10-Q 1 t24529.txt QUARTERLY REPORT 6/30/02 UNITED STATES 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 JUNE 30, 2002 ---------------- [ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------------ --------------------- Commission file no. 0-49617 ------------------- ROYAL CASKET DISTRIBUTION CORP. ---------------------------------------------- (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER) FLORIDA 65-1129409 ----------------------------------------- ----------------------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) SUITE 314, WASHINGTON MUTUAL BANK TOWER 2401 EAST ATLANTIC BOULEVARD POMPANO BEACH, FLORIDA 33062 -------------------------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (954) 782-5006 -------------------------- (ISSUER'S TELEPHONE NUMBER) Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) as been subject to such filing requirements for past 90 days. Yes X No ----- ----- APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of the issuer's common stock as of latest practicable date (May 21, 2002): 20,000,000 shares Transitional Small Business Disclosure Format (CHECK ONE): Yes No X ----- ----- 1 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following financial statements are filed with this Form 10-QSB: PAGE ---- Accountant's Report F-1 Balance Sheets as of December 31, 2001 and June 30, 2002 F-2 Statement of Operations for periods ending December 31, 2001 and June 30, 2002 F-3 Statement of Changes in Stockholders' Equity F-4 Statement of Cash Flows F-5 Notes to Financial Statements F-6 ROYAL CASKET DISTRIBUTION CORPORATION (A DEVELOPMENT STAGE COMPANY) REVIEW OF FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 2002 TABLE OF CONTENTS PAGE ACCOUNTANTS' REVIEW REPORT F-1 FINANCIAL STATEMENTS: BALANCE SHEET F-2 STATEMENTS OF OPERATIONS F- 3 STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY F-4 STATEMENTS OF CASH FLOWS F-5 NOTES TO FINANCIAL STATEMENTS F-6-7 ACCOUNTANTS' REVIEW REPORT To the Board of Directors and Stockholder Royal Casket Distribution Corporation Pompano Beach, Florida We have reviewed the accompanying balance sheet of Royal Casket Distribution Corporation (a Florida corporation and a development stage company) as of June 30, 2002 and the related statements of operations, changes in stockholder's equity, and cash flows for the quarter then ended, year-to-date through June 30, 2002, the period from inception, July 27, 2001 through December 31, 2001 and the period from inception, July 27, 2001, through June 30, 2002. All information included in these financial statements is the responsibility of the Company's management. A review consists primarily of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. The financial statements for the year ended December 31, 2001 were audited by us, and we expressed an unqualified opinion on them in our report dated May 20, 2002, but we have not performed any auditing procedures since that date. Michaelson & Co., P.A. West Palm Beach, FL July 30, 2002 F-1

