U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 2001
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[ ] 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. 000-32749
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Kettle River Group Inc.
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(Name of Small Business Issuer in its Charter)
Nevada 76-0616468
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(State or Other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)
Suite 676 - 141-757 West Hastings Street
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Vancouver, BC V6C 1A1 Canada
(Address of Principal Executive Offices)
(604) 681-7806
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Issuer's Telephone Number
N/A
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(Former Name or Former Address, if changed since last Report)
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 Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
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(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable
(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:
June 18, 2001
Common - 4,500,000 shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is contained in Item
6 of this Report.
Transitional Small Business Issuer Format Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together with related Notes. In the opinion of management, the Financial
Statements fairly present the financial condition of the Company.
Kettle River Group Inc.
(A Development Stage Company)
Interim Financial Statements
March 31, 2001
(Unaudited)
Index
Balance Sheet F-2
Statement of Operations F-3
Statement of Cash Flows F-4
Notes to the Financial Statements F-5
Page F-2
Kettle River Group Inc.
(A Development Stage Company)
Balance Sheets
March 31, December 31,
2001 2000
$ $
(unaudited) (audited)
ASSET
License (Note 3) - -
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liability
Accrued liabilities 20,700 1,200
Stockholders' Equity (Deficit)
Common Stock, 25,000,000 shares authorized
with a par value of $0.001; 4,500,000
shares issued and outstanding 4,500 4,500
Additional Paid-in Capital 75 75
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4,575 4,575
Deficit Accumulated During the Development Stage (25,275) (5,775)
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(20,700) (1,200)
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- -
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Contingent Liability (Note 1)
(The accompanying notes are an integral part of the financial statements)
Page F-3
Kettle River Group Inc.
(A Development Stage Company)
Statements of Operations
Accumulated From
August 18, 1999 Three months
(Date of Inception) ended
to March 31, March 31,
2001 2001 2000
$ $ $
(unaudited) (unaudited) (unaudited)
Revenue - - -
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Expenses
Amortization of license 667 - -
License written-off 1,833 500 -
Organizational expenses 2,575 - -
Professional fees 11,500 11,500 -
Rent, office and administration 7,500 7,500 -
Transfer agent and regulatory 1,200 - -
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25,275 19,500 -
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Net Loss for the Period (25,275) (19,500) -
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Net Loss Per Share (0.004) -
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Weighted Average Shares Outstanding 4,500,000 4,500,000
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Page F-4
Kettle River Group Inc.
(A Development Stage Company)
Statements of Cash Flows
Three months ended
March 31,
2001 2000
$ $
(unaudited) (unaudited)
Cash Flows to Operating Activities
Net loss (19,500) -
Non-cash item
Accrued liabilities 19,500 -
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Net Cash Used by Operating Activities - -
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Cash Flows from Financing Activities - -
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Net Cash Provided by Financing Activities - -
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Cash Flows from Investing Activities - -
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Net Cash Provided by Investing Activities - -
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Change In Cash - -
Cash - Beginning of Period - -
Cash - End of Period - -
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Non-Cash Financing Activities - -
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Supplemental Disclosures
Interest paid - -
Income tax paid - -
Page F-5
Kettle River Group Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
1. Development Stage Company
Kettle River Group Inc. herein (the "Company") was incorporated in the
State of Nevada, U.S.A. on August 18, 1999. The Company acquired a
license to market and distribute a product in Maine, New Hampshire and
Vermont. As discussed in Note 3, this license was cancelled and the
Company has retained the right to sue the vendor. As a replacement for
this license, the Company was granted additional rights to market and
distribute vitamins, minerals, nutritional supplements, and other health
and fitness products in Great Britain. The grantor of the license
offers these products for sale from various suppliers on their Web Site.
See Note 4 regarding related party transactions.
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/or attain profitable operations. There is no guarantee
that the Company will be able to raise any equity financing or sell any
of its products at a profit. 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 December 31.
(b) Licenses
The cost to acquire the License was capitalized. The carrying value
of the License is evaluated in each reporting period to determine if
there were events or circumstances which would indicate a possible
inability to recover the carrying amount. Such evaluation is based
on various analyses including assessing the Company's ability to
bring the commercial applications to market, related profitability
projections and undiscounted cash flows relating to each application
which necessarily involves significant management judgment. The
License has been written-off to operations as at December 31, 1999
due to cancellation of the Biocatalyst License Agreement.
