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 period from July 1, 2003, to September 30, 2003
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15 (d)OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-31245
KAW ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 91-2048013
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
191 Post Road West, Suite 10
Westport CT 06880
(Address of principal executive offices (zip code))
203-221-2770
(Registrant's telephone number, including area code)
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the
Exchange Act: NONE
Securities registered pursuant to Section 12(g) of the
Exchange Act: Common Stock:
$0.001 Per Share
Check whether the issuer: (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
State the number of shares outstanding of each of the issuer's
class of common equity, as of September 30, 2003: 500,000 shares.
Transitional Small Business Disclosure Format:
Yes No X
PART I
ITEM 1. FINANCIAL STATEMENTS
KAW ACQUISITION CORPORATION
(A Development Stage Company)
BALANCE SHEET (Unaudited)
SEPTEMBER 30, 2003
ASSETS
Current Assets
Cash $ 0
---------------
Total Current Assets $ 0
---------------
LIABILITIES
Liabilities $ 0
$ 0
---------------
See notes to financial statements
KAW ACQUISITION CORPORATION
(A Development Stage Company)
Statements of Operations (Unaudited)
Three Months From From
May 3, 2000
Ended (Inception)
June 30 to June
2003 2002 2003
------ ------ ----------
Income
Other income (net) $ -- $ -- $ -
------ ------ ----------
Expenses
General and administrative $ -- $
------ ------ ----------
Net Loss $ -- $ -- $
------ ------ ----------
Earnings per share
Net loss per common
share $ 0
------
Weighted average of
common shares
outstanding 500,000
----------
See notes to financial statements
KAW ACQUISITION CORPORATION
(A Development Stage Company)
Statements of Changes in Stockholder's Equity (Unaudited)
From May 3, 2000 (Inception) to September 30, 2003
Deficit
Accumulated
through the
Common Stock Develop-
Paid in ment
Shares Amount Capital Stage Total
----------------------------------------
----------
Initial stock
issuance, on
June 29, 2000 500,000 $ 500 $ -- $ -- $ 500
Net loss,
December 31,
2000 (26) (26)
----------------------------------------
----------
Balance
December 31,
2000 500,000 $ 500 $ (26) $ 474
Net loss,
December 31, -- -- -- (35) (35)
2001 ----------------------------------------
----------
Balance March
31, 2002 500,000 $ 500 $ -- (61) $ 439
----------------------------------------
----------
Net loss,
December 31,
2002
----------------------------------------
----------
Balance
March 31, 2003 500,000 $ 500 $ -- $ 0
----------------------------------------
----------
Balance
June 30, 2003 500,000 $ 500 $ -- $ 0
----------------------------------------
----------
Balance
September 30,
2003 500,000 $ 500 $ -- $ 0
----------------------------------------
----------
See notes to financial statements
KAW ACQUISITION CORPORATION
(A Development Stage Company)
Statements of Cash Flows (Unaudited)
From
May 3, 2000
Three Months (Inception)
Ended Sept. 30, to Sept. 30
2003 2002 2003
---------- ---------- ----------
Cash flows from operating
activities
Net loss
---------- ---------- ----------
Adjustments to reconcile
net loss to net cash used
in operating activities:
Net cash used in operating
activities
---------- ---------- ----------
Cash flows from financing
activities:
Net proceeds from issuance
of common stock
---------- ---------- ----------
Net cash provided by
financing activities
---------- ---------- ----------
Net increase (decrease) in
cash
Cash, beginning of period $
---------- ---------- ----------
Cash, end of period $ 0
---------- ---------- ----------
See notes to financial statements
KAW ACQUISITION CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 30, 2003
NOTE 1 UNAUDITED FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-QSB
and, therefore, omit or condense certain footnotes and other
information normally included in financial statements prepared
in accordance with generally accepted accounting principles.
It is suggested that these condensed financial statements
should be read in conjunction with the Company's financial
statements and notes thereto included in the Company's audited
financial statements on Form 10-KSB for the fiscal year ended
December 31, 2002.
