SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For Period ended March 31, 2003
Commission File Number 000-50177
WIGWAM DEVELOPMENT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4735252
(State of Incorporation) (I.R.S. Employer Identification No.)
1438 Black Brant Place
Parksville, BC V9P 2A3 Canada
(Address of Principal Executive Offices) (Zip Code)
(250) 752-5851
(Registrant's telephone number, including area code)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
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 [ ]
There were 1,233,000 shares of Common Stock outstanding as of March 31, 2003.
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENT
WIGWAM DEVELOPMENT, INC.
(A Development Stage Company)
Balance Sheets
- --------------------------------------------------------------------------------
As of Year Ended
March 31, June 30,
2003 2002
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 1,175 $ 7,026
-------- --------
TOTAL CURRENT ASSETS 1,175 7,026
-------- --------
TOTAL ASSETS $ 1,175 $ 7,026
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 2,025 $ 110
-------- --------
TOTAL CURRENT LIABILITIES 2,025 110
-------- --------
TOTAL LIABILITIES 2,025 110
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, ($.0001 par value, 20,000,000
shares authorized; none issued and outstanding) -- --
Common stock ($.0001 par value, 80,000,000 shares
authorized; 1,233,000 issued and outstanding as of
March 31, 2003 and June 30, 2002) 125 125
Paid in-capital 24,175 24,175
Deficit accumulated during development stage (25,150) (17,384)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (850) 6,916
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 1,175 $ 7,026
======== ========
See Notes to Financial Statements
2
WIGWAM DEVELOPMENT, INC.
(A Development Stage Company)
Statements of Operations
- --------------------------------------------------------------------------------
July 20, 1998
Nine Months Nine Months Three Months Three Months (inception)
Ended Ended Ended Ended through
March 31, March 31, March 31, March 31, March 31,
2003 2002 2003 2002 2003
----------- ----------- ----------- ----------- -----------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
TOTAL REVENUES -- -- -- --
GENERAL & ADMINISTRATIVE EXPENSES 7,766 679 2,426 429 25,150
----------- ----------- ----------- ----------- -----------
TOTAL GENERAL & ADMINISTRATIVE
EXPENSES 7,766 679 2,426 429 25,150
----------- ----------- ----------- ----------- -----------
NET LOSS $ (7,766) $ (679) $ (2,426) $ (429) $ (25,150)
=========== =========== =========== =========== ===========
BASIC LOSS PER SHARE (0.01) (0.00) (0.00) (0.00)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,233,000 1,233,000 1,233,000 1,233,000
=========== =========== =========== ===========
See Notes to Financial Statements
3
WIGWAM DEVELOPMENT, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
From July 20, 1998 (inception) through March 31, 2003
- --------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Development
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
Stock issued for cash on April 6,
1999 @ $0.10 per share 14,000 $ 1 $ 1,399 $ -- $ 1,400
Stock issued for cash on April 13,
1999 @ $0.10 per share 1,000 -- 100 -- 100
Stock issued for cash on April 14,
1999 @ $0.10 per share 7,000 1 699 -- 700
Stock issued for cash on April 15,
1999 @ $0.10 per share 8,000 1 799 -- 800
Stock issued for cash on April 23,
1999 @ $0.001 per share 1,000,000 100 900 -- 1,000
Net loss, July 20, 1998 (inception)
through June 30, 1999 (76) (76)
---------- -------- ------- -------- --------
BALANCE, JUNE 30, 1999 1,030,000 103 3,897 (76) 3,924
========== ======== ======= ======== ========
Stock issued for cash on October 14,
1999 @ $0.10 per share 11,000 1 1,099 -- 1,100
Stock issued for cash on October 15,
1999 @ $0.10 per share 6,000 1 599 -- 600
Stock issued for cash on January 18,
2000 @ $0.10 per share 5,000 1 499 -- 500
Stock issued for cash on January 26,
2000 @ $0.10 per share 6,000 1 599 -- 600
Stock issued for cash on January 28,
2000 @ $0.10 per share 10,000 1 999 -- 1,000
Stock issued for cash on February 15,
2000 @ $0.10 per share 1,000 -- 100 -- 100
Stock issued for cash on February 18,
2000 @ $0.10 per share 39,000 4 3,896 -- 3,900
Stock issued for cash on March 31,
2000 @ $0.10 per share 25,000 3 2,497 -- 2,500
Stock issued for cash on May 22,
2000 @ $0.10 per share 100,000 10 9,990 -- 10,000
Net loss, June 30, 2000 (5,168) (5,168)
---------- -------- ------- -------- --------
BALANCE, JUNE 30, 2000 1,233,000 125 24,175 (5,244) 19,056
========== ======== ======= ======== ========
Net loss, June 30, 2001 (10,623) (10,623)
---------- -------- ------- -------- --------
BALANCE, JUNE 30, 2001 1,233,000 125 24,175 (15,867) 8,433
========== ======== ======= ======== ========
Net loss, June 30, 2002 (1,517) (1,517)
---------- -------- ------- -------- --------
BALANCE, JUNE 30, 2002 1,233,000 125 24,175 (17,384) 6,916
========== ======== ======= ======== ========
Net loss, March 31, 2003 (7,766) (7,766)
---------- -------- ------- -------- --------
BALANCE, MARCH 31, 2003 1,233,000 $ 125 $24,175 $(25,150) $ (850)
========== ======== ======= ======== ========
See Notes to Financial Statements
4
WIGWAM DEVELOPMENT, INC.
