UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
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[ ] 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 0-49649
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DONAR ENTERPRISES, INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 23-3083371
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2000 Hamilton Street, #520, Philadelphia, Pennsylvania 19130-3883
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(Address of principal executive offices)
(215) 893-3662
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(Issuer's telephone number, including area code)
Indicate by check mark whether the registrant (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 [ ]
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Class Outstanding at June 30, 2002
------------------------------ ----------------------------
Common Stock, par value $0.001 4,750,000
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
DONAR ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
June 30,
2002 December
(Unaudited) 31, 2001
----------- -----------
Current assets:
Cash $ -- $ --
Accounts receivable 168 --
----------- -----------
Total current assets $ 168 $ --
=========== ===========
Other assets:
Deferred offering costs 5,573 3,480
----------- -----------
TOTAL ASSETS $ 5,741 $ 3,480
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Due to stockholder $ 4,851 $ 4,004
Accounts payable 1,350 --
----------- -----------
Total current liabilities 6,201 4,004
Stockholders' equity (deficit):
Preferred stock: $.001 par value,
20,000,000 shares authorized,
none issued or outstanding -- --
Common stock: $.001 par value,
100,000,000 shares authorized,
4,750,000 issued and outstanding 4,750 4,750
Additional paid-in capital 232,750 232,750
Deferred officer's compensation (222,500) (222,500)
Accumulated amortization, officer's
compensation 222,500 129,792
(Deficit) accumulated during the
development stage (237,960) (145,316)
----------- -----------
Total stockholders' equity (deficit) (460) (524)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,741 $ 3,480
=========== ===========
See Accompanying Notes to Financial Statements
DONAR ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
From
Inception on
3 Months 6 Months May 25, 2001
Ended Ended Through
June 30, June 30, June 30,
2002 2002 2002
------------ ------------ ------------
Revenue $ 168 $ 168 $ 168
------------ ------------ ------------
Costs and expenses:
General and administrative expenses 37,133 92,812 238,128
------------ ------------ ------------
Total costs and expenses 37,133 92,812 238,128
------------ ------------ ------------
Net income (loss) from operations $ (36,965) $ (92,644) $ (237,960)
============ ============ ============
Per share information: Basic and fully diluted
Weighted average number of common
shares outstanding 4,750,000 4,750,000 4,750,000
============ ============ ============
Net (loss) per common share $ (0.01) $ (0.02) $ (0.05)
============ ============ ============
See Accompanying Notes to Financial Statements
DONAR ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
From
Inception on
3 Months 6 Months May 25, 2001
Ended Ended Through
June 30, June 30, June 30,
2002 2002 2002
------------ ------------ ------------
Cash flows from operating activities:
Net (loss) $ (36,965) $ (92,644) $ (237,960)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities:
Issuance of stock for services rendered -- -- 237,500
Increase in deferred offering costs (41) (2,093) (5,573)
Increase in deferred officer's compensation -- -- (222,500)
Amortization of deferred officer's compensation 37,083 92,708 222,500
Increase in accounts payable -- 1,350 1,350
Increase in accounts receivable (168) (168) (168)
------------ ------------ ------------
Net cash (used in) operating activities (91) (847) (4,851)
------------ ------------ ------------
Cash flows from investing activities: -- -- --
------------ ------------ ------------
Net cash provided by investing activities -- -- --
------------ ------------ ------------
Cash flows from financing activities:
Advances from stockholder 91 847 4,851
------------ ------------ ------------
Net cash provided by financing activities 91 847 4,851
------------ ------------ ------------
Net Increase in Cash -- -- --
Beginning Cash -- -- --
------------ ------------ ------------
Ending Cash $ -- $ -- $ --
============ ============ ============
NONCASH FINANCING AND INVESTING ACTIVITIES
Common stock issued to founder for organizational
costs and services $ 237,500 $ 237,500 $ 237,500
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for: Income taxes $ -- $ -- $ --
============ ============ ============
Interest $ -- $ -- $ --
============ ============ ============
See Accompanying Notes to Financial Statements
DONAR ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Donar Enterprises, Inc. ("Donar" or "the Company") was incorporated
under the laws of the State of Delaware on May 25, 2001. The Company
is organized to engage in any lawful act or activity for which a
corporation may be organized under the General Corporation Law of
the State of Delaware including, without limitation, to provide
document formatting and electronic filing services to public
corporations and individuals.
Donar has been in the development stage since its formation on May
25, 2001. Planned principal operations have only recently commenced
since then, but Donar has not generated any significant revenue.
