UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| | |
| | For the quarterly period ended February 28, 2007 |
| | |
| [ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
| | |
| | For the transition period __________ to __________ |
| | |
| | Commission File Number: 333-100636 |
ENWIN RESOURCES INC.
(Exact name of small business issuer as specified in its charter)
NEVADA | 98-0379370 |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
700 West Pender Street, Suite 1204 Vancouver, BC, Canada V6C 1G8 |
| (Address of principal executive offices) |
(604) 505-5825 |
| (Issuer’s telephone number) |
_______________________________________________________________ |
| (Former name, former address and former fiscal year, if changed since last report) |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [ ] No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4,250,000 common shares as of February 28, 2007
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
| | | Page |
PART I - FINANCIAL INFORMATION |
| | |
| | |
| | |
PART II - OTHER INFORMATION |
| | |
| | |
| | |
| | |
| | |
| | |
PART I - FINANCIAL INFORMATION
| Our unaudited financial statements included in this Form 10-QSB are as follows: |
| |
| |
| |
| |
These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-QSB. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended February 28, 2007 are not necessarily indicative of the results that can be expected for the full year.
ENWIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
| | | | |
| | (unaudited) | | |
| ASSETS | | | |
| | | | |
| Current assets | | | |
| Cash | $ | 4,726 | | $ | 97,594 |
| Total current assets | | 4,726 | | | 97,594 |
| TOTAL ASSETS | $ | 4,726 | | $ | 97,594 |
| | | | | | |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | |
| Current liabilities | | | | | |
| Accounts payable | $ | 444 | | $ | 5,850 |
| Shareholders advances | | 97,612 | | | 132,301 |
| Total current liabilities | | 98,056 | | | 138,151 |
| Total liabilities | | 98,056 | | | 138,151 |
| | | | | | |
| | | | | | |
| STOCKHOLDERS’ DEFICIT: | | | | | |
Common stock, $.001 par value, 100,000,000 (August 31, 2006- 25,000,000) shares authorized, 4,250,000, shares issued and outstanding | | 4,250 | | | 4,250 |
| Additional paid in capital | | 154,503 | | | 149,955 |
| Deficit accumulated deficit during the development stage | | (252,083) | | | (194,762) |
| Total stockholders’ deficit | | (93,330) | | | (40,557) |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 4,726 | | $ | 97,594 |
The accompanying notes are an integral part of these financial statements.ENWIN RESOURCES, INC. (AN EXPLORATION STAGE COMPANY)
Three and Six Months Ended February 28, 2007 and February 28, 2006 and
Period From July 3, 2002 (Inception) through February 28, 2007
(Unaudited)
| | Three months ended February 28, | | Six months ended February 28, | | Inception through February 28, |
| | 2007 | | 2006 | | 2007 | | 2006 | | 2007 |
| General and administrative: | | | | | | | | | |
| Professional and consulting | $ | 39,614 | | $ | 9,075 | | $ | 49,001 | | $ | 17,574 | | $ | 126,793 |
| Impairment | | - | | | - | | | - | | | - | | | 10,000 |
| Compensation | | 500 | | | 1,500 | | | 2,000 | | | 3,000 | | | 20,500 |
| Interest | | 1,952 | | | 2,646 | | | 4,548 | | | 5,092 | | | 30,753 |
| Exploration costs | | - | | | - | | | - | | | - | | | 42,022 |
| Other | | 475 | | | 6,498 | | | 1,772 | | | 7,634 | | | 22,015 |
| | | | | | | | | | | | | | | |
| Net loss | $ | (42,541) | | $ | (19,719) | | $ | (57,321) | | $ | (33,300) | | $ | (252,083) |
| | | | | | | | | | | | | | | |
| Net loss per share: | | | | | | | | | | | | | | |
| Basic and diluted | $ | (0.01) | | $ | (0.01) | | $ | (0.01) | | $ | (0.01) | | | |
| | | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | |
| Basic and diluted | | 4,250,000 | | | 3,416,667 | | | 4,250,000 | | | 3,208,333 | | | |
The accompanying notes are an integral part of these financial statements.
ENWIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
(unaudited)
| | Six Months Ended February 28, | | Inception, July 3, 2002, through February 28, |
| | 2007 | | 2006 | | 2007 |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | |
| Net loss | $ | (57,321) | | $ | (33,300) | | $ | (252,083) |
| Adjustments to reconcile net deficit to cash used by operating activities: | | | | | | | | |
| Imputed interest on stockholder advances | | 4,548 | | | 5,092 | | | 30,753 |
| Impairment | | - | | | - | | | 10,000 |
| | | | | | | | | |
| Change in non cash working capital items related to operations | | | | | | | | |
| Accounts payable | | (5,406) | | | (2,175) | | | 444 |
| CASH FLOWS USED IN OPERATING ACTIVITIES | | (58,179) | | | (30,383) | | | (210,886) |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
| Payment on option to acquire mining interest in property | | - | | | - | | | (10,000) |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| Proceeds from the sale of common stock | | - | | | 125,000 | | | 128,000 |
| Shareholder advances | | (34,689) | | | 20,000 | | | 97,612 |
| CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | | (34,689) | | | 145,000 | | | 225,612 |
| | | | | | | | | |
| NET INCREASE (DECREASE) IN CASH | | (92,868) | | | 114,617 | | | 4,726 |
| Cash, beginning of period | | 97,594 | | | 10,332 | | | - |
| Cash, end of period | $ | 4,726 | | $ | 124,949 | | $ | 4,726 |
| | | | | | | | | |
| SUPPLEMENTAL CASH FLOW INFORMATION | | | | | | | | |
| Interest paid | | - | | | - | | | - |
| Income taxes paid | | - | | | - | | | - |
The accompanying notes are an integral part of these financial statements.
