UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended SEPTEMBER 30, 2002
------------------
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission file no. 0-49617
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ROYAL CASKET DISTRIBUTION CORP.
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
FLORIDA 65-1129409
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
SUITE 314, WASHINGTON MUTUAL BANK TOWER
2401 EAST ATLANTIC BOULEVARD
POMPANO BEACH, FLORIDA 33062
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(954) 782-5006
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(ISSUER'S TELEPHONE NUMBER)
Check whether the registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) as been subject to such filing requirements for past 90 days. Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of the issuer's common stock
as of latest practicable date (September 30, 2002): 20,000,000 shares
Transitional Small Business Disclosure Format (CHECK ONE):
Yes No X
----- -----
1
PART I
FINANCIAL INFORMATION
ROYAL CASKET DISTRIBUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
REVIEW OF FINANCIAL STATEMENTS
FOR THE QUARTER ENDED
SEPTEMBER 30, 2002
TABLE OF CONTENTS
PAGE
ACCOUNTANTS' REVIEW REPORT 1
FINANCIAL STATEMENTS:
BALANCE SHEET 2
STATEMENTS OF OPERATIONS 3
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY 4
STATEMENTS OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-7
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholder
Royal Casket Distribution Corporation
Pompano Beach, Florida
We have reviewed the accompanying balance sheet of Royal Casket
Distribution Corporation (a Florida corporation and a development stage company)
as of September 30, 2002 and the related statements of operations for the
quarter then ended, the quarter ended September 30, 2001, year-to-date through
September 30, 2002, the period from inception, July 27, 2001 through December
31, 2001 and the period from inception, July 27, 2001, through September 30,
2002. We have also reviewed the related statements of changes in stockholder's
equity and statements of cash flows for year-to-date through September 30, 2002,
the period from inception, July 27, 2001 through December 31, 2001 and the
period from inception, July 27, 2001, through September 30, 2002. All
information included in these financial statements is the responsibility of the
Company's management.
A review consists primarily of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
The financial statements for the year ended December 31, 2001 were audited by
us, and we expressed an unqualified opinion on them in our report dated May 20,
2002, but we have not performed any auditing procedures since that date.
Michaelson & Co., P.A.
West Palm Beach, FL
October 9, 2002
1
ROYAL CASKET DISTRIBUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
SEPT. 30, 2002 Dec. 31, 2001
(Unaudited) (Audited)
-------------- --------------
CURRENT ASSETS
Cash $ 8,168 $ 4,531
Prepaid Expenses -- 1,232
-------- --------
TOTAL ASSETS 8,168 5,763
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accrued Expenses 12,763 2,577
Shareholder Loans 6,146 --
-------- --------
TOTAL LIABILITIES 18,909 2,577
STOCKHOLDER'S EQUITY
Common stock; $.001 par value, 100,000,000 shares authorized, 20,000 20,000
20,000,000 shares issued and outstanding as of September 30,
2002 and December 31, 2001, respectively
Stock subscription receivable -- (9,500)
(Deficit) accumulated during the development stage (30,741) (7,314)
-------- --------
TOTAL STOCKHOLDER'S EQUITY (10,741) 3,186
-------- --------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 8,168 $ 5,763
======== ========
See Accountants' Review Report and Accompanying Notes
2
ROYAL CASKET DISTRIBUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 2002, THE QUARTER ENDED SEPTEMBER 30, 2001
YEAR-TO-DATE THROUGH SEPTEMBER 30, 2002,
THE PERIOD FROM JULY 27, 2001 (INCEPTION) THROUGH DECEMBER 31, 2001,
AND THE PERIOD FROM JULY 27, 2001 (INCEPTION) THROUGH SEPTEMBER 30, 2002
YEAR- JULY 27, 2001 JULY 27, 2001
QUARTER QUARTER TO-DATE (INCEPTION) (INCEPTION)
ENDED ENDED THROUGH THROUGH THROUGH
SEPT. 30, 2002 SEPT. 30, 2001 SEPT. 30, 2002 DEC. 31, 2001 SEPT. 30, 2002
(UNAUDITED) (UNAUDITED) (UNAUDITED) (AUDITED) (UNAUDITED)
-------------- -------------- -------------- ------------- --------------
REVENUES:
Income $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
GENERAL & ADMINISTRATIVE
EXPENSES:
Corporate Expense -- -- -- 312 312
Professional Fees 2,744 1,200 19,041 6,068 25,110
SEC Filing Services 328 -- 2,086 -- 2,085
