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| KLYG.OB > SEC Filings for KLYG.OB > Form 10QSB/A on 16-May-2008 | All Recent SEC Filings |
16-May-2008
Quarterly Report
Forward Looking Statements
The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, the Financial Statements of the Company and Notes thereto included elsewhere in this Report and incorporated by reference in the audited financial statements and notes thereto for the year ended December 31, 2007, included in the Company's 2007 Annual Report on Form 10-KSB, filed with the Securities and Exchange Commission on March 11, 2008. Historical results and percentage relationships among any amounts in these unaudited financial statements are not necessarily indicative of trends in operating results for any future period.
The statements, which are not historical facts contained in this Report, including this Plan of Operations, and Notes to the Financial Statements, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information, and are subject to various risks and uncertainties. Future events and the Company's actual results may differ materially from the results reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, dependence on existing and future key strategic and strategic end-user customers, limited ability to establish new strategic relationships, ability to sustain and manage growth, variability of operating results, the Company's expansion and development of new service lines, marketing and other business development initiatives, the commencement of new engagements, competition in the industry, general economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of its clients, the potential liability with respect to actions taken by its existing and past employees, risks associated with international sales, and other risks described herein and in the Company's other SEC filings. The words "believe," "expect," "anticipate," "intend," "plan," and similar expressions identify forward-looking statements.
The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Reform Act are unavailable to us.
Overview of Business
Kelyniam Global, Inc. was originally organized and incorporated under the name Ketner Global Investments, Inc. in the state of Nevada on December 30, 2005. On January 1, 2006, the Company formally commenced operations. On December 5, 2007, the name was changed from Ketner Global Investments, Inc. to Kelyniam Global, Inc. The Company's address is 1100 North University Avenue, Suite 135, Little Rock, Arkansas 72207.
The Company is an engineering and management consulting company providing services for, but not limited to, large scale manufacturing industries. We offer a complete cradle to grave consulting service that encompasses all disciplines of the Design, Engineering and Manufacturing process which specializes in the use of CADCAM (Computer aided design computer aided manufacturing). Our clients are typically in the aircraft and automotive industries. Historically, our primary revenue generation has been done by consulting for these larger firms. Some examples of the types of services our Company and officers have offered in the past, and which Kelyniam Global, Inc. intends to offer in the future but not limited to are as follows:
Initial design and development in automotive styling studios including 'Class A' surface design and development, Wind tunnel model design and production, Sheet metal design for body in White, and conventional stampings, Numeric Control Programming for production, tooling, composite and conventional tooling and manufacturing methods, Interior aircraft design and development including follow through to manufacturing processes, Primary Structural Design for aircraft, plastic injection molding design and development including follow through to the manufacturing processes with accompanying tool design, Research and Development of practicality issues from new manufacturing processes, CADCAM support for CATIA (Computer aided three dimensional interactive application), Research and development of alternate methods of electrical generation and the study of vibratory and bounded field harmonics.
We not only provide specific consulting work for these processes, but also offer a product lifecycle management as well. Our engineering services are not limited to the automotive and aircraft industry. The use of CADCAM technology today can be seen in many disciplines of the design and manufacturing processes, and Kelyniam Global, Inc. has the ability through the Company's staff to accommodate almost any need in these types of environments. We also intend to make investments in the companies in which we provide consulting work and continue with Research and development of alternate methods of electrical generation and the study of vibratory and bounded field harmonics.
Plan of Operations
Kelyniam Global, Inc. has historically generated revenue by providing engineering consulting for large scale manufactures and or directly owning a diversified group of businesses that we provide consulting work for that generate cash and consistently earn above average returns on capital. The Company intents on acquiring contracts with small and large scale engineering and manufacturing companies in the United States and abroad as a primary vendor approved representative. The Company has recently begun investigating the use of CADCAM technology in the medical industries. Kelyniam Global, Inc. believe that with our expertise with high tolerance manufacturing, we can assist the medical industry in providing a better product to patients by the use of Bio-CADCAM technology.
Kelyniam Global, Inc. relies heavily on the officers past experience and past contacts to obtain new contacts in the engineering consulting fields. The officers of the Company have extensive experience in these environments. The Company will also rely on the officer's historic performance and reputation with past customers to obtain, maintain, and acquire these types of contracts. Kelyniam Global, Inc. also relies on the officer's experience in conducting business in North and South American to position the Company competitively in these emerging markets.
Critical Accounting Policies and Estimates
Refer to the audited financial statements and notes thereto for the year ended December 31, 2007, included in the Company's 2007 Annual Report on Form 10-KSB, filed with the Securities and Exchange Commission on March 11, 2008.
Results of Operations
The following comparisons in results of operations are based on the three months ended March 31, 2008 and 2007 as reflected in the unaudited interim financial statements included in this prospectus.
Revenues from contractual and non-contractual consulting performed for three months ended March 31, 2008 were $5,450, as compared to revenues of $24,456 from three months ended March 31, 2007. The Company did not have any formal contract to perform consulting after May 10, 2007, which resulted in the reduction of revenue during the three months ended March 31, 2008.
