UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended January 31, 2004
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to _________
Commission File No. 333-103083
USED KAR PARTS, INC.
----------------------------------------------
(Name of Small Business Issuer in Its Charter)
Florida 04-3721895
- -------------------------------- ----------------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
3 West 57th Street, New York, New York 10019
- ---------------------------------------- -----------
(Address of Principal Executive Offices) (Zip Code)
(646) 442-4985
--------------------------
(Issuer's Telephone Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: (None)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: (None)
Check whether the issuer (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) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $0
The market value of the common stock held by non-affiliates cannot be estimated
since there is no market for the company's shares.
There were 2,068,000 shares of common stock outstanding as of May 5, 2004.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
2
INTRODUCTORY NOTE
This Annual Report on Form 10-KSB may be deemed to contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
forward-looking statements included herein are based on current expectations
that involve a number of risks and uncertainties set forth under "Risk Factors."
Accordingly, to the extent that this Annual Report contains forward-looking
statements regarding possible acquisitions, financial condition, operating
results, business prospects or any other aspect of the Company, please be
advised that the Company's actual financial condition, operating results and
business performance may differ materially from that projected or estimated by
the Company in forward-looking statements.
3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
THE COMPANY
We were incorporated in the State of Florida on April 26, 2002 and
planned to develop an on-line marketplace for used car parts. In an effort to
develop that business, we entered into a contract with a web hosting service on
a month to month basis to provide storage for website development and
transaction processing. Our temporary website arrangement was suspended to
preserve cash and pending new management's evaluation of the business.
On February 24, 2004, Jeannine Karklins, formerly our President,
Treasurer, Secretary and principal shareholder entered into a Capital Stock
Purchase Agreement (the "Stock Purchase Agreement") with Panetta Partners, Ltd.,
a Colorado limited partnership ("Panetta"). All conditions to the closing were
fulfilled and funds released to Ms. Karklins on February 26, 2004.
Under the Stock Purchase Agreement:
o Panetta purchased an aggregate of 2,000,000 restricted shares
of our common stock from Ms. Karklins for $386,400
o Ms. Karklins resigned as an officer and director of the
Company.
The 2,000,000 shares represent approximately 97% of our outstanding
shares of common stock. Of the $386,400 purchase price, $295,000 was borrowed
from a private investor in technology companies based in the United Kingdom, and
the balance came from the working capital of Panetta and its limited partners.
The loan is due February 28, 2005, bears annual interest at 2% and is secured by
a pledge of 1,520,000 of the 2,000,000 shares of the registrant's common stock
acquired by Panetta.
Panetta, acting in its capacity as our principal stockholder, appointed
Christoph Bruening to serve as sole director, filling the vacancy created by the
resignation of Ms. Karklins. Mr. Bruening also became President, Secretary and
Treasurer.
Panetta Partners, our principal stockholder entered into a letter of
intent with a biotechnology company which contemplates the acquisition and
financing of the biotechnology company. We are negotiating an acquisition
agreement with the biotechology company. If we reach an agreement, we will
promptly disclose the terms of the agreement and other information concerning
the biotechnology company by filing a Form 8-K, including a copy of the
agreement as an exhibit. The letter of intent provides for confidentiality and
sets forth proposed terms, but is not a binding agreement to make the
acquisition. Such an acquisition, if we can reach an agreement, will require
the issuance of a substantial number of shares of our common stock, to the
current shareholders of the biotech company in exchange for 100% of their
outstanding stock and to investors to raise working capital.
Our offices are located at 3 West 57th Street, New York, New York
10019. Our telephone number is (646) 442-4985.
4
We presently do not have a corporate Internet website. Our annual
report on Form 10-KSB, quarterly reports on Form 10-QSB, current reports on Form
8-K, and amendments to those reports filed or furnished pursuant to Section
15(d) of the Securities Exchange Act of 1934, as amended, are available on the
website of the Securities and Exchange Commission at www.sec.gov shortly after
they are filed or furnished.
CORPORATE EMPLOYEES
As of January 31, 2004, we had no employees. Our sole director and
executive officer, Christoph Bruening, serves without compensation.
RISK FACTORS
Since our plan to develop an on-line market for used car parts did not
result in any revenue and we are exploring acquisition opportunities, there are
many risks and uncertainties that could impact our financial position or results
of operations.
