UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q/A
Amendment
#2
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended June 30, 2014
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the transition period from _____to_____.
Commission
File Number 000-54307
Kopjaggers,
Inc
(Exact
name of small business issuer as specified in its charter)
FLORIDA |
|
27-2037711 |
(State
or other jurisdiction of incorporation or
organization) |
|
(I.R.S.
Employer Identification No.) |
5920
North Florida Ave.
Hernando,
FL 34442
(Address
of principal executive offices)
(352)-498-6912
(Company’s
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has 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 ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
Non-accelerated
filer |
☐ |
Smaller reporting
company |
☒ |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The Company
has 12,000,000 shares outstanding as of September 17, 2014.
Explanatory
Note: The purpose of this restatement is to correct assets that had not been previously recorded that were contributed
to the Company from a shareholder of the Company during the fiscal year ending December 31, 2013. The primary affect of the restatement
was to property and equipment and the Shareholder note. Depreciation expense and interest expense on the shareholder loan were
also affected. See note 8 of the financial statements for a reconciliation of the misstatement to the quarterly financial statements
for the six months ended June 30, 2014 and 2013 that were filed on August 18, 2014.
TABLE
OF CONTENTS
|
|
|
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 |
|
17 |
Item
3. |
Quantitative and
Qualitative Disclosures about Market Risk |
|
19 |
Item
4. |
Controls
and Procedures |
|
19 |
|
|
|
|
|
PART
II — Other Information |
|
|
Item
1. |
Legal
Proceedings |
|
20 |
Item
2. |
Unregistered
Sales of Equity Securities and Use of Proceeds |
|
20 |
Item
3. |
Defaults
Upon Senior Securities |
|
20 |
Item
4. |
Mine
Safety Disclosures |
|
20 |
Item
5. |
Other
Information |
|
20 |
Item
6. |
Exhibits |
|
20 |
|
Signatures |
|
21 |
PART
I – FINANCIAL INFORMATION
KOPJAGGERS,
INC. |
CONSOLIDATED
FINANCIAL STATEMENTS |
FOR
THE QUARTER ENDED JUNE 30, 2014 |
Index to Consolidated Financial Statements |
|
|
Page |
|
|
Unaudited
Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013 |
4 |
Unaudited
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013 |
5 |
Unaudited
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013 |
6 |
Unaudited
Consolidated Notes to the Financial Statements |
7-16 |
KOPJAGGERS, INC.
CONSOLIDTED BALANCE SHEETS (UNAUDITED)
AS OF JUNE 30, 2014 AND DECEMBER 31, 2013
| |
2014 | | |
2013 | |
| |
(Unaudited) | | |
| |
Assets | |
| | |
| |
Current
assets: | |
| | |
| |
Cash
and cash equivalents | |
$ | 96,930 | | |
$ | 57,447 | |
Accounts
receivable, net | |
| 118,397 | | |
| 98,619 | |
Other
current assets | |
| 2,660 | | |
| 2,660 | |
| |
| | | |
| | |
Total
current assets | |
| 217,987 | | |
| 158,726 | |
| |
| | | |
| | |
Property
and equipment, net | |
| 618,045 | | |
| 638,740 | |
| |
| | | |
| | |
Other
assets: | |
| | | |
| | |
Intangible
assets, net | |
| 45,403 | | |
| 54,488 | |
Secured
letter of credit | |
| 324,950 | | |
| 324,950 | |
Deposits | |
| 8,750 | | |
| 8,750 | |
| |
| | | |
| | |
Total
other assets | |
| 379,103 | | |
| 388,188 | |
| |
| | | |
| | |
Total
assets | |
$ | 1,215,135 | | |
$ | 1,185,654 | |
| |
| | | |
| | |
Liabilities
and Stockholder's Equity (Deficit) | |
| | | |
| | |
Current
liabilities: | |
| | | |
| | |
Accounts
payable and accrued expenses | |
$ | 39,942 | | |
$ | 32,615 | |
Due
to related party - accrued interest | |
| 55,364 | | |
| 50,836 | |
| |
| | | |
| | |
Total
current liabilities | |
| 95,306 | | |
| 83,451 | |
| |
| | | |
| | |
Long-term
liabilities: | |
| | | |
| | |
Environmental
remediation obligation | |
| 424,596 | | |
| 424,596 | |
Loan
from shareholder | |
| 811,499 | | |
| 938,118 | |
| |
| | | |
| | |
Total
liabilities | |
$ | 1,331,401 | | |
$ | 1,446,165 | |
Commitments
and Contingencies (see note 6) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders'
deficit: | |
| | | |
| | |
Common
stock, no par value; 20,000,000 | |
| | | |
| | |
authorized,
9,490,000 and 20,000,000 | |
| | | |
| | |
shares
issued and outstanding at June 30 | |
| | | |
| | |
2014
and December 31, 2013, respectively | |
$ | - | | |
$ | - | |
Additional
paid-in capital | |
| 9,454 | | |
| 9,454 | |
Accumulated
deficit | |
| (125,720 | ) | |
| (269,965 | ) |
| |
| | | |
| | |
Total
stockholders' deficit | |
| (116,266 | ) | |
| (260,511 | ) |
| |
| | | |
| | |
Total
liabilities and stockholders' deficit | |
$ | 1,215,135 | | |
$ | 1,185,654 | |
KOPJAGGERS, INC.
