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| KRTF.OB > SEC Filings for KRTF.OB > Form 10-Q on 10-Feb-2009 | All Recent SEC Filings |
10-Feb-2009
Quarterly Report
The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in, Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements.
Forward-Looking Statements
This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", variations of such words, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth herein and in other reports and documents that we file from time to time with the Securities and Exchange Commission, particularly the Report on Form 10-KSB, Form 10-Q and any Current Reports on Form 8-K.
Overview and History
Kurrant Food Enterprises, Inc. was incorporated in the State of Colorado on May 3, 2005. We develop, own, and operate a catering business in Colorado through our subsidiary corporation, Kurrant Cuisine Enterprises, Inc. We plan to expand our operations to other lines of business in the food industry, such as production of food products. However, we have no definitive plans to be involved in any other activities at the present time other than our catering business.
Through our catering business, we organize and cater a number of different events, from cocktail parties, to buffets of various kinds, to multi-course plated dinners.
Our headquarters are located at 194 Hermosa Circle, Durango, Colorado 81301. Our phone number at our headquarters is (970) 247-4980. Our fiscal year end is September 30th.
Results of Operations
The following discussion involves our results of operations for the fiscal quarters ended December 31, 2008 and December 31, 2007. For the fiscal quarter ended December 31, 2008 we had sales of $8,000, compared to sales of $175,882 for the fiscal quarter ended December 31, 2007.
Costs of goods include all direct costs incurred in providing services. Direct costs consist of food, beverages, and catering supplies. Our costs of goods for the fiscal quarter ended December 31, 2008 was $-0-. Our costs of goods for the fiscal quarter ended December 31, 2007 was $88,225.
The difference between total sales and costs of goods is gross profit. Our gross profit for the fiscal quarter ended December 31, 2008 was $8,000. Our gross profit for the fiscal quarter ended December 31, 2007 was $87,657.
The major components of operating expenses include professional fees, salaries and associated payroll costs, rent and telephone expenses.
Operating expenses, which includes depreciation and general and administrative expenses for the fiscal quarter ended December 31, 2008 was $19,621. Operating Expenses for the fiscal quarter ended December 31, 2007 was $86,018. Our general and administrative expenses remains the single largest item on our Statement of Operations. The major component of these general and administrative expenses were payments to independent contractors, professional fees, and pre-paid expenses, and accrued receivables. While our general and administrative expenses will continue to be our largest expense item, we believe that this expense will stabilize in the coming fiscal quarters as we reduce prepaid expenses and develop efficiencies in our operations.
We had a net loss of $13,224, or $(0.00) per share, for the fiscal quarter ended December 31, 2008, compared to a net profit of $847, or $(0.00) per share, for the fiscal quarter ended December 31, 2007. While we were profitable in the first fiscal quarter last year, we continue to have losses. It is too early to determine if we will be profitable for this fiscal year.
Liquidity and Capital Resources
As of December 31, 2008, we had cash or cash equivalents of $174, compared to cash or cash equivalents of $11,487 at December 31, 2007.
Net cash used for operating activities was $8,651 for the three months ended December 31, 2008 compared to net cash provided by operating activities of $2,595 for the three months ended December 31, 2007.
Cash flows used for investing activities were-0- for the three months ended December 31, 2008, compared to $-0- for the three months ended December 31, 2007.
Cash flows provided by financing activities were $8,362 for the three months ended December 31, 2008, compared cash flows used for financing activities of $638 for the three months ended December 31, 2007.
We believe that our recent public offering will continue to provide sufficient capital in the short term for our current level of operations, which includes becoming profitable. Additional resources will be needed to expand into additional locations.
Otherwise, we do not anticipate needing to raise additional capital resources in the next twelve months.
Until the current operations become cash flow positive, our officers and directors will fund the operations to continue the business. At this time we have no other resources on which to get cash if needed without their assistance.
Our principle source of liquidity is our operations. Our variation in sales is based upon the level of our catering event activity and will account for the difference between a profit and a loss. Also business activity is closely tied to the economy of Colorado and the U.S. economy. A slow down in entertaining activity will have a negative impact to our business. In any case, we try to operate with minimal overhead. Our primary activity will be to seek to expand the number of catering events and, consequently, our sales. If we succeed in expanding our customer base and generating sufficient sales, we will become profitable. We cannot guarantee that this will ever occur. Our plan is to build our Company in any manner which will be successful.
Recently Issued Accounting Pronouncements
We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position, or cash flows.
Seasonality
We have found that our sales are impacted by seasonal demands for our services, with greater sales coming at the end of the calendar year and around major holidays.
Critical Accounting Policies
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.
We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us. These relate to bad debts, impairment of intangible assets and long lived assets, contractual adjustments to revenue, and contingencies and litigation. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future financial conditions or results of operations.
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