UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2003
---------------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from to
------------------------------ --------------------------
Commission file number 0-730
-----------------------------------------------------
Penn-Pacific Corp.
------------------------------------------------------------------
(Exact name of small business issuer as
specified in its charter)
Nevada 95-3227748
- --------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
3325 Griffin Road, #200, Ft. Lauderdale, FL 33323
----------------------------------------------------------------------------
(Address of principal executive offices)
(866) 387-6583
Issuer's telephone number
(Former name, former address and former fiscal year, if changed
since last report.)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes ----- No -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date: May 10, 2005 1,168,698
- -------------------------------------------------
Transitional Small Business Disclosure Format (check one).
Yes ; No X
---- -----
PART I
ITEM 1. FINANCIAL STATEMENTS
PENN-PACIFIC CORP.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
March 31, September 30,
2003 2002
------------------ ------------------
Assets: $ - $ -
================== ==================
Liabilities - Accounts Payable $ 31,076 $ 31,076
------------------ ------------------
Stockholders' Equity:
Preferred Stock, Par value $.0001
Series A, Authorized 10,000,000 shares, None issued - -
Series B, authorized 9,990,000 shares, None issued - -
Series C, Authorized 10,000 shares, None issued - -
Common Stock, Par value $.00001
Authorized 500,000,000 shares,
Issued 1,168,698 Shares at March 31, 2003 and
September 30, 2002 12 12
Paid-In Capital 35,811,071 35,811,071
Retained Deficit (35,735,362) (35,735,362)
Deficit Accumulated During the
Development Stage (106,797) (106,797)
------------------ ------------------
Total Stockholders' Equity (31,076) (31,076)
------------------ ------------------
Total Liabilities and
Stockholders' Equity $ - $ -
================== ==================
See accompanying notes.
PENN-PACIFIC CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
since
January 13,
1997
For the three months ended For the six months ended inception of
March 31, March 31, development
------------------------------------- -------------------------------------
2003 2002 2003 2002 stage
------------------ ----------------- ----------------- ------------------ ------------------
Revenues: $ - $ - $ - $ - $ -
Expenses: - 950 - 950 106,797
------------------ ----------------- ----------------- ------------------ ------------------
Net Loss $ - $ (950) $ - $ (950) $ (106,797)
================== ================= ================= ================== ==================
Basic &
Diluted loss
per share $ - $ - $ - $ -
================== ================= ================= ==================
See accompanying notes.
PENN-PACIFIC CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
since January
13, 1997
For the six months ended Inception of
March 31, Development
-------------------------------------
2003 2002 Stage
----------------- ------------------ ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ - $ - $ (106,797)
Increase (Decrease) in Accounts Payable - - 30,821
Increase (Decrease) in Accrued Expenses - - 97,693
----------------- ------------------ ------------------
Net Cash Used in operating activities - - 21,717
----------------- ------------------ ------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by investing activities - - -
----------------- ------------------ ------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Common Stock issued for expenses - - 21,717
----------------- ------------------ ------------------
Net Cash Provided by
Financing Activities - - 21,717
----------------- ------------------ ------------------
Net (Decrease) Increase in
Cash and Cash Equivalents - - -
Cash and Cash Equivalents
at Beginning of Period - - -
----------------- ------------------ ------------------
Cash and Cash Equivalents
at End of Period $ - $ - $ -
================= ================== ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ - $ -
Franchise and income taxes $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
See accompanying notes.
PENN-PACIFIC CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Penn-Pacific Corp. (a
development stage company) is presented to assist in understanding the Company's
financial statements. The accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
Going Concern
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States, which
contemplates the Company as a going concern. However, the Company has sustained
substantial operating losses in recent years and has used substantial amounts of
working capital in its operations. Realization of the assets reflected on the
accompanying balance sheet is dependent upon continued operations of the Company
which, in turn, is dependent upon the Company's ability to meet its financing
requirements and succeed in its future operations. Management believes that
actions presently being taken to revise the Company's operating and financial
requirements provide them with the opportunity for the Company to continue as a
going concern.
Interim Reporting
The unaudited financial statements as of March 31, 2003 and for the
three and six month period then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three
months. Operating results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the state of Delaware on
May 18, 1971. From 1979 to 1991 the primary business of Penn Pacific and its
subsidiaries was the acquisition, exploration, development, production and
operation of oil and gas properties. Penn Pacific has been inactive since 1991.
The Company filed a voluntary petition of reorganization under Chapter 11 of the
United States Bankruptcy Code on January 27, 1994. On January 13, 1997, the
Company emerged from bankruptcy pursuant to a final decree of the United States
Bankruptcy Court for the Northern District of Oklahoma. The Company is in the
development stage since January 13, 1997 and has not commenced planned principal
operations.
PENN-PACIFIC CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002 (Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Nature of Business
The Company has no products or services as of March 31, 2003. The
Company was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company.
Loss per Share
The reconciliations of the numerators and denominators of the basic
loss per share computations are as follows:
Per-Share
Income Shares Amount
(Numerator) (Denominator)
For the three months ended March 31, 2003
BASIC LOSS PER SHARE
Loss to common shareholders $ - 1,168,698 $ -
================== =================== ==================
For the three months ended March 31, 2002
BASIC LOSS PER SHARE
Loss to common shareholders $ - 1,168,698 $ -
================== =================== ==================
For the six months ended March 31, 2003
BASIC LOSS PER SHARE
Loss to common shareholders $ - 1,168,698 $ -
================== =================== ==================
For the six months ended March 31, 2002
BASIC LOSS PER SHARE
Loss to common shareholders $ - 1,168,698 $ -
================== =================== ==================
The effect of outstanding common stock equivalents would be
anti-dilutive for March 31, 2003 and 2002 and are thus not considered. There are
no common stock equivalents outstanding at March 31, 2003 and 2002.
