UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2013


TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission file number 000-54307


Kopjaggers, Inc

(Exact name of small business issuer as specified in its charter)


Florida


5990

27-2037711

----------------

----------------------------

----------------------

(State or other jurisdiction of incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer Identification Code Number)


28325 Utica Road

Roseville, MI 48066

321-507-7836

(Registrant’s telephone number, including area code)



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the last 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


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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer (__)   Accelerated filer (__)   Non-accelerated filer* (__)   Smaller reporting company (X)

 (*Do not check if a 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 X     No


The number of shares of the issuer’s common stock, no par value, outstanding as of September 30, 2013 was 10,510,000.











TABLE OF CONTENTS

 

Page

Part I.  Financial Information

 

Item 1.  Condensed Financial Statements.

 

Condensed Balance Sheets for the periods ended September 30, 2013 (unaudited) and December 31, 2012 (audited)

3

Condensed Statements of Operations for the three and nine months ended September 30 , 2013 and 2012 and from Inception (February 23, 2010) through September 30, 2013 (unaudited)

4

Condensed Statements of Stockholders’ Deficit from Inception (February 23, 2010) through September 30, 2013

6

Condensed Statements of Cash Flows for the nine month periods ended September 30, 2013 and 2012 (unaudited) and from Inception(February 23, 2010) to September 30, 2013  

5

Notes to Condensed Financial Statements (unaudited)

7

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

14

Item 4.  Controls and Procedures.

14

Part II.  Other Information

14

Item 1.  Legal Proceedings.

14

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

14

Item 3.  Defaults Upon Senior Securities.

14

Item 4.  Mine Safety Disclosures.

14

Item 5.  Other Information.

14

Item 6.  Exhibits

14

Signatures

15














KOPJAGGERS INC.

 

 

 

 

 

 

(A DEVELOPMENT STAGE COMPANY)

 

 

 

 

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEPTEMBER 30,

DECEMBER 31,

 

 

 

 

 

 

2013

2012

 

 

 

 

 

 

 (UNAUDITED)

 (AUDITED)

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT

 

 

 

 

 

 

 

Cash

 

 

 

 

 

 $                      50

 $                     2,150

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

 

 

 $                      50

 $                     2,150

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Accounts payable

 

 

 

 

 $                       -   

 $                     2,500

Note payable - related party

 

 

 

                    8,685

                        2,825

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

 

 

                    8,685

                        5,325

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

 

Commons shares, authorized 20,000,000, no par value

 

 

 

 

 - issued and outstanding -10, 510,000 (December 31, 2012 - 10,510,000)

 

                    2,750

                        2,750

 

 

 

 

 

 

 

 

DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE

 

                 (11,385)

                      (5,925)

 

 

 

 

 

 

 

 

TOTAL STOCKHOLDERS' EQUITY

 

 

 

                   (8,635)

                      (3,175)

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

 $                      50

 $                     2,150


The accompanying notes are an integral part of these condensed financial statements.







KOPJAGGERS INC.

 

 

 

 

 

 

 

(A DEVELOPMENT STAGE COMPANY)

 

 

 

 

CONDENSED INTERIM STATEMENT OF OPERATIONS

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 FROM

 

 

 

 

 

 

 

 

 INCEPTION

 

 

 

 

THREE MONTHS ENDED

NINE MONTHS ENDED

 FEBRUARY 23, 2010

 

 

 

 

SEPTEMBER 30,

SEPTEMBER 30,

 TO SEPT 30,

 

 

 

 

2013

2012

2013

2012

  2013

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 $                -   

 $                -   

 $                -   

 $                -   

 $                             -   

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

General and administrative

 

             3,835

                   -   

             5,460

                   -   

                         11,385

 

 

 

 

 

 

 

 

 

Total Expenses

 

 

             3,835

                   -   

             5,460

                   -   

                         11,385

 

 

 

 

 

 

 

 

 

NET INCOME(LOSS)

 

 

 $        (3,835)

 $                -   

 $        (5,460)

 $                -   

 $                    (11,385)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME(LOSS) PER SHARE

 $          (0.00)

 $                -   

 $          (0.00)

 $                -   

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES

 

 

 

 

  OUTSTANDING(1)

 

 

    10,510,000

    10,000,000

    10,510,000

    10,000,000

 

 

 

 

 

 

 

 

 

 

(1) Post forward split on comparative basis

 

 

 

 


The accompanying notes are an integral part of these condensed financial statements.








