UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED March 31,
2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD From to
Commission File Number 333-40954
KINSHIP SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0648148
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22 East 100 South, Suite 400
Salt Lake City, Utah 84111
(Address of principal executive officers)
(801) 521-8636
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock: 1,372,750 shares issued as of April 31, 2001, No
Par Value. Authorized - 50,000,000 common voting shares. The
company has only one class of shares.
INDEX
1
Kinship Systems, Inc.
For Quarter Ending March 31, 2001
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets - March 31, 2001 (Unaudited) and
December 31, 2000.
Statements of Operations (Unaudited) - For the
three months ended March 31, 2001 and 2000, and
for the period from February 1, 2000 (Date of Inception)
through March 31, 2001.
Statements of Cash Flows (Unaudited) - For the
three months ended March 31, 2001 and 2000, and for the period
February 1, 2000 (Date of Inception) through March 31, 2001.
Notes to Financial Statements (Unaudited) - March 31, 2001
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 4. Submission of Matters to a Vote of Security
Holders
Item 5. Other Matters
Item 6. Exhibits and Reports on Form 8-K
Signatures
2
Part I - Financial Information
Item I. Financial Statements
KINSHIP SYSTEMS, INC.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
Page
Financial Statements:
Balance Sheets - March 31, 2001 (Unaudited)
and December 31, 2000 1
Statements of Operations (Unaudited) for the
Three Months Ended March 31, 2001 and 2000,
and for the Period from February 1, 2000
(Date of Inception) through March 31, 2001 2
Statements of Cash Flows (Unaudited) for
the Three Months Ended March 31, 2001 and
2000, and for the Period from February 1,
2000 (Date of Inception) through March 31, 2001 3
Notes to Financial Statements (Unaudited) 4
/PAGE/
KINSHIP SYSTEMS, INC.
(A Development Stage Enterprises)
BALANCE SHEETS
March 31, December 31,
2001 2000
Unaudited)
ASSETS ---------- -----------
Current Assets
Cash $ 7,148 $ 10,955
---------- -----------
Total Current Assets 7,148 10,955
---------- -----------
Deferred Offering Costs 26,560 24,907
---------- -----------
Total Assets $ 33,708 $ 35,862
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 18,687 $ 17,986
---------- ----------
Total Current Liabilities 18,687 17,986
---------- ----------
Stockholders' Equity
Common stock - no par value;
50,000,000 shares authorized;
1,270,000 shares issued and
outstanding 25,813 25,813
Deficit accumulated during the
development stage (10,792) (7,937)
---------- ----------
Total Stockholders' Equity 15,021 17,876
---------- ----------
Total Liabilities and Stockholders' Equity $ 33,708 $ 35,862
========== ==========
The accompanying notes are an integral part of these financial statements.
1
KINSHIP SYSTEMS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(UNAUDITED)
From
February 1,
2000
(Date of
For the Three Monts Ended Inception)
March 31, through
------------------------- March 31,
2001 2000 2001
---------- ---------- ----------
Revenue $ - $ - $ -
General and administrative expenses 2,855 813 10,792
----------- ---------- ----------
Net Loss $ 2,855 $ 813 $ (10,792)
=========== ========== ==========
Basic and Diluted Loss Per Share $ - $ - $ (0.01)
=========== ========== ==========
Weighted Average Number of Shares
Outstanding 1,270,000 1,270,000 1,270,000
The accompanying notes are an integral part of these financial statements.