The accounting policies followed for interim financial
reporting are the same as those disclosed in Note 1 of the
Notes to Financial Statements included in the Company's
audited financial statements on Form 10-KSB for the fiscal
year ended December 31, 2002.
In the opinion of management, the unaudited financial
statements include all necessary adjustments (consisting of
normal, recurring accruals) for a fair presentation of the
financial position, results of operations and cash flow for
the interim periods presented. Preparing financial statements
requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues
and expenses. Actual results may differ from these estimates.
Interim results are not necessarily indicative of results for
a full year. The results of operations for the nine-month
period ended September 30, 2003, are not necessarily
indicative of operating results to be expected for a full year.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Stock Options
The Company elected to account for stock options issued to
employees in accordance with Accounting Principles Board
Opinion No. 25 (APB Opinion No. 25) Accounting For Stock
Issued to Employees and related interpretations, which
established financial accounting and reporting for
compensation cost of stock issued to employees through
non-variable plans, variable plans, and non-compensatory
plans, and accounts for stock options and warrants issued to
non-employees in accordance with SFAS 123, Accounting for
Stock-Based Compensation, which established a fair value
method of accounting for stock compensation plans with
employees and others.
Accounting Pronouncements
In June, 2001, the Financial Accounting Standards Board issued
Statement of Accounting Standards No. 141, Business
Combinations (SFAS No. 141), which establishes financial
accounting and reporting for business combinations and
establishes financial accounting and reporting for business
combinations and supersedes APB Opinion No. 16, Business
Combinations, and FASB Statement No. 38 Accounting for
Preacquisition Contingencies of Purchased Enterprises. All
business combinations in the scope of this statement are to be
accounted for using the Purchase Method. SFAS No. 141 is
applicable for fiscal years beginning after June 30, 2001.
Accounting Standards No. 142 Goodwill and Other Intangible
Assets (SFAS No. 142) addresses financial accounting and
reporting for acquired goodwill and other intangible assets
and supersedes APB Opinion No. 17. This statement addresses
how goodwill and intangible assets other than those acquired
in a business combination should be accounted for after they
have been initially recognized on the financial statements.
SFAS No. 142 is applicable for fiscal years beginning after
December 15, 2001.
Statement No. 144 Accounting for the Impairment or Disposal of
Long-Lived Assets supersedes Statement No. 121 Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of ("SFAS 121"). Though it retains the basic
requirements of SFAS 121 regarding when and how to measure an
impairment loss, SFAS 144 provides additional implementation
guidance. SFAS 144 excludes goodwill and intangibles not
being amortized among other exclusions. SFAS 144 also
supersedes the provisions of APB 30, Reporting the Results of
Operations pertaining to discontinued operations. Separate
reporting of a discontinued operation is still required, but
SFAS 144 expands the presentation to include a component of an
entity, rather than strictly a business segment as defined in
SFAS 131, Disclosures about Segments of an Enterprise and
Related Information.
SFAS 144 also eliminates the current exemption to
consolidation when control over a subsidiary is likely to be
temporary. This statement is effective for all fiscal years
beginning after December 15, 2001. The Company believes that
the future implementation of SFAS 144 will not have a material
effect on the Company's financial position, results of
operations or liquidity.
Concentration of Risk
There were no cash balances at September 30, 2003, that exceed
federal insurance limits.
Basic Earnings (Loss) per Share
Basic earnings (loss) per share for each year is computed by
dividing income (loss) for the year by the weighted average
number of common shares outstanding during the year. Diluted
earnings (loss) per share include the effects of common stock
equivalents to the extent they are dilutive.
Basic weighted average number of shares outstanding at
September 30, 2003, is as follows:
Basic weighted average number of shares outstanding 500,000
NOTE 3 STOCKHOLDER'S EQUITY
Common Stock
The Company is authorized to issue 100,000,000 shares of
common stock at $0.001 par value. On June 29, 2000, the
Company issued 500,000 shares of common stock for an aggregate
consideration of $500.
NOTE 4 GOING CONCERN UNCERTAINTY
These financial statements are presented assuming the Company
will continue as a going concern. The Company has no
operating history, no established source of revenue or
earnings from operations, as well as an accumulated deficit.