ENWIN RESOURCES, INC.
AN EXPLORATION STAGE COMPANY
(unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Enwin Resources, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s registration statement filed with the SEC on Form 10-KSB. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2006 as reported in Form 10-KSB, have been omitted.
NOTE 2 - GOING CONCERN
Enwin has recurring losses and has a deficit accumulated during the exploration stage of $252,083 as of February 28, 2007. Enwin’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, Enwin has no current source of revenue. Without realization of additional capital, it would be unlikely for Enwin to continue as a going concern. Enwin’s management plans on raising cash from public or private debt of equity financing, on an as needed basis and in the longer term, revenues from the acquisition, exploration and development of mineral interests, if found. Enwin’s ability to continue as a going concern is dependent on these additional cash financings, and ultimately, upon achieving profitable operations through the development of mineral interests.
NOTE 3 - RELATED PARTY TRANSACTIONS
A shareholder of Enwin has advances due from Enwin of $ 97,612 (August 31, 2006- $ 132,301) at February 28, 2007. The advances are non-interest bearing and are due upon demand. Enwin has imputed interest at 8% or $4,548 and $ 1,952 for the six months and three months ended February 28, 2007 and $5,092 and $ 2,646 for the six months and three months ended February 28, 2006.
During the six months and three months ended February 28,2007, management fees in the amount of $2,000 (2006- $ 1,500) and $ 500 (2006 - $1,500) were earned by a director of the company.
NOTE 4 - CAPITAL STOCK
During the period, the company increased its authorized share capital to 100,000,000.
NOTE 5 - MINERAL PROPERTY
On February 22, 2007, the company terminated its option agreement with Cadre Capital to acquire an 100% undivided interest in a mineral property in British Columbia, Canada.
NOTE 6 - RECLASSIFICATION
The company has reclassified certain items on the statements of operations for the periods ended February 28, 2006 to facilitate comparisons. These reclassifications have no effect on net loss or stockholders’ deficit.
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Plan of Operation
Since our inception on July 3, 2002, we have been engaged in the exploration of mineral properties. Shortly after our formation, we entered into an option agreement (the “Agreement”) with Cadre Capital (“Cadre”) to acquire an undivided 100% interest in a mineral property in British Columbia, Canada. The property, known as the Spring Lake Property (the “Property”), consists of five mining claims known as the Summer Claims 1-5 located in Lac La Hache, British Columbia. Our business plan was to explore these mining claims for any valuable minerals, including silver, copper and zinc.
Our exploration program consisted of three phases, all of which required the performance and supervision of Derrick Strickland, our former director, and independent contractor we hired as a geologist for the project. We never completed the exploration program or fulfilled our obligations under the Agreement to acquire an undivided 100% interest in the Property. Pursuant to the Agreement, we were required to spend a cumulative total of $350,000 in respect of the Property by April 30, 2009. As of the date of this report, we have expended a total of $42,022 on the project. This amount includes a total of $35,402 in exploration expenditures which satisfied our expenditure
obligation of $25,000 due by April 30, 2007. The work was completed by Rio Minerals Ltd., the company we hired to perform all exploration and development work on the Property, and included line cutting, grid surveying, and limited geochemical soil and silt samples.
We were obligated to make continuing payments toward the exploration of the Property in order to retain our rights under Agreement. On February 22, 2007, however, we terminated our option to acquire the Property in accordance with Section 4 of the Agreement. As a result, we will no longer pursue exploration of the Property. We terminated the Agreement in order to avoid making further payments and as a result of Mr. Strickland’s resignation as a director and geologist of our company.
As a result of our terminating the Agreement, we have no present business operations. We have minimal assets and no revenues with a stockholders’ deficit and losses since our inception. Our plan of operation is to direct our efforts and limited resources to identify and evaluate other business opportunities. We have not yet established any criteria upon which to consider and proceed with a business opportunity. At the present time, we have not identified any business opportunity that management believes is consistent with our income needs.
We can provide no assurance that we will be successful in acquiring another business due to our limited working capital. We anticipate that if we are successfully able to identify businesses for acquisition, we will require additional financing in order to enable us to complete any acquisition. However, we can provide no assurance that if we pursue additional financing we will receive any financing.
