U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File No. 333-60906
TWO MOONS KACHINAS CORP.
------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 87-0656515
------ ----------
(State or Other Jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
9005 Cobble Canyon Lane
Sandy, Utah 84093
-----------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 942-0555
Securities Registered under Section 12(b) of the Exchange Act: None
Securities Registered under Section 12(g) of the Exchange Act: $.001 par value
common stock
Check whether the Company (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 Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if there is no disclosure of delinquent files in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State Company's revenues for its most recent fiscal year: December 31,
2003 - $3,200.
State the aggregate market value of the voting stock of the Company held
by non-affiliates computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a specified
date within the past 60 days.
April 5, 2004 - $79,800. There are presently approximately 79,800
shares of common voting stock of our Company that are beneficially owned by
non-affiliated persons. There is a limited public market for our common
stock; this valuation is based upon the offering price of our common stock in
our recent public offering pursuant to Form SB-2 that was filed with the
Securities and Exchange Commission on May 14, 2001, and which became effective
on August 10, 2001. See Part III, Item 1.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the Registrant has filed all documents and reports required
to be filed by Section 12,13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes No
--- ---
Not applicable.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Company's classes
of common equity, as of the latest practicable date:
April 5, 2004; 660,300 shares.
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained
in Part III, Item I.
Transitional Small Business Issuer Format Yes X No
--- ---
PART I
Item 1. Description of Business.
------------------------
Business Development.
---------------------
Two Moons Kachinas Corp. (our "Company" or "Two Moons" or "we,"
"our," "us" or words of similar import) was formed on May 19, 2000, and has
only recently begun intended operations. We were organized for the purpose of
marketing and selling Kachina dolls in the $6,000 to $8,000 price range. A
Kachina doll is a carved wooden doll that resembles a Kachina or benevolent
spirit recognized by the Hopi Indians of the American Southwest.
In May, 2000, 500,000 shares of our common stock were issued to
our two founders, directors and executive officers, 250,000 shares to each, in
consideration of the aggregate sum of $25,000, $12,500 from each.
On May 14, 2001, we filed an SB-2 Registration Statement with the
Securities and Exchange Commission to offer and sell 200,000 shares of our
common stock at an offering price of $1.00 per share. This Registration
Statement became effective on August 10, 2001, and we closed the offering
after the sale of 79,800 shares on or about November 8, 2001.
We filed an 8-A with the Securities and Exchange Commission on May 28,
2003, which registered our shares under Section 12(g) of the Securities Act of
1933. See Part III, Item 13.
On September 26, 2003, we filed an S-8 Registration Statement to issue
80,500 of our shares of common stock for services under two written
compensation agreements. See Part III, Item 13.
Business.
---------
Two Moons principally markets Hopi Kachina Dolls. Each Kachina doll
represents a different Kachina, or benevolent spirit, who lives among the Hopi
for a six month period each year, generally from February to July. The
Kachina tradition is a religious practice that is unique only to the Pueblo
tribes of Arizona and New Mexico, which include the Hopi.
The Pueblo Indians believe that there are more than 350 Kachinas, or
ancestral spirits, who act as intermediaries between God and man. These
spirits may be animals, plants or earth. Well-known Kachinas include Mongwu,
the Great Horned Owl Kachina; Kwahu, the Eagle Kachina; Hon, the Bear Kachina;
Patung, the Squash Kachina and Koyemsi, the Mudhead Kachina. Each tribe has
its own variations.
During religious ceremonies, male members of the tribe wear masks
and costumes representing a particular Kachina. During the ceremony the
tribes believe that the Kachina actually inhabits the participant's body. The
dolls were initially created by Hopi men and given to children of the tribal
villages during the ceremonial performances.
Kachina dolls are carved of dried cottonwood roots to represent the
men who dance in costume as Kachina spirits. Because it draws moisture and
life from the earth, the carvers believe that the cottonwood root has a
spiritual quality. The carvers take only roots that are found broken from the
tree; never from live trees.
Originally, Kachina dolls were carved with flint knives and sanded
and finished with pieces of sandstone. The dolls were then painted with
mineral paint and adorned with feathers, shells, fur or leather. Most dolls
were carved from several pieces of wood, with the head and limbs being glued
to the torso.
In recent years, the style of carving has evolved. Today's dolls
feature intricate detail and are made with wood burning instruments, Dremel
tools and other modern tools. A Dremel tool is an electric carving tool that
has a spinning tip onto which bits of different shapes and sizes can be added
for different effects. Since the federal government banned the use of
endangered species, feathers are now carved into the doll. Carvers make their
dolls out of one piece of cottonwood and often spend several months on a
single doll. It has been the experience of our President, David C. Merrell,
that as collectors have begun to realize the beauty of these creations, demand
and prices have increased.
The Kachina dolls that Two Moons plans to market are unique works of
collectable art. We specialize in the higher end of the market, with prices
generally ranging from $6,000 to $8,000.
Principal Products or Services and their Markets.
-------------------------------------------------
There are over 350 varieties of Kachinas and our Company will
specialize in dolls in the $6,000 to $8,000 price range. All Kachina dolls
will be signed by the artist, and will include the name of the Kachina and the
village where the artist is from. We have not conducted any studies of the
size of the market for Kachina dolls. However, based on the experience of our
President, Mr. Merrell, we believe that there is a large enough market for
Kachinas in both the U.S. and Europe for us to make regular sales.
We also sell jewelry.
Distribution Methods of our Products or Services.