No existing market
Quotations for our common stock can be found on the Over The Counter
Bulletin Board under the symbol "UKAR.OB" and our stock has not traded. Except
for the OTC Bulletin Board, there is no existing trading market for our
securities. Accordingly, there can be no assurance as to the liquidity of any
markets that may develop for the securities, the ability of holders of the
securities to sell their securities, or the prices at which holders may be able
to sell their securities.
The market price of our common stock may be adversely affected by several
factors
The market price of our common stock, if a market develops, could
fluctuate significantly in response to various factors and events, including:
o our ability to integrate operations, technology, products and
services;
o ability of a potential acquisition to execute their business
plan;
o operating results below expectations;
o announcements of technological innovations or new products by
us or our competitors;
o loss of any strategic relationship;
o industry developments;
o economic and other external factors; and
o period-to-period fluctuations in our financial results.
In addition, the securities markets have from time to time experienced
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. These market fluctuations may also
materially and adversely affect the market price of our common stock. Past stock
performance is not an indication of future performance.
5
We will require additional funding to execute a business strategy of any company
we may acquire or any business we develop. If funding is not available or not
available on acceptable terms, we may be required to curtail our activities.
We will require substantial additional funds to fund the development of
a business. Our future capital requirements will depend on many factors. If we
are able to reach an agreement with the biotechnology company with which we have
a letter of intent, such factors will include continued scientific progress,
progress with pre-clinical testing and clinical trials, the time and costs
involved in obtaining regulatory approvals, the costs involved in filing,
prosecuting and enforcing patent claims, competing technological and market
developments, our ability to establish collaborative arrangements, effective
commercialization activities and arrangements and the purchase or development of
additional equipment and facilities. There can be no assurance that additional
financing will be available, or, if available, that such additional financing
will be available on terms acceptable to us. If additional funds are raised by
issuing debt, we will incur fixed payment obligations, which could delay the
time, if any, when we may achieve profitability. If adequate funds are not
available, we may be required to delay, scale back or eliminate any business
plans.
ITEM 2. DESCRIPTION OF PROPERTY
Panetta Partners, our principal stockholder, provides us with an office
located in its offices at 3 West 57th Street, New York, New York and does not
charge us rent. The facilities there are adequate for our limited current
operations. In the event we acquire or develop a business we may require
additional office or operating facilities.
ITEM 3. LEGAL PROCEEDINGS
We may from time to time be involved in various claims, lawsuits,
disputes with third parties, actions involving allegations of discrimination, or
breach of contract actions incidental to the operation of our business. We are
not currently involved in any such litigation that we believe could have a
materially adverse effect on our reported financial condition or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the three months ended January 31, 2004.
6
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
MARKET INFORMATION
Our securities do not currently, and have not in the past, traded on
any public market. Thus, there is currently no market for our securities and
there can be no assurance that a trading market will develop or, if one
develops, that it will continue. The shares of commons tock are quoted in the
NASD's OTC Bulletin Board under the symbol "UKAR.OB"
NUMBER OF SHAREHOLDERS
The number of shareholders of record of our Common Stock as of the
close of business on May 5, 2004 was 52.
DIVIDEND POLICY
To date, we have declared no cash dividends on our Common Stock, and we
do not expect to pay cash dividends in the near term. We intend to retain future
earnings, if any, to provide funds for operation of our business.
RECENT SALES OF UNREGISTERED SECURITIES
We did not sell any securities during the three months ended January
31, 2004.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Critical Accounting Policies
Our accounting policies are described in Note 1 of the consolidated
financial statements included in this Annual Report on Form 10-KSB for the
fiscal year ended January 31, 2004. The financial statements are prepared in
accordance with accounting principles generally accepted in the United States of
America, which requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Since we are in the development stage and have had only limited
expenditures and no estimates we do not consider any accounting policy to be
critical to the understanding of our business.
7
Results of Operations
Our audited financial statements, which are set forth in Item 7 of this
report, reflect our operating results from April 26, 2002 (inception) to January
31, 2004 and for the year ended January 31, 2004. During the period from
inception to January 31, 2004, we had no revenue and our expenses totaled
$5,194, of which $1,024 was incurred in the fiscal year ended January 31, 2003
and $3,760 in the fiscal year ended January 31, 2004. Substantially all of these
expenses were for office and administrative activities related to the early
stages of developing plans for our on-line used car parts. We entered into an
agreement for the hosting of our website prior to our change in control in
February, 2004 and thereafter suspended that agreement to preserve cash pending
our new management's assessment of plans. Substantially all of these
expenditures were made by management before February, 2004.
