UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB/A
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(Mark one)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 31, 2001
[ ] 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 Number: 0-29493
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Tekron, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 51-0395658
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(State of incorporation) (IRS Employer ID Number)
26 Voyager Court, South, Etobicoke, Ontario, Canada M9W 5M7
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(Address of principal executive offices)
(416) 679-0707
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(Issuer's telephone number)
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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 [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: March 4, 2002: 4,095,000
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Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]
Tekron, Inc.
Form 10-QSB for the Quarter ended December 31, 2001
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 11
Part II - Other Information
Item 1 Legal Proceedings 12
Item 2 Changes in Securities 12
Item 3 Defaults Upon Senior Securities 12
Item 4 Submission of Matters to a Vote of Security Holders 12
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8-K 12
Signatures 12
Discussion of Amendment
-----------------------
This quarterly filing has been amended to restate certain expense items
initially presented in Canadian dollars instead of reflecting the appropriate
conversion to United States dollars.
2
Item 1 - Part 1 - Financial Statements
Tekron, Inc.
(a development stage company)
Balance Sheets
December 31, 2001 and 2000
(Unaudited)
December 31, December 31,
2001 2000
------------ ------------
ASSETS
------
Current Assets
Cash on hand and in bank $ -- $ 529
-------- --------
Total Assets $ -- $ 529
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities
Accounts payable - trade $ -- $ --
Due to officer 19,377 --
-------- --------
Total liabilities 19,377 --
-------- --------
Commitments and Contingencies
Shareholders' Equity
Common stock - $0.001 par value
50,000,000 shares authorized
4,095,0000 and 4,104,000 shares
issued and outstanding, respectively 4,095 4,104
Additional paid-in capital 5,025 5,016
Deficit accumulated during the development stage (28,497) (8,591)
-------- --------
Total shareholders' equity (19,377) 529
-------- --------
Total Liabilities and Shareholders' Equity $ -- $ 529
======== ========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
3
Tekron, Inc.
(a development stage company)
Statements of Operations and Comprehensive Income
Nine and Three months ended December 31, 2001 and 2000
Period from May 31, 1994 (date of inception) through December 31, 2001
(Unaudited)
Period from
May 31, 1994
Nine months Nine months Three months Three months (date of inception)
ended ended ended ended through
December 31, December 31, December 31, December 31, December 31,
2001 2000 2001 2000 2001
------------- ------------ ------------- ------------- -----------------
Revenues $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
Expenses
General and administrative 19,747 4,344 8,221 190 28,497
----------- ----------- ----------- ----------- -----------
Total expenses 19,747 4,344 8,221 190 28,497
----------- ----------- ----------- ----------- -----------
Loss before Income Taxes (19,747) (4,344) (8,221) (190) (28,497)
Provision for Income Taxes -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net Loss (19,747) (4,344) (8,221) (190) (28,497)
Other comprehensive income -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Comprehensive Income $ (19,747) $ (4,344) $ (8,221) $ (190) $ (28,497)
=========== =========== =========== =========== ===========
Loss per weighted-average share
of common stock outstanding,
computed on Net Loss -
basic and fully diluted $ (0.01) nil nil nil $ (0.01)
=========== =========== =========== =========== ===========
Weighted-average number
of shares of common
stock outstanding 4,095,000 4,104,000 4,095,000 4,104,000 2,122,470
=========== =========== =========== =========== ===========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
4
Tekron, Inc.
(a development stage company)
Statements of Cash Flows
Nine months ended December 31, 2001 and 2000
Period from May 31, 1994 (date of inception) through December 31, 2001
(Unaudited)
Period from
May 31, 1994
Six months Six months (date of inception)
ended ended through
December 31, December 31, December 31,
2001 2000 2001
------------- ----------- -----------------
Cash Flows from Operating Activities
Net Loss $(19,747) $ (4,344) $(28,497)
Adjustments to reconcile net income to
net cash provided by operating activities
Common stock issued for services -- -- 20
Increase in Accounts payable - trade -- -- --
-------- -------- --------
Net cash used in operating activities (19,747) (4,344) (28,477)
-------- -------- --------
Cash Flows from Investing Activities -- -- --
-------- -------- --------
Cash Flows from Financing Activities
Advances from officers - net 19,377 -- 19,377
Proceeds from sale of common stock -- -- 9,100
-------- -------- --------
Net cash provided by financing activities 19,377 -- 28,477
-------- -------- --------
Increase (Decrease) in Cash (370) (4,344) --
Cash at beginning of period 370 4,873 --
-------- -------- --------
Cash at end of period $ -- $ 529 $ --
======== ======== ========
Supplemental Disclosures of Interest
and Income Taxes Paid
Interest paid during the period $ -- $ -- $ --
======== ======== ========
Income taxes paid (refunded) $ -- $ -- $ --
======== ======== ========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
5
Tekron, Inc.
