**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-Q**

** **

*(Mark One)*

   [x]     Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterlyperiod ended**June 30, 2014**.

 

   [ ]     Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transitionperiod from                  to                 .

 

Commission file number: **333-17627**

 

**SKAJAQUODA GROUP, INC.**

 (Exact name of registrantas specified in its charter)

 

**Delaware**

(State or other jurisdiction of

incorporation or organization)

**45-2117356**

 (I.R.S. Employer

Identification No.)

 

**1204 11th Avenue, Clarkfield,Minnesota, 56223**

 (Address of principalexecutive offices)    (Zip Code)

 

**(302) 504-4448**

 (Registrant’stelephone number, including area code)

 

**1001 Society Drive, Claymont, Delaware19703**

(Former name, former addressand former fiscal year, if changes since last report)

 

Indicate by check mark whether the registrant: (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes []  No [ x ].

 

Indicate by check mark whether the registrant has submitted electronicallyand posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit and post such files). Yes [x]   No [ ]

 

Indicate by check mark whether the registrantis a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined by Rule12b-2 of the Exchange Act:

 

Large accelerated filer [ ]   Accelerated filer [ ]  Non-accelerated filer [ ]  Smaller reporting company [x]

 

Indicate by check mark whether the registrantis a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes [ ]   No [x]****

 

Indicate the number of shares outstanding of each of the issuer’sclasses of common stock, as of the latest practicable date.

 

The number of shares outstanding of the issuer’s common stock,$0.00001 par value (the only class of voting stock), at August 19, 2014, was 1,000,000.

 

 
1 
**TABLE OF CONTENTS**

**PART 1- FINANCIAL INFORMATION**
Item1.   Financial Statements:3Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations4Item 3. Quantitative and Qualitative Disclosures about Market Risk10Item 4.  Controls and Procedures10
 

 

 

**PART II-OTHER INFORMATION**

 
 Item 1.Legal Proceedings10Item 1A.   Risk Factors11Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds11Item 3.  Defaults Upon Senior Securities11Item 4. Mine Safety Disclosures11Item 5.   Other Information11Item 6.  Exhibits11 Signatures12
 

 
2 
**PART I – FINANCIAL INFORMATION**

 

**ITEM 1.     FINANCIALSTATEMENTS**

 

As used herein, the terms “Company,” “we,”“our,” and “us” refer to Skajaquoda Group, inc., a Delaware corporation, and our subsidiaries and predecessors,unless otherwise indicated. In the opinion of management, the accompanying unaudited financial statements included in this Form10-Q reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results ofoperations for the periods presented. The results of operations for the periods presented are not necessarily indicative of theresults to be expected for the full year.

 
Unaudited Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013F-1Unaudited Consolidated Statements of Operations for the three months ended June 30, 2014 and 2013 and for the period from April 29, 2011 (Inception) through June 30, 2014.F-2Unaudited Consolidated Statements of Cash Flows for the three months ended June 30, 2014 and 2013 and for the period from April 29, 2011 (Inception) through June 30, 2014.F-3Unaudited Consolidated Notes to Financial StatementsF-4
 

 
3 
 
Skajaquoda Group, Inc.(A Development Stage Entity)Consolidated Balance Sheet (Unaudited)June 30, 2014 and December 31, 2013        **June 30, 2014**   **December 31, 2013**    **(Unaudited)**   **(Unaudited)** Assets        Current assets        Cash and cash equivalents $884,459  $884,459 Accounts receivable  180,253   179,545 Inventory  487   487 Total current assets  1,065,199   1,064,491 Noncurrent assets        Equity Stakes in other companies  100   100 Property, plant, and equipment, Net  901   901 Goodwill  50,000   50,000 Intangible Assets  13,500,000   13,500,000 Interest accrued  3,052   3,052 Loan receivable  41,020   41,020 Total noncurrent assets  13,595,073   13,595,073 Total assets $14,660,272  $14,659,564          Liabilities and Stockholders’ Equity        Current liabilities        Current income taxes payable $—    $—   Deferred tax liability  4,855,897   4,855,897 Loan  71,447   71,447 Accounts payable  340,538   315,513 Total current liabilities  5,267,882   5,242,857 Total liabilities  5,267,882   5,242,857          Stockholders' Equity        Common stock, $0.00001 par value,        10,000,000 shares authorized, 1,000,000        shares issued and outstanding at        June 30, 2014 and December 31, 2013  10   10 Additional paid-in capital  20,129   20,129 Accumulated deficit during the development stage  9,372,251   9,396,568 Total stockholders’ equity  9,392,390   9,416,707          Total liabilities and stockholders’ equity $14,660,272  $14,659,564          The accompanying notes are an integral part of these financial statements.        F-1 
 