This raises substantial doubt about the Company's ability to
continue as a going concern. Management's plan in regard to
these matters includes active pursuit of suitable business
opportunities with which to negotiate business combinations on
terms favorable to the Company.
NOTE 5 CHANGES IN CONTROL OF REGISTRANT
On April 25, 2003, the then sole shareholder, officer and
director, Peter R. Goss of Kaw Acquisition Corporation
("Kaw/Company") appointed Henry J. Boucher, Jr., and Robert
Laraia as Directors of Kaw with Henry J. Boucher, Jr., to
serve as President and Robert Laraia to serve as
Secretary/Treasurer. Mr. Goss resigned as the Company's sole
Officer and Director of the Company. Mr. Goss' resignation
did not involve any disagreement with the Company on any
matter related to Kaw's operations, policies or practices.
During the month of July, 2002, Peter Goss, the sole
shareholder the of the Company, agreed to sell all of his
shares of stock comprising 500,000 common shares of Kaw
Acquisition Corporation for $165,000. The sale was subject to
the Company being current in all of its required filings with
the Securities and Exchange Commission through December 31,
2002. Mr. Goss received a partial payment of $55,000 in
October, 2002, as against the then purchase price. The
transaction was a private sale by Mr. Goss of his restricted
common shares of the Company. The parties to the sale and
purchase agreement then renegotiated the terms of the
agreement (including the undertaking of Mr. Goss to update all
filings required to be made with the United States Securities
and Exchange Commission). These filings are now complete and
the sale of stock was completed as follows: Mr. Goss sold
250,000 shares of the common shares of the Company to each of
Trails End Management, LLC, and Deerwood Capital, LLC, each
Delaware limited liability companies, and Mr. Goss resigned as
an Officer and Director of the Company and appointed new
Directors.
Upon completing the events described above, a change of
control of Kaw resulted.
NOTE 6 BENEFICIAL OWNERSHIP
The following table shows the Kaw Common Stock owned
beneficially by (i) each of our Executive Officers, (ii) each
of our current Directors, (iii) all Executive Officers and
Directors as a group, and (iv) each person known by us to be
the beneficial owner of more than five percent of our Common
Stock as of April 25, 2003. "Beneficial ownership" is a
technical term broadly defined by the Securities and Exchange
Commission to mean more than ownership in the usual sense. For
example, you beneficially own Common Stock not only if you
hold it directly, but also if you indirectly (through a
relationship, a position as Director or Trustee, or a contract
or understanding), have (or share the power to vote the stock
or sell it) the right to acquire it within 60 days. Except as
disclosed in the footnotes below, each of the Executive
Officers and Directors listed have sole voting and investment
power over his shares. As of April 25, 2003, there were
500,000 shares of Common Stock issued and outstanding and two
holders of record.
SHARES
BENEFICIALLY
NAME CURRENT TITLE OWNED
Henry J. Boucher, Jr. President, Director 250,000
Robert Laraia Director, 250,000
Secretary/Treasurer
All Current Officers and
Directors as a Group
(2 persons) 500,000
Deerwood Capital, LLC 250,000
Trails End Management, LLC 250,000
(1) Unless otherwise specifically noted, all addresses are
care of the Company at Trails End Management, LLC, 222
Main Street, #276, Farmington CT 06032.
(2) Mr. Boucher is the sole member and sole manager of
Deerwood Capital, LLC, which owns 250,000 shares of Kaw
common stock, representing 50% of the issued and
outstanding common stock
(3) Mr. Laraia is the sole member and sole manager of Trails
End Management, LLC, which owns 250,000 shares of Kaw
common stock, representing 50% of the issued and
outstanding common stock.
NOTE 7 MANAGEMENT
The following table sets forth certain information regarding
the members of Kaw's Board of Directors and its executive
officers as of April 25, 2003:
Name Age Position
Henry Boucher, Jr. 55 President, Director
Robert Laraia 33 Director,
Secretary/Treasurer
Our Directors have been elected to serve until the next Annual
Meeting of Kaw's stockholders and until their respective
successors have been elected and qualified or until death,
resignation, removal or disqualification. Kaw's Certificate
of Incorporation provides that the number of Directors to
serve on the Board of Directors may be established, from time
to time, by action of the Board of Directors. Director
vacancies are filled by election by a majority vote of the
remaining Directors. Kaw's executive officers are appointed
by and serve at the discretion of the Board of Directors.
