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 ended September 30, 2007
[ ]
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 333--138471
DANAPC.COM
(Exact Name of small business issuer as specified in its charter)
Wyoming
20-5244503
(State or other Jurisdiction of
I.R.S. Employer Identi-
Incorporation or Organization
fication No.)
24351 Pasto Road, #B, Dana Point, California 92629
(Address of Principal Executive Offices)
(Zip Code)
(949) 489-2400
(Issuer's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) has 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 (of for such shorter period that the Registrant was required to file such reports) and (ii) has been subject to such filing requirements for the past 90 days.
Yes No X
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.
Yes X No ____
Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.
Common Stock, no par value
16,000,000
Title of Class
Number of Shares outstanding
at November 2, 2007
Transitional Small Business Format Yes No X
DANAPC.COM
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
ASSETS
September 30,
2007
CURRENT ASSETS
Cash and Cash equivalents
$
443
Total Current Assets
443
Total Assets
$
443
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable
13,160
Accounts payable – related party
33,319
Total Current Liabilities
46,479
Total Liabilities
$
46,479
STOCKHOLDERS' DEFICIT
Preferred Stock, no par value; unlimited shares
authorized; no shares issued and outstanding
--
Common Stock, no par value; unlimited shares
authorized; 16,000,000 shares issued and outstanding
16,000
Additional paid in capital
500
Subscription receivable
(6,000)
Deficit accumulated during development stage
(56,536)
TOTAL STOCKHOLDERS' DEFICIT
(46,036)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT
$
443
The accompanying notes are an integral part of the financial statements.
DANAPC.COM
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
FROM INCEPTION
FOR THE THREE
FROM INCEPTION
(JULY 21,
MONTHS ENDED
(JULY 21, 2006) TO
2006) TO
SEPTEMBER 30,
SEPTEMBER 30,
SEPTEMBER 30
2007
2006
2007
REVENUES
$
--
$
--
$
--
EXPENSES
General and Administrative
14,560
1,746
56,536
Operating Loss
(14,560)
(1,746)
(56,536)
LOSS BEFORE
INCOME TAXES
(14,560)
(1,746)
(56,536)
CURRENT TAX EXPENSE
--
--
--
NET LOSS
$
(14,560)
$
(1,746)
$
(56,536)
BASIC LOSS PER
COMMON SHARE
$
(.00)
$
(.00)
$
(.01)
BASIC WEIGHTED
AVERAGE SHARES
OUTSTANDING
16,000,000
16,000,000
16,000,000
The accompanying notes are an integral part of these unaudited condensed financial statements.
DANAPC.COM
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE
FROM INCEPTION
FROM INCEPTION
MONTHS ENDED
(JULY 21, 2006)
(JULY 21, 2006)
SEPTEMBER 30,
SEPTEMBER 30,
TO
2007
2006
SEPTEMBER 30, 2007
Cash Flows from Operating Activities:
Net loss
$
(14,560)
$
(1,746)
$
(56,536)
Changes in assets and liabilities:
Increase (decrease) in accounts payable
--
--
13,160
Increase (decrease) in accounts payable -
related party
9,519
19
33,319
Net Cash Provided (used) by
Operating Activities
(5,041)
1,727
(10,053)
Cash Flows from Financing Activities:
Proceeds from sale of common stock
5,000
5,000
10,000
Net Cash Provided by
Financing Activities
5,000
5,000
10,000
Net Increase (Decrease) in Cash
41
3,273
443
Cash Balance at Beginning of Period
484
--
--
Cash at End of Period
$
443
$
3,273
$
443
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest
$
--
$
--
$
--
Income taxes
$
--
$
--
$
--
Non cash disclosure
Forgiveness of Debt
$
--
$
--
$
500
The accompanying notes are an integral part of these unaudited condensed financial statements.
DANAPC.COM
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization – DanaPC.com (the “Company”) was organized under the laws of the State of Wyoming on July 21, 2006. The Company is developing a web site to give consumers information on commonly encountered problems with personal computers. The Company has not yet generated any revenues from planned principal operations and is considered a development stage company as defined in Statement of Financial Accounting Standards No. 7. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2007 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the notes to financial statements thereto included in the Company’s June 30, 2007 audited financial statements. The results of operations for the period ended September 30, 2007 are not necessarily indicative of the operating results for the full year.
Fiscal Year - The Company’s fiscal year-end is June 30.
Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.
Advertising Costs -Advertising costs are charged to operations when incurred. The Company has not yet incurred any advertising costs.
