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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended March 31, 2006.
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period to
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Commission File Number 333-126504
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HOST VENTURES INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada Applied For
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(State or other jurisdiction of (IRS Employer Identification No.)
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incorporation or organization)
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9544 South Chesapeake Street
Highlands Ranch, Colorado 80126
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(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 970-567-7717
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None
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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 Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ X ] Yes [ ] No
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ] Yes [ X ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 5,125,000 Shares of $0.001 par value
Common Stock outstanding as of May 11, 2006.
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
March 31, 2006
(Unaudited)
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
Financial Statements
(Unaudited)
TABLE OF CONTENTS
Page
FINANCIAL STATEMENTS
Balance sheet 1
Statements of operations 2
Statements of stockholders' equity 3
Statements of cash flows 4
Notes to financial statements 6
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
BALANCE SHEET
March 31, 2006
(Unaudited)
<table>
<caption>
ASSETS
<s> <c>
Current assets
Cash $ 13,800
-----------------
Total current assets 13,800
---------------
Fixed assets 950
Accumulated depreciation (370)
-----------------
580
-----------------
Total Assets $ 14,380
=================
LIABILITIES & STOCKHOLDERS' EQUITY
Liabilities $ -
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Stockholders' Equity
Common stock, $.001 par value;
75,000,000 shares authorized;
5,125,000 issued and outstanding 5,125
Additional paid in capital 54,375
Deficit accumulated during the exploration stage (45,120)
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Total Stockholders' Equity 14,380
----------------
Total Liabilities and Stockholders' Equity $ 14,380
================
</table>
1
The accompanying notes are an integral part of the financial statements.
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<table>
<caption>
Period From Period From
July 20, 2004 July 20, 2004
Three Months Three Months Nine Months (Inception) (Inception)
Ended Ended Ended Through Through
Mar. 31, 2006 Mar. 31, 2005 Mar. 31, 2006 Mar. 31, 2005 Mar. 31, 2006
------------------ ---------------- --------------- --------------- ---------------
<s> <c> <c> <c> <c> <c>
Revenue $ - $ - $ - $ - $ -
------------------ ---------------- --------------- --------------- ---------------
Expenses:
Bank charges - 5
Legal & accounting 3,028 - 6,318 9,318
Mining property expenses - - 5,000 12,500
Office expense 1,530 - 2,896 2,896
Rent 750 - 2,250 1,750 4,750
Travel 337 - 837 837
Transfer agent - - 3,120 3,120
Depreciation 317 - 370 370
Administration and management 1,500 - 6,324 3,500 11,324
------------------ ---------------- --------------- --------------- ---------------
7,462 - 27,115 5,250 45,120
------------------ ---------------- --------------- --------------- ---------------
Loss from operations (7,462) - (27,115) (5,250) (45,120)
------------------ ---------------- --------------- --------------- ---------------
Other income (expense) - - - - -
------------------- --------------- --------------- --------------- ---------------
Income (loss) before provision for income taxes (7,462) - (27,115) (5,250) (45,120)
Provision for income tax - - - - -
------------------- --------------- --------------- --------------- ---------------
Net income (loss) $ (7,462) $ - $ (27,115) $ (5,250) $ (45,120)
=================== =============== =============== =============== ===============
Net income (loss) per share
(Basic and fully diluted) $ (0.00) $ - $ (0.01) $ (0.03) $ (0.01)
=================== =============== =============== =============== ===============
Weighted average number of
common shares outstanding 5,125,000 5,125,000 5,125,000 200,000 3,585,588
=================== =============== =============== =============== ===============
</table>
The accompanying notes are an integral part of the financial statements.
2
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<table>
<caption>
Deficit
Accum.
