Attached files
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended September 30, 2009
-OR-
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________ to________
Commission file number: 333-155059
KODIAK INTERNATIONAL, INC.
(Exact name of registrant in its charter)
Nevada Applied For
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Pembroke House
Upper Pembroke Street
Dublin 2, Republic of Ireland
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: 353 (0) 1 234 2528
Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [x] No [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerate filer, or a small
reporting company as defined by Rule 12b-2 of the Exchange Act):
Large accelerated filer [ ] Non-accelerated filer [ ]
Accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [x]
The number of outstanding shares of the registrant's common stock,
November 11, 2009:
Common Stock - 6,600,000
2
Kodiak International, Inc.
FORM 10-Q
For the quarterly period ended September 30, 2009
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 10
Item 4T. Controls and Procedures 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 1A. Risk Factors 12
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security
Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
SIGNATURES
3
PART I
Item I - FINANCIAL STATEMENTS
Kodiak International, Inc.
(An Exploration Stage Enterprise)
Balance Sheet
Unaudited (Audited)
September 30, December 31,
2009 2008
------------ -----------
ASSETS
Current Assets:
Cash $ - $ 23,356
Accounts receivable - -
Inventory - -
--------- --------
Total current assets - 23,356
--------- --------
Fixed Assets:
Furniture and Equipment - -
Computer Equipment - -
Leasehold Improvements - -
--------- --------
Total Fixed Assets - -
Less Accumulated Depreciation - -
--------- --------
Net fixed assets - -
--------- --------
Other Assets
Deposits - -
Goodwill - -
--------- --------
Total other assets - -
--------- --------
Total Assets $ - $ 23,356
========= ========
LIABILITIES
Current Liabilities:
Checks in excess of deposits $ 31 $ -
Accounts payable and accrued expenses - -
Advances from shareholder 10,000 -
--------- --------
Total current liabilities 10,031 -
--------- --------
Total Liabilities 10,031 -
STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, 75,000,000
authorized, 6,600,000 and 6,600,000 shares
issued and outstanding, respectively 6,600 6,600
Capital in excess of par value 79,400 79,400
Deficit accumulated during the
development stage (96,031) (62,644)
--------- --------
4
Total stockholders' deficit (10,031) 23,356
-------- --------
Total liabilities and
stockholders' deficit $ - $ 23,256
======== ========
The accompanying notes are an integral part of these statements
5
Kodiak International, Inc.
(An Exploration Stage Enterprise)
Statements of Operations
Three Months Nine Months
2009 2008 2009 2008
---------- ---------- ---------- ----------
Sales $ - $ - $ - $ -
Cost of sales - - - -
---------- ---------- ---------- ----------
Gross profit - - - -
---------- ---------- ---------- ----------
General and administrative expenses
Salaries - - - -
Depreciation and amortization - - - -
Mineral property expenditures - - - -
Legal and professional fees 10,430 19,303 29,698 19,303
Other general and administrative 564 41 3,627 41
---------- ---------- ---------- ----------
Total operating expenses 10,994 19,334 33,325 19,344
---------- ---------- ---------- ----------
(Loss) from operations (10,994) (19,334 (33,325) (19,344)
---------- ---------- ---------- ----------
Other income (expense):
Interest income - - - -
Currency losses - (5,670) (63) (5,670)
Interest expense - - - -
---------- ---------- ---------- ----------
(Loss) before taxes (10,994) (25,014) (33,388) (25,014)
---------- ---------- ---------- ----------
Provision (credit) for taxes
On income - - - -
---------- ---------- ---------- ----------
Net (loss) $ (10,994) $ (25,014) $ (33,388) $ (25,014)
========== ========== ========== ==========
Basic earnings(loss)
per common share $ (0.0017) $ (0.0040) $ (0.0051) $ (0.0040)
========== ========== ========== ==========
Weighted average number
Of shares outstanding 6,600,000 6,300,000 6,600,000 6,300,000
========== ========== ========== ==========
The accompanying notes are an integral part of these statements
6
Kodiak International, Inc.