Panetta Partners, Ltd, our principal shareholder, pays for expenses
such as accounting and legal fees relating to our reporting responsibility under
the Securities Exchange Act of 1934, as well as provides us with an office
location without any expectation of repayment. In the event we do not reach an
agreement with the company with which we have a letter of intent or the
transaction is not completed and we do not abandon our plan to develop on-line
used car marketplace, we will incur expenses in this endeavor.
Liquidity and Capital Resources
Most of our operating expenses are borne by Panetta Partners, our
principal shareholder, without any expectation of reimbursement.
If the proposed acquisition is completed, we will require substantial
additional funds to conduct and sponsor research and development activities, to
conduct pre-clinical and clinical testing, and to market the target company's
products. Our future capital requirements will depend on many factors, including
continued scientific progress, progress with pre-clinical testing and clinical
trials, the time and costs involved in obtaining regulatory approvals, the costs
involved in filing, prosecuting and enforcing patent claims, competing
technological and market developments, our ability to establish collaborative
arrangements, effective commercialization activities and arrangements and the
purchase or development of additional equipment and facilities. We will need to
raise additional funds as a condition of closing. We intend to seek such
additional funding through private financings. There can be no assurance that
additional financing will be available, or, if available, that such additional
financing will be available on terms acceptable to us. If additional funds are
raised by issuing debt, we will incur fixed payment obligations, which could
delay the time, if any, when we may achieve profitability. If adequate funds are
not available, we may be required to delay, scale back or eliminate one or more
of its principal product candidates or obtain funds through arrangements with
collaborative partners or others that may require us to relinquish rights to
certain of its technologies, product candidates or products that our prospective
acquisition would not otherwise relinquish.
ITEM 7. FINANCIAL STATEMENTS
Our audited financial statements follow on the next page.
8
USED KAR PARTS, INC
(A Development Stage Company)
Audited Financial Statements
April 26, 2002 (Inception) to January 31, 2004
TABLE OF CONTENTS
Page
----
Independent Auditors' Report F-1
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-F-7
9
BAUM & COMPANY, P.A.
Certified Public Accountants
1515 University Drive - Suite 209
Coral Springs, Florida 33071
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Used Kar Parts, Inc.
New York City, New York
We have audited the accompanying balance sheet of Used Kar Parts, Inc. (A
Development Stage Company) as of January 31, 2004 and 2003 and the related
statement of operations, cash flows and changes in stockholders' equity for the
year ended January 31, 2004 and the period commencing April 26, 2002 (date of
inception) to January 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America.. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Used Kar Parts, Inc.. (A Development Stage
Company) at January 31, 2004 and 2003 and the statement of operations, cash
flows and changes in stockholders' equity for the year ended January 31, 2004
and the period commencing April 26, 2002 (Date of Inception) to January 31, 2003
in conformity with accounting principles generally accepted in the United States
of America.
/s/ Baum & Company, P.A.
Coral Springs, Florida
May 14, 2004
F-1
USED KAR PARTS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
JANUARY 31, 2004 AND 2003
ASSETS
2004 2003
--------- ---------
Current Assets
Cash $ 206 $ 3,876
--------- ---------
Total Assets $ 206 $ 3,876
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ - 0 - $ - 0 -
--------- ---------
Stockholders' Equity
Common Stock, $.001 par value, authorized
50,000,000 shares, 2,068,000 issued and outstanding 2,068 2,068
Additional paid-in capital 3,332 3,332
Accumulated deficit during development stage (5,194) (1,524)
Total Stockholders'Equity $ 206 $ 3,876
Total Liabilities and Stockholders' Equity $ 206 $ 3,876
========= =========
See accompanying notes to financial statements.
F-2
USED KAR PARTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
YEAR ENDED JANUARY 31, 2004 AND THE
PERIOD COMMENCING APRIL 26, 2002 (DATE OF INCEPTION)
TO JANUARY 31, 2003
Operations During
Development Stage
Inception
April 26, 2002
2004 2003 To January 31, 2004
----------- ----------- -------------------
Revenue $ - 0 - $ - 0 - $ - 0 -
Operating expenses 3,670 1,524 5,194
----------- ----------- -----------
Net income (loss) $ (3,670) $ (1,524) $ (5,194)
=========== =========== ===========
Weighed average of shares outstanding 2,068,000 229,778
=========== ===========
Net income(loss) per share - basic and diluted $ (0.00) $ (0.01)
=========== ===========
See accompanying notes to financial statements.
