UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
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(Mark one)
X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
------ Act of 1934
For the quarterly period ended October 31, 2003
Transition Report Under Section 13 or 15(d) of the Securities Exchange
------ Act of 1934
For the transition period from ______________ to _____________
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Commission File Number: 0-9483
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Tomahawk Industries, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 95-3502207
------------------------ ------------------------
(State of incorporation) (IRS Employer ID Number)
211 West Wall Street, Midland, TX 70701-4556
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(Address of principal executive offices)
(915) 682-1761
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: November 24, 2003: 56,637,228
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
Tomahawk Industries, Inc.
Form 10-QSB for the Quarter ended October 31, 2003
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 11
Item 3 Controls and Procedures 12
Part II - Other Information
Item 1 Legal Proceedings 12
Item 2 Changes in Securities 12
Item 3 Defaults Upon Senior Securities 13
Item 4 Submission of Matters to a Vote of Security Holders 13
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 13
Signatures 13
2
Part I
Item 1 - Financial Statements
Tomahawk Industries, Inc.
Balance Sheets
October 31, 2003 and 2002
(Unaudited)
October 31, October 31,
2003 2002
----------- -----------
Assets
------
Assets
Cash on hand and in bank $ 594 $ 594
----------- -----------
Total Assets $ 594 $ 594
=========== ===========
Liabilities and Shareholders' Equity
------------------------------------
Liabilities
Accounts payable - trade $ -- $ --
Advances from shareholder 5,144 --
----------- -----------
Total Liabilities 5,144 --
----------- -----------
Commitments and contingencies
Shareholders' Equity
Common stock - $0.001 par value
200,000,000 shares authorized
56,637,228 shares issued and outstanding, respectively 56,637 56,637
Additional paid-in capital 5,443,447 5,443,447
Accumulated deficit (5,504,634) (5,499,490)
----------- -----------
Total shareholders' equity (4,550) 594
----------- -----------
Total Liabilities and Shareholders' Equity $ 594 $ 594
=========== ===========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
3
Tomahawk Industries, Inc.
Statements of Operations and Comprehensive Loss
Six and three months ended October 31, 2003 and 2002
(Unaudited)
Six months Six months Three months Three months
ended ended ended ended
October 31, October 31, October 31, October 31,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenues $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------
Expenses
General and administrative expenses 5,144 250 -- --
------------ ------------ ------------ ------------
Loss from operations (5,144) (250) -- --
Other Income (Expense) -- -- -- --
------------ ------------ ------------ ------------
Loss before provision for income taxes (5,144) (250) -- --
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net Loss (5,144) (250) -- --
Other Comprehensive Income -- -- -- --
------------ ------------ ------------ ------------
Comprehensive Loss $ (5,144) $ (250) $ -- $ --
============ ============ ============ ============
Loss per weighted-average share
of common stock outstanding,
computed on Net Loss - basic
and fully diluted nil nil nil nil
============ ============ ============ ============
Weighted-average number of shares
of common stock outstanding 56,637,228 56,637,228 56,637,228 56,637,228
============ ============ ============ ============
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
4
Tomahawk Industries, Inc.
Statements of Cash Flows
Six months ended October 31, 2003 and 2002
(Unaudited)
Six months Six months
ended ended
October 31, October 31,
2003 2002
----------- -----------
Cash Flows from Operating Activities
Net Loss $ (5,144) $ (250)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization -- --
----------- -----------
Net cash used in operating activities (5,144) (250)
----------- -----------
Cash Flows from Investing Activities -- --
----------- -----------
Cash Flows from Financing Activities
Cash advanced by controlling shareholder to support operations 5,144 --
----------- -----------
Net cash provided by financing activities 5,144 --
----------- -----------
Increase (Decrease) in Cash and Cash Equivalents -- (250)
Cash and cash equivalents at beginning of period 594 844
----------- -----------
Cash and cash equivalents at end of period $ 594 $ 594
=========== ===========
Supplemental Disclosures of Interest and Income Taxes Paid
Interest paid during the period $ -- $ --
=========== ===========
Income taxes paid (refunded) during the period $ -- $ --
=========== ===========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
5
Tomahawk Industries, Inc.
