U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File No. 0-29765
Kilimanjaro Group.com Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 76-0609438
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1601 Fifth Avenue, Suite 2100, Seattle, Washington 98101-1686
(Address of principal executive offices)
(206) 447-7000
(Issuer's telephone number, including area code)
Check whether the issuer (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) has been
subject to such filing requirements for the past 90 days.
YES NO X
--------- --------
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: As of April 30, 2000, 2,500,000 shares
of common stock, $.001 par value were outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
INDEX
PART I -- Financial Information Page
Item 1. Financial Statements.............................................. 2
Independent Accountants Report............................................. 3
Balance Sheets as of April 30, 2000 and January 31, 2000................... 4
Statements of Operations for the period from May 27, 1999 (inception) to
April 30, 2000, for the three months ended April 30, 2000, and for the
period from May 27, 1999 (inception) to January 31, 2000................... 5
Statements of Cash Flows for the period from May 27, 1999 (inception) to
April 30, 2000, for the three months ended April 30, 2000, and for the
period from May 27, 1999 (inception) to January 31, 2000................... 6
Statement of Stockholders' Equity from May 27, 1999 (inception) to April
30, 2000................................................................... 7
Notes to the Financial Statements.......................................... 8
Item 2. Management's Discussion and Analysis or Plan of Operation......... 10
PART II -- Other Information............................................... 13
Signatures................................................................. 13
1
PART I - Financial Information
Item 1. Consolidated Financial statements
Kilimanjaro Group.com Inc.
(A Development Stage Company)
Index
Independent Accountants' Report.......................................... 3
Balance Sheet............................................................ 4
Statement of Operations.................................................. 5
Statement of Cash Flows.................................................. 6
Statement of Stockholders' Equity........................................ 7
Notes to the Financial Statements........................................ 8
(The accompanying notes are an integral
part of the financial statements)
2
Independent Accountants' Report
-------------------------------
To the Board of Directors and Stockholders of
Kilimanjaro Group.com Inc.
(A Development Stage Company)
Seattle, Washington
We have reviewed the accompanying balance sheet of Kilimanjaro Group.com Inc. (A
Development Stage Company) as of April 30, 2000 and the related statements of
operations, stockholders' equity and cash flows for the three month period ended
April 30, 2000. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted 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 such financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the accompanying balance sheet of Kilimanjaro Group.com Inc. (A
Development Stage Company) as of January 31, 2000, and the related statements of
operations, stockholders' equity, and cash flows for the period from May 27,
1999 (Date of Inception) to January 31, 2000 and in our report dated February
23, 2000, we expressed an unqualified opinion on those financial statements.
/s/ Elliott Tulk Pryce Anderson
CHARTERED ACCOUNTANTS
Vancouver, Canada
May 3, 2000
(The accompanying notes are an integral
part of the financial statements)
3
Kilimanjaro Group.com Inc.
(A Development Stage Company)
Balance Sheet
(expressed in U.S. dollars)
April 30, January 31,
2000 2000
$ $
(Unaudited)
Assets
License (Note 3) - -
------ ------
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 1,200 1,200
------ ------
Contingent Liability (Note 1)
Stockholders' Equity
Common Stock, 25,000,000 shares authorized with a
par value of $.001; 2,500,000 shares issued and
outstanding 2,655 2,655
Deficit Accumulated During the Development Stage (3,855) (3,855)
------ ------
(1,200) (1,200)
------ ------
- -
====== ======
(The accompanying notes are an integral
part of the financial statements)
4
Kilimanjaro Group.com Inc.
(A Development Stage Company)
Statement of Operations
(expressed in U.S. dollars)
Accumulated For the
from May 27, 1999 three months From May 27, 1999
(Date of Inception) ended (Date of Inception)
to April 30, 2000 April 30, 2000 to January 31, 2000
$ $ $
(Unaudited) (Unaudited)
Revenues - - -
------ ------ ------
Expenses
Amortization 1,000 - 1,000
License written-off 1,000 - 1,000
Organization expenses 655 - 655
Transfer agent 1,200 - 1,200
------ ----- ------
3,855 - 3,855
------ ----- ------
Net Loss (3,855) - (3,855)
====== ===== ======
(The accompanying notes are an integral
part of the financial statements)
5
Kilimanjaro Group.com Inc.
