Form 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended December 31, 2004.
( ) Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File No: 000-28795
FRANKLYN RESOURCES II, INC.
---------------------------------------
(Name of small business in its charter)
Nevada 84-1491681
- -------------------------- -----------------------
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
P. O. Box 461029, Glendale, CO 80246
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(Address of executive offices) Zip Code
(303) 394-1187
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(Issuer's telephone number, including area code)
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Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act 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 _____
Indicate the number of shares outstanding of each of the issuer's classes
of stock, as of the latest practicable date.
Class of Securities Shares Outstanding
at December 31, 2004
------------------- -------------------
Common Stock, $.001 par value 3,416,000
Transitional Small Business Disclosure Format
Yes _____ No __X__
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
(a) The financial statements of registrant for the three months
ended December 31, 2004, follow. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim period presented.
FRANKLYN RESOURCES II, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended December 31, 2004
CONTENTS
Balance Sheet 1
Statements of Operations 2
Statements of Cash Flows 3
Notes to Financial Statements 4
FRANKLYN RESOURCES II, INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 2004
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 50
---------
Total current assets 50
---------
TOTAL ASSETS $ 50
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -
---------
Total current liabilities -
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value;
25,000,000 shares authorized;
3,416,000 shares issued and
outstanding 3,416
Additional paid-in capital 67,254
Deficit accumulated during the
development stage (70,620)
---------
50
---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 50
=========
The accompanying note is an integral part of the financial statements.
1
FRANKLYN RESOURCES II, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the
period from For the For the
inception three three
(March 3, months months
1999) to ended ended
December 31, December 31, December 31,
2004 2004 2003
----------- ---------- ----------
REVENUES $ - $ - $ -
----------- ---------- ----------
EXPENSES
Selling, general and
administrative 70,620 199 -
----------- ---------- ----------
Total expenses 70,620 199 -
----------- ---------- ----------
NET INCOME/(LOSS) (70,620) (199) -
Accumulated deficit
Balance, Beginning
of period - (70,421) (69,921)
----------- ---------- ----------
Balance,
End of period $ (70,620) $ (70,620) $ (69,921)
=========== ========== ==========
NET LOSS PER SHARE $ (0.02) $ (NIL) $ (NIL)
=========== ========== ==========
WEIGHTED AVERAGE NUMBER
OF SHARES
OUTSTANDING 3,378,175 3,416,000 3,416,000
=========== ========== ==========
The accompanying note is an integral part of the financial statements.
2
FRANKLYN RESOURCES II, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the period
from inception
(March 3, For the three For the three
1999) to months ended months ended
December 31, December 31, December 31,
2004 2004 2003
-------------- ------------- -------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (70,620) $ (199) $ -
Adjustments to reconcile
net loss to net cash flows
from operating activities:
Stock issued for services 60,200 - -
-------------- ------------- -------------
Net cash flows from
operating activities (10,420) (199) -
CASH FLOWS FROM
INVESTING ACTIVITIES - - -
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock 9,770 - -
Shareholder Contributions 700 200 -
-------------- ------------- -------------
Net cash flows from
financing activities 10,470 200 -
-------------- ------------- -------------
Net increase
in cash and cash
equivalents 50 1 -
CASH AND CASH EQUIVALENTS,
Beginning of Period - 49 49
-------------- ------------- -------------
CASH AND CASH EQUIVALENTS,
End of Period $ 50 $ 50 $ 49
============== ============= =============
The accompanying note is an integral part of the financial statements.
3
FRANKLYN RESOURCES II, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
(UNAUDITED)
1. Management's Representation of Interim Financial Information
------------------------------------------------------------
The accompanying financial statements have been prepared by Franklyn
Resources II, Inc. without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
as allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
These financial statements include all of the adjustments which, in the
opinion of management, are necessary to a fair presentation of financial
position and results of operations. All such adjustments are of a normal
and recurring nature. These financial statements should be read in
conjunction with the audited financial statements of the Company for the
year ended September 30, 2004 and notes thereto included in the Company's
10-KSB annual report. The Company follows the same accounting policies in
the preparation of interim reports. Results of operations for interim
periods are not indicative of annual results.
4
Item 2. Management's Discussion and Analysis Of Financial
Conditions and Results of Operations.
Liquidity and Capital Resources
The Company remains in the development stage and, since inception,
has experienced no significant change in liquidity or capital resources or
stockholder's equity other than the receipt of cash in the amount of $9,770
and services valued at $60,200 as payment for its outstanding common stock,
and cash contributions of $700 from existing shareholders. The Company's
balance sheet for the period ending December 31, 2004 reflects a current
asset value and a total asset value of $50, in the form of cash, as compared
to $49 in current and total assets as of December 31, 2003.
The Company's business plan is to seek, investigate, and, if
warranted, acquire one or more properties or businesses, and to pursue other
related activities intended to enhance shareholder value. The acquisition
of a business opportunity may be made by purchase, merger, exchange of stock,
or otherwise, and may encompass assets or a business entity, such as a
corporation, joint venture, or partnership. The Company has very limited
capital, and it is unlikely that the Company will be able to take advantage
of more than one such business opportunity.
The Company will carry out its plan of business as discussed above.
