SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For Period ended October 31, 2004
Commission File Number 000-50673
DUNGANNON INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0901631
(State of Incorporation) (I.R.S. Employer Identification No.)
805-510 West Hastings Street
Vancouver, British Columbia V6B 1LB
(Address of Principal Executive Offices) (Zip Code)
(604) 689-1818
(Registrant's telephone number, including area code)
Check 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
past90 days. Yes [X] No [ ]
There were 3,177,000 shares of Common Stock outstanding as of October 31, 2004
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENT
Dungannon International, Inc.
(a Development Stage Company)
Balance Sheet
(unaudited)
October 31,
2004
--------
ASSETS
Current assets:
Cash $ 1,022
--------
Total current assets 1,022
--------
$ 1,022
========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Notes payable - related party $ 7,970
--------
Total current liabilities 7,970
--------
Stockholders' (deficit):
Preferred stock, $0.0001 par value, 20,000,000 shares
authorized, no shares issued and outstanding --
Common stock, $0.0001 par value, 80,000,000 shares
authorized, 3,177,000 shares issued and outstanding 318
Additional paid-in capital 20,382
(Deficit) accumulated during development stage (27,648)
--------
(6,948)
--------
$ 1,022
========
The accompanying notes are an integral part of these financial statements.
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Dungannon International, Inc.
(a Development Stage Company)
Statements of Operations
(unaudited)
Three Months Ended
October 31, February 18, 1999
------------------------------ (Inception) to
2004 2003 October 31, 2004
----------- ----------- -----------------
Revenue $ -- $ -- $ --
----------- ----------- -----------
Expenses:
General and administrative expenses 2,706 61 27,648
----------- ----------- -----------
Total expenses 2,706 61 27,648
----------- ----------- -----------
Net (loss) $ (2,706) $ (61) $ (27,648)
=========== =========== ===========
Weighted average number of common shares
outstanding - basic and fully diluted 3,177,000 3,177,000
=========== ===========
Net (loss) per share - basic and fully diluted $ (0.00) $ (0.00)
=========== ===========
The accompanying notes are an integral part of these financial statements.
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Dungannon International, Inc.
(a Development Stage Company)
Statements of Cash Flows
(unaudited)
Three Months Ended
October 31, February 18, 1999
------------------------ (Inception) to
2004 2003 October 31, 2004
-------- -------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (2,706) $ (61) $(27,648)
Adjustments to reconcile net (loss) to
net cash (used) by operating activities:
(Decrease) in accounts payable -- (81) --
-------- -------- --------
Net cash (used) by operating activities (2,706) (142) (27,648)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received from notes payable 2,000 -- 7,970
Issuances of common stock -- -- 20,700
-------- -------- --------
Net cash provided by financing activities 2,000 -- 28,670
-------- -------- --------
Net increase (decrease) in cash (706) (142) 1,022
Cash - beginning 1,728 483 --
-------- -------- --------
Cash - ending $ 1,022 $ 341 $ 1,022
======== ======== ========
Supplemental disclosures:
Interest paid $ -- $ -- $ --
======== ======== ========
Income taxes paid $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements.
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Dungannon International, Inc.
(a Development Stage Company)
Notes
NOTE 1 - BASIS OF PRESENTATION
The interim financial statements included herein, presented in accordance with
United States generally accepted accounting principles and stated in US dollars,
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
interim financial statements be read in conjunction with the financial
statements of the Company for the year ended July 31, 2004 and notes thereto.
The Company follows the same accounting policies in the preparation of interim
reports.
Results of operations for the interim periods are not indicative of annual
results.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As shown in the accompanying financial
statements, the Company has incurred a net loss of ($27,648) for the period from
February 18, 1999 (inception) to October 31, 2004, and has no sales. In order to
obtain the necessary capital, the Company raised funds via private placement
offering. If the securities offering does not provide sufficient capital, some
of the shareholders of the Company have agreed to provide sufficient funds as a
loan over the next twelve-month period. However, the Company is dependent upon
its ability to secure equity and/or debt financing and there are no assurances
that the Company will be successful, without sufficient financing it would be
unlikely for the Company to continue as a going concern.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. These financial statements do not include any adjustments
that might arise from this uncertainty.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company does not lease or rent any property. Office services are provided
without charge by an officer and director of the Company. 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 becomes 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 the resolution
of such conflicts.