F-3
USED KAR PARTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD COMMENCING APRIL 26, 2002 (DATE OF INCEPTION) TO JANUARY 31, 2004
Common Stock Additional Deficit Total
------------------------- Paid-In Development Stage Stockholders'
Shares Amount Capital Period Equity
--------- ---------- ----------- ----------------- -------------
Beginning Balance
April 26, 2002 (Inception) - 0 - $ - 0 - $ - 0 - $ - 0 - $ - 0 -
Sale of common stock to
to founder at par value 2,000,000 2,000 - 0 - 2,000
Sale of common stock
for cash 68,000 68 3,332 - 0 - 3,400
Net (loss) - from inception
through January 31, 2003 - 0 - - 0 - - 0 - (1,524) (1,524)
--------- ---------- ---------- ---------- ----------
Balance - January 31, 2003 2,068,000 $ 2,068 $ 3,332 $ (1,524) $ 3,876
Net (loss) - January 31, 2004 - 0 - - 0 - - 0 - (3,670) (3,670)
--------- ---------- ---------- ---------- ----------
Balance - January 31, 2004 2,068,000 $ 2,068 $ 3,332 $ (5,194) $ 206
========= ========== ========== ========== ==========
See accompanying notes to financial statements.
F-4
USED KAR PARTS, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
YEAR ENDED JANUARY 31, 2004 AND THE
PERIOD COMMENCING APRIL 26, 2002 (DATE OF INCEPTION)
TO JANUARY 31, 2004
Operations During
Development Stage
Inception to
2004 2003 January 31, 2004
--------- --------- ------------------
Cash flows from operations:
Net income (loss) $ (3,670) $ (1,524) $ (5,194)
--------- --------- ---------
Net cash provided (used) for operations (3,670) (1,524) (5,194)
Cash flows from financing activities:
Sale of common stock - 0 - 3,400 5,400
--------- --------- ---------
Net increase (decrease) in cash (3,670) 3,876 206
Cash - beginning 3,876 - 0 - - 0 -
--------- --------- ---------
Cash - ending $ 206 $ 3,876 $ 206
========= ========= =========
See accompanying notes to financial statements.
F-5
USED KAR PARTS,INC..
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
Organization and Operations
The Company was organized under the laws of the State of Florida on
April 26, 2002. The Company is in the development stage. The Company
plans to develop a website where individuals subscribe to and interact
in an online marketplace for used car parts. The Company currently has
no operations.
On February 24, 2004, the principal stockholder and founder of the
Company sold her controlling interest.
Basis of Accounting
The Company's policy is to prepare its financial statements using the
accrual basis of accounting in accordance with generally accepted
accounting principles. The Company has elected to use January 31 as its
annual year end.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Cash and equivalents
Cash and cash equivalents include cash and cash in banks. The Company
maintaines cash and cash equivalent balances at a financial institution
that is insured by the Federal Deposit Insurance Corporation up to
$100,000. At January 31, 2004, there is no concentration of credit risk
from uninsured bank balances
NOTE 2 CAPITAL TRANSACTIONS
The Company sold 2,000,000 restricted shares of common stock to its
founder in January, 2003 for $2,000.
The Company in January, 2003 sold 68,000 restricted shares of common
stock for $ .05 per share. The offering was made in reliance upon
exemption from registration provided by Regulation D, Rule 504 of the
Securities Exchange Commission.
F-6
USED KAR PARTS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
NOTE 4 INCOME TAX
In February 1992, the Financial Standards Board issued Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".
Under SFAS No. 109, deferred assets and liabilities are recognized for
the estimated future tax consequences between the financial statement
carrying amounts of the existing assets and their respective basis.
Deferred assets and liabilities are measured using enacted tax rates in
effect for the year in which temporary differences are expected to be
recovered or settled. Under SFAS No. 109 the effect on deferred assets
and liabilities of a change in tax rates is recognized in the period
that includes the enactment date.
The Company has a net operating loss carry forward of $5,194 which is
offset by a $5,194 valuation allowance due the uncertainty surrounding
the ultimate realization of these assets. The loss carryforward expires
in 2019.