Revenue Recognition
Revenues from document formatting and electronic filing services are
recognized at the time the services are provided to the customer.
Use of Estimates
The preparation of the Company's financial statements in conformity
with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the balance sheet
date and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
Net Loss Per Share
The Company follows Statement of Financial Accounting Standards No.
128, "Earnings Per Share" ("SFAS No. 128"). Basic earnings (loss)
per common share ("EPS") calculations are determined by dividing net
income (loss) by the weighted average number of shares of common
stock outstanding during the year. Diluted earnings (loss) per
common share calculations are determined by dividing net income
(loss) by the weighted average number of common shares and dilutive
common share equivalents outstanding. Common stock equivalents were
not considered during the periods presented, as their effect would
be anti-dilutive.
Cash and Cash Equivalents
For purposes of balance sheet classification and the statements of
cash flows, the Company considers all highly liquid investments
purchased with an original maturity of three months or less to be
cash equivalents.
DONAR ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Segment Information
The Company follows SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information". Certain information is
disclosed, per SFAS No. 131, based on the way management organizes
financial information for making operating decisions and assessing
performance. The Company currently operates in one business segment
and will evaluate additional segment disclosure requirements as it
expands operations.
Comprehensive Income
There have been no items of comprehensive income since the Company's
inception on May 25, 2001.
Impairment Of Long-Lived Assets
The Company periodically reviews the carrying amount of property,
plant and equipment and its identifiable intangible assets to
determine whether current events or circumstances warrant
adjustments to such carrying amounts. If an impairment adjustment is
deemed necessary, such loss is measured by the amount that the
carrying value of such assets exceeds their fair value.
Considerable management judgement is necessary to estimate the fair
value of assets, accordingly, actual results could vary
significantly from such estimates. Assets to be disposed of are
carried at the lower of their financial statement carrying amount or
fair value less costs to sell. As of June 30, 2002, management does
not believe there is any impairment of the carrying amounts of assets.
Fair Value of Financial Instruments
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of
June 30, 2002. The respective carrying value of certain
on-balance-sheet financial instruments approximated their fair
values. These financial instruments include cash, accounts payable
and accrued expenses, and notes payable. Fair values were assumed to
approximate carrying values for these financial instruments because
they are short term in nature, their carrying amounts approximate
fair values, or they are receivable or payable on demand.
Deferred Offering Costs
The Company defers costs associated with the raising of capital
until such time as the offering is completed, at which time the
costs are charged against the capital raised. Should the offering be
terminated, the costs are charged to operations during the period
when the offering is terminated.
DONAR ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Recent Pronouncements
In July, 2001, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) 141,
Business Combinations, and SFAS 142, Goodwill and Intangible Assets.
SFAS 141 is effective for all business combinations completed after
June 30, 2001. SFAS 142 is effective for the year beginning January
1, 2002; however certain provisions of that Statement apply to
goodwill and other intangible assets acquired between July 1, 2001,
and the effective date of SFAS 142. The Company does not believe the
adoption of these standards will have a material impact on the
Company's financial statements.
In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 143,
Accounting for Asset Retirement Obligations. This statement
addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. This Statement applies to all
entities. It applies to legal obligations associated with the
retirement of long-lived assets that result from the acquisition,
construction, development and (or) the normal operation of a
long-lived asset, except for certain obligations of lessees. This
Statement is effective for financial statements issued for fiscal
years beginning after June 15, 2002. The Company is evaluating the
impact of the adoption of this standard and has not yet determined
the effect of adoption on its financial position and results of
operations.
In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. This statement
addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes FASB Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. The provisions of the statement
are effective for financial statements issued for fiscal years
beginning after December 15, 2001. The Company is evaluating the
impact of the adoption of this standard and has not yet determined
the effect of adoption on its financial position and results of
operations.
NOTE 2. GOING CONCERN
The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the
United States of America, which contemplates continuation of the
Company as a going concern. The Company has generated losses since
its inception on May 25, 2001, aggregating $237,960 through June
30, 2002. Additionally, the Company was recently formed, and has not
been able to establish operations since the date of inception. The
Company has been reliant on funding from stockholders.
DONAR ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
As discussed in Note 4, the Company plans on issuing up to 2,000,000
shares of voting common stock in exchange for up to $100,000.
The financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification
of assets or the amounts and classification of liabilities that may
result from the possible inability of the Company to continue as a
going concern.
