-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I0hZDQ4jBSPjV66yPSTnSQjaOxVqzS/LK25hK2C36nx+p76qQPeGdu3ruO8KnSBR zTY3o9keTW9MOOUUj5fHww== 0001108890-05-000035.txt : 20050113 0001108890-05-000035.hdr.sgml : 20050113 20050113154517 ACCESSION NUMBER: 0001108890-05-000035 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20041130 FILED AS OF DATE: 20050113 DATE AS OF CHANGE: 20050113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNUSAGA CORP CENTRAL INDEX KEY: 0000225544 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC BUILDING AND RELATED FURNITURE [2531] IRS NUMBER: 621004034 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-07795 FILM NUMBER: 05528179 BUSINESS ADDRESS: STREET 1: 3578 S VAN DYKE HWY CITY: ALMONT STATE: MI ZIP: 48003 BUSINESS PHONE: 8107988567 FORMER COMPANY: FORMER CONFORMED NAME: AMERICANADA LTD DATE OF NAME CHANGE: 19600201 10QSB 1 knusaga10qsb113004.txt PERIOD ENDED 11-30-04 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended November 30, 2004 Commission File Number 0-7795 KNUSAGA CORPORATION ---------------------------------------------------- (Exact name of Registrant as specified in its charter) NEVADA ------------------------------------------------------------ (State or other jurisdiction of incorporation or organization) 38-3601122 (I.R.S.) Employer Identification Number 3578 S. VAN DYKE ALMONT, MI 48003 -------------------------------------------------- (Address of principal executive office and zip code) Registrant's telephone number (include area code): (810) 798-8567 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 twelve months (or 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. X YES NO ----- ----- Shares of Common Stock Par Value $.001, outstanding: 10,862,773. -1-
RESULTS OF OPERATIONS The Registrant's operations are classified into two principal reportable segments that provide different products or services. Separate management of each segment is required because each business unit is subject to different marketing, production and technology strategies. The tubing business segment services the heavy truck market and the seat track business segment services the recreational vehicle market. The Registrant ceased operation of the tubing segment on November 23, 2004. The equipment associated with this segment has been sold. The building associated with this segment has been listed for sale. The seat track segment is unaffected and continues to operate out of the Registrant's other leased facility. The Statements of Income and Cash Flow for November 30, 2003 have been restated reflecting the discontinued operations. Sales for the discontinued tubing segment increased 35.7% in the first quarter of the fiscal year ending August 31, 2005 to $1,429,095 from $1,052,947 in the year ago period. This was due to increased production of the Heavy Truck Industry. Income for the discontinued truck segment for the period ending November 30, 2004 was $47,168 compared to a loss of $34,613 in the year ago period. This was a result of a gain of $281,866 on the sale of equipment used by the tube segment offset by a loss of $232,998 for the discontinued operations. The seat track segment sales decreased 56.7% in the quarter ending November 30, 2004 to $238,840 from $551,596 in the year ago period. This was a result of the loss of a major customer compared to the year ago period. As a result of the sales decline the seat track segment experienced a loss of $5,385 in the quarter from a profit of $74,321 in the year ago period. Below is summarized segmental data for the three months ended November 30, 2004 and 2003. - ------------------------ --------------------------------- ----------------------------------- ----------------------------------- Tubing Seat Track Total - ------------------------ --------------- ----------------- ----------------- ----------------- ----------------- ----------------- 2004 2003 2004 2003 2004 2003 - ------------------------ --------------- ----------------- ----------------- ----------------- ----------------- ----------------- External Revenue - ------------------------ --------------- ----------------- ----------------- ----------------- ----------------- ----------------- Intersegment 1,429,095 $1,052,947 $238,840 $551,596 $1,667,935 $1,604,543 Revenue - ------------------------ --------------- ----------------- ----------------- ----------------- ----------------- ----------------- Profit (loss) $ 47,168 ($ 34,613) ($ 5,385) $ 74,321 $ 41,783 $ 39,708 - ------------------------ --------------- ----------------- ----------------- ----------------- ----------------- ----------------- LIQUIDITY AND SOURCES OF CAPITAL The registrant has a $600,000 line of credit with Standard Federal Bank, with interest payable monthly at the Bank's Prime Rate plus 1%. This line of credit is evidenced by a note which is secured by a security interest/mortgage of all of the Registrant's assets. This line of credit is due January 31, 2005. As of November 30, 2003, the outstanding balance was $102,393.30 and the applicable interest was 6.0%. CONTINGENT MATTERS There are no contingencies or consequential uncertainties known that will materially affect the financial information as presented. -2-
