SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB/A
Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period March 31,2001
Commission file number 0-28927
Garden Bay International, Ltd.
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(Name of Small Business Issuer in its Charter)
77-513 Ashberry Court, Palm Desert, California, 92211
______________________________________________ __________
(Address of Principal Executive Offices) (ZIP Code)
(760) 409-6749
________________________________________________
(Issuer's Telephone Number, Including Area Code)
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(Issuer's Telephone Number, Including Area Code)
Not applicable
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(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 Exchange Act during the past 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.
Yes [X] No [ ]
--- ---
There were 5,230,000 shares of Common stock outstanding as of
May 1, 2001.
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PART I
Item 1. FINANCIAL STATEMENTS.
Armando C. Ibarra, C.P.A.
Members of the California Society of
Armando Ibarra, Jr., C.P.A.
Certified Public Accountants
To the Board of Directors of
Garden Bay International, Ltd.
(A Development Stage Company)
INDEPENDENT ACCOUNTANT'S REPORT
We have reviewed the accompanying balance sheets of Garden Bay International,
Ltd. (A Development Stage Company) as of March 31, 2001, and the related
statements of operations, changes in stockholders' equity, and cash flows for
the three months then ended, in accordance with Statements on Standards for
Accounting Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is
the representation of the management of Garden Bay International, Ltd.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than
an audit in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any modifications that should be made
to the accompanying financial statements in order for them to be in conformity
with generally accepted accounting principles.
Our review was made for the purpose of expressing limited assurance that there
are no material modifications that should be made to the financial statements
in order for them to be in conformity with generally accepted accounting
principles. The information included in the accompanying schedules of general
and administrative expenses is presented only for supplementary analysis
purposes. Such information has been subjected to the inquiry and analytical
procedures applied in the review of the basic financial statements, and we are
not aware of any material modifications that should be made to it.
____________________________
Armando C. Ibarra, CPA-APC
May 11, 2001
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GARDEN BAY INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
May 31,2001
December 31, 1999
TABLE OF CONTENTS
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Page
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INDEPENDENT AUDITORS' REPORT 1
BALANCE SHEET 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 7-9
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GARDEN BAY INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheets
As of March 31, 2001 and 2000
- -----------------------------------------------------------------------
ASSETS
Three Months Three Months
Ended Ended
March 31, March 31,
2001 2000
------------ ------------
Current Assets
Cash $ 20 $ 6,944
Inventory 219 0
------------ ------------
Total Current Assets 239 6,944
------------ ------------
TOTAL ASSETS $ 239 $ 6,944
------------ ------------
LIABILITIES & STOCKHOLDERS' EQUITY
TOTAL LIABILITIES $ 0 $ 0
Stockholders' Equity
Preferred stock, $.0001 par value
authorized(20,000,000 shares
authorized; none issued
and outstanding.) 0 0
Common stock $.0001 par value
Authorized (80,000,000
shares authorized; 5,437,000
and 5,187,000 shares issued
and outstanding at March 31, 2001
and 2000, respectively.) 544 519
Additional paid-in capital 19,181 19,181
Deficit accumulated during
development stage (19,486) (12,756)
--------- ---------
Total Stockholders' Equity 239 6,944
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TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 239 $ 6,944
======== =========
The accompanying notes are an integral part of these financial statements.
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4
GARDEN BAY INTERNATIONAL, LTD.