(A Development Stage Company)
Statement of Cash Flows
(expressed in U.S. dollars)
Accumulated For the
from May 27, 1999 three months From May 27, 1999
(Date of Inception) ended (Date of Inception)
to April 30, 2000 April 30, 2000 to January 31, 2000
$ $ $
(Unaudited) (Unaudited)
Cash Flows to Operating Activities
Net loss (3,855) - (3,855)
Non-cash items 2,155 - 2,155
Accounts payable 1,200 - 1,200
------ ---- ------
Net Cash Used by Operating Activities (500) - (500)
------ ---- ------
Cash Flows from Financing Activities
Increase in shares issued 500 - 500
------ ---- ------
Net Cash Provided by Financing Activities 500 - 500
------ ---- ------
Change in cash - - -
Cash - beginning of period - - -
------ ---- ------
Cash - end of period - - -
====== ==== ======
Non-Cash Financing Activities
A total of 2,000,000 shares were issued at
a fair market value of $0.001 per share for
the acquisition of a License (Note 3) 2,000 - 2,000
Organization costs paid for by a director
for no consideration treated as additional
paid in capital 155 - 155
------ ---- ------
2,155 - 2,155
====== ==== ======
Supplemental Disclosures
Interest paid - - -
Income tax paid - - -
(The accompanying notes are an integral
part of the financial statements)
6
Kilimanjaro Group.com Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From May 27, 1999 (Date of Inception) to April 30, 2000
(expressed in U.S. dollars)
Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage
# $ $
Balance - May 27, 1999 (Date of Inception) - - -
Stock issued for $500 of organizational expenses 500,000 500 -
Additional paid in capital for organizational expenses
incurred by a director on behalf of the Company - 155 -
Stock issued for "The Biocatalyst License" at a fair
market value of $0.001 per share 2,000,000 2,000 -
Net loss for the period - - (3,855)
--------- ----- ------
Balance - January 31, 2000 2,500,000 2,655 (3,855)
Net loss for the period - - -
--------- ----- ------
Balance - April 30, 2000 (Unaudited) 2,500,000 2,655 (3,855)
========= ===== ======
(The accompanying notes are an integral
part of the financial statements)
7
Kilimanjaro Group.com Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
1. Development Stage Company
Kilimanjaro Group.com Inc. herein (the "Company") was incorporated in the
State of Nevada, U.S.A. on May 27, 1999. The Company acquired a license to
market and distribute a product. As discussed in Note 3, this license is in
jeopardy and the Company has retained the right to sue the vendor.
The Company's new business plan is as a "blank check" company. Under the
Securities Act of 1933, a blank check company is defined as a development
stage company that has no specific business plan or purpose or has
indicated that its business plan is to engage in a merger or acquisition
with an unidentified company or companies and is issuing "penny stock"
securities.
In a development stage company, management devotes most of its activities
in investigating business opportunities. Planned principal activities have
not yet begun. The ability of the Company to emerge from the development
stage with respect to any planned principal business activity is dependent
upon its successful efforts to raise additional equity financing and find
an appropriate merger candidate. There is no guarantee that Kilimanjaro
will be able to raise any equity financing or find an appropriate merger
candidate. There is substantial doubt regarding the Company's ability to
continue as a going concern.
2. Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is January 31.
(b) Licenses
Costs to acquire licenses are capitalized as incurred. These costs
will be amortized on a straight-line basis over their remaining
estimated useful lives.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.
(d) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the periods. Actual results could differ from
those estimates.
3. License
The Company's only asset is a license to distribute and produce an oxygen
enriched water product, called "Biocatalyst," for remediation of sewage and
waste water in septic tanks and waste water treatment facilities, and for
other similar uses, and the rights accruing from this license. The
Company's original business plan was to determine the feasibility of the
Biocatalyst sewage and waste remediation application, and, if Biocatalyst
proved to be feasible for this application, become a Biocatalyst producer.
The Company acquired the three-year license from Mortenson & Associates on
July 1, 1999 by issuing 2,000,000 shares at a fair market value of $.001 or
$2,000. The general partner of Mortenson & Associates is also a spouse of a
former director and officer of the Company. Mortenson & Associates acquired
its right to sublicense Biocatalyst to the Company from NW Technologies.
8
3. License (continued)
In December, 1999, David R. Mortenson, Mortenson & Associates' principal,
notified the Company that he was involved in a legal dispute with NW
Technologies, and would be unable to fulfill his obligations under the
license to the Company. As a result, the Company's ability to implement its
business plan was seriously undermined. On February 18, 2000, Mortenson &
Associates, the Company, and the Company's shareholders, James L.