NOTE 4 - NOTES PAYABLE - RELATED PARTY
During the three months ended October 31, 2004, the Company received $2,000 as a
loan from an officer and director of the Company. As of October 31, 2004, the
total amount owed is $7,970. The loan is due upon demand and bears no interest.
NOTE 5 - SUBSEQUENT EVENTS
On November 2, 2004, the Company received an additional $500 as a loan from an
officer and director of the Company. The loan is due upon demand and bears no
interest.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
CERTAIN FORWARD-LOOKING INFORMATION
Information provided in this Quarterly report on Form 10-QSB 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 not
limited 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 services,
capital expenditures, financing needs, as well as assumptions related to the
forgoing. For this purpose, any statements contained in this Quarterly Report
that are not statement 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, including the Company's
most recent Form 10SB.
CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31, 2004
Our current cash balance is $1,022. Revenues were -0- for the quarter ending
October 31, 2004 and -0- for the same quarter ending 2003. Operating Expenses
were $2,706 for the three months ended October 31, 2004 and $61 for the same
period in 2003. Dungannon International, Inc. is a development stage company
involved in the business of acquiring revenue generating environmental
enterprise products/services. It is the Company's goal to seek small-sized,
high-growth potential environment business acquisitions to eventually form a
diversified multi-based environmental company.
Dungannon was formed and has been evolving since its inception to seek out and
enter into operating and/or financing arrangements and strategic alliances to
develop and introduce proven and/or new technologies and processes which address
environmental concerns in general and "green" alternative energy, waste
management/recycling and agricultural crop yield technology, in particular. The
mission of the Company is to create a profit by identifying, screening,
evaluating environmental products, services or enterprises and acquiring or
establishing an operating involvement or alliance with those entities or
prospective businesses approved by management. The ultimate goal of Dungannon is
to seek profitable operating positions in environmental business ventures that
are selected. As resources allow, the Company will seek to acquire potential
high-growth environmental businesses to eventually form a diversified,
multi-business environmental company.
As of this date, we have begun minimal operations and have not acquired any
environmental products, services or enterprises despite continuing efforts to do
so; however, the above strategies have been put in place as management
guidelines in acquiring those potential environmental entities. We are currently
a development stage Company, and no revenues have been generated.
Currently the Company has a deficit of $6,948 as of October 31, 2004 and there
is no assurance that the Company will be successful in growing its assets or
accomplishing its goals given its present state.
We have taken the following steps in furthering the company's business plan: (1)
formed a developmental alliance with another similarly directed by more
developed Canadian environmental company to review and introduce for the
alliances, (2) identified six possible acquisition environmental candidates, the
investigation of which tow are still ongoing at the present time, (3) designed
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methods of review process for possible acquisition of environmental services,
products or companies, and (4) commenced review and designed methods of
evaluations of those target ventures for possible acquisition. The Company has
also filed Form 10-SB with the securities and Exchange Commission
in order to make our financial information equally available to any interested
parties or investors. On October 28, 2003 the Company obtained an unpriced
quotation on the Pink Sheets L.L.C. for its common stock.
In order to progress with our business plan, the company plans the following
future steps to be completed over one year: complete all Form 10-SB filing
requirements during the fourth quarter, 2004, obtain a listing on the Over-the
Counter Electronic Bulletin Board during the first quarter, 2005, prepare a
private placement memorandum and raise capital of $200,000 in investment capital
to commence full-scale operations and begin executing our business plan.
None of these activities are revenue generating. Due to limited resources and
lack of operational performance, there is not a guarantee that the Company will
succeed in executing its business plan or its projected activities over the next
12 months. Because we have no operating history, it is difficult to evaluate our
business and future prospects. Our revenue and income potential is unproven and
our business model may not work. Our independent auditors have issued a "going
concern" opinion which raises substantial doubts to our ability to remain in
business, much less properly execute our business plan and ever achieve
profitability, without securing any new investment capital.
RISK FACTORS RELATED TO DUNGANNON INTERNATIONAL, INC.
