U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission File No. 000-50295
Two Moons Kachinas Corp.
------------------------
(Exact name of Small Business Issuer as specified 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
Check whether the Registrant 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date:
September 30, 2004
660,300
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Transitional Small Business Disclosure Format: Yes X No
--- ---
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence on the
following page, together with Related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Company.
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
CONTENTS
PAGE
Unaudited Condensed Balance Sheets,
September 30, 2004 and December 31, 2003 2
Unaudited Condensed Statements of Operations,
for the three and nine months ended September 30, 2004
and 2003 and for the period from inception on
May 19, 2000 through September 30, 2004 3
Unaudited Condensed Statements of Cash Flows,
for the nine months ended September 30, 2004
and 2003 and for the period from inception on
May 19, 2000 through September 30, 2004 4
Notes to Unaudited Condensed Financial Statements 5 - 9
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
September 30, December 31,
2004 2003
___________ ___________
CURRENT ASSETS:
Cash $ 2,974 $ 7,759
Interest receivable 2 1
Inventory 50,500 50,500
Prepaid expenses 333 126
___________ ___________
Total Current Assets 53,809 58,386
PROPERTY AND EQUIPMENT, net 2,369 3,896
OTHER ASSETS:
Website development, net - -
___________ ___________
$ 56,178 $ 62,282
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 20,511 $ 9,428
Advances from shareholder 6,653 6,173
___________ ___________
Total Current Liabilities 27,164 15,601
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
660,300 shares issued and
outstanding 660 660
Capital in excess of par value 113,400 113,400
Deficit accumulated during the
development stage (85,046) (67,379)
___________ ___________
Total Stockholders' Equity 29,014 46,681
___________ ___________
$ 56,178 $ 62,282
___________ ___________
Note: The balance sheet as of December 31, 2003 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
F-2
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three For the Nine From Inception
Months Ended Months Ended On May 19,
September 30, September 30, 2000 Through
________________ _______________ September 30,
2004 2003 2004 2003 2004
________________ _______________ _____________
REVENUE $ 2,500 $ - $ 2,500 $ - $ 13,376
COST OF GOODS SOLD 2,000 - 2,000 - 9,000
_______ _______ ________ ________ ________
GROSS PROFIT 500 - 500 - 4,376
OPERATING EXPENSES:
Selling - - - - 5,144
General and administrative 3,479 16,606 18,185 26,777 85,172
_______ _______ ________ ________ ________
Total Operating Expenses 3,479 16,606 18,185 26,777 90,316
_______ _______ ________ ________ ________
LOSS FROM OPERATIONS (2,979) (16,606) (17,685) (26,777) (85,940)
_______ _______ ________ ________ ________
OTHER INCOME:
Interest income 7 5 18 36 894
_______ _______ ________ ________ ________
Total Other Income 7 5 18 36 894
_______ _______ ________ ________ ________
LOSS BEFORE INCOME TAXES (2,972) (16,601) (17,667) (26,741) (85,046)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
_______ _______ ________ ________ ________
NET LOSS $(2,972)$(16,601) $(17,667) $(26,741)$(85,046)
_______ _______ ________ ________ ________
LOSS PER COMMON SHARE $ (.00) $ (.03) $ (.03) $ (.05)$ (.15)
_______ _______ ________ ________ ________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
F-3
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
NET INCREASE (DECREASE) IN CASH
For the Nine From Inception
Months Ended On May 19,
September 30, 2000 Through
_____________________ September 30,
2004 2003 2004
__________ __________ __________
Cash Flows from Operating Activities:
Net loss $ (17,667)$ (26,741) $ (85,046)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 1,527 1,700 8,335
Non-cash services paid by issuance of stock - 2,500 2,500
Changes in assets and liabilities:
(Increase) decrease in interest receivable (1) 6 (2)
(Increase) in inventory - - (50,500)
(Increase) in prepaid expenses (207) (324) (333)
Increase in accounts payable 11,083 15,423 38,136
__________ __________ __________
Net Cash (Used) by Operating
Activities (5,265) (7,436) (86,910)
__________ __________ __________
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 480 697 6,653
Proceeds from issuance of common stock - - 104,800
Payments for stock offering costs - - (10,865)
__________ __________ __________
Net Cash Provided by Financing
Activities 480 697 100,588
__________ __________ __________
Net Increase (Decrease) in Cash (4,785) (6,739) 2,974
Cash at Beginning of Period 7,759 12,701 -
__________ __________ __________
Cash at End of Period $ 2,974 $ 5,962 $ 2,974
__________ __________ __________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the nine months ended September 30, 2004:
None
For the nine months ended September 30, 2003:
In September 2003, the Company issued 70,500 shares of common stock to
repay accounts payable of $17,625 and the Company issued 10,000 shares
of stock for services valued at $2,500.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
F-4
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED 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.
