UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 endedMarch 31, 2005.
¨ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period to
Commission File Number333-110680
Global-Wide Publication Ltd.
(Exact name of small Business Issuer as specified in its charter)
Nevada | 76-0742386 |
(State or other jurisdiction of | (IRS Employer Identification No.) |
incorporation or organization) | |
422 Larkfield Center, suite 310, | |
Santa Rosa, CA | 95403 |
(Address of principal executive offices) | (Postal or Zip Code) |
Issuer’s telephone number, including area code: | (707)575-4027 |
Box 18, Suite 323-595 Howe Street Vancouver, British Columbia, Canada, V6C 2T5
(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
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:6,300,000Shares of $0.001 par value Common Stock issued and outstanding as of March 31, 2005.
PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months, and six months, ended March 31, 2004 are not necessarily indicative of the results that can be expected for the year ending September 30, 2005.
GLOBAL–WIDE PUBLICATION LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2005
(Stated in US Dollars)
(Unaudited)
GLOBAL–WIDE PUBLICATION LTD.
INTERIM CONSOLIDATED BALANCE SHEETS
March 31, 2005 and September 30, 2004
(Stated in US Dollars)
(Unaudited)
March 31, | September 30, | |||||
ASSETS | 2005 | 2004 | ||||
Current | ||||||
Cash | $ | 1,280 | $ | 3,344 | ||
Accounts receivable | 26,595 | 9,361 | ||||
$ | 27,875 | $ | 12,705 | |||
LIABILITIES | ||||||
Current | ||||||
Bank indebtedness | $ | - | $ | 7,037 | ||
Accounts payable | 52,106 | 49,520 | ||||
Due to related party | 31,136 | 3,707 | ||||
83,243 | 60,264 | |||||
STOCKHOLDERS’ DEFICIENCY | ||||||
Capital stock | ||||||
Common stock, $0.001 par value, 70,000,000 shares authorized | ||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized | ||||||
6,300,000 common shares issued and outstanding | 6,300 | 6,300 | ||||
Additional paid-in capital | 44,700 | 44,700 | ||||
Accumulated other comprehensive loss | (3,938 | ) | (2,177 | ) | ||
Accumulated deficit | (102,430 | ) | (96,382 | ) | ||
(55,368 | ) | (47,559 | ) | |||
$ | 27,875 | $ | 12,705 |
SEE ACCOMPANYING NOTES
GLOBAL–WIDE PUBLICATION LTD.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended March 31, 2005 and 2004
(Stated in US Dollars)
(Unaudited)
Three months | Six months | |||||||||||
ended | ended | |||||||||||
March 31, | March 31, | |||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||
Revenue | ||||||||||||
Sales | $ | 38,079 | $ | 35,058 | $ | 84,356 | $ | 80,483 | ||||
Direct Costs | ||||||||||||
Contract service fees | 15,736 | 16,118 | 28,188 | 27,087 | ||||||||
Printing, distribution and sorting | 9,721 | 8,632 | 19,251 | 16,030 | ||||||||
25,457 | 24,750 | 47,439 | 43,117 | |||||||||
Gross margin | 12,622 | 10,308 | 36,917 | 37,366 | ||||||||
General and Administrative Expenses | ||||||||||||
Accounting and audit fees | 2,772 | 2,234 | 16,950 | 11,616 | ||||||||
Advertising and promotion | 303 | 522 | 578 | 965 | ||||||||
Auto expenses | 3,661 | 3,584 | 9,816 | 7,225 | ||||||||
Bad debt expense (recovery) | 5,344 | 9,232 | (2,822 | ) | 15,962 | |||||||
Bank charges and interest | 312 | 222 | 697 | 802 | ||||||||
Consulting fees | - | 4,000 | - | 9,500 | ||||||||
Legal fees | - | 1,858 | - | 1,858 | ||||||||
Office and general | 3,421 | 4,261 | 5,651 | 8,905 | ||||||||
Rent | 3,928 | 3,871 | 9,073 | 7,308 | ||||||||
Telephone | 1,549 | 1,138 | 2,645 | 2,021 | ||||||||
Transfer agent and filing fees | 377 | 1,200 | 377 | 1,200 | ||||||||
Travel | - | 379 | - | 379 | ||||||||
21,667 | 32,501 | 42,965 | 67,741 | |||||||||
Net loss for the period | (9,045 | ) | (22,193 | ) | (6,048 | ) | (30,375 | ) | ||||
Other comprehensive loss | ||||||||||||
Foreign currency adjustment | 274 | (731 | ) | (1,761 | ) | (606 | ) | |||||
Comprehensive loss for the period | $ | (8,771 | ) | $ | (22,924 | ) | $ | (7,809 | ) | $ | (30,981 | ) |
Basic and diluted loss per share | ||||||||||||
