10QSB 1 form10qsb033104.txt FORM 10-QSB 03-31-04 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004. OR / / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION FROM _______ TO ________. COMMISSION FILE NUMBER 000-31313 BLACKFOOT ENTERPRISES, INC. -------------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) NEVADA 88-0409160 ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6767 W. Tropicana Avenue, Suite 207 LAS VEGAS, NEVADA 89103 ---------------------------------------- --------- (Address of principal executive offices) (Zip code) Issuer's telephone number: (702) 248-1027 N/A ----------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark 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 // State the number of shares outstanding of each of the issuer's classes of common equity, for the period covered by this report and as at the latest practicable date: -1- At March 31, 2004, and as of the date hereof, there were outstanding 2,100,000 shares of the Registrant's Common Stock, $.001 par value. Transitional Small Business Disclosure Format: Yes / / No /X/ -2- PART I Item 1. Financial Statements BLACKFOOT ENTERPRISES, INC. (A Development Stage Company) FINANCIAL REPORTS MARCH 31, 2004 DECEMBER 31, 2003 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) CONTENTS ----------------------------------------------------------------------------- FINANCIAL STATEMENTS Balance Sheets F-1 Statements of Income F-2 Statements of Stockholders' Equity F-3 Statements of Cash Flows F-4 Notes to Financial Statements F-5 - F-8 -----------------------------------------------------------------------------
BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS March 31, December 31, 2004 2003 ------------- ------------ ASSETS CURRENT ASSETS $ 0 $ 0 ------------- ------------ Total current assets $ 0 $ 0 ------------- ------------ Total assets $ 0 $ 0 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 1,500 $ 700 Officers advances (Note 7) 32,872 32,127 ------------- ------------ Total current liabilities $ 34,372 $ 32,827 ------------- ------------ STOCKHOLDERS' EQUITY Common stock: $.001 par value; authorized 25,000,000 shares; issued and outstanding: 2,100,000 shares at December 31, 2003: $ $ 2,100 2,100,000 shares at March 31, 2004; 2,100 Additional Paid In Capital 0 0 Accumulated deficit during development stage (36,472) (34,927) ------------- ------------ Total stockholders' equity $ (34,372) $ (32,827) ------------- ------------ Total liabilities and stockholders' equity $ 0 $ 0 ============= ============
See Accompanying Notes to Financial Statements. F-1
BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF INCOME July 10, 1996 Three months ended Years Ended (inception) to March 31, March 31, December 31, December 31, March 31, 2004 2003 2003 2002 2004 -------------- ------------- ------------ ------------- ------------ Revenues $ 0 $ 0 $ 0 $ 0 $ 0 Cost of revenue 0 0 0 0 0 -------------- ------------- ------------ ------------- ------------ Gross profit $ 0 $ 0 $ 0 $ 0 $ 0 General, selling and administrative expenses 1,545 0 615 1,873 36,472 -------------- ------------- ------------ ------------- ------------ Operating (loss) $ (1,545) $ 0 $ (615) $ (1,873) $ (36,472) Nonoperating income (expense) 0 0 0 0 0 -------------- ------------- ------------ ------------- ------------ Net (loss) $ (1,545) $ 0 $ (615) $ (1,873) $ (36,472) =============== ============== ============= ============= ============ Net (loss) per share, basic and diluted (Note 2) $ 0.00 $ (0.00) $ (0.00) $ (0.00) $ (0.02) ============== ============= ============ ============= ============ Average number of shares of common stock outstanding 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 ============== ============= ============ ============= ============
See Accompanying Notes to Financial Statements. F-2
BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' EQUITY Accumulated (Deficit) Common Stock Additional During ------------------------------- Paid-In Development Shares Amount Capital Stage ------------- ------------- ------------- ------------ Balance, December 31, 1998 2,100,000 $ 2,100 $ 0 $ (2,100) Net (loss), December 31, 1999 0 ------------- ------------ ------------- ------------ Balance, December 31, 1999 2,100,000 $ 2,100 $ 0 $ (2,100) April 24, 2000, changed from no par value to $.001 (2,079) 2,079 April 24, 2000, forward stock 100:1 2,079 (2,079) Net (loss), December 31, 2000 (24,662) ------------- ------------ ------------- ------------- Balance, December 31, 2000 2,100,000 $ 2,100 $ 0 $ (26,762) Net (loss) December 31, 2001 (5,677) ------------- ------------ ------------- ------------- Balance, December 31, 2001 2,100,000 $ 2,100 $ 0 $ (32,439) Net (loss) December 31, 2002 (1,873) ------------- ------------ ------------- ------------- Balance, December 31, 2002 2,100,000 $ 2,100 $ 0 $ (34,312) Net (loss) December 31, 2003 (615) ------------- ------------ ------------- ------------- Balance, December 31, 2003 2,100,000 $ 2,100 $ 0 $ (34,927) Net (loss) January 1, 2003 to March 31, 2004 (1,545) ------------- ------------ ------------- ------------- Balance, March 31, 2003 2,100,000 $ 2,100 $ 0 $ (36,472) ============= ============ ============= =============
