U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SECOND AMENDED
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________ to _______________.
COMMISSION FILE NUMBER: 000-49688
SKTF ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 33-0961488
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1059 E. SKYLER DRIVE
DRAPER, UTAH 84020
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (801) 361-7644
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No.
-----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes _____ No _____.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. As of August 1, 2002, there
were 6,013,000 shares of common stock issued and outstanding.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(check one):
Yes ______ No X
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SKTF ENTERPRISES, INC.
TABLE OF CONTENTS
-----------------
PART I
Item 1 Financial Statements
Item 2 Management's Discussion and Analysis or Plan of Operations
PART II
Item 1 Legal Proceedings
Item 2 Changes in Securities and Use of Proceeds
Item 3 Defaults Upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
2
PART I
This Quarterly Report includes forward-looking statements within the meaning of
the Securities Exchange Act of 1934 (the "Exchange Act"). These statements are
based on management's beliefs and assumptions, and on information currently
available to management. Forward-looking statements include the information
concerning possible or assumed future results of operations of the Company set
forth under the heading "Management's Discussion and Analysis of Financial
Condition or Plan of Operation." Forward-looking statements also include
statements in which words such as "expect," "anticipate," "intend," "plan,"
"believe," "estimate," "consider" or similar expressions are used.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. The Company's future results
and shareholder values may differ materially from those expressed in these
forward-looking statements. Readers are cautioned not to put undue reliance on
any forward-looking statements.
ITEM 1 FINANCIAL STATEMENTS
3
SKTF ENTERPRISES, INC.
(A FLORIDA DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
06/30/02
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -
----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -
==========
LIABILITIES AND EQUITY
Accounts payable and accrued liabilities . . . . . . . . . . . . . $ 9,861
Commitments and contingencies (See Note 4) . . . . . . . . . . . . -
Shareholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized;. -
No shares issued or outstanding at June 30, 2002
Common stock, $0.001 par value; 100,000,000 shares authorized; . 6,013
6,013,000 shares issued and outstanding at June 30, 2002
Additional paid in capital . . . . . . . . . . . . . . . . . . . 14,095
Deficit accumulated during development . . . . . . . . . . . . . (29,969)
----------
Total shareholders' equity . . . . . . . . . . . . . . . . . . (9,861)
----------
Total Liabilities and Shareholders' Equity . . . . . . . . . . . . $ -
==========
The accompanying notes are an integral part of these statements.
4
SKTF ENTERPRISES, INC.
(A FLORIDA DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
INCEPTION INCEPTION
THREE MONTHS THREE MONTHS SIX MONTHS 03/27/01 03/27/01
ENDED ENDED ENDED THROUGH THROUGH
06/30/02 06/30/01 6/30/02 06/30/01 06/30/02
------------ ------------ ---------- ---------- -----------
Revenue . . . . . . . . . . . . . . . . $ - $ - $ - $ - $ -
Costs and expenses - Organization costs $ 2,031 $ 308 $ 9,225 $ 308 29,969
----------- ----------- ----------- ----------- -----------
Net Loss. . . . . . . . . . . . . . . . $ (2,031) $ (308) $ (9,225) $ (308) $ (29,969)
=========== =========== =========== =========== ===========
Net loss per share available to common
stockholders
Basic and Diluted. . . . . . . . . . . $ (0.00) $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted average number of common
shares outstanding . . . . . . . . . 6,013,000 4,681,319 6,013,000 4,484,211 5,709,207
The accompanying notes are an integral part of these statements.
5
SKTF ENTERPRISES, INC.