Operating expenses for the three months ended March 31, 2008 were $63,406 as compared to an expense in the amount of $23,363 for the three months ended March 31, 2007. The primary components of operation expenses for the periods were general and administrative expenses, professional fees. For the three months ended March 31, 2008, there was an increase in general and administrative expenses in the amount of $3,423, attributed to the Company's continued normal phases of day-to-day operations; a $6,620 increase in professional fees, primarily due to fees incurred in order for the Company to become a fully reporting publicly traded company; and an increase in officer compensation expense in the amount of $30,000 for shares issued to directors of the Company for services.
The Company had other expenses of $1,179 for the three months ended March 31, 2008, as compared to $579 for the three months ended March 31, 2008. The other expenses primarily consist of interest expense. The $600 increase in interest expense for the three months ended March 31, 2008 are primarily related to the Company incurring debt in the acquisition of assets through financing.
From our Inception through March 31, 2008, the Company has recorded losses on the sales of marketable securities in the amount of $39,469. Management has decided to limit investments in marketable securities until a more profitable situational occurs, and a significant reduction of current liabilities has been obtained; subsequently has closed its investment account as of December 31, 2007.
As a result of the foregoing, we had a net loss for the three months ended March 31, 2008 of $59,135 and a net income of $514 for the three months ended March 31, 2007.
Liquidity and Capital Resources
The operating costs we incur consist primarily of rent, professional fees, insurance premiums, and general and administrative expenses. Our ability to operate profitably in the future depends on our ability to obtain, maintain, and to secure additional contracts in the future, and to raise additional funds. Additionally, we are attempting to streamline our operations and reviewing other possible areas of cost reductions.
Our office space is currently leased through a non-cancelable operating lease which expires December 31, 2008. The minimum rental expense projected for fiscal 2008 is $6,060.
The following comparisons in liquidity and capital resources are based on the three months ended March 31, 2008 and 2007 as reflected in the unaudited interim financial statements included in this prospectus.
During the three months ended March 31, 2008 we had net cash used in operating activities of $13,297, as compared to net cash from operating activities of $10,606 for the three months ended March 31, 2007. The decrease in cash from operating activities for the three months ended March 31, 2008 resulted primarily from non-cash charges for stock issued for services along with a increase in the Company's accounts payable consisting primarily of accounting and legal fees incurred during that period, decrease in accounts receivable, increase in other assets, depreciation of assets, loss on sale of securities and the Company's overall net loss for that period.
We had net cash used in investing activities of $4,481 for the three months ended March 31, 2008, as compared to $6,857 used in the three months ended March 31, 2007. The net cash used in investing activities during both three month periods resulted primarily from the purchase of marketable securities and fixed assets and net borrowings from related parties.
We had net cash provided by financing activities of $17,665 for the three months ended March 31, 2008, as compared to net cash used in financing activities of $1,785 for the three months ended March 31, 2007. The cash provided by financing activities during the three months ended March 31, 2008 was primarily a result of cash received from the issuance of common stock, offset by the repayment of long-term debt.
As a result of the foregoing, the Company had a net decrease of $113 in cash resulting in a total cash of $8,420 for the three months ended March 31, 2008, as compared to a $1,964 increase in cash resulting in a total cash of $3,930 for the three months ended March 31, 2007.
One of the officer/directors of the Company has made interest free advances to the Company. At the Company's inception in 2005, the officer contributed office furnishings and equipment in the amount of $1,913. During Fiscal 2006, the officer made a loan to the Company, in the amount of $13,000, by way of an automobile trade. As of March 31, 2008, the balance of this loan payable is $10,985. The balance of this loan will be paid as cash flow permits.
Another of the officer/directors of the Company has made interest free advances to the Company. At the Company's inception in 2005, the officer contributed computer equipment in the amount of $3,000. During Fiscal 2006, the officer made a loan to the Company, in the amount of $20,000, by way of an automobile trade. As of March 31, 2008, the balance of this loan payable is $8,875. The balance of this loan will be paid as cash flow permits.
The Company had entered into notes payable for fixed assets in the amount of $40,098 during Fiscal 2006. There were no additional purchases made in Fiscal 2007. The notes payable incurred in 2006 are primarily for two automobiles that are being repaid at an interest rate of 5.9% and both notes are due to be paid in full by the year 2011.
The revenues generated by the Company for the three months ended March 31, 2008, were used toward the repayment of debts incurred as a result of operations. The Company will continue to maintain limited cash on hand until all debts the Company has incurred have been repaid. The Company currently has a debt load of approximately $145,274. The Company's ability to repay this debt is dependent on the Company's ability to obtain and maintain revenue generating contracts to provide engineering consulting work in the future.
Off-balance Sheet Arrangements
The Company currently has no Off-balance sheet arrangements.
Going Concern
Because we are a new and expanding Company with a limited history of revenues, and a limited history of operations, and currently we have only a limited generating contract, our independent auditors have indicated that there is substantial doubt about our ability to continue as a going concern over the next twelve months.
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