(a development stage company)
Notes to Financial Statements
Note A - Organization and Description of Business
Tekron, Inc. (Company) was incorporated on May 31, 1994 in accordance with the
laws of the State of Delaware. The Company was formed for the purpose of
developing a marine service company for boat owners that would offer on-site
preventative maintenance and repair services. The Company has had no substantial
operations or substantial assets since inception.
The Company experienced a change in management control during Fiscal 2002 and,
accordingly, abandoned its initial business plan. The Company is currently
seeking to develop either a new viable business plan or to seek a business
combination transaction with another viable business enterprise.
Due to the lack of sustaining operations from inception, the Company is
considered in the development stage and, as such, has generated no significant
operating revenues and has incurred cumulative operating losses of approximately
$28,500.
Note B - Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 reporting period. Actual results could differ from those estimates.
The Company follows the accrual basis of accounting in accordance with generally
accepted accounting principles and has a year-end of March 31.
Management further acknowledges that it is solely responsible for adopting sound
accounting practices, establishing and maintaining a system of internal
accounting control and preventing and detecting fraud. The Company's system of
internal accounting control is designed to assure, among other items, that 1)
recorded transactions are valid; 2) valid transactions are recorded; and 3)
transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods being
presented
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements filed with the U. S. Securities and
Exchange Commission on its Annual Report on Form 10-KSB for the year ended March
31, 2002. The information presented within these interim financial statements
may not include all disclosures required by generally accepted accounting
principles and the users of financial information provided for interim periods
should refer to the annual financial information and footnotes when reviewing
the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the U. S. Securities and Exchange Commission's
instructions for Form 10-QSB, are unaudited and contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations and cash flows of
the Company for the respective interim periods presented. The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending March 31, 2002.
6
Tekron, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note C - Going Concern Uncertainty
The Company has had no substantial operations or substantial assets since
inception. Due to the lack of sustaining operations from inception, the Company
is considered in the development stage and, as such, has generated no
significant operating revenues and has incurred cumulative operating losses of
approximately $28,500.
The Company is fully dependent either future sales of securities or upon its
current management and/or advances or loans from significant stockholders or
corporate officers to provide sufficient working capital to preserve the
integrity of the corporate entity during the development phase.
There is no assurance that the Company will be able to obtain additional funding
through the sales of additional securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company. It is the
intent of management and significant stockholders to provide sufficient working
capital necessary to support and preserve the integrity of the corporate entity.
However, there is no legal obligation for either management or significant
stockholders to provide additional future funding.
Note D - Summary of Significant Accounting Policies
1. Currency translation
--------------------
The Company incurs expenses in both US dollar (US$) and Canadian dollar
(CN$) transaction accounts. All transactions reflected in the accompanying
financial statements have been converted into US dollar equivalents, for
each respective quarter at the average of the last day of the month
published exchange rate on the last day of the fiscal quarter or the
published exchange rate on the first day of the month for related party
transactions related to rent and management services for CN$ accounts and
at historical amounts for US$ accounts.
2. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
3. Organization costs
------------------
The Company has adopted the provisions of AICPA Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities" whereby all organization
and initial costs incurred with the incorporation and initial
capitalization of the Company were charged to operations as incurred.
4. Research and development expenses
---------------------------------
Research and development expenses are charged to operations as incurred.
5. Advertising expenses
--------------------
Advertising and marketing expenses are charged to operations as incurred.
7
Tekron, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note D - Summary of Significant Accounting Policies - Continued
6. Income Taxes
------------
The Company utilizes the asset and liability method of accounting for
income taxes. At June 30, 2001 and 2000, the deferred tax asset and
deferred tax liability accounts, as recorded when material, are entirely
the result of temporary differences. Temporary differences represent
differences in the recognition of assets and liabilities for tax and
financial reporting purposes, primarily accumulated depreciation and
amortization. As of December 31, 2001 and 2000, respectively, the deferred
tax asset is related solely to the Company's net operating loss
carryforward and is fully reserved.
7. Earnings (loss) per share
-------------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of December 31, 2001 and 2000,
respectively, the Company had no warrants and/or options outstanding.
Note E - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
Note F - Related Party Transactions
The Company has an unwritten agreement with an entity controlled by its officers
for management services and office rent. Under this agreement, the Company is
obligated to pay, on a monthly basis, $1,000 CN$ for management and
administrative office services and $500 CN$ for office rent. This agreement
commenced on July 1, 2001, concurrent with a change in management. As of
December 31, 2001, approximately $5,800 US$ has been charged to operations on
this agreement.