RISKS
Investors in Dungannon International should carefully consider the following
risk factors associated with our plans and product:
WE ARE A DEVELOPMENT STAGE COMPANY WITH NO OPERATING HISTORY. THIS WILL MAKE IT
DIFFICULT FOR OUR SHAREHOLDERS TO EVALUATE OUR FUTURE PLANS AND PROSPECTS.
Investors should carefully evaluate any investment in our company due to the
inherent risks, expenses, delays, and difficulties that will likely be a part of
our development. As we are implementing a business plan with no near-term
revenues, we expect to incur net losses in the foreseeable future. The ability
of Dungannon to establish itself as a viable environmental operating and/or
investment commercial enterprise based upon establishing a sound asset base has
not been proven and its prospects to do so must, therefore, must be considered
speculative.
THE EARLY OR DEVELOPMENT STAGE ENVIRONMENTAL ACQUISITION, INVESTMENT AND
BUSINESS ACTIVITIES TO BE UNDERTAKEN BY DUNGANNON MUST BE CONSIDERED
SPECULATIVE.
Although management will adopt certain sound evaluation criteria with respect to
investment and acquisitions to be made by Dungannon, the development stage
environmental acquisition, investment and business activities to be undertaken
by Dungannon must be considered speculative. The value of the assets of
Dungannon may be materially affected by the failure of one or more of the
enterprises in which Dungannon invests or operates.
NO DIVIDENDS HAVE BEEN PAID ON DUNGANNON'S COMMON SHARES SINCE INCEPTION AND
THERE IS NO ASSURANCE THAT SUCH DIVIDENDS WILL BE EARNED OR PAID IN THE FUTURE.
For the foreseeable future, Dungannon expects to re-invest in Dungannon's
operations, all profits that would otherwise be available for distribution to
shareholders for cash dividends. While the payment of stock dividends is an
alternative, there is no assurance that these will ever be paid in the future.
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OUR FINANCIAL STATUS CREATES A DOUBT WHETHER WE WILL CONTINUE AS A GOING
CONCERN. OUR INDEPENDENT AUDITORS HAVE ISSUED AN AUDIT OPINION FOR DUNGANNON
INTERNATIONAL WHICH INCLUDES A STATEMENT DESCRIBING OUR GOING CONCERN STATUS. IF
OUR BUSINESS PLAN FOR THE FUTURE IS NOT SUCCESSFUL, INVESTORS WILL LIKELY LOSE
ALL OF THEIR INVESTMENT IN OUR STOCK.
As noted in our accompanying financial statements, our current financial
condition of nominal assets and no current operating business activities
necessary for revenues and operating capital create substantial doubt as to our
ability to continue as a going concern. If our business plan does not work, we
could remain as a start-up company with no material operations, revenues, or
profits. Currently the Company has a deficit of $6,948 as of October 31, 2004
and there is no assurance that the company will be successful in growing its
assets or accomplishing its goals given its present state.
OUR BUSINESS STRATEGY REQUIRES US TO RAISE CASH OF $200,000. WITHOUT THIS
FUNDING, WE COULD REMAIN AS A DEVELOPMENT STAGE COMPANY WITH NO MATERIAL
OPERATIONS, REVENUES OR PROFITS.
We require new funding of $200,000 in order to implement our business plan. We
have not determined a source for this funding. We currently have no funding
commitments from any individuals or entities. If we use equity capital as a
source of funding, potential new shareholders may be unwilling to accept either
the likely dilution of their per share value or the high level of risk involved
with our current business model. Without this funding, we may be only partially
successful or completely unsuccessful in implementing our business plan, and our
shareholders may lose part or all of their investment.
THERE IS NO TRADING MARKET FOR OUR COMMON STOCK. WE HAVE NO CURRENT PUBLIC
OFFERING AND NO PROPOSED PUBLIC OFFERING OF OUR EQUITY.