(An Exploration Stage Enterprise)
Statements of Cash Flows
Cumulative,
Inception,
February 2,
Nine Months Year ended 2004 Through
September 30, December 31 September 30,
2009 2008 2009
----------- ----------- -----------
Cash flows from operating activities:
Net (loss) $ (33,388) $ (25,014) $ (96,030)
Adjustments to reconcile net (loss) to
cash provided (used) by developmental
stage activities:
Depreciation and Amortization - - -
Change in current assets and liabilities:
Inventory - - -
Deposits - - -
Rounding 1 - (1)
Accounts payable and accrued expenses - - -
--------- --------- ---------
Net cash flows from operating activities (22,394) (25,014) (96,031)
--------- --------- ---------
Cash flows from investing activities:
Purchase of fixed assets - - -
--------- --------- ---------
Net cash flows from investing activities - - -
--------- --------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock - 60,000 86,000
Advances from shareholder 31 - 31
Convertible note payable 10,000 - 10,000
--------- --------- ---------
Net cash flows from financing activities 10,031 60,000 96,031
--------- --------- ---------
Net cash flows (23,356) 34,986 -2
Cash and equivalents, beginning of period 23,356 4,895 -
--------- --------- ---------
Cash and equivalents, end of period $ - $ 39,881 $ -
========= ========= =========
Supplemental cash flow disclosures:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
The accompanying notes are an integral part of these statements.
7
Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
September 30, 2009
Note 1 - Organization and summary of significant accounting policies:
Following is a summary of the Company's organization and significant
accounting policies:
Organization and nature of business -Kodiak International Inc., ("We,"
or "the Company") is a Nevada corporation incorporated on February 2,
2004. The Company is primarily engaged in the acquisition and
exploration of mining properties.
The Company has been in the exploration stage since its formation and
has not yet realized any revenues from its planned operations. Upon
the location of commercially mineable reserves, the Company plans to
prepare for mineral extraction and enter the development stage.
Basis of presentation - Our accounting and reporting policies conform
to U.S. generally accepted accounting principles applicable to
Exploration Stage enterprises. Changes in classification of 2008
amounts have been made to conform to current presentations.
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
amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Cash and cash equivalents -For purposes of the statement of cash flows,
we consider all cash in banks, money market funds, and certificates of
deposit with a maturity of less than three months to be cash
equivalents.
Property and Equipment - The Company values its investment in property
and equipment at cost less accumulated depreciation. Depreciation is
computed primarily by the straight line method over the estimated
useful lives of the assets ranging from five to thirty-nine years.
Mineral Property Acquisition and Exploration Costs - The company
expenses all costs related to the acquisition and exploration of
mineral properties in which it has secured exploration rights prior to
establishment of proven and probable reserves. To date, the Company
has not established the commercial feasibility of any exploration
prospects; therefore, all costs are being expensed.
Fair value of financial instruments and derivative financial
instruments - We have adopted Statements of Financial Accounting
Standards regarding Disclosure About Derivative Financial Instruments
and Fair Value of Financial Instruments. The carrying amounts of cash,
accounts payable, accrued expenses, and other current liabilities
approximate fair value because of the short maturity of these items.
These fair value estimates are subjective in nature and involve
8
Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
September 30, 2009
uncertainties and matters of significant judgment, and, therefore,
cannot be determined with precision. Changes in assumptions could
significantly affect these estimates. We do not hold or issue
financial instruments for trading purposes, nor do we utilize
derivative instruments in the management of foreign exchange, commodity
price or interest rate market risks.
Federal income taxes - Deferred income taxes are reported for timing
differences between items of income or expense reported in the
financial statements and those reported for income tax purposes in
accordance with Statements of Financial Accounting Standards regarding
Accounting for Income Taxes, which requires the use of the
asset/liability method of accounting for income taxes. Deferred income
taxes and tax benefits are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases, and for tax loss and credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are
expected to be recovered or settled. Deferred taxes are provided for
the estimated future tax effects attributable to temporary differences
and carryforwards when realization is more likely than not.
Net income per share of common stock - We have adopted Statements of
Financial Standards regarding Earnings per Share, which requires
presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and requires
a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. In the accompanying financial statements, basic earnings
per share of common stock is computed by dividing net income by the
weighted average number of shares of common stock outstanding during
the period. We do not have a complex capital structure requiring the
computation of diluted earnings per share.