KOPJAGGERS INC.

 

 

 

 

 

 

(A DEVELOPMENT STAGE COMPANY)

 

 

 

 

CONDENSED INTERIM STATEMENT OF CASH FLOWS

 

 

 

(UNAUDITED)

 

 

 

 

 

 FROM

 

 

 

 

 

 

 

 INCEPTION

 

 

 

 

 

NINE MONTHS ENDED

 FEBRUARY 23, 2010

 

 

 

 

 

SEPTEMBER 30,

 TO SEPT 30,

 

 

 

 

 

2013

 2012

  2013

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net income(loss)

 

 

 

 $           (5,460)

 $                       -   

 $                 (11,385)

Changes in operating assets and liabilities:

 

 

 

 

Accounts payable

 

 

 

              (2,500)

                          -   

                              -   

Net cash used in operating activities

 

 

              (7,960)

                          -   

                    (11,385)

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from note payable

 

 

               5,860

                       200

                        8,685

Issuance of common stock

 

 

 

                     -   

                          -   

                        2,750

Net cash provided by financing activities

 

               5,860

                       200

                      11,435

 

 

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH

 

 

              (2,100)

                       200

                             50

 

 

 

 

 

 

 

 

CASH, Beginning of period

 

 

               2,150

                          -   

                              -   

 

 

 

 

 

 

 

 

CASH, End of period

 

 

 

 $                 50

 $                    200

 $                          50

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:

 

 

 

Interest paid

 

 

 

 $                  -   

 $                       -   

 $                           -   

 

Income taxes paid

 

 

 $                  -   

 $                       -   

 $                           -   


The accompanying notes are an integral part of these condensed financial statements.







KOPJAGGERS INC.

 

 

 

 

 

(A DEVELOPMENT STAGE COMPANY)

 

 

 

 

CONDENSED INTERIM STATEMENT OF STOCKHOLDERS' EQUITY

 

 

FROM INCEPTION(FEBRUARY 23, 2010) TO SEPTEMBER 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON STOCK

ACCUMULATED

 

 

 

 

SHARES

AMOUNT

DEFICIT

TOTALS

 

 

 

 

 

 

 

Balance - February 23, 2010

                 -   

 $              -   

 $                      -   

 $              -   

 

 

 

 

 

 

 

Common shares issued for cash

 

 

 

 

   - July 2010 at $.0004

 

       500,000

               200

                         -   

              200

 

 

 

 

 

 

 

Net loss - December 31, 2010

                 -   

                 -   

                     (550)

             (550)

 

 

 

 

 

 

 

Balance - December 31, 2010(Audited)

       500,000

               200

                     (550)

             (350)

 

 

 

 

 

 

 

Net loss - December 31, 2011

                 -   

                 -   

                  (2,200)

          (2,200)

 

 

 

 

 

 

 

Balance - December 31, 2011(Audited)

       500,000

               200

                  (2,750)

          (2,550)

 

 

 

 

 

 

 

Common shares issued for cash

 

 

 

 

 - November 2012 at $.10

 

         25,500

            2,550

                         -   

           2,550

 

 

 

 

 

 

 

Net loss - December 31, 2012

                 -   

                 -   

                  (3,175)

          (3,175)

 

 

 

 

 

 

 

Balance - December 31, 2012(Audited)

       525,500

            2,750

                  (5,925)

          (3,175)

 

 

 

 

 

 

 

Forward split 20 shares for 1 common share

    9,985,000

                 -   

                         -   

                 -   

 

 

 

 

 

 

 

Net loss - September 30, 2013

                 -   

                 -   

                  (5,460)

          (5,460)

 

 

 

 

 

 

 

Balance - September 30, 2013(Unaudited)

  10,510,500

 $         2,750

 $             (11,385)

 $       (8,635)

 

 

 

 

 

 

 



The accompanying notes are an integral part of these condensed financial statements.