(A Development Stage Company)
Statements of Cash Flows
- --------------------------------------------------------------------------------
July 20, 1998
Nine Months Nine Months Three Months Three Months (inception)
Ended Ended Ended Ended through
March 31, March 31, March 31, March 31, March 31,
2003 2002 2003 2002 2003
-------- -------- -------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (7,766) $ (679) $ (2,426) $ (429) $(25,150)
Increase (decrease) in accounts payable 1,915 -- 2,025 -- 2,025
-------- -------- -------- -------- --------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (5,851) (679) (401) (429) (23,125)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES -- -- -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock -- -- -- -- 125
Additional paid-in capital -- -- -- -- 24,175
-------- -------- -------- -------- --------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES -- -- -- -- 24,300
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH (5,851) (679) (401) (429) 1,175
CASH AT BEGINNING OF PERIOD 7,026 9,433 1,576 9,183 --
-------- -------- -------- -------- --------
CASH AT END OF PERIOD $ 1,175 $ 8,754 $ 1,175 $ 8,754 $ 1,175
======== ======== ======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Interest paid $ -- $ -- $ -- $ --
======== ======== ======== ========
Income taxes paid $ -- $ -- $ -- $ --
======== ======== ======== ========
See Notes to Financial Statements
5
WIGWAM, DEVELOPMENT, INC.
(A Development Stage Company)
Notes to Financial Statements
As of March 31, 2003
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was incorporated on July 20, 1998, under the laws of the State of
Delaware, as Wigwam Development, Inc. The Company is engaged in the business of
providing online consulting services to individuals and businesses wishing to
establish start-up operations of family dining establishments. Company has no
operations and in accordance with SFAS # 7, the Company is considered a
development stage company.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF ACCOUNTING
The financial statements have been prepared using the accrual basis of
accounting. Under the accrual basis of accounting, revenues are recorded as
earned and expenses are recorded at the time liabilities are incurred. The
Company has adopted a June 30, year-end.
B. 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 reporting period.
Actual results could differ from those estimates.
C. CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
E. INCOME TAXES
Income taxes are provided in accordance with Statement of Financial accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.
6
WIGWAM, DEVELOPMENT, INC.
(A Development Stage Company)
Notes to Financial Statements
As of March 31, 2003
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
F. BASIC EARNINGS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective July 20, 1998 (inception).
Basic net loss per share amounts is computed by dividing the net income by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.
G. REVENUE RECOGNITION
The Companies initial source of revenue is expected to be derived form various
consulting services. Such as: Concept Development and Design; Menu and Product
Development; Alcohol Beverage Licensing; and Manager and Employee Training
Services. Wigwam Development, Inc. plans on recognizing revenue when services on
contracts are provided.
NOTE 3. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common or preferred stock.
NOTE 4. GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek additional capital
through sale of its securities through private placements.