-------------------------------------------------
Two Moons will market and distribute the Kachinas and our jewelry in
two ways; first, through our web site with multiple pictures and descriptions
of each piece, and second, by placing a few pieces at a time on an Internet
auction site such as E-bay or on consignment in retail speciality stores. We
expect that about 75% of sales will come from our web site, with the remaining
25% coming from Internet auctions and consignment sales. Our sole officer
will use a computer at his home office to monitor our corporate web site.
In December, 2001, our Company acquired our first inventory that can
be viewed on our web site, www.twomoonskachinas.com, and entered into
consignment relationships with Crosby Collections in Park City, Utah, and
Payne Anthony's in Trolley Square in Salt Lake City, Utah. We attended in
early 2003 the Marin County American Indian Arts Show which was held on
February 21-23, 2003; we also attended shows in San Francisco and Del Mar,
California; and we are actively researching the availability of similar events
to showcase our products.
Competition.
------------
Our management believes that there is substantial competition for
the sale of Kachina dolls, but that most of the competition is for Kachinas
that sell for under $300. In our President's 10 years of experience as a
Kachina collector, he has found that most Kachinas are sold in the Southwest
in trading post stores to tourists. There are also many Internet web sites
and Internet auctions that offer Kachinas. He believes that the higher priced
Kachinas that we will offer are primarily sold in art galleries. We do not
expect our competitive position within our industry to be significant, either
now or in the foreseeable future.
Sources and Availability of Raw Materials.
------------------------------------------
Two Moons plans to acquire Kachinas through the help of Indian
traders who have dealt with Hopi carvers for many years. David C. Merrell,
our President, has contacts that will allow us to purchase Kachinas at below
wholesale prices. There are many Hopi Kachina carvers, but only a limited
number who produce the quality of Kachina that our Company markets. However,
we believe that our ability to purchase inventory will be limited more by lack
of funding than by the limited number of carvers. See the Risk Factor "Lack
of funding would limit our ability to buy inventory."
We do not currently have any binding contracts for the supply of
Kachinas.
Dependence On One or a Few Major Customers.
-------------------------------------------
We have not undertaken any studies of the size of the market for
Kachinas. However, we believe that there is a large enough market, both in
the U.S. and Europe, that we will not have one or a few major customers. We
expect our customers to be numerous, coming mainly from the Internet and from
around the world. We sell and plan to sell and ship our products both
domestically and internationally.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts.
----------------
We have obtained the domain name "twomoonskachinas.com."
Governmental Approval of Principal Products or Services.
--------------------------------------------------------
There are no laws pertaining to the purchase or sale of Kachina
Dolls.
Effects of Existing or Probable Governmental Regulations.
---------------------------------------------------------
Federal Legislation.
--------------------
It is federal crime for any person to offer, display for sell, or
sell any item in a way that falsely suggests that it is produced by Native
Americans. For a corporation, the first knowing violation may result in a
fine of up to $1,000,000, and for second violations, the fine may be as much
as $5,000,000. Federal law also permits the U. S. Attorney General and Native
American tribes to bring a civil action against any person who misrepresents
an item as being produced by a Native American. The court may award
injunctive relief, and the greater of: (i) treble damages; or (ii) $1000 for
each day on which the offer, display for sale, or sale continues. The court
may also award punitive damages and attorney's fees and costs of the lawsuit.
We will use our best efforts to make sure that we buy only Native American
goods. However, any violation of these statutes may significantly hurt our
operations. Other than any potential violation of these statutes, we do not
believe that existing governmental regulations will have any significant
effect on our business, other than the usual requirements for a business
license and payment of applicable taxes. Management is not aware of any
government restrictions on the export of cottonwood products.
Sarbanes-Oxley Act.
-------------------
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley
Act of 2002 (the "Sarbanes-Oxley Act"). The Sarbanes-Oxley Act imposes a wide
variety of new regulatory requirements on publicly-held companies and their
insiders. Many of these requirements will affect us. For example:
* Our chief executive officer and chief financial officer must
now certify the accuracy of all of our periodic reports that contain financial
statements;
* Our periodic reports must disclose our conclusions about the
effectiveness of our disclosure controls and procedures; and
* We may not make any loan to any director or executive officer
and we may not materially modify any existing loans.
The Sarbanes-Oxley Act has required us to review our current
procedures and policies to determine whether they comply with the
Sarbanes-Oxley Act and the new regulations promulgated thereunder. We will
continue to monitor our compliance with all future regulations that are
adopted under the Sarbanes-Oxley Act and will take whatever actions are
necessary to ensure that we are in compliance.
Penny Stock.
------------
Our common stock is "penny stock" as defined in Rule 3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks:
* with a price of less than five dollars per share;
* that are not traded on a "recognized" national exchange;
* whose prices are not quoted on the NASDAQ automated quotation
system; or
* in issuers with net tangible assets less than $2,000,000, if
the issuer has been in continuous operation for at least three years, or
$5,000,000, if in continuous operation for less than three years, or with
average revenues of less than $6,000,000 for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the Securities
and Exchange Commission require broker/dealers dealing in penny stocks to
provide potential investors with a document disclosing the risks of penny
stocks and to obtain a manually signed and dated written receipt of the
document before making any transaction in a penny stock for the investor's
account. You are urged to obtain and read this disclosure carefully before
purchasing any of our shares.
Rule 15g-9 of the Securities and Exchange Commission requires
broker/dealers in penny stocks to approve the account of any investor for
transactions in these stocks before selling any penny stock to that investor.