On October 28, 2003 the Company obtained an unpriced quotation on the Pink
Sheets L.L.C. for its common stock. There are no minimum quantitative standards
that a company must meet in order to obtain an unpriced quotation on the Pink
Sheets and the securities quoted on the Pink Sheets are not governed by any
regulatory body. At this time, no trading market has been established for our
common stock or any other securities of the Company and there can be no
assurance that a trading market will develop in the future, or if developed,
that it will be sustained. Furthermore, investors who desire to sell their
shares of common stock in any market that develops may encounter substantial
difficulty in doing so because of the fact that the price thereof may fluctuate
rapidly as a result of changing economic conditions as well as conditions in the
securities markets. There is no guarantee of trading volume or trading price
levels sufficient for investors to sell their stock, recover their investment in
our stock, or profit from the sale of their stock.
OUR SOLE OFFICER/DIRECTOR BENEFICIALLY OWNS 94% OF THE OUTSTANDING SHARES OF OUR
COMMON STOCK. IF HE CHOOSES TO SELL HIS SHARES IN THE FUTURE, IT MIGHT HAVE AN
ADVERSE EFFECT ON THE MARKET PRICE OF OUR STOCK.
Due to the controlling amount of our officer/director's share ownership in our
company, if he decides to sell his shares in the public market, the market price
of our stock could decrease and all shareholders suffer a dilution of the value
of their stock. If our officer/director decides to sell any of his common stock,
he will be subject to Rule 144 under the 1933 Securities Act. Rule 144 restricts
the ability of directors and officers (affiliates) to sell their shares by
limiting the sales of securities made under Rule 144 during any three-month
period to the greater of: (1) 1% of the outstanding common stock of the issuer;
or (2) the average weekly reported trading volume in the outstanding common
stock reported on all securities exchanges during the four calendar weeks
preceding the filing of the required notice of the sale under Rule 144 with the
SEC.
7
DUE TO THE LARGE AMOUNT OF AUTHORIZED BUT UNISSUED COMMON STOCK, THE COMPANY'S
SECURITIES MAY BE ISSUED TO MANAGEMENT, PROMOTERS OR THEIR AFFILIATES OR
ASSOCIATES WITHOUT SHAREHOLDER APPROVAL OR NOTICE.
Due to Mr. Gary Ciccozzi's status as sole director, officer and controlling
shareholders of the Company, he could issue large amounts of common stock to
management, promoters or their affiliates or associates without shareholder
approval or notice. However, Mr. Ciccozzi, so long as he is an officer/director
of the Company is subject to the restriction that any such issuance would be
toward furthering the Company's business plan. A breach of this requirement will
be a breach of his fiduciary duty as an officer/director of the Company.
THE CURRENT OFFICER/DIRECTOR, GARY CICCOZZI, IS THE SOLE OFFICER/DIRECTOR OF THE
COMPANY, AND AT THE SAME TIME, HE IS INVOVLED IN OTHER BUSINESS ACTIVITIES.
DUNGANNON INTERNATIONAL'S NEEDS FOR HIS TIME AND SERVICES COULD CONFLICT WITH
HIS OTHER BUSINESS ACTIVITIES. THIS POSSIBLE CONFLICT OF INTEREST COULD RESULT
IN HIS INABILITY TO PROPERLY MANAGE DUNGANNON INTERNATIONAL'S AFFAIRS, RESULTING
IN OUR REMAINING A SMALL COMPANY WITH NO MATERIAL OPERATIONS, REVENUES, OR
PROFITS.
Our president and chief executive officer Mr. Gary Ciccozzi is the President of
VisionQuest Enterprise Group, Inc., a public company listed on the TSX Venture
Exchange and its wholly owned subsidiary, World Enviro-solutions Technology
Corp. ("WEST"), Vancouver, British Columbia. VisionQuest is classified in Canada
as an enterprise management and development company and its subsidiary WEST is a
Canadian environmental acquisition/development similar in scope to Dungannon.
Although Mr. Ciccozzi is active in our management, he does not devote his
full-time and resources to our business. Because Mr. Ciccozzi has these divided
responsibilities, he may not be able to devote enough time to properly execute
our business plan, which could result in missed business opportunities and
worse-than-expected operating results. Mr. Ciccozzi will spend minimal time
working for the Company but has committed to share environmental enterprise
opportunities developed for Canada with Dungannon for the United States market.
Currently Mr. Ciccozzi does not have an employment agreement with the Company.