CONSOLIDTED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND
2013 AND THREE MONTHS ENDED JUNE 30, 2014 AND 2013
| |
Six Months | | |
Six Months | | |
Three Months | | |
Three Months | |
| |
Ended | | |
Ended | | |
Ended | | |
Ended | |
| |
June 30, 2014 | | |
June 30, 2013 | | |
June 30, 2014 | | |
June 30, 2013 | |
| |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
| |
| | |
| | |
| | |
| |
Revenues | |
$ | 818,936 | | |
$ | 583,893 | | |
$ | 424,600 | | |
$ | 296,012 | |
| |
| | | |
| | | |
| | | |
| | |
Cost of revenues | |
| 474,105 | | |
| 316,097 | | |
| 233,385 | | |
| 171,557 | |
| |
| | | |
| | | |
| | | |
| | |
Gross profit | |
| 344,831 | | |
| 267,796 | | |
| 191,215 | | |
| 124,455 | |
| |
| | | |
| | | |
| | | |
| | |
Selling, general and administrative expenses | |
| 196,058 | | |
| 168,235 | | |
| 90,872 | | |
| 98,049 | |
| |
| | | |
| | | |
| | | |
| | |
Income from operations | |
| 148,773 | | |
| 99,561 | | |
| 100,343 | | |
| 26,406 | |
| |
| | | |
| | | |
| | | |
| | |
Other income (expenses) | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| (4,528 | ) | |
| (5,872 | ) | |
| (2,191 | ) | |
| (3,582 | ) |
Gain on sale of assets | |
| - | | |
| 8,000 | | |
| - | | |
| 8,000 | |
| |
| | | |
| | | |
| | | |
| | |
Total other income (expenses) | |
| (4,528 | ) | |
| 2,128 | | |
| (2,191 | ) | |
| 4,418 | |
| |
| | | |
| | | |
| | | |
| | |
Net income | |
$ | 144,245 | | |
$ | 101,689 | | |
$ | 98,152 | | |
$ | 30,824 | |
KOPJAGGERS, INC.
CONSOLIDTED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND
2013
| |
2014 | | |
2013 | |
| |
(Unaudited) | | |
(Unaudited) | |
Cash flow from operating activities: | |
| | | |
| | |
Net income | |
$ | 144,245 | | |
$ | 101,689 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation and amortization expenses | |
| 59,907 | | |
| 27,663 | |
Bad debt expense | |
| 762 | | |
| 762 | |
Non cash interest expense | |
| 4,528 | | |
| 4,566 | |
(Increase) decrease in assets: | |
| | | |
| | |
Accounts receivable, net of allowances | |
| (20,540 | ) | |
| (16,183 | ) |
(Decrease) increase in liabilities: | |
| | | |
| | |
Accounts payable and accrued expenses | |
| 7,331 | | |
| (26,165 | ) |
Net cash provided by operating activities | |
$ | 196,233 | | |
$ | 92,332 | |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Purchases of property and equipment | |
| (30,131 | ) | |
| (29,300 | ) |
Proceeds from sale of assets | |
| - | | |
| - | |
| |
| | | |
| | |
Net cash used in investing activities | |
$ | (30,131 | ) | |
$ | (29,300 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Advances on loan from shareholder | |
| 8,100 | | |
| - | |
Payments on loan from shareholder | |
| (134,719 | ) | |
| (11,063 | ) |
| |
| | | |
| | |
Net cash provided by financing activities | |
$ | (126,619 | ) | |
$ | (11,063 | ) |
| |
| | | |
| | |
Net increase (decrease) in cash | |
$ | 39,483 | | |
$ | 51,969 | |
| |
| | | |
| | |
Cash, beginning of year | |
| 57,447 | | |
| 60,485 | |
| |
| | | |
| | |
Cash, end of year | |
$ | 96,930 | | |
$ | 112,454 | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information: | |
| | | |
| | |
| |
| | | |
| | |
Cash paid during the year for interest | |
$ | - | | |
$ | 1,306 | |
| |
| | | |
| | |
Supplemental schedule of non-cash activities: | |
| | | |
| | |
Assets contributed from shareholder in lieu of
increasing the Shareholder Note Payable | |
$ | - | | |
$ | 109,630 | |
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
1 – Business Organization
These
financial statements represent the financial statements of Kopjaggers, Inc (“Kopjaggers”) and its wholly owned subsidiaries,
Sandland Acquisition Corp., Inc. and Sand/Land of Florida Enterprises, Inc. (“Sand/Land”). Kopjaggers and Sand/Land
are collectively referred to herein as the “Company”.