This procedure requires the broker/dealer to:
* get information about the investor's financial situation,
investment experience and investment goals;
* reasonably determine, based on that information, that
transactions in penny stocks are suitable for the investor and that the
investor can evaluate the risks of penny stock transactions;
* provide the investor with a written statement setting forth
the basis on which the broker/dealer made his or her determination; and
* receive a signed and dated copy of the statement from the
investor, confirming that it accurately reflects the investors' financial
situation, investment experience and investment goals.
Compliance with these requirements may make it harder for our
stockholders to resell their shares.
Reporting Obligations.
----------------------
Section 14(a) of the Exchange Act requires all companies with
securities registered pursuant to Section 12(g) of the Exchange Act to comply
with the rules and regulations of the Securities and Exchange Commission
regarding proxy solicitations, as outlined in Regulation 14A. Matters
submitted to stockholders of our Company at a special or annual meeting
thereof or pursuant to a written consent will require our Company to provide
our stockholders with the information outlined in Schedules 14A or 14C of
Regulation 14; preliminary copies of this information must be submitted to the
Securities and Exchange Commission at least 10 days prior to the date that
definitive copies of this information are forwarded to our stockholders.
We are also required to file annual reports on Form 10-KSB and
quarterly reports on Form 10-QSB with the Securities Exchange Commission on a
regular basis, and will be required to timely disclose certain material
events (e.g., changes in corporate control; acquisitions or dispositions of a
significant amount of assets other than in the ordinary course of business;
and bankruptcy) in a current report on Form 8-K.
Small Business Issuer.
----------------------
The integrated disclosure system for small business issuers adopted
by the Securities and Exchange Commission in Release No. 34-30968 and
effective as of August 13, 1992, substantially modified the information and
financial requirements of a "Small Business Issuer," defined to be an issuer
that has revenues of less than $25,000,000; is a U.S. or Canadian issuer; is
not an investment company; and if a majority-owned subsidiary, the parent is
also a small business issuer; provided, however, an entity is not a small
business issuer if it has a public float (the aggregate market value of the
issuer's outstanding securities held by non-affiliates) of $25,000,000 or
more. We are deemed to be a "small business issuer."
The Securities and Exchange Commission, state securities commissions
and the North American Securities Administrators Association, Inc. ("NASAA")
have expressed an interest in adopting policies that will streamline the
registration process and make it easier for a small business issuer to have
access to the public capital markets.
Cost and Effect of Compliance with Environmental Laws.
------------------------------------------------------
Management does not believe that compliance with environmental laws
will require any of our resources.
Research and Development Expenses.
----------------------------------
There are no research and development requirements, other than
developing a market on the Internet.
Number of Employees.
--------------------
Management of Two Moons plan to work part time. If and when needed,
one full time employee will be hired.
Item 2. Description of Property.
------------------------
Two Moons does not currently own any property. Our executive office
is the home of David C. Merrell, our President, and is provided rent free. We
plan to use a third-party web hosting service to house and maintain our web
site.
Item 3. Legal Proceedings.
------------------
Two Moons is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against us. No director, executive
officer or affiliate of Two Moons or owner of record or beneficially of more
than five percent of our common stock is a party adverse to Two Moons or has a
material interest adverse to us in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
There were no matters that were submitted to a vote of our
shareholders during the calendar year ended December 31, 2003; however,
subsequent to the date of this Annual Report, we did file a Definitive
Information Statement with the Securities and Exchange Commission on February
24, 2004, regarding two amendments to our Articles of Incorporation that
increased our authorized shares by adding a class of preferred stock; and
allowed our Board of Directors to change our name without stockholder
approval. See our Definitive Information Statement that is incorporated
herein by reference in Part III, Item 13.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information.
-------------------
Pink Sheets LLC provided the following quotations. They do not
represent actual transactions and they do not reflect dealer markups,
markdowns or commissions.
STOCK QUOTATIONS
CLOSING BID
Quarter ended: High Low
-------------- ---- ---
September 24, 2002
Through
September 30, 2002 None None
December 31, 2002 0.05 0.05
March 31, 2003 0.50 0.50
June 30, 2003 0.50 0.50
September 30, 2003 0.50 0.50
December 31, 2003 0.52 0.50
Since September 24, 2002, our common stock has been quoted on the OTC
Bulletin Board of the National Association of Securities Dealers, Inc.
("NASD"). Our symbol is "TMOO." No assurance can be given that any market
for our Company's common stock will develop or be maintained. If a public
market ever develops in the future, the sale of "unregistered" and
"restricted" shares of common stock pursuant to Rule 144 of the Securities and
Exchange Commission by our current stockholders may have a substantial
negative impact on any such public market.
There are no outstanding options, warrants or calls to purchase
any of our authorized shares.
Future sales of the "unregistered" and "restricted" shares of common
stock may decrease the value of our common stock in any public market that may
develop for our common stock. See "Security Ownership of Certain Beneficial
Owners and Management."
Recent Sales of Unregistered Securities.
----------------------------------------
The following table provides information about all "unregistered"
and "restricted" securities that Two Moons has sold since inception,
and which were not registered under the Securities Act of 1933 Act, as amended
(the "Securities Act"):
Number
Date of Aggregate
Name of Owner Acquired Shares* Consideration
------------- -------- ------ ------------
David C. Merrell 5-19-00 250,000 $12,500
Common
R. Kip Paul 5-19-00 250,000 $12,500
Common
Management believed that Messrs. Merrell and Paul are "accredited
investors" as that term is defined under applicable federal and state
securities laws, rules and regulations, because they are directors and
executive officers of Two Moons. Management also believed that the
offer and sale of these shares of common stock were exempt from the
registration requirements of Section 5 of the Securities Act pursuant to
Section 4(2) thereof, Rule 506 of Regulation D promulgated thereunder by the
Securities and Exchange Commission and from similar states' securities laws,
rules and regulations covering the offer and sale of securities by available
state exemptions from such registration.