Web Development Costs - Web Development costs are expensed as incurred.
Stock-Based Compensation- The Company has one stock-based employee compensation plan [See Note 2]. The Company accounts for its plan under the recognition and measurement principles of SFAS 123R, “Share Based Payment” and related Interpretations. The Company has not issued any stock options or warrants.
Organization Costs - Organization costs are expensed as incurred. Organization costs expensed for the three months ended September 30, 2007 and 2006 were $0 and $200, respectively.
Income Taxes -The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” [See Note 3].
Loss Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with Statement of Financial Accounting Standards No. 128, “Earnings Per Share” [See Note 6].
DANAPC.COM
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Accounting Estimates- The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimated.
Recently Enacted Accounting Standards –In July 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this statement did not have an effect on the Company’s financial statements.
In October 2006, the FASB issued SFAS No. 157, “Statement of Financial Accounting Standards” (“SFAS 157”). The purpose of SFAS 157 is to provide users of financial statements with better information about the extent to which fair value is used to measure recognized assets and liabilities, the inputs used to develop the measurements, and the effect of certain of the measurements on earnings for the period. SFAS No. 157 also provides guidance on the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. This changes the definition of fair value to be the price that would be received to sell an asset or paid to transfer a liability, an exit price, as opposed to the price that would be paid to acquire the asset or received to assume the liability, an entry price. SFAS No. 157 is effective for f inancial statements issued for fiscal years beginning after November 15, 2007, and interim periods with those fiscal years (e.g., January 1, 2008, for calendar year-end entities.) We do not expectthe adoption of SFAS No. 157 to have a material impact on our consolidated financial position, results of operations or cash flows.
In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108), which addresses how to quantify the effect of financial statement errors. The provisions of SAB 108 become effective as of the end of our 2007 fiscal year. We do not expect the adoption of SAB 108 to have a significant impact on our financial statements.
In February 2007, the FASB issued Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115" (FAS 159). FAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The provisions of FAS 159 become effective as of the beginning of our 2009 fiscal year. We are currently evaluating the impact that FAS 159 will have on our financial statements.
DANAPC.COM
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock -The Company has authorized an unlimited number of shares of no par value common stock and preferred stock. In July 2006, in connection with its organization, the Company issued 16,000,000 shares of common stock to various individuals including 10,000,000 shares which were issued to an officer/shareholder of the Company. The shares were issued for a subscription receivable of $11,000 and for cash of $5,000 (or $.001 per share). The subscription receivable was paid in part during August 2007.
In November 2006, an entity related to a stockholder performed legal services valued at $500 in connection with the Company’s registration statement on Form SB-2. The related payable was forgiven by the law firm and was accounted for as a contribution to capital.
Stock Option Plan- In July 2006, the Board of Directors adopted and the stockholders at that time approved the 2006 Stock Option Plan (“the Plan”). The Plan provides for the granting of qualified and non-qualified stock options to purchase up to 2,000,000 shares of common stock to directors, officers, advisors and employees of the Company as well as to employees of companies that do business with the Company. Awards under the plan will be granted as determined by the Stock Option Committee of the Board of Directors. The Plan limits awards to directors, officers and employees to $100,000 of compensation per year. The options will expire after 10 years or 5 years if the option holder owns at least 10% of the common stock of the Company. The exercise price of a non-qualified option must be at least 85% of the market price. The exercise price of a qualified option must be at least equal to the market price or 110% of the market price if the option holder owns at least 10% of the common stock of the Company. At September 30, 2007, no awards had been made and total awards available to be granted from the Plan amounted to 2,000,000 shares.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”. SFAS No. 109 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.
The Company has available at September 30, 2007 an unused operating loss carryforward of approximately $57,000 which may be applied against future taxable income and which expires in 2026. The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the net deferred tax assets, the Company has established a valuation allowance equal to their tax effect and, therefore, no deferred tax asset has been recognized.
DANAPC.COM
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS
Office Space- The Company has not had a need to rent office space. An officer/shareholder of the Company is allowing the Company to use his offices, as needed, at no expense to the Company.
A shareholder performed web design services in the quarter ended December 31, 2006 valued at $4,000, for which he has not been paid and which have been recorded as an account payable – related party.