PENN-PACIFIC CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002 (Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements.
NOTE 2 - INCOME TAXES
As of March 31, 2003, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $106,000 that may be offset
against future taxable income through 2022. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage. The Company's financial statements are prepared using
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal
PENN-PACIFIC CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002 (Continued)
(Unaudited)
NOTE 3 - DEVELOPMENT STAGE COMPANY (continued)
course of business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern. In
the interim, shareholders of the Company have committed to meeting its minimal
operating expenses.
NOTE 4 - COMMITMENTS
As of March 31, 2003 all activities of the Company have been conducted
by corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the company for the use of these
facilities and there are no commitments for future use of the facilities.
NOTE 5 - SUBSEQUENT EVENTS
Delinquent Delaware Annual Corporate Report
As of March 31, 2003 the Company is delinquent in filing its annual
corporate report in the State of Delaware. During April 2004 the Company paid
the required franchise tax and was reinstated. The liability for the tax has
been included in accounts payable.
Merger
On April 8, 2005 a Plan and Articles of Merger between Penn-Pacific
Corp. (Delaware) and Penn-Pacific Corp. (Nevada) was filed in the State of
Nevada whereby the Company was redomiciled in the State of Nevada. As part of
the merger, the Company changed the authorized stock to 500,000,000 Common
shares, par value $.00001 and 20,000,000 Preferred shares, par value $.0001. The
common and the preferred stock are entitled to all the same rights and
privileges except for the voting restrictions for Series C Preferred shares
which are entitled to 50% of the stockholders' voting rights. Changes in par
value have been retroactively restated.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the ability of the Company to continue its
expansion strategy, changes in costs
of raw materials, labor, and employee benefits, as well as general market
conditions, competition and pricing. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this Quarterly
Report will prove to be accurate. In light of the significant uncertainties
inherent in the forward- looking statements included herein, the inclusion of
such information should not be regarded as a presentation by the Company or any
other person that the objectives and plans of the Company will be achieved.
As used herein the term "Company" refers to Penn-Pacific Corp., a
Nevada corporation and its predecessors, unless the context indicates otherwise.
The Company is currently a shell company whose purpose is to acquire operations
through an acquisition or merger or to begin its own start-up business.
The Company is in the process of attempting to identify and acquire a
favorable business opportunity. The Company has reviewed and evaluated a number
of business ventures for possible acquisition or participation by the Company.
The Company has not entered into any agreement, nor does it have any commitment
or understanding to enter into or become engaged in a transaction as of the date
of this filing. The Company continues to investigate, review, and evaluate
business opportunities as they become available and will seek to acquire or
become engaged in business opportunities at such time as specific opportunities
warrant.
PLAN OF OPERATIONS
The Company had no sales or sales revenues for the three months ended
March 31, 2003 or 2002 because it is a shell company that has not had any
business operations for the past three years.
The Company had no costs of sales revenues for the three months ended
March 31, 2003 or 2002 because it is a shell company that has not had any
business operations for the past three years. The Company had general and
administrative expenses of $-0- for the three month period ended March 31, 2003
and 2002.
CAPITAL RESOURCES AND LIQUIDITY
At March 31, 2003, the Company had total current assets of $0 and total
assets of $0 as compared to $0 current assets and $0 total assets at September
30, 2001. The Company had a net working capital deficit of $31,076 at March 31,
2003 and $31,076 at September 30, 2002.
Net stockholders' deficit in the Company was $31,076 as of March 31,
2003 and $31,076 at September 30, 2002.
ITEM 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
concluded, based on an evaluation conducted as of the end of the period covered
by this Quarterly Report on Form 10- QSB, that the Company's disclosure controls
and procedures have functioned effectively so as to provide those officers the
information necessary to evaluate whether:
(i) this Quarterly Report on Form 10-QSB contains any untrue statement
of a material fact or omits to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this Quarterly Report on Form 10-QSB, and
(ii) the financial statements, and other financial information included
in this Quarterly Report on Form 10-QSB, fairly present in all material
respects the financial condition, results of operations and cash flows
of the Company as of, and for, the periods presented in this Quarterly
Report on Form 10-QSB.
There have been no significant changes in the Company's internal
controls or in other factors since the date of the Chief Executive Officer's and
Chief Financial Officer's evaluation that could significantly affect these
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None/Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None/Not Applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following documents are filed herewith or have been included as
exhibits to previous filings with the Commission and are incorporated herein by
this reference:
Exhibit No. Exhibit
*3 Articles of Incorporation
*3.2 Bylaws
*3.1 Amended Articles of Incorporation
31 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32 Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) Reports on Form 8-K. No reports on Form 8-K were filed
during the period covered by this
Form 10-KSB.
* Incorporated herein by reference
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, this 10th day of May, 2005.
Penn-Pacific Corp.
/s/ Rose Fischer
Rose Fischer
President/CFO and Director
May 10, 2005