(A FLORIDA DEVELOPMENT STAGE CORPORATION)
STATEMENT OF STOCKHOLDERS' EQUITY
DEFICIT
ADDITIONAL ACCUMULATED
COMMON STOCK PAID-IN DURING
SHARES PAR VALUE CAPITAL DEVELOPMENT TOTAL
------------------------- ---------- ------------ -----
Founder stock, $0.0001 per share,
issued April 20, 2001. . . . . 6,000,000 $ 6,000 $ (5,400) $ - $ 600
Common stock, $0.10 per share,
issued August 8, 2001. . . . . 12,000 12 1,188 1,200
Common stock, $0.10 per share,
issued August 24, 2001 . . . . 1,000 1 99 100
Contributed capital-services . . 14,199 14,199
Net loss . . . . . . . . . . . . (20,744) (20,744)
--------- ------------- --------- ----------- ---------
Balance, December 31, 2001 . . . 6,013,000 $ 6,013 $ 10,086 $ (20,744) $ (4,645)
========= ============= ========= =========== =========
Contributed capital-services . . 2,569 2,569
Net loss . . . . . . . . . . . . (7,194) (7,194)
--------- ------------- --------- ----------- ---------
Balance, March 31, 2002. . . . . 6,013,000 $ 6,013 $ 12,655 $ (27,938) $(9,270)
Contributed capital-services. . . 1,440 1,440
Net loss. . . . . . . . . . . . . (2,031) (2,031)
--------- ------------- --------- ----------- ---------
Balance, June 30, 2002. . . . . . 6,013,000 $ 6,013 $ 14,095 $ (29,969) (9,861)
========= ============= ========= =========== =========
The accompanying notes are an integral part of these statements.
6
SKTF ENTERPRISES, INC.
(A FLORIDA DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
INCEPTION INCEPTION
SIX 03/27/01 03/27/01
MONTHS THROUGH THROUGH
06/30/02 06/30/01 06/30/02
Cash flows from operating activities -
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . $ (9,225) $ (308) $ (29,969)
Adjustments to reconcile net loss to cash
used in operating activities -. . . . . . . . . . . . . . . - - -
Contributed capital for services rendered at no charge. . 4,009 - 18,208
Changes in assets and liabilities -
Increase in payables. . . . . . . . . . . . . . . . . . . 5,216 25 9,861
----------- ----------- ----------
Cash used in operating activities . . . . . . . . . . . . . . . - (283) (1,900)
Cash flows from investing activities -. . . . . . . . . . . . . - - -
----------- ----------- ----------
Cash provided by investing activities . . . . . . . . . . . . . - - -
Cash flows from financing activities -
Proceeds from issuance of common stock. . . . . . . . . . . . - 600 1,900
----------- ----------- ----------
Cash provided by financing activities . . . . . . . . . . . . . - 600 1,900
Net increase in cash. . . . . . . . . . . . . . . . . . . . . - 317 -
Cash, beginning of the period . . . . . . . . . . . . . . . . - - -
----------- ----------- ----------
Cash, end of the period . . . . . . . . . . . . . . . . . . . $ - $ 317 $ -
=========== =========== ==========
Supplemental information -
No amounts were paid for interest or taxes during the period.
The accompanying notes are an integral part of these statements.
7
SKTF ENTERPRISES, INC.
(A FLORIDA DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES
-------------------------------------------------
NATURE OF OPERATIONS. The Company incorporated in Florida on March 27, 2001.
The fiscal year end of the Company is December 31. Planned principal operations
of the Company have not yet commenced; activities to date have been limited to
forming the Company, developing its business plan, and obtaining initial
capitalization. Initially, the Company will focus its efforts to develop,
market and distribute branded and licensed headwear targeting niche markets.
The Company plans to focus on high-end events such as, the World Series, the
Super Bowl, the Indianapolis 500, the Republican and Democratic National
Conventions, and others.
PRINCIPLES OF ACCOUNTING. The accompanying financial statements have been
prepared in conformity with generally accepted accounting principles.
ACCOUNTING ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates that affect the reported amounts of assets and liabilities and
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 may differ from those estimates.
SHARES ISSUED IN EXCHANGE FOR SERVICES. The fair value of shares issued in
exchange for services rendered to the Company is determined by the Company's
officers and directors, as there is currently no market for the Company's stock.
As of June 30, 2002, no shares have been issued for services.
CASH AND CASH EQUIVALENTS. The Company includes cash on deposit and short-term
investments with original maturities less than ninety days as cash and cash
equivalents in the accompanying financial statements.