Holders.
--------
The number of record holders as of April 5, 2004, is 64, with
660,300 shares outstanding.
Dividends.
----------
Two Moons has not declared any cash dividends with respect to our
common stock, and does not intend to declare dividends in the foreseeable
future. There are no material restrictions limiting, or that are likely to
limit, our ability to pay dividends on our securities.
Securities Authorized for Issuance under Equity Compensation Plans.
-------------------------------------------------------------------
The table has not been included because the Company has not adopted
any such plans.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
------------------
Our plan of operation for the next 12 months is to continue sales of
Kachina dolls and jewelry, both through our own web site and through Internet
auction sites and consignment to specialty stores.
At the time of our public offering, management estimated that we
needed minimum cash resources of about $60,000 to begin material operations.
We determined that amount based on the following expected expenses:
Costs of offering - $15,000;
Web design - $1,000;
Web maintenance - $1,500
Kachinas - $30,000;
Travel - $5,000;
Working Capital - $7,500.
Net proceeds of our public offering exceeded this amount by
approximately $10,000. We have not yet identified any other source of
funding, and we can not assure you that we will have any success in this
regard if additional resources are needed.
From our public offering proceeds, we hired a web site designer to
design our retail web site, which became operational in December, 2001. We
then purchased approximately 10 collector-quality Kachinas from jobbers, who
purchased Kachinas directly from the carvers, at below wholesale prices of
$1,200 to $1,800. In some cases, we will purchase Kachinas directly from
carvers in the $1,000 to $2,000 price range.
We have placed photographs of the Kachinas on our web site and, if
sales are slow after one month, we will put one or two Kachinas up for
auction, with a minimum bid price, on an Internet auction site. We also have
arrangements with two retail specialty stores. We attended the Marin County
American Indian Arts Show which was held on February 21-23, 2003, and shows in
San Francisco and Del Mar, California, and are actively researching the
availability of similar events to showcase our products.
As we sell Kachinas, we plan to use the proceeds to buy additional
Kachinas or jewelry for resale. Our President provides us with rent-free
office space, and our management has verbally agreed not to accept any
compensation until we are operating profitably. Because of our low overhead,
we believe that we can finance our initial needs for at least 12 months from
the minimum gross proceeds of $60,000 that we realized from our public
offering. Mr. Merrell has contacts through which he can purchase Kachinas at
below wholesale prices. We plan to keep our expenses low and to keep our
inventory rolling over.
Mr. Merrell is well-informed about Kachinas and plans to stay up-
to-date on current trends through reading industry publications, visiting
trade shows and communicating with personal contacts.
Item 7. Financial Statements.
---------------------
Financial Statements for the year ended
December 31, 2003
Independent Auditors Report
Balance Sheet - December 31, 2003
Statements of Operations for the years ended
December 31, 2003 and 2002 and for the period from
inception on May 19, 2000 through December
31, 2003
Statement of Stockholders' Equity, from inception
on May 19, 2000 through December 31, 2003
Statements of Cash Flows, for the years ended
December 31, 2003 and 2002 and for the period from
inception on May 19, 2000 through December 31, 2003
Notes to Financial Statements
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
FINANCIAL STATEMENTS
DECEMBER 31, 2003
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
CONTENTS
PAGE
Independent Auditors' Report 1
Balance Sheet, December 31, 2003 2
Statements of Operations, for the years ended
December 31, 2003 and 2002 and for the period from
inception on May 19, 2000 through December 31,
2003 3
Statement of Stockholders' Equity, from
inception on May 19, 2000 through December 31,
2003 4
Statements of Cash Flows, for the years ended
December 31, 2003 and 2002 and for the period from
inception on May 19, 2000 through December 31,
2003 5
Notes to Financial Statements 6 - 11
INDEPENDENT AUDITORS' REPORT
Board of Directors
TWO MOONS KACHINAS, CORP.
Sandy, Utah
We have audited the accompanying balance sheet of Two Moons Kachinas, Corp. [a
development stage company] at December 31, 2003 and the related statements of
operations, stockholders' equity and cash flows for the years ended December
31, 2003 and 2002 and for the period from inception on May 19, 2000 through
December 31, 2003. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of Two Moons Kachinas, Corp. [a
development stage company] as of December 31, 2003 and the results of its
operations and its cash flows for the years ended December 31, 2003 and 2002
and for the period from inception on May 19, 2000 through December 31, 2003 in
conformity with generally accepted accounting principles in the United States
of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 7 to the
financial statements, the Company was recently formed and has not yet been
successful in establishing profitable operations. These factors raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regards to these matters are also described in Note 7.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties.
/s/Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
January 21, 2004
Salt Lake City, Utah
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
BALANCE SHEET
ASSETS
December 31,
2003
------------
CURRENT ASSETS:
Cash $ 7,759
Interest receivable 1
Inventory 50,500
Prepaid expense 126
-----------
Total Current Assets 58,386
PROPERTY AND EQUIPMENT, net 3,896
OTHER ASSETS:
Website development, net -
-----------
$ 62,282
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 9,428
Advances from shareholder 6,173
-----------
Total Current Liabilities 15,601
-----------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
50,000,000 shares authorized,
660,300 shares issued and
outstanding 660
Capital in excess of par value 113,400
Deficit accumulated during the
development stage (67,379)
-----------
Total Stockholders' Equity 46,681
-----------
$ 62,282
===========
The accompanying notes are an integral part of this financial statement.
