BULLDOG FINANCIAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED NOTES TO FINANCIAL STATEMENTS
MAY 31, 2007
Property and equipment are stated at cost. Depreciation and amortization is provided using the straight-line method over the estimated useful lives of the assets. The useful life of property and equipment for purposes of computing depreciation is three years. The following is a summary of property, equipment, and accumulated depreciation:
Depreciation and amortization expense for the period ended May 31, 2007 was $5,032. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations.
The Company is authorized to issue 200,000,000 shares of common stock. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. The Company is also authorized to issue 20,000,000 shares of preferred stock. None of the preferred shares have been issued.
BULLDOG FINANCIAL, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED NOTES TO FINANCIAL STATEMENTS
MAY 31, 2007
In its initial capitalization in August 2004, the Company issued 25,000,000 shares of common stock for a total of $100 cash. The Company issued an additional 1,925,000 shares and 1,937,500 shares of common stock for $38,500 and $38,750 during the periods ending May 31, 2006 and February 28, 2006, respectively.
On June 22, 2007, the Board of Directors of the Company with Majority Stockholders consent, approved authorizing the Company' s Board of Directors (1) to increase the authorized shares of common stock to 200,000,000; (2) to effect a 5-for-1 forward stock split (pro-rata increase) of the Company's issued and outstanding shares of Common Stock; and, (3) to amend the Articles of Incorporation to create a class of blank check preferred stock with 20,000,000 shares authorized. Under the forward stock split, each one share of the Company's Common Stock will be converted automatically into five shares of Common Stock. The effective date of the forward stock split will be July 23, 2007. The accompanying financial statements and notes reflect the split as if it had occurred at the earliest period presented.
NOTE 5 - INCOME TAXES
At May 31, 2007, the Company had net deferred tax assets calculated at an expected rate of 34% of approximately $32,700, principally arising from net operating loss carry forwards for income tax purposes. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at May 31, 2007. The significant components of the deferred tax asset at May 31, 2007, and August 31, 2006 were as follows:
At May 31, 2007, the Company has net operating loss carry forwards of approximately $96,000, which begin to expire in the year 2024. The change in valuation allowance from August 31, 2006 to May 31, 2007, is approximately $6,800.
| May 31, | | August 31, |
| 2007
| | 2006
|
Net operating loss carry forward: | 96,000
| | 76,200
|
Deferred tax asset | 32,700 | | 25,900 |
Deferred tax asset valuation allowance | (32,700)
| | (25,900)
|
Net deferred tax asset | -
| | -
|
NOTE 6 - RELATED PARTY TRANSACTIONS
Accounts payable to related parties represents amounts due to the president and chief executive officer for payment of expenses on behalf of the Company. These payables are non-interest bearing and not collateralized. At August 31, 2006 and May 31, 2007, the Company owed the president $29,322 and $39,322, respectively, for expenses paid on behalf of the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
We were incorporated in the state of Nevada on August 23, 2004. We have started operations. We have not generated revenues from operations, but must be considered a start-up business. Our statutory registered agent in Nevada is The Corporation Trust Company of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada 89511. From the proceeds of our offering, we subleased office space to commence operations. Our telephone number is (303) 278-0207.
On May 25, 2006, we completed our public offering by selling 3,862,500 shares at $0.02 per share, totaling $77,250. We began our operations as described in the business section of our registration statement during June 2006.
On June 22, 2007, our shareholders approved increasing our authorized shares of common stock to 200,000,000; effecting a five-for-one forward stock split (pro-rata increase) of our issued and outstanding shares of common stock; and, amending our Articles of Incorporation to create a class of blank check preferred stock with 20,000,000 shares authorized. Under the forward stock split, each one share of the our common stock was converted automatically into five shares of common stock. The effective date of the forward stock split was July 23, 2007. The management's discussion and analysis, as well as the accompanying financial statements and notes reflect the split as if it had occurred at the earliest period presented.
We have not conducted any market research into the likelihood of success of our operations.
Plan of Operations
This section of the report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
We are a start-up stage corporation and have begun operations but have not yet generated revenues from our business operations.
Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not purchased a significant number of contracts or generated any revenues from the development.
We cannot guarantee that we will stay in business. We will either have to suspend operations until we raise additional cash, or cease operations entirely.
We do not have sufficient cash to satisfy our cash requirements during the next twelve months. We will not be conducting any product research or development. We intend to hire additional employees on an as needed basis.