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary
to present fairly the financial position, results of operations and cash
flows at September 30, 2004 and 2003 and for the periods then ended have
been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles in the United States of America have been condensed or omitted.
It is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's December 31, 2003 audited financial statements. The results of
operations for the periods ended September 30, 2004 and 2003 are not
necessarily indicative of the operating results for the full year.
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 and Loans Receivable - The Company records accounts and loans
receivable at the lower of cost or fair value. The Company determines the
lower of cost or fair value of nonmortgage loans on an individual asset
basis. 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 recognizes interest income on a
loan receivable based on the stated interest rate over the term of the
loan. The Company accumulates and defers fees and costs associated with
establishing a receivable to be amortized over the estimated life of the
related receivable. The Company estimates allowances for doubtful accounts
and loan losses based on the aged receivable balance and historical losses.
The Company records interest income on delinquent accounts and loans
receivable only when payment is received. The Company first applies
payments received on delinquent accounts and loans receivable to eliminate
the outstanding principal. The Company charges off uncollectible accounts
and loans receivable when management estimates no possibility of collecting
the related receivable. The Company considers accounts and loans
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 September 30, 2004 and December 31,
2003, respectively, inventory consists of Kachina dolls and related artwork
valued at $50,500 and $50,500. The Company has estimated that no allowance
for slow moving or obsolete inventory was necessary at September 30, 2004
and December 31, 2003.
F-5
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
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.
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
September 30, 2004, 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 nine months ended September 30, 2004
and 2003.
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 nine months ended September 30, 2004 and 2003, respectively,
advertising costs amounted to $0 and $0.
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. 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. 149 and 150 have no current
applicability to the Company or their effect on the financial statements
would not have been significant.
F-6
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - PROPERTY AND EQUIPMENT
The following is a summary of property and equipment at cost, less
accumulated depreciation at:
September 30, December 31,
2004 2003
___________ ___________
Computer and office equipment $ 10,171 $ 10,171
Less: accumulated depreciation (7,802) (6,275)
___________ ___________
$ 2,369 $ 3,896
___________ ___________
Depreciation expense for the nine months ended September 30, 2004 and 2003
amounted to $1,527 and $1,522, respectively.
NOTE 3 - OTHER ASSETS
The following is a summary of other assets at cost, less accumulated
amortization at:
September 30, December 31,
2004 2003
___________ ___________
Website development $ 533 $ 533
Less: accumulated amortization (533) (533)
___________ ___________
$ - $ -
___________ ___________
Amortization expense for the nine months ended September 30, 2004 and 2003
amounted to $0 and $178, respectively.
NOTE 4 - CAPITAL STOCK
Preferred Stock - In March 2004, the Company amended its Articles of
Incorporation to authorize 5,000,000 shares of preferred stock, $.001 par
value, with such rights, preferences and designations and to be issued in
such series as determined by the Board of Directors. No shares are issued
and outstanding at September 30, 2004.
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.
F-7
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - CAPITAL STOCK [Continued]
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).
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 September 30, 2004, operating loss carryforwards of
approximately $86,000, which may be applied against future taxable income
and which expire in various years through 2024.
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 $12,900 and $10,300 as of September 30, 2004 and December 31,
2003, respectively, with an offsetting valuation allowance of the same
amount. The change in the valuation allowance during the nine months ended
September 30, 2004 is approximately $2,600.
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 September 30, 2004 and December 31, 2003, respectively,
the Company owed the shareholder $6,653 and $6,173. The advances bear no
interest and are due on demand.
F-8
TWO MOONS KACHINAS CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED 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 Three For the Nine From Inception
Months Ended Months Ended On May 19,
September 30, September 30, 2000 Through
________________ _________________ September 30,
2004 2003 2004 2003 2004
________________ _________________ __________
Loss from operations
available to common
shareholders (numerator) $(2,972)$(16,601)$(17,667)$(26,741) $ (85,046)
_______ ________ ________ ________ __________
Weighted average number of
common shares outstanding
for the period (denominator)660,300 586,800 660,300 582,159 571,970
________ _______ ________ ________ __________
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 nine months ended September 30, 2004, 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.
F-9
Item 2. 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, both through our own web site and through Internet auction
sites and consignment to specialty stores.
