10QSB 1 form10qsb.txt FORM 10-QSB FOR THE PERIOD ENDING 06-30-04 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 JUNE 30, 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: At June 30, 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/ -1- PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BLACKFOOT ENTERPRISES, INC. (A Development Stage Company) FINANCIAL REPORTS JUNE 30, 2004 DECEMBER 31, 2003 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) CONTENTS ________________________________________________________________________________ FINANCIAL STATEMENTS Balance Sheets F-1 Statements of Income F-2-3 Statements of Stockholders' Equity F-4 Statements of Cash Flows F-5-6 Notes to Financial Statements F-7-9 ________________________________________________________________________________ BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS June 30, 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 $ 0 $ 700 Officers advances (Note 7) 36,897 32,127 ________ ________ Total current liabilities $ 36,897 $ 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 June 30, 2004; 2,100 Additional Paid In Capital 0 0 Accumulated deficit during development stage (38,997) (34,927) ________ ________ Total stockholders' equity $(36,897) $(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 Three months ended Six months ended ___________________________ ___________________________ June 30, June 30, June 30, June 30, 2004 2003 2004 2003 __________ __________ __________ __________ Revenues $ 0 $ 0 $ 0 $ 0 Cost of revenue 0 0 0 0 __________ __________ __________ __________ Gross profit $ 0 $ 0 $ 0 $ 0 General, selling and administrative expenses 2,525 0 (4,070) 0 __________ __________ __________ __________ Operating (loss) $ (2,525) $ 0 $ (4,070) $ 0 Nonoperating income (expense) 0 0 0 0 __________ __________ __________ __________ Net (loss) $ (2,525) $ 0 $ (4,070) $ 0 ========== ========== ========== ========== Net (loss) per share, basic and diluted (Note 2) $ (0.00) $ 0.00 $ (0.00) $ 0.00 ========== ========== ========== ========== Average number of shares of common stock outstanding 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 INCOME Years Ended July 10, 1996 ___________________________ (inception) to December 31, December 31, June 30, 2003 2002 2004 ____________ ____________ _____________ Revenues $ 0 $ 0 $ 0 Cost of revenue 0 0 0 __________ __________ __________ Gross profit $ 0 $ 0 $ 0 General, selling and administrative expenses 615 1,873 38,997 __________ __________ __________ Operating (loss) $ (615) $ (1,873) $ (38,997) Nonoperating income (expense) 0 0 0 __________ __________ __________ Net (loss) $ (615) $ (1,873) $ (38,997) ========== ========== ========== Net (loss) per share, basic and diluted (Note 2) $ (0.00) $ (0.00) $ (0.02) ========== ========== ========== Average number of shares of common stock outstanding 2,100,000 2,100,000 2,100,000 ========== ========== ========== See Accompanying Notes to Financial Statements. F-3
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, 2004 to June 30, 2004 (4,070) _________ _______ _______ ________ Balance, June 30, 2004 2,100,000 $ 2,100 $ 0 $(38,997) ========= ======= ======= ========
See Accompanying Notes to Financial Statements. F-4
BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS Three months ended Six months ended _____________________ _____________________ June 30, June 30, June 30, June 30, 2004 2003 2004 2003 ________ ________ ________ ________ Cash Flows From Operating Activities Net (loss) $ (2,525) $ 0 $ (4,070) $ 0 Adjustments to reconcile net (loss) to cash (used in) operating activities: Changes in assets and liabilities Increase (decrease) in accounts payable (1,500) 0 (700) 0 Increase in officer advances 4,025 0 4,770 0 ________ ________ ________ ________ Net cash (used in) operating activities $ 0 $ 0 $ 0 $ 0 ________ ________ ________ ________ Cash Flows From Investing Activities $ 0 $ 0 $ 0 $ 0 ________ ________ ________ ________ Cash Flows From Financing Activities Issuance of common stock 0 0 0 0 ________ ________ ________ ________ Net cash (used in) financing activities $ $ 0 $ 0 $ 0 ________ ________ ________ ________ Net increase (decrease) in cash $ 0 $ 0 $ 0 $ 0 Cash, beginning of period 0 0 0 0 ________ ________ ________ ________ Cash, end of period $ 0 $ 0 $ 0 $ 0 ======== ======== ======== ========
See Accompanying Notes to Financial Statements. F-5 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS Years Ended July 10, 1996 ___________________________ (inception) to December 31, December 31, June 30, 2003 2002 2004 ____________ ____________ _____________ Cash Flows From Operating Activities Net (loss) $ (615) $ (1,873) $ (38,997) Adjustments to reconcile net (loss) to cash (used in) operating activities: Changes in assets and liabilities Increase in accounts payable 615 (1,100) 0 Increase in officer advances 0 2,983 36,897 __________ __________ __________ Net cash (used in) operating activities $ 0 $ 0 $ (2,100) __________ __________ __________ Cash Flows From Investing Activities $ 0 $ 0 $ 0 __________ __________ __________ Cash Flows From Financing Activities Issuance of common stock 0 0 2,100 __________ __________ __________ Net cash (used in) financing activities $ 0 $ 0 $ 2,100 __________ __________ __________ Net increase (decrease) in cash $ 0 $ 0 $ 0 Cash, beginning of period 0 0 $ 0 __________ __________ __________ Cash, end of period $ 0 $ 0 $ 0 ========== ========== ========== See Accompanying Notes to Financial Statements. F-6 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS JUNE 30, 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 June 30, 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-7 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS JUNE 30, 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 13, 2000, the Company's shareholders approved a forward split of its common stock at one hundred shares for one share of the existing shares. On April 24, 2000, the State of Nevada approved the Company's Amendment to the 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. 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 June 30, 2004 and 2003, December 31, 2003 and 2002, 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 June 30, 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 June 30, 2004 is as follows: Net operating loss carry forward $ 38,997 Valuation allowance $ (38,997) _________ 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-8 BLACKFOOT ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS JUNE 30, 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. It is the intent of the Company to seek a merger with an existing, operating company. Until that time, 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. An officer 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 in connection with its business purpose and to comply with the federal securities laws. 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-9 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. -2- 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. -3- 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 June 30, 2004, we had total liabilities of $36,897 and we had a negative net worth of $36,897. 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 June 30, 2004. We have a loss from inception through December 31, 2003 of $34,927 and a loss from inception through June 30, 2004 of $38,997 or an increase for the six months or the first two quarters of $4,070. -4- We have officer's advances of $36,897 from inception to June 30, 2004. The officer's advances as of December 31, 2003 were $32,127 or an increase for period ending June 30, 2004 of 4,770. ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK. 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. -5- 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 one meeting 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 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. -6- 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 Certification. 32.2 Section 906 Certification. 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: August 2, 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 -7-