On
June 16, 2014, pursuant to a share exchange agreement, Kopjaggers merged with Sand/Land. Sandland Acquisition Corp., Inc. was
formed in May 20014 and Sand/Land of Florida Enterprises, Inc. was formed on August 15, 1986; both corporations were formed as
S-Corporations under the laws of the State of Florida. Sandland Acquisition Corp., Inc., a non-operating subsidiary holding company
was formed for the sole purpose of merging with Sand/Land of Florida of Enterprises, the operating subsidiary in order to initiate
a merger with Koppjaggers, Inc. (the “Reverse Merger”). The existing stockholders of Sand/Land exchanged all of their
issued and outstanding shares of common stock for 9,490,000 shares of common stock of Kopjaggers (the “Reverse Merger”).
After the consummation of the Reverse Merger, stockholders of Sand/Land owned 47.45% of Kopjaggers outstanding common stock.
As
a result of the Reverse Merger, Sand/Land became a wholly owned subsidiary of Kopjaggers. For accounting purposes, the Reverse
Merger was treated as a reverse acquisition with Sand/Land as the acquirer and Kopjaggers as the acquired party. As a result,
the business and financial information included in this Quarterly Report on Form 10-Q is the business and financial information
of Sand/Land. The accumulated deficit of Kopjaggers has been included in additional paid-in-capital. Pro-forma information has
not been presented as the financial information of Kopjaggers was insignificant.
The
Company operates as a licensed Construction & Demolition landfill. The Company’s primary operations are based near Tampa,
Florida.
Note
2 – Significant Accounting Policies
Basis
of Presentation
The
financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally
accepted in the United States of America (“GAAP”).
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the amounts reported in the financial statements. Actual results could differ from those estimates.
Fair
Value of Financial Instruments
For
certain financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, advances payable
and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
2 – Significant Accounting Policies (Continued)
Fair
Value of Financial Instruments (Continued)
The
Company adopted ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes
a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value
measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify
as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination
of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy
are defined as follows:
| ● | Level
1 inputs to the valuation methodology are quoted prices for identical assets or liabilities
in active markets. |
| ● | Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities
in active markets, and inputs that are observable for the asset or liability, either
directly or indirectly, for substantially the full term of the financial instrument. |
| ● | Level
3 inputs to the valuation methodology are unobservable and significant to the fair value
measurement. |
The
Company did not identify any non-recurring assets and liabilities that are required to be presented in the balance sheets at fair
value in accordance with ASC 815.
In
February 2007, the FASB issued ASC 825-10 “Financial Instruments.” ASC 825-10 permits entities to choose to measure
many financial assets and financial liabilities at fair value. Unrealized gains and losses
on
items for which the fair value option has been elected are reported in earnings. ASC 825-10 is effective as of the beginning of
an entity’s first fiscal year that begins after November 15, 2007.
The
carrying amounts of cash and current liabilities approximate fair value due to the short maturity of these items. These fair value
estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined
with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial
instruments for trading purposes, nor does it utilize derivative instruments in the management of foreign exchange, commodity
price, or interest rate market risks.