NOTE 3. RELATED PARTY TRANSACTIONS
The Company issued 4,750,000 shares of unregistered common stock for
$237,500, based on the Company's expected offering price of $0.05
per share, to its President in exchange for services as President,
Secretary, and Treasurer. These shares were issued under Section
4(2) of the Securities act of 1933, as amended, and are subject to
the resale provisions of Rule 144 and may not be sold or transferred
without registration except in accordance with Rule 144.
Certificates representing the securities bear such a legend.
On November 1, 2001, the sole director of the Company agreed to loan
the Company $25,000. The advance will bear an interest rate of 10%
per annum, due and payable on or before June 30, 2003. As of June
30, 2002, the Company owed the sole director an outstanding balance
of $4,851.
NOTE 4. COMMON STOCK OFFERING
The Company has filed a registration statement with the SEC on Form
SB-2, which became effective February 27, 2002, for the sale of up
to 2,000,000 shares of its common stock at $0.05 per share. The
offering is on a best-efforts, no minimum basis. As such, there will
be no escrow of any of the proceeds of the offering and the Company
will have the immediate use of such funds to finance its operations.
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion should be read in conjunction with the
information contained in the financial statements of the Company and
the Notes thereto appearing elsewhere herein.
History and Organization
The Company was organized on May 25, 2001 under the laws of the
State of Delaware, and has commenced operations, but it has not
generated any significant revenue and is still a development stage
corporation. The Company is in the business of providing document
formatting and electronic filing services for companies and
individuals that desire to submit filings, such as reports,
prospectuses, registration statements, and other documents pursuant
to the federal securities laws, to the Securities and Exchange
Commission's Edgar (Electronic Data Gathering, Analysis and
Retrieval) system.
In connection with organizing the Company, on May 25, 2001, William
Tay, the Company's founder, was issued 4,750,000 shares of the
Company's restricted common stock in exchange for services, his
first year's salary, the business plan of the Company, and the
Company's web site and domain name, pursuant to Section 4(2) of the
Securities Act of 1933, to sophisticated persons (officers and
directors) having superior access to all corporate and financial
information. The amount of shares issued in exchange for
organizational costs, business plan, the website domain name and the
first year's salary was valued at $237,500.
The Company's common stock is not listed on any recognized exchange
or quoted on any quotation medium. There can be no assurance that
the Company's common stock will ever develop a market.
Plan of Operations
The Company's plan of operations is to provide high quality Edgar
filing services primarily to small public corporations traded on the
over-the-counter market and certain individuals by marketing its
services to these groups directly or through legal and accounting
firms specializing in securities practices. To do this, the Company
intends to carry out an aggressive targeted marketing campaign.
The Company presently does not have any cash to satisfy any future
cash requirements. The Company will need a minimum of $25,000 to be
raised from its public offering of its common stock (the "offering")
filed with the Securities and Exchange Commission ("Commission") on
Form SB-2, which was declared effective by the Commission on
February 27, 2002, or from loans to satisfy its cash requirements
for the next 12 months. The offering proceeds, if any, or loan
proceeds will be used to pay off the offering expenses and for its
planned operations. The Company will not be able to operate fully if
it does not obtain equity financing through this offering, subsequent
private offerings, loans or contributions from Mr. William Tay, the
Company's sole director. If only a minimal number of shares are sold
in the offering, the Company will continue to satisfy its cash
requirements by contributions or from loans from Mr. William Tay,
which the Company expects he will continue to contribute for the next
twelve months. This minimum amount of capital in the amount of
$25,000, which includes the offering expenses, must be raised in the
offering or from loans from Mr. William Tay, in order to minimally
execute the Company's plan of operations, and to pay off its offering
expenses in the amount of $15,500.
If the Company does not raise at least $25,000 from the offering,
then it will seek additional funding by borrowing from Mr. William
Tay who has committed to loaning the Company the full amount of
$25,000 even if the Company manages to raise some proceeds from the
offering, e.g. $10,000. Based on a loan agreement executed on
November 1, 2001, as amended, Mr. William Tay is bound under the
terms and conditions of the agreement to lend the Company money on a
promissory note, payable at 10% interest per annum, if the Company
fails to raise $25,000 from the offering needed to fund its plan of
operations, and to pay off the offering expenses. Mr. William Tay
will make the loan to the Company after the offering closes.
The Company has no current material commitments. The Company will
depend upon capital to be derived from future financing activities
such as subsequent offerings of its common stock. The Company may
never be successful in raising the capital it requires.
The Company's sole director, Mr. William Tay, believes that, if the
offering is successful in raising $100,000, it will be able to
generate enough revenue and become profitable from providing Edgar
filing services and achieve liquidity within the next twelve months.