F-2
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
From Inception
For the On May 19,
Year Ended 2000 Through
December 31, December 31,
_________________
2003 2002 2003
_________ _______ _______________
REVENUE $ 3,200 $ 7,676 $ 10,876
COST OF GOODS SOLD 2,500 4,500 7,000
--------- ------- ---------------
GROSS PROFIT 700 3,176 3,876
OPERATING EXPENSES:
Selling - 5,144 5,144
General and administrative 30,462 24,457 66,987
--------- ------- ---------------
Total Operating Expenses 30,462 29,601 72,131
--------- ------- ---------------
LOSS FROM OPERATIONS (29,762)(26,425) (68,255)
--------- ------- ---------------
OTHER INCOME:
Interest income 41 150 876
--------- ------- ---------------
Total Other Income 41 150 876
--------- ------- ---------------
LOSS BEFORE INCOME TAXES (29,721)(26,275) (67,379)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
--------- ------- ---------------
NET LOSS $(29,721)$(26,275)$ (67,379)
========= ======= ===============
LOSS PER COMMON SHARE $ (.05)$ (.05)$ (.12)
========= ======= ===============
The accompanying notes are an integral part of these financial statements.
F-3
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 19, 2000
THROUGH DECEMBER 31, 2003
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
--------------- ------------ Excess of Development
Shares Amount Shares Amount Par Value Stage
------- ------- ------- ------ ----------- ---------
BALANCE, May 19, 2000 - $ - - $ - $ - $ -
Issuance of 500,000 shares
of common stock for cash at
$.05 per share, May 2000 - - 500,000 500 24,500 -
Net loss for the period
ended December 31, 2000 - - - - - (916)
-------- ------- -------- ------ ---------- ---------
BALANCE, December 31,
2000 - - 500,000 500 24,500 (916)
Issuance of 79,800 shares
of common stock for cash
at $1.00 per share, net
of offering costs
of $10,865, November
2001 - - 79,800 80 68,855 -
Net loss for the year ended
December 31, 2001 - - - - - (10,467)
------ ------ ------- ------ -------- ---------
BALANCE, December 31,
2001 - - 579,800 $ 580 $ 93,355 $ (11,383)
Net loss for the year ended
December 31, 2002 - - - - - (26,275)
------ ------ ------- ------ -------- ---------
BALANCE, December 31, 2002 - $ - 579,800 $ 580 $ 93,355 $ (37,658)
------ ------ ------- ------ -------- ---------
Issuance of 80,500 shares
of common stock at $.25
per share, for services
of $2,500 and reduction
of accounts payable for
legal services of $17,625,
September 2003 - - 80,500 80 20,045 -
Net loss for the year
ended December 31, 2003 - - - - - (29,721)
------- ------ ------- ------ -------- ---------
BALANCE, December 31, 2003 - $ - 660,300 $ 660 $113,400 $ (67,379)
======= ====== ======= ====== ======== =========
The accompanying notes are an integral part of this financial statement.
F-4
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
NET INCREASE (DECREASE) IN CASH
From Inception
For the On May 19,
Year Ended 2000 Through
December 31, December 31,
_________________
2003 2002 2003
_________ _______ _______________
Cash Flows From Operating Activities:
Net loss $(29,721) $(26,275) $(67,379)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 2,212 2,301 6,808
Non-cash services paid by issuance of stock 2,500 - 2,500
Changes in assets and liabilities:
(Increase) decrease in interest receivable 7 35 (1)
(Increase) decrease in inventory 2,500 1,000 (50,500)
(Increase) in prepaid expense (109) (17) (126)
Increase in accounts payable 16,816 9,544 27,053
---------- -------- --------
Net Cash (Used) by Operating
Activities (5,795) (13,412) (81,645)
---------- -------- --------
Cash Flows From Investing Activities:
Purchase of property and equipment - - (10,171)
Payments for website development - - (533)
---------- -------- --------
Net Cash (Used) by
Investing Activities - - (10,704)
---------- -------- --------
Cash Flows From Financing Activities:
Advances from shareholder 853 3,672 6,173
Proceeds from issuance of common stock - - 104,800
Payments for stock offering costs - - (10,865)
---------- -------- --------
Net Cash Provided by Financing Activities 853 3,672 100,108
---------- -------- --------
Net Increase (Decrease) in Cash (4,942) (9,740) 7,759
Cash at Beginning of Period 12,701 22,441 -
---------- -------- --------
Cash at End of Period $ 7,759 $ 12,701 $ 7,759
========== ======== ========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the period from inception on May 19, 2000 through December 31, 2003:
In September 2003, the Company issued 70,500 shares of common stock to
pay legal fees of $17,625 previously accrued in accounts payable and the
Company issued 10,000 shares of stock for services valued at $2,500.
The accompanying notes are an integral part of these financial statements.
F-5
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Two Moons Kachinas, Corp. ("the Company") was organized
under the laws of the State of Nevada on May 19, 2000. The Company
sells Hopi Kachina Dolls and related artwork. The Company has not yet
generated significant revenues from its planned principal operations and
is considered a development stage company as defined in Statement of
Financial Accounting Standards No. 7. The Company has, at the present
time, not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and
other relevant factors.
Cash and Cash Equivalents - The Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be cash
equivalents.