See Accompanying Notes to Financial Statements. F-3
BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS July 10, 1996 Three months ended Years Ended (inception) to March 31, March 31, December 31, December 31, March 31, 2004 2003 2003 2002 2004 -------------- ------------- ------------ ------------- ------------ Cash Flows From Operating Activities Net (loss) $ (1,545) $ (0) $ (615) $ (1,873) $ (36,472) Adjustments to reconcile net (loss) to cash (used in) operating activities: Changes in assets and liabilities Increase in accounts payable 800 0 615 (1,100) 1,500 Increase in officer advances 745 0 0 2,973 32,872 -------------- -------------- ------------ ------------- ------------ Net cash (used in) operating activities $ 0 $ 0 $ 0 $ 0 $ (2,100) -------------- -------------- ------------ ------------- ------------ Cash Flows From Investing Activities $ 0 $ 0 $ 0 $ 0 $ 0 -------------- -------------- ------------ ------------- ------------ Cash Flows From Financing Activities Issuance of common stock 0 0 0 0 2,100 -------------- -------------- ------------ ------------- ------------ Net cash (used in) financing activities $ $ 0 $ 0 $ 0 $ 2,100 -------------- -------------- ------------ ------------- ------------ Net increase (decrease) in cash $ 0 $ 0 $ 0 $ 0 $ 0 Cash, beginning of period 0 0 0 0 $ 0 -------------- -------------- ------------ ------------- ------------ Cash, end of period $ 0 $ 0 $ 0 $ 0 $ 0 ============== ============== ============ ============= ============
See Accompanying Notes to Financial Statements. F-4 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004, AND DECEMBER 31, 2003 NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS: Blackfoot Enterprises, Inc. ("Company") was organized July 10, 1996 under the laws of the State of Nevada. The Company currently has no operations and, in accordance with Statement of Financial Accounting Standard (SFAS) No. 7, "ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE ENTERPRISES," is considered a development stage company. A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES IS AS FOLLOWS: 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. CASH For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of March 31, 2004 and 2003, and December 31, 2003 and 2002. INCOME TAXES Income taxes are provided for using the liability method of accounting in accordance with SFAS No. 109 "ACCOUNTING FOR INCOME TAXES." A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. REPORTING ON COSTS FOR START-UP ACTIVITIES Statement of Position 98-5 ("SOP 98-5), "REPORTING ON THE COSTS OF START-UP ACTIVITIES" which provides guidance on the financial reporting of start-up and organization costs, requires most costs of start-up activities and organization costs to be expensed as incurred. With the adoption of SPO 98-5, there has been little to no effect on the Company's financial statements. F-5 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004, AND DECEMBER 31, 2003 NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) RECENT ACCOUNTING PRONOUNCEMENTS In April 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 149 (SFAS 149), "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS 149 amends SFAS 133 to provide clarification on the financial accounting and reporting for derivative instruments and hedging activities and requires similar accounting treatment for contracts with comparable characteristics. We do not believe the adaptation of SFAS 149, effective primarily for contracts entered into or modified after June 30,2003 and for hedging relationships designed after June 30, 2003, will have a material effect on our financial statements. In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No.150 (SFAS 150), "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity," SFAS 150 addresses financial accounting and reporting for certain financial instruments with characteristics of both liabilities and equity. This statement requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. As required by SFAS 150, we will adopt this new accounting standard effective July 1, 2003. We do not believe the adaptation of SFAS 150 will have a material impact on our financial statements. In November 2003, the EITF reached a consensus on Issue 03-01, THE MEANING OF OTHER-THAN-TEMPORARY IMPAIRMENT AND ITS APPLICATION TO CERTAIN INVESTMENTS (EITF 03-01) establishes additional disclosure requirements for each