(A Development Stage Company)
STATEMENT OF OPERATIONS
-----------------------
July 20, 1998
Three Months Three Months (Inception)
Ended Ended through
March 31, March 31, March 31,
2001 2000 2001
------------ ------------ -------------
Revenues
Revenues $ 0 $ 0 $ 1,200
------------ ------------ -------------
Total Revenues 0 0 1,200
General & Administrative
Expenses 24 3,339 11,245
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Total General & Administrative
Expenses 24 3,339 11,245
Net Loss $ (24) $ (3,339) $ (10,045)
=========== =========== ============
Basic loss per share $ (0.0000) $ (0.0006)
Weighted average number of
common shares outstanding 5,437,000 5,187,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
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5
GARDEN BAY INTERNATIONAL, LTD.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
From July 20, 1998 (Inception) through March 31, 2001
Deficit
Accumulated
Common Common Additional During Total
Shares Stock paid-in Development
Amount capital Stage
--------- ------ ------- ---------
Issued for cash
on July 20, 1998 5,000,000 $ 500 $ 500 $ 0 $ 1,000
Net loss, July 20, 1998
(inception)
to December 31, 1998 (25) (25)
- -----------------------------------------------------------------------------------------
Balance, December 31, 1998 5,000,000 500 500 (25) 975
=========================================================================================
Issued from sale of
private placement
(Note #1) March 25, 1999 187,000 19 18,681 0 18,700
Net loss, January 1, 1999
through December 31, 1999 (9,392) (9,392)
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Balance, December 31, 1999 5,187,000 519 19,181 (9,417) 10,283
========================================================================================
Common Stock issued
November 11,2000
@ $0.0001 per share 250,000 25 0 0 25
Net loss, January 1, 2000
Though December 31, 2000 (10,045) (10,045)
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Balance, December 31, 2000 5,437,000 $ 544 $ 19,181 $ (19,462) $ 263
========================================================================================
Net loss, January 1, 2001
Though March 31, 2001 (24) (24)
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Balance, March 31, 2001 5,437,000 $ 544 $ 19,181 $ (19,486) $ 239
========================================================================================
The accompanying notes are an integral part of these financial statements.
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GARDEN BAY INTERNATIONAL, LTD.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
-----------------------
July 20, 1998
Three Months Three Months (Inception)
Ended Ended through
March 31, March 31, March 31,
2001 2000 2001
------------ ------------ -------------
CASH FLOWS FROM OPERATING
ACTIVITIES
- -------------------------
Operating loss $ (24) $ (3,339) $ (19,461)
Amortization 0 0 281
(Increase) in
organization costs 0 0 (219)
(Increase) in inventory 0 0 (306)
------------ ------------ -------------
Net cash provided (used)
by operating activities (24) (3,339) (19,705)
------------ ------------ -------------
CASH FLOWS FROM INVESTING
ACTIVITIES
- --------------------------
Net cash used by
investing activities 0 0 0
CASH FLOWS FROM FINANCING
ACTIVITIES
- --------------------------
Common stock 0 0 18,725
------------ ------------ -------------
Net cash provided by
financing activities 0 0 18,725
------------ ------------ -------------
Net increase in cash (24) (3,339) (980)
------------ ------------ -------------
Cash at beginning of period 44 10,283 1,000
------------ ------------ -------------
Cash at end of period $ 20 $ 6,944 $ 20
============ ============ =============
The accompanying notes are an integral part of these financial statements.
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GARDEN BAY INTERNATIONAL, LTD.
(A Development Stage Company)
Notes to Financial Statements
For the Three Months Ended March 31, 2001
NOTE 1. HISTORY AND ORGANIZATION OF THE COMPANY
- ------ ---------------------------------------
The Company was organized July 20, 1998, under the laws of the state of
Delaware, as Garden Bay International, Ltd. The Company has no significant
revenues and no material operations and in accordance with SFAS # 7, the
Company is considered a development stage company.
On July 20, 1998, the Company issued 5,000,000 shares of its $ 0.0001 par
value common stock for cash of $ 1,000.00.
On March 25, 1999, the Company completed a public offering that was offered
without registration under the securities Act of 1933, as amended (The "Act"),
in reliance upon the exemption from registration afforded by sections 4(2) and
3(b) of Securities Act and Regulation D promulgated thereunder. The Company
sold 187,000 shares of common stock at a price of $ 0.10 per share for a total
amount raised of $ 18,700.00.
NOTE 2. ACCOUNTING POLICIES AND PROCEDURES
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a. Basis of Accounting
The Company uses the accrual method of accounting.
b. Basic Loss Per Share
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for
earnings (loss) per share for entities with publicly held common stock. SFAS
No. 128 supersedes the provisions of APB No. 15, and requires the presentation
of basic earnings (loss) per share and diluted earnings (loss) per share. The
Company has adopted the provisions of SFAS No. 128 effective May 27, 1998
(inception).