Furthermore, because Mr. Ciccozzi is involved in other business interests
similar to that of the company, he could encounter potential conflicts of
interest between his divided responsibilities. There is no agreement in place to
prevent Mr. Ciccozzi from redirecting future clients and/or business
opportunities away from the Company. Additionally, we do not have a formal
policy for the resolution of any such conflicts or interest should they arise.
In addition, the Company's executive officer/director/controlling shareholder
currently is and could become, in his individual capacity,
officer/director/controlling shareholder and/or partner in other entities
engaged in a variety of businesses that may in the future engage in various
transactions with the Company.
We have not formulated a plan to resolve any possible conflicts that may arise
between our needs for Ciccozzi's services and his other business
responsibilities.
DUNGANNON WILL BE COMPETING FOR ENVIRONMENTAL OPERATING AND INVESTMENT
OPPORTUNITIES WITH OTHER ENTITIES, MANY OF WHICH MAY HAVE GREATER FINANCIAL
RESOURCES THAN DUNGANNON.
In the environmental industry in which Dungannon intends to operate, there is
considerable competition and there are several well capitalized environmental
investment capital sources seeking to identify potential in environmental
enterprises' products. Such competition may reduce the availability of suitable
investments or increase costs and/or price of acquisitions.
8
EXECUTIVE MANAGEMENT OF DUNGANNON'S BUSINESS IS PRIMARILY PROVIDED BY
DUNGANNON'S PRESIDENT.
At this stage of its corporate development, Dungannon has necessarily limited
the establishment of extensive administrative and operating infrastructure.
Instead, Dungannon will likely rely, for necessary skills, on external
adviser/consultants with extensive senior level management experience in such
fields as environmental enterprises, finance, process and production, marketing,
legal and regulatory, and investment. Accordingly, the future success of
Dungannon is very dependent upon the ongoing availability and commitment of its
officer, director and advisor consultants, not all of who will be bound by
formal contractual employment agreements. The absence of these formal
contractual relationships may be considered to represent an area of risk.
DUNGANNON MAY REQUIRE ADDITIONAL FUNDING WHICH MAY BE DILUTIVE TO COMMON
SHAREHOLDERS.
While there may be some immediate contribution to operating overhead from
prospective acquired and/or portfolio companies, in the event that existing
operating expenses cannot be supported by portfolio company revenues when the
proceeds of any corporate equity and/or debt offering may have been expended,
Dungannon may be required to seek additional funding which may be dilutive to
common shareholders.
DUNGANNON'S INVESTMENT/ACQUISITION POLICIES MAY BE CHANGED AT THE DISCRETION OF
ITS BOARD OF DIRECTORS.
Any funds invested or loaned into Dungannon will be entrusted to the Company's
sole director in whose judgment investors must depend with only limited
information about specific intentions. The Company's investment/acquisition
policies may be changed at the discretion of its sole director.
OUR COMMON STOCK IS SUBJECT TO THE PENNY STOCK RULE
The Securities and Exchange Commission Rule 15g-9 established the definition of
a "penny stock," for the purposes relevant to the company, as any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless exempt,
the rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience objectives of the person; and
(ii) make a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. The effective result of this Rule 15g-9, is that if the share
price is below $5.00 there will be fewer purchasers qualified by their brokers
to purchase shares of the company, and therefore a less liquid market for the
securities.
9
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 AND REPORTS ON FORM 8-K
Exhibit 31.1 - Certification of Chief Executive Officer pursuant to Section
302 of The Sarbanes-Oxley Act Of 2002
Exhibit 31.2 - Certification of Chief Financial Officer pursuant to Section
302 of The Sarbanes-Oxley Act Of 2002
Exhibit 32.1 - Certification of Chief Executive Officer pursuant to Section
906 of The Sarbanes-Oxley Act Of 2002
Exhibit 32.2 - Certification of Chief Financial Officer pursuant to Section
906 of The Sarbanes-Oxley Act Of 2002
SIGNATURES
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.
DUNGANNON INTERNATIONAL, INC.
Date: January 6, 2005
By: /s/ Gary Ciccozzi
-------------------------------
Gary Ciccozzi, President
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