**Skajaquoda Group, Inc.**(A Development Stage Entity)Consolidated Statement Of Operations (Unaudited)For the three months ended June 30, 2014 and 2013For the periods from April 29, 2011 (Inception) to June 30, 2014         Three Months Ended June 30, 2014 Three Months Ended June 30, 2013 Cumulative From April 29, 2011 (Inception) to June 30, 2014  (Unaudited) (Unaudited) (Unaudited)**Revenue**            Product sales  0   0   16,606,234 Services  —     1,430,570   14 Services - related party $0  $   $131,932 Interest income  —     513   3,121 Commission income  —     —     22 **Total revenue**  **0**   **1,430,570**   **16,741,323** Cost of goods sold  0   0   2,316,939 **Gross profit**  **0**   **1,430,570**   **14,424,384**              **Expenses**            General administrative  0   11,110   196,237 **Total expenses**  **0**   **11,110**   **196,237**              **Total income before income taxes**  **0**   **1,419,460**   **14,228,147** Income tax expense  0   0   0 Deferred tax expense  —     0   4,855,897 **Net income (loss)** **$****0**  **$****1,419,460**  **$****9,372,250**              **Earnings per share**            Basic $(0.00)  $1.42     Diluted $(0.00)  $1.42     **Weighted average common shares**            Basic  1,000,000   1,000,000     Diluted  1,000,000   1,000,000                  The accompanying notes are an integral part of these financial statements.            F-2 
 
**Skajaquoda Group, Inc.**(A Development Stage Entity)Consolidated Statement Of Cash Flows (Unaudited)For the three months ended June 30, 2014 and 2013For the periods from April 29, 2011 (Inception) to June 30, 2014         Three Months Ended June 30, 2014 Three Months Ended June 30, 2013 Cumulative From April 29, 2011 (Inception) to June 30, 2014**Cash flow from operating activities**            Net income (loss) $   $1,419,458  $9,372,250 **Adjustments to reconcile net income to net cash**            **provided by operating activities:**            Depreciation  —         410 **Changes to Assets and Liabilities:**            Increase (Decrease) in accounts receivable      371,404   (180,253)Increase (Decrease) in Accounts payable      (562,751)   340,538 Increase (Decrease) in Inventory assets  —     6,228   (486)Increase (Decrease) in deferred tax liability  —         4,855,897 Interest Accrued  —         (3,052)Increase (Decrease) in loan  —         71,447 **Net cash provided by operating activities** **$****—  **  **$****1,234,339**  **$****14,456,751**              **Net cash provided by investing activities**            Purchase of property and equipment  0   —     (1,311)Purchase of Goodwill  —     (50,000)   (50,000)Acquired intangible assets  —     (1,000,000)   (13,500,000)Cash flow from investing activities  —     (1,028)   (100)Issuance of loan receivable  0   —     (41,020)**Cash flow used in investing activities** **$****—  **  **$****(1,051,028) **  **$****(13,592,431****)**             **Cash flow from financing activities**            Issuance of common stock  0   0   20,139 Payment of deferred offering costs  0   0   0 Proceeds from demand loans from related party  0   0   0 Payment to demand loans from related party  0   (5,600)   0 **Cash flow provided by financing activities** **$****0**  **$****(5,600)**  **$****20,139**              **Net increase in cash and cash equivalents**  —     177,711   884,459              **Cash and cash equivalents at beginning of period**  884,459   448,707   0              **Cash and cash equivalents at end of period** **$****884,459**  **$****626,431**  **$****884,459**              **Supplemental Cash Flow Information**            Interest paid $0  $0  $0 Taxes paid $0  $0  $0              The accompanying notes are an integral part of these financial statements.            
**Skajaquoda Group, Inc.**
F-3 
 

**(A Development Stage Company)**

**Unaudited ConsolidatedNotes to Financial Statements as of June 30, 2014**

**1. Incorporation and Operations**Skajaquoda Group Inc. ("Skajaquoda" or the "Company") is domiciled in Delaware, and commenced operations onApril 29, 2011 (Inception). The Company plans to become a registered investment advisor. The company is a licensed metals retailerin the state of Delaware and started offering the sale and storage of precious metals to its clients. We see this service as apart of our planned investment management service and allows us to provide our clients with a broader range of investment opportunities.Based on the Company's business plan, it is a development stage company since planned principle operations have not yet commenced.Accordingly, the Company has prepared its financial statements in accordance with accounting principles generally accepted in theUnited States of America ("GAAP") that apply to developing enterprises. As a development stage entity, the Company disclosesits retained earnings during the development stage and the cumulative statements of operations and cash flows from commencementof development stage to the current balance sheet date. The development stage began on April 29, 2011, when the Company was organized.During the quarter ended September 30, 2013, The Skajaquoda Group moved their headquarters from Claymont, Delaware to a much largerbuilding in Clarkfield, Minnesota. The new headquarters will house Skajaquoda and their research facility. The relocation to alarger building will be a valuable asset for growth in the market and the overall expansion of the company.