Basic net loss per share amounts is computed by dividing the net income by the
weighted average number of common shares outstanding. Diluted earnings per
share are the same as basic earnings per share due to the lack of dilutive
items in the Company.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
d. Inventory
Inventory is valued at the lower cost or market.
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NOTE 2. ACCOUNTING POLICIES AND PROCEDURES (CONTINUED)
- ------ ----------------------------------------------
e. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires 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.
f. Income Taxes
The Company accounts for income taxes using the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of "temporary differences" by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets and
liabilities. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized.
NOTE 3. WARRANTS AND OPTIONS
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There are no warrants or options outstanding to acquire any additional shares
of common stock or preferred stock.
NOTE 4. GOING CONCERN
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The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek additional
capital through the sale of equity and/or private placement offering.
NOTE 5. RELATED PARTY TRANSACTION
- ------ -------------------------
The Company neither owns, nor leases any real or personal property. A director
provides office services without charge. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity become available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for resolution of
such conflicts.
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NOTE 6. INCOME TAXES
- ------ ------------
March 31, 2001 March 31, 2000
--------------- --------------
Deferred tax assets:
Net operating loss carryforwards $ 24 $ 4,828
--------------- --------------
Other -0- -0-
Valuation allowance (24) (4,828)
--------------- --------------
Net deferred tax assets $ -0- $ -0-
=============== ==============
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and
carryforwards are expected to be available to reduce taxable income. As the
achievement of required future taxable income is uncertain, the Company
recorded a valuation allowance.
NOTE 7. SCHEDULE OF NET OPERATING LOSSES
1998 Net Operating Loss $ (25)
1999 Net Operating Loss (9,392)
2000 Net Operating Loss (10,264)
2001 Net Operating Loss (1st quarter) (24)
------------
Net Operating Loss $ (19,705)
============
As of March 31, 2001, the Company has net operating loss carryforwards of
approximately $ 19,705, which will expire through 2019.
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ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Certain Forward-Looking Information
Information provided in this Form 10QSB may contain forward-looking statements
within the meaning of Section 21E or Securities Exchange Act of 1934 that are
not historical facts and information. These statements represent the
Company's expectations or beliefs, including, but notlimited to, statements
concerning future and operating results, statements concerning industry
performance, the Company's operations, economic performance, financial
conditions, margins and growth in sales of the Company's products, capital
expenditures, financing g needs, as well assumptions related to the forgoing.
For this purpose, any statements contained in this Quarterly Report that are
not statements of historical fact may be deemed to be forward-looking
statements. These forward-looking statements are based on current
expectations and involve various risks and uncertainties that could cause
actual results and outcomes for future periods to differ materially from any
forward-looking statement or views expressed herein. The Company's financial
performance and the forward-looking statements contained herein are further
qualified by other risks including those set forth from time to time in the
documents filed by the Company with the Securities and Exchange Commission.
COMPARISON OF QUARTER ENDED MARCH 31, 2001 WITH QUARTER ENDED MARCH 31, 2000
Revenues for 2001 were $0 and compared with $0 in 2000.
General & Administrative Expenses were $24 in 2001 and $3,339 in 2000.
Net loss in 2001 was $24 as against $3,339 in fiscal 2000.
The company had Total Assets of $239 at March 31, 2001 as compared to $6,944 at
March 31, 2000. This decrease was do to loss on operations.
The Business Plan for the Company over the next twelve months is to design and
manufacture sets of distinctive, hand-painted ceramic dinnerware in four
designs approved by the company and to implement a wholesale sales group to
distribute the Company's products for placement to retail outlets. The
Company plans to implement a merchandising strategy that will seek out other
hand-designed products by artisans world-wide for distribution. The Company
plans initially to have its products shipped directly from the vendor to the
wholesale suppliers and distributors and later, as the need arises, to rent a
small order fulfillment and distribution facility. The shipment of products
directly from vendors to the suppliers or directly to the stores reduces the
level of the lead-time required to receive the products. Financing will be
arranged as required during this period. The Company will require a down payment
on all orders sufficient to defray the cost of the
production. The Company has plans to raise the additional capital by the
sale of its securities in a private placement. There can be no assurance that
this offering can be accomplished at prices satisfactory to the Company, if at
all.