2
KINSHIP SYSTEMS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
From
February 1,
2000
For The (Date of
Three Months Ended Inception)
March 31, through
----------------- March 31,
2001 2000 2001
------- ------- --------
Cash Flows from Operating Activities
Net loss $(2,855) $ (813) $(10,792)
Adjustments to reconcile net loss to net cash
used by operating activities:
Accounts payable (310) - 528
Stock issued for services - 813 813
------- ------- --------
Net Cash Used by Operating Activities (3,165) - (9,451)
------- ------- --------
Net Cash From Investing Activities - - -
------- ------- --------
Cash Flows From Financing Activities
Deferred offering costs (642) - (8,401)
Proceeds from issuance of common stock - 25,000 25,000
------- ------- --------
Net Cash Provided (Used) by Financing
Activities (642) 25,000 16,599
------- ------- --------
Net Increase (Decrease) in Cash and
Cash Equivalents (3,807) 25,000 7,148
Cash and Cash Equivalents at Beginning
of Period 10,955 - -
------- ------- --------
Cash and Cash Equivalents at End
of Period $ 7,148 $25,000 $ 7,148
======= ======= ========
Non-Cash Financing and Investing Information
Accrual of Deferred Offering Costs $ 1,011 $ - $ 18,159
======= ======= ========
The accompanying notes are an integral part of these financial statements.
3
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements-The accompanying financial
statements are unaudited. In the opinion of management, all
necessary adjustments (which include only normal recurring
adjustments) have been made to present fairly the financial
position, results of operations and cash flows for the periods
presented. Certain information and disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It
is suggested that these condensed consolidated financial
statements be read in conjunction with the Company's financial
statements and notes thereto included in the Form 10-KSB dated
December 31, 2000. The results of operations for the three month
period ended March 31, 2001 are not necessarily indicative of the
operating results to be expected for the full year.
Basis of Presentation - The accompanying financial statements
have been prepared on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in
the normal course of business. During the three months ended
March 31, 2001 and 2000, the Company incurred net losses of
$2,855 and $813, respectively. As of March 31, 2001, the
accumulated deficit from inception totaled $10,792. These
factors, among others, indicate that the Company may be unable to
continue as a going concern. The accompanying financial
statements do not include any adjustments relating to the
carrying amount and classification of recorded assets or the
amount and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The
Company has plans to complete a SB-1 Registration Statement to
raise additional capital. The Company's ability to continue as a
going concern is dependent upon its ability to generate
sufficient cash flows to meet its obligations on a timely basis,
to obtain additional financing and ultimately to attain
successful operations.
NOTE 2 - COMMITMENTS AND CONTINGENCIES
The Company has entered into an agreement with the president to
provide a $1,000 stipend per month that will not accrue until the
Company has revenues or until after six months. After that time,
the anticipated salaries for the three full time officers will be
determined by the Board of Directors. For services performed
previous to the Company receiving revenues or the six month time
period, the officers received common stock as compensation.
NOTE 3 - SUBSEQUENT EVENTS
On April 30, 2001, the Company closed its initial public offering
and issued 102,750 common shares upon receiving cash proceeds of
$102,750. Accrued deferred offering costs in the amount of
$18,687 were recognized as a reduction from the proceeds of the
offering.
4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
- ---------------------
3
Kinship was incorporated in Utah on February 1, 2000 and has been
involved exclusively to this point in start-up operations
including incorporation, initial organization and an initial
public offering ("IPO") of its shares closed as of April 30, 2001
by which it raised gross proceeds of $102,750 by selling 102,750
of its common voting shares at $1.00/share to 28 investors, most
of whom reside in Utah. The use of proceeds from the IPO are
more particularly described under Part II, Item 2 of this Report.
The accumulated deficit for Kinship during the development stage
resulting from general and administrative costs were $7,937 as of
December 31, 2000 and $10,792 as of March 31, 2001. Net losses
from inception (2/1/2000) to March 3l, 2001 were $10,792.
As noted in Kinships's earlier IPO filing and 10-KSB report, it
intends to engage in the near future in the attempted marketing
and distribution of its unique proprietary accident
reconstruction software and will employ the net proceeds of its
IPO generally as outlined and previously disclosed in its IPO
filing.