NOTE 5. MARKETING STRATEGY
The Company plans to market its consulting services via an on-line web-site. At
the current time, the Company has not developed it's web-site, but has started
the design phase of producing a site that will describe all consulting services
and information about the Company. The Company anticipates spending
approximately 4 months and $12,000 on this phase of their marketing strategy. In
accordance with APB 17, paragraph 27, the development cost of the web-site would
be classified as an intangible asset and amortization shall be determined from
the pertinent factors.
7
WIGWAM, DEVELOPMENT, INC.
(A Development Stage Company)
Notes to Financial Statements
As of March 31, 2003
NOTE 6. INCOME TAXES
As of March 31, 2003
--------------------
Deferred tax assets:
Net operating tax carryforwards $ 3,773
Other 0
-------
Gross deferred tax assets 3,773
Valuation allowance (3,773)
-------
Net deferred tax assets $ 0
=======
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.
NOTE 7. SCHEDULE OF NET OPERATING LOSSES
1998 Net Operating Loss $ (76)
1999 Net Operating Loss (5,168)
2000 Net Operating Loss (10,623)
2001 Net Operating Loss (1,517)
2002 Net Operating Loss (3rd. Qtr.) (7,766)
--------
Net Operating Loss $(25,150)
========
As of March 31, 2003, the Company has a net operating loss carryforward of
approximately $25,150, which will expire 20 years from the date the loss was
incurred.
NOTE 8. RELATED PARTY TRANSACTION
The Company's neither owns nor leases any real or personal property. A director
without charge provides office services. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
CERTAIN FORWARD-LOOKING INFORMATION
Information provided in this Quarterly report on Form 10QSB may contain
forward-looking statements within the meaning of Section 21E or Securities
Exchange Act of 1934 that are not historical facts and information. These
statements represent the Company's expectations or beliefs, including, but not
limited to, statements concerning future and operating results, statements
concerning industry performance, the Company's operations, economic performance,
financial conditions, margins and growth in sales of the Company's services,
capital expenditures, financing needs, as well as assumptions related to the
forgoing. For this purpose, any statements contained in this Quarterly Report
that are not statement of historical fact may be deemed to be forward-looking
statements. These forward-looking statements are based on current expectations
and involve various risks and uncertainties that could cause actual results and
outcomes for future periods to differ materially from any forward-looking
statement or views expressed herein. The Company's financial performance and the
forward-looking statements contained herein are further qualified by other risks
including those set forth from time to time in the documents filed by the
Company with the Securities and Exchange Commission, including the Company's
most recent Form 10SB.
CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003
Revenues were -0- for the quarter ending March 31, 2003 and -0- for the same
quarter ending 2002. Operating Expenses were $2,426 for the three months ended
March 31, 2003 and $429 for the same period in 2002. Wigwam Development, Inc. is
a development stage company involved in the business of providing consulting and
supporting services to individuals and companies that are in the start-up phase
of operations of restaurant establishments. The Company plans to implement and
offer its consulting services in all specialized areas for the creation,
development and ongoing management of a restaurant establishment. This will
include consulting in the areas of concept development and design, menu and
product development, alcoholic beverage licensing, and manager training.
As of the date of this 10QSB, we have not commenced any operations or begun to
offer any of the above-mentioned services. These are services we intend to
provide whenever, it ever, we are able to commence full-scale operations. To
date all of our efforts and limited resources have been spent on developing our
business plan, seeking outside investment capital, and organizing preliminary
meetings with prospective clients. We will not be able to begin executing our
business plan until we raise sufficient capital. At this time we estimate we
need at least $300,000 in investment capital to commence full-scale operations
and begin executing our business plan.
Over the next 12-months, the Company intends to spend our time and resources on
the following activities: complete SEC registration process, raise capital,
establish a working office and commence marketing efforts. None of these
activities are revenue generating. Due to limited resources and lack of
operational performance, there is not a guarantee that the Company will succeed
in executing its business plan or its projected activities over the next 12
months. Because we have no operating history, it is difficult to evaluate our
business and future prospects. Our revenue and income potential is unproven and
our business model may not work.
9
RISK FACTORS RELATED TO WIGWAM DEVELOPMENT, INC.
