FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2004
Commission File Number 000-27867
DENDO GLOBAL CORP.
(Exact name of registrant as specified in its charter)
Nevada 87-0533626
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5555 North Star Ridge Way, Star, Idaho 83669
(Address of principal executive offices)
(Zip Code)
(208) 286-0166
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) 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 (or for such shorter
period that the registrant 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.
Class Outstanding as of May 6, 2004
Common Stock 28,875,000
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Unaudited Condensed Balance Sheets,
March 31, 2004 and September 30, 2003 2
- Unaudited Condensed Statements of Operations,
for the three and six months ended March 31,
2004 and 2003 and from inception on June 26,
1998 through March 31, 2004 3
- Unaudited Condensed Statements of Cash Flows,
for the six months ended March 31, 2004
and 2003 and from inception on June 26, 1998
through March 31, 2004 4
- Notes to Unaudited Condensed
Financial Statements 5 - 8
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
March 31, September 30,
2004 2003
___________ ___________
CURRENT ASSETS:
Cash $ 627 $ 2,995
Income taxes receivable 730 730
___________ ___________
Total Current Assets 1,357 3,725
___________ ___________
$ 1,357 $ 3,725
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 790 $ 1,060
Accrued expenses - related party 21,500 21,500
___________ ___________
Total Current Liabilities 22,290 22,560
___________ ___________
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.001 par value,
50,000,000 shares authorized,
520,000 shares issued and
outstanding 520 520
Capital in excess of par value 5,480 5,480
Deficit accumulated during the
development stage (26,933) (24,835)
___________ ___________
Total Stockholders'
Equity (Deficit) (20,933) (18,835)
___________ ___________
$ 1,357 $ 3,725
___________ ___________
Note: The balance sheet at September 30, 2003 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-2-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three For the Six From Inception
Months Ended Months Ended on June 26,
March 31, March 31, 1998 Through
__________________ _________________ March 31,
2004 2003 2004 2003 2004
________ ________ _______ ________ ______________
REVENUE $ - $ 2,000 $ - $ 2,000 $ 37,890
EXPENSES:
Selling - - - - 4,561
General and
administrative 798 21,706 2,098 22,936 59,968
________ ________ _______ ________ ______________
Total Expenses 798 21,706 2,098 22,936 64,529
________ ________ _______ ________ ______________
LOSS BEFORE INCOME
TAXES (798) (19,706) (2,098) (20,936) (26,639)
CURRENT TAX EXPENSE
(BENEFIT) - (546) - (730) 294
DEFERRED TAX EXPENSE
(BENEFIT) - (2,411) - (2,411) -
________ ________ _______ ________ ______________
NET LOSS $ (798)$(16,749)$(2,098) $(17,795) $ (26,933)
________ ________ _______ ________ ______________
LOSS PER COMMON SHARE $ (.00)$ (.03 $ (.00) $ (.03) $ (.05)
________ ________ _______ ________ ______________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-3-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Six From Inception
Months Ended on June 26,
March 31, 1998 Through
______________________ March 31,
2004 2003 2004
__________ __________ _____________
Cash Flows from Operating Activities:
Net loss $ (2,098) $ (17,795) $ (26,933)
Adjustments to reconcile net loss
to net cash used by
operating activities:
Changes in assets and liabilities:
(Increase) in income
taxes receivable - (730) (730)
Increase in deferred tax assets - (2,411) -
Increase in accounts payable (270) 1,326 790
Increase in accrued
expenses - related party - 15,500 21,500
(Decrease) in income
taxes payable - (1,024) -
Increase (decrease) in
accrued expenses - (464) -
__________ __________ _____________
Net Cash (Used) by
Operating Activities (2,368) (5,598) (5,373)
__________ __________ _____________
Cash Flows from Investing Activities - - -
__________ __________ _____________
Net Cash Provided by
Investing Activities - - -
__________ __________ _____________
Cash Flows from Financing Activities:
Proceeds from issuance of
common stock - - 6,000
__________ __________ _____________
Net Cash Provided by
Financing Activities - - 6,000
__________ __________ _____________
Net Increase (Decrease) in Cash and
Cash Equivalents (2,368) (5,598) 627
Cash and Cash Equivalents at
Beginning of Period 2,995 10,920 -
__________ __________ _____________
Cash and Cash Equivalents at
End of Period $ 627 $ 5,322 $ 627
__________ __________ _____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ 1,024 $ 1,024
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the six months ended March 31, 2004:
None
For the six months ended March 31, 2003:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-4-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Dolphin Productions, Inc. ("the Company") was organized
under the laws of the State of Nevada on June 26, 1998. The Company
provides musical and other performance services for concerts and other
events. The Company has not yet generated significant revenues from its
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.