Revenue
and Cost Recognition
The
Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes
revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all
of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the sales price is fixed or determinable,
(iii) collectability is reasonably assured and (iv) goods have been shipped and/or services rendered.
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
2 – Significant Accounting Policies (Continued)
Cash
and Cash Equivalents
For
purposes of reporting cash flows, the Company considers cash and cash equivalents to be all highly liquid deposits with maturities
of three months or less. Cash equivalents are carried at cost, which approximates market value.
The
Company maintains its cash and cash equivalents at various financial institutions where they are insured by the Federal Deposit
Insurance Corporation (FDIC) up to $250,000. The balances of these accounts from time to time exceed federally insured limits.
The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
Accounts
Receivable, Bad Debts and Allowance for Doubtful Accounts
An
allowance for doubtful accounts is provided for as a percentage of trade accounts receivable based on historical loss experience.
At June 30, 2014 and December 31, 2013, the allowance for doubtful accounts was approximately $112,000. Bad debt expense recognized
for the six months ended June 30, 2014 and 2013 was $762 and $0, respectively. Bad debt expense recognized for the three months
ended June 30, 2014 and 2013 was $420 and $0, respectively.
Property,
Plant and Equipment
Property,
plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements are
capitalized. As property and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from
the accounts and any resulting gain or loss thereon is recognized as operating expenses.
Depreciation
is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term
of the related lease, including renewal periods, if shorter. Estimated useful lives are as follows:
Transportation equipment | |
| 5 years | |
Office and machinery equipment | |
| 5 years | |
Roll off containers | |
| 5-7 years | |
Airspace | |
| 39.5 years | |
The
Company reviews property, plant and equipment and all amortizable intangible assets for impairment whenever events or changes
in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based on estimated
undiscounted cash flows. Measurement of the impairment loss, if any, is based on the difference between the carrying value and
fair value.
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
2 – Significant Accounting Policies (Continued)
Impairment
of Long-Lived Assets and Amortizable Intangible Assets
The
Company follows ASC 360-10, “Property, Plant, and Equipment,” which established a “primary asset” approach
to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for
a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset
is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition
of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Through June 30, 2014, the Company has not experienced impairment losses on its long-lived assets.
Intangible
Assets – Customer List
A
Customer list was bought from a related party in 2011. It is being amortized over five years.
Advertising
Costs
The
Company expenses all advertising costs as incurred. Advertising expense for the six months ended June 30, 2014 and 2013 was $2,302
and $2,694, respectively. Advertising expense for the three months ended June 30, 2014 and 2013 was $1,153 and $1,392, respectively.
Income
Taxes
The
Company files income tax returns in the United States and Florida, which are subject to examination by the tax authorities in
these jurisdictions, generally for three years after the filing date.
Management
has evaluated tax positions in accordance with FASB ASC 740, Income Taxes, and has not identified any tax positions that require
disclosure.
Environmental
Remediation Liability
The
Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably
estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion
of the remedial feasibility study. Such accruals are adjusted as further information develops or circumstances change. Costs of
future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental
remediation costs from other parties are recorded as assets when their receipt is deemed probable.
Reclassifications
Certain
reclassifications have been made in prior year balances to conform to the current year presentation. Such reclassifications had
no effect on net income as previously reported.
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
3 – Going Concern
The
financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets
and discharge its liabilities in the normal course of business for the foreseeable future. Although the Company has been operating
since August of 1986, the Company has suffered consecutive negative cash flows from operations and has limited working capital.
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital, and ultimately,
the achievement of significant operating revenues over operating expenses. The accompanying financial statements do not include
any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.
Note
4 – Property, Plant and Equipment
Property,
plant and equipment and related accumulated depreciation consist of the following at June 30, 2014 and December 31, 2013:
| |
2014 | | |
2013 | |
Machinery and equipment | |
| 1,914,696 | | |
| 1,884,566 | |
Airspace | |
| 865,076 | | |
| 865,076 | |
Transportation equipment | |
| 561,240 | | |
| 561,240 | |
Improvements | |
| 306,372 | | |
| 306,372 | |
Office furniture and equipment | |
| 2,117 | | |
| 2,117 | |
Land Fill Area | |
| 72,098 | | |
| 72,098 | |
Total Property, plant and equipment | |
| 3,721,599 | | |
| 3,691,469 | |
Less: accumulated depreciation | |
| (3,103,554 | ) | |
| (3,052,729 | ) |
Property, plant and equipment, net | |
| 618,045 | | |
| 638,740 | |
Depreciation
expense for the six months ended June 30, 2014 and 2013 was $39,736 and $18,579, respectively. Depreciation expense for the three
months ended June 30, 2014 and 2013 was $20,100 and $9,374, respectively.