The new 144.000 square-foot building allows Skajaquodato open a new research facility. The expansion benefits the Skajaquoda Group because it allows for greater and more advanced researchand development, which will enable the company to develop cutting edge technology for the future challenges and needs of our world’sgrowing population. Skajaquoda aims to evolve technological solutions that will minimize human pollution and global impact aswell as restore balance to our ecosystem. The expansion of their headquarters will also enable Skajaquoda to provide servicesand products to more clients, consequently diversifying their client base to a greater extent. Skajaquoda is an investment firmquoted on the OTC (ticker symbol: SKAJ) that invests according to its socially responsible investment policy. Furthermore, movingthe company to a larger headquarters will provide jobs, as the companies will need to recruit more employees to accommodate forthis expansion. The relocation of Skajaquoda’s headquarters is an important factor for the company, which has up to thispoint only been an investment company. Skajaquoda proudly announces that they will soon launch a completely new research programthat deals with renewable energy, which makes them a progressive company offering financial solutions, research, and developmentin renewable energy. Skajaquoda aims to begin operating its renewable research facility in their new headquarters before the endof the year. Skajaquoda plans to research and develop improvements for current renewable energy technology and take today’stechnology to the next level.
F-4 
 **2. Going Concern**The preparation of financial statements in accordance with GAAP contemplates that operations will be sustained for a reasonableperiod. The Company is in the development stage and is dependent on outside sources of financing for continuation of its operations.These conditions raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period.The company plans to improve its financial condition thru a private placement. However, there is no assurance that the companywill be successful in accomplishing this objective. Management believes that this plan provides an opportunity for the Companyto continue as a going concern. We cannot give any assurances regarding the success of management's plans. Our financial statementsdo not include adjustments relating to the recoverability of recorded assets or liabilities that might be necessary should we beunable to continue as a going concern.**3. Significant Accounting Policies***Cash and Cash Equivalents* - For purposes of the statements of cash flows, the Company considers all highly liquid investmentswith original maturities of three months of less to be cash equivalents. Cash and cash equivalents are stated at cost which approximatesfair value.*Accounts Receivable* - The Company grants credit to customers in the normal course of operations. Accounts receivables arebased on management's evaluation of outstanding receivables at year end. Allowance for doubtful accounts, if any, is provided basedon the review of outstanding receivables, historical experience and economic conditions. Uncollectible accounts are expensed inthe period such amounts are determined.*Property and Equipment* - Property and equipment are recorded at cost, less accumulated depreciation. Depreciation and amortizationon capital leases and property and equipment are determined using the straight line method over the estimated useful lives (usuallyten years) of the assets or terms of the leases. Expenditures for maintenance and repairs are expensed when incurred and bettermentsare capitalized. Gains and losses on the sale of property and equipment are reflected in operations.

*Loan Receivable*- Loans receivable are financial assets with fixed or determinable payments that are not quoted in an active market are measuredat amortized cost using the effective interest method, less any impairment. Loans receivable are assessed for indicators of impairmentat the end of each reporting period, and are considered to be impaired when there is objective evidence that, as a result of oneor more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investmenthave been affected.*Revenue*- Revenue is recognized as earned from the performance of services in accordance with SEC Staff Bulletin No. 104,"Revenue Recognition" ("SAB 104"). Under SAB 104, service revenues are recognized when persuasive evidenceof an arrangement exists, service has been performed, the sales price is fixed and determinable, and collectability is reasonablyassured.

*Income Taxes* - The Company followsthe asset and liability method of accounting for future income taxes. Under this method, future income tax assets and liabilitiesare recorded based on temporary differences between the carrying amount of assets and liabilities and their corresponding tax basis.In addition, the future benefits of income tax assets including unused tax losses, are recognized, subject to a valuation allowanceto the extent that it is more likely than not that such future benefits will ultimately be realized. Future income tax assets andliabilities are measured using enacted tax rates and laws expected to apply when the tax liabilities or assets are to be eithersettled or realized. As of June 30, 2014, the Company has deferred tax liabilities of $4,855,897. The Company's effective tax rateapproximates the Federal statutory rates.*Earnings Per Share* - Basic earnings per share is computed by dividing net income by the weighted average number of sharesof common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted averagenumber of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.The Company has no potentially dilutive common shares at June 30, 2014.
F-5 
*Other Comprehensive Income* - Other comprehensive loss represents the change in equity of an enterprise during a period fromtransactions from non-owner sources. The company has no accounts or transactions that give rise to other comprehensive income.*Fair Value* - The fair values of accounts receivable and taxes payable approximates their carrying values due to the short-termnature of these instruments. The fair value of loan receivable approximates its carrying value due the proximity of its issuancedate to the date of the accompanying financial statements.