The Company anticipates that a small 150 - 250 square feet warehouse space will
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be adequate to carry on the operation over the next year of business. Sales
will be established through wholesale suppliers and distributors. It is
anticipated that sales will grow in an orderly fashion over the next year. An
Internet web site for sales, information, trades is being designed A catalog
for retail consumers is being planned after sales have commenced but has
currently not been established at this time.
RISK FACTORS
1. Limited History of Operations. The Company was organized on July 20,
1998 and has had limited operations to date. Therefore its operations are
subject to all of the risks inherent in new business enterprises. The
likelihood of the success of the Company must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with the start up of new businesses and the
competitive environment in which the Company will operate. The Company has
had no significant revenues to date.
2. Time lapse to Operational Stage of the Company Operations therefore will
depend upon the continued availability of investment capital to fully fund
subsequent Projects. If operating revenues are insufficient to continue the
Company's operations, additional funds would have to be raised through equity
or debt financing. The Company has no commitments for any additional debt or
equity financing and there can be no assurance that any such commitments will
be obtained on favorable terms, if at all.
3. Competition. The Company will operate in a highly competitive
environnemt. The Company will compete with retailers which have a history and
experience the company does not have.
4. Dependence on Management. Because the Company is a new business and has
no significant operating history, it will be heavily dependent upon the
services and experiences of its officers. The loss of the service of any
officer could adversely affect the conduct of the Company's business.
5. Industry and Economic Factors. The industry in which the Company expects
to operate is subject to constant changes based upon changes in public taste
as well as the condition of the general economy. Factors beyond the control
of the Company or those on whom it intends to rely could cause the Company to
fail.
6. Control of the Company. The Officers, Directors and Principal Shareholder
Group own more than 50% of the Common Shares of the Company. Therefore, the
Control Group will either control or significantly influence a voting control
of the Company. Pursuant to the laws of Delaware, a majority of all
shareholders entitled to vote an any regularly called shareholders meeting,
may act, as a majority, without notice or meeting, giving notice to other
shareholders only after such action may have been taken. While there are some
limits upon this right of the majority, Investors should understand that
Management commands a voting majority in control of the Company.
7. Dividends. The Company has paid no dividends on its Common Shares since
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its inception. The Company does not anticipate paying any dividends on its
Common Stock until and unless such profit is realized and may not pay out any
dividends thereafter.
8. Potential Conflicts of Interest. The officers and directors may be
associated with other firms, including others with material contractual
relationships with this Issuer, and may become involved in a range of business
activities. Due to these affiliations and the fact that some officers are
expected to devote only a portion of their time to the business of the
Company, there are potential inherent conflicts of interest in their acting as
directors and as officers. Each of the officers and directors is or may
become an officer, director, controlling shareholder, partner or participant
in other entities engaged in a variety of businesses. These existing and
potential conflicts of interest are irreconcilable and could involve the
participating officers and directors in litigation brought by the Company's
shareholders or by the shareholders of other entities with which the officers
and directors are currently, or may become, affiliated. To help alleviate
this position somewhat, Management has adopted a policy of full disclosure
with respect to business transactions with any entity in which any or all of
the officers or directors are affiliated, either directly or indirectly. An
officer or director may continue any business activity in which such officer
or director engaged prior to joining the Company.
9. Going Concern. As of December 31, 2000 the company had a stockholders'
Equity of $263. The auditors have raised a "going concern" question on the
audit for the year ended December 31, 2000. The Company's auditors also raised
a going concern question on the reviewed financial statements for the quarter
ended March 31, 2001.
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
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Item 6. Exhibits and Reports on Form 8-K
(a) (2) Filed by reference; Form 10-SB filed February 23, 2000.
(3) Filed by reference; Form 10-SB filed February 23, 2000.
(11) Statement re: Computation of per share earnings.
(b) There were no reports filed on Form 8-K
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Company has duly caused this disclosure statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
GARDEN BAY INTERNATIONAL, LTD.
Dated: 08/07/2001
ROBERT BERK
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ROBERT BERK
President
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