Note 2 - Uncertainty, going concern:
At September 30, 2009, we were engaged in a business and had suffered
losses from exploration stage activities to date. In addition, we have
minimal operating funds. Although management is currently attempting
to identify business opportunities and is seeking additional sources of
equity or debt financing, there is no assurance these activities will
be successful. Accordingly, we must rely on our officers to perform
essential functions without compensation until a business operation can
be commenced. No amounts have been recorded in the accompanying
financial statements for the value of officers' services, as it is not
considered material.
9
Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
September 30, 2009
These factors raise substantial doubt about the ability of the Company
to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Note 3 - Federal income tax:
We follow Statements of Financial Accounting Standards regarding
Accounting for Income Taxes. Deferred income taxes reflect the net
effect of (a) temporary difference between carrying amounts of assets
and liabilities for financial purposes and the amounts used for income
tax reporting purposes, and (b) net operating loss carryforwards. No
net provision for refundable Federal income tax has been made in the
accompanying statement of loss because no recoverable taxes were paid
previously. Similarly, no deferred tax asset attributable to the net
operating loss carryforward has been recognized, as it is not deemed
likely to be realized.
The provision for refundable Federal income tax consists of the
following:
2009 2008
Refundable Federal income tax attributable to:
Current operations $ (21,105) $(41,539)
Less, Nondeductible expenses - -
-Less, Change in valuation allowance 20,105 41,539
Net refundable amount - -
The cumulative tax effect at the expected rate of 15% of significant
items comprising our net deferred tax amount is as follows:
2009 2008
Deferred tax asset attributable to:
Net operating loss carryover $ 3,166 $ 6,230
Less, Valuation allowance (3,166) (6,230)
Net deferred tax asset - -
At December 31, 2008, an unused net operating loss carryover
approximating $62,243 is available to offset future taxable income; it
expires beginning in 2025.
Note 4 - Cumulative sales of stock:
Since its inception, we have issued shares of common stock as follows:
On August 8, 2005, our Directors authorized the issuance of 2,000,000
founder shares at par value of $0.001. These shares are restricted
under rule 144 of the Securities Exchange Commission.
10
Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
September 30, 2009
On August 28, 2005, our Directors authorized the issuance of 2,000,000
shares of common stock at a price of $0.001 per share as fully paid and
non-assessable to the subscriber. These shares are not restricted and
are free trading.
On July 14, 2006, our Directors authorized the issuance of 1,100,000
shares of common stock at a price of $0.002 per share as fully paid and
non-assessable to the subscriber. These shares are not restricted and
are free trading.
On August 21, 2008, our Directors authorized the issuance of 1,500,000
shares of common stock at a price of $0.04 per share as fully paid and
non-assessable to the subscriber. These shares are not restricted and
are free trading.
Note 5 - Mining Rights
In September 2008, the Company purchased the Kodiak Lode Mining Claim
for $7,500. The mining claim is in the Sunset Mining District in the
extreme southern portion of the State of Nevada. The claim is on 20.66
acres and includes gold, silver, copper and lead. The full mining
claim was recorded as a period expense.
Note 6 - New accounting pronouncements:
Recent Accounting Pronouncements
In May 2008, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts
and interpretation of FASB Statement No. 60". SFQAS No. 163 clarifies
how Statement 60 applies to financial guarantee insurance contracts,
including the recognition and measurement of premium revenue and claims
liabilities. This statement also requires expanded disclosures about
financial guarantee insurance contracts. SFAS No. 163 is effective for
fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the
Company's financial position, statements of operations, or cash flows
at this time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 162, "The Hierarchy of Generally Accepted Accounting
Principles". SFAS No. 162 sets forth the level of authority to a given
accounting pronouncement or document by category. Where there might be
conflicting guidance between two categories, the more authoritative
category will prevail. SFAS No. 162 will become effective 60 days
after the SEC approves the PCAOB's amendments to AU Section 411 of the
AICPA Professional Standards. SFAS No. 162 has no effect on the
Company's financial position, statements of operations, or cash flows
at this time.