*Use of Estimates* - The preparationof financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses duringthe reporting period. Actual results could differ from those estimates. Management believes that the estimates are reasonable.**4. Loan Receivable**On June 23, 2011, the Company disbursed $20,730 under a $25,000 line of credit ("Note") to an unrelated party. The unpaidprincipal of this line of credit shall bear simple interest at the rate of 5% per annum. Interest shall be calculated based onthe principal balance as may be adjusted from time to time to reflect additional advances made hereunder. The loan does not bearinterest in 2011. Interest on the unpaid balance of this Note shall accrue monthly beginning in January 1 2012 but shall not bedue and payable until June 22, 2016, when the principal balance of this Note becomes due and payable. No consideration was receivedfor this disbursement.

On June 30, 2012, the Company disbursed $20,290 under a loan ("Note") to an unrelated party. The unpaid principal ofthis loan shall bear simple interest at the rate of 5% per annum. Interest shall be calculated based on the principal balance asmay be adjusted from time to time to reflect additional advances made hereunder. Interest on the unpaid balance of this Note shallaccrue monthly but shall not be due and payable until June 30, 2014, when the principal balance of this Note becomes due and payable.No consideration was received for this disbursement.Accrued interest on both the loan receivable as at June 30, 2014 and December 31, 2013 was $3,052 and $3,052 respectively.

**5. Stockholders' Equity***Common Stock -*The Company is authorized to issue ten million (10,000,000) shares of shares of Common Stock, par value $.00001per share (the "Common Stock").As of June 30, 2014, ten million (10,000,000) shares of Common Stock, par value $.00001 per share, are authorized, of which 1,000,000shares are issued and outstanding.

All shares of the Company's Common Stockhave equal rights and privileges with respect to voting, liquidation and dividend rights. Each share of Common Stock entitles theholder thereof to:
F-6  ·One non-cumulative vote for each share held of record on all matters submitted to a vote of the stockholders;
 
 ·To participate equally and to receive any and all such dividends as may be declared by the Board of Directors out of funds legally available therefore; and
 
 ·To participate pro rata in any distribution of assets available for distribution upon liquidation.
Stockholders have no preemptive rights to acquire additional shares of Common Stock or any other securities. Common shares arenot subject to redemption and carry no subscription or conversion rights. All outstanding shares of Common Stock are fully paidand non-assessable.*Preferred Stock -*As of June 30, 2014, no shares of Preferred Stock are authorized and no shares are issued and outstanding.**6. Related Party Transactions**As of June 30, 2014 the outstanding amount of loan agreement between the Company and Einar Agustsson, the chief executive officerof the company is $71,447. The loan does not bear interest and is due on demand.

**7. Demand Loan Payable**Effective September 30, 2011, the Company entered into a loan agreement with a related party to borrow $110,000 to fund operations.The loan does not bear interest and is due on demand.**8. Acquisition Of Skajaquoda Limited**

During the three month period endedJune 30, 2013, the company acquired 100% of Skajaquoda Limited in Ireland for $50,000 which has been recorded as goodwill. Thecompany does not record impairment on goodwill for the three months ended June 30, 2014.**9. Income Taxes**

The Company uses the asset and liabilitymethod of accounting for deferred income taxes wherein deferred tax assets and liabilities are determined based on the expectedfuture tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and incometax reporting purposes at rates expected to be in effect when the differences are realized.During the three months ended June 30, 2013, deferred tax liability of $4,855,897 was recognized due to the acquisition of SkajaquodaLimited. Deferred tax liability was recognized on the revenue of $14,282,050 at the effective income tax rate of 34%.

 **10. EnergyResearch**

Skajaquoda Group inc. is trying to find a cost effectiveway to maintain superconductivity for use in generators, power distribution, energy storage and many other applications. Superconductorstransport electricity without resistance so there is no power loss due to friction or distances. If successful it will greatlyreduce carbon emissions and other pollutants and open up many scientific and technological possibilities that are hard to imaginetoday.
F-7 
 

**Item2.****MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND**

**RESULTS OF OPERATIONS**

                 

This *Management’s Discussion and Analysis of FinancialCondition and* *Results of Operations* and other parts of this current report contain forward-looking statementsthat involve risks and uncertainties. Forward-looking statements can also be identified by words such as “anticipates,”“expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-lookingstatements are not guarantees of future performance and our actual results may differ significantly from the results discussedin the forward-looking statements. Factors that might cause such differences include but are not limited to those discussed inthe subsection entitled *Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition* below.The following discussion should be read in conjunction with our financial statements and notes thereto included in this currentreport. Our fiscal year end is December 31.