KNUSAGA CORPORATION BALANCE SHEET (UNAUDITED) NOVEMBER 30, 2004 ASSETS November 30, 2004 CASH $ 26,941 NOTES RECEIVABLE $ 69,504 ACCOUNTS RECEIVABLE $ 110,654 ACCOUNTS RECEIVABLE - OTHER $ 8,642 INVENTORIES $ 104,693 PREPAID EXPENSE $ 1,867 DEFERRED TAX ASSET $ 14,100 CURRENT ASSETS FROM DISCONTINUED OPER $ 1,171,825 TOTAL CURRENT ASSETS $ 1,508,226 NET PROPERTY, PLANT AND EQUIPMENT CONTINUING OPERATIONS $ 118,128 DISCONTINUED OPERATIONS $ 1,095,492 NET PROPERTY AND EQUIPMENT $ 1,213,620 OTHER ASSETS DEPOSITS $ 15,050 INVESTMENT IN JOINT VENTURES $ 137,530 INTANGIBLES $ 4,648 TOTAL OTHER ASSETS $ 157,228 TOTAL ASSETS $ 2,879,074 LIABILITIES ACCOUNTS PAYABLE $ 96,583 NOTES PAYABLE $ 32,107 ACCRUED LIABILITIES $ 90,706 LIABILITIES DISCONTINUED OPERATIONS $ 963,955 TOTAL CURRENT LIABILITIES $ 1,183,351 LONG TERM DEBT, NET OF CURRENT PORTION $ 21,390 DEFERRED TAXES-CONTINUING OPERATIONS $ 14,100 DEFERRED TAXES-DISCONTINUED OPERATIONS $ 15,100 TOTAL LIABILITIES $ 1,233,941 STOCKHOLDERS EQUITY (DEFICIENCY) Common Stock, par value $.001 per share authorized $ 10,863 10,862,773 shares issued and outstanding ADDITIONAL PAID-IN CAPITAL $ 1,552,446 RETAINED EARNINGS $ 143,097 OTHER COMPREHENSIVE LOSS ($ 31,273) TOTAL STOCKHOLDERS EQUITY $ 1,845,133 TOTAL LIABILITIES AND $ 2,879,074 STOCKHOLDERS EQUITY KNUSAGA CORPORATION STATEMENT OF INCOME (UNAUDITED) THREE MONTHS ENDED NOVEMBER 30, 2004 AND NOVEMBER 30, 2003 (UNAUDITED) THREE MONTHS ENDED RESTATED NOVEMBER 30, NOVEMBER 30, 2004 2003 NET SALES $ 238,840 $ 551,596 COST OF GOODS SOLD $ 207,939 $ 396,600 GROSS PROFIT $ 30,901 $ 154,996 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES $ 37,986 $ 42,389 OTHER INCOME EXPENSE 0 0 INCOME (LOSS) BEFORE TAXES ($ 7,085) $ 112,607 PROVISION FOR FEDERAL INCOME TAXES ($ 1,700) $ 38,286 NET INCOME FROM CONTINUING OPERATIONS ($ 5,385) $ 74,321 DISONTINUED OPERATIONS INCOME FROM DISCONTINED OPER ($ 232,998) ($ 52,825) GAIN ON DISPOSAL OF DICONTINUED OPERATIONS $ 281,866 0 INCOME TAX ON DISCONTINUED OPER $ 1,700 ($ 18,212) NET INCOME FROM DISCONTINUED OPERATIONS NET INCOME $ 47,168 ($ 34,613) $ 41,783 $ 39,708 PAR SHARE OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: AVERAGE OUTSTANDING SHARES 10,682,773 10,682,773 EARNINGS PER SHARE .004 .004 -4- KNUSAGA CORPORATION STATEMENT OF CASH FLOW (UNAUDITED) THREE MONTHS ENDED NOVEMBER 30, 2004 AND NOVEMBER 30, 2003 (UNAUDITED) THREE MONTHS ENDED RESTATED NOVEMBER 30, NOVEMBER 30, 2004 2003 CASH PROVIDED BY (USED FOR) OPERATIONS NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS, ($ 5,385) $ 74,321 EXCHANGE LOSS NON-CASH EXPENSE INCLUDED IN NET INCOME $ 12,531 $ 12,515 DEPRECIATION (INCREASE) DECREASE IN: ACCOUNTS RECEIVABLE $ 23,645 $ 15,887 INVENTORIES ($ 3,782) ($ 6,028) PREPAID EXPENSES $ 2,793 $($3,704) OTHER ASSETS ($ 8,000) 0 INCREASE (DECREASE) IN: ACCOUNTS PAYABLE ($ 45,954) $ 5,668 ACCRUED LIABILITIES ($ 1,336) $ 37,502 NET CASH PROVIDED BY (USED FOR) CONTINUING OPERATIONS ($ 25,488) $ 136,161 DISCONTINUED OPERATIONS $ 142,257 ($ 10,459) --------- --------- NET CASH USED IN OPERATING ACTIVITIES $ 116,769 $ 125,702 INVESTING ACTIVITIES PROCEEDS FROM SALE OF ASSETS $ 640,710 0 PURCHASE OF PORPERTY AND EQUIPMENT ($ 23,372) ($ 16,079) INVESTMENTS IN JOINT VENTURES ($ 2,250) 0 PAYMENT S FOR NOTES RECEIVABLE 0 ($ 22,955) PROCEEDS FROM NOTES RECEIVABLE $ 18,560 0 FINANCING ACTIVITIES PAYMENT OF NOTES ($808,250) ($ 46,953) INCREASE (DECREASE) IN CASH ($ 56,833) $ 39,715 BALANCE AT BEGINNING OF PERIOD $ 83,774 $ 47,061 BALANCE AT END OF PERIOD $ 26,941 $ 86,776 -5- FORWARD LOOKING STATEMENTS -------------------------- Certain sections of this quarterly report contain statements reflecting the Registrant's views about its future performance and constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements can be identified by the use of terminology such as "will," anticipate," "estimate," "expect," intends," or similar words. These views involve risks and uncertainties that are