KETTLE RIVER GROUP INC. (aka Koala International Wireless Inc.)III
(Name of small business issuer in its charter)
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No established public trading market exists for Kettle River Group Inc.'s securities. Kettle River Group Inc. has no common equity subject to outstanding purchase options or warrants. Kettle River Group Inc. has no securities convertible into its common equity. There is no common equity that could be sold pursuant to Rule 144 under the Securities Act of 1933, as amended, or that Kettle River Group Inc. has agreed to register under the Securities Act of 1933, as amended, for sale by shareholders.
ITEM 2. LEGAL PROCEEDINGS
Kettle River Group Inc. is not a party to any pending legal proceeding or litigation and none of its property is the subject of a pending legal proceeding. Further, the officer and director knows of no legal proceedings against Kettle River Group Inc. or its property contemplated by any governmental authority.
Kettle River Group Inc. is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.
No director, officer, or affiliate of Kettle River Group Inc. and no owner of record or beneficial owner of more than 5.0% of the securities of Kettle River Group Inc., or any associate of any such director, officer or security holder, is a party adverse to the company or has a material interest adverse to the company in reference to pending litigation.
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ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
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ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Each of the sales listed above was made for cash, services, or in exchange for Kettle River Group Inc.'s principal asset. All of the listed sales were made in reliance upon the exemption from registration offered by Section 4(2) of the Securities Act of 1933, as amended. Kettle River Group Inc. had reasonable grounds to believe immediately prior to making an offer to the private investors, and did in fact believe, when such subscriptions were accepted, that such purchasers (1) were purchasing for investment and not with a view to distribution, and (2) had such knowledge and experience in financial and business matters that they were capable of evaluating the merits and risks of their investment and were able to bear those risks. The purchasers had access to pertinent information enabling them to ask informed questions. Two separate filings of Form D have been made to the Securities and Exchange Commission concerning the issuance of the aforementioned shares. All such sales were made without the aid of underwriters, and no sales commissions were paid.
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On August 20, 1999, Kettle River Group Inc., issued 2,500,000 shares of common stock to two shareholders in satisfaction of certain organizational costs (approximately $2500.00) and activities performed by the shareholders. The issuance of the shares were exempt from registration under Rule 506 of Regulation D, and sections 3(b) and 4(2) of the Securities Act of 1933, as amended, due to the shareholders being Kettle River Group Inc.'s founders and serving as its initial management, and the limited number of investors (two).
On August 20, 1999, Kettle River Group Inc. issued a total of 2,000,000 shares of common stock to ten shareholders, one of whom is the general partner, and nine of whom are investor participants in the licensor of Kettle River Group Inc.'s Biocatalyst rights. The issuance of the common stock was exempt from registration under Rule 504 of Regulation D and section 3(b) of the Securities Act of 1933, as amended. Kettle River Group Inc.'s shares were valued at $0.001 per share, and they were issued to accredited investors according to an exemption from registration under Texas law that permits general solicitation and general advertising so long as sales are made only to accredited investors. If the exemption under Rule 504 of Regulation D is not available, Kettle River Group Inc. believes that the issuance was also exempt under Rule 506 of Regulation D and section 3(b) and 4(2) under the Securities Act of 1933, as amended, due to the limited manner of the offering, promptly filing notices of sale, and limiting the issuance of shares to a small number of accredited investors (ten).
On February 15, 2000, four of the shareholders described above transferred their shares to four other individuals. These four selling shareholders received consideration of $200.00 each for their shares. The purchasers represented and warranted to the sellers that the purchasers were "accredited investors" as that term is defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended. These were sales between private individuals.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation and the By-laws of Kettle River Group Inc., filed as Exhibits 3.1 and 3.2, respectively, provide that the company will indemnify its officers and directors for costs and expenses incurred in connection with the defense of actions, suits, or proceedings where the officer or director acted in good faith and in a manner she reasonably believed to be in Kettle River Group Inc.'s best interest and is a party by reason of her status as an officer or director, absent a finding of negligence of misconduct in the performance of duty.
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PART F/S
FINANCIAL STATEMENTS
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Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Balance Sheets as at December 31, 2000 and 1999 (audited) . . . . . . . . . . . . . . 19
Statements of Operations for the year ended December 31, 2000 and periods ended from
inception (August 18, 1999) through December 31, 2000 and 1999 (audited). . . . . . . 20
Statements of Cash Flows for the year ended December 31, 2000 and periods ended from
inception (August 18, 1999) to December 31, 2000 and 1999 (audited) . . . . . . . . . 21
Statement of Stockholder's Equity for the period from inception (August 18, 1999) to
December 31, 2000 (audited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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(Graphic Omitted)
Manning Elliott 11th floor, 1050 West Pender Street,
Vancouver, BC, Canada V6E 357
Chartered Accountants Tel: 604.714.3600 Fax: 604.714.3669
Web: manningelliott.com
Independent Auditors' Report
To the Stockholders and Directors
of Kettle River Group Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Kettle River Group Inc. (A Development Stage Company) as of December 31, 2000 and 1999 and the related statements of operations, stockholders' equity and cash flows for the period from August 18, 1999 (Date of Inception) to December 31, 2000, the year ended December 31, 2000 and the period from August 18, 1999 (Date of Inception) to December 31, 1999. 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 audits.
We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the aforementioned financial statements present fairly, in all material respects, the financial position of Kettle River Group Inc. (A Development Stage Company), as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the period from August 18, 1999 (Date of Inception) to December 31, 2000, the year ended December 31, 2000 and the period from August 18, 1999 (Date of Inception) to December 31, 1999, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated any revenues or conducted any operations since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
"Manning Elliott"
CHARTERED ACCOUNTANTS
Vancouver, Canada
February 20, 2001
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Kettle River Group Inc.
