SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[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
Commission file number 0-30489
YAAK RIVER RESOURCES, INC.
------------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-1097796
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(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
423 Baybridge Drive, Sugarland, TX 77478
---------------------------------------------------
Address of principal executive offices)
(281) 242-7656
--------------
(Issuer's telephone number)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 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 [_]
As of June 30, 2004, 67,308,857 shares of common stock were outstanding.
Transitional Small Business Disclosure Format: Yes [_] No [X]
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
For financial information, please see the financial statements and the
notes thereto, attached hereto and incorporated herein by this reference.
The financial statements have been prepared by Yaak River Resources, 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 at December 31, 2003, included in the Company's Form 10-KSB.
Yaak River Resources, Inc.
Financial Statements
For the Six Months Ended June 30, 2004
(Unaudited)
Michael Johnson & Co., LLC.
9175 Kenyon Ave., #100
Denver, CO 80237
Phone: 303-796-0099
Fax: 303-796-0137
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors
Yaak River Resources, Inc.
Casper, Wyoming
We have reviewed the accompanying balance sheet of Yaak River Resources, Inc. as
of June 30, 2004 and the related statements of operations for the three months
and six month periods ended June 30, 2004 and 2003, and the related cash flows
for the six months ended June 30, 2004 and 2003 included in the accompanying
Securities and Exchange Commission Form 10-QSB for the period ended June 30,
2004. These financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States, the
objective of which is the expression of an opinion regarding the financial
statements as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with accounting principles generally accepted in the United States and the
standards of PCAOB.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet as of December 31, 2003, and
the related statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein). In our report dated March 24, 2004,
we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of June
30, 2004 is fairly stated in all material respects in relation to the balance
sheet from which it has been derived.
/s/ Michael Johnson & Co., LLC.
Michael Johnson & Co., LLC.
Denver, Colorado
August 6, 2004
F-1
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
June 30, December 31,
2004 2003
---------------- -------------
ASSETS:
Current Assets:
Cash $ 185 $ 2,219
---------------- -------------
Total Current Assets 185 2,219
---------------- -------------
Other Assets:
Investment - Properties 35,743 35,743
---------------- -------------
Total Other Assets 35,743 35,743
---------------- -------------
TOTAL ASSETS $ 35,928 $ 37,962
================ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 5,666 $ 9,971
Advances from shareholders' 9,500 4,500
---------------- -------------
Total Current Liabilities 15,166 14,471
---------------- -------------
Stockholders' Equity:
Preferred stock, $.0001 par value, 50,000,000
share authorized, issued and outstanding - none - -
Series A - Common stock, $.0001 par value; 250,000,000
shares authorized; issued and outstanding - 67,308,857 shares 6,730 6,730
Series B - Common stock, $.0001 par value; 250,000,000
shares authorized; issued and outstanding - none - -
Capital paid-in excess of par value 378,099 378,099
Deficit accunulated during the development stage (364,067) (361,338)
---------------- -------------
Total Stockholders' Equity 20,762 23,491
---------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 35,928 $ 37,962
================ =============
See accountant's review report.
F-2
YAAK RIVER RESOURCES INC.
(A Development Stage Company)
STATEMENTS OF OPEATIONS
(Unaudited)
June 18, 1988
(Inception)
Three Months Ended Six Months Ended to
June 30, June 30, June 30,
2004 2003 2004 2003 2004
------------- ------------- ------------- ------------ -------------
REVENUES: $ - $ - $ - $ - $ -
OPERATING EXPENSES:
Amortization - - - - 1,500
Bank charges 18 19 36 31 685
Legal and accounting 1,000 1,006 1,000 4,006 114,765
Director fees - - - - 800
Office expenses - - - - 8,990
Stock fees and other costs 300 962 1,693 962 14,996
Administration and consulting - 1,010 - 1,010 128,389
Mining assessments and fees - - - - 75,479
Bad debt - - - - 6,250
Rent/telephone - - - - 12,213
------------- ------------- ------------- ------------ -------------
Total Operating Expenses 1,318 2,997 2,729 6,009 364,067
------------- ------------- ------------- ------------ -------------
Net Loss from Operations (1,318) (2,997) (2,729) (6,009) (364,067)
------------- ------------- ------------- ------------ -------------
Other Income and expenses:
Interest income - - - - -
Interest expense - - - - -
Other - - - - -
------------- ------------- ------------- ------------ -------------
- - - - -
------------- ------------- ------------- ------------ -------------
Net Loss $ (1,318) $ (2,997) $ (2,729) $ (6,009) $(364,067)
============= ============= ============= ============ =============
Weighted average number of
shares outstanding 67,308,857 67,308,857 67,308,857 67,308,857
============= ============= ============= ============
Basic and diluted net loss per share * * * *
============= ============= ============= ============
* Less than $.01
See accountant's review report.