difficult to predict and, accordingly, the Registrant's actual results may differ materially from the results discussed in such forward-looking statements. Readers should consider that various factors in the United States and abroad, including changes in general economic conditions, competitive market conditions and pricing pressures, relationships with key customers, industry consolidation of vehicle and truck suppliers, shifts in distribution, currency exchange rates and other factors discussed in the Registrant's other filings with the Securities and Exchange Commission, may affect the Registrant's performance. The Registrant undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise. Supplemental Item. Controls and Procedures ----------------------- Based on their most recent evaluation, which was completed within 90 days of the filing of this Form 10-QSB, the registrant's Chief Executive Officer and Chief Financial Officer believe the registrant's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective to ensure that information required to be disclosed by the registrant in this report is accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. There were no significant changes in these controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses. Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits: 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K during the quarter ended November 30, 2004: None Pursuant to the requirements of Section 13 or 15(d) 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. KNUSAGA CORPORATION KNUSAGA CORPORATION By: /s/ James G. Musser By: /s/ Jerry Luptak -------------------------- -------------------------- James G. Musser Jerry Luptak Director/President Vice President and (Principal Executive Officer Principal Financial Officer and Controller) Dated: January 14, 2005 Dated: January 14, 2005 -------------------- -------------------- -6- EX-31.1 2 knusagaexhib311-113004.txt CERTIFICATION OF CEO PER SECTION 302 Exhibit 31.1 KNUSAGA CORPORATION CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION --------------- I, James G. Musser, certify that: 1) I have received this quarterly report on Form 10-QSB of KnuSaga Corporation; 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us, particularly during the period in which this quarterly report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6) The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: January 14, 2005 /s/ James G. Musser - ------------------------- James G. Musser Chief Executive Officer EX-31.2 3 knusagaexhib312-113004.txt CERTIFICATION OF CFO PER SECTION 302 Exhibit 31.2 KNUSAGA CORPORATION CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION ----------------- I, Jerry Luptak, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of KnuSaga Corporation; 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us, particularly during the period in which this quarterly report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying office and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: January 14, 2005 /s/ Jerry Luptak - --------------------- Jerry Luptak Chief Financial Officer EX-32.1 4 knusagaexhib321-113004.txt CERTIFICATION OF CEO PER SECTION 906 Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 of THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of KnuSaga Corporation ("KnuSaga") on Form 10-QSB for the period ending November 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James G. Musser, President, Chief Executive Officer of KnuSaga and a member of the Board of Directors, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) of 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly represents, the financial condition and result of operations of the Company. /s/ James G. Musser - -------------------------- James G. Musser Chief Executive Officer January 14, 2005 EX-32.2 5 knusagaexhib322-113004.txt CERTIFICATION OF CFO PER SECTION 906 Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 of THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of KnuSaga Corporation ("KnuSaga") on Form 10-QSB for the period ending November 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jerry Luptak, Vice President, Finance, General Counsel, and Chief Financial Officer of KnuSaga, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) of 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly represents, the financial condition and result of operations of the Company. /s/ Jerry Luptak - -------------------------- Jerry Luptak Chief Financial Officer January 14, 2005 -----END PRIVACY-ENHANCED MESSAGE-----