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |
Weighted average number of common | ||||||||||||
shares outstanding | 6,300,000 | 6,300,000 | 6,300,000 | 6,300,000 |
SEE ACCOMPANYING NOTES
GLOBAL–WIDE PUBLICATION LTD.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six months ended March 31, 2005 and 2004
(Stated in US Dollars)
(Unaudited)
Six months ended | ||||||
March 31, | ||||||
2005 | 2004 | |||||
Operating Activities | ||||||
Net loss for the period | $ | (6,048 | ) | $ | (30,981 | ) |
Changes in non-cash working capital items | ||||||
related to operations | ||||||
Accounts receivable | (17,234 | ) | (7,828 | ) | ||
Prepaid expenses | - | (5,387 | ) | |||
Accounts payable | 2,586 | 11,711 | ||||
Net cash flows used in operating activities | (20,696 | ) | (32,485 | ) | ||
Financing Activities | ||||||
Bank indebtedness | (7,037 | ) | - | |||
Decrease in due from related party | - | 14,715 | ||||
Increase in due to related party | 27,430 | 3,872 | ||||
Net cash flow provided by financing activities | 20,393 | 18,587 | ||||
Effect of foreign exchange rate changes on cash | (1,761 | ) | - | |||
Decrease in cash during the period | (2,064 | ) | (13,898 | ) | ||
Cash, beginning of period | 3,344 | 31,831 | ||||
Cash, end of period | $ | 1,280 | $ | 17,933 | ||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for: | ||||||
Interest | $ | - | $ | - | ||
Income taxes | $ | - | $ | - |
SEE ACCOMPANYING NOTES
GLOBAL–WIDEPUBLICATION LTD.
INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
for the period July 14, 2003 (Date of Inception) to March 31, 2005
(Stated in US Dollars)
Accumulated | |||||||||||||||||
Additional | Other | ||||||||||||||||
Common Stock | Paid-in | Comprehensive | |||||||||||||||
Number | Par Value | Capital | Loss | Deficit | Total | ||||||||||||
Issuance of common stock for cash | |||||||||||||||||
– at $0.001 | 3,900,000 | $ | 3,900 | $ | - | $ | - | $ | - | $ | 3,900 | ||||||
Issuance of common stock for acquisition | |||||||||||||||||
of Marco Polo World News Inc. | |||||||||||||||||
– at $0.001 | 2,100,000 | 2,100 | - | - | - | 2,100 | |||||||||||
Issuance of common stock for cash | |||||||||||||||||
– at $0.15 | 300,000 | 300 | 44,700 | - | - | 45,000 | |||||||||||
Net loss for the period | - | - | - | - | (5,833 | ) | (5,833 | ) | |||||||||
Balance, September 30, 2003 | 6,300,000 | 6,300 | 44,700 | - | (5,833 | ) | 45,167 | ||||||||||
Other comprehensive loss for the year | - | - | - | (2,177 | ) | - | (2,177 | ) | |||||||||
Net loss for the year | - | - | - | - | (90,549 | ) | (90,549 | ) | |||||||||
Balance, September 30, 2004 | 6,300,000 | 6,300 | 44,700 | (2,177 | ) | (96,382 | ) | (47,559 | ) | ||||||||
Other comprehensive loss for the period | - | - | - | (1,761 | ) | - | (1,761 | ) | |||||||||
Net loss for the period | - | - | - | - | (6,048 | ) | (6,048 | ) | |||||||||
Balance, March 31, 2005 | 6,300,000 | $ | 6,300 | $ | 44,700 | $ | (3,938 | ) | $ | (102,430 | ) | $ | (55,368 | ) |
SEE ACCOMPANYING NOTES
GLOBAL–WIDE PUBLICATION LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2005 and September 30, 2004
(Stated in US Dollars)
(Unaudited)
Note 1 | Summary of Significant Accounting Policy |
Interim Reporting | |
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB of Regulation S-B. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended September 30, 2004 included in the Company’s Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. The interim unaudited consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-KSB. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended March 31, 2005 are not necessarily indicative of the results that may be expected for the year ending September 30, 2005. | |
Note 2 | Continuance of Operations |
The interim consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America applicable for a going concern which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. As at March 31, 2005, the Company has a working capital deficiency of $55,368 which is not sufficient to meet its planned business objectives and ongoing operations for the next fiscal year. The Company has accumulated losses of $106,368 since its commencement and has not yet achieved profitable operations. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. | |
