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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
  o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ___to___
 Commission File Number 0-50187
 KUHLMAN COMPANY, INC.
  Nevada
    
    86-0883289(State or other jurisdiction of
incorporation or organization)
    
    (IRS Employer Identification No.)701 North Third Street, Suite B-1,
Minneapolis, Minnesota
    
    55401(Address of Principal Executive Offices)
    
    (Zip Code)(612) 338-5752(Issuers telephone number)
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TABLE OF CONTENTS
 PagePART I
    
    Financial InformationItem 1
    
    Financial Statements (Unaudited):Condensed
Consolidated Balance Sheets as of October 1, 2005 and January 1,
2005
    
    
    3Condensed
Consolidated Statements of Operations for the three months and nine
months ended October 1, 2005 and September 30, 2004
    
    
    4Condensed
Consolidated Statements of Cash Flows for the nine months ended
October 1, 2005 and September 30, 2004
    
    
    5Notes to Condensed
Consolidated Financial Statements at October 1, 2005 and September
30, 2004
    
    
    6Item 2
    
    Management's Discussion and Analysis or Plan of Operation
    
    
    13Item 3
    
    Controls and Procedures
    
    
    17PART II
    
    Other InformationItem 1
    
    Legal Proceedings
    
    
    19Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19Item 6
    
    Exhibits
    
    
    20Certification of Principal Executive OfficerCertification of Principal Accounting OfficerSection 1350 Certification of Chief Executive OfficerSection 1350 Certification of Princiapl Executive Officer
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Kuhlman Company, Inc.
Condensed Consolidated Balance Sheets
(UNAUDITED)
 October 1, 2005
    
    
    January 1, 2005AssetsCurrent assets:Cash
    
    $
    3,345,369
    
    
    $
    518,919Accounts receivable  net of allowance for
doubtful accounts of $2,000
    
    
    125,562
    
    
    
    50,074Inventories
    
    
    4,729,916
    
    
    
    1,514,591Prepaid expenses
    
    
    830,537
    
    
    
    20,808Due from officer
    
    
    
    
    
    
    7,731Other current assets
    
    
    
    
    
    
    36,326Total current assets
    
    
    9,031,384
    
    
    
    2,148,449Furniture, fixtures and leasehold improvements
    
    
    1,246,387
    
    
    
    323,131Less accumulated depreciation and amortization
    
    
    (256,164
    )
    
    
    (64,610
    )Furniture, fixtures and leasehold
improvements  net
    
    
    990,223
    
    
    
    258,521Other assets  lease deposits
    
    
    307,733
    
    
    
    28,022Total assets
    
    $
    10,329,340
    
    
    $
    2,434,992Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    1,132,129
    
    
    $
    587,712Notes payable
    
    
    741,010
    
    
    
    621,570Other accrued liabilities
    
    
    279,716
    
    
    
    224,748Total current liabilities
    
    
    2,152,855
    
    
    
    1,434,030Shareholders equity:Common Stock ($.001 par value; 50,000,000
shares authorized; 1,329,912 and 0 shares,
respectively, issued and outstanding) and
Preferred Stock ($.001 par value; 22,000,000
shares authorized; 20,357,211 and 10,013,228,
respectively, issued and outstanding)
    
    
    21,687
    
    
    
    10,013Additional paid-in capital
    
    
    14,081,336
    
    
    
    2,889,925Accumulated deficit
    
    
    (5,926,538
    )
    
    
    (1,898,976
    )Total shareholders equity
    
    
    8,176,485
    
    
    
    1,000,962Total liabilities and shareholders equity
    
    $
    10,329,340
    
    
    $
    2,434,992
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Kuhlman Company, Inc.
Condensed Consolidated Statements of Operations
For the Three Months and Nine Months Ended October 1, 2005 and September 30, 2004
(UNAUDITED)
 Three Months Ended


    
    
    Nine Months EndedOctober 1, 2005
    
    
    September 30, 2004
    
    
    October 1, 2005
    
    
    September 30, 2004Sales
    
    $
    1,188,339
    
    
    $
    1,105,340
    
    
    $
    3,880,056
    
    
    $
    3,011,767Cost of sales
    
    
    1,060,152
    
    
    
    864,463
    
    
    
    2,783,958
    
    
    
    1,897,550Gross profit
    
    
    128,187
    
    
    
    240,877
    
    
    
    1,096,098
    
    
    
    1,114,217Store operating expenses
    
    
    732,686
    
    
    
    404,663
    
    
    
    1,984,361
    
    
    
    673,078General and administrative
    
    
    1,337,224
    
    
    
    405,931
    
    
    
    3,020,186
    
    
    
    1,092,758Loss from operations
    
    
    (1,941,723
    )
    
    
    (569,717
    )
    
    
    (3,908,449
    )
    
    
    (651,619
    )Other income (expense):Interest expense
    
    
    (52,242
    )
    