Accounts Receivable - The Company records accounts receivable at the
lower of cost or fair value. The Company recognizes interest income on
an account receivable based on the stated interest rate for past-due
accounts over the period that the account is past-due. The Company
estimates allowances for doubtful accounts based on the aged receivable
balance and historical losses. The Company records interest income on
delinquent accounts receivable only when payment is received. The
Company first applies payments received on delinquent accounts
receivable to eliminate the outstanding principal. The Company charges
off uncollectible accounts receivable when management estimates no
possibility of collecting the related receivable. The Company considers
accounts receivable to be past-due or delinquent based on contractual
terms.
Inventory - Inventory is carried at the lower of cost or market using
the specific identification method. At December 31, 2003, inventory
consists of Kachina dolls and related artwork valued at $50,500. The
Company has estimated that no allowance for slow moving or obsolete
inventory was necessary at December 31, 2003.
Property and Equipment - Property and equipment are stated at cost.
Expenditures for repairs and maintenance are charged to operating
expense as incurred. Expenditures for additions and betterments that
extend the useful lives of property and equipment are capitalized upon
being placed in service. When assets are sold or otherwise disposed of,
the cost and related accumulated depreciation or amortization is removed
from the accounts and any resulting gain or loss is included in
operations. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets of five years.
F-6
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Website Costs - The Company has adopted the provisions of Emerging
Issues Task Force 00-2, "Accounting for Web Site Development Costs."
Costs incurred in the planning stage of a website are expensed as
research and development while costs incurred in the development stage
are capitalized and amortized over the life of the asset, estimated to
be two years. As of December 31, 2003 the Company has capitalized a
total of $533 of website costs. The Company did not incur any planning
costs and did not record any research and development costs for the
years ended December 31, 2003 and 2002.
Revenue Recognition - The Company recognizes revenue upon delivery of
the product. Revenue derived from sales through art dealers and
galleries is recorded net of any commissions to the dealers or
galleries.
Advertising Costs - Advertising costs, except for costs associated with
direct-response advertising, are charged to operations when incurred.
The costs of direct-response advertising are capitalized and amortized
over the period during which future benefits are expected to be
received. During the years ended December 31, 2003 and 2002,
respectively, advertising costs amounted to $0 and $5,144.
Loss Per Share - The computation of loss per share is based on the
weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Accounting Standards
No. 128, "Earnings Per Share".
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from those
estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards ("SFAS") No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities", SFAS No. 147, "Acquisitions of
Certain Financial Institutions - an Amendment of FASB Statements No. 72
and 144 and FASB Interpretation No. 9", SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure - an Amendment of
FASB Statement No. 123", SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities", and SFAS No. 150,
"Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity", were recently issued. SFAS No. 146, 147,
148, 149 and 150 have no current applicability to the Company or their
effect on the financial statements would not have been significant.
F-7
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - PROPERTY AND EQUIPMENT
The following is a summary of property and equipment at cost, less
accumulated depreciation at:
December 31,
2003
___________
Computer and office equipment $ 10,171
Less: accumulated depreciation (6,275)
___________
$ 3,896
___________
Depreciation expense for the years ended December 31, 2003 and 2002
amounted to $2,034 and $2,034, respectively.
NOTE 3 - OTHER ASSETS
The following is a summary of other assets at cost, less accumulated
amortization at:
December 31,
2003
___________
Website development $ 533
Less: accumulated amortization (533)
___________
$ -
___________
Amortization expense for the years ended December 31, 2003 and 2002
amounted to $178 and $267, respectively.
NOTE 4 - CAPITAL STOCK
Common Stock In May 2000, in connection with its organization, the
Company issued 500,000 shares of its previously authorized but unissued
common stock. The shares were issued for cash of $25,000 (or $.05 per
share).
In November 2001, the Company issued 79,800 shares of its previously
authorized but unissued common stock. The shares were issued for cash
of $79,800 (or $1.00 per share). Stock offering costs of $10,865 were
netted against the proceeds.
In September 2003, the Company issued 70,500 shares of its previously
authorized but unissued common stock to pay for legal services that had
previously been accrued as accounts payable of $17,625 (or $.25 per
share).
In September 2003, the Company issued 10,000 shares of its previously
authorized but unissued common stock for services rendered valued at
$2,500 (or $.25 per share).
F-8
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes".
SFAS No. 109 requires the Company to provide a net deferred tax
asset/liability equal to the expected future tax benefit/expense of
temporary reporting differences between book and tax accounting methods
and any available operating loss or tax credit carryforwards. The
Company has available at December 31, 2003, operating loss carryforwards
of approximately $68,700, which may be applied against future taxable
income and which expire in various years through 2023.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is dependent, in
part, upon the tax laws in effect, the future earnings of the Company,
and other future events, the effects of which cannot be determined.
Because of the uncertainty surrounding the realization of the loss
carryforwards, the Company has established a valuation allowance equal
to the tax effect of the loss carryforwards and, therefore, no deferred
tax asset has been recognized for the loss carryforwards. The net
deferred tax assets are approximately $10,300 and $6,000 as of December
31, 2003 and 2002, respectively, with an offsetting valuation allowance
of the same amount. The change in the valuation allowance during the
year ended December 31, 2003 is approximately $4,300.
NOTE 6 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any compensation to
any officer or director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his
offices as a mailing address, as needed, at no expense to the Company.
Advances from a shareholder - An officer/shareholder of the Company has
made advances to the Company and has directly paid expenses on behalf of
the Company. At December 31, 2003, the Company owed the shareholder
$6,173. The advances bear no interest and are due on demand.