Notes to Financial Statements
Note A - Organization and Description of Business
Tomahawk Industries, Inc. (Company) was incorporated under the laws of the State
of Nevada on May 13, 1980. From its inception through 1988, the Company was
engaged in oil and gas exploration. Beginning in 1984, the Company entered the
business of installing energy recovery and energy saving devices through a then
wholly- owned subsidiary.
In July 1987, the Company filed for protection under Chapter 11 of the U. S.
Bankruptcy Code and operated as a debtor-in-possession. Subsequent thereto, the
petition for bankruptcy protection was denied. The Company then ceased all
business operations, liquidated its former subsidiary and abandoned all net
assets remaining by April 30, 1988.
The Company has effectively had no operations, assets or liabilities since its
fiscal year ended April 30, 1998.
Note B - Preparation of Financial Statements
The Company follows the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America and has
a year-end of April 30.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.
Management further acknowledges that it is solely responsible for adopting sound
accounting practices, establishing and maintaining a system of internal
accounting control and preventing and detecting fraud. The Company's system of
internal accounting control is designed to assure, among other items, that 1)
recorded transactions are valid; 2) valid transactions are recorded; and 3)
transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods being
presented
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements filed with the U. S. Securities and
Exchange Commission on its Annual Report on Form 10-KSB for the year ended April
30, 2003. The information presented within these interim financial statements
may not include all disclosures required by accounting principles generally
accepted in the United States of America and the users of financial information
provided for interim periods should refer to the annual financial information
and footnotes when reviewing the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the U. S. Securities and Exchange Commission's
instructions for Form 10-QSB, are unaudited and contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations and cash flows of
the Company for the respective interim periods presented. The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending April 30, 2004.
6
Tomahawk Industries, Inc.
Notes to Financial Statements - Continued
Note C - Going Concern Uncertainty
In July 1987, the Company filed for protection under Chapter 11 of the U. S.
Bankruptcy Code and operated as a debtor-in-possession. Subsequent thereto, the
petition for bankruptcy protection was denied and the Company ceased all
business operations and abandoned all net assets remaining by April 30, 1988.
The Company has effectively had no operations, assets or liabilities since its
fiscal year ended April 30, 1998.
The Company's continued existence is dependent upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.
The Company anticipates offering future sales of equity securities. However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional equity securities or, that such funding, if
available, will be obtained on terms favorable to or affordable by the Company.
If no additional operating capital is received during the next twelve months,
the Company will be forced to rely on existing cash in the bank and upon
additional funds loaned by management and/or significant stockholders to
preserve the integrity of the corporate entity at this time. In the event, the
Company is unable to acquire advances from management and/or significant
stockholders, the Company's ongoing operations would be negatively impacted.
It is the intent of management and significant stockholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.
The Company has a limited operating history, minimal cash on hand, no profit and
operates a business plan with inherent risk. Because of these factors, our
auditors have issued an audit opinion for the Company which includes a statement
describing our going concern status. This means, in our auditor's opinion,
substantial doubt about our ability to continue as a going concern exists at the
date of their opinion.
While the Company is of the opinion that good faith estimates of the Company's
ability to secure additional capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive sufficient funding to
sustain operations or implement any future business plan steps.
Note D - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
For Statement of Cash Flows purposes, the Company considers all cash on
hand and in banks, including accounts in book overdraft positions,
certificates of deposit and other highly-liquid investments with maturities
of three months or less, when purchased, to be cash and cash equivalents.
7
Tomahawk Industries, Inc.
Notes to Financial Statements - Continued
Note D - Summary of Significant Accounting Policies - Continued
2. Income Taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. At October 31, 2003 and 2002, respectively, the deferred tax asset
and deferred tax liability accounts, as recorded when material to the
financial statements, are entirely the result of temporary differences.