ORGANIZATION COSTS. Organization costs, primarily professional fees, of
approximately $29,969 have been charged against operating income.
RESEARCH AND DEVELOPMENT. Research and development costs are expensed as
incurred as required by Statement of Financial Accounting Standards No. 2,
"Accounting for Research and Development Costs." As of June 30, 2002, no costs
had been incurred.
STOCK-BASED COMPENSATION. In accordance with the provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensa-
tion," (FAS 123), the Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," (APB 25) and related
interpretations in accounting for its employee stock option plans. Under APB 25,
if the exercise price of the Company's employee stock options equals or exceeds
the fair value of the underlying stock on the date of grant, no compensation is
recognized. As of June 30, 2002, no options had been issued for services.
INCOME TAXES. The Company has made no provision for income taxes because of
financial statement and tax losses since its inception. A valuation allowance
has been used to offset the recognition of any deferred tax assets due to the
uncertainty of future realization. The use of any tax loss carryforward
benefits may also be limited as a result of changes in Company ownership.
8
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES (CONTINUED)
--------------------------------------------------------------
FAIR VALUE OF FINANCIAL INSTRUMENTS. The Company considers all liquid interest-
earning investments with a maturity of three months or less at the date of
purchase to be cash equivalents. Short-term investments generally mature between
three months and six months from the purchase date. All cash and short-term
investments are classified as available for sale and are recorded at market
using the specific identification method; unrealized gains and losses are
reflected in other comprehensive income. Cost approximates market for all
classifications of cash and short-term investments; realized and unrealized
gains and losses were not material.
NET LOSS PER COMMON SHARE. Basic loss per common share (Basic EPS) excludes
dilution and is computed by dividing net loss available to common shareholders
(the numerator) by the weighted average number of common shares outstanding (the
denominator) during the period. Diluted loss per common share (Diluted EPS) is
similar to the computation of Basic EPS except that the denominator is increased
to include the number of additional common shares that would have been
outstanding if the dilutive potential common shares had been issued. In
addition, in computing the dilutive effect of convertible securities, the
numerator is adjusted to add back the after-tax amount of interest recognized in
the period associated with any convertible debt. The computation of Diluted EPS
does not assume exercise or conversion of securities that would have an
anti-dilutive effect on net loss per share. All potential common shares are
anti-dilutive; therefore, Basic EPS equals Diluted EPS.
2. STOCKHOLDERS' EQUITY
---------------------
FOUNDERS' STOCK. The Company issued 6,000,000 shares of common stock on April
20, 2001 for cash totaling $600.
STOCK-BASED COMPENSATION. The Company did not issue nor did it recognize
stock-based compensation from Inception, March 27, 2001, through June 30, 2002.
PRIVATE PLACEMENT MEMORANDUM. On June 1, 2001, the Company began offering
100,000 shares of common stock at $0.10 per share pursuant to a Private
Placement Memorandum. All proceeds from the offering are to be used for
pre-incorporation expenditures, consulting fees and working capital. Through
June 30, 2002, a total of 13,000 shares were sold for $1,300 cash.
STOCK OPTION PLAN. The Company's Board and shareholders approved a Stock Option
Plan, effective June 1, 2001. The plan limits the aggregate number of shares
available to 600,000. Each award under the plan will be evidenced by a Stock
Purchase Agreement; each agreement will establish the vesting requirements and
the maximum term of the options granted. As of June 30, 2002, no options had
been granted.
CONTRIBUTED CAPITAL. The Company's president elected to forego a salary during
the early developmental stages. Additionally, he does not charge the Company
for the use of his home office. The Company estimates the value of these
services, since inception, at $1,900 and has recorded contributed capital and
the related organizational expense in the accompanying financial statements.
The Company's corporate counsel has elected to provide professional services to
the Company free of charge; however, the Company must reimburse him for all out
of pocket costs. The value of contributed services, since inception, determined
based on hours incurred, were $16,309 and has been recorded as organizational
costs (and contributed capital) in the accompanying financial statements.