11
Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
September 30, 2009
In March 2008, the Financial Accounting Standards Board, or FASB,
issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities - an amendment of FASB Statement No. 133. This
standard requires companies to provide enhanced disclosures about (a)
how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under Statement
133 and its related interpretations, and (c) how derivative instruments
and related hedged items affect an entity's financial position,
financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods
beginning after November 15, 2008, with early application encouraged.
The Company has not yet adopted the provisions of SFAS No. 161, but
does not expect it to have a material impact on its consolidated
financial position, results of operations or cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No.
110 regarding the use of a "simplified" method, as discussed in SAB No.
107 (SAB 107), in developing an estimate of expected term of "plain
vanilla" share options in accordance with SFAS No. 123(R), Share-Based
Payment. In particular, the staff indicated in SAB 107 that it will
accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined
estimates of expected term. At the time SAB 107 was issued, the staff
believed that more detailed external information about employee
exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily
available to companies. Therefore, the staff stated in SAB 107 that it
would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such
detailed information about employee exercise behavior may not be widely
available by December 31, 2007. Accordingly, the staff will continue
to accept, under certain circumstances, the use of the simplified
method beyond December 31, 2007. The Company currently uses the
simplified method for "plain vanilla" share options and warrants, and
will assess the impact of SAB 110 for fiscal year 2009. It is not
believed that this will have an impact on the Company's consolidated
financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements-an amendment of ARB No.
51. This statement amends ARB 51 to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated
entity that should be reported as equity in the consolidated financial
statements. Before this statement was issued, limited guidance existed
for reporting noncontrolling interests. As a result, considerable
diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as
liabilities or in the mezzanine section between liabilities and equity.
This statement improves comparability by eliminating that diversity.
12
Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
September 30, 2009
This statement is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008
(that is, January 1, 2009, for entities with calendar year-ends).
Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The
Company will adopt this Statement beginning March 1, 2009. It is not
believed that this will have an impact on the Company's consolidated
financial position, results of operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations. This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in Statement
141. This Statement establishes principles and requirements for how
the acquirer: (a) recognizes and measures in its financial statements
the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree; (b) recognizes and measures
the goodwill acquired in the business combination or a gain from a
bargain purchase; and (c) determines what information to disclose to
enable users of the financial statements to evaluate the nature and
financial effects of the business combination. This statement applies
prospectively to business combinations for which the acquisition date
is on or after the beginning of the first annual reporting period
beginning on or after December 15, 2008. An entity may not apply it
before that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements. The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will
have an impact on the Company's consolidated financial position,
results of operations or cash flows.
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option
for Financial Assets and Liabilities - Including an Amendment of FASB
Statement No. 115. This standard permits an entity to choose to
measure many financial instruments and certain other items at fair
value. This option is available to all entities. Most of the
provisions in FAS 159 are elective; however, an amendment to FAS 115.
Accounting for Certain Investments in Debt and Equity. Securities
applies to all entities with available for sale or trading securities.
Some requirements apply differently to entities that do not report net
income. SFAS No. 159 is effective as of the beginning of an entities
first fiscal year that begins after November 15, 2007. Early adoption
is permitted as of the beginning of the previous fiscal year provided
that the entity makes that choice in the first 120 days of that fiscal
year and also elects to apply the provisions of SFAS No. 157 Fair Value
Measurements. The Company will adopt SFAS No. 159 beginning March 1,
2008 and is currently evaluating the potential impact the adoption of
this pronouncement will have on its consolidated financial statements.
13
Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
September 30, 2009
In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. This statement defines fair value, establishes a
framework for measuring fair value measurements. This statement
applies under other accounting pronouncements that require or permit
fair value measurements, the Board having previously concluded in those
accounting pronouncements that fair value is the relevant measurement
attribute. Accordingly, this statement does not require any new fair
value measurements. However, for some entities, the application of
this statement change current practice. This statement is effective
for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years.
Earlier application is encouraged, provided that the reporting entity
has not yet issued financial statements for that fiscal year, including
financial statements for an interim period within that fiscal year.
The Company will adopt this statement March 1, 2008, and it is not
believed that this will have an impact on the Company's consolidated
financial position, results of operations or cash flows.