NOTE 5 NEW ACCOUNTING PRONOUCEMENTS
In December 2002, the FASB issued Statements of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure an Amendment of FASB Statement No. 123" (SFAS
148). SFAS 148 amends SFAS 123 "Accounting for Stock-Based
Compensation," providing for an alternative method of transition for a
voluntary change to the fair value based method of accounting for
stock-based employee compensation. Additionally, it amends the
disclosure requirements of SFAS 123 to require prominent disclosures in
both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the
method used on reported results. SFAS 148 is effective for fiscal years
beginning after December 15, 2002. The interim disclosure provisions
are effective for financial reports containing financial statements for
interim periods beginning after December 15, 2002. The Company's
adoption of the interim disclosure provisions of SFAS 148 did not
affect our financial position.
The FASB issued FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities (FIN 46) in January 2003. FIN 46 requires that if an
entity has a controlling financial interest in a variable interest
entity, the assets, liabilities and results of activities of the
variable interest entity should be included in the consolidated
financial statements of the entity. This FASB is not applicable to the
company since the company does not have any variable interest entities.
F-7
USED KAR PARTS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2004
NOTE 5 NEW ACCOUNTING PRONOUCEMENTS - continued
In May 2003, the FASB issued Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity" (SFAS 150), sets
standards for an issuer as to how to classify and measure financial
instruments with characteristies of both liabilities and equity. SFAS
150 is effective for financial instruments entered into after May 31,
2003, and is effective after June 15, 2003. Adoption of SFAS 150 is not
expected to have a material effect on the Company.
NOTE 6 SUBSEQUENT EVENTS
The Company is negotiating a possible requisition with the shareholders
of a biotechology company. The terms of an agreement have not been
finalized.
F-8
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 8A. CONTROLS AND PROCEDURES
Our Chief Executive Officer, based on evaluation of our disclosure
controls and procedures (as defined in Rules 13a-5(e) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended) required by paragraph (b) of Rule
13a-15 or Rule 15d-15, as of January 31, 2004, has concluded that our disclosure
controls and procedures were effective to ensure the timely collection,
evaluation and disclosure of information relating to our company that would
potentially be subject to disclosure under the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
There has been no significant change in our internal controls over
financial reporting that could significantly affect internal controls subsequent
to October 31, 2003.
10
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
The following table sets forth the names and ages of our current
directors and executive officers, the principal offices and positions held by
each person and the date such person became a director or executive officer. The
executive officers are elected annually by the Board of Directors. The directors
serve one-year terms until their successors are elected. The executive officers
serve terms of one year or until their death, resignation or removal by the
Board of Directors. There are no family relationships between any of the
directors and executive officers. In addition, there was no arrangement or
understanding between any executive officer and any other person pursuant to
which any person was selected as an executive officer.
Our directors and executive officers as of May 5, 2004, are as follows:
Name Age Position
---- --- --------
Christoph Bruening 36 President, Secretary and Director
Mr. Bruening was appointed director and President/Secretary of the
Company on February 25, 2004 to fill the vacancy resulting from the resignation
of Jeannine Karklins. Mr. Bruening serves as a Director of Callisto
Pharmaceuticals, Inc., a biopharmaceutical company primarily focused on the
development of drugs to treat multiple myeloma, other cancers and osteolytic
bone disease. He organized Value Relations GmbH, a full service investor
relations firm operating in Frankfurt, Germany in 1999 and currently serves as
its Managing Partner. From 1998 to 1999, Mr. Bruening served as a funds manager
and Director of Asset Management for Value management & Research AG, a private
investment fund and funds manager in Germany. From 1997 to 1998, Mr. Bruening
was a financial analyst and Head of Research for Value Research GmbH. Mr.
Bruening is a member of the advisory board of Clarity AG and served as a member
of the board of Matchnet plc. Mr. Bruening holds a Bachelor of Science degree in
Chemistry from Technischen Universitat Darmstadt.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 is not applicable
to our officers, directors or persons who own more than ten percent of our
common stock until we register a class of securities under Section 12
thereunder.
ITEM 10. EXECUTIVE COMPENSATION
We have not paid any compensation to executives since our inception.
COMPENSATION OF DIRECTORS
Directors were not separately compensated for their services in the
year ended January 31, 2004.
11
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 5, 2004, certain information
with respect to our equity securities owned of record or beneficially by (i)
each of our officers and directors; (ii) each person who owns beneficially more
than 5% of each class of our outstanding equity securities; and (iii) all
directors and executive officers as a group.