Management plans to continue to provide for its capital needs during the year ended September 30, 2005 by the development of its sales of newspapers and advertising revenues and by issuing equity securities or by obtaining related party loans. The Company also plans to review other business ventures or acquisition opportunities in the publication industry or other industries if they become available. | |
The Company was incorporated on July 14, 2003 in the State of Nevada and has adopted September 30 as its fiscal year end. |
SEE ACCOMPANYING NOTES
Note 3 | Commitments | |
a) | At March 31, 2005, the Company has operating lease agreements for vehicles and is committed to the following payments: |
Year ended: | 2005 | $ | 5,911 | |||
2006 | 5,134 | |||||
2007 | 3,242 | |||||
$ | 14,287 |
b) | By agreement dated June 1, 2002, Marco Polo World News Inc. (“MPW”), the Company’s subsidiary, entered into a sales agency and personal services agreement with a director of MPW wherein the director will be compensated by a 25% sales commission (contract service fees) on all sales secured by him. This agreement terminates on July 31, 2005 and may be renewed at the option of the director for an additional three years. | |
Note 4 | Subsequent Event | |
The Company entered into a Memorandum of Terms and Conditions dated May 2, 2005 in respect to a proposed reverse triangular merger, with an established technology company that develops hardware and software products, located in California. Consideration was negotiated based upon the Company completing a forward split on a 1 old share for 6 new shares prior to closing of the merger. The Company would then issue 37,260,000 common shares to effect the merger. In addition, the Company will issue a further 8,100,000 common shares to complete the acquisition of a second company. Should the acquisition of the second company not occur before February 15, 2006, or less than 8,100,000 common shares be issued for this acquisition, then any remaining shares will be distributed to the shareholders of the first company. | ||
The Company will be the surviving company and on or before February 15, 2006, it intends to sell and issue up to a further 5,000,000 common shares at no less than $1.50 per share. | ||
As part of this transaction the Company would dispose of Marco Polo World News Inc., its wholly owned subsidiary, in exchange for the return to the Company of 2,100,000 common shares of the Company. In addition, the 2,400,000 restricted common shares originally issued by the Company at $0.001 per share would be returned to the Company. The total 4,500,000 common shares would be returned to treasury and cancelled. | ||
The Company also intends on decreasing its post split authorized capital to 200,000,000 shares of common stock with a par value of $0.001. | ||
This proposed merger is subject to a tax analysis, formal due diligence, the execution of a formal merger agreement and approvals from the board of directors and shareholders of the companies. This transaction would also be subject to regulatory approval. |
SEE ACCOMPANYING NOTES
Item 2. Plan of Operation
Global-Wide Publication Ltd. ("the Company") was incorporated in the state of Nevada on July 14, 2003. Pursuant to an Agreement dated August 29, 2003, and completed September 30, 2003, the Company acquired all of the issued and outstanding shares of Marco Polo World News Inc. ("MPW"), a British Columbia, Canada corporation, in consideration of 2,100,000 restricted shares of its common stock issued to the one shareholder of MPW. As a result of the transaction MPW has become a wholly owned subsidiary of the Company and, as of the date of completion of the acquisition agreement, the financial operations of the two companies have been merged.