    
    (100,648
    )
    
    
    (126,850
    )
    
    
    (212,942
    )Other income
    
    
    7,575
    
    
    
    5,765
    
    
    
    7,737
    
    
    
    6,810Net loss
    
    $
    (1,986,390
    )
    
    $
    (664,600
    )
    
    $
    (4,027,562
    )
    
    $
    (857,751
    )Basic and diluted loss per share
    
    $
    (0.09
    )
    
    $
    (0.11
    )
    
    $
    (0.22
    )
    
    $
    (0.14
    )Weighted average number of shares
Outstanding  Basic and diluted
    
    
    21,495,566
    
    
    
    6,311,191
    
    
    
    18,341,470
    
    
    
    6,303,730
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Kuhlman Company, Inc.
Condensed Consolidated Statements of Cash Flow
For the Nine Months Ended October 1, 2005 and September 30, 2004
(UNAUDITED)
 2005
    
    
    2004Cash flows from operating activities:Net loss
    
    $
    (4,027,562
    )
    
    $
    (857,751
    )Adjustments to reconcile net loss to net
cash used in
operating activities:Non-cash interest charges
    
    
    42,926
    
    
    
    40,203Warrants issued for services
    
    
    48,400
    
    
    
    Depreciation and amortization
    
    
    191,554
    
    
    
    37,186(Increase) decrease in:Accounts receivable, net
    
    
    (75,488
    )
    
    
    117,391Inventories
    
    
    (3,215,325
    )
    
    
    (676,625
    )Prepaid expenses
    
    
    (809,728
    )
    
    
    (14,419
    )Due from officer
    
    
    7,731
    
    
    
    Other current assets
    
    
    36,326
    
    
    
    Long-term lease deposits
    
    
    (279,711
    )
    
    
    (14,120
    )Increase (decrease) in:Accounts payable
    
    
    544,417
    
    
    
    (196,868
    )Other accrued liabilities
    
    
    54,968
    
    
    
    225,301Net cash used in operating activities
    
    
    (7,481,492
    )
    
    
    (1,339,702
    )Cash flows from investing activities:Capital expenditures
    
    
    (923,256
    )
    
    
    (155,426
    )Net cash used in investing activities
    
    
    (923,256
    )
    
    
    (155,426
    )Cash flows from financing activities:Net proceeds from issuance of stock
    
    
    11,154,686
    
    
    
    793,769Net proceeds from exercise of warrants
    
    
    
    
    
    
    112,798Net proceeds from notes payable
    
    
    76,512
    
    
    
    890,251Net cash provided by financing activities
    
    
    11,231,198
    
    
    
    1,796,818Increase in cash
    
    
    2,826,450
    
    
    
    301,690Cash  beginning of period
    
    
    518,919
    
    
    
    60,428Cash  end of period
    
    $
    3,345,369
    
    
    $
    362,118Supplemental disclosure of non-cash
financing activities:Distribution of non-cash assets
    
    
    
    
    
    $
    231,820Warrants issued for services
    
    $
    48,400
    
    
    
    
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KUHLMAN COMPANY, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
October 1, 2005 and September 30, 2004
(UNAUDITED)
 A. Summary of Significant Accounting Policies
 Basis of Presentation
   Use of Estimates
  Change in Capitalization and Change in Reporting Entity
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Cash Concentrations
  Accounts Receivable, credit risk and allowance for doubtful accounts
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Valuation of Inventories
   Revenue Recognition
  Income Taxes
  Segment Reporting
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Stock-Based Compensation
   Three Months Ended
    
    
    Nine Months EndedOctober 1, 2005
    
    
    September 30, 2004
    
    
    October 1, 2005
    
    
    September 30, 2004Net loss:As reported
    
    
    ($1,986,390
    )
    
    
    ($664,600
    )
    
    
    ($4,027,562
    )
    
    
    ($857,751
    )Pro forma
    
    
    ($2,020,683
    )
    
    
    ($664,600
    )
    
    
    ($4,334,279
    )
    
    
    ($857,751
    )Basic and diluted
net loss per share:As reported
    
    
    ($0.09
    )
    
    
    ($0.11
    )
    
    
    ($0.22
    )
    
    
    ($0.14
    )Pro forma
    
    
    ($0.09
    )
    
    
    ($0.11
    )
    
    
    ($0.24
    )
    
    
    ($0.14
    )
  Three Months Ended
    
    
    Nine Months EndedOctober 1, 2005
    
    
    September 30, 2004
    
    
    October 1, 2005
    
    
    September 30, 2004Risk-free interest rate
    
    
    3.84
    %
    
    
    
    
    
    
    3.84
    %
    
    
    Expected life of
options granted
    
    4-5 years
    
    
    
    
    
    4-5 years
    
    
    Expected volatility
    
    
    60.0
    %
    
    
    