F-3
YAAK RIVER RESOURCES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Deficit
Capital Paid Accum. During
Common In Excess of the Development
# of Shares Stock Par Value Stage Totals
------------- ----------- -------------- --------------- -----------
Balance - December 31, 2000 64,808,857 6,480 360,849 (323,316) 44,013
Issuance of common stock for cash 1,500,000 150 10,350 - 10,500
Net Loss for year - - - (16,350) (16,350)
------------- ----------- -------------- --------------- -----------
Balance - December 31, 2001 66,308,857 6,630 371,199 (339,666) 38,163
------------- ----------- -------------- --------------- -----------
Issuance of common stock for cash 1,000,000 100 6,900 - 7,000
Net Loss for year - - - (9,430) (9,430)
------------- ----------- -------------- --------------- -----------
Balance - December 31, 2002 67,308,857 6,730 378,099 (349,096) 35,733
------------- ----------- -------------- --------------- -----------
Net Loss for year - - - (12,242) (12,242)
------------- ----------- -------------- --------------- -----------
Balance - December 31, 2003 67,308,857 6,730 378,099 (361,338) 23,491
------------- ----------- -------------- --------------- -----------
Net Loss for period - - - (2,729) (2,729)
------------- ----------- -------------- ---------------
-----------
Balance - June 30, 2004 67,308,857 $6,730 $ 378,099 $ (364,067) $20,762
============= =========== ============== =============== ===========
See accountant's review report.
F-4
YAAK RIVER RESOURCES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
June 10, 1988
(Inception)
Six Months Ended to
June 30, June 30,
2004 2003 2004
------------ ------------ -------------
Cash Flows From Operating Activities:
Net (Loss) $(2,729) $(6,009) $(364,067)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization and depreciation - - 1,500
Organization costs - - (1,500)
Stock issued for services - - 8,800
Changes in assets and liabilities:
Increase in accounts payable and accrued expenses 695 4,011 5,666
------------ ------------ -------------
Total adjustments 695 4,011 14,466
------------ ------------ -------------
Net Cash Used in Operating Activities (2,034) (1,998) (349,601)
------------ ------------ -------------
Cash Flow From Investing Activities:
Exchange of properties - net - - 147,167
Investment purchase - - (305,410)
------------ ------------ -------------
Net Cash Provided By Investing Activities - - (158,243)
------------ ------------ -------------
Cash Flow From Financing Activities:
Proceeds from long-term debt - - 189,500
Payment of long-term debt - - (45,000)
Issuance of common stock - - 354,029
Advance from shareholder - 2,000 9,500
------------ ------------ -------------
Net Cash Provided By Financing Activities - 2,000 508,029
------------ ------------ -------------
Increase (Decrease) in Cash (2,034) 2 185
Cash and Cash Equivalents - Beginning of period 2,219 754 -
------------ ------------ -------------
Cash and Cash Equivalents - End of period $ 185 $ 756 $ 185
============ ============ =============
Supplemental Cash Flow Information:
Interest paid $ - $ - $ -
============ ============- =============
Taxes paid $ - $ - $ -
============ ============ =============
Noncash Investing and financing activities:
In 1999, the Company exchanged properties with a book
value of $182,910 to a related party in lieu of payment of
============ ============ =============
liabilities of $147,167 and land with book value of $35,743. $ - $ - $ 182,910
============ ============ =============
See accountant's review report.
F-5
YAAK RIVER RESOURCES, INC.
NOTES TO FINANCIAL STATEMENTS
1. Presentation of Interim Information
In the opinion of the management of Yaak River Resources, Inc., the
accompanying unaudited financial statements include all normal adjustments
considered necessary to present fairly the financial position as of June
30, 2004, and the results of operations for the three months and six months
ended June 30, 2004 and 2003, and cash flows for the six months ended June
30, 2004 and 2003. Interim results are not necessarily indicative of
results for a full year.
The financial statements and notes are presented as permitted by Form
10-QSB, and do not contain certain information included in the Company's
audited financial statements and notes for the fiscal year ended December
31, 2003.
2. Going Concern
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which
contemplates continuation of the Company as a going concern. The Company's
operations generated no income during the current period ended and the
Company's deficit is $364,067.
The future success of the Company is likely dependent on its ability to
attain additional capital to develop its proposed products and ultimately,
upon its ability to attain future profitable operations. There can be no
assurance that the Company will be successful in obtaining such financing,
or that it will attain positive cash flow from operations.
F-6
Item 2. Management's Discussion and Analysis or Plan of Operation
The Company had no operations in the six month period.
Results of Operations for the Three Month Period Ended June 30, 2004 Compared to
- --------------------------------------------------------------------------------
the Three Month Period Ended June 30, 2003
- ------------------------------------------
The Company incurred expenses totaling $1,318 for the three months ending June
30, 2004 compared to $2,997 for the same period in 2003. The Company generated
no revenues in this period as well as for the same period in 2003. The net loss
for the three months ending June 30, 2004 was $(1,318) as compared to a loss of
$(2,997) in the same period 2003.