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
5 – Amortizable Intangible Assets
Intangible
assets consist of the following as of June 30, 2014 and December 31, 2013:
| |
| | |
| | |
Amortization | |
| |
2014 | | |
2013 | | |
Period | |
Customer list | |
$ | 90,813 | | |
$ | 90,813 | | |
| 5 years | |
Less accumulated amortization | |
| (45,411 | ) | |
| (36,325 | ) | |
| | |
Intangible assets, net | |
$ | 45,403 | | |
$ | 54,488 | | |
| | |
The estimated aggregate amortization expense for each of the next five years is as follows: |
| |
| |
Year Ending | |
| |
2014 | |
$ | 9,081 | |
2015 | |
| 18,163 | |
2016 | |
| 18,159 | |
| |
$ | 45,403 | |
Amortization
expense for the six months ended June 30, 2014 and 2013 was $9,081 and $9,084, respectively. Amortization expense for the three
months ended June 30, 2014 and 2013 was $4,540 and $4,544, respectively.
Note
6 – Commitments and Contingencies
During
the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation,
it evaluates the merits of the case in accordance with FASB ASC 450, Contingencies. The Company evaluates its exposure to the
matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines than an
unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. Certain insurance policies
held by the Company may reduce the cash outflows with respect to an adverse outcome of certain of these litigation matters.
The
Company currently operates a fully licensed landfill under approval by the Florida Department of Environmental Protection. As
such the company has set up a reserve allowance of $424,596 against estimated future closing cost. As of December 31, 2013 the
Florida Department of Environmental Protection has approved the secured letter of credit cash reserve of $324,950 set aside by
the Company at June 30, 2014 and December 31, 2013, respectively, in order to be in compliance with the financial assurance requirements
for long term care cost of the facility. It is reasonably possible that the recorded estimate of the obligation may change in
the near term.
As
discussed in note 7 to the financial statements, as of June 30, 2014 and 2013, approximately 38% and 12% of the Company’s
revenues were generated from a related party, respectively and approximately 56% and 24% of net accounts receivable were due from
a related party as of June 30, 2014 and 2013, respectively.
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
7 – Related Party Transactions
Related
Party Sales and Accounts Receivable
The
Company generates a significant portion of their revenue from a related party, a Company owned by the majority shareholder of
the Company. Total revenue generated from the related party during the six months ended June 30, 2014 and 2013 was $312,224 and
$69,060 or 38% and 12% of total revenue, respectively. Total revenue generated from the related party during the three months
ended June 30, 2014 and 2013 was $166,250 and $43,175 or 39% and 15% of total revenue, respectively. Total related party accounts
receivable as of June 30, 2014 and 2013 related to these sales was approximately $118,397 and 98,619, or 56% and 24% of total
net accounts receivable, respectively.
Related
Party Shareholder Loan
The
Company has a note with the sole shareholder of the Company. This note is unsecured, matures on December 31, 2016 and carries
a 1% interest rate. This note is due during 2016, though the Company makes periodic payments on the Note when excess cash is available.
The
balance of the note at June 30, 2014 and December 31, 2013 was $811,499 and $828,488, respectively. The balance of the related
accrued interest at June 30, 2014 and December 31, 2013 was $55,364 and $50,836, respectively. Interest expense for the six months
ended June 30, 2014 and 2013 was $4,528 and $5,872, respectively. Interest expense for the three months ended June 30, 2014 and
2013 was $2,191 and $3,582, respectively.
The
aggregate annual maturities of the related party long-term debt are as follows:
Year Ending | |
| |
2014 | |
$ | - | |
2015 | |
| - | |
2016 | |
| 811,499 | |
2017 | |
| - | |
2018 | |
| - | |
| |
$ | 811,499 | |
Related
Party Assets Contributed
During
the three months ended March 31, 2013, the Company’s sole shareholder contributed approximately $110,000 of assets to the
Company. The assets increased the note payable due the shareholder by approximately $110,000.