(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) Revenue Recognition
The Company will receive from the Grantor of the License,
commissions of 50% of the profit on all sales made through the
Grantor's Web Site. The commission revenue will be recognized in
the period the sales have occurred. The Company will report the
commission revenue on a net basis as the Company is acting as an
Agent for the Grantor and does not assume any risks or rewards of
the ownership of the products. This policy is prospective in nature
as the Company has not yet generated any revenue.
(e) 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.
Kettle River Group Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
2. Summary of Significant Accounting Policies (continued)
(f) Interim Financial Statements
These interim unaudited financial statements have been prepared on
the same basis as the annual financial statements and in the
opinion of management, reflect all adjustments, which include only
normal recurring adjustments, necessary to present fairly the
Company's financial position, results of operations and cash flows
for the periods shown. The results of operations for such periods
are not necessarily indicative of the results expected for a full
year or for any future period.
3. Licenses
(a) The Company acquired a license to market and distribute a product in
Maine, New Hampshire and Vermont. The Company's right to use this
license was in jeopardy due to a lawsuit between the vendor of the
license and the original owner. As a result, the unamortized
balance of $1,333 was written-off to operations. The Company and
its shareholder have the right to sue for breach of contract. This
license was cancelled and all financial obligations pursuant to the
License Agreement were extinguished.
(b) As a replacement for the above license, at no additional cost, the
Company was granted additional rights to market vitamins, minerals,
nutritional supplements and other health and fitness products
through the Grantor's Web Site. The Company desires to market these
products to medical practitioners, alternative health professionals,
martial arts studios and instructors, sports and fitness trainers,
other health and fitness practitioners, school and other fund
raising programs and other similar types of customers in Great
Britain. The license was acquired on February 14, 2000 for a term
of three years. The Company must pay an annual fee of $500 for
maintenance of the Grantor's Web Site commencing on the anniversary
date. The Grantor of the license retains 50% of the profit on all
sales made through the Web Site.
March 31, December 31,
2001 2000
$ $
(unaudited) (audited)
License - Biocatalyst
Cost 2,000 2,000
Less accumulated amortization (833) (833)
Less amount written-off (1,167) (1,167)
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License - Vitamineralherb - -
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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 Secretary/
Treasurer of the Company and a director for consideration of 2,000,000
shares for total fair market consideration of $2,000, also being the
transferor's cost of such license. These shares were paid evenly to the
ten partners. The replacement license was also owned by the same
partnership.
Item 2. Management's Discussion and Analysis or Plan of Operation
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The following discussion should be read in conjunction with the accompanying
unaudited financial statements for the three month periods ended March 31, 2001
and March 31, 2000 prepared by management and the audited financial statements
for the twelve months ended December 31, 2000 as presented in the Form 10SB.
Special Note Regarding Forward Looking Statements
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Certain statements in this report and elsewhere (such as in other filings by the
company with the Securities and Exchange Commission ("SEC"), press releases,
presentations by the Company of its management and oral statements) may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," and
"should," and variations of these words and similar expressions, are intended to
identify these forward-looking statements. Actual results may materially differ
from any forward-looking statements. Factors that might cause or contribute to
such differences include, among others, competitive pressures and constantly
changing technology and market acceptance of the Company's products and
services. The Company undertakes no obligation to publicly release the result of
any revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
The Company's Services
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The Company's operations currently consists of activities in investigating
business opportunities. No planned principal activities have yet begun.
The Company operates an office and is actively seeking further opportunities,
either by starting up a business, acquiring an existing business, by merging
with a business or through some other method.
Subsequent Events
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There were no reportable subsequent events.
Results of Operation
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Comparison of the three months ended March 31, 2001 with the three months ended
March 31, 2000.
No revenue was recorded for the three month period ended March 31, 2001 and no
revenue was recorded during the same period of the prior year.
Net (loss) for the three month period ended March 31, 2001 was $(19,500)
compared to a loss of $(0) in the three months ended March 31, 2000. The
expenditures reflected in the loss represent the Company's efforts to maintain
an office and visible presence in its on going search for business opportunity.
To date, the company has generated no revenues.
Comparison of Financial Position at March 31, 2001 with March 31, 2000
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The Company's working capital position remained deteriorated at March 31, 2001
with current liabilities of $20,700 in excess of current assets of $0. At
December 31, 2000 the Company had a working capital deficit of $1,200.
Liquidity and Capital Resources
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The Company may not be successful in its efforts to raise equity financing and/
or attain profitable operations. There is doubt regarding the Company's ability
to continue as a going concern.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
None.
DOCUMENTS INCORPORATED BY REFERENCE
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Kettle River Group Inc.
Date: June 18, 2001 By: /s/ Christine Cerisse
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President and Director