U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended February 28, 2011
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________ to _________
Commission File No. 333 - 162461
SHAWCORE DEVELOPMENT CORP.
(Name of small business issuer in its charter)
Nevada
(State or other jurisdiction of incorporation
or organization)
329 Manchester Road, Deepcar, Sheffield England
(Address of principal executive offices)
(011 44 161 884 0149)
(Issuer's telephone number)
Securities registered pursuant to Name of each exchange on which
Section 12(b) of the Act: registered:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001
(Title of Class)
Indicate by checkmark whether the issuer: (1) has 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[ ]
Indicate by check mark whether the registrant is a large accelerated filed, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the
Preceding Five Years. N/A
Indicate by checkmark whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act
of 1934 after the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
Applicable Only to Corporate Registrants
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the most practicable date:
Class Outstanding as of February 28, 2011
----- -----------------------------------
Common Stock, $0.001 5,375,000
SHAWCORE DEVELOPMENT CORPSHAWCORE DEVELOPMENT CORP.
FORM 10-Q
Part 1. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
Item 4. Controls and Procedures 11
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
2
SHAWCORE DEVELOPMENT CORP
(A Development Stage Company)
Balance Sheets
February 28, August 31,
2011 2010
-------- --------
(Unaudited) (Audited)
ASSETS
Current Assets
Cash $ 24 $ 6,972
-------- --------
TOTAL CURRENT ASSETS 24 6,972
-------- --------
TOTAL ASSETS $ 24 $ 6,972
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ -- $ 3,323
Advances from Director 27,399 14,299
-------- --------
TOTAL CURRENT LIABILITIES 27,399 17,622
-------- --------
TOTAL LIABILITIES 27,399 17,622
-------- --------
Stockholders' Deficit
Common stock: $0.001 par value; 75,000,000 shares
authorized 5,375,000 shares issued and outstanding as
of February 28, 2011 and August 31, 2010, respectively 5,375 5,375
Additional paid-in-capital 16,125 16,125
Deficit accumulated during the development stage (48,875) (32,150)
-------- --------
TOTAL STOCKHOLDERS' DEFICIT (27,375) (10,650)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 24 $ 6,972
======== ========
The accompanying notes are an integral part of these financial statements.
3
SHAWCORE DEVELOPEMENT CORP
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the For the For the For the From Inception
Three Months Three Months Six Months Six Months (September 25, 2008)
Ended Ended Ended Ended through
February 28, February 28, February 28, February 28, February 28,
2011 2010 2011 2010 2011
---------- ---------- ---------- ---------- ----------
Expenses
General and Administrative Expenses $ 10,239 $ 3,649 $ 16,725 $ 18,104 $ 48,875
---------- ---------- ---------- ---------- ----------
Total expenses 10,239 3,649 16,725 18,104 48,875
---------- ---------- ---------- ---------- ----------
Net Loss $ (10,239) $ (3,649) $ (16,725) $ (18,104) $ (48,875)
========== ========== ========== ========== ==========
LOSS PER COMMON SHARE - BASIC $ 0.00 $ 0.00 $ 0.00 $ 0.00
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING- BASIC $5,375,000 $5,375,000 $5,375,000 $5,375,000
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
SHAWCORE DEVELOPEMENT CORP
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the For the From Inception
Six Months Six Months (September 25, 2008)
Ended Ended through
February 28, February 28, February 28,
2011 2010 2011
-------- -------- --------
Operating Activities
Net loss $(16,725) $(18,104) $(48,875)
Changes in assets and liabilities:
(Decrease) in accounts payable (3,323) -- --
-------- -------- --------
Net cash used for operating activities (20,048) (18,104) (48,875)
-------- -------- --------
Financing Activities
Advances from Director 13,100 -- 27,399
Sale of common stock -- -- 21,500
-------- -------- --------
Net cash provided by financing activities 13,100 -- 48,899
-------- -------- --------
Net increase (decrease) in cash and equivalents (6,948) -- 24
Cash and equivalents at beginning of the period 6,972 19,737 --
-------- -------- --------
Cash and equivalents at end of the period $ 24 $ 1,633 $ 24
======== ======== ========
Supplemental cash flow information:
Cash paid for:
Interest $ -- $ -- $ --
======== ======== ========
Taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements.
5
SHAWCORE DEVELOPMENT CORP.