Vandeberg, Kinne F. Hawes and Chapin E. Wilson, entered into a settlement
agreement. Under the terms of the settlement agreement, Mortenson &
Associates' affiliate, Vitamineralherb.com will grant to Vandeberg, Hawes
and Wilson a license to distribute vitamins and similar products in part
for his agreement not to pursue his individual claims against Mortenson &
Associates. The settlement agreement provides that Mortenson will prosecute
his claims against NW Technologies diligently, with a goal toward
recovering the Biocatalyst rights. Pursuant to the settlement agreement,
the Company has retained its right to prosecute its claims against
Mortenson & Associates for breach of contract. The Company has no plans to
pursue a claim at this time.
April 30, January 31,
2000 2000
$ $
(Unaudited)
License
Cost 2,000 2,000
Less amortization (1,000) (1,000)
Less amount written-off (1,000) (1,000)
------ ------
- -
====== ======
4. Related Party Transaction
The License referred to in Note 3 was sold to the Company by a partnership
whose general manager is the spouse of the former officer and director of
the Company for consideration of 2,000,000 shares for total fair market
consideration of $2,000. These shares were paid evenly to the ten partners.
9
Item 2. Management's Discussion and Analysis or Plan of Operation
This report contains forward-looking statements. The words, "anticipate",
"believe", expect", "plan", "intend", "estimate", "project", "could", "may",
"foresee", and similar expressions are intended to identify forward-looking
statements. The following discussion and analysis should be read in conjunction
with the Company's Financial Statements and Notes thereto and other financial
information included elsewhere in this report which contains, in addition to
historical information, forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from the
results discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include those discussed below, as well as those
discussed elsewhere in the Company's Form 10-SB filed with the Securities and
Exchange Commission.
Overview
The Company's business plan is to merge with or acquire a business entity
in exchange for the Company's securities. The Company has no particular
acquisition in mind and has not entered into any negotiations regarding such an
acquisition. Neither the Company's sole officer nor any affiliate has engaged in
any negotiations with any representative of any company regarding the
possibility of an acquisition or merger between the Company and such other
company.
Management anticipates seeking out a target company through solicitation.
Such solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates will likely pay referral fees to
consultants and others who refer target businesses for mergers into public
companies in which management and its affiliates have an interest. Payments
would be made if a business combination occurs, and may consist of cash or a
portion of the stock in the Company retained by management and its affiliates,
or both.
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity which desires to seek the
perceived advantages of a corporation which has a class of securities registered
under the Exchange Act. The Company will not restrict its search to any
specific business, industry, or geographical location and the Company may
participate in a business venture of virtually any kind or nature. Management
anticipates that it will be able to participate in only one potential business
venture because the Company has nominal assets and limited financial resources.
See "Item F/S, Financial Statements." This lack of diversification should be
considered a substantial risk to the shareholders of the Company because it will
not permit the Company to offset potential losses from one venture against gains
from another.
The Company will not restrict its search for any specific kind of business
entity, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
business life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, providing liquidity for shareholders and
other factors. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
difficult and complex.
The Company has, and will continue to have, no capital with which to
provide cash or other assets to the owners of business entities. However,
management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
public company without incurring the cost and time required to conduct an
initial public offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the sole officer and director of the Company, who is not a
professional business analyst. In analyzing prospective business opportunities,
management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; the nature of present and
expected competition; the quality and experience of management services which
may be available and the depth of that management; the potential for further
research, development, or exploration; specific risk factors not now foreseeable
but which then may be anticipated to impact the proposed activities of the
Company; the potential for growth or expansion; the potential for profit; the
perceived public recognition or acceptance of products, services, or trades;
name identification; and other relevant factors. This discussion of the proposed
criteria is not meant to be restrictive of the Company's virtually unlimited
discretion to search for and enter into potential business opportunities.
The Company may enter into a business combination with a business entity
that desires to establish a public trading market for its shares. A target
company may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on satisfactory terms.
10
Management of the Company, which in all likelihood will not be experienced
in matters relating to the business of a target company, will rely upon its own
efforts in accomplishing the business purposes of the Company. Outside
consultants or advisors may be utilized by the Company to assist in the search
for qualified target companies. If the Company does retain such an outside
consultant or advisor, any cash fee earned by such person will need to be
assumed by the target company, as the Company has limited cash assets with which
to pay such obligation.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to the
Company only on the condition that the services of a consultant or advisor be
continued after a merger or acquisition. Such preexisting agreements of target
companies for the continuation of the services of attorneys, accountants,
advisors or consultants could be a factor in the selection of a target company.