**PLAN OF OPERATIONS:**

Our plan of operations for the next twelve months is to proceedwith the implementation of our business plan. We will strive to launch all aspects of our operations. We may require up to $200,000in additional financing to expand our operations as outlined in the table below, subject to our cash on hand and actual revenues.
**Goal****Expected Manner of occurance or Method of Achievement****Date When Steps Should Be Accomplished****Cost of Completion**Complete IA RegistrationComplete investment advisor registration process3 - 6 months$30,000Launch Marketing PhaseImplementation of markting plan3 - 6 months$70,000Create Corporate Identity and brand recognitionBuild our image as a trusted service provider6 - 18 months$50,000
Our total expenditures over the next twelve months are anticipatedto be approximately $150,000. Our cash on hand as of June 30, 2014 is $884,459

Our monthly expenses consist of rent, legal fees, accountingand audit fees. We are currently in the beginning stages of the investment advisor registration process which has created minorcosts.

All steps will be undertaken contemporaneously.

Limited operating history; need for additional capital

We cannot guarantee we will be successful in our businessoperations. Our business is subject to risks inherent in the establishment of a business enterprise, including limited capitalresources and possible cost overruns due to price and cost increases in services and products.

We have no assurance that future financing will be availableto us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expandour operations. Equity financing could result in dilution to shareholders.

**Long-Term Liquidity Needs**

We plan to meet our most significant liquidity needs beyondthe next 12 months through future cash flow, the private or public issuance of debt or equity securities. We cannot provide anyassurances that we will be able to access the capital markets on favorable terms, if at all.
4 
**Cash Requirements**

Our cash on hand as of June 30, 2014 is $884,459. However,we will require additional financing in order to proceed with some or all of our goals as projected at more than twelve (12) months.We presently do not have any arrangements for additional financing, and no potential lines of credit or sources of financing arecurrently available for the purpose of proceeding with any of our goals projected at more than twelve (12) months.

Any additional growth of the Company may require additionalcash infusions. We may face expenses or other circumstances such that we will have additional financing requirements. In such event,the amount of additional capital we may need to raise will depend on a number of factors. These factors primarily include the extentto which we can achieve revenue growth, the profitability of such revenues, operating expenses, research and development expenses,and capital expenditures. Given the number of programs that we have ongoing and not complete, it is not possible to predict theextent or cost of these additional financing requirements.

Notwithstanding the numerous factors that our cash requirementsdepend on, and the uncertainties associated with each of the major revenue opportunities that we have, we believe that our planof operation can build long-term value if we are able to demonstrate clear progress toward our objectives.

Progress in the development of our business plan will likelylend credibility to our plan to maintain profitability. We anticipate that we will hire several members to our sales, marketing,research and development, regulatory and administrative staff during the course of 2013 in order to fully implement our plans forgrowth.

The failure to secure any necessary outside funding wouldhave an adverse affect on our development and results therefrom and a corresponding negative impact on shareholder liquidity.

**Future Financings**

Our plan of operation calls for significant expenses in connectionwith the implementation of our business plan over the course of the next 24 months. For the next twelve months, management anticipatesthat the minimum cash requirements to fund our proposed goals and our continued operations will be at least $150,000. We plan toseek additional financing to meet our planned expenditures through a private placement of our common stock in the near future.These plans, if successful, will mitigate the factors which raise substantial doubt about the Company's ability to continue asa going concern. Obtaining additional financing would be subject to a number of factors, including development of our businessplan and interest in our company. These factors may make the timing, amount, terms or conditions of additional financing unavailableto us.

**RESULTS OF OPERATIONS**

**Results of Operations for the Three Months Ended June 30, 2014and 2013**

 

**Revenues**

 

We had revenues of $0 during the three months ended June 30, 2014,compared to $1,419,460 in revenues during the corresponding three month period ended June 30, 2013. The revenue came from productsales, consulting services and interest on loan assets.

Fluctuations in our revenues are primarilythe result of the nature of the business model we operate. The Company can neither predict or assess, nor prevent fluctuations.We attempt to offer services at competitive prices. Because of the unpredictable nature of fluctuations, we do not attribute fluctuationsto any particular item or event. Our business model is designed to respond to fluctuation with immediate change. We do not accountfor or analyze the fluctuations as we do not believe it to be a prudent use of resources, given our business model.