Telephone Expense 30 60 120 100 220
Licenses, Permits and Fees 1,500 -- 1,659 -- 1,659
Rent Expense 300 286 886 477 1,363
Printing Expense -- 157 -- 157 157
Miscellaneous Expenses 70 120 300 200 500
------------ ------------ ------------ ------------ ------------
TOTAL EXPENSES 4,972 1,823 24,092 7,314 31,406
------------ ------------ ------------ ------------ ------------
OTHER INCOME & (EXPENSES):
Interest Income 665 -- 665 -- 665
------------ ------------ ------------ ------------ ------------
NET (LOSS) $ (4,307) $ (1,823) $ (23,427) $ (7,314) $ (30,741)
============ ============ ============ ============ ============
(LOSS) PER SHARE DATA:
BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
Weighted average shares
outstanding - basic 20,000,000 10,000,000 20,000,000 16,666,667
============ ============ ============ ============
See Accountants' Review Report and Accompanying Notes
3
ROYAL CASKET DISTRIBUTION CORPORATION
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE PERIOD FROM JULY 27, 2001 (INCEPTION) THROUGH SEPTEMBER 30, 2002
(DEFICIT)
ACCUMULATED
STOCK DURING THE
COMMON STOCK SUBSCRIPTION DEVELOPMENT
SHARES AMOUNT RECEIVABLE STAGE TOTAL
---------- --------- ------------- ------------ ----------
BALANCE AT JULY 27, 2001 -- $ -- $ -- $ -- $ --
Stock issued, 8/23/01 20,000,000 20,000 (9,500) -- 10,500
Net (loss) -- -- -- (7,314) (7,314)
---------- ---------- ---------- ---------- ----------
BALANCE AT DECEMBER 31, 2001 20,000,000 20,000 (9,500) (7,314) 3,186
---------- ---------- ---------- ---------- ----------
Stock subscription paid, 8/23/02 -- -- 9,500 -- 9,500
Net (loss) -- -- -- (23,427) (23,427)
---------- ---------- ---------- ---------- ----------
BALANCE AT SEPTEMBER 30, 2002 20,000,000 $ 20,000 $ -- $ (30,741) $ (10,741)
========== ========== ========== ========== ==========
See Accountants' Review Report and Accompanying Notes
4
ROYAL CASKET DISTRIBUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR YEAR-TO-DATE THROUGH SEPTEMBER 30, 2002,
THE PERIOD FROM JULY 27, 2001 (INCEPTION) THROUGH DECEMBER 31, 2001, AND
THE PERIOD FROM JULY 27, 2001 (INCEPTION) THROUGH SEPTEMBER 30, 2002
YEAR-TO- JULY 27, 2001 JULY 27, 2001
DATE (INCEPTION) (INCEPTION)
THROUGH THROUGH THROUGH
SEPT. 30, 200 DEC. 31, 2001 SEPT. 30, 2002
(UNAUDITED) (AUDITED) (UNAUDITED)
------------- ------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) $(23,427) $ (7,314) $(30,741)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities:
(Increase) decrease in Prepaid Expenses 1,232 (1,232) --
Increase in Accrued Expenses 10,186 2,577 12,763
Increase in Shareholder Loans 6,146 -- 6,146
-------- -------- --------
NET CASH (USED IN) OPERATING ACTIVITIES (5,863) (5,969) (11,832)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 9,500 10,500 20,000
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 9,500 10,500 20,000
-------- -------- --------
NET INCREASE IN CASH 3,637 4,531 8,168
-------- -------- --------
CASH AT BEGINNING OF PERIOD 4,531 -- --
-------- -------- --------
CASH AT END OF PERIOD $ 8,168 $ 4,531 $ 8,168
======== ======== ========
See Accountants' Review Report and Accompanying Notes
5
ROYAL CASKET DISTRIBUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE QUARTER ENDED SEPT. 30, 2002, YEAR-TO-DATE THROUGH SEPT. 30, 2002,
THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH DECEMBER 31, 2001 (AUDITED),
AND THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH SEPTEMBER 30, 2002
(See Accountants' Review Report)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION:
Royal Casket Distribution Corporation ("the Company") is a
development stage enterprise incorporated under the laws of the State
of Florida in July 2001. The Company's offices are in Pompano Beach,
Florida, its only location, and its year-end is December 31.
Although the Company does not presently conduct business operations,
its plans include purchasing caskets from manufacturers under
non-exclusive agreements and distributing them to the public in a
retail setting.
METHOD OF ACCOUNTING:
The Company reports the results of its operations using the accrual
method of accounting for both financial statement and income tax
purposes. Under this method, income is recognized when earned and
expenses are deducted when incurred. The accounting policies of the
Company are in accordance with generally accepted accounting
principles and conform to the standards applicable to development
stage companies.
INCOME TAXES:
The Company has no taxable income to date; therefore, no provision
for federal or state taxes has been made.