Each biography of our current Officer and Directors follows:
HENRY J. BOUCHER, JR., PRESIDENT AND DIRECTOR: Mr. Boucher
received his M.S. in economics from South Dakota State
University in 1972. From 1992 to June, 1999, he was a Vice
President of Mercer Management Consulting, a subsidiary of
Marsh McLennan, an insurance brokerage firm. Prior to joining
Mercer, Mr. Boucher was a partner with the accounting firm of
Coopers and Lybrand (now Price Waterhouse Coopers). From
June, 1999, to July, 2000, Mr. Boucher was a partner with
Arthur Andersen. He joined Business Edge Solutions, where he
was a Vice President until December, 2000. From January,
2001, Mr. Boucher has been a principal of Mentus Consulting, LLC.
ROBERT LARAIA, DIRECTOR AND SECRETARY/TREASURER: Mr. Laraia
received a Bachelor in Business Administration from The
University of Hartford in 1991 and a Masters Degree in
Business Administration from The University of Hartford in
1993. From 1991 to 1997 he was the Network Manager of the
Investment Division of Cigna Corporation; from 1997-2000 he
was a Consultant for Avares Partners, Westchester, New York,
an information technology firm, and since 2000 to the present
he owns and is the President of Wintonbury Consulting in
Farmington, Connecticut. Mr. Laraia is a Registered
Communication Distribution Designer and Wintonbury Consulting
is involved in the design, integration and implementation of
telephone communication (voice, data, video, audio and other
low voltage control) transportation systems and their related
infrastructure components.
PART II
OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the
Company is unaware of such proceedings contemplated against it.
ITEM 2 CHANGES IN SECURITIES
Not applicable.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company has registered its common stock on a Form 10-SB
registration statement filed pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") and Rule 12(g)
thereof. The Company files with the Securities and Exchange
Commission periodic and episodic reports under Rule 13(a) of
the Exchange Act, including quarterly reports on Form 10-QSB
and annual reports Form 10-KSB.
The Company was formed to engage in a merger with or
acquisition of an unidentified foreign or domestic private
company which desires to become a reporting company whose
securities have been registered under the Exchange Act. The
Company may be deemed to meet the definition of a "blank
check" company contained in Section (7)(b)(3) of the
Securities Act of 1933, as amended.
Management believes that there are perceived benefits to being
a reporting company which may be attractive to foreign and
domestic private companies.
These benefits are commonly thought to include:
(1) the ability to use securities to make acquisition f
assets or businesses;
(2) increased visibility in the financial community;
(3) the facilitation of borrowing from financial institutions;
(4) improved trading efficiency;
(5) the potential for shareholder liquidity;
(6) greater ease in subsequently raising capital;
(7) compensation of key employees through options for stock
for which there may be a public market;
(8) enhanced corporate image; and
(9) a presence in the United States capital market.
A private company which may be interested in a business
combination with the Company may include:
(1) a company for which a primary purpose of becoming a
reporting company is the use of its securities for the
acquisition of assets or businesses;
(2) a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of
securities on terms acceptable to it;
(3) a company which wishes to become a reporting company with
less dilution of its common stock than would occur
normally upon an underwriting;
(4) a company which believes that it will be able to obtain
investment capital on more favorable terms after it has
become a reporting company;
(5) a foreign company which may wish an initial entry into
the United States securities market;
(6) a company seeking one or more of the other benefits
believed to attach to a reporting company.
The Company is not currently engaged in negotiations with any
potential target company for a business combination.
The Company is authorized to enter into a definitive agreement
with a wide variety of private businesses without limitation
as to their industry or revenues. It is not possible at this
time to predict with which private company, if any, the
Company will enter into a definitive agreement or what will be
the industry, operating history, revenues, future prospects or
other characteristics of that company.