**Cost of Goods Sold**

We had cost of goods sold of $0 and $0 forthe three months ended June 30, 2014 and 2013 respectively.
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**Expenses**

 

We incurred operating expenses in the amount of $0 during the threemonths ended June 30, 2014, compared to $11,110 for the corresponding three months ended June 30, 2013. Expenses consisted primarilyof general operating expenses including professional fees. Our operating expenses are mostly attributable to our accounting andlegal expenses. Our Chief executive officer is currently not receiving salary so we did not have any significant costs associatedwith salary.

 

**Net Profit (Loss)**

 

We incurred a net income (loss) of $0 during the three months endedJune 30, 2014, compared to $1,419,460 during the corresponding three months ended June 30, 2013. This translates to income(loss) per share of $ 0.000 and $1.42 for the three months ended June 30, 2014 and 2013, respectively.

** **

**Results of Operations for the period from April 29, 2011 (Inception)to March 31, 2014**

 

**Revenues**

 

We had revenues of $16,741,323 for the period from April 29, 2011(Inception) to June 30, 2014. The revenue came from product sales, consulting services and interest on loan assets.

 

Fluctuations in our revenues are primarily the result of the natureof the business model we operate. The Company can neither predict or assess, nor prevent fluctuations. We attempt to offer servicesat competitive prices. Because of the unpredictable nature of fluctuations, we do not attribute fluctuations to any particularitem or event. Our business model is designed to respond to fluctuation with immediate change. We do not account for or analyzethe fluctuations as we do not believe it to be a prudent use of resources, given our business model.

**Cost of Goods Sold**

We had cost of goods sold of $2,316,939 forthe period from April 29, 2011 (Inception) to June 30, 2014.

**Expenses**

 

We incurred operating expenses in the amount of $196,237 for theperiod from April 29, 2011 (Inception) to June 30, 2014. Expenses consisted primarily of general operating expenses including professionalfees. Our operating expenses are mostly attributable to our accounting and legal expenses. Our Chief executive officer iscurrently not receiving salary so we did not have any significant costs associated with salary.

 

**Net Profit (Loss)**

 

We incurred a net profit of $9,372,250 for the period from April29, 2011 (Inception) to June 30, 2014

***LIQUIDITY AND CAPITAL RESOURCES***

Since its inception, the Company has financed its cash requirementsfrom the sale of common stock. Uses of funds have included activities to establish our business, professional fees and other generaland administrative expenses.

 

The Company’s principal sources of liquidity as of June 30,2014 consisted of $884,459 in cash equivalents.

**Off-Balance Sheet Arrangements**

The Company has no material transactions, arrangements, obligations(including contingent obligations), or other relationships with unconsolidated entities or other persons that have or are reasonablylikely to have a material current or future impact on its financial condition, changes in financial condition, results of operations,liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.
6 
**Market Risk**

In the normal course of business, the Company is exposedto foreign currency exchange rate and interest rate risks that could impact its results of operations. Substantial portion of thecompany's net sales, cost of sales and operating expenses could be denominated in foreign currencies. This exposes the Companyto risks associated with changes in foreign currency exchange rates that can adversely impact revenues, net income and cash flow.**Critical Accounting Policies and Estimates**

Management has identified the following policies and estimatesas critical to the Company's business operations and the understanding of the Company's results of operations. Note that the preparationof this report requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,disclosure of contingent assets and liabilities at the date of the Company's financial statements, and the reported amounts ofrevenue and expenses during the reporting period. Actual results could differ from those estimates, and the differences could bematerial.**Revenue Recognition**

SAB No. 104 requires that four basic criteria be met beforerevenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered;(3) the fee is fixed or determinable; and (4) collectibility is reasonably assured. Should changes in conditions cause managementto determine that these criteria are not met for certain future transactions, revenue recognized for a reporting period could beadversely affected.

**Goodwill**

The Company has recorded a goodwill of $50,000 due to acquisitionof Skajaquoda Limited during the three month period ended June 30, 2013.

**Accounting for Income Taxes**

The Company accounts for income taxes under the asset andliability method. Under this method, deferred assets and liabilities are recognized based on anticipated future tax consequencesattributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not berecoverable against future taxable income.

**Code of Ethics**

We have adopted a Code of Ethics and Business Conduct for Officers,Directors and Employees that applies to all of our officers, directors and employees.

**Investment Advisor Registration Process **

In recent years the registration system for Investment adviserswas overhauled. Previously, Investment advisers were required to register with the SEC, and with each state in which they did business.Today Investment advisers are regulated by either the SEC or the States, but not both. Of course, both groups of regulators maintainjurisdiction over the activities of these advisers, the change has been in the registration requirements.