We currently have forecasted the expenditure of approximately $20,000 during the next six to twelve months in order to remain in compliance with the reporting requirements of the Securities Exchange Act of 1934 and to identify additional businesses for acquisition. As of February 28, 2007, we had cash in the bank in the amount of $4,726. As such, the completion of a business opportunity and the fulfilment of our reporting requirements in the next 12 months depends on our ability to obtain additional financing. If we are unable to obtain additional financing, our business plan will be significantly impaired. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds. Investors in our stock could likely lose their entire investment.
We do not anticipate purchasing any real property or significant equipment during the next 12 months.
At the present time we have no employees other than our sole officer and director, Mr. Michael Bebek. We do not anticipate hiring any employees until such time as we are able acquire any additional businesses.
Results of Operations for the three and six months ended February 28, 2007 and 2006
We did not earn any revenues during the three or six months ended February 28, 2007, and have not earned any since our inception in July 3, 2002.
We incurred operating expenses in the amount of $42,541 for the three months ended February 28,
2007, compared to operating expenses in the amount of $19,719 for the same period ended February 28, 2006. We incurred operating expenses in the amount of $57,321 for the six months ended February 28, 2007, compared to operating expenses in the amount of $33,300 for the same period ended February 28, 2006. Our expenses for the three months ended February 28, 2007 consisted largely of professional and consulting fees of $39,614, interest of $1,952, compensation of $500 and other expenses of $475. Our expenses for three months ended February 28, 2006 consisted largely of professional and consulting fees of $9,075, interest of $2,646, compensation of $1,500 and other expenses of $6,498. Our expenses for the six months ended February 28, 2007 consisted largely of professional and consulting fees of $49,001, interest of $4,548, compensation of $2,000 and other expenses of $1,772. Our expenses for six months ended February 28, 2006 consisted largely of professional and consulting fees of $17,574, interest of $5,092, compensation of $3,000 and other expenses of $7,634. The increase in expenses from the three and six month periods ended February 28, 2007 compared with the same periods for February 28, 2006 is primarily attributable to an increase in professional and consulting fees.
Our net loss for the three months ended February 28, 2007 was $(42,541), compared to a net loss of $(19,719) in the same period ended February 28, 2006. Our net loss for the six months ended February 28, 2007 was $(57,321), compared to a net loss of $(33,300) in the same period ended February 28, 2006.
Liquidity and Capital Resources
As of February 28, 2007, our sole asset was cash in the amount of $4,726. We had a working capital deficit of $(93,330) as of February 28, 2007. A large portion of our liabilities that contributes to our working capital deficient comes from advances provided by our officer and director, Mr. Michael Bebek, who advanced a total of $132,301 to our company. The advances are non-interest bearing and are due upon demand. We have imputed interest at 8% or $4,548 and $1,952 for the six and three months ended February 28, 2007 and $5,092 and $2,646 for the six and three months ended February 28, 2006.
As disclosed in prior filings, Mr. Bebek intended to carry these advances and not demand repayment until we became profitable and cash-flow positive in operating activities. However, as a result of the resignation of Mr. Strickland as our geologist and director, and the termination of the option agreement with Cadre Capital, Mr. Bebek demanded repayment of $34,689 of the $132,301 during the current reporting period. We made this payment and now owe Mr. Bebek a total of $97,612.
At the present time, we do not have the funds necessary to repay Mr. Bebek advances of $97,612. We are currently searching out business opportunities for our company and the advances we owe Mr. Bebek could hinder our ability to obtain a successful business combination. Also, our present cash is inadequate to meet our capital needs in the next twelve months. As such, if we are unable to obtain additional financing, our business plan will be significantly impaired. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds. Investors in our stock could likely lose their entire investment.
Off Balance Sheet Arrangements
As of February 28, 2007, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to stockholders.
Going Concern
We have recurring losses and have a deficit accumulated during the exploration stage of $252,083 as of February 28, 2007. Our financial statements are prepared using the generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, we have no current source of revenue. Without realization of additional capital, it would be unlikely for us to continue as a going concern. Our management plans on raising cash from public or private debt of equity financing, on an as needed basis and in the longer term, revenues from the acquisition, exploration and development of mineral interests, if found. Our ability to continue as a going concern is dependent on these additional cash financings, and ultimately, upon achieving profitable operations through the development of mineral interests.
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of February 28, 2007. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Mr. Michael Bebek. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of February 28, 2007, our disclosure controls and procedures are effective. There have been no changes in our internal controls over financial reporting during the quarter ended February 28, 2007.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
PART II - OTHER INFORMATION
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
None
None
No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended February 28, 2007.
None
Exhibit Number | Description of Exhibit |
| |
| |
| |
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | ENWIN RESOURCES, INC. |
| | |
| Date: | March 28, 2007 |
| | |
| | By: /s/ Michael Bebek Michael Bebek Title: Chief Executive Officer, Chief Financial Officer, and Director |