1. NO OPERATING HISTORY TO EVALUATE
The Company was incorporated under the laws of the State of Delaware on July 20,
1998. The Company's activities to date have been to develop its business model,
and to date has not generated revenue. The Company has a limited operating
history and must be considered in the early development stages of embarking upon
a new venture. We are among many companies that are involved in the business of
providing consulting services to individuals and companies that are in the
start-up phase of operations of family dining establishments. There is no
assurance that the Company will be successful in the consulting dining services
industry now or in the future.
Our business must be considered in light of the risk, expense, and difficulties
frequently encountered by companies in an early stage of development.
Prospective investors should be aware of the difficulties encountered by such
new enterprises, as the Company faces all the risks inherent in any new business
including: under capitalization, cash shortages, limitations with respect to
personnel, technological, financial and other resources and lack of a customer
base and market recognition, most of which are beyond our control. The
likelihood of the success of the Company must be considered in light of the
problems and expenses that are frequently encountered in connection with the
operation of a new business and the competitive environment in which the company
will be operating.
2. NEED FOR ADDITIONAL WORKING CAPITAL - CONTINUATION OF GOING CONCERN NOT
ASSURED
As of March 31, 2003, the Company had working capital of $1,175 and faces the
need for substantial additional working capital in the near future. As the
capital needs of the Company are greater than the current working capital, the
Company must raise additional capital in order to implement its business plan.
No assurance can be given that the Company will be able to organize debt or
equity financing, or that if available, it will be available on terms and
conditions satisfactory to management and might dilute current shareholders.
We anticipate minimal cash requirements until we commence a full-scale execution
of our business plan. Until we raise sufficient capital from outside sources to
commence full-scale operations or if no capital is available on terms and
conditions satisfactory to management, we anticipate our executive officer
and/or directors will cover any basic cash requirements required to keep us in
compliance with all existing corporate filing requirements, including the
Securities and Exchange Commission over the course of the next twelve months.
However, because there are no formal agreements in place with our executive
officer and/or directors, no assurances can be given that they will provide for
any cash shortfalls or that any cash shortfalls can be deferred or paid for
through the issuance of common stock.
If our executive officer and/or directors do not cover the cash cost of our
auditing requirements, a failure to maintain current auditing of our corporate
affairs would result in our failure to meet our future filing requirements with
the Securities and Exchange Commission. Failure to retain our status as a
reporting company could further limit our abilities to raise the necessary
amount of investment capital to commence execution of our business plan.
The Company has prepared audited financial statements as of March 31, 2003,
reporting that the Company is in the development stage and its ability to
10
establish itself as a going concern is dependent upon the Company obtaining
sufficient financing to continue its development activities. There is no
assurance that the Company will achieve profitable operations in the future. The
Company could be required to secure additional financing to implement further
development plans. There is no assurance that such financing will be available
to the Company, or if available, will be available on terms and conditions
satisfactory to management.
3. THE COMPANY HAS GENERATED NO INCOME FROM OPERATIONS AND EXPECT OPERATING
LOSSES IN THE FORESEEABLE FUTURE
The Company currently has generated no income from operations and expects to
incur operating losses for the foreseeable future. As of March 31, 2003, the
accumulated deficit is $25,150. There can be no assurance that the Company will
achieve positive cash flow operations in the future. If the Company ever has
operating profits, it may not be able to sustain them. Expenses will increase as
we build an infrastructure to implement our business model. In addition, we plan
to significantly increase our operating expenses to include, but not limited to:
- Raising capital;
- Designing web site;
- Establishing working office;
- Commencing marketing efforts.
Expenses may also increase due to the potential effect of goodwill amortization
and other charges resulting from future partnerships and/or alliances, if any.
If any of these and other expenses is not accompanied by increased revenue, our
operating losses will be even greater than we anticipate.