KOPJAGGERS INC.

A Development Stage Company

NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

(Unaudited)


NOTE 1 -  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 

(a)

Organization and Business:


KOPJAGGERS INC. (the “Company”) was incorporated in the State of Florida on February 23, 2010 for the purpose of raising capital that is intended to be used in connection with its business plan which is to buy artwork from throughout the world and sell these artworks through the Company's web site which is presently under construction.  Plans  may include a possible merger, acquisition or other business combination with an operating business.


The Company is currently in the development stage. All activities of the Company to date relate to its organization, initial funding, and share issuances.


 

(b)

Significant Accounting Policies:


Basis of Presentation

Basis :

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these condensed financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2012 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the “SEC”).


The results of operations for the nine month period ended September 30, 2013 are not necessarily indicative of the results for the full fiscal year ending December 31, 2013.



 

 

                  Use of Estimates:


The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual

       

 

                     Cash and Cash Equivalents


For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.


                        Income taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.


Any deferred tax asset is considered immaterial and has been fully offset by a valuation allowance because at this time the Company believes that it is more likely than not that the future tax benefit will not be realized as the Company has no current operations.


 

 

Loss per Common Share:


Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.


 

 

Fair Value of Financial Instruments:

The carrying value of cash, accounts payable and note payable – related party approximate their fair value due to the short period of these instruments.


       Stock Based Compensation:







Share-based Expense


ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.  Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.  Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).  


The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.  


Share-based expense for the nine months ended September 30, 2013 and 2012 was $0 and $0, respectively.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  


We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.


NOTE 2 -

    GOING CONCERN


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred losses of $11,385 since inception, has not yet produced revenues from operations, and has a working capital deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern.


The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. Management anticipates that it will be able to raise additional working capital through the issuance of stock and through additional loans and advances from investors.


The ability of the Company to continue as a going concern is dependent upon the Company’s ability to attain a satisfactory level of profitability and obtain suitable and adequate financing. There can be no assurance that management's plan will be successful.


NOTE 3 -  CAPITAL STOCK


The total number of shares of capital stock which the Company shall have authority to issue is now 20,000,000 shares consisting of common shares with no par value.


In July 2010, the Company issued a total of 500,000 shares to Kopjaggers Consulting, LLC for a total consideration of $200.


In November 2012, the Company issued a total of 25,500 shares to qualified investors for a total consideration of $2,550.


In September 2013 the Company increased its authorized share capital from 10,000,000 shares of common stock with no par value to 20,000,000 shares of common stock with no par value.  In that same month the Company completed a 20 for 1 forward stock split and as a result the issued common stock went from 525,500 shares to 10,510,000 shares of common stock.

 

NOTE 4 – NOTES PAYABLE – RELATED PARTY


In support of the Company’s efforts and cash requirements, it has relied on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders.  Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.  


The amounts advanced by a director are non-interest bearing, unsecured, with no fixed terms of repayment. At both September 30, 2013 and December 31, 2012, the balance in notes payable to related party was $8,685 and $2,825 respectively.







NOTE 5 – FEDERAL INCOME TAXES


The Company accounts for income taxes under the asset and liability method, whereby deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.


Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.  Significant components of the Company's deferred tax liabilities and assets as of September 30, 2013 are as follows:


Deferred tax assets:

 

 

   Federal and state net operating loss        

$

--

   Equity instruments issued for compensation

 

--

             Total deferred tax assets                

 

--

             Less valuation allowance                        

 

--

 

$

--


At September 30, 2013, the Company had a net operating loss carry–forward for Federal income tax purposes of $11,385 that may be offset against future taxable income through 2030.  No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets of approximately $3,870, calculated at an effective tax rate of 34%, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance.


Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.



NOTE 6 – SUBSEQUENT EVENTS


Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation no events have occurred requiring adjustment or disclosure.









Item 2.  Management’s Discussion and Analysis or Plan of Operation.


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:

increased competitive pressures from existing competitors and new entrants;

our ability to raise adequate working capital;

deterioration in general or regional economic conditions;

adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

loss of customers or sales weakness;

inability to achieve sales levels or other operating results;

the unavailability of funds for capital expenditures; and ,

 operational inefficiencies.


For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Factors That May Affect Our Results of Operations” in this document.

The following discussion and analysis should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this filing.


Background Overview


Kopjaggers, Inc. was incorporated on February 23, 2010 in the State of Florida. We commenced operations in July 2010. Kopjaggers, Inc. is a development stage company focused on the business of the buying and then the auctioning of artwork (more specifically, paintings and sculptures) from around the world through our website www.kopjaggers.com.

We recently launched our preliminary website which provides some basic corporate information. We expect that we will build out our website to have additional features for our expected audience of art collectors.

Our plan of operations is to build our website to be the leading site on the Internet for anyone interested in buying fine art from around the world.

Since our inception on February 23, 2010 through September 30, 2013, we have not generated any revenues and have incurred a net loss of $11,385.


As of the date of this we have only one officer and director acting as our sole employee, who we anticipate devoting only a small portion of his time to the company going forward. Additionally, even with the sale of securities, we will not have the financial resources needed to hire additional employees or meaningfully expand our business. We anticipate operating losses for at least the next 12 months. Even if we sell all the securities, the majority of the proceeds will be spent for advertising expenses and additional website development. Investors should realize that following this offering we will be required to raise additional capital to cover the costs associated with our plans of operation.







CRITICAL ACCOUNTING POLICIES

We prepare our condensed financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions.  On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our condensed financial statements.  


While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.


For a full description of our critical accounting policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2012 Annual Report on Form 10-K.


PLAN OF OPERATIONS


Our plan of operations is to build our website to be the leading site on the Internet for Americans interested in buying fine art from around the world.

The Auction Business


The purchase and sale of works of art in the international art market are effected through numerous dealers, the major auction houses, the smaller auction houses and also directly between collectors. Although dealers and smaller auction houses generally do not report sales figures publicly, the Company believes that dealers account for the majority of the volume of transactions in the international art market.

Kopjaggers, Inc. intends to auction unique items, and their value, therefore, can only be estimated prior to sale. Kopjaggers’ principal role as an auctioneer will be to identify, evaluate, and appraise works of art; to stimulate purchaser interest through professional marketing techniques; and to match sellers and buyers through the auction process.  In its role as auctioneer, the Company intends to also function as an agent accepting property on consignment from its selling clients. The Company will sell property as agent of the consignor, billing the buyer for property purchased, receiving payment from the buyer, and remitting to the consignor the consignor's portion of the buyer's payment after deducting the Company's commission, expenses, and applicable taxes. All buyers will pay a premium (known as the buyer's premium) to Kopjaggers, Inc. on auction purchases.  Kopjaggers will also charge consignors a selling commission. Our sources of revenue will include transaction fees and advertising from our website.

Kopjaggers’ operating revenues will be significantly influenced by a number of factors not within the Company's control, including: the overall strength of the international economy and financial markets and, in particular, the economies of the United States, the United Kingdom, and the major countries of continental Europe and Asia (principally Japan and Hong Kong); political conditions in various nations; the presence of export and exchange controls; local taxation, including taxes on sales of auctioned property; competition; and the amount of property being consigned to art auction houses.

Kopjaggers expects that our business is seasonal, with peak revenues and operating income occurring in the second and fourth quarters of each year as a result of the traditional spring and fall art auction seasons.