See Accountants' Review Report and Accompanying Notes F-2

See Accountants' Review Report and Accompanying Notes F-3

See Accountants' Review Report and Accompanying Notes F-4

See Accountants' Review Report and Accompanying Notes F-5 ROYAL CASKET DISTRIBUTION CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 2002, YEAR-TO-DATE THROUGH JUNE 30, 2002, THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH DECEMBER 31, 2001 (AUDITED), AND THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH JUNE 30, 2002 (See Accountants' Review Report) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ORGANIZATION: Royal Casket Distribution Corporation ("the Company") is a development stage enterprise incorporated under the laws of the State of Florida in July 2001. The Company's offices are in Pompano Beach, Florida, its only location, and its year-end is December 31. Although the Company does not presently conduct business operations, its plans include purchasing caskets from manufacturers under non-exclusive agreements and distributing them to the public in a retail setting. METHOD OF ACCOUNTING: The Company reports the results of its operations using the accrual method of accounting for both financial statement and income tax purposes. Under this method, income is recognized when earned and expenses are deducted when incurred. The accounting policies of the Company are in accordance with generally accepted accounting principles and conform to the standards applicable to development stage companies. INCOME TAXES: The Company has no taxable income to date; therefore, no provision for federal or state taxes has been made. COMPUTATION OF NET LOSS PER SHARE: In February 1997, the Financial Accounting Standards Board issued SFAS No. 128, Earnings Per Share. The Company has reflected the provisions of SFAS No. 128 in the accompanying financial statements for the period presented. SFAS 128 replaces the presentation of primary Earnings Per Share ("EPS") with a presentation of basic EPS, which excludes dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. The Statement also requires the dual presentation of basic and diluted EPS on the face of the statement of operations for all entities with complex capital structures. During the periods presented, the Company did not have a complex capital structure. F-6 ROYAL CASKET DISTRIBUTION CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 2002, YEAR-TO-DATE THROUGH JUNE 30, 2002, THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH DECEMBER 31, 2001 (AUDITED), AND THE PERIOD FROM INCEPTION, JULY 27, 2001, THROUGH JUNE 30, 2002 (See Accountants' Review Report) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): INTERIM FINANCIAL STATEMENTS: It is management's representation that all adjustments that are necessary for the interim financial statements not to be misleading have been included in the accompanying statements. 2. DEVELOPMENT STAGE OPERATIONS: The Company was formed on July 27, 2001. There have not been any operations since inception and the Company is in the process of raising capital and financing for its future operations. The Company has one shareholder. 3. RELATED PARTY TRANSACTIONS: In the second quarter of 2002, the Company incurred $1,260 in facility and service costs provided by the sole shareholder, whose time and offices are being utilized for the Company's operations. Year-to-date through June 30, 2002, the Company incurred $8,926 in these costs. During the period from July 27, 2001 (inception) through June 30, 2002, the Company incurred $11,503 in these expenses. The costs included $900 and $8,100, respectively, in professional services provided by the sole shareholder during the quarters ended June 30, 2002 and March 31, 2002. During the period from July 27, 2001 (inception) through June 30, 2002, professional services provided by the sole shareholder totaled $9,900. The Company owed $11,503 and $2,577 to the sole shareholder for these facility and service costs as of June 30, 2002 and December 31, 2001, respectively. Also in the second quarter of 2002, the sole shareholder personally paid for Company expenses amounting to $4,646. As of June 30, 2002, the Company owed the sole shareholder this amount in addition to the amounts owed for facility and service costs provided. F-7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Much of the discussion in this Item 2 is "forward looking" as that term is used in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Actual operations and results may materially differ from present plans and projections due to changes in economic conditions, new business opportunities, changed business conditions, and other developments. Other factors that could cause results to differ materially are described in the prospectus filed with the company's registrations statement with the Securities and Exchange Commission. Royal Casket (sometimes referred to as "we" or "us") is a new company organized to engage in the retail sale of caskets. We are a development stage company and do not have any business as of the present. We were incorporated under the laws of Florida in July 2001, and since incorporation, our activities have been limited to market analysis and identification of suppliers. In October 2001, we amended our Articles of Incorporation to increase the number of authorized shares of stock to 100,000,000. We intend to be a non-exclusive dealer for Casket Royale, a New Hampshire company which manufactures caskets in New Hampshire. Casket Royale presently offers about a dozen models, including adult, youth, and infant models in wood, steel, heavy gage steel, and copper. Management intends to maintain two or three of each model in stock for immediate sale; a larger inventory is not deemed necessary because of the availability of overnight shipping. Casket Royale also provides training, sales tools, and marketing aids to its dealers, as well as overnight shipping to Florida and to most other parts of the continental United States. We are not aware that any other dealers carry Casket Royale caskets in the Palm Beach area, but we do not have an exclusive arrangement with Casket Royale, and it is free to sell through other dealers should it so choose. By the same token, Casket Royale does not require that we limit our sales to Casket