The current shareholders of the Company have agreed not to
sell or otherwise transfer any of their common stock of the
Company except in connection with a business combination.
The Company does not intend to trade its securities in the
secondary market until completion of a business combination.
It is anticipated that following such occurrence the Company
will take the steps required to cause its common stock to be
admitted to quotation on the NASD OTC Bulletin Board or, if it
then meets the financial and other requirements thereof, on
the Nasdaq SmallCap Market, National Market System or regional
or national exchange.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5 OTHER INFORMATION
Not applicable.
ITEM 6 EXHIBITS AND REPORTS
(a) Exhibits
EXHIBIT NUMBER DESCRIPTION
3.1 Articles of Incorporation (1)
3.3 Bylaws (1)
10.1 Agreement with Peter Goss (1)
10.2 Shareholders Agreement (1)
99.X Certification by the Company's Chief Executive
Officer and Chief Financial Officer.*
(1) filed as an Exhibit to the Company's Form 10-SB,
filed with the Securities and Exchange Commission
on August 7, 2000
* filed as an Exhibit with this Form 10-QSB
(b) Reports on Form 8-K.
Registrant's Form 8-K filed May 6, 2003, (Commission File
No. 000-31245)
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.
KAW ACQUISITION CORPORATION
By: /s/ Henry J. Boucher, Jr.
Henry J. Boucher, Jr.
President
Dated: November 13, 2003
EXHIBIT 99.X
CERTIFICATION
I, Henry J. Boucher, Jr., President of Kaw Acquisition
Corporation, certify that:
1. I have reviewed this quarterly report on Form
10-Q of Kaw Acquisition Corporation;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements,
and other financial information included in this 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 report;
4. The registrant's other certifying officer and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and we have:
a) Designed such disclosure controls and procedures,
or caused such disclosure controls and procedures
to be designed under our supervision, to ensure
that material information relating to the
registrant, including its consolidated
subsidiaries, is made known to us by others
within those entities, particularly during the
period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented
in this report our conclusions about the
effectiveness of the disclosure controls and
procedures, as of the end of the period covered
by this report based on such evaluation; and
c) Disclosed in this report any change in the
registrant's internal control over financial
reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual
report) that has materially affected, or is
reasonably likely to materially affect, the
registrant's internal control over financial
report; and
5. The registrant's other certifying officer and I
have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant's
auditors and to the audit committee of registrant's board of
directors (or persons fulfilling the equivalent function):
a) All significant deficiencies and material
weaknesses in the design or operation of internal
control over financial reporting which are
reasonably likely to adversely affect the
registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves
management or other employees who have a
significant role in the registrant's internal
control over financial report.
By: /s/ Henry J. Boucher, Jr.
Henry J. Boucher, Jr.
President
Dated: November 13, 2003
EXHIBIT 99.X
CERTIFICATION
I, Robert Laraia, Chief Financial Officer of Kaw Acquisition
Corporation, certify that:
1. I have reviewed this quarterly report on Form
10-Q of Kaw Acquisition Corporation;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements,
and other financial information included in this 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 report;
4. The registrant's other certifying officer and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and we have:
a) Designed such disclosure controls and procedures,
or caused such disclosure controls and procedures
to be designed under our supervision, to ensure
that material information relating to the
registrant, including its consolidated
subsidiaries, is made known to us by others
within those entities, particularly during the
period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented
in this report our conclusions about the
effectiveness of the disclosure controls and
procedures, as of the end of the period covered
by this report based on such evaluation; and
c) Disclosed in this report any change in the
registrant's internal control over financial
reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual
report) that has materially affected, or is
reasonably likely to materially affect, the
registrant's internal control over financial
report; and
5. The registrant's other certifying officer and I
have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant's
auditors and to the audit committee of registrant's board of
directors (or persons fulfilling the equivalent function):
a) All significant deficiencies and material
weaknesses in the design or operation of internal
control over financial reporting which are
reasonably likely to adversely affect the
registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves
management or other employees who have a
significant role in the registrant's internal
control over financial report.
By: /s/ Robert Laraia
Robert Laraia
Chief Financial Officer
Dated: November 13, 2003