(A Development Stage Company)
Balance Sheets
(expressed in U.S. dollars)
December 31, December 31,
2000 1999
$ $
Asset
Licenses (Note 3) - -
======================================================================================================
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 1,200 1,200
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Contingent Liability (Note 1)
Stockholders' Equity
Common Stock: 25,000,000 shares authorized with a par value of $.001; 4,500 4,500
4,500,000 shares issued and outstanding
Additional Paid-in Capital 75 75
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4,575 4,575
Deficit Accumulated During the Development Stage (5,775) (5,775)
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(1,200) (1,200)
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- -
======================================================================================================
(The accompanying notes are an integral part of the financial statements)
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Kettle River Group Inc.
(A Development Stage Company
Statements of Operations
(expressed in U.S. dollars)
Accumulated from From
August 18, 1999 For the Year August 18, 1999
(Date of Inception) Ended (Date of Inception)
to December 31, December 31, to December 31,
2000 2000 1999
$ $ $
Revenue - - -
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Expenses
Amortization of license 667 - 667
License written-off 1,333 - 1,333
Organization expenses 2,575 - 2,575
Transfer agent 1,200 - 1,200
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5,775 - 5,775
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Net Loss (5,775) - (5,775)
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Net Loss Per Share (.000) (.001)
==================================================================================================
Weighted Average Shares Outstanding 4,500,000 4,500,000
==================================================================================================
(The accompanying notes are an integral part of the financial statements)
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Kettle River Group Inc.
(A Development Stage Company
Statements of Cash Flows
(expressed in U.S. dollars)
Accumulated
from August 18, From
1999 (Date of For the Year August 18, 1999
Inception) to Ended (Date of Inception)
December 31, December to December 31,
2000 31, 2000 1999
$ $ $
Cash Flows to Operating Activities
Net loss (5,775) - (5,775)
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Non cash items
Expenses not paid with cash 2,575 - 2,575
Accounts payable 1,200 - 1,200
Amortization of license 667 - 667
License written-off 1,333 - 1,333
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Net Cash Used by Operating - - -
Activities
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Cash Flows from Financing Activities
Increase in shares issued - - -
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Net Cash Provided by Financing - - -
Activities
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Change in cash - - -
Cash - beginning of period - - -
Cash - end of period - - -
==================================================================================================
Non-Cash Financing Activities
A total of 2,000,000 shares were
issued for the acquisition of a
license (Note 3) 2,000 - 2,000
Organization costs paid for by a
director for no consideration treated
as additional paid in capital 75 - 75
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2,075 - 2,075
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Supplemental Disclosures
Interest paid - - -
Income tax paid - - -
(The accompanying notes are an integral part of the financial statements)
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Kettle River Group Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From August 18, 1999 (Date of Inception) to December 31, 2000
(expressed in U.S. dollars)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Total Stage
# $ $ $ $
Balance - August 18, 1999 (Date of
Inception) - - - - -
Stock issued for $2,500 of
organizational expenses 2,500,000 2,500 - 2,500 -
Additional paid in capital for
organizational expenses incurred by a
director on behalf of the Company - - 75 75 -
Stock issued for a license 2,000,000 2,000 - 2,000 -
Net loss for the period - - - -- (5,775)
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Balance - December 31, 1999 4,500,000 4,500 75 4,575 (5,775)
Net loss for the year - - - - -
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Balance - December 31, 2000 4,500,000 4,500 75 (4,575) (5,775)
=======================================================================================================
(The accompanying notes are an integral part of the financial statements)
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Kettle River Group Inc.
(A Development Stage Company)
Notes to Financial Statements
(expressed in U.S. dollars)
1. Development Stage Company
Kettle River Group Inc. herein (the "Company") was incorporated in the State of Nevada, U.S.A. on August 18, 1999. The Company acquired a license to market and distribute a product in Maine, New Hampshire and Vermont. As discussed in Note 3, this license was cancelled and the Company has retained the right to sue the vendor. As a replacement for this license, the Company was granted additional rights to market and distribute vitamins, minerals, nutritional supplements, and other health and fitness products in Great Britain. The grantor of the license offers these products for sale from various suppliers on their Web Site. See Note 4 regarding related party transactions.
In a development stage company, management devotes most of its activities in investigating business opportunities. Planned principal activities have not yet begun. The ability of the Company to emerge from the development stage with respect to any planned principal business activity is dependent upon its successful efforts to raise additional equity financing and/or attain profitable operations. There is no guarantee that the Company will be able to raise any equity financing or sell any of its products at a profit. There is substantial doubt regarding the Company's ability to continue as a going concern.
2. Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is December 31.
(b) Licenses
The cost to acquire the License was capitalized. The carrying value of the License is evaluated in each reporting period to determine if there were events or circumstances which would indicate a possible inability to recover the carrying amount. Such evaluation is based on various analyses including assessing the Company's ability to bring the commercial applications to market, related profitability projections and undiscounted cash flows relating to each application which necessarily involves significant management judgment. The License has been written-off to operations as at December 31, 1999 due to cancellation of the Biocatalyst License Agreement.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
(d) Revenue Recognition
The Company will receive from the Grantor of the License, commissions of 50% of the profit on all sales made through the Grantor's Web Site. The commission revenue will be recognized in the period the sales have occurred. The Company will report the commission revenue on a net basis as the Company is acting as an Agent for the Grantor and does not assume any risks or rewards of the ownership of the products. This policy is prospective in nature as the Company has not yet generated any revenue.
(e) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from those estimates.
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