4. THE PROGRESS AND OVERALL SUCCESS OF THE COMPANY IS SUBSTANTIALLY DEPENDENT
UPON MANAGEMENT WHOSE EXPERIENCE AND/OR TIME COMMITMENT IS LIMITED
The Company will be dependent upon its executive officer and directors, who do
not receive monetary compensation currently or in the foreseeable future. The
Company does not currently have an employment agreement or "key-man" life
insurance in place with its executive officer or directors at this time. Should
the Company lose its executive officer or directors, we could have great
difficulty replacing them with another qualified executive officer or directors,
which could limit the chances for success and have a negative effect upon the
Company's business, financial condition, operating results and cash flows. The
Company intends to hire additional technical, sales and other personnel as they
move forward with their business model, though competition for such personnel is
intense. There can be no assurance that the company can retain key employees, or
to attract or retain highly qualified technical and managerial personnel in the
future. The inability to attract and retain the necessary technical, sales and
other personnel, would limit the chances for success and have a negative effect
upon the Company's business, financial condition, operating results and cash
flows. In addition, the concentrated ownership the officer and directors have
over the company, which will not be significantly affected and may have a
material adverse effect on future business progress. Further, the current
officer and directors are involved with other employment other than that of the
Company, which may take time from developing the business of the Company and
effect the overall success.
11
5. OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER HAS DIVIDED RESPONSIBILITIES AND
POSSIBLE CONFLICTS OF INTEREST
Our president and chief executive officer Mr. Steven Grauer is the manager of a
sport-fishing lodge in British Columbia, Canada. Although Mr. Grauer is active
in our management, he does not devote his full-time and resources to our
business. Because Mr. Grauer has these divided responsibilities, he may not be
able to devote enough time to properly execute our business plan, which could
result in missed business opportunities and worse-than-expected operating
results. Mr. Grauer will spend minimal time working for the Company. Currently,
Mr. Grauer does not have an employment agreement with the Company.
Futhermore, because Mr. Grauer is a developer and operator of a fishing lodge
property, he could encounter potential conflicts of interest between his divided
responsibilities. Although the Company is involved in a different business,
there is no agreement in place to prevent Mr. Grauer from redirecting future
clients and/or business opportunities away from the Company. Additionally, we do
not have a formal policy for the resolution of any such conflicts or interests
should they arise.
In addition, the Company's executive officer, directors and/or controlling
shareholders are or may become, in their individual capacities, officers,
directors, controlling shareholders and/or partners of other entities engaged in
a variety of businesses that may in the future engage in various transactions
with the Company.
6. THE COMPANY DOES NOT HAVE A RIGHT OF FIRST REFUSAL PERTAINING TO
OPPORTUNITIES THAT COME TO THE ATTENTION ON MANAGEMENT
The Company does not currently have a right of first refusal pertaining to
opportunities that come to Mr. Grauer's attention insofar as such opportunities
may relate to the Company's business operations. However, Mr. Grauer, so long as
he is an officer and/or director of the Company is subject to the restriction
that all opportunities contemplated by the Company's plan of operation which
come to his attention, either in the performance of his duties or in any other
manner, will be considered opportunities of, and made available to the Company.
A breach of this requirement will be a breach of his fiduciary duty as an
officer and/or director of the Company.
7. THE COMPANY IS SUBJECT TO INTENSE COMPETITION AND IS AT A COMPETITIVE
DISADVANTAGE
The Company expects to face strong competition from other business that provides
restaurant-consulting services. The Company expects to compete on the basis of
its reputation among customers as a quality provider of restaurant consulting
services. However, its opportunity to attract business customers may be limited
by our financial resources and other assets. Consequently, we will be at a
competitive disadvantage in obtaining the employees, financing and other
resources required to provide superior consulting services. The Company expects
to be less able than its larger competitors to handle generally increasing costs
and expenses of doing business.
8. THE COMPANY MAY ENCOUNTER UNFORESEEN COSTS IN THE RESTAURANT CONSULTING
SERVICES BUSINESS
Our estimates of the cost of and time to be consumed in the provision of various
consulting services customarily provided to restaurants based upon management's
knowledge and limited experience in the consulting restaurant business, may not
12
be accurate. There can be no assurance that the provision of general restaurant
consulting services, including overall analysis of the customer's various needs,
recommendations for and/or implementation of improvements, modifications, cost
reductions and consulting and specific problem-solving, will not cost
significantly more than expected or even prove to be prohibitive. Further, we
are unable to predict the amount of time or funding that will be consumed in
management's efforts to obtain the additional debt and/or equity financing
required in order permitting Wigwam Development, Inc. to offer a full range of
restaurant consulting services. Therefore, we may expend significant
unanticipated funds or significant funds may be expended by use without the
development of commercially viable services. There can be no assurance that cost
overruns will not occur or that such cost overruns will not adversely affect us.
