SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended: May 31, 2002
Commission file number 000-30129
S.D.E. HOLDINGS 2, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 84-1529309
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(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
7609 Ralston Road, Arvada, CO 80002
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Address of principal executive offices)
(303) 422-8127
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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 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
As of May 31, 2002 1,000,000 shares of common stock were outstanding.
Transitional Small Business Disclosure Format: Yes No X
SDE HOLDINGS 2, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
MAY 31, 2002
(UNAUDITED)
MICHAEL JOHNSON & CO., LLC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
Michael B. Johnson C.P.A. Telephone: (303) 796-0099
Member: A.I.C.P.A. Fax: (303) 796-0137
Colorado Society of C.P.A.s
ACCOUNTANT'S REVIEW REPORT
Board of Directors
SDE Holdings 2, Inc.
Denver, CO
We have reviewed the accompanying balance sheet of SDE Holdings 2, Inc. for May
31, 2002 and the related statement of operations and cash flows for the
three-months ended May 31, 2002, included in the accompanying Securities and
Exchange Commission Form 10-QSB for the period ended May 31, 2002. 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 Accounts. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, 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 unaware of any material modifications that should be
made to the accompanying financial statements for them to be in conformity with
accounting principles generally accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet as of February 28, 2002 and
2001, and the related statements of operations, stockholders' equity and cash
flows for the year then ended (not presented herein). In our report dated May 4,
2002, we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of May
31, 2002 is fairly stated in all material respects in relation to the balance
sheet from which it has been derived.
Michael Johnson & Co., LLC
August 23, 2002
/s/Michael Johnson & Co., LLC
S.D.E HOLDINGS 2, INC.
(A Develoment Stage Company)
Balance Sheets
(Unaudited)
May 31, February 28,
2002 2002
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ASSETS:
Current assets:
Cash $ - $ -
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Total Current Assets - -
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TOTAL ASSETS $ - $ -
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable - Related Party $ 2,220 $ 2,220
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Total Current Liabilities 2,220 2,220
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Stockholders' Equity:
Common Stock, $.001 Par Value, 25,000,000 shares
authorized, 1,000,000 shares issued and outstanding 1,000 1,000
Deficit accumulated during the development stage (3,220) (3,220)
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Total Stockholders' Deficit (2,220) (2,220)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ -
================== ==================
See Accountant's Review Report
SDE HOLDINGS 2, INC.
(A Development Stage company)
Statements of Operations
(Unaudited)
January 19, 2000
Three-Months Ended (Inception) to
May 31, May 30,
2002 2001 2002
---- ---- ----
Revenue
Revenue $ - $ - $ -
--------- --------- --------
Total Income - - -
Operating Expenses
General and Administrative - - 3,220
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Total Expenses - - 3,220
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Net Loss From Operations - - (3,220)
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Other Income
Interest Income - - -
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Net Loss $ - $ - $ (3,220)
========= ========= ========
Per Share Information:
Weighted average number of
common shares outstanding 1,000,000 1,000,000
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Net Loss per Common Share * *
========= =========
* Less than $.01
See Accountant's Review Report
SDE HOLDINGS 2, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
May 31, 2002
(Unaudited)
Deficit
Accumulated
Additonal During the
Common Stock Paid-In Development
# of Shares Amount Capital Stage Totals
----------- ------ ------- ----- ------
Balance - January 19, 2000 - $ - $ - $ - $ -
Issuance for cash February 21, 2000 1,000,000 1,000 - - 1,000
Net Loss for Period - - - (220) (220)
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Balance - February 29, 2000 1,000,000 1,000 - (220) 780
--------- --------- ---- -------- ----------
Net Loss for year - - - (2,349) (2,349)
--------- --------- ---- -------- ----------
Balance - February 28, 2001 1,000,000 1,000 - (2,569) (1,569)
--------- --------- ---- -------- ----------
Net Loss for year - - - (651) (651)
--------- --------- ---- -------- ----------
Balance - February 28, 2002 1,000,000 1,000 - (3,220) (2,220)
--------- --------- ---- -------- ----------
Net Loss for Period - - - - -
--------- --------- ---- -------- ----------
Balance - May 31, 2002 1,000,000 $ 1,000 $ - $ (3,220) $ (2,220)
========= ========= ==== ======== ==========
See Accountant's Review Report
SDE HOLDINGS 2, INC.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
January 19, 2000
Three-Months Ended (Inception) to
May 31, May 31,
2002 2001 2002
---- ---- ----
Cash Flows from Operating Activities:
Net Loss $ - $ (651) $ (3,220)
Increase in Accounts Payable - - 2,220
---- ------ --------
Net Cash Flows Used by Operating Activities - (651) (1,000)
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Cash Flows from Financing Activities:
Issuance of Common Stock - - 1,000
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Net Cash Flows Provided by Financing Activities - - 1,000
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Net Increase (Decrease) in Cash - (651) -
---- ------ --------
Cash and cash equivalents - Beginning of period - 651 -
---- ------ --------
Cash and cash equivalents - End of period $ - $ - $ -
==== ====== ========
Supplemental Disclosure of Cash Flow Information
Cash paid for Interest $ - $ - $ -
==== ====== ========
Cash paid for Income Taxes $ - $ - $ -
==== ====== ========
See Accountant's Review Report
SDE HOLDINGS 2, INC.