(A Development Stage Company)
Notes To The Financial Statements
February 28, 2011
1. ORGANIZATION AND BUSINESS OPERATIONS
SHAWCORE DEVELOPMENT CORP.("the Company") was incorporated under the laws of the
State of Nevada, U.S. on September 25, 2008. The Company is in the development
stage as defined under Financial Accounting Standards Board Accounting Standards
Codification (FASB ASC 915-205) "Development-Stage Entities" and it intends to
design and construct eco-friendly self assembly housing and storage structures.
The Company intends to build a product that will be well suited to a more
environmentally conscious market looking for affordable quality housing and
storage that can be put together easily and quickly. Initially the target market
will be the resort and cabin markets of Europe and North America.
The Company has not generated any revenue to date and consequently its
operations are subject to all risks inherent in the establishment of a new
business enterprise. For the period from inception (September 25, 2008) through
February 28, 2011, the Company has accumulated losses of $48,875.
In the opinion of management, all adjustments necessary to present fairly the
financial position as of February 28, 2011 and the results of operations and
cash flows presented herein have been included in the financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
b) Going Concern
The financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. The
Company has incurred losses since inception resulting in an accumulated deficit
of $48,875 as of February 28, 2011 and further losses are anticipated in the
development of its business raising substantial doubt about the Company's
ability to continue as a going concern. The ability to continue as a going
concern is dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months
with existing cash on hand, advances from directors and/or private placement of
common stock. These financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts, or amounts
and classification of liabilities that might result from this uncertainty.
c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.
d) Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
e) Foreign Currency Translation
The Company's functional currency and its reporting currency is the United
States dollar.
f) Financial Instruments
The carrying value of the Company's financial instruments approximates their
fair value because of the short maturity of these instruments.
6
SHAWCORE DEVELOPMENT CORP.
(A Development Stage Company)
Notes To The Financial Statements
February 28, 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g) Stock-based Compensation
Stock-based compensation is accounted for at fair value in accordance with
Financial Accounting Standards Board Accounting Standards Codification 718 (FASB
ASC 718). To date, the Company has not adopted a stock option plan and has not
granted any stock options.
h) Income Taxes
Income taxes are accounted for under the assets and liability method. Deferred
tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
those temporary differences are expected to be recovered or settled.
i) Basic and Diluted Net Loss per Share
The Company computes net loss per share in accordance with FASB ASC 205
"Earnings per Share". FASB ASC 205 requires presentation of both basic and
diluted earnings per share (EPS) on the face of the income statement. Basic EPS
is computed by dividing net loss available to common shareholders (numerator) by
the weighted average number of shares outstanding (denominator) during the
period. Diluted EPS gives effect to all potentially dilutive common shares
outstanding during the period. Diluted EPS excludes all potentially dilutive
shares if their effect is anti-dilutive.
j) Fiscal Periods
The Company's fiscal year end is August 31.
3. COMMON STOCK
The authorized capital of the Company is 75,000,000 common shares with a par
value of $0.001 per share.
In February 2009, the Company issued 4,500,000 shares of common stock at a price
of $0.001 per share for total cash proceeds of $4,500.
In February, April, May and June 2009, the Company issued 600,000 shares of
common stock at a price of $0.01 per share for total cash proceeds of $6,000.
In June, July and August 2009, the Company issued 275,000 shares of common stock
at a price of $0.04 per share for total cash proceeds of $11,000.
During the period from inception (September 25, 2008) to August 31, 2010, the
Company sold a total of 5,375,000 shares of common stock for total cash proceeds
of $21,500.
4. RELATED PARTY TRANSACTONS
On September 25, 2008, the sole Director and President, Gary Burkinshaw,
advanced the Company $299. On March 2, 2010 and June 16, 2010, the sole Director
and President, Gary Burkinshaw, advanced the Company $4,000 and $10,000,
respectively. On October 6, 2010, the sole Director and President, Gary
Burkinshaw, advanced the Company $3,800. On December 10, 2010 the sole Director
and President, Gary Burkinshaw advanced the Company $1,500. On December 16, 2010
the sole Director and President, Gary Burkinshaw advanced the Company $500. On
January 13, 2011 the sole Director and President, Gary Burkinshaw advanced the
Company $1200. On February 8, 2011 the sole director and President Gary
Burkinshaw loaned the company $5000. On February 18, 2011 the sole Director and
President Gary Burkinshaw loaned the company $1,100 The advances are
non-interest bearing, due upon demand and unsecured.