The Company through MPW is considered a start-up company engaged in the production and distribution of an ethnic bilingual (English/Italian) weekly newspaper called “Marco Polo”. MPW currently produce and distribute 2,500 copies of the newspaper on a weekly basis mainly in the Vancouver, British Columbia, metropolitan area. It earns revenue by selling advertising space in the newspaper to businesses and professionals who want to market their products and services to individuals of Italian origin residing in the areas of distribution. We also earn revenues through the sale of the newspaper to individual subscribers and through newsstands sales.
As of March 31, 2005 the Company had total assets of $ 27,875 consisting of $ 1,280 cash and accounts receivable of $ 26,595. These are the Company’s present and only sources of liquidity.
The Company’s liabilities at March 31, 2005 totaled $83,243, consisting of $52,106 in accounts payables and $31,136 due to related party.
For the six month period ending March 31, 2005 the Company generated gross revenues of $84,356 with gross margin of $36,917 and comprehensive net loss for the period of $7,809.
During the three months period ended March 31, 2005 the Company generated gross revenues of $38,079 with gross margin of $12,622 and comprehensive net loss for the period of $8,771.
The Company has not realized significant revenues since inception, and for the six month period ended March 31, 2005, and it is presently operating at an ongoing deficit. The Company’s ability to continue as an ongoing concern is dependent on its ability to generate revenues from expanded operation. Failing that, the Company may need to raise additional capital, either debt or equity capital, to fund future operation and ultimately to attain profitable operation.
In view of the company’s consistent losses from operations since inception, and its inability to implement its Business Plan in the publication industry, it has executed a memorandum of terms and conditions in relation to a proposed merger (the "Merger") with an established California technology company that develops hardware and software products that solve today’s complex problems.
The memorandum of terms and conditions is subject to tax analysis, formal due diligence, execution of formal merger agreement and approvals from the boards of Directors and shareholders of both companies, it is currently contemplated that the Merger will be a reverse triangular merger with Global Wide Publication Ltd. being the surviving entity - to be concurrently renamed after the target company ("Targetco"). A further condition for the closing of the merger is the restructuring of the Company’s capital stock such as one present common share in the capital stock of the company will be converted to six new common shares in the capital stock of the Company concurrently, or prior to, the closing of the formal merger agreement. At the date of this report, the company has initiated the process to restructure its capital stock.
The confidentiality provisions of the memorandum of terms and conditions do not allow the disclosure of the identity of Targetco at this time; however, this information will be disclosed as the Merger proceeds.
As part of this transaction the Company would dispose of Marco Polo World News Inc., its wholly owned subsidiary, in exchange for the return to the Company of 2,100,000 common shares of the Company. In addition, the 2,400,000 restricted common shares originally issued by the Company at $0.001 per share would be returned to the Company. The total 4,500,000 common shares would be returned to treasury and cancelled. Global-Wide publication Ltd. would the surviving company in conjunction with the proposed merger.
The Company has will have an obligation to issue 37,260,000 common shares to effect the merger. In addition, the Company will issue a further 8,100,000 common shares to complete the acquisition of a second company and will have a further obligation to sell and issue up to a further 5,000,000 common shares at no less than $1.50 per share to raise the funds necessary to carry out its business plan subsequent to the merger.
Concurrent with the execution of the memorandum of terms and conditions, on April 14, 2005 Mr. Grant Miller, of Santa Rosa, California, was appointed to the Company’s Board of Directors with the positions of Director, Chief Executive Officer and President. His knowledge and experience of capital markets and corporate matters will be of great assistance to the Company during the period of corporate and capital restructuring and in the implementation of the company’s future Business Plan.
The Company anticipates that additional funding will be required in the form of equity financing from the sale of its common stock or from shareholders’ or directors’ loans to finance the contemplated acquisition and development of new assets that will be acquired in the future. There is no assurance that the Company will be able to achieve additional sales of its common stock or to secure debt financing sufficient to fund its future development. Presently it does not have any arrangements in place for future equity financing.