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
8 – Restatement
The
financial statements for the six months ended June 30, 2014 have been restated due to $109,630 of assets that had not been previously
recorded that were contributed to the Company from a shareholder during the fiscal year ending December 31, 2013. The primary
affect of the restatement relates to property and equipment non-cash additions and the non-cash addition to the Shareholder note.
Depreciation expense and interest expense on the shareholder loan were also affected. Following is a tabular presentation of the
balance sheet and income statement affect of the restatement.
Balance
sheet restatement:
| |
As of June 30, 2014 | |
| |
(unaudited) | |
Previously stated property and equipment | |
$ | 504,254 | |
Restatement | |
| 113,791 | |
Restated property and equipment | |
| 618,045 | |
| |
| | |
Previously stated total assets | |
| 1,101,344 | |
Restatement | |
| 113,791 | |
Restated property and equipment | |
| 1,215,135 | |
| |
| | |
Previously stated related party - accrued interest | |
| 54,941 | |
Restatement | |
| 423 | |
Restated related party - accrued interest | |
| 55,364 | |
| |
| | |
Previously stated loan from shareholder | |
| 701,869 | |
Restatement | |
| 109,630 | |
Restated loan from shareholder | |
| 811,499 | |
| |
| | |
Previously stated total liabilities | |
| 1,221,348 | |
Restatement | |
| 110,053 | |
Restated loan from shareholder | |
| 1,331,401 | |
| |
| | |
Previously stated total liabilities and stockholders deficit | |
| 1,101,344 | |
Restatement | |
| 113,791 | |
Restated loan from shareholder | |
$ | 1,215,135 | |
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
8 – Restatement (continued)
| |
Six Months Ended | | |
Three Months Ended | |
| |
June 30, 2014 | | |
June 30, 2014 | |
| |
(unaudited) | | |
(unaudited) | |
Previously stated cost of sales | |
$ | 450,287 | | |
$ | 221,570 | |
Restatement | |
| 23,818 | | |
| 11,815 | |
Restated cost of sales | |
| 474,105 | | |
| 233,385 | |
| |
| | | |
| | |
Previously stated gross profit | |
| 368,649 | | |
| 203,030 | |
Restatement | |
| (23,818 | ) | |
| (11,815 | ) |
Restated gross profit | |
| 344,831 | | |
| 191,215 | |
| |
| | | |
| | |
Previously stated income from operations | |
| 172,591 | | |
| 112,158 | |
Restatement | |
| (23,818 | ) | |
| (11,815 | ) |
Restated income from operations | |
| 148,773 | | |
| 100,343 | |
| |
| | | |
| | |
Previously stated other income (expense) | |
| (4,105 | ) | |
| (2,042 | ) |
Restatement | |
| (423 | ) | |
| (149 | ) |
Restated other income (expense) | |
| (4,528 | ) | |
| (2,191 | ) |
| |
| | | |
| | |
Previously stated net income | |
| 168,486 | | |
| 110,116 | |
Restatement | |
| (24,241 | ) | |
| (11,964 | ) |
Restated net income | |
$ | 144,245 | | |
$ | 98,152 | |
KOPJAGGERS, INC.
CONSOLIDTED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
Note
9 – Subsequent Events
On
July 9, 2014, the Company cancelled 8,000,000 shares of the Company’s common stock. All cancelled shares were those of Insiders,
the Board of Directors or Officers of the Company.
On
July 21, 2014, the Company’s largest shareholder approved, in lieu of a shareholder meeting, that the Company increase the
authorized shares of common stock to 250,000,000, institute a forward stock split of the common stock at a rate of 5:1 and change
the name of the Company from Kopjaggers, Inc. to National Waste Management Holdings, Inc. The Company’s President is authorized
to take all action required to properly effect the amendment, including properly filing with the Department of State of Florida,
the Securities and Exchange Commission, and delivering notice to all shareholders of the Company. These changes are not final
and thus the financial statements for the six months ended June 30, 2014 and 2013 do not reflect any adjustments to incorporate
these changes.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING
STATEMENTS
This
document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of
federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items;
any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed
new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and
any statements of assumptions underlying any of the foregoing.
Forward-looking
statements may include the words “may,” “could,” “estimate,” “intend,” “continue,”
“believe,” “expect” or “anticipate” or other similar words. These forward-looking statements
present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend,
and undertake no obligation, to update any forward-looking statement.