7
FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use of terms such as "may," "will," "expect," "believe," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. We intend that
such forward-looking statements be subject to the safe harbors for such
statements. We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. Any
forward-looking statements represent management's best judgment as to what may
occur in the future. However, forward-looking statements are subject to risks,
uncertainties and important factors beyond our control that could cause actual
results and events to differ materially from historical results of operations
and events and those presently anticipated or projected. We disclaim any
obligation subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statement or to reflect the
occurrence of anticipated or unanticipated events.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
GENERAL
SHAWCORE DEVELOPMENT CORP. was incorporated under the laws of the State of
Nevada on September 25 2008. Our registration statement was filed with the
Securities and Exchange Commission on September 1, 2010.
Please note that throughout this Quarterly Report, and unless otherwise noted,
the words "we," "our," "us," the "Company," refers to SHAWCORE DEVELOPMENT CORP.
CURRENT BUSINESS OPERATIONS
As of the date of this Quarterly Report, we have not started operations. The
Company is in the development stage as defined under Statement on Financial
Accounting Standards No. 7, Development Stage Enterprises ("SFAS No.7") (ASC
915-10). As of February 28, 2011 we have no revenues, have minimal assets and
have incurred losses since inception.
The Company intends to build a product that will be well suited to a more
environmentally conscious market looking for affordable quality housing and
storage that can be put together easily and quickly. Initially the target market
will be the resort and cabin markets of Europe and North America.
The Company has not generated any revenue to date and consequently its
operations are subject to all risks inherent in the establishment of a new
business enterprise. For the period from inception (September 25, 2008) through
February 28, 2011, the Company has accumulated losses of $48,875.
RESULTS OF OPERATION
Our financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation. We expect we
will require additional capital to meet our long term operating requirements. We
expect to raise additional capital through, among other things, the sale of
equity or debt securities.
8
SIX MONTH PERIOD ENDED FEBRUARY 28, 2011 COMPARED TO THE SIX MONTHS ENDED
FEBRUARY 28, 2010 AND THE PERIOD FROM INCEPTION (SEPTEMBER 25, 2008) TO FEBRUARY
28, 2011.
Our net loss for the six-months ended February 28, 2011 was approximately
($16,725) compared to a net loss of ($18,104) during the six-months ended
February 28, 2010. During the six-months ended February 28, 2011 and 2009, we
did not generate any revenue. Net loss during the period from inception
(September 25, 2008) to February 28, 2011 was ($48,875).
During the six-months ended February 28, 2011, we incurred general and
administrative, consulting, and professional expenses of approximately $16,725
compared to $18,104 during the three months ended February 28, 2010. General and
administrative expenses incurred during the six-month period ended February 28,
2011 and 2010 were generally related to corporate overhead, financial and
administrative contracted services, such as legal and accounting and
developmental costs. During the period from inception (September 25, 2008) to
February 28, 2011, we incurred general and administrative, consulting, and
professional expenses of approximately $48,875.
Our net loss during the six-months ended February 28, 2011 and 2010 was
($16,725) or ($0.00) per share and ($18,104) or ($0.00), respectively. The
weighted average number of shares outstanding was 5,373,000 for the six-month
period ended February 28, 2011.
LIQUIDITY AND CAPITAL RESOURCES
SIX-MONTH PERIOD ENDED FEBRUARY 28, 2011
As at the six-months ended February 28, 2011, our current assets were $24 and
our total liabilities were $27,399, which resulted in a working capital of
($27,375). As at the six-months ended February 28, 2011, current assets were
comprised of $24 in cash compared to $6,972 in current assets at fiscal year
ended August 31, 2010. As at the six-months ended February 28, 2011, current
liabilities were comprised of $27,399 advances from director compared to $14,299
at fiscal year ended August 31, 2010. Accounts payable were reduced by $3,323 to
$0 during the six months ended February 28, 2011.
Stockholders' equity decreased from ($10,650) as of August 31, 2010 to ($27,375)
as of February 28, 2011.
CASH FLOWS FROM OPERATING ACTIVITIES
We have not generated positive cash flows from operating activities. For the
six-month period ended February 28, 2011, net cash flows used in operating
activities was ($20,048) consisting primarily of a net loss of ($16,725) and
payment of accounts payable in the amount of $3,323. Net cash flows used in
operating activities was $18,104 during the six-months ended February 28, 2010.