During the Stock-
Common Stock Paid In Exploration holders'
Shares Amount Capital Stage Equity
------------- ----------- ------------ -------------- ------------
<s> <c> <c> <c> <c> <c>
Balances at July 20, 2004 - $ - $ - $ - $ -
December 15, 2004, 2,000,000 shares
of common stock issued for cash of
$2,000 to a founder, for
$.001 per share 2,000,000 2,000 2,000
January, 2005 - February, 2005,
2,825,000 shares of common stock
issued for cash of $28,250 pursuant
to a Regulation D offering,
at .01 per share 2,825,000 2,825 25,425 28,250
March, 2005 - April, 2005,
300,000 shares of common stock
issued for cash of $15,000 pursuant
to a Regulation D offering,
at .05 per share 300,000 300 14,700 15,000
August, 2004 - April, 2005,
Services and office space
provided by officer 7,500 7,500
Gain (loss) for the period from
July 20, 2004 (Inception)
through June 30, 2005 (18,005) (18,005)
------------- ----------- ------------ -------------- ------------
Balances at June 30, 2005 5,125,000 $ 5,125 $ 47,625 $ (18,005) $ 34,745
July, 2005 - Mar. 31, 2006,
Services and office space
provided by officer 6,750 6,750
Gain (loss) for the period (27,115) (27,115)
------------- ----------- ------------ --------------- ------------
Balances at March 31, 2006 5,125,000 $ 5,125 $ 54,375 $ (45,120) $ 14,380
============= =========== ============ =============== ============
</table>
The accompanying notes are an integral part of the financial statements.
3
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<table>
<caption>
Period From Period From
July 20, 2004 July 20, 2004
Nine Months (Inception) (Inception)
Ended Through Through
Mar. 31, 2006 Mar. 31, 2005 Mar. 31, 2006
-------------- -------------- ---------------
<s> <c> <c> <c>
Cash Flows From Operating Activities:
Net income (loss) during the exploration stage $ (27,115) $ (5,250) $ (45,120)
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Depreciation 370 370
Donated office space and services 6,750 5,250 14,250
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Net cash provided by (used for)
operating activities (19,995) - (30,500)
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Cash Flows From Investing Activities:
Purchase of fixed assets (950) - (950)
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Net cash provided by (used for)
investing activities (950) - (950)
-------------- -------------- ---------------
</table>
(Continued On Following Page)
4
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued From Previous Page)
<table>
<caption>
Period From Period From
July 20, 2004 July 20, 2004
Nine Months (Inception) (Inception)
Ended Through Through
Mar. 31, 2006 Mar. 31, 2005 Mar. 31, 2006
-------------- -------------- -------------
<s> <c> <c> <c>
Cash Flows From Financing Activities:
Sales of common stock - 38,000 45,250
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Net cash provided by (used for)
financing activities - 38,000 45,250
-------------- -------------- ---------------
Net Increase (Decrease) In Cash (20,945) 38,000 13,800
Cash At The Beginning Of The Period 34,745 - -
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Cash At The End Of The Period $ 13,800 $ 38,000 $ 13,800
============== ============== ===============
Schedule Of Non-Cash Investing And Financing Activities
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None
Supplemental Disclosure
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Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
</table>
The accompanying notes are an integral part of the financial statements.
5
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Host Ventures, Inc. (the "Company"), was incorporated in the State of Nevada on
July 20, 2004. The Company was formed to engage in the acquisition, exploration,
and production of precious minerals. The Company may also engage in any other
business permitted by law, as designated by the Board of Directors of the
Company.
Exploration Stage
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The Company is currently in the exploration stage and has no significant
operations to date.
Cash and cash equivalents
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The Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
Use of Estimates
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The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect 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.
Income tax
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The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 ("SFAS 109"). Under SFAS 109 deferred taxes are provided on a
liability method whereby deferred tax assets are recognized for deductible
temporary differences and operating loss carryforwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. 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. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
Fiscal year
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The Company employs a fiscal year ending June 30.
6
<page>
HOST VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
Net income (loss) per share
- ---------------------------
The net income (loss) per share is computed by dividing the net income (loss) by
the weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.
Revenue recognition
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Revenue is recognized on an accrual basis as earned under contract terms. The
Company has had no revenue to date.
Mineral Properties
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Costs of acquiring specific mineral properties are capitalized on a property by
property basis. Mineral properties are periodically assessed for impairment of
value and any impairments are charged to operations at the time of impairment.