Although
we believe that the expectations reflected in any of our forward- looking statements are reasonable, actual results could differ
materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results
of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors
impacting these risks and uncertainties include, but are not limited to:
| ● | Our
results are vulnerable to economic conditions; |
| ● | Our
ability to raise adequate working capital; |
| ● | Loss
of customers or sales weakness; |
| ● | Inability
to achieve sales levels or other operating results; |
| ● | The
unavailability of funds for capital expenditures; |
| ● | Operational
inefficiencies; |
| ● | Increased
competitive pressures from existing competitors and new entrants; |
| ● | Competition
for acquisition candidates, consolidation within the waste industry and economic and
market conditions may limit our ability to grow through acquisitions; |
| ● | We
may incur charges related to capitalized expenditures of landfill development projects,
which would decrease our earnings; |
| ● | Pending
or future litigation or governmental proceedings could result in material adverse consequences,
including judgments or settlements; |
| ● | We
may be subject in the normal course of business to judicial, administrative or other
third-party proceedings that could interrupt or limit our operations, require expensive
remediation, result in adverse judgments, settlements or fines and create negative publicity;
|
| ● | Our
accruals for our landfill site closure and post-closure costs may be inadequate; |
| ● | Liabilities
for environmental damage may adversely affect our financial condition, business and earnings;
|
| ● | Our
financial and operating performance may be affected by the inability to renew landfill
operating permits, obtain new landfills and expand existing ones; |
| ● | Extensive
and evolving environmental, health and safety laws and regulations may restrict our operations
and growth and increase our costs; |
| | |
| ● | Extensive
regulations that govern the design, operation and closure of landfills may restrict our
landfill operations or increase our costs of operating landfills; and |
| ● | Alternatives
to landfill disposal may cause our revenues and operating results to decline. |
These
risks and uncertainties, as well as others, are discussed in greater detail in this Quarterly Report on Form 10-Q and our other
filings with the Securities and Exchange Commission, or SEC, including our most recent Annual Report on Form 10-K. There may be
additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact
on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances
that may change.
GENERAL
Overview
We
are a landfill service that provides landfill services, roll-off dumpster service, and mulch products. We service the counties
of Citrus, Hernando, and Marion in Florida. We average annual disposals of approximately 110,000 cubic yards of construction debris
and manage our 54 acre landfill facility. We started operations with one roll-off truck and now operate four trucks and 350 containers.
We have maintained a contract with Citrus County Solid Waste Management landfill to back-up their roll-off trucks since 2000.
Results
of Operations
Comparison
for the six months ended June 30, 2014 and 2013
Sales
for the six months ended June 30, 2014 and 2013 were $818,936, and $583,893, respectively, an increase of $235,043 or approximately
40%. The increase in sales is primarily attributable to increased sales to a related party accounting for $312,224 of total sales
for the for the six months ended June 30, 2014 (38% of total sales) as compared to sales of $69,060 to this related party for
the six months ended June 30, 2013 (12% of total sales). Increased sales are also attributable to a better economy year over year
and stronger customer base.
Cost
of goods sold for the six months ended June 30, 2014 and 2013 were $474,105 and $316,097 respectively, an increase of $158,008
or 50%. The increase is primarily due to an increase in sales as discussed above.
General
and administrative cost for the six months ended June 30, 2014 and 2013 respectively were $196,058 and $168,235, an increase of
$27,823 or approximately 17%. The increase is primarily due to an increase in sales activity.
Interest
expense was $4,528 and $5,872 for the six months ended June 30, 2014 and 2013, respectively. The decrease was attributable to
the reduction of credit card balances and interest associated with these carrying costs.
Net
income for the six months ended June 30, 2014 and 2013 respectively were $144,245 and $101,689. The increase is primarily attributable
to the increase in sales and more efficient use of resources.
Comparison
for the three months ended June 30, 2014 and 2013
Sales
for the three months ended June 30, 2014 and 2013 were $424,600 and $296,012, respectively, an increase of $128,588 or approximately
43%. The increase in sales is primarily attributable to increased sales to a related party accounting for $166,250 of total sales
for the for the three months ended June 30, 2014 (39% of total sales) as compared to sales of $43,175 to this related party for
the three months ended June 30, 2013 (15% of total sales). Increased sales are also attributable to a better economy year over
year and stronger customer base.
Cost
of goods sold for the three months ended June 30, 2014 and 2013 were $233,385 and $171,557 respectively, an increase of $61,828
or 36%. The increase is primarily due to an increase in sales as discussed above.