F-9
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of
America, which contemplate continuation of the Company as a going
concern. However, the Company was recently formed and has not yet been
successful in establishing profitable operations. These factors raise
substantial doubt about the ability of the Company to continue as a
going concern. In this regard, management is proposing to raise any
necessary additional funds not provided by operations through loans or
through additional sales of its common stock. There is no assurance
that the Company will be successful in raising this additional capital
or in achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
NOTE 8 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
For the From Inception
Year Ended on May 19,
December 31, 2000 Through
______________________ December 31,
2003 2002 2003
__________ __________ ____________
Loss from continuing operations
available to common shareholders
(numerator) $ (29,721) $ (26,275) $ (67,379)
__________ __________ ____________
Weighted average number of
common shares outstanding
used in loss per share for the
period (denominator) 601,855 579,800 553,649
__________ __________ ____________
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
NOTE 9 - CONCENTRATIONS
Geographic Region - During the year ended December 31, 2003, all of the
Company's sales and operations were located in and around Salt Lake
City, Utah including all of the Company's inventory and property.
Significant Customers - During the year ended December 31, 2003, the
Company had only one customer that accounted for all of the Company's
revenues. The loss of this significant customer could adversely affect
the Company's business and financial position. During 2002, the Company
had only two customers that accounted for all the Company's revenue
during that year.
F-10
TWO MOONS KACHINAS, CORP.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 10 - SUBSEQUENT EVENTS
The Company is proposing to amend the Articles of Incorporation such
that the Company will now have 5,000,000 shares of $.001 par value
preferred stock authorized.
F-11
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------
There has been no change in our independent accounting firm since
our inception.
Item 8(a). Controls and Procedures.
------------------------------------
Within 90 days prior to the date of this Annual Report and as of the
period covered thereby or December 31, 2003, we carried out an evaluation,
under the supervision and with the participation of our President and
Treasurer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our President and
Treasurer concluded that our disclosure controls and procedures are effective
in timely alerting them to material information required to be included in our
periodic Securities and Exchange Commission reports. It should be noted that
the design of any system of controls is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote. In addition, we reviewed our internal
controls, and there have been no significant changes in our internal controls
or in other factors that could significantly affect those controls subsequent
to the date of their last evaluation.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
Identification of Directors and Executive Officers.
---------------------------------------------------
The following table sets forth the names of all of our current directors
and executive officers. These persons will serve until the next annual
meeting of the stockholders or until their successors are elected or appointed
and qualified, or their prior resignations or terminations.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
David C. Merrell President 5/00 *
Director 5/00 *
Secretary & 1/03
Treasurer 1/03
R. Kip Paul Secretary/ 5/00 1/03
Treasurer 5/00 1/03
Director 5/00 1/03
* This person presently serve in the capacities
indicated.
Term of Office.
---------------
The terms of office of the current sole director shall continue
until the annual meeting of stockholders, which has been scheduled by the
Board of Directors to be held in May of each year. The annual meeting of the
Board of Directors immediately follows the annual meeting of stockholders, at
which executive officers for the coming year are elected.
Business Experience.
--------------------
David C. Merrell, Director, President, Secretary and Treasurer.
Mr. Merrell is 45 years of age. Since 1989, he has been the owner of DCM
Finance, a Salt Lake City based finance company that makes and brokers real
estate loans. Mr. Merrell received his Bachelor of Science degree in
Economics from the University of Utah in 1981. He has been a Kachina
collector for over 10 years.
Family Relationships.
---------------------
None; not applicable.
Involvement in Certain Legal Proceedings.
-----------------------------------------
During the past five years, no present or former director,
executive officer or person nominated to become a director or an executive
officer of Two Moons:
(1) was a general partner or executive officer of any business
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
On May 30, 2003, David C. Merrell, who is our sole director and officer,
filed with the Securities and Exchange Commission a Form 3, Inital Statement
of Beneficial Ownership of Securities, disclosing his ownership of 250,000
shares of our Company's common stock.
On June 2, 2003, R. Kip Paul, a former officer, also filed with the
Securities and Exchange Commission a Form 3 disclosing his ownership of
250,000 shares of our Company's common stock.
On January 20, 2004, R. Kip Paul filed with the Securities and
Exchange Commission a Form 4 disclosing the gift of 200,000 shares of our
Company's common stock to family members.
Based upon our review of the copies of such forms and reports we have
received from the foregoing persons, we believe that no such person was
required to file a Form 5 for the year ended December 31, 2003.
Code of Ethics.
---------------
The Company has adopted a Code of Ethics and it is attached to this
Report as Exhibit 14. See Part III, Item 13.
Audit Committee.
----------------
The Company has adopted an Audit Committee and a Charter for the Audit
Committee. See Part III, Item 13.
Item 10. Executive Compensation.
-----------------------
Two Moons has not paid its directors or officers any compensation
since our inception. We do not have any employment agreements with our
officers. If we are able to establish profitable operations, we expect to pay
each of them $1,000 per month in compensation. The compensation may be
deferred and convertible to stock at the officers' option. We have not
created any arrangement in this regard; however, we will disclose the terms of
any such arrangement in future periodic report filings with the Securities and
Exchange Commission.
Compensation Plans.
-------------------
We have no compensation plans.
Termination of Employment and Change of Control Arrangements.