(Remainder of this page left blank intentionally)
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Tekron, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note G - Income Taxes
The components of income tax (benefit) expense for the three months ended
December 31, 2001 and 2000 and for the period from May 31, 1994 (date of
inception) through December 31, 2001, respectively, are as follows:
December 31, December 31,
2001 2000 Cumulative
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Federal:
Current $ -- $ -- $ --
Deferred -- -- --
------- ------ ------
-- -- --
------- ------ ------
State:
Current -- -- --
Deferred -- -- --
------- ------ ------
-- -- --
------- ------ ------
Total $ -- $ -- $ --
======= ====== ======
As of December 31, 2001, the Company has a net operating loss carryforward of
approximately $28,500 to offset future taxable income. Subject to current
regulations, this carryforward will begin to expire in 2015. The amount and
availability of the net operating loss carryforwards may be subject to
limitations set forth by the Internal Revenue Code. Factors such as the number
of shares ultimately issued within a three year look-back period; whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate; continuity of historical business; and subsequent income of
the Company all enter into the annual computation of allowable annual
utilization of the carryforwards.
The Company's income tax expense for the nine months ended December 31, 2001 and
2000 and for the period from June 30, 1994 (date of inception) through December
31, 2001, respectively, are as follows:
December 31, December 31,
2001 2000 Cumulative
------------ ----------- ----------
Statutory rate applied to loss before income taxes $(6,700) $(1,500) $(9,700)
Increase (decrease) in income taxes resulting from:
State income taxes -- -- --
Other, including reserve for deferred tax asset 6,700 1,500 9,700
------- ------- -------
Income tax expense $ -- $ -- $ --
======= ======= =======
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Tekron, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note G - Income Taxes - Continued
Temporary differences, consisting primarily of statutory deferrals of expenses
for organizational costs and statutory differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of December 31, 2001 and 2000, respectively:
December 31, December 31,
2001 2000
------------ ------------
Deferred tax assets
Net operating loss carryforwards $ 9,700 $ 2,900
Less valuation allowance (9,700) (2,900)
-------- ---------
Net Deferred Tax Asset $ -- $ --
======== =========
Note H - Common Stock Transactions
On March 22, 2001, the Company's officers surrendered and cancelled 9,000 shares
of common stock to the Company for no consideration. The effect of this action
was to reallocate the par value of the surrendered shares to additional paid-in
capital.
(Remainder of this page left blank intentionally)
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Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
Certain statements contained in this quarterly filing, including, without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of similar import, constitute forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following: international, national and
local general economic and market conditions: demographic changes; the ability
of the Company to sustain, manage or forecast its growth; the ability of the
Company to successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-QSB and investors are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
(2) Results of Operations, Liquidity and Capital Resources
Tekron, Inc. (Company) experienced a change in the Board of Directors and Senior
Management on June 11, 2001. Accordingly, the Company has abandoned it's initial
plan of operation as previously reported in its Form 10-KSB for the year ended
March 31, 2001. The Company is currently in search of a suitable merger or
acquisition candidate.
The Company has engaged in no significant operations other than organizational
activities and preparation for registration of its securities under the
Securities Exchange Act of 1934, as amended, since it's inception in May 1994.
For the nine months ended December 31, 2001 and 2000, respectively, the Company
incurred net operating losses as a result of expenses principally associated
with compliance with reporting obligations under The Securities Exchange Act of
1934, and other administrative expenses associated with the maintenance of the
Company's issued and outstanding stock records. The Company anticipates that
until a business combination is completed with an acquisition candidate, it will
not generate revenues. The Company may also continue to operate at a loss after
completing a business combination, depending upon the performance of any
acquired business.
Management anticipates that the Company will require additional capital to pay
ongoing expenses, including particularly legal and accounting fees incurred in
conjunction with preparation and filing of various required periodic reports to
the U. S. Securities and Exchange Commission.
The Company is fully dependent either future sales of securities or upon its
current management and/or advances or loans from significant stockholders or
corporate officers to provide sufficient working capital to preserve the
integrity of the corporate entity during the development phase.
11
There is no assurance that the Company will be able to obtain additional funding
through the sales of additional securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company. It is the
intent of management and significant stockholders to provide sufficient working
capital necessary to support and preserve the integrity of the corporate entity.
However, there is no legal obligation for either management or significant
stockholders to provide additional future funding.
Further, the Company has no plans, proposals, arrangements or understandings
with respect to the sale or issuance of additional securities at the date of
this filing and the Company does not currently contemplate making a Regulation S
offering.
Regardless of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.
In such a restricted cash flow scenario, we would be unable to complete our
business plan steps, and would, instead, delay all cash intensive activities.
Without necessary cash flow, we may be dormant during the next twelve months, or
until such time as necessary funds could be raised in the equity securities
market.
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Exhibits
99.1 CEO/CFO Certification Pursuant to 18 USC, Section 1330, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Reports on Form 8-K
None
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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.
Tekron, Inc.
Dated: August 22, 2002 /s/ Luigi Brun
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Luigi Brun
President, Secretary
and Director
12