General
and administrative cost for the three months ended June 30, 2014 and 2013 respectively, were $90,872 and $98,049 a decrease of
$7,177 or 7%.. The decrease is primarily due to an increase in operational efficiencies.
Interest
expense was $2,191 and $3,582 for the three months ended June 30, 2014 and 2013, respectively. The decrease was attributable to
the reduction of credit card balances and interest associated with these carrying costs.
Net
income for the three months ended June 30, 2014 and 2013 was $98,152 and $30,824 respectively. The increase is primarily attributable
to the increase in sales, specifically the increase in related party sales as discussed above. A better economy and stronger customer
base are also factors for the increase.
Liquidity
and Capital Resources
Our
primary sources of cash are cash flows from operations and related-party borrowings. We intend to use excess cash on hand and
cash from operating activities, together with borrowings, to fund purchases of equipment, working capital, acquisitions and debt
repayments. As of June 30, 2014, we had cash of $96,930 and working capital of $122,681 as compared to cash of $57,447 and working
capital of $75,275 at December 31, 2013.
Cash
Flows for the Six Months Ended June 30, 2014 Compared to the Six Months Ended June 30 2014
Operating
activities for the six months ended June 30, 2014 provided cash of $196,233 compared to $92,332 for the six months ended June
30, 2014, an increase of $103,901. This increase was primarily due to an increase in income between the two periods. Our cash
flows from investing activities were ($30,131) and ($29,300) respectively, an increase of $831 primarily due to purchases of equipment.
Our cash flows used in financing activities was ($134,719) and ($11,063) respectively, an increase of ($123,656) primarily due
to payment on related party loans.
Off-Balance
sheet arrangements
There were
no off-balance sheet arrangements for the period ended June 30, 2014.
Item
3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable
Item
4. Controls and Procedures.
We
maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and
management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As
required by SEC Rule 15d-15(b), we carried out an evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2014.
PART
II — OTHER INFORMATION
Item
1. Legal Proceedings.
We
know of no material pending legal proceedings to which our company or our subsidiary is a party or of which any of our properties,
or the properties of our subsidiary, is the subject. In addition, we do not know of any such proceedings contemplated by any governmental
authorities.
We
know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder
is a party adverse to our company or our subsidiary or has a material interest adverse to our company or our subsidiary.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item
3. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item
4. Mine Safety Disclosures.
None
Item
5. Other information
None.
Item
6. Exhibits.
Exhibit
No. |
|
Exhibit
Description |
|
|
|
3.1* |
|
Articles
of Incorporation |
3.1* |
|
Amended
and Restated Articles of Incorporation |
3.2* |
|
Bylaws |
31 |
|
Certification
pursuant to Section 302 of the Sarbanes-Oxley Act |
32.1 |
|
Certification
pursuant to Section 906 of the Sarbanes-Oxley Act |
SIGNATURES
In accordance
with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
Kopjaggers Inc. |
|
|
|
Date: September
17, 2014 |
By: |
/s/
Charles Teelon |
|
|
Charles
Teelon , President, |
|
|
Chief Executive
Officer |
21
EXHIBIT
31.1
SECTION
302 CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER OF KOPJAGGERS, INC.
I, Charles
Teelon, certify that:
1. I have
reviewed this quarterly report on Form 10-Q/A2 of Kopjaggers, Inc.;
2. Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this quarterly report;
3. Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this quarterly report;
4. The registrant’s
other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: September
17, 2014 |
/s/ Charles Teelon
Charles
Teelon
President
and Chief Executive Officer, principal accounting officer and principal financial officer
|
EXHIBIT 32.1
SECTION
906 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF EMONECO INC.
In connection
with the accompanying Quarterly Report on Form 10-Q/A2 of Kopjaggers, Inc. for the quarter ended June 30, 2014, the undersigned,
Charles Teelon, President and Chief Executive Officer, principal accounting officer and principal financial officer, of Kopjaggers,
Inc., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) such
Quarterly Report on Form 10-Q/A2 for the quarter ended June 30, 2014 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the
information contained in such Quarterly Report on Form 10-Q/A2 for the quarter ended June 30, 2014 fairly presents, in all material
respects, the financial condition and results of operations of Kopjaggers, Inc.
Date: September
17, 2014 |
/s/ Charles Teelon
Charles
Teelon
President
and Chief Executive Officer, principal accounting officer and principal financial officer
|
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