Results of Operations for the Six Month Period Ended June 30, 2004 Compared to
- --------------------------------------------------------------------------------
the Six Month Period Ended June 30, 2003
- ----------------------------------------
The Company incurred expenses totaling $2,729 for the three months ending June
30, 2004 compared to $6,009 for the same period in 2003. The Company generated
no revenues in this period as well as for the same period in 2003. The net loss
for the six months ending June 30, 2004 was $(2,729) as compared to a loss of
$(6,009) in the same period 2003.
Liquidity and Capital Resources
The Company had a net working capital (deficit) at June 30, 2004 of $(15,000).
There were no cash flows provided from operations during the year-to-date ended
June 30, 2004.
Cash and cash equivalents at June 30, 2004 were $185, a decrease of $2,034 from
June 30, 2003. During the three-month period ended, June 30, 2004, the Company
used ($2,034) net cash in operating activities as compared to ($1,998) for the
same period 2003. This increase of cash used in operations of $4,032 was as a
result of administrative expenses.
We had, at June 30, 2004, working capital of $185. We anticipate that there will
be no cash generated from operations in the current year necessary to fund our
current and anticipated cash requirements. We plan to obtain additional
financing from equity and debt placements. We have been able to raise capital in
a series of equity and debt offerings in the past. While there can be no
assurances that we will be able to obtain such additional financing, on terms
acceptable to us and at the times required, or at all, we believe that
sufficient capital can be raised in the foreseeable future.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing reporting requirements of
the Securities Exchange Act of 1934. The Company will have to seek loans or
equity placements to cover such cash needs. Lack of its existing capital may be
a sufficient impediment to prevent it from accomplishing the goal of expanding
its operations. There is no assurance, however, that without funds it will
ultimately allow company to carry out its business
The Company will need to raise additional funds to expand its business
activities in the next twelve months.
No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any additional funds
will be available to the Company to allow it to cover its expenses as they may
be incurred.
Irrespective of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.
GOING CONCERN
The Company's auditor has issued a "going concern" qualification as part of his
opinion in the Audit Report. There is substantial doubt about the ability of the
Company to continue as a "going concern." The Company has no business, limited
capital, debt in excess of $78,000, $47,552 of which is current, $3,044 in cash,
minimal other liquid assets, and no capital commitments. The effects of such
conditions could easily be to cause the Company's bankruptcy.
Management hopes to seek and obtain funding, via loans or private placements of
stock for operations, debt and to provide working capital. Management has plans
to seek capital in the form of loans or stock private placements.
Item 3. Controls and Procedures
The management of the Company has evaluated the effectiveness of the issuer's
disclosure controls and procedures as of a date within 90 days prior to the
filing date of the report (evaluation date) and have concluded that the
disclosure controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.
There were no significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of the most
recent evaluation of such, including any corrective actions with regard to
significant deficiencies and material weaknesses.
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
On June 24, 2004, the shareholders of the Company, at a Special Meeting of the
Shareholders, approved a change of name of the Company to a name to be
determined by the Board of Directors and further approved a reverse split of the
Company's common stock on a one for 68 basis to become effective when determined
by the Board of Directors.
There were 67,303,857 shares issued and outstanding at the date of the meeting,
and 39,306,177 shares attended the meeting in person or by proxy. The shares
represented constituted a quorum, and the shareholders approved the actions to
change the name by a vote of 39,306,177 shares in favor of the proposal to
change the name and none against the proposal. A total of 39,296,177 shares
voted in favor of the reverse split, and 10,000 shares voted against the reverse
split.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: 31 and 32
b. Reports on Form 8-K: June 25, 2004
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Yaak River Resources, Inc.
(Registrant)
Dated: August 16, 2004 By: Blaize N. Kaduru
------------------------------
Blaize N. Kaduru
President, Secretary/Treasurer, and
Director
EXHIBIT 31
CERTIFICATION PURSUANT TO SECTION
302 OF THE SARBANES OXLEY ACT
EXHIBIT 31
CERTIFICATION PURSUANT TO SECTION
302 OF THE SARBANES OXLEY ACT
I, Blaize N. Kaduru, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Yaak River Resources,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this quarter-
ly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: August 16, 2004
/s/ Blaize N. Kaduru
- ------------------------
Blaize N. Kaduru,
President, Treasurer, & Director
EXHIBIT 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
EXHIBIT 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Yaak River Resources, Inc. (the
"Company") on Form 10-QSB for the period ending June 30, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"). I, Blaize
N. Kaduru, CEO and Chief Financial Officer of the company, certify, pursuant to
18 USC Section 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 Sction 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ Blaize N. Kaduru
--------------------------------
Blaize N. Kaduru, CEO & CFO
Dated: 8/16/04