss per share (denominator) 1,316,292 1,316,292
____________ ____________
Dilutive loss per share was not presented, as the Company had no common
equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
- 12 -
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Kayenta Kreations, Inc.
By: /s/ Brenda White Date: March 20, 2006
Brenda White, President and Secretary/Treasurer
Chief Executive Officer and
Chief Financial Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and the
dates indicated.
By: /s/ Brenda White Date: March 20, 2006
Brenda White, President and Secretary/Treasurer
Chief Executive Officer and
Chief Financial Officer
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Exchange Act by Non Reporting Issuers
No annual report or proxy statement has been sent to security holders.