-------------------------------------------------------------
We have no special arrangements involving any change of control of
our company or termination of any director or executive officer.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
The following tables set forth the share holdings of our directors
and executive officers and those persons who own more than five percent of our
common stock as of the date of the Report:
Number Percentage
Name and Address of Shares Beneficially Owned of Class
---------------- ---------------------------- --------
David C. Merrell 250,000 37.86%
9005 Cobble Canyon Lane
Sandy, Utah 84093
R. Kip Paul 50,000 7.57%
175 East 400 South, #700
Salt Lake City, Utah 84111
Helen W. Paul 50,000 7.57%
5293 Cottonwood Club Drive
Salt Lake City, Utah 84117
Mark H. Paul 50,000 7.57
7 Addison Avenue
Franklin, MA 08038
Robert P. Paul 50,000 7.57%
5293 Cottonwood Club Drive
Salt Lake City, Utah 84117
Terri J. Paul 50,000 7.57%
87 U Street
Salt Lake City, Utah 84103
Leonard W. Burningham, Esq. 41,400 6.27%
455 East 500 South, Suite #204
Salt Lake City, Utah 84111
Daniel L. Ross 40,000 6.9%
2424 East Katie Lynn Lane
Salt Lake City, Utah 84117
------- -----
TOTALS 581,400 88.1%
Security Ownership of Management.
---------------------------------
The following table sets forth the share holdings of our directors
and executive officers as of the date of this Annual Report. Each of these
persons has sole investment and sole voting power over his shares.
Number Percentage
Name and Address of Shares Beneficially Owned of Class
---------------- ---------------------------- ----------
David C. Merrell 250,000 37.86%
9005 Cobble Canyon Lane
Sandy, Utah 84093
------- -----
All directors and executive
officers as a group
(1 persons) 250,000 37.86%
Changes in Control.
-------------------
To our knowledge, there are no present arrangements or pledges of
our securities that may result in a change in control of our Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
----------------------------------------
Except as stated below, during the past two years, there have been
no material transactions, series of similar transactions or currently proposed
transactions, to which our Company or any of our subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to us to
own of record or beneficially more than five percent of our common stock, or
any member of the immediate family of any of the foregoing persons, or any
promoter or founder had a material interest.
An officer/shareholder of our Company has made advances to us and has
directly paid expenses on behalf of our Company in the amount of $6,173, as of
December 31, 2003. The advances bear no interest and are due on demand.
Certain Business Relationships.
-------------------------------
Except as stated above, during the past two years, there have been
no material transactions, series of similar transactions or currently proposed
transactions, to which our Company or any of our subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to us to
own of record or beneficially more than five percent of our common stock, or
any member of the immediate family of any of the foregoing persons, or any
promoter or founder had a material interest.
Indebtedness of Management.
---------------------------
Except as stated above, during the past two years, there have been
no material transactions, series of similar transactions or currently proposed
transactions, to which our Company or any of our subsidiaries was or is to be
a party, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to us to
own of record or beneficially more than five percent of our common stock, or
any member of the immediate family of any of the foregoing persons, or any
promoter or founder had a material interest.
Parents of the Issuer.
----------------------
Except and to the extent that Mr. Merrell may be deemed to be a
parent of our Company by virtue of his substantial stock ownership, we have no
parents.
Transactions with Promoters.
----------------------------
During the past two years, there have been no material transactions,
series of similar transactions or currently proposed transactions, to which
our Company or any of our subsidiaries was or is to be a party, in which the
amount involved exceeded $60,000 and in which any director or executive
officer, or any security holder who is known to us to own of record or
beneficially more than five percent of our common stock, or any member of the
immediate family of any of the foregoing persons, or any promoter or founder
had a material interest.
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
None.
Exhibits*
(i)
Where Incorporated
in this Report
--------------
Registration Statement on SB-2, as Parts I, II and III
amended.**
8-A Registration Statement, filed May 28, 2003**
S-8 Registration Statement, as amended, filed on May 14, 2001**
Definitive Information Statement, filed February 24, 2004**
(ii)
Exhibit
Number Description
------ -----------
14 Code of Ethics
31 302 Certification of David C. Merrell
32 906 Certification of David C. Merrell
* Summaries of all exhibits contained within this
Report are modified in their entirety by reference
to these Exhibits.
** These documents and related exhibits have been
previously filed with the Securities and Exchange
Commission and are incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
---------------------------------------
The following is a summary of the fees billed to Two Moons by its
principal accountants during the calendar years ended December 31, 2003 and
2002:
Fee category 2003 2002
------------ ---- ----
Audit fees $3,830 $3,125
Audit-related fees $ 0 $ 0
Tax fees $ 520 $ 300
All other fees $ 0 $ 0
------ ------
Total fees $4,350 $3,425
Audit fees. Consists of fees for professional services rendered by our
principal accountants for the audit of our annual financial statements and the
review of financial statements included in our Forms 10-QSB Quarterly Reports
or services that are normally provided by our principal accountants in
connection with statutory and regulatory filings or engagements.
Audit-related fees. Consists of fees for assurance and related services
by our principal accountants that are reasonably related to the performance of
the audit or review of Two Moons's financial statements and are not reported
under "Audit fees."
Tax fees. Consists of fees for professional services rendered by our
principal accountants for tax compliance, tax advice and tax planning.
All other fees. Consists of fees for products and services provided by
our principal accountants, other than the services reported under "Audit
fees," "Audit-related fees" and "Tax fees" above.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TWO MOONS KACHINAS CORP.
Date: 4/12/2004 By/s/David C. Merrell
------------- -------------------------------------
David C. Merrell
President and Director
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
TWO MOONS KACHINAS CORP.
Date: 4/12/2004 By/s/David C. Merrell
------------- -------------------------------------
David C. Merrell
President and Director