9. THERE IS NO TRADING MARKET FOR OUR COMMON STOCK
On August 27, 2002, the NASD cleared the Company's request for an unpriced
quotation on the Pink Sheets L.L.C. for the Company's common stock. However, at
this time, no trading market has been established for our common stock or any
other securities of the Company and there can be no assurance that a trading
market will develop in the future, or if developed, that it will be sustained.
Furthermore, investors who desire to sell their shares of common stock in any
market that develops may encounter substantial difficulty in doing so because of
the fact that the price thereof may fluctuate rapidly as a result of changing
economic conditions as well as conditions in the securities markets. There is no
guarantee of trading volume or trading price levels sufficient for investors to
sell their stock, recover their investment in our stock, or profit from the sale
of their stock.
10. OUR COMMON STOCK IS SUBJECT TO THE PENNY STOCK RULES
The Securities and Exchange Commission (SEC) has adopted a set of rules called
the penny stock rules that regulate broker-dealer securities with a price of
less than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information regarding transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker-dealer to deliver to
the customer a standardized risk disclosure document prepared by the SEC that
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with other
information. The penny stock rules require that prior to a transaction in a
penny stock, the broker-dealer must determine in writing that the penny stock is
a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may reduce the level
of trading activity in the secondary market for a stock that is subject to the
penny stock rules. In the event a market ever develops for our common stock,
investors in our common stock may find it more difficult to sell their common
stock.
11. WE ARE LARGELY CONTROLLED BY MANAGEMENT
Mr. Steven Grauer, our officer/director, currently owns or controls 81.1% of our
outstanding common stock and thereby continues to be able to exercise voting
control over the Company for the foreseeable future and will be able to elect
the entire Board of Directors. Mr. Grauer's control could prevent, or make more
difficult, on-going business. In addition, the concentrated ownership by Mr.
Grauer may have a material adverse effect on future business progress, as Mr.
Grauer is involved with other employment other than that of the company, which
may take time from developing the business of the Company and affect the overall
success.
13
12. NO DIVIDENDS HAVE BEEN PAID
The Company has never paid dividends and does not anticipate declaring or paying
dividends in the foreseeable future. Our retained earnings, if any, will finance
the development and expansion of our business. Our dividends will be at our
board of director's discretion and contingent upon our financial condition,
earnings, capital requirements and other factors. Future dividends may also be
affected by covenants contained in loan or other financing documents we may
execute. Therefore, there can be no assurance that cash dividends of any kind
will ever be paid.
13. INDEPENDENT AUDITOR'S "GOING CONCERN" OPINION
The auditor's opinion to our financial statements indicates that it was prepared
on the assumption that we continue as a going concern. Nevertheless, our
independent auditor believes it is "unlikely" that we can continue as a going
concern. See "Independent Auditors' Report" on page 1. The auditor notes that we
remain a development stage company and that we are dependent upon the Company's
ability to meet its future financing requirements.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
14
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Company has duly caused this disclosure statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
WIGWAM DEVELOPMENT, INC.
Date: 07/22/03
By: /s/ Steven Grauer
- -------------------------------
Steven Grauer, President
15
QUARTERLY CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven Grauer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Wigwam Development,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. As the registrant's certifying officer, I am responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report the conclusions about the
effectiveness of the disclosure controls and procedures based on the
evaluation as of the Evaluation Date;
5. As the registrant's certifying officer, I have disclosed, based on the most
recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. As the registrant's certifying officer, I have indicated in this quarterly
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
IN WITNESS WHEREOF, the undersigned has executed this certification as of the
22nd day of July 2003.
/s/ Steven Grauer
- -------------------------------
Chief Executive Officer
16
QUARTERLY CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven Grauer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Wigwam Development,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. As the registrant's certifying officer, I am responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report the conclusions about the
effectiveness of the disclosure controls and procedures based on the
evaluation as of the Evaluation Date;
5. As the registrant's certifying officer, I have disclosed, based on the most
recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. As the registrant's certifying officer, I have indicated in this quarterly
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
IN WITNESS WHEREOF, the undersigned has executed this certification as of the
22nd day of July 2003.
/s/ Steven Grauer
- -------------------------------
Chief Financial Officer
17