The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares as to which
the selling stockholder has sole or shared voting power or investment power and
also any shares that the selling stockholder has the right to acquire within 60
days. The actual number of shares of Common Stock issuable upon the conversion
of the debentures is subject to adjustment depending on, among other factors,
the number of shares outstanding at the time of conversion and could be
materially less than the number estimated in the table.
Beneficial Ownership
Name of Beneficial Owner Shares Percentage
- ------------------------ ------ ----------
Panetta Partners, Ltd. 1,980,012(1) 96%
- --------------------
(1) Of the shares owned by Panetta Partners, Ltd., 1,520,000 are pledged to
secure $295,000 of debt incurred to acquire the shares.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Panetta Partners, our principal shareholder, bears substantially all of
our operating expenses.
12
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Exhibit Description
2.1 Capital Stock Purchase Agreement between Panetta Partners,
Ltd. and Jeannine Karklins dated February 24, 2004 (1)
3.1 Articles of Incorporation of the Company (2)
3.2 Bylaws of the Company (2)
4.1 Form of Stock Certificate, $.001 par value (2)
9. None
10 None
11. Statement re: computation of per share earnings. See Notes to
Financial Statements
13. None
16 None
18. None
21. None
22. None
23. None
24. None
31.1 Certification of Chief Executive Officer of Periodic Report
pursuant to Rule 13a-14a and Rule 14d-14(a). *
31.2 Certification of Chief Financial Officer of Periodic Report
pursuant to Rule 13a-14a and Rule 15d-14(a). *
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350. *
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350. *
- --------------------
(1) Incorporated by reference to the exhibits filed with the Company's Current
Report on Form 8-K dated February 26, 2004.
(2) Incorporated by reference to the exhibits filed with the Company's Form SB-2
Registration Statement, as amended, filed June 25, 2003.
* Filed herewith
(b) Reports on Form 8-K
The following reports on Form 8-K were filed during the quarter ended
January 31, 2004:
None
13
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees. We incurred aggregate fees and expenses of approximately $6,250
from Baum & Co., P.A. for the 2004 fiscal year. Such fees were primarily for
work completed for our annual audit and reviews of our Form 10-QSB's.
Audit Related Fees. We did not incur any audit related fees or expenses for the
2004 fiscal year. Such fees were primarily for due diligence related to mergers
and acquisitions and accounting consultations related to mergers and
acquisitions.
Tax Fees. We incurred no fees from Baum & Co., P.A. for the 2004 and 2003 fiscal
years for professional services rendered for tax compliance, tax advice and tax
planning.
All Other Fees. We did not incur any other fees from Baum & Co., P.A. during
fiscal 2004 or fiscal 2003. The Board of Directors, acting as the Audit
Committee considered whether, and determined that, the auditor's provision of
non-audit services was compatible with maintaining the auditor's independence.
All of the services described above for fiscal year 2004 and 2003 were approved
by the Board of Directors pursuant to its policies and procedures. We intend to
continue using Baum & Co., P.A. solely for audit and audit-related services, tax
consultation and tax compliance services, and, as needed, for due diligence in
acquisitions.
14
SIGNATURES
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.
Dated: May 17, 2004
USED KAR PARTS, INC.
By: /s/ Christoph Bruening
------------------------------
Christoph Bruening, President
Pursuant to requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Capacity Date
--------- -------- ----
/s/ Christoph Bruening President, Secretary May 17, 2004
- -------------------------- and Director
Christoph Bruening
15
Exhibit 31.1
CERTIFICATION
I, Christoph Bruening, certify that:
1. I have reviewed this annual report on Form 10-KSB of Used Kar Parts,
Inc.;
2. Based on my knowledge, this annual 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
annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respect the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.
4. The registrant's other certifying officers and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures 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 annual 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 annual report (the "Evaluation Date");
and
c) presented in this annual 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 officers 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 functions):
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 officers and I have indicated in
this annual 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.
May 17, 2004
/s/ Christoph Bruening
- -------------------------------------------------
Christoph Bruening, President
(Chief Executive Officer and Financial Officer)
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 annual report of Used Kar Parts, Inc. (the
"Company") on Form 10-KSB for the year ending January 31, 2004 as filed with the
Securities and Exchange Commission on May 17, 2004 (the "Report"), I, Christoph
Bruening, Chief Executive and Financial Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and result of
operations of the Company.
/s/ Christoph Breuning
- --------------------------------------
Christoph Bruening
Chief Executive and Financial Officer
May 17, 2004
A signed original of this certification has been provided to the Company and
will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.