Condensed Financial Statements - 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 March 31, 2004 and 2003 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 condensed financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's September 30, 2003 audited financial statements.
The results of operations for the periods ended March 31, 2004 and 2003
are not necessarily indicative of the operating results for the full year.
Fiscal Year - The Company's fiscal year-end is September 30th.
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.
Accounts and Loans Receivable - The Company records accounts and loans
receivable at the lower of cost or fair value. The Company determines the
lower of cost or fair value of non-mortgage loans on an individual asset
basis. The Company recognizes interest income on an account receivable
based on the stated interest rate for past-due accounts over the period
that the account is past due. The Company recognizes interest income on a
loan receivable based on the stated interest rate over the term of the
loan. The Company accumulates and defers fees and costs associated with
establishing a receivable to be amortized over the estimated life of the
related receivable. The Company estimates allowances for doubtful
accounts and loan losses based on the aged receivable balances and
historical losses. The Company records interest income on delinquent
accounts and loans receivable only when payment is received. The Company
first applies payments received on delinquent accounts and loans
receivable to eliminate the outstanding principal. The Company charges
off uncollectible accounts and loans receivable when management estimates
no possibility of collecting the related receivable. The Company
considers accounts and loans receivable to be past due or delinquent based
on contractual terms.
-5-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Revenue Recognition - The Company recognizes revenue from providing
musical and other performances for concerts and other events for a
negotiated fee in the period when the services are provided. The Company
records only its fee from a concert performance and reflects the Company's
expenses related to the performance as general and administrative expense.
The Company recognizes revenue from the sale of compact discs when the
product is delivered.
Advertising Costs - Advertising costs, except for costs associated with
direct-response advertising, are charged to operations when incurred. The
costs of direct-response advertising are capitalized and amortized over
the period during which future benefits are expected to be received.
During the six months ended March 31, 2004 and 2003, advertising costs
amounted to $0 and $0, 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 4].
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].
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 effect the reported amounts of assets and liabilities, the
disclosures 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
estimated by management.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities", SFAS No. 147, "Acquisitions of Certain Financial
Institutions - an Amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9", SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an Amendment of FASB Statement
No. 123", SFAS No. 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities", and SFAS No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity", were recently issued. SFAS No. 146, 147, 148, 149 and 150 have
no current applicability to the Company or their effect on the financial
statements would not have been significant.
Restatement - On January 15, 1999, the Company effected a 5-for-2 forward
stock split. The financial statements have been restated, for all periods
presented, to reflect the stock split [See Note 2].
Reclassification - The financial statements for periods prior to March 31,
2004 have been reclassified to conform to the headings and classifications
used in the March 31, 2004 financial statements.
-6-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock - During June 1998, the Company issued 500,000 shares of its
previously authorized but unissued common stock for cash of $2,000 (or
$.004 per share).
During January 1999, the Company issued 20,000 shares of its previously
authorized but unissued common stock for cash of $4,000 (or $.20 per
share).
Stock Split - On January 15, 1999, the Company effected a five for two
common stock split. The financial statements, for all periods presented,
have been restated to reflect the stock split.
NOTE 3 - RELATED PARTY TRANSACTIONS
Management Compensation and Accrued Expenses - Salary expense to the
President for the six months ended March 31, 2004 and 2003 amounted to $0
and $500, respectively. At March 31, 2004, the Company owes a total of
$6,500 in accrued salary to the President.
Legal Services and Accrued Expenses - During the six months ended March
31, 2004 and 2003, respectively, the President provided legal services of
$0 and $15,000 to the Company. At March 31, 2004, the Company owes a
total of $15,000 in accrued legal fees to the President.
NOTE 4 - 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. At March
31, 2004, the Company has available unused operating loss carryforwards of
approximately $4,350, which may be applied against future taxable income
and which expire in 2024.
The amount of and ultimate realization of the benefits from the deferred
tax assets 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 deferred tax assets, the
Company has established a valuation allowance equal to their tax effect
and, therefore, no deferred tax asset has been recognized for the deferred
tax assets. The net deferred tax assets, which consist mainly of accrued
compensation and net operating loss carryforward, are approximately $3,900
and $3,700 as of March 31, 2004 and September 30, 2003, respectively, with
an offsetting valuation allowance of the same amount, resulting in a
change in the valuation allowance of approximately $200 during the six
months ended March 31, 2004.
-7-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 has not yet been successful in establishing
profitable operations and has current liabilities in excess of current
assets. 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 through loans or through
additional sales of its common stock or through the possible acquisition
of other companies. There is no assurance that the Company will be
successful in raising this additional capital or in achieving profitable
operations.