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is likely that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, it is likely
that the Company's officer and director will, as part of the terms of the
acquisition transaction, resign and be replaced by one or more new officers and
directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank check
company. Until such time as this occurs, the Company will not register any
additional securities. The issuance of additional securities and their potential
sale into any trading market which may develop in the Company's securities may
depress the market value of the Company's securities in the future if such a
market develops, of which there is no assurance.
While the terms of a business transaction to which the Company may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended (the "Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which
target company shareholders would acquire in exchange for their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage of ownership may be subject to significant
reduction in the event the Company acquires a target company with substantial
assets. Any merger or acquisition effected by the Company can be expected to
have a significant dilutive effect on the percentage of shares held by the
Company's shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, will outline
the manner of bearing costs, including costs associated with the Company's
attorneys and accountants, and will include miscellaneous other terms.
The Company will not acquire or merge with any entity which cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. The Company is subject to all of the
reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements as
part of or within 60 days following its Form 8-K to be filed with the Securities
and Exchange Commission upon consummation of a merger or acquisition, as well as
the Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the representations made
by the target company, the closing documents may provide that the proposed
transaction will be voidable at the discretion of the present management of the
Company.
11
Results of Operations
During the period from May 27, 1999 (inception) through April 30, 2000, the
Company has engaged in no significant operations other than organizational
activities and acquisition of the rights to market Biocatalyst. No revenues were
received by the Company during this period.
For the current fiscal year, the Company anticipates incurring a loss as a
result of organizational expenses, expenses associated with registration under
the Securities Exchange Act of 1934, and expenses associated with setting up a
company structure to begin implementing its business plan. The Company
anticipates that until these procedures are completed, it will not generate
revenues other than interest income, and may continue to operate at a loss
thereafter, depending upon the performance of the business.
Liquidity and Capital Resources
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity. Consequently, the Company's balance sheet as of April
30, 2000 reflects current assets of $0.
The Company will carry out its plan of business as discussed above. The
Company cannot predict to what extent its liquidity and capital resources will
be diminished prior to the consummation of a business combination or whether its
capital will be further depleted by the operating losses (if any) of the
business entity which the Company may eventually acquire.
The Company will need additional capital to carry out its business plan to
engage in a business combination. No commitments to provide additional funds
have been made by management or stockholders. Accordingly, there can be no
assurance that any additional funds will be available on terms acceptable to
the Company or at all. Irrespective of whether the Company's cash assets prove
to be inadequate to meet its operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
12
PART II Other Information
Item 4. Submission of Matters to a Vote of Security Holders
On February 18, 2000, the shareholders of the Company held a special meeting at
which they unanimously elected James L. Vandeberg the sole director of the
Company.
Item 5. Other Information
The following table sets forth, as of February 18, 2000 and May 5, 2000, the
Company's outstanding Common Stock owned of record or beneficially by each
Executive Officer and Director and by each person who owned of record, or was
known by the Company to own beneficially, more than 5% of the Company's Common
Stock, and the shareholdings of all Executive Officers and Directors as a group.
Each person has sole voting and investment power with respect to the shares
shown.
- ----------------------------------------------------------------------------------------------------
Percentage of
Name Shares Owned Shares Owned
- ----------------------------------------------------------------------------------------------------
James L. Vandeberg, President, Secretary, Treasurer and 1,125,000 45%
Director
1601 Fifth Avenue, Suite 2100
Seattle, Washington 98101
Kinne F. Hawes 1,125,000 45%
One Union Square, Suite 2424
600 University Street
Seattle, Washington 98101
Chapin E. Wilson 250,000 10%
1601 Fifth Avenue, Suite 2100
Seattle, Washington 98101
- ----------------------------------------------------------------------------------------------------
ALL EXECUTIVE OFFICERS & DIRECTORS AS A GROUP (1 Individual) 1,125,000 45%
- ----------------------------------------------------------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit No. Description
----------- -----------
27.1 Financial Data Schedule
Signature
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.
Dated: May 5, 2000 Kilimanjaro Group.com Inc.
By: /s/ James L. Vandeberg
----------------------------------
James L. Vandeberg, President
(Principal Executive Officer)
13