The Auction Market


Competition in the international art market is intense.  A fundamental challenge facing any auctioneer or dealer is to obtain high quality and valuable property for sale.  The owner of a work of art wishing to sell it has three options: sale or consignment to, or private brokerage by, an art dealer; consignment to, or private sale by, an auction house; or private sale to a collector or museum without the use of an intermediary. The more valuable the property, the more likely it is that the owner will consider more than one option and will solicit proposals from more than one potential purchaser or agent, particularly if the seller is a fiduciary representing an estate or trust.

A complex array of factors may influence the seller's decision. These factors include: the level of expertise of the dealer or auction house with respect to the property; the extent of the prior relationship, if any, between the seller and the firm; the reputation and historic performance by a firm in attaining high sale prices in the property's specialized category; the breadth of staff expertise; the desire for privacy on the part of sellers and buyers; the amount of cash offered by a dealer or other purchaser to purchase the property outright compared with the estimates given by auction houses; the time that will elapse before the seller will receive sale proceeds; the desirability of a public auction in order to achieve the maximum possible price (a particular concern for fiduciary sellers); the amount of






commission proposed by dealers or auction houses to sell a work on consignment; the cost, style and extent of presale marketing and promotion to be undertaken by a firm; recommendations by third parties consulted by the seller; personal interaction between the seller and the firm's staff; and the availability and extent  of related services, such as a tax or insurance appraisal and short-term financing. The Company's ability to obtain high quality and valuable property for sale depends, in part, on the relationships that certain employees of the Company, particularly its senior art specialists and management, have established with potential sellers.

It is not possible to measure the entire international art market or to reach any conclusions regarding overall competition because dealers and smaller auction firms frequently do not publicly report annual sales totals.

Our Website


Our plan of operations is to develop a comprehensive website for AmMR. consumers interested in purchasing fine arts from around the world.

We plan to generate revenues from advertising fees from companies seeking to reach our expected audience of purchasers.

We plan to generate revenues from advertising fees from companies seeking to reach our expected audience.  Our audience is expected to include educated and high net worth individuals. Our preliminary advertising plan will be to join an advertising network such as Google’s AdSense. AdSense is an ad serving application run by Google Inc. Website owners can enroll in this program to enable text, image, and video advertisements on their websites. These advertisements are administered by Google and generate revenue on either a per-click or per-impression basis.

Many websites use AdSense to monetize their content; it is a very popular advertising network. AdSense has been particularly important for delivering advertising revenue to small websites that do not have the resources for developing advertising sales programs and sales people. To fill a website with advertisements that are relevant to the topics discussed, webmasters implement a brief script on the websites' pages.

There are several other competing programs that we could make application to in the event we are unable to secure a relationship with Google’s AdSense.

Some of the features we are considering include a search engine for artwork that is currently for sale from our own inventory as well as for featured artists with whom we will develop exclusive rights to sell their art.

Growth Strategy


We have a plan to grow our business which requires us to build an audience for our website. Key elements of our strategy include:

Build Strong Brand Awareness.  We believe that it is essential to establish a strong brand with Internet users and within certain segments of the art industry.  We intend to utilize online marketing such as search engine placement and social to promote our brand to consumers. We intend to market our company at various art events, at art shows and exhibitions, and through various offline channels such as magazines and radio subject to available financing. In addition, we believe that we build brand awareness by product excellence that is promoted by word-of- mouth.

Develop an audience:  In order to attract users to our products, we intend to utilize online and offline advertising campaigns to grow our business as funds allow. We believe that we also can attract more users by giving our visitors an excellent user experience that is results in good word by word-of-mouth among our actual and intended customers.

Quality User Base:  We believe that, in addition to increasing our reach, we need to develop a quality our user base. We believe that high quality content will attract a quality user base.

The following are a sample of the creative approaches and tactics we may use to build our brands:

Media advertisements (newspaper and magazine) that will be placed with the advice of media buying professionals;

Improved electronic presence (enhanced website and e-mail communication).