category of FAS 115 investments in a loss position. Effective for years ending after December 15, 2003, companies must disclose the aggregate amount of unrealized losses, and aggregate related fair value of their investments with unrealized losses. Those investments are required to be segregated by those in a loss position for less than 12 months and those in a loss position for greater than 12 months. Additionally, certain qualitative disclosures should be made to clarify a circumstance whereby an investment's fair value that is below cost is not considered other-than-temporary. The provisions of this consensus do not have a significant effect on our financial position or operating results. In November 2003, the EITF reached a consensus on Issue 03-10, APPLICATION OF EITF 02-16 BY RESELLERS TO SALES INCENTIVES OFFERED TO CONSUMERS BY MANUFACTURERS, addressing how a reseller is to account for the redemption of a manufacturer's coupon by a consumer at the reseller's location (EITF 03-10). EITF 03-10 eliminates the option that permitted resellers to report the value of the consideration received as a reduction in costs of goods sold, but rather mandates that it re recorded as revenue. EITF 03-10 is applicable to new arrangements, including modifications to existing arrangements, entered into in fiscal periods beginning after November 25, 2003. The provisions of this consensus do not have a significant effect on our financial position or operating results. F-6 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004, AND DECEMBER 31, 2003 NOTE 2. STOCKHOLDERS' EQUITY COMMON STOCK The authorized common stock of the Company consists of 25,000,000 shares with par value of $0.001. On July 30, 1996, the Company authorized and issued 21,000 shares of its no par value common stock in consideration of $2,100 in cash. On April 24, 2000, the State of Nevada approved the Company's restated Articles of Incorporation, which increased its capitalization from 25,000 common shares to 25,000,000 common shares. The no par value was changed to $0.001 per share. On April 24, 2000, the Company's shareholders approved a forward split of its common stock at one hundred shares for one share of the existing shares. The number of common stock shares outstanding increased from 21,000 to 2,100,000. Prior period information has been restated to reflect the stock split The Company has not authorized any preferred stock. NET LOSS PER COMMON SHARE Net loss per share is calculated in accordance with SFAS No. 128, "EARNINGS PER SHARE." The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted averaged number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net loss per common share is based on the weighted average number of shares of common stock outstanding of 2,100,000 during 2003, 2002, 2001 and since inception. As of December 31, 2003, 2002, 2001, and since inception, the Company had no dilutive potential common shares. NOTE 3. INCOME TAXES There is no provision for income taxes for the period ended March 31, 2004, due to the net loss and no state income tax in Nevada, the state of the Company's domicile and operations. The Company's total deferred tax asset as of March 31, 2004 is as follows: Net operating loss carry forward $ 36,472 Valuation allowance $ (36,472) ------------------- Net deferred tax asset $ 0 The net federal operating loss carry forward will expire between 2016 and 2021. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. F-7 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004, AND DECEMBER 31, 2003 NOTE 4. GOING CONCERN The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have significant cash of other material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. Until the Company has sufficient operations, the stockholders, officers, and directors have committed to advancing the operating costs of the Company. NOTE 5. RELATED PARTY TRANSACTIONS The Company neither owns nor leases any real or personal property. The registered agent of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors for 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 interest. The Company has not formulated a policy for the resolution of such conflicts. NOTE 6. WARRANTS AND OPTIONS There are no warrants or options outstanding to acquire any additional shares of common stock of the Company. NOTE 7. OFFICERS ADVANCES The Company has incurred costs while seeking additional capital through a merger with an existing company. An officer of the Company has advanced funds on behalf of the Company to pay for these costs. These funds have been advanced interest free. F-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The discussion contained herein contains "forward- looking statements" that involve risk and uncertainties. These statements may be identified by the use of terminology such as "believes," "expects," "may," "should" or anticipates" or expressing this terminology negatively or similar expressions or by discussions of strategy. The cautionary statements made in this Form 10QSB should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10QSB. Our actual results could differ materially from those discussed in this report. Generally. The Company currently has no assets or operations. Since January 1, 1997, we have been in the developmental stage and have had no operations. We originally had intended to engage in the sale of reproduced full size cigar store Indians and reproduced totem poles. Our business concept contemplated that we would only to be a sales agent. As at December 31, 1996, all funds raised by the sale of shares of $.001 par value common stock in order to fulfill our initial objective had been expended and we, thereafter, become dormant. As of the date hereof, the Company can be defined as a "shell" company, whose sole purpose is to locate and consummate a merger or acquisition with another public entity or a private entity. We are not a blank-check nor blind pool company. Plan of Operation. The Company intends to seek to acquire assets or shares of an entity actively engaged in business that generates revenues in exchange for its securities. The Company has no particular acquisitions in mind and has not entered into any negotiations regarding such an acquisition. -3- The Securities and Exchange Commission has adopted a rule (Rule 419) which defines a blank-check company as (i) a development stage company, that is (ii) offering penny stock, as defined by Rule 3a51-1, and (iii) that has no specific business plan or purpose or has indicated that its business plan is engage in a merger or acquisition with an unidentified company or companies. We have been informed that the Securities and Exchange Commission position is that the securities issued by all blank check companies that are issued in unregistered offerings must be registered with the Commission before resale. At the time that our shareholders acquired our stock in 1996, we had a specific business plan and purpose. In addition, Rule 419 is applicable only if a registration statement is filed covering an offering of a penny stock by a blank check company. We have not filed a registration statement. In addition, since we had a specific business plan and purpose at the time that our shareholders acquired our stock, we are not deemed to be a so-called "blind pool" company, a company that has a detailed plan of business that involves the acquisition of unidentified properties in a specific industry. We have been informed that the Securities and Exchange Commission is considering whether to propose amendments to the Form 8-S and the Form 8-K for shell companies like us. The proposed amendments could expand the definition of a shell company to be broader than a company with no or nominal operations/assets or assets consisting of cash and cash equivalents, the amendments may prohibit the use of a From S-8 (a form used by a corporation to register securities issued to an employee, director, officer, consultant or advisor, under certain circumstances), and may revise the Form 8-K to require a shell company to include current Form 10 or Form 10-SB information, including audited financial statements, in the filing on Form 8-K that the shell company files to report the acquisition of the business opportunity. Financial Condition. Our auditor's going concern opinion for prior year ended and the notation in the financial statements indicate that we do not have significant cash or other material assets and that we are relying on advances from stockholders, officers and directors to meet limited operating expenses. We do not have sufficient cash or other material assets or do we have sufficient operations or an established source of revenue to cover our operational costs that would allow us to continue as a going concern. We are insolvent in that we are unable to pay our debts in the ordinary course of business as they become due. -4- Since the Company has had no operating history nor any revenues or earnings from operations, with no significant assets or financial resources, the Company will in all likelihood sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in the Company incurring a net operating loss which will increase continuously until the Company can consummate a business combination with a profitable business opportunity and consummate such a business combination. Liquidity and Operational Results. The Company has no current operating history and does not have any revenues or earnings from operations. The Company has no assets or financial resources. The Company will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in the Company incurring a net operating loss that will increase