COMPUTATION OF NET LOSS PER SHARE:
In February 1997, the Financial Accounting Standards Board issued
SFAS No. 128, Earnings Per Share. The Company has reflected the
provisions of SFAS No. 128 in the accompanying financial statements
for the period presented. SFAS 128 replaces the presentation of
primary Earnings Per Share ("EPS") with a presentation of basic EPS,
which excludes dilution and is computed by dividing income or loss
available to common shareholders by the weighted average number of
common shares outstanding for the period. The Statement also requires
the dual presentation of basic and diluted EPS on the face of the
statement of operations for all entities with complex capital
structures. During the periods presented, the Company did not have a
complex capital structure.
6
ROYAL CASKET DISTRIBUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE QUARTER ENDED SEPT. 30, 2002, YEAR-TO-DATE THROUGH SEPT. 30, 2002,
THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH DECEMBER 31, 2001 (AUDITED),
AND THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH SEPTEMBER 30, 2002
(See Accountants' Review Report)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
INTERIM FINANCIAL STATEMENTS:
It is management's representation that all adjustments that are
necessary for the interim financial statements not to be misleading
have been included in the accompanying statements.
2. DEVELOPMENT STAGE OPERATIONS:
The Company was formed on July 27, 2001. There have not been any
operations since inception and the Company is in the process of
raising capital and financing for its future operations. The Company
has one shareholder.
3. RELATED PARTY TRANSACTIONS:
In the third quarter of 2002, the Company incurred $1,260 in facility
and service costs provided by the sole shareholder, whose time and
offices are being utilized for the Company's operations. Year-to-date
through September 30, 2002, the Company incurred $10,186 in these
costs. During the period from July 27, 2001 (inception) through
September 30, 2002, the Company incurred $12,763 in these expenses.
The costs included $900, $900 and $8,100, respectively, in
professional services provided by the sole shareholder during the
quarters ended September 30, 2002, June 30, 2002 and March 31, 2002.
During the period from July 27, 2001 (inception) through September
30, 2002, professional services provided by the sole shareholder
totaled $10,800. The Company owed $12,763 and $2,577 to the sole
shareholder for these facility and service costs as of September 30,
2002 and December 31, 2001, respectively.
Also in the third quarter of 2002, the sole shareholder personally
paid for Company expenses amounting to $1,500. As of September 30,
2002, the Company owed the sole shareholder $6,146 in addition to the
amounts owed for facility and service costs provided. Also in the
third quarter of 2002, the sole shareholder paid the Company $9,500
owed on 20,000,000 shares of common stock purchased in August 2001.
Additionally, the sole shareholder paid $665 in interest on this
loan.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Much of the discussion in this Item 2 is "forward looking" as that
term is used in Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. Actual operations and results may materially differ
from present plans and projections due to changes in economic conditions, new
business opportunities, changed business conditions, and other developments.
Other factors that could cause results to differ materially are described in the
prospectus filed with the company's registrations statement with the Securities
and Exchange Commission.
Royal Casket (sometimes referred to as "we" or "us") is a new company
organized to engage in the retail sale of caskets. We are a development stage
company and do not have any business as of the present. We were incorporated
under the laws of Florida in July 2001, and since incorporation, our activities
have been limited to market analysis, identification of suppliers, scouting
store locations, construction of a long-term business plan, and interviewing
potential management. In October 2001, we amended our Articles of Incorporation
to increase the number of authorized shares of stock to 100,000,000.
We intend to be a non-exclusive dealer for Casket Royale, a New
Hampshire company which manufactures caskets in New Hampshire. Casket Royale
presently offers over a dozen models, including adult, youth, and infant models
in wood, steel, heavy gage steel, and semi precious metals. Management intends
to maintain two or three of each model in stock for immediate sale; a larger
inventory is not necessary because of the availability of overnight shipping.
Casket Royale also provides training, sales tools, and marketing aids to its
dealers, as well as overnight shipping to Florida and to most other parts of the
continental United States. We are not aware that any other dealers carry Casket
Royale caskets in the Palm Beach area, but we do not have an exclusive
arrangement with Casket Royale, and it is free to sell through other dealers
should it so choose. By the same token, Casket Royale does not require that we
limit our sales to Casket Royale products, but, while we reserve the right to do
so in the future, we do not presently intend to sell caskets made by other
manufacturers, nor do we intend initially to sell any items other than caskets.
The registrant plans to focus on highly discounted caskets. At some point in the
future, we may also sell related items.
Our initial efforts will focus on selling caskets at retail in Southeastern
Florida. Our initial store will be in the Palm Beach area, after which, if and
when cash flow permits, we would seek to open stores in other locations in
Florida.