Temporary differences represent differences in the recognition of assets
and liabilities for tax and financial reporting purposes, primarily
accumulated depreciation and amortization, allowance for doubtful accounts
and vacation accruals.
As of October 31, 2003 and 2002, the deferred tax asset related to the
Company's net operating loss carryforward is fully reserved. Due to the
provisions of Internal Revenue Code Section 338, the Company may have
limited net operating loss carryforwards available to offset financial
statement or tax return taxable income in future periods in the event of a
change in control involving 50 percentage points or more of the issued and
outstanding securities of the Company.
3. Income (Loss) per share
-----------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock
outstanding. The calculation of fully diluted earnings (loss) per share
assumes the dilutive effect of the exercise of outstanding options and
warrants, using the treasury stock method, at either the beginning of the
respective period presented or the date of issuance, whichever is later. As
of October 31, 2003 and 2002, respectively, the Company has no outstanding
stock warrants, options or convertible securities which could be considered
as dilutive for purposes of the loss per share calculation.
Note E - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
Interest rate risk is the risk that the Company's earnings are subject to
fluctuations in interest rates on either investments or on debt and is fully
dependent upon the volatility of these rates. The Company does not use
derivative instruments to moderate its exposure to interest rate risk, if any.
Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the volatility of these rates. The company does not use derivative
instruments to moderate its exposure to financial risk, if any.
Note F - Advances from Controlling Shareholder
On January 2, 2001, the Company's controlling shareholder loaned the Company
$25,000 to support operations, settle outstanding trade accounts payable and
provide working capital. The advance was repayable upon demand and is
non-interest bearing. On September 25, 2001, the shareholder executed a private
placement letter converting this advance into 25,000,000 shares of restricted,
unregistered common stock.
8
Tomahawk Industries, Inc.
Notes to Financial Statements - Continued
Note F - Advances from Controlling Shareholder - Continued
During the quarter ended July 31, 2003, the Company's controlling shareholder
advanced approximately $5,100 through payments on the Company's behalf to
support operations and the corporate entity. These advances are non-interest
bearing and are repayable upon demand.
Note G - Income Taxes
The components of income tax (benefit) expense for the six months ended October
31, 2003 and 2002, respectively, are as follows:
Six months Six months
ended ended
October 31, October 31,
2003 2002
----------- -----------
Federal:
Current $ -- $ --
Deferred -- --
----------- -----------
-- --
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State:
Current -- --
Deferred -- --
----------- -----------
-- --
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Total $ -- $ --
=========== ===========
As of October 31, 2003, the Company has a net operating loss carryforward of
approximately $21,000 to offset future taxable income. Subject to current
regulations, this carryforward will begin to expire in 2021. The amount and
availability of the net operating loss carryforwards may be subject to
limitations set forth by the Internal Revenue Code. Factors such as the number
of shares ultimately issued within a three year look-back period; whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate; continuity of historical business; and subsequent income of
the Company all enter into the annual computation of allowable annual
utilization of the carryforwards.
The Company's income tax expense (benefit) for the six months ended October 31,
2003 and 2002, respectively, differed from the statutory federal rate of 34
percent as follows:
Six months Six months
ended ended
October 31, October 31,
2003 2002
----------- -----------
Statutory rate applied to income before income taxes $ (1,750) $ (85)
Increase (decrease) in income taxes resulting from:
State income taxes -- --
Other, including reserve for deferred tax asset
and application of net operating loss carryforward 1,750 85
----------- -----------
Income tax expense $ -- $ --
=========== ===========
9
Tomahawk Industries, Inc.