The Company has no alternative plan of operations. In the event that
the Company does not receive additional financing from subsequent
offerings of its stock, or loans from its president is inadequate,
the Company may have to liquidate its business and undertake any or
all of the following actions:
* Sell or dispose of the Company's assets, if any;
* Pay the Company's liabilities in order of priority, if it has
available cash to pay such liabilities;
* If any cash remains after the Company satisfies amounts due
to its creditors, distribute any remaining cash to its
shareholders in an amount equal to the net market value of its
net assets;
* File a certificate of dissolution with the State of Delaware
to dissolve the corporation and close its business;
* Make the appropriate filings with the Commission so that the
Company will not be required to file periodic and other
required reports with the Commission, if, in fact, the Company
is a reporting company at that time; and
* Make the appropriate filings with the National Association of
Securities Dealers to affect a delisting of the Company's
common stock, if, in fact, its common stock is trading on the
Over-the-Counter Bulletin Board at that time.
Based upon the Company's current assets, however, the Company will
not have the ability to distribute any cash to its shareholders. If
the Company has any liabilities that it is unable to satisfy and it
qualifies for protection under the U.S. Bankruptcy Code, the Company
may voluntarily file for reorganization under Chapter 11 or
liquidation under Chapter 7. The Company's creditors may also file a
Chapter 7 or Chapter 11 bankruptcy action against it. If the
Company's creditors or the Company files for Chapter 7 or Chapter 11
bankruptcy, the Company's creditors will take priority over its
shareholders. If the Company fails to file for bankruptcy under
Chapter 7 or Chapter 11 and the Company has creditors, such
creditors may institute proceedings against the Company seeking
forfeiture of its assets, if any.
The Company does not know and cannot determine which, if any, of
these actions it will be forced to take. If any of these foregoing
events occur, you could lose your entire investment in the Company's
shares.
The Company does not anticipate any further research and development
of any products, nor does it expect to incur any research and
development costs. The Company does not expect the purchase or sale
of plant or any significant equipment, and it does not anticipate
any change in the number of its employees. The Company has no
current material commitments.
The Company is still considered to be a development stage company,
with no significant revenue, and is dependent upon the raising of
capital through placement of its common stock. There can be no
assurance that the Company will be successful in raising the capital
it requires through the sale of its common stock.
Readers are referred to the cautionary statement below, which
addresses forward-looking statements.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"), the
Company is hereby providing cautionary statements identifying
important factors that could cause the Company's actual results to
differ materially from those projected in forward-looking statements
(as such term is defined in the Reform Act) made by or on behalf of
the Company herein or orally, whether in presentations, in response
to questions or otherwise. Any statements that express, or involve
discussions as to expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always,
through the use of words or phrases such as "will result", "are
expected to", "will continue", "is anticipated", "estimated",
"projection" and "outlook") are not historical facts and may be
forward-looking and, accordingly, such statements involve estimates,
assumptions, and uncertainties which could cause actual results to
differ materially from those expressed in the forward-looking
statements. Such uncertainties include, among other, the following:
(i) the Company's ability to obtain additional financing to
implement its business strategy; (ii) the financial condition of the
Company's clients; (iii) imposition of new regulatory requirements
affecting the Company; (iv) a downturn in general economic
conditions (v) the delay or failure to properly manage growth and
successfully integrate acquired companies and operations; (vi) lack
of geographic diversification; and (vii) other factors which are
described in further detail in the Company's filings with the
Securities and Exchange Commission.
The Company cautions that actual results or outcomes could differ
materially from those expressed in any forward-looking statements
made by or on behalf of the Company. Any forward-looking statement
speaks only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the
date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it
is not possible for management to predict all of such factors.
Further, management cannot assess the impact of each such factor on
the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
There are no legal proceedings against the Company and the Company
is unaware of such proceedings contemplated against it.
Item 2. Changes in Securities.
There have been no changes or modifications in the Company's
securities.
Item 3. Defaults upon Senior Securities.
There has been no default upon senior securities.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the security holders during
the quarterly period covered by this report.
Item 5. Other Information.
There is no other information deemed material by management for
disclosure herein.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
1. A Form 8-K was filed by the Company dated May 9, 2002 and
filed May 13, 2002; and
2. A Form 8-K was filed by the Company dated and filed June 7,
2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DONAR ENTERPRISES, INC.
(Registrant)
By: /s/ William Tay
----------------------------------
William Tay, President, Chief
Executive Officer, Treasurer and
Director
(Principal Executive, Financial and
Accounting Officer)
Dated: August 2, 2002