Notes to Financial Statements
May 31, 2002
(Unaudited)
Note 1 - Presentation of Interim Information:
In the opinion of the management of SDE Holdings 2, Inc., the accompanying
unaudited financial statements include all normal adjustments considered
necessary to present fairly the financial position as of May 31, 2002 and the
results of operations for the three-months ended May 31, 2002 and 2001, and cash
flows for the three-months ended May 31, 2002 and 2001. Interim results are not
necessarily indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended February 28, 2002.
Item 2. Management's Discussion and Analysis or Plan of Operation.
- - - - ------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
The Company had $0 cash capital at the end of the period and no current assets.
The Company will be forced to either borrow or make private placements of stock
in order to fund operations. No assurance exists as to the ability to achieve
loans or make private placements of stock.
Results of Operations for the Three Month Period Ended May 31, 2002 compared to
same period in 2001
- - - ----------------------------------------------------------------------------
The Company had no operations or revenues for the three month period ended
May 31, in 2002 or 2001. The Company incurred no general and administrative
expenses in the three month period in 2002 or 2001. The Company had no
profit/loss in the three month period in 2002 or 2001.
(a) Plan of Operation. S.D.E. Holdings 2, Inc. (the "Company") intends to
seek to acquire assets or shares of an entity actively engaged in business which
generates revenues, in exchange for its securities. The Company has no
particular acquisitions in mind and has not entered into any negotiations
regarding such an acquisition. As of the date of this report, the Company has no
plans, arrangements, understandings or commitments with respect to any potential
merger or acquisition, nor is the Company engaged in negotiations with respect
to such matter.
transferred will not materially differ from the representations included in such
closing documents, or the transaction will be voidable.
(b) Liquidity and Capital Resources. At May 31, 2002 , the Company had
minimal cash or other assets with which to conduct operations. There can be no
assurance that the Company will be able to complete its business plan and to
exploit fully any business opportunity that management may be able to locate on
behalf of the Company. Due to the lack of a specified business opportunity, the
Company is unable to predict the period for which it can conduct operations.
Accordingly, the Company will need to seek additional financing through loans,
the sale and issuance of additional debt and/or equity securities, or other
financing arrangements. Management of the Company and its counsel have advised
that they will pay certain costs and expenses of the Company from their personal
funds as interest free loans in order to facilitate development of the Company's
business plan. Management believes that the Company has inadequate working
capital to pursue any operations at this time; however, loans to the Company
from management and its counsel may facilitate development of the business plan.
For the foreseeable future, the Company through its management and counsel
intend to pursue acquisitions as a means to develop the Company. The Company
does not intend to pay dividends in the foreseeable future. As of the end of the
reporting period, the Company had no material cash or cash equivalents. There
was no significant change in working capital during this quarter.
Evaluation of Internal and Disclosure Controls
- ----------------------------------------------
The management of the company has evaluated the effectiveness of the
issuer's disclosure controls and procedures as of a date within 90 days prior to
the filing date of the report (evaluation date) and have concluded that the
disclosure controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.
There were no significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the
most recent evaluation of such, including any corrective actions with regard to
significant deficiencies and material weaknesses.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
- - - - --------------------------
There are no pending legal proceedings, and the Company is not aware of any
threatened legal proceedings, to which the Company is a party, however, the
Company has had three judgments rendered against it for collection for old
obligations for money due. Such judgements remain unsatisfied, and are carried
as liabilities in the balance sheet.
Item 2. Changes in Securities.
- - - - ------------------------------
(a) There have been no material modifications in any of the instruments
defining the rights of the holders of any of the Company's registered
securities.
(b) None of the rights evidenced by any class of the Company's
registered securities have been materially limited or qualified by the issuance
or modification of any other class of the Company's securities.
Item 3. Defaults Upon Senior Securities.
- - - - ----------------------------------------
(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders.
- - - - ------------------------------------------------------------
(Not applicable)
Item 5. Other Information.
- - - - --------------------------
(Not applicable)
Item 6. Exhibits and Reports on Form 8-K.
- - - - -----------------------------------------
(a) Exhibits
SK# 99.14 Sarbanes-Oxley Certification
(b) Reports on Form 8-K
March 7, 2002
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
S.D.E. Holdings 2, Inc.
Date: January 9, 2002
/s/Scott Deitler
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Scott Deitler, President