Kinship would anticipate that it may have actual revenues to
report as early as the next quarterly filing, though no warranty
or assurance of this projection can be made. In all events, the
next periodic filing will contain a continuing review and
explanation of the use of proceeds of the IPO.
Liquidity and Sources of Capital
- --------------------------------
As noted above, Kinship has not engaged in business operations to
date. It is holding in its subscription account $102,750 of
gross proceeds of its recently completed IPO. As to these funds
the company has accrued obligations for offering related costs to
the accountants, legal counsel as well as miscellaneous printing
and filing costs of approximately $18,687 leaving estimated net
operating proceeds to be employed in future business operations
of approximately $84,063. Its accrued accumulated deficit to
date is $10,792 with stockholders equity of $l5,021.
Kinship is fully dependent on implementing its original business
plan of marketing and distributing its unique proprietary
software from the limited net proceeds of its recently completed
IPO. The company believes that it has the minimal capital to
implement its operations and business plan as generally outlined
in its prior IPO and 10-KSB filing. However, no assurance or
warranty that the company will be successful in its marketing
efforts can be made or is implied. Further, if Kinship is not
successful in reaching a state of profitability from the use of
the net offering proceeds, there is no presently committed or
determined alternative source or means of financing.
It is possible that Kinship could seek subsequent private
placement financing funds or other means to continue its business
operations, though no assurance or warranty that funds will be
available or that even the company would deem it as feasible or
appropriate to seek such alternative financing can be made if the
initial IPO proceeds are not sufficient to sustain continuing
operations.
4
Forward-Looking Information
- ---------------------------
Certain statements in this Section and elsewhere in this report
are forward-looking in nature and relate to trends and events
that may affect the Company's future financial position and
operating results. Such statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. The terms "expect,""anticipate,""intend," and "project"
and similar words or expressions are intended to identify forward-
looking statements. These statements speak only as of the date
of this report. The statements are based on current
expectations, are inherently uncertain, are subject to risks, and
should be viewed with caution. Actual results and experience may
differ materially from the forward-looking statements as a result
of many factors, including changes in economic conditions in the
markets served by the company, increasing competition,
fluctuations in raw materials and energy prices, and other
unanticipated events and conditions. It is not possible to
foresee or identify all such factors. The company makes no
commitment to update any forward-looking statement or to disclose
any facts, events, or circumstances after the date hereof that
may affect the accuracy of any forward-looking statement.
5
Part II - Other Information
Item 1. Legal Proceedings
Kinship is not presently engaged in any legal proceedings, nor
does it know of any claims for or against the company by any
party.
Item 2. Changes in Securities and Use of Proceeds
The company has not had any change in its securities since its
last report filing on Form 10-K.
In accordance with SEC Rule 463 the company reports the use of
proceeds to date from its initial public offering "IPO" completed
on April 30, 2001:
1. Gross proceeds sold - $102,750
2. Accrued offering related costs including printing,
accounting, legal and related filing fees - $18,687
3. Net proceeds for future operations: $84,063
Item 4. Submission of Matters to a Vote of Security Holders
During the present quarter there has been no matter submitted to
security holders for a vote. Kinship presently anticipates
holding its first annual shareholders meeting at a date to be
designated in the fourth quarter of 2001 for the election of
directors and other routine matters, but has not presently set a
definitive date for such meeting. Shareholders will be
independently advised of any such formal annual meeting date.
Item 5. Other Matters
To the date of this filing, Kinship has not established a current
trading market for its shares. It is continuing to work for a
listing on the Electronic Bulletin Board, but can give no
warranty or assurance of this result.
Item 6. Exhibits and Reports on Form 8-K
None
6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
REGISTRANT: KINSHIP SYSTEMS, INC.
By: /s/ Mr. Terry Derru
------------------------
Mr. Terry Derru
President
By: /s/ Mr. Andrew Limpert
----------------------
Mr. Andrew Limpert
Chief Financial and Accounting
Officer
Dated: May 10, 2001
7