continuously until the Company can consummate a business combination with a profitable business opportunity. There is no assurance that the Company can identify such a business opportunity and consummate such a business combination. The Company is dependent upon its officers to meet any de minimis costs that may occur. Johann Rath, an officer and director of the Company, has agreed to provide the necessary funds, without interest, for the Company to comply with the Securities Exchange Act of 1934, as amended; provided that he is an officer and director of the Company when the obligation is incurred. All advances are interest-free. Liquidity. As of March 31, 2004, we had total liabilities of $34,372 and we had a negative net worth of $34,372. As of December 31, 2003, we had total liabilities of $32,127 and a negative net worth of $32,827. We have had no revenues from inception through December 31, 2003 and we had no revenues for the period ended March 31, 2004. We have a loss from inception through December 31, 2003 of $34,927 and a loss from inception through March 31, 2004 of $36,472 or an increase for the first quarter of $1,545. We have officer's advances of $32,872 from inception to March 31, 2004. The officer's advances as of December 31, 2003 were $32,127 or an increase for the current quarter of $745. Item 3. Qualitative and Quantitative Disclosures About Market Risk. -5- The Company has not considered nor conducted any research concerning qualitative and quantitative market risk. Item 4. Evaluation of Disclosure on Controls and Procedures. Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this Form 10QSB (and the financial statements contained in the report), our president and treasurer have determined that the our current disclosure controls and procedures are effective. There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) or any other factors during the quarter covered by this report, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. PART II OTHER INFORMATION Item 1 - Legal Proceedings ..............................................None Item 2 - Changes in the Rights of the Company's Security Holders ...............................................None Item 3 - Defaults by the Company on its Senior Securities ..............................................None Item 4 - Submission of Matter to Vote of Security Holders ........................................................None Item 5 - Other Information Board Meeting. Our board held four meetings during the period covered by this current report. Audit Committee. Our board of directors has not established an audit committee. In addition, we do not have any other compensation or executive or similar committees. We will not, in all likelihood, establish an audit committee until such time as the Company generates a positive cash flow of which there can be no assurance. We recognize that an audit committee, when established, will play a critical role in our financial reporting system by overseeing and monitoring management's and the independent auditors' participation in the financial -6- reporting process. At such time as we establish an audit committee, its additional disclosures with our auditors and management may promote investor confidence in the integrity of the financial reporting process. Until such time as an audit committee has been established, the full board of directors will undertake those tasks normally associated with an audit committee to include, but not by way of limitation, the (i) review and discussion of the audited financial statements with management, and (ii) discussions with the independent auditors the matters required to be discussed by the Statement On Auditing Standards No. 61 and No. 90, as may be modified or supplemented. Code of Ethics. We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The code of ethics will be posted on the investor relations section of the Company's website in the event that we have a website. At such time as we have posted the code of ethics on our website, we intend to satisfy the disclosure requirements under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of the code of ethics by posting such information on the website. Item 6 - Exhibits and Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter for which this report is filed. The following exhibits are filed with this report: 31.1 Certification of Chief Executive Officer. 31.2 Certification of Chief Financial Officer. 32.1 Section 906 Certifications. -7- 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. Dated: May 3, 2004 BLACKFOOT ENTERPRISES, INC. By: /s/ JOHANN RATH ----------------------------- Johann Rath President and Chief Executive Officer and Director By: /s/ TERRI RUSSO ------------------------------ Terri Russo Treasurer and Chief Financial Officer and Director -8-