Royale products, but, while we reserve the right to do so in the future, we do not presently intend to sell caskets made by other manufacturers, nor do we intend initially to sell any items other than caskets. While casket dealers in Europe typically sell other items related to funerals, the registrant plans to focus on highly discounted caskets. At some point in the future, we may also sell related items. Our initial efforts will focus on selling caskets at retail in Florida. Our initial store will be in the Palm Beach area, after which, if and when cash flow permits, we would seek to open stores in other locations in Florida. If experience warrants and financing is available, we would contemplate opening operations in California and perhaps other states. No decisions have yet been made as to expansion into other states; such decisions will be based on population and age statistics, laws governing consumer finance, accessability for management, and other factors. 2 As of the date of this report, Royal Casket has no significant cash resources, and we have not engaged in any business activities which provide cash flow. We are presently looking for suitable retail space in West Palm Beach, Florida, in which to display our merchandise and make sales, but we do not yet have a store and have not yet made any sales. We expect to have negotiated a lease and commence operations by September 2002. Our president, Don A. Paradiso, has agreed to advance the company's start-up expenses, which are expected to amount to approximately $150,000. Such expenses will be accounted for as contributions to capital, not loans, and will not be repayable. Until such time as Royal Casket has leased a store, Mr. Paradiso has also agreed to provide an office, office equipment, and management without cost to the company. Commencing with the month after the company's aggregate sales (gross revenues) amount to $250,000, Mr. Paradiso will commence receiving a salary at the rate of $52,000 per year. No officer or director of the company has received any cash remuneration to date. It is anticipated that expenses for the first six months will include $22,000 for salaries, $16,000 for rent, $30,000 for inventory, $2,000 for training, and $5,000 for advertising. When we have leased a store, we intend to hire a store manager and sales clerk. As revenues permit, we will employ additional employees for sales, bookkeeping, and clerical functions. We will stock Casket Royale's entire product line, but the amount of inventory we will carry will be limited in light of the fact that Casket Royale can generally provide overnight delivery to Florida. Except for the monies which Mr. Paradiso has agreed to advance, we do not have any funds or capital resources, nor do we have any commitments for loans or lines of credit. In the future, we will seek financing from a bank with which to finance our inventory, and will seek such other financing as may be available for working capital. There can be no assurance that such financing will be available, or available on terms acceptable to management. We believe that the funds which Mr. Paradiso has agreed to provide will be sufficient to inaugurate our business plan, but there can be no assurance that additional monies will not be required, nor can there be any assurance that, if they are required, such finds will be available. Royal Casket's financial capacity will be limited, which will limit the amount of advertising it can obtain, the number of stores it can open, and the amount of inventory it can maintain. Inasmuch as initial financing is being provided by Mr. Paradiso, no in depth consideration has been given to any particular source of financing, but managaement does hope to effect a public equity offering sometime in the future after operations commence. FIRST HALF COSTS AND CHANGES IN FINANCIAL CONDITION As of the date of this report, we have not engaged in any business activities which provide cash flow, and have not recorded any revenues from operations. Losses from inception (July 27, 2001) have amounted to $26,434, including $6,180 in the three months ended June 30, 2002. Such losses primarily reflect the costs of organizing the company and in preparing and filing our registration statement with the Securities and Exchange Commission. General and administrative expenses decreased from $12,939 for the three months ended March 31, 2002, to $6,180. The Company attributes this decrease primarily to a decrease in professional fees. The company's assets decreased from $5,763 on December 31, 2001 to $215 on June 30, 2002. This decrease resulted from the payment of expenses relating to preparing and filing our registration statement with the Securities and Exchange Commission, and the preparation and filing of periodic reports with the Securities and Exchange Commission. 3 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS No matters were submitted during the period covered by this report to a vote of security holders, through the solicitation of proxies or otherwise. ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K INDEX TO EXHIBITS (3) Charter and By-Laws 3.1 Articles of Incorporation (July 27, 2001) * 3.1a Articles of Amendment (October 29, 2001) * 3.2 By-Laws (August 23, 2001) * (3) Instruments Defining the Rights of Security Holders 4.1 Specimen Certificate of Common Stock * (6) Material Contracts 10.1 Employment agreement between Registrant and Don A. Paradiso (December 3, 2001) * (12) Additional Exhibits 21.0 Statement as to Subsidiaries (May 23, 2002) 16 (15) Letter of acknowledgment 15.1 Accountant's acknowledgment of use of reviewed financials 15 * Filed with registrant's Form 10-SB January 7, 2002, and incorporated herein by reference. ITEM 2. DESCRIPTION OF EXHIBITS Not applicable. 4 REPORTS ON FORM 8-K No reports on Form 8-K were filed during the last quarter of the period covered by this report. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROYAL CASKET DISTRIBUTION CORP. ------------------------------- (Registrant) Date AUGUST 9, 2002 By /S/ DON A. PARADISO -------------- ------------------------------ Don A. Paradiso, President Date AUGUST 9, 2002 By /S/ DON A. PARADISO -------------- ------------------------------ Don A. Paradiso, principal financial officer 5

ROYAL CASKET DISTRIBUTION CORP 10-Q