U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: June 30, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-4066
KAYENTA KREATIONS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 87-0554463
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
311 South State Street, Suite 460, Salt Lake City, Utah 84111
(Address of principal executive offices)
(801) 364-9262
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
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 number of $.001 par value common shares outstanding at June 30, 2006:
1,316,292
FORWARD-LOOKING STATEMENT NOTICE
When used in this report, the words "may," "will," "expect,"
"anticipate,""continue," "estimate," "project," "intend," and similar
expressions are intended to identify forward-looking statements regarding
events, conditions, and financial trends that may affect the Company's future
plans of operations, business strategy, operating results, and financial
position. Persons reviewing this report are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks
and uncertainties and that actual results may differ materially from those
included within the forward-looking statements as a result of various factors.
Such factors include general economic factors and conditions that may directly
or indirectly impact the Company's financial condition or results of
operations.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
KAYENTA KREATIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2006
KAYENTA KREATIONS, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Unaudited Condensed Balance Sheet,
June 30, 2006 2
- Unaudited Condensed Statements of Operations,
for the three and six months ended June 30,
2006 and 2005 and from inception on December 26,
1995 through June 30, 2006 3
- Unaudited Condensed Statements of Cash Flows,
for the six months ended June 30, 2006 and 2005
and from inception on December 26, 1995 through
June 30, 2006 4
- Notes to Unaudited Condensed Financial Statements 5 - 6
KAYENTA KREATIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
June 30,
2006
___________
CURRENT ASSETS:
Cash $ -
___________
Total Current Assets -
___________
$ -
___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 1,676
Accounts payable - related party 525
Advances from related party 4,303
Accrued interest - related party 108
___________
Total Current Liabilities 6,612
___________
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 (102,934)
___________
Total Stockholders' Equity (Deficit) (6,612)
___________
$ -
___________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-2-
KAYENTA KREATIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three For the Six
Months Ended Months Ended From Inception
June 30, June 30, on December 26,
_________________ ________________ 1995 Through
2006 2005 2006 2005 June 30, 2006
_______ ________ _______ ________ _____________
REVENUE $ - $ - $ - $ - $ -
EXPENSES:
General and
administrative 2,126 2,160 5,211 3,890 33,533
_______ ________ _______ ________ ________
LOSS BEFORE OTHER
INCOME (EXPENSE) (2,126) (2,160) (5,211) (3,890) (33,533)
OTHER INCOME (EXPENSE):
Interest expense (83) (96) (108) (96) (4,079)
_______ ________ _______ ________ _________
LOSS BEFORE INCOME
TAXES (2,209) (2,256) (5,319) (3,986) (37,612)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
_______ ________ _______ ________ _________
LOSS FROM CONTINUING
OPERATIONS (2,209) (2,256) (5,319) (3,986) (37,612)
_______ ________ _______ ________ _________
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) $(2,209) $(2,256) $(5,319) $(3,986) $(102,934)
_______ ________ _______ ________ _________
LOSS PER COMMON SHARE:
Continuing operations $ (.00) $ (.00) $ (.00) $ (.00)
Discontinued operations - - - -
Cumulative effect of
change in accounting
principle - - - -
_______ ________ _______ ________
Net Loss Per
Common Share $ (.00) $ (.00) $ (.00) $ (.00)
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-3-
KAYENTA KREATIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Six Months From Inception
Ended June 30,on December 26,
__________________ 1995 Through
2006 2005 June 30, 2006
_________ ________ ___________
Cash Flows from Operating Activities:
Net loss $ (5,319) $ (3,986) $ (102,934)
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 908 (1,135) 2,201
Increase in accrued interest
- related party 108 96 1,725
_________ ________ ___________
Net Cash (Used) by
Operating Activities (4,303) - (83,913)
_________ ________ ___________
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 advances from shareholder 4,303 5,025 40,024
Proceeds from common stock issuance - - 72,725
Stock offering costs - - (14,533)
Capital contributions - - 20
_________ ________ ___________
Net Cash Provided by
Financing Activities 4,303 5,025 98,236
_________ ________ ___________
Net Increase (Decrease) in Cash - - -
Cash at Beginning of Period - - -
_________ ________ ___________
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 six months ended June, 30 2006:
None
For the six months ended June, 30 2005:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-4-
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.