An officer and shareholder advanced $1,800 to pay web development costs in the quarter ended March 31, 2007. The same officer and shareholder has accrued salary of $27,000 for the nine months ended September 30, 2007 at the rate of $3,000 per month.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company was only recently formed and has not yet been successful in establishing profitable operations. As of Septyember 30, 2007 the Company had no revenues and an accumulated deficit of $56,536. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
NOTE 6 - LOSS PER SHARE
The Company computes net loss per share in accordance with SFAS No. 128, Earnings per Shares (SFAS 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB 98, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of share of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. For the period from October 18, 2006 (Date of inception) through September 30, 2007, the Company had no potentially dilutive securities.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
We have not generated revenues from operations through September 30, 2007. Until we receive funding from outside sources, such as debt or equity financing, our operations will be severely limited by the financial resources that can be provided by officers' personal loans.
DanaPC.com will require approximately $50,000 in cash over the next twelve months to effect its business plan. We expect to obtain this cash from the proceeds of one or more private or public offerings.
The following sets forth the approximate amounts needed for each category of expenses:
Marketing, advertising and promotion
$
10,000
Webpage development and updating
25,000
General and administrative expenses
15,000
Total
$
50,000
Marketing will primarily consist of costs to upgrade the website’s position in search engines and a limited cash outlay for sponsored link advertising in search engines.
Webpage development will be primarily conducted by independent contractor web programmers outsourced in Ukraine. The monthly salary for web designers in Ukraine ranges from $150 to $800 per month, so DanaPC.com believes that the $25,000 will be sufficient to develop and maintain a web site with changes. We have already constructed a temporary version of the site at DanaPC.com.
General and Administrative Expenses, consisting of salaries, legal, accounting and office expenses are about $2,000 per month.
If we do not receive enough to carry out the entire business plan, we will cut general and administrative expenses to under $1,000 per month, defer marketing, and our product development will be delayed. This delay may or may not have a significant effect on revenues, depending on our success in search engine placement.
We do not have any agreements or understandings with respect to sources of capital. We have not identified any potential sources. It's likely that we will not be able to raise the entire amount required initially, in which case our development time will be extended until such full amount can be obtained. Even if we are successful in obtaining the required funding, we probably will need to raise additional funds at the end of 12 months.
Information included in this filing includes forward looking statements, which can be identified by the use of forward-looking terminology such as may, expect, anticipate, believe, estimate, or continue, or the negative thereof or other variations thereon or comparable terminology. The statements in "Risk Factors" and other statements and disclaimers in this filing constitute cautionary statements identifying important factors, including risks and uncertainties, relating to the forward-looking statements that could cause actual results to differ materially from those reflected in the forward-looking statements.
Since we have not yet generated any revenues, we are a development stage company as that term is defined in paragraphs 8 and 9 of SFAS No. 7. Our activities to date have been limited to seeking capital; seeking supply contracts and development of a business plan. Our auditors have included an explanatory paragraph in their report on our financial statements for the year ended June 30, 2007, relating to the uncertainty of our business as a going concern, due to our lack of operating history or current revenues, its nature as a start up business, management's limited experience and limited funds. We do not believe that conventional financing, such as bank loans, is available to us due to these factors. We have no bank line of credit available to us. Management believes that it will be able to raise the required funds for
operations from one or more future offerings, in order to effect our business plan.
Our future operating results are subject to many facilities, including:
o our success in developing our website;
o our ability to attract and retain sponsored banner advertisements;
o the effects of competition from other websites offering similar information;
o our ability to obtain additional financing; and
o other risks which we identify in future filings with the SEC.
Any or all of our forward looking statements in this quarterly report and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward looking statement can be guaranteed. In addition, we undertake no responsibility to update any forward-looking statement to reflect events or circumstances which occur after the date of this prospectus.
Item 3.Controls and Procedures.
(a) Evaluation of disclosure controls and procedures. The Company’s principal executive officer and its principal financial officer, based on their evaluation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d -14 (c) as of a date within 90 days prior to the filing of this Quarterly Report on Form 10Q, have concluded that the Company’s disclosure controls and procedures are adequate and effective for the purposes set forth in the definition in Exchange Act rules.
(b) Changes in internal controls. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s internal controls subsequent to the date of their evaluation.
PART II. OTHER INFORMATION
Item 1.
LEGAL PROCEEDINGS - None
Item 2.
CHANGES IN SECURITIES - None
Item 3.
DEFAULTS UPON SENIOR SECURITIES - None
Item 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
Item 5.
OTHER INFORMATION - None
Item 6.
EXHIBITS
--None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DANAPC.COM
Date:
November 12, 2007
By:/s/ Yuriy Semenov
Yuriy Semenov
President and Chief Financial
Officer (chief financial officer
and accounting officer and duly
authorized officer)