2
As of the date of this report, Royal Casket has no significant cash
resources, and we have not engaged in any business activities which provide cash
flow. We are presently looking for suitable retail space in Southeastern
Florida, in which to display our merchandise and make sales, but we do not yet
have a store and have not yet made any sales. We expect to have negotiated a
lease and commence operations by the end of the first quarter of 2003.
Our president, Don A. Paradiso, has agreed to advance the company's
start-up expenses, which are expected to amount to approximately $150,000. Such
expenses will be accounted for as contributions to capital, not loans, and will
not be repayable. Until such time as Royal Casket has leased a store, Mr.
Paradiso has also agreed to provide an office, office equipment, and management
without cost to the company. Commencing with the month after the company's
aggregate sales (gross revenues) amount to $250,000, Mr. Paradiso will commence
receiving a salary at the rate of $52,000 per year. No officer or director of
the company has received any cash remuneration to date.
It is anticipated that expenses for the first six months of actual
operations will include $22,000 for salaries, $16,000 for rent, $30,000 for
inventory, $2,000 for training, and $5,000 for advertising. When we have leased
a store, we intend to hire a store manager and sales clerk. As revenues permit,
we will employ additional employees for sales, bookkeeping, and clerical
functions. We will stock Casket Royale's entire product line, but the amount of
inventory we will carry will be limited in light of the fact that Casket Royale
can generally provide overnight delivery to Florida.
Except for the monies which Mr. Paradiso has agreed to advance, we do
not have any funds or capital resources, nor do we have any commitments for
loans or lines of credit. In the future, we will seek financing from a bank with
which to finance our inventory, and will seek such other financing as may be
available for working capital. There can be no assurance that such financing
will be available, or available on terms acceptable to management.
We believe that the funds which Mr. Paradiso has agreed to provide
will be sufficient to inaugurate our business plan, but there can be no
assurance that additional monies will not be required, nor can there be any
assurance that, if they are required, such finds will be available. Royal
Casket's financial capacity will be limited, which will limit the amount of
advertising it can obtain, the number of stores it can open, and the amount of
inventory it can maintain.
Inasmuch as initial financing is being provided by Mr. Paradiso, no
in depth consideration has been given to any particular source of financing, but
managaement does hope to effect a public equity offering sometime in the future
after operations commence.
FIRST HALF COSTS AND CHANGES IN FINANCIAL CONDITION
As of the date of this report, we have not engaged in any business
activities which provide cash flow, and have not recorded any revenues from
operations. Losses from inception (July 27, 2001) have amounted to $ 30,741.00,
including $ 4,307.00 in the three months ended September 30, 2002. Such losses
primarily reflect the costs of organizing the company and in preparing and
filing our registration statement with the Securities and Exchange Commission.
General and administrative expenses were $ 4,972.00 for the three months ended
September 30, 2002.
3
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted during the period covered by this report to
a vote of security holders, through the solicitation of proxies or otherwise.
ITEM 5. OTHER INFORMATION
On September 24, 2002 The U.S. Securities and Exchange Commission advised the
Registrant that the SEC had no further comments on the Form 10 which we filed.
On August 22, 2002 we amended Article IV of our By-Laws . The pertinent
restatement of the By-Laws is as follows:
"Certificates representing the shares of the Corporation shall be issued for
value, in the sole discretion of the Board of Directors, and shares may be
issued for cash, cash equivalents, or any other lawful
Compensation, or for debt, provided, however, that no share shall be issued for
a consideration which Is less than the par value of the shares."
The By-Laws of the Corporation were not restated as a result of the change.
The change allows the Board of Directors to issue shares in exchange for debt,
such as a promissory Note, if otherwise allowed by State Law.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
INDEX TO EXHIBITS
(3) Charter and By-Laws
3.1 Articles of Incorporation (July 27, 2001) *
3.1a Articles of Amendment (October 29, 2001) *
3.2 By-Laws (August 23, 2001) *
(3) Instruments Defining the Rights of Security Holders
4.1 Specimen Certificate of Common Stock *
(6) Material Contracts
10.1 Employment agreement between Registrant and Don A. Paradiso
(December 3, 2001) *
(12) Additional Exhibits
21.0 Statement as to Subsidiaries (May 23, 2002) 16
(15) Letter of acknowledgment
15.1 Accountant's acknowledgment of use of reviewed financials 15
* Filed with registrant's Form 10-SB January 7, 2002, and incorporated herein
by reference.
ITEM 2. DESCRIPTION OF EXHIBITS
Not applicable.
4
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
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.
ROYAL CASKET DISTRIBUTION CORP.
-------------------------------
(Registrant)
Date OCTOBER 29, 2002 By /S/ DON A. PARADISO
-------------- ------------------------------
Don A. Paradiso, President
Date OCTOBER 29, 2002 By /S/ DON A. PARADISO
-------------- ------------------------------
Don A. Paradiso, principal
financial officer
5