Simplifying the structure, firms that have less than $25million of assets under continuous and regular management generally must register with the state or states in which they have aplace of business and in which they have clients, while firms that have more than $30 million under management must register withthe SEC. Between $25 and $30 million the firm is allowed to register with the SEC or applicable states. (There are other exceptionsto state registration, such as for firms doing business in 30 or more states and firms doing an Internet based business.) Firmsthat are registered with the SEC usually have to provide a copy of their Form ADV and pay a filing fee to states in which theyhave clients.
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**Filings**The main document in the registration of an investment adviser is Form ADV. All advisers now register with the SEC and the Stateselectronically through IARD, a secure Internet based data system. Setting Up an IARD Account is the first step in the registrationprocess. Once an adviser establishes an IARD account, the adviser can access Form ADV (Part 1) on IARD, complete this part of FormADV, and submit it electronically through IARD to the SEC. Part II of Form ADV is completed in paper form as discussed below. The SEC generally has 45 days after receipt of the Form ADV to declare an applicant's registration effective. The SEC will mailan Effective Order to an adviser once an adviser's registration is declared effective. An adviser can also check on IARD underthe heading "Registration Status" to see if its registration has been declared effective by the SEC. The process forState registered advisers varies from state to state, but is similar to the SEC process.Form ADV has two parts. **Part 1** asks for information about an adviser's business, the persons who own or control the adviser, and whether theadviser or certain of its personnel have been sanctioned for violating the securities laws or other laws. Part 1 is available inelectronic format and is both filed and amended through IARD. See the General Instructions to Form ADV (No. 4) for informationon updating Form ADV. 

**Part II** is a written disclosure statement (ora written brochure) that provides information about business practices, fees, and conflicts of interest the adviser may have withits clients. Part II must be completed in paper format. IARD is not prepared to accept an electronic filing of Part II at thistime. You can print a blank copy of Part II from the SEC website.

Part II is a disclosure statement that an adviser must useto provide information to clients and potential clients. Read rule 204-3 under the Investment Advisers Act of 1940 regarding yourlegal obligations 1) to deliver a copy of Part II (or a brochure containing comparable information) to prospective clients and2) to offer annually a copy of Part II (or a brochure containing comparable information) to all current customers. You must keepyour Part II current, maintain a copy in your files, and make it available to SEC staff upon request. Do not send your Part IIto the SEC. Check with state securities authorities to determine what their filing requirements are for Part II. 

**Ongoing Requirements**While the requirements for registration and maintaining the registration vary from state to state, there are some general principleswhich apply in all states. Each state requires that IAs who do business in their state: State advisers to register or become licensed.        Federal covered advisers to make a notice filing of their Form ADV.         A passing score on a competency examination for each individual acting as an investmentadviser or investment adviser representative.        Payment of a fee for processing the applications.         Certain disclosures to the securities agency and/or the public.        Registration of branch offices of the adviser.        A bond or minimum net capital.A notice filing for a federal covered adviser is usually made by:        Filing a complete copy of its Form ADV as filed with the US SEC.        Filing a Form U-4 application for each investment adviser representative who will provideservices on behalf of the investment adviser.        Payment of any required notice filing fees.The State and the SEC require electronic filing via the Investment Adviser Registration Depository (IARD). Firms must registerwith the IARD prior to making a filing. Complete information regarding the IARD system is available at http://www.iard.com/GetStarted.asp
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**Annual Renewals**Investment advisers and investment adviser representatives must renew their registration/license annually. In many states, theterm is from January 1 to December 31 of a given year. However, some states have different renewal dates. If an adviser becomesregistered/licensed in the middle of a year, the fee is usually not prorated. Today, the renewal process for investment advisersis handled by IARD.

**Market Price of and Dividends on the Registrant's CommonEquity and Related Stockholder Matters**

(a) The Company application to FINRA for the Company's sharesto be quoted on the OTCBB was approved and the shares are trading with the ticker symbol SKAJ

Company's common stock is traded in the OTCBB and the sharesare subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "ExchangeAct"), commonly referred to as the "penny stock" rule. Section 15(g) sets forth certain requirements for transactionsin penny stocks and Rule 15g9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

The Commission generally defines penny stock to be any equitysecurity that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equitysecurity is considered to be a penny stock unless that security is: registered and traded on a national securities exchange meetingspecified criteria set by the Commission; authorized for quotation on The NASDAQ Stock Market; issued by a registered investmentcompany; excluded from the definition on the basis of price (at least $5.00 per share) or the issuer's net tangible assets; orexempted from the definition by the SEC. If the Company's shares are deemed to be a penny stock, trading in the shares will besubject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customersand accredited investors, generally persons with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000together with their spouse.