The Company cannot predict to what extent its liquidity and capital resources
will be diminished prior to the consummation of a business combination or
whether its capital will be further depleted by the operating losses (if any)
of the business entity which the Company may eventually acquire.
Results of Operations
During the period from March 3, 1999 (inception) through December
31, 2004, the Company has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
registration of its securities under the Securities Exchange Act of 1934,
as amended. No revenues were received by the Company during this period.
For the current fiscal year, the Company anticipates incurring a
loss as a result of expenses associated with compliance with reporting
requirements and expenses associated with locating and evaluating
acquisition candidates. The Company anticipates that until a business
combination is completed with an acquisition candidate, it will not generate
revenues and may continue to operate at a loss after completing a business
combination, depending upon the performance of the acquired business.
For the quarter ended December 31, 2004 and 2003, the Company showed
net losses of $199 and $0, respectively. From inception the Company has
experienced losses of $70,620 of which $60,200 was settled for shares of
stock in the Company. The decrease in net loss is attributed primarily to
a difference in timing of costs.
5
Need for Additional Financing
The Company will require additional capital in order to pay the costs
associated with completion and filing of all its delinquent reports, to remain
current on its future filings and to seek out suitable merger or acquisition
candidates.
No specific commitments to provide additional funds have been made by
management or other stockholders, and the Company has no current plans,
proposals, arrangements or understandings with respect to the sale or issuance
of additional securities prior to the location of a merger or acquisition
candidate. Accordingly, there can be no assurance that any additional funds will
be available to the Company to allow it to cover its expenses. Notwithstanding
the foregoing, to the extent that additional funds are required, the Company
anticipates receiving such funds in the form of advancements from current
shareholders without issuance of additional shares or other securities, or
through the private placement of restricted securities rather than through a
public offering.
The Company may also seek to compensate providers of services by issuances
of stock in lieu of cash.
Item 3. Controls and Procedures
As of the end of the period covered by this report, the Company conducted
an evaluation, under the supervision and with the participation of the Chief
Executive Officer and Chief Financial Officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act"). Based on this evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms. There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
6
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
(a) Exhibits
31.1 Certification by the Principal Executive Officer pursuant to Section 302
of the Sarbanes-0xley Act of 2002
31.2 Certification by the Principal Financial Officer pursuant to Section 302
of the Sarbanes-0xley Act of 2002
32.1 Certification by the Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification by the Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K:
None.
7
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.
Date: August 12, 2005
FRANKLYN RESOURCES II, INC.
By: /s/ FRANK L. KRAMER
--------------------------
Frank L. Kramer
President and
Principal Executive Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name Title Date
- ---- ----- ----
President
/s/ FRANK L. KRAMER Principal Executive Officer
- ----------------------- Director August 12, 2005
Frank L. Kramer
/s/ DEBORAH A. SALERNO Secretary/Treasurer
- ---------------------- Principal Financial Officer August 12, 2005
Deborah A. Salerno Director
8
Exhibit 31.1
Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
I, Frank L. Kramer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Franklyn Resources
II, Inc. (the "Registrant");
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 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 report;
4. The Registrant's other certifying officer(s) 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 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 is made
known to us, particularly during the period in which this quarterly report
is being prepared. The Registrant has no consolidated or unconsolidated
subsidiaries;
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
reporting; and
5. The Registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Registrant's auditors and the audit committee of the Registrant's board
of directors (or persons performing the equivalent functions):
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 reporting.
/s/ FRANK L. KRAMER August 12, 2005
- ---------------------------------------
Frank L. Kramer, Principal Executive Officer
Exhibit 31.2
Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
I, Deborah A. Salerno, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Franklyn Resources
II, Inc. (the "Registrant");
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 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 report;
4. The Registrant's other certifying officer(s) 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 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 is made
known to us, particularly during the period in which this quarterly report
is being prepared. The Registrant has no consolidated or unconsolidated
subsidiaries;
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
reporting; and
5. The Registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Registrant's auditors and the audit committee of the Registrant's board
of directors (or persons performing the equivalent functions):
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 reporting.
/s/ DEBORAH A. SALERNO August 12, 2005
- ---------------------------------------
Deborah A. Salerno, Principal Financial Officer
Exhibit 32.1
Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
In connection with the filing of the Quarterly Report on Form 10-QSB of Franklyn
Resources II, Inc. (the "Company") for the period ended December 31, 2004
as filed with the Securities and Exchange Commission, I, Frank L. Kramer,
President of the Company certify, pursuant to 18 U.S.C. ss.1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of
my knowledge and belief:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results or operations of the
Company.
/s/ FRANK L. KRAMER August 12, 2005
- ---------------------------------
Frank L. Kramer
Principal Executive Officer
Exhibit 32.2
Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
In connection with the filing of the Quarterly Report on Form 10-QSB of Franklyn
Resources II, Inc. (the "Company") for the period ended December 31, 2004
as filed with the Securities and Exchange Commission, I, Deborah A. Salerno,
Treasurer of the Company certify, pursuant to 18 U.S.C. ss.1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of
my knowledge and belief:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results or operations of the
Company.
/s/ DEBORAH A. SALERNO August 12, 2005
- ---------------------------------
Deborah A. Salerno
Principal Financial Officer