We have placed photographs of the Kachinas on our web site and may
consider putting 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 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 needs for the next 12 months from current
resources. We plan to keep our expenses low and to keep our inventory
rolling over.
Results of Operations
---------------------
Three Months ended September 30, 2004 versus September 30, 2003.
----------------------------------------------------------------
We had revenues from operations of $2,500 in the three months ended
September 30, 2004, with $2,000 in cost of goods sold for a gross profit of
$500. We had $0 revenues from operations in the three months ended September
30, 2003. Our general and administrative expenses for the quarter ended
September 30, 2004, were $3,479, and for the quarter ended September 30, 2003,
were $16,606, which resulted in a loss from operations of ($2,979) and
($16,606), respectively. We had interest income for the quarter ended
September 30, 2004, of $7 and for the quarter ended September 30, 2003, of $5.
Our Company's net loss was ($2,972) for the quarter ended September 30, 2004,
and ($16,601) for the quarter ended September 30, 2003.
Nine Months ended September 30, 2004 versus September 30, 2003.
---------------------------------------------------------------
For the nine months ended September 30, 2004, we had revenues from
operations of $2,500, with $2,000 in cost of goods sold for a gross profit of
$500. We had $0 revenues from operations in the nine months ended September
30, 2003. Our general and administrative expenses for the nine months ended
September 30, 2004 and 2003, were $18,185 and $26,777, respectively, which
resulted in a loss from operations of ($17,685) and ($26,741), respectively.
For the nine months ended September 30, 2004 and 2003, we had interest income
of $18 and $36 and a net loss of ($17,667) and ($26,741), respectively.
Liquidity
---------
We had cash on had at September 30, 2004, of $2,974, which we
believe will be sufficient to continue our operations for the next 12 months.
In the event we feel we need to raise additional funds not provided by
operations, we plan on doing so through loans or through additional sales of
our common stock. We also have received advances from an officer as of
September 30, 2004, of $6,653.
Forward-Looking Statements.
---------------------------
Statements made in this Quarterly Report which are not purely
historical are forward-looking statements with respect to the goals, plan
objectives, intentions, expectations, financial condition, results of
operations, future performance and business of our Company, including, without
limitation, (i) our ability to gain a larger share of the Kachina doll
industry, our ability to continue to develop products acceptable to the
industry, our ability to retain relationships with suppliers, our ability to
raise capital, and the growth of the Native American arts and crafts industry,
and (ii) statements preceded by, followed by or that include the words "may",
"would", "could", "should", "expects", "projects", "anticipates", "believes",
"estimates", "plans", "intends", "targets" or similar expressions.
Forward-looking statements involve inherent risks and uncertainties,
and important factors (many of which are beyond our Company's control) that
could cause actual results to differ materially from those set forth in the
forward-looking statements, including the following, in addition to those
contained in our Company's reports on file with the Securities and Exchange
Commission; general economic or industry conditions, nationally and/or in the
communities in which our Company conducts business, changes in the interest
rate environment, legislation or regulatory requirements, conditions of the
securities markets, changes in the Native American arts and crafts industry,
the development of products and that may be superior to the products and
services offered by our Company, demand for Kachina dolls, competition,
changes in the quality or composition of our Company's products, our ability
to raise capital, changes in accounting principles, policies or guidelines,
financial or political instability, acts of war or terrorism, other economic,
competitive, governmental, regulatory and technical factors affecting our
Company's operations, products, services and prices.
Accordingly, results actually achieved may differ materially from
expected results in these statements. Forward-looking statements speak only
as of the date they are made. Our Company does not undertake, and
specifically disclaims, any obligation to update any forward-looking
statements to reflect events or circumstances occurring after the date of such
statements.
Item 3. Controls and Procedures.
----------------------------------
As of the end of the period covered by this Quarterly Report, we carried
out an evaluation, under the supervision and with the participation of our
President, of the effectiveness of our disclosure controls and procedures.
Based on this evaluation, our President 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 over financial reporting, and
there have been no changes in our internal controls or in other factors in the
last fiscal quarter that has materially affected or is reasonably likely to
materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
----------------------------
None; not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
----------------------------------------------------------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
--------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
----------------------------
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
-------------------------------------------
(a) Exhibits.
31.1 302 Certification of David C. Merrell
32 906 Certification
(b) Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Quarterly Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Two Moons Kachinas Corp.
Date: 10/29/2004 By /s/ David C. Merrell
----------- -------------------------------------
David C. Merrell
President and Director