9
3. RELATED PARTY TRANSACTIONS
----------------------------
LEGAL SERVICES. The Company has engaged a shareholder as its corporate counsel.
All out of pocket costs are billed as incurred; billings to date total $1,485.
See "Contributed Capital" and "Stockholder Loans and Advances" for more
information about transactions with the Company's corporate counsel.
STOCKHOLDERS LOANS AND ADVANCES. From time to time, certain Company stock-
holders loan or advance monies to the Company. Loans bear interest at rates
established at the time of the loan; advances bear no interest. While these
loans and advances have no maturity dates, they are expected to be repaid as
early as practicable. At June 30, 2002, the Company's corporate counsel had
advanced $9,270 for organizational costs.
4. COMMITMENTS, CONTINGENCIES, RISKS AND UNCERTAINTIES
-------------------------------------------------------
GOING CONCERN CONTINGENCY. The Company has minimal capital resources presently
available to meet obligations that normally can be expected to be incurred by
similar companies, and with which to carry out its planned activities. These
factors raise doubt about the Company's ability to continue as a going concern.
Management is seeking additional equity financing to fund planned operations;
management believes actions currently being taken provide the opportunity for
the Company to continue as a going concern. However, there is no assurance that
the Company will be able to obtain such financing. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
10
ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company is currently engaged in a public offering of up to $1,000,000
pursuant to a Form SB-2 filed with the Securities and Exchange Commission. No
shares of our common stock have been sold under the offering. Until the
completion of the offering, management anticipates that SKTF will engage in very
little business activity, will not hire any employees, and will not enter into
any material contracts. As a result, our cash requirements will be minimal,
related only to the cost of maintaining the company in good standing. Our two
primary shareholders, Mr. Berg and Mr. Lebrecht, have agreed to advance funds to
us to fund these minimal cash requirements.
Upon the completion of the offering, management intends to seek to have a
market maker file an application to list our securities on the OTC Bulletin
Board.
Even if we are successful in raising the full $1,000,000 under the
offering, we do not know how long this cash will last. It is a best-efforts
offering with no minimum, therefore, we may raise less than $1,000,000. Cash
will be used to acquire hat and clothing licenses, to pay for the manufacturing
of products for sale, to market the products, and to hire sales people located
at upcoming events. We have not taken action to complete any of these steps,
and will not do so until after this offering is completed. We do not know what
action will be taken to achieve any of these steps, and we do not know how long
any of the steps will take.
Although we had hoped to offer products focused on the 2002 Winter
Olympics, we did not take any steps to obtain the necessary licenses or
manufacture the products to do so, and did not successfully market any products
at that event. Upon completion of the offering, we will develop a timetable of
steps to be taken in order offer products for future events.
It is not anticipated that current management will be paid a salary during
the next twelve months.
Management does not anticipate that we will engage in any material product
research and development because we will negotiate for the acquisition of
licenses to manufacture and sell products that are already in existence.
Management does not anticipate that we will purchase a plant or significant
equipment because we will enter into agreements with existing hat and clothing
manufacturers to manufacture the products.
Management anticipates that over the next twelve months we will hire up to
five full-time employees to oversee a temporary sales force at each location
where we will sell our products. The temporary sales people will either be paid
a commission based on sales, or will be paid an hourly wage plus a commission
based on sales, depending on applicable laws at that location. The temporary
sales people will not be offered benefits.
Our financial statements have been prepared assuming we will continue as a
going concern. Because we have not generated any revenues to date and have
minimal capital resources, our auditors included an explanatory paragraph in
their report raising substantial doubt about our ability to continue as a going
concern. We have not identified any critical accounting issues.
11
PART II
ITEM 1 LEGAL PROCEEDINGS
None.
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
There have been no events which are required to be reported under this
Item.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no events which are required to be reported under this
Item.
ITEM 5 OTHER INFORMATION
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act
of 2002
(b) Reports on Form 8-K
None.
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.
SKTF ENTERPRISES, INC.
/s/ Carl M. Berg
Dated: November 20, 2002 --------------------------------
Carl M. Berg
President, Director,
Chief Executive Officer,
Chief Financial Officer
12