We intend to accomplish the foregoing through the following milestones:
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1. We initiated an inital marketing campaign. We market our services in the state of Colorado, primarily through word of mouth with lenders. We also make personal contact with potential clients which may require us to travel and entertain potential customers. Marketing is an ongoing matter that will continue during the life of our operations. From the proceeds from our offering, we obtained an initial marketing study and assessment for $7,500. We felt additional monies would be better spent purchasing delinquent accounts and generating revenues. We intend to continue marketing programs and will fund any such programs from operating revenues generated from the collection of delinquent accounts.
2. We will begin servicing additional contracts.
We are in full operation at this time.
If we cannot generate sufficient revenues to continue operations, we will suspend or cease operations. If we cease operations, we do not know what we will do and we do not have any plans to do anything else. If this occurs, you will lose all of your investment.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have not generated any revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
From Inception on August 23, 2004 to May 31, 2007
During this period we incorporated the company, hired the attorney, and hired the auditor for the preparation of our Form SB-2 Registration Statement. We have prepared an internal business plan. Our loss since inception is $96,248.
Since inception, we sold 25,000,000 shares of common stock to our officers and directors for $100 and 3,862,500 shares of common stock to other investors for $77,250 in cash.
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Accounts payable
Accounts payable of $7,096 was recorded at May 31, 2007, represented by liabilities. Additional the Company has $39,322 of related party liabilities.
Liquidity and capital resources
As of the date of this annual report, we have yet to generate any revenues from our business operations.
In August 2004, we issued 25,000,000 shares of common stock pursuant to the exemption from registration contained in section 4(2) of the Securities Act of 1933. This was accounted for as a sale of common stock.
As of May 31, 2007, our total assets were $826 in cash, $13,000 in inventory and $13,964 in fixed assets and our total liabilities were $46,418 comprised of a related party accounts payable of $39,322 and accounts payable of $7,096, Scott D. McDowell, our president, advanced us the sum of $39,322 to pay for legal, accounting and other expenses associated with our public offering. The payable is without interest and the agreement with Mr. McDowell is oral. There is no written documentation evidencing the same.
Recent accounting pronouncements
In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159, " The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115" (hereinafter "SFAS No. 159" ). This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board' s long-term measurement objectives for accounting for financial instruments. This statement is effective as of the beginning of an entity' s first fiscal year that begins after November 15, 2007, although earlier adoption is permitted. Management has not determined the effect that adopting this statement would have on the Company' s financial condition or results of operation.
In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 158, " Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)" (hereinafter " SFAS No. 158" ). This statement requires an employer to recognize the overfunded or underfunded statues of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not for profit organization. This statement also requires an employer to measure the funded status of a plan as of the date of its year end statement of financial position, with limited exceptions. The Company does not expect the adoption of SFAS No. 158 to have a significant material immediate effect on its financial position or results of operations.
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Critical accounting policies and estimates
Management has reviewed the financial statement disclosures for the list of the most important accounting policies that the Company has. Management feels that the accounting policies that are estimate based, fair value, and revenue recognition are the most important accounting policies that the Company has.
ITEM 3. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended May 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
On August 31, 2005, the Securities and Exchange Commission declared our Form SB-2 Registration Statement effective, file number 333-120689, permitting us to offer up to 12,500,000 shares of common stock at $0.10 per share. There is no underwriter involved in our public offering. On May 25, 2006, we completed our public offering by selling 3,862,500 shares at $0.02 per share, totaling $77,250. Some of the proceeds have been used to implement our business plan during the period ended May 31, 2007. Proceeds were used as follows: legal - $17,295; accounting - $14,854; marketing - $7,500; office equipment - $10,125; software - $10,000; purchase of delinquent accounts for collection - $13,000; and, rent and office expense - $3,666.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On June 22, 2007 our shareholders approved increasing our authorized shares of common stock to 200,000,000; effecting a five-for-one forward stock split (pro-rata increase) of our issued and outstanding shares of common stock; and, amending our Articles of Incorporation to create a class of blank check preferred stock with 20,000,000 shares authorized. Under the forward stock split, each one share of the our common stock will be converted automatically into five shares of common stock. The effective date of the forward stock split was July 23, 2007. The accompanying financial statements and notes reflect the split as if it had occurred at the earliest period presented. 5,000,000 shares owned by Scott McDowell approved the action. The action was taken without a meeting of shareholders pursuant to applicable Nevada law.
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ITEM 6. EXHIBITS.
The following documents are included herein:
Exhibit No. | Document Description |
| |
31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended. |
| |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer). |
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities and Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 26th day of July, 2007.
| BULLDOG FINANCIAL, INC. |
| | |
| BY: | SCOTT McDOWELL |
| | Scott D. McDowell, President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer and a member of the Board of Directors |
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