Notes to Financial Statements - Continued
Note G - Income Taxes - Continued
Temporary differences, consisting primarily of statutory deferrals of expenses
for organizational costs and statutory differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of October 31, 2003 and 2001, respectively:
October 31, October 31,
2003 2002
----------- -----------
Deferred tax assets
Net operating loss carryforwards $ 7,500 $ 5,635
Less valuation allowance (7,500) (5,635)
----------- -----------
Net Deferred Tax Asset $ -- $ --
=========== ===========
During the six months ended October 31, 2003 and 2002, respectively, the reserve
for the deferred current tax asset increased (decreased) by approximately $1,865
and $85.
(Remainder of this page left blank intentionally)
10
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
Certain statements contained in this quarterly filing, including, without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of similar import, constitute forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following: international, national and
local general economic and market conditions: demographic changes; the ability
of the Company to sustain, manage or forecast its growth; the ability of the
Company to successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-QSB and investors are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
(2) Results of Operations, Liquidity and Capital Resources
Tomahawk Industries, Inc. (Company) was incorporated under the laws of the State
of Nevada on May 13, 1980. From its inception through 1988, the Company was
engaged in oil and gas exploration. Beginning in 1984, the Company entered the
business of installing energy recovery and energy saving devices through a then
wholly- owned subsidiary.
In July 1987, the Company filed for protection under Chapter 11 of the U. S.
Bankruptcy Code and operated as a debtor-in-possession. Subsequent thereto, the
petition for bankruptcy protection was denied. The Company then ceased all
business operations and abandoned all net assets remaining by April 30, 1988.
The Company has effectively had no operations, assets or liabilities since its
fiscal year ended April 30, 1998.
The Company had no revenue for the respective six and three month periods ended
October 31, 2003 and 2002, respectively.
General and administrative expenses for the six months ended October 31, 2003
and 2002 were approximately $5,144 and $250, respectively. These expenses
consisted primarily of legal and accounting expenses associated with maintaining
the corporate status of the Company and compliance with the periodic reporting
requirements of the Securities Exchange Act of 1934 ('34 Act).
The Company does not expect to generate any meaningful revenue or incur
operating expenses for purposes other than fulfilling the obligations of a
reporting company under the '34 Act.
Net income (loss) for the three months ended October 31, 2003 and 2002,
respectively, was approximately $(5,144) and $(250). Earnings per share for the
respective quarters ended October 30, 2003 and 2002 was $0.00 and $0.00 on the
weighted-average post-reverse split shares issued and outstanding.
At October 31, 2003 and 2002, respectively, the Company had working capital of
approximately $600 and $600.
11
The Company anticipates offering future sales of equity securities. However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional equity securities or, that such funding, if
available, will be obtained on terms favorable to or affordable by the Company.
It is the intent of management and significant stockholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.
In such a restricted cash flow scenario, the Company would be unable to complete
our business plan steps, and would, instead, delay all cash intensive
activities. Without necessary cash flow, the Company may become dormant during
the next twelve months, or until such time as necessary funds could be raised in
the equity securities market.
The Company has a limited operating history, minimal cash on hand, no profit and
operates a business plan with inherent risk. Because of these factors, our
auditors have issued an audit opinion for the Company which includes a statement
describing our going concern status. This means, in our auditor's opinion,
substantial doubt about our ability to continue as a going concern exists at the
date of their opinion.
While the Company is of the opinion that good faith estimates of the Company's
ability to secure additional capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive sufficient funding to
sustain operations or implement any future business plan steps.
Item 3 - Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to
the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's
President, Chief Executive and Chief Financial Officer. Based upon that
evaluation, the Company's President, Chief Executive and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.
There have been no significant changes in the Company's internal controls or in
other factors, which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Company's Chief
Executive and Chief Financial Officer as appropriate, to allow timely decisions
regarding required disclosure.
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
12
Item 3 - Defaults on 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
Exhibits
--------
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
Reports on Form 8-K
-------------------
None
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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.
Tomahawk Industries, Inc.
Dated: November 24, 2003 /s/ Glenn A. Little.
----------------- ------------------------------------
Glenn A. Little
President, Chief Executive Officer,
Chief Financial Officer and Director
13