For transactions covered by these rules, broker-dealers mustmake a special suitability determination for the purchase of such securities and must have received the purchaser's written consentto the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules requirethe delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealeralso must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotationsfor the securities. Finally, the monthly statements must be sent disclosing recent price information for the penny stocks heldin the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of brokerdealers to trade and/or maintain a market in the Company's common stock and may affect the ability of shareholders to sell theirshares.

(b) Holders. At June 30, 2014, there were 41 record holdersof 1,000,000 shares of the Company's Common Stock.(c) Dividends. The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends inthe foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant'sbusiness.

**Equity Compensation Plans**

We have no equity compensation program including no stockoption plan and none are planned for the foreseeable future.**Dividends**There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
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**Going Concern**

 

Our auditors included an explanatory statementin their report on the Company’s financial statements for the year ended December 31, 2013, expressing an opinion as to ourability to continue as a going concern as a result of a working capital deficit. Our ability to continue as a going concern issubject to the ability of the Company to obtaining additional funding from outside sources. Management’s plan to addressthe Company’s ability to continue as a going concern includes (i) increasing our gross profit; (ii) financing from privateplacement sources; and (iii) converting outstanding debt to equity. Although the Company believes that it will be able to remaina going concern, through the methods discussed above, there can be no assurances that such methods will prove successful.

 

**Stock-Based Compensation**

 

We have adopted Accounting Standards Codification Topic (“ASC”)718, Share-Based Payment, which addresses the accounting for stock-based payment transactions in which an enterprise receives employeeservices in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’sequity instruments or that may be settled by the issuance of such equity instruments.

 

We account for equity instruments issued in exchange for the receiptof goods or services from other than employees in accordance with ASC 505. Costs are measured at the estimated fair market valueof the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable.The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performancecommitment or completion of performance by the provider of goods or services.

 

**ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

Not required.

 

**ITEM 4.          CONTROLSAND PROCEDURES**

 

***Evaluation of Disclosure Controls and Procedures***

 

In connection with the preparation of this report on Form 10-Q,an evaluation was carried out by the Company’s management, with the participation of the chief executive officer and thechief financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e)and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)). Disclosure controls and procedures are designedto ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed,summarized, and reported within the time periods specified in the Commission’s rules and forms and that such informationis accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allowtimely decisions regarding required disclosures.

 

Based on that evaluation, the Company’s management concluded,as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were ineffectivein recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified inthe Commission’s rules and forms, and that such information was not accumulated and communicated to management, includingthe chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

 

***Changes in Internal Control over Financial Reporting***

 

There have been no changes in internal control over financial reporting(as defined in Rule 13a-15(f) of the Exchange Act) during the period ended June 30, 2014, that materially affected, or are reasonablylikely to materially affect, the Company’s internal control over financial reporting.

 

**PART II****– OTHER INFORMATION**

 

**ITEM 1.          LEGALPROCEEDINGS**

 

None
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**ITEM 1A.       RISK FACTORS**** **

The information to be reported under this item has not changed sincethe previously filed 10Q, for the quarter ended June 30, 2013.

  

**ITEM 2.          UNREGISTEREDSALES OF EQUITY SECURITIES****AND USE OF PROCEEDS**

None.

 

 

**ITEM 3.          DEFAULTSON SENIOR SECURITIES**

 

None. 

**ITEM 4.          MineSafety Disclosures**

 

None. 

**ITEM 5.          OTHERINFORMATION**** **

None.

 

**ITEM 6.          EXHIBITS**

 
 **Exhibit** **Description****Number**  31.1 * Certification of the Chief Executive Officer required by Rule 13a - 14(a) or Rule 15d - 14(a) 31.2 * Certification of the Chief Financial Officer required by Rule 13a - 14(a) or Rule 15d - 14(a) 32.1 * Certification of the Chief Executive Officer required by Rule 13a - 14(b) or Rule 15d - 14(b) and 18 U.S.C. 1350 32.2 * Certification of the Chief Financial Officer required by Rule 13a - 14(b) or Rule 15d - 14(b) and 18 U.S.C. 1350 101* The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 formatted in Extensible Business Reporting Language (XBRL)
**  **
 * Provided herewith 
 
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**SIGNATURES**

 

Pursuant to the requirements 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.

 

 

***Skajaquoda Group, inc.                                                        Date***

 

 

           /s/ Einar Agustsson                                                                 August19, 2014

By: Einar Agustsson

Its: Chief Executive Officer and Director

 

 

 

           /s/ Einar Agustsson                                                                August 19, 2014

By: Einar Agustsson

Its: Chief Financial Officer and Principal AccountingOfficer

 

 
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