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Trends and Uncertainties
------------------------
Kodiak is in the exploration stage, has not commenced material
operations and has sustained a loss to date. The demand for our
products would be negatively affected by adverse weather conditions,
impurities in the minerals and volume limitations.
Investing Activities
--------------------
For the nine months ended September 30, 2009 and 2008, Kodiak did
not pursue any investing activities.
Financing Activities
--------------------
For the nine months ended September 30, 2009, Kodiak received checks
in excess of deposits of $31 and receive advances from shareholder
of $10,000. As a result, Kodiak had net cash flows from financing
activities of $10,031 for the nine months ended September 30, 2009.
For the nine months ended September 30, 2009, Kodiak received
proceeds from the sale of common stock of $60,000. As a result,
Kodiak had net cash flows from financing activities of $60,000 for
the nine months ended September 30, 2009.
Results of Operations
---------------------
We are an exploration stage company and have not yet commenced
material operations.
For the three months ended September 30, 2009 and 2008, Kodiak paid
legal and professional fees of $10,430 and $19,303. The decrease in
legal and professional fees was due to the completion of the public
offering and reporting requirements. Mineral property expenditures
were $0 in 2009 and 2008. Other general and administrative expenses
increased from $41 in 2008 to $564 in 2009.
For the nine months ended September 30, 2009 and 2008, Kodiak paid
legal and professional fees of $29,698 and $19,303. The increase in
legal and professional fees was due to our recent public offering
and reporting requirements. Mineral property expenditures were $0
in 2009 and 2008. Other general and administrative expenses
increased from $41 in 2008 to $3,627 in 2009.
Plan of Operation. We did not raise any funds in our recent public
offering. Our ability to continue in existence is dependent on our
ability to commence full scale operations.
Milestones: Steps Timeline
Phase I Mapping and sampling 4 weeks
over known zone
Phase II Soil Sampling 1 week
15
Phase III VLF-EM Survey 2 weeks
Phase IV Trenching 4 weeks
Phase V Report Preparation/
Data Management 4 weeks
Phase VI Rotary Drilling and Samplying 6 weeks
Each phase needs to be completed before pursuing the next phase.
Management is pursuing alternative forms of funding, not yet
determined, necessary to reach the milestones described above.
Recent Accounting Pronouncements
--------------------------------
In May 2008, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts-
and interpretation of FASB Statement No. 60". SFAS No. 163 clarifies
how Statement 60 applies to financial guarantee insurance contracts,
including the recognition and measurement of premium revenue and claims
liabilities. This statement also requires expanded disclosures about
financial guarantee insurance contracts. SFAS No. 163 is effective for
fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the Kodiak's
financial position, statements of operations, or cash flows at this
time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 162, "The Hierarchy of Generally Accepted Accounting
Principles". SFAS No. 162 sets forth the level of authority to a given
accounting pronouncement or document by category. Where there might be
conflicting guidance between two categories, the more authoritative
category will prevail. SFAS No. 162 will become effective 60 days after
the SEC approves the PCAOB's amendments to AU Section 411 of the AICPA
Professional Standards. SFAS No. 162 has no effect on Kodiak's
financial position, statements of operations, or cash flows at this
time.
In March 2008, the Financial Accounting Standards Board, or FASB,
issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities-an amendment of FASB Statement No. 133. This
standard requires companies to provide enhanced disclosures about (a)
how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under Statement
133 and its related interpretations, and (c) how derivative instruments
and related hedged items affect an entity's financial position,
financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods
beginning after November 15, 2008, with early application encouraged.
Kodiak has not yet adopted the provisions of SFAS No. 161, but does not
expect it to have a material impact on its consolidated financial
position, results of operations or cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No.
110 regarding the use of a "simplified" method, as discussed in SAB No.