Net cash flows used in operating activities was ($48,875) for the period from
inception (September 25, 2008) to February 28, 2011.
CASH FLOWS FROM FINANCING ACTIVITIES
We have financed our operations primarily from either advances from directors or
the issuance of equity and debt instruments. For the six-months ended February
28, 2011, we generated $13,100 net cash from financing activities. For the
six-months ended February 28, 2010 net cash provided by financing activities
were $0. For the period from inception (September 25, 2008) to February 28,
2011, net cash provided by financing activities was $48,899 received from sale
of common stock and advances from Director.
9
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a
combination of our existing funds and further issuances of securities. Our
working capital requirements are expected to increase in line with the growth of
our business.
Existing working capital, further advances, equity and debt instruments, and
anticipated cash flow are expected to be adequate to fund our operations over
the next three months. We have no lines of credit or other bank financing
arrangements. Generally, we have financed operations to date through the
proceeds of the private placement of equity and debt instruments. In connection
with our business plan, management anticipates additional increases in operating
expenses and capital expenditures relating to: (i) acquisition of inventory;
(ii) developmental expenses associated with a start-up business; and (iii)
marketing expenses. We intend to finance these expenses with further issuances
of securities and debt issuances. Thereafter, we expect we will need to raise
additional capital and generate revenues to meet long-term operating
requirements. Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Quarterly Report, we have a material commitment. During
the period from inception (September 25, 2008) to February 28, 2011, Gary
Burkinshaw, our Chief Executive Officer and a director, advanced us $27,399. The
advances are non-interest bearing and payable upon demand.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do 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 are material to investors.
GOING CONCERN
The independent auditors' report accompanying our August 31, 2010 financial
statements contained an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern. The financial statements have been
prepared "assuming that we will continue as a going concern," which contemplates
that we will realize our assets and satisfy our liabilities and commitments in
the ordinary course of business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of loss that may impact our financial position,
results of operations or cash flows due to adverse change in foreign currency
and interest rates.
10
EXCHANGE RATE
Our reporting currency is United States Dollars ("USD").
INTEREST RATE
Any future loans will relate mainly to trade payables and will be mainly
short-term. However our debt may be likely to rise in connection with expansion
and if interest rates were to rise at the same time, this could become a
significant impact on our operating and financing activities. We have not
entered into derivative contracts either to hedge existing risks of for
speculative purposes.
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act
is recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer's management, including its principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
An evaluation was conducted under the supervision and with the participation of
our management of the effectiveness of the design and operation of our
disclosure controls and procedures as of February 28, 2011. Based on that
evaluation, our management concluded that our disclosure controls and procedures
were not effective as of such date to ensure that information required to be
disclosed in the reports that we file or submit under the Exchange Act, is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms. Such officer also confirmed that there was no change in
our internal control over financial reporting during the six-months ended
February 28, 2011 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any
governmental authority or any other party involving us or our properties. As of
the date of this Quarterly Report, no director, officer or affiliate is (i) a
party adverse to us in any legal proceeding, or (ii) has an adverse interest to
us in any legal proceedings. Management is not aware of any other legal
proceedings pending or that have been threatened against us or our properties.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On September 1, 2010, we filed a registration statement on Form S-1 with the
Securities and Exchange Commission pursuant to which we registered 3,000,000
shares of our restricted common stock to be issued to certain shareholders and
2,375,000 shares were registered for resale.
11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No report required.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No report required.
ITEM 5. OTHER INFORMATION
No report required.
ITEM 6. EXHIBITS
31.1 Certification of Chief Executive Officer pursuant to Securities
Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
31.2 Certification of Chief Financial Officer pursuant to Securities
Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1 Certifications pursuant to Securities Exchange Act of 1934 Rule
13a-14(b) or 15d- 14(b) and 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes- Oxley Act of 2002.
12
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.
SHAWCORE DEVELOPMENT CORP.
Dated: March 29, 2011
By: /s/ Gary Burkinshaw
---------------------------------------
Gary Burkinshaw, President and
Chief Executive Officer
Dated: March 29, 2011
By: /s/ Gary Burkinshaw
----------------------------------------
Gary Burkinshaw, Chief Financial Officer
13