Condensed Financial Statements - The accompanying financial statements
have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results
of operations and cash flows at June 30, 2006 and 2005 and for the periods
then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. It is suggested that these condensed financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's December 31, 2005 audited financial statements.
The results of operations for the periods ended June 30, 2006 and 2005 are
not necessarily indicative of the operating results for the full year.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted 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.
-5-
KAYENTA KREATIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - RELATED PARTY TRANSACTIONS
Advance from Shareholder - As of June 30, 2006, a shareholder of the
Company has made advances totaling $4,303 to the Company. The advances
bear interest at 10% per annum and are due on demand. Accrued interest
expense at June 30, 2006 amounted to $108.
Legal Services - An entity owned by a shareholder of the Company provided
legal services for the Company. Legal fees to the entity for the six
months ended June 30, 2006 amounted to $1,600. At June 30, 2006 the
Company owed a total of $525 to the shareholder.
NOTE 4 - LOSS PER SHARE
The following data show the amounts used in computing loss per share for
the periods presented:
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
_____________________ ____________________
2006 2005 2006 2005
________ __________ _________ _________
Loss from
continuing
operations
(numerator) $ (2,209) $ (2,256) $ (5,319) $ (3,986)
Loss from
discontinued
operations
(numerator) - - - -
Cumulative
effect of
change in
Accounting
principle
(numerator) - - - -
_________ __________ _________ _________
Weighted average
number of common
shares outstanding
used in loss
per share during
the period
(denominator) 1,316,292 1,316,292 ,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.
NOTE 5 - SUBSEQUENT EVENTS
The Company has entered into a non-binding letter of intent to acquire a
private company. The potential acquisition is subject to certain
conditions precedent and no assurance can be given that the acquisition
will be completed. If completed, it will involve a change of management
and shareholder control along with other matters.
-6-
ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS
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.
On June 13, 2006, the Company issued a press release announcing it has
entered into a non-binding letter of intent to acquire a private company. The
potential acquisition is subject to certain conditions precedent and no
assurance can be given that the acquisition will be completed. If completed,
it will involve a change of management and shareholder control along with
other matters.
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 3. 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 quarter (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 II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings. No
such action is contemplated by the Company nor, to the best of its knowledge,
has any action been threatened against the Company.
ITEM 2. SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS
(a) During the period covered by this report, there were no equity
securities of the issuer, sold by the issuer, that were not
registered under the Securities Act.
(b) During the period covered by this report, there were no securities
that the issuer sold by registering the securities under the
Securities Act.
(c) During the period covered by this report, there was no repurchase
made of equity securities registered pursuant to section 12 of the
Exchange Act. None of the issuer's securities is registered
pursuant to section 12 of the Exchange Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has not been any material default in the payment of principal,
interest, a sinking or purchase fund installment, or any other material
default not cured within 30 days, with respect to any indebtedness of the
issuer exceeding 5 percent of the total assets of the issuer.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of security holders during the
period covered by this report, through the solicitation of proxies or
otherwise.
ITEM 5. OTHER INFORMATION
On June 13, 2006, the Company issued a press release announcing it has
entered into a non-binding letter of intent to acquire a private company. The
potential acquisition is subject to certain conditions precedent and no
assurance can be given that the acquisition will be completed. If completed,
it will involve a change of management and shareholder control along with
other matters.
ITEM 6. EXHIBITS.
Exhibit Index - 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
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Kayenta Kreations, Inc.
Date: August 10, 2006 by: /s/ Brenda White
Brenda White, Chairman