107 (SAB 107), in developing an estimate of expected term of "plain
16
vanilla" share options in accordance with SFAS No. 123 (R), Share-Based
Payment. In particular, the staff indicated in SAB 107 that it will
accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined
estimates of expected term. At the time SAB 107 was issued, the staff
believed that more detailed external information about employee
exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily
available to companies. Therefore, the staff stated in SAB 107 that it
would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such
detailed information about employee exercise behavior may not be widely
available by December 31, 2007. Accordingly, the staff will continue
to accept, under certain circumstances, the use of the simplified
method beyond December 31, 2007. Kodiak currently uses the simplified
method for "plain vanilla" share options and warrants, and will assess
the impact of SAB 110 for fiscal year 2009. It is not believed that
this will have an impact on our consolidated financial position,
results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements-an amendment of ARB No.
51. This statement amends ARB 51 to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated
entity that should be reported as equity in the consolidated financial
statements. Before this statement was issued, limited guidance existed
for reporting noncontrolling interests. As a result, considerable
diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as
liabilities or in the mezzanine section between liabilities and equity.
This statement improves comparability by eliminating that diversity.
This statement is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008
(that is, January 1, 2009, for entities with calendar year-ends).
Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007).
Kodiak will adopt this Statement beginning March 1, 2009. It is not
believed that this will have an impact on Kodiak's consolidated
financial position, results of operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations.'This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in
Statement 141. This Statement establishes principles and requirements
for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed,
and any noncontrolling interest in the acquiree; (b) recognizes and
measures the goodwill acquired in the business combination or a gain
from a bargain purchase; and (c) determines what information to
disclose to enable users of the financial statements to evaluate the
nature and financial effects of the business combination. This
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statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity
may not apply it before that date. The effective date of this
statement is the same as that of the related FASB Statement No. 160,
Noncontrolling Interests in Consolidated Financial Statements. Kodiak
will adopt this statement beginning March 1, 2009. It is not believed
that this will have an impact on our financial position, results of
operations or cash flows.
In February 2007, FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities-Including an Amendment of FASB
Statement No. 115. This standard permits an entity to choose to
measure many financial instruments and certain other items at fair
value. This option is available to all entities. Most of the
provisions in FAS 159 are elective; however, an amendment to FAS 115
Accounting for Certain Investments in Debt and Equity Securities
applies to all entities with available for sale or trading securities.
Some requirements apply differently to entities that do not report net
income. SFAS No. 159 is effective as of the beginning of an entity's
first fiscal year that begins after November 15, 2007. Early adoption
is permitted as of the beginning of the previous fiscal year provided
that the entity makes that choice in the first 120 days of that fiscal
year and also elects to apply the provisions of SFAS No. 157 Fair Value
Measurements. We will adopt SFAS No. 159 beginning March 1, 2008 and
is currently evaluating the potential impact the adoption of this
pronouncement will have on our financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting
principles (GAAP), and expands disclosures about fair value
measurements. This statement applies under other accounting
pronouncements that require or permit fair value measurements, the
Board having previously concluded in those accounting pronouncements
that fair value is the relevant measurement attribute. Accordingly,
this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will
change current practice. This statement is effective for financial
statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Earlier application is
encouraged, provided that the reporting entity has not yet issued
financial statements for that fiscal year, including financial
statements for an interim period within that fiscal year. Kodiak will
adopt this statement March 1, 2009, and it is not believed that this
will have an impact on our financial position, results of operations or
cash flows.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not consider the effects of interest rate movements to be a
material risk to our financial condition. We do not hold any
derivative instruments and do not engage in any hedging activities.
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Item 4T. Controls and Procedures.
During the three months ended September 30, 2009, there were no changes
in our internal controls over financial reporting (as defined in Rule
13a-15(f) and 15d-15(f) under the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, we
conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as
of September 30, 2009. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures to be effective as of September 30, 2009 to
ensure that information required to be disclosed by the issuer in the
reports that it files or submits under the Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rules and forms and to ensure that information required to
be disclosed by an issuer in the reports that it files or submits under
the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings. not applicable.
Item 1A. Risk Factors. not applicable
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
not applicable.
Item 3. Defaults Upon Senior Securities.
not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
not applicable.
Item 5. Other Information. not applicable.
Item 6. Exhibits
Exhibit 31 - Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32 - Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: November 16, 2009
KODIAK INTERNATIONAL, INC.
By: /s/Henry Bush
---------------------------
Henry Bush, Principal Executive Officer