The Company plan of business relating its publication activities for the 2004 calendar year, and subsequently for 2005 calendar year, was to expand its business by attempting to:
1. | Enlarge the publication to 24 pages from the present 20 pages by July 2004.This step was subject to the Company securing approximately 40% more advertising space for each additional page planned for production. The Company anticipated that it would have incurred an additional $70 production cost per issue for this expanded publication. |
2. | Reach an average monthly revenue from advertising and newspaper sales of $ 16,000 by July 2004 The Company did not anticipate to incur any additional cost of sales for increasing the revenues as any additional compensation would have been covered by sales commissions. |
3. | Increase the advertising-to-editorial ratio of the newspaper content to a 40% to 60% by July 2004. |
4. | Increase the printing and distribution of Marco Polo to 3,000 copies a week by November 2004. |
5. | In conjunction with the increase of production to 3,000 copies per issue, the Company would have introduced two new areas in British Columbia (Victoria and Penticton/Kelowna) as additional distribution bases for the publication and would have created content segments in the newspaper to cover news and editorials relating to the two new areas of distribution by November 2004. |
Additional costs for printing and distribution in these new areas would have been approximately US$280 and US$70 per issue respectively. |
The Company’s objectives to obtain these operational milestones have not been met yet. It has no assurances that it will be able to reach these milestones in the near future. Even though the company will attempt to maintain the current operational levels, it cannot give assurances that it will be successful in these endeavors to reach a profitable operation. Furthermore the revenues have remained constant and insufficient to cover costs relating to the production, publication and distribution of the newspaper and general administration of our business activities.
The Company anticipates incurring approximately $91,600 for administrative expenses including accounting and audit costs ($24,000) legal fees ($20,000), rent and office costs ($24,000), computer costs ($5,000), telephone costs ($1,800), Edgar filings ($1,800) and general administrative costs ($15,000) over the next 12 months.
On November 22, 2003, the Company filed an SB2 Registration Statement with The Security and Exchange Commission of the United States (SEC) in order to gain a reporting Status in the United States and in order to register its common stock. On May 13, 2004, the company received its effective status with the SEC becoming a fully reporting company in the United States.
The Company has retained a market maker to sponsor a 15c211 application with the National Association of Securities Dealers (NASD) in order to have its common shares posted for trading on the NASD Over the Counter Bulletin Board (OTC BB) upon approval of this application. The 15c211 application was accepted by NASD and, on June 7, 2004, the Company’s common shares were posted for trading on the OTC BB.
Forward-Looking Statements
This Form 10-QSB includes - "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
All statements other than historical facts included in this Form, including without limitation, statements under "Plan of Operation", regarding the Company's financial position, business strategy, and plans and objectives of management of the Company for the future operations, are forward-looking statements.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, market conditions, competition and the ability to successfully complete financing.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
Shareholders and Directors of the Company have approved a capital stock restructuring whereas 1 (one) present common share of the capital stock of the company will be converted into 6 (six) new common shares in the capital stock of the company (the “forward split”). Subsequent to the forward split the resulting number of the authorized capital stock of the company will be fixed at 200,000,000 common shares with a par value of $0.001 per share of which 37,800,000 common shares will be issued and outstanding. The authorized preferred capital stock of the company will remain unchanged at 5,000,000 shares with a par value of $0.001 per share.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
Resolution consented by shareholders representing 71.42 % majority of the issued and outstanding share capital of the company approving, in accordance with the company’s bylaws:
a. | a forward split of its capital stock such as every one share of common stock issued and outstanding prior to the split be exchanged for six post-split shares of common stock resulting in an increase of the share capital issued and outstanding, subsequent to the split, to a total of 37,800,000 common shares with a par value of one tenth of one cent per share | |
b. | decrease the company’s post-split authorized capital to 200,000,000 shares of common stock with a par value of one tenth of one cent per share, | |
c. | maintain unchanged the authorized capital of its preferred stock at 5,000,000 shares with a par value of one tenth of one cent per share; |
Item 5. Other Information
None
Item 6. Exhibits and Report on Form 8-K
There were no reports were filed on form 8K during the three months ending March 31, 2005.
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.
Global Wide Publication Ltd.
/s/ “Grant Miller”
Grant Miller, Director
Date: May 13, 2005.