    
    
    
    60.0
    %
    
    
    Expected Dividend Yield
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    
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New Accounting Pronouncement
  Earnings per Share
   Three Months Ended
    
    
    Nine Months EndedOctober 1, 2005
    
    
    September 30, 2004
    
    
    October 1, 2005
    
    
    September 30, 2004Net loss
    
    
    ($1,986,390
    )
    
    
    ($664,600
    )
    
    
    ($4,027,562
    )
    
    
    ($857,751
    )Weighted average shares outstanding
    
    
    21,495,566
    
    
    
    6,311,191
    
    
    
    18,341,470
    
    
    
    6,303,730Net loss per share  basic and diluted
    
    
    ($0.09
    )
    
    
    ($0.11
    )
    
    
    ($0.22
    )
    
    
    ($0.14
    )
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B. Notes Payable
      C. Commitments and Contingencies
 Legal Proceedings
  Leases
  11




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Equity Financing
   Subsequent Event
  12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 Overview:
    Results of Operations:
    13




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Liquidity and Capital Resources:
  14




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Safe Harbor Statement:
  
    
    Our continued growth depends on our ability to open and operate stores on a profitable
basis and on managements ability to manage our expansion. Our recent and planned expansion
includes the opening of stores in both existing and new geographic markets. Opening stores
in new markets has presented, and may continue to present, competitive and merchandising
challenges that are different from those faced by us in our existing geographic markets.
    
    Our planned expansion is dependent upon a number of factors, including our ability to
locate and obtain favorable store sites, negotiate acceptable lease terms, obtain adequate
merchandise supply and hire and train qualified management and employees. Factors beyond
our control may also affect our ability to expand, including general economic and business
conditions affecting consumer spending.
    
    Our continued growth will place an increasing strain on our resources, and we could
experience difficulties relating to a variety of operational matters, including hiring,
training and managing an increasing number of employees, obtaining sufficient quantities of
merchandise from vendors, obtaining sufficient material and contract manufacturers to
produce our products, expanding our distribution facility and enhancing our financial and
operating systems. There can be no assurance that we will be able to manage our growth
effectively. Any failure to manage growth could have a material adverse effect on our
business, financial conditions and results of operations.
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
    
    Our business is seasonal by nature, with the third and fourth quarters accounting for
the largest percentage of annual net sales. It is therefore important that we successfully
execute our business plan and operate our business during that time. Outside of the
holiday season, monthly sales generally do not fluctuate widely within each store given our
one price strategy and lack of discounting. Nonetheless, our quarterly results of
operations in the future may fluctuate significantly as a result of a variety of factors,
including the timing of store openings, the amount of revenue contributed by new stores,
changes in the mix of products sold, overstocking or under-stocking of merchandise, the
timing and level of markdowns, the timing of store closings, expansions and relocations,
competitive factors and general economic conditions.
    
    Currently, all of our merchandise is manufactured and sourced outside the United States,
principally in Italy and Turkey. As a result, our operations are subject to the risks
generally associated with doing business abroad, such as foreign government regulations,
political instability, regulations relating to imports, the imposition of duties, taxes and
other charges on imports, significant fluctuations in the value of the dollar against
foreign currencies or restrictions on the transfer of funds.
    
    We have experienced delays in receipt of merchandise due to import regulations. The
inability of a contract manufacturer to ship orders in a timely manner or the inability of
us to receive orders in a timely manner could cause us to fail to meet the merchandise
requirements of its stores for those items, which could result in lost sales and
dissatisfied customers. Any significant interruption in our foreign sourcing would have a
material adverse effect on our business, financial condition and results of operations.
 Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
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ITEM 3. CONTROLS AND PROCEDURES
   
    
    implemented polices and procedures to address the communicated items;
    
    invested in internal reporting systems;
    
    invested in accounting and reporting systems;
    
    implemented plans to hire additional accounting staff;
    
    formalized our internal controls and procedures in accordance with the Securities and
Exchange Commissions rules on implementing the internal controls reporting requirements
included in Section 404 of the Sarbanes-Oxley Act of 2002; and
    
    engaged a third party firm to assist in the process of becoming Section 404 compliant.
  .
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PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 2. SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 6. EXHIBITS
  Exhibit No.
    
    Description31.1
    
    Rule 13a-14(a)/15d-14(a) certification of principal executive officer31.2
    
    Rule 13a  14(a)/15d-14(a) certification of principal accounting officer32.1
    
    Section 1350 certification of chief executive officer32.2
    
    Section 1350 certification of principal accounting officer
 SIGNATURES
  KUHLMAN COMPANY, INC.Date: November 14, 2005
    By:
    /s/  Scott KuhlmanTitle: Chief Executive Officer Date:  November 14, 2005
    By:
    /s/  Jon GangelhoffTitle: Chief Financial Officer(Principal Accounting Officer) 19