Competition


There are few if any barriers to entry into Internet commerce.   Competition is intense in our industry. The company competes with other websites that are dedicated to art sales.  Our business is highly competitive. We also compete with traditional media and auction houses catering to the art market. All of our competitors are more experienced and have greater financial resources than our company as we have generated no revenue and has limited assets and experience.







It is our estimate that important factors affecting our ability to compete successfully include:


trade and consumer promotions;

rapid and effective acquisition of works of art; and ,

branded - product advertising; and pricing.


FACTORS THAT MAY AFFECT OUR FUTURE OPERATING RESULTS


We are subject to various risks which may materially harm our business, financial condition and results of operations. You should carefully consider the risks and uncertainties described below and the other information in this filing before deciding to purchase our common stock. If any of these risks or uncertainties actually occurs, our business, financial condition or operating results could be materially harmed.


LIQUIDITY AND CAPITAL RESOURCES


At September 30, 2013, the Company did not have adequate cash resources to meet current obligations.  The Company is currently financing its operations primarily through loans and advances from the majority shareholder.  We do not believe we can currently satisfy our cash requirements for the next twelve months with our current expected revenue, and rely on our majority shareholder’s support and the expected capital to be raised in private placement and sales of our common stock.  Our shareholder has made a commitment to fund operating expenses as we develop our operating plan, however there is no written commitment. Additionally, we may begin to use our common stock as payment for certain obligations and secure work to be performed.  

At September  30, 2013 and December 31, 2012, the Company had negative working capital. Working capital as of both dates consisted entirely of cash, which was less than our current liabilities. The Company has limited operating history, which consists of losses, and it is not in the foreseeable future that revenues may be generated to meet current obligations.

At September 30, 2013, the Company has minimal cash, increasing accrued liabilities, no revenues, and a history of operating losses.  Absent an outside capital infusion, the Company will seek funding from traditional banking and other private sources.  There are no assurances that any manner of securities offering (debt or equity) will be successful, and the Company’s revenues are inadequate to provide for the growth projected in this filing.  We may be reliant on additional shareholder contributions, including from management, to continue operations.  We are hopeful that the market awareness and financial transparency afforded through becoming a reporting company will assist us in procuring additional investment capital or loans.

As reflected in the audited financial statements, as of December 31, 2012, our auditor’s report included an explanatory paragraph indicating concerns that raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company's ability to become profitable and or attain funding through additional sale of common stock or debt financing.  The unaudited financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

We have no known demands or commitments and are not aware of any events or uncertainties as of September 30, 2013 and December 31, 2012 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

We had no material commitments for capital expenditures as of September 30, 2013 or December 31, 2012.


OFF BALANCE SHEET ARRANGEMENTS


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

As of September 30, 2013, we have no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.







Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures.


(a)

  Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures.


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 defined in  Rules13a-15(e) and 15d-15(e) procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are ineffective, as of June 30 , 2013, in ensuring that material information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.   Material weaknesses identified were: lack of a functioning audit committee due to a lack of a majority of independent members; lack of a majority of outside directors on the board of directors; inadequate segregation of duties consistent with control objectives and affecting the functions of authorization, recordkeeping, custody of assets, and reconciliation; and, management dominated by a single individual without adequate compensating controls.

.



(b)   Changes in Internal Control over Financial Reporting


There were no changes in our system of internal controls over financial reporting during the nine months ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


For a full discussion of our internal control over financial reporting, please refer to Item 9A, “Controls and Procedures” in our 2012 Annual Report on Form 10-K.


PART II – OTHER INFORMATION

Item 1.  Legal Proceedings.


None.


Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.


None.


Item 3.  Defaults Upon Senior Securities.


None.


Item 4.  Mine Safety Disclosures.


Not applicable.


Item 5.  Other Information.


None.


Item 6. Exhibits and Reports on Form 8-K.


 

 

 

 

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

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act   

 


* Incorporated by reference



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.





By:/s/ John Eggermont

 

John. Eggermont, President,

Chief Executive Officer

Chief Financial Officer


Date: November 8, 2013