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per share:
For the Three For the Six From Inception
Months Ended Months Ended on June 26,
March 31, March 31, 1998 Through
___________________ _________________ March 31,
2004 2003 2004 2003 2004
________ _________ ________ ________ ____________
Net loss available
to common
shareholders
(numerator) $ (8) $ (16,749) $ (1,308) $(17,795) $ (26,143)
________ _________ ________ ________ ____________
Weighted average
number of common
shares outstanding
used in loss per
share for the
period
(denominator) 520,000 520,000 520,000 520,000 518,071
________ _________ ________ ________ ____________
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
-8-
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
Company's consolidated results of operations and financial condition. The
discussion should be read in conjunction with the consolidated financial
statements and notes thereto.
Plan of Operation
The Company has no business operations, and very limited assets or
capital resources. The Company's business plan is to seek one or more
potential business ventures that, in the opinion of management, may
warrant involvement by the Company. The Company recognizes that because of
its limited financial, managerial and other resources, the type of
suitable potential business ventures which may be available to it will be
extremely limited. The Company's principal business objective will be to
seek long-term growth potential in the business venture in which it
participates rather than to seek immediate, short-term earnings. In
seeking to attain the Company's business objective, it will not restrict
its search to any particular business or industry, but may participate in
business ventures of essentially any kind or nature. It is emphasized that
the business objectives discussed are extremely general and are not
intended to be restrictive upon the discretion of management.
The Company will not restrict its search for any specific kind of
firms, but may participate in a venture in its preliminary or development
stage, may participate in a business that is already in operation or in a
business in various stages of its corporate existence. It is impossible to
predict at this stage the status of any venture in which the Company may
participate, in that the venture may need additional capital, may merely
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer. In some instances, the business
endeavors may involve the acquisition of or merger with a corporation
which does not need substantial additional cash but which desires to
establish a public trading market for its common stock.
The Company does not have sufficient funding to meet its long term
cash needs. The Company believes that its current cash will be sufficient
to support the Company's planned operations for the next twelve months.
The current sole officer and director has expressed his intent that to the
extent necessary the Company will seek to raise additional funds through
the sale of equity securities or by borrowing to funds until a suitable
business venture can be completed. Management does not anticipate raising
funds during the next twelve months. There is no assurance that the
Company will be able to successfully identify and/or negotiate a suitable
potential business venture or raise additional funds if and when needed.
The Company has experienced net losses during the development stage
(1994 to present) and has had no significant revenues during such period.
During the past two fiscal years the Company has had no business
operations. In light of these circumstances, the ability of the Company to
continue as a going concern is significantly in doubt. The attached
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
Off-Balance Sheet Arrangements
The Company does not have any 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 investors.
Critical Accounting Policies
Due to the lack of current operations and limited business
activities, the Company does not have any accounting policies that it
believes are critical to facilitate an investor's understanding of the
Company's financial and operating status.
Recent Accounting Pronouncements
The Company has not adopted any new accounting policies that would
have a material impact on the Company's financial condition, changes in
financial conditions or results of operations.
Forward-Looking Statements
When used in this Form 10-QSB or other filings by the Company with
the Securities and Exchange Commission, in the Company's press releases or
other public or shareholder communications, or in oral statements made
with the approval of an authorized officer of the Company's executive
officers, the words or phrases "would be", "will allow", "intends to",
"will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project", or similar expressions are intended
to identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made, and
advises readers that forward-looking statements involve various risks and
uncertainties. The Company does not undertake, and specifically disclaims
any obligation to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date of
such statement.
Item 3. Controls and Procedures
The Company has evaluated, with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, the effectiveness of
the design and operation of the Company's disclosure controls and
procedures as of March 31, 2004 pursuant to Exchange Act Rule 15d-15.
Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company required to be included in the Company's periodic
SEC filings. There have been no significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a)
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
3(i).1 Articles of Incorporation of the Company (Incorporated by
reference to Exhibit 3.1 of the Company's Form 10-SB, filed
October 29, 1999).
3(i).2 Certificate of Amendment to the Articles of Incorporation of the
Company (Incorporated by reference to Exhibit 3.2 of the
Company's Form 10-SB, filed October 29, 1999).
3(ii).1 Bylaws of the Company (Incorporated by reference to Exhibit 3.3
of the Company's Form 10-SB, filed October 29, 1999).
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
None.
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.
Date: May 17, 2004 DENDO GLOBAL CORP.
By /s/ Lindsay Hedin
Lindsay Hedin
President, Secretary, Treasurer, CFO