Should a property be sold or abandoned, its capitalized costs are charged to
operations and gain or loss recognized.
Financial Instruments
- ---------------------
The carrying value of the Company's financial instruments, including cash and
cash equivalents, as reported in the accompanying balance sheet, approximates
fair value.
NOTE 2. RELATED PARTY TRANSACTIONS
The Company recorded rent expense of $250 per month for the use of office space
donated to the Company by an officer. Total rent expense under this arrangement
was $2,500 for the nine months ended March 31, 2006. The Company also recorded
compensation expense of $500 per month ($4,5000 total) for administrative and
management services donated to the Company by an officer.
NOTE 3. INCOME TAXES
At March 31, 2006 the Company had a net operating loss carryforward for tax
purposes of approximately $30,000 which will begin to expire in 2026. The
deferred tax asset of $6,000 created by the net operating loss has been offset
by a 100% valuation allowance. The change in the valuation allowance in fiscal
year 2006 was $3,973.
7
<page>
This Form 10-QSB includes "forward-looking statements" within the meaning of the
"safe-harbor" provisions of the Private Securities Litigation Reform Act of
1995. Such statements are based on management's current expectations and are
subject to a number of factors and uncertainties that could cause actual results
to differ materially from those described in the forward-looking statements.
All statements other than historical facts included in this Form, including
without limitation, statements under "Plan of Operation", regarding our
financial position, business strategy, and plans and objectives of management
for the future operations, are forward-looking statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from our expectations include, but are not limited to, market
conditions, competition and the ability to successfully complete financing.
Item 2. Plan of Operation
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Our plan of operation for the next twelve months is to complete the recommended
phase two exploration program on the Scadding West claim consisting of a
geological mapping, prospecting and geochemical sampling. We anticipate that
these exploration programs will each cost approximately $10,000.
As well, we anticipate spending an additional $20,000 on administrative fees,
including fees payable in connection with the filing of this registration
statement and complying with reporting obligations.
Total expenditures over the next 12 months are therefore expected to be $30,000.
While we have enough funds to cover the cost of our anticipated exploration
program, we will require additional funding in order to cover anticipated
administrative fees and to proceed with any additional recommended exploration
on the Scadding West claim following the completion of the phase two program. We
anticipate that additional funding will be in the form of equity financing from
the sale of our common stock or from director loans. We do not have any
arrangements in place for any future equity financing or loans.
If our proposed exploration programs are not successful in identifying economic
mineralization on the Scadding West mineral claim, we intend to acquire an
interest in an alternative mineral property in order to assess its potential to
contain a mineral deposit. It is likely that we would have to raise additional
funding in order to acquire an interest in an additional mineral claim and would
sell shares of our common stock to obtain this financing.
Results Of Operations For The Period Ended March 31, 2006
- ---------------------------------------------------------
We did not earn any revenue from our operations in the nine-month period ended
March 31, 2006. We do not anticipate earning revenues unless we enter into
commercial production on the Scadding West claim, which is doubtful. We have
only recently commenced the exploration stage of our business and can provide no
assurance that we will discover economic mineralization on the Scadding West
claim, or if such minerals are discovered, that we will enter into commercial
production.
<page>
We incurred operating expenses in the amount of $27,115 for the nine-month
period ended March 31, 2006. These operating expenses were comprised of,
administration and management fees of $6,324, legal and accounting fees of
$6,318, mining property expenses of $5,000, transfer agent fees of $3,120,
office expense of $2,896, rent of $2,250, travel costs of $837 and depreciation
expense of $370.
At March 31, 2006, we had total assets of $14,380, consisting of cash ($13,800)
and fixed assets ($950) less accumulated depreciation ($370). At the same date,
we had no liabilities.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue exploration activities.
Item 3 Controls and Procedures
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Evaluation of Disclosure Controls
We evaluated the effectiveness of our disclosure controls and procedures as of
March 31, 2006. This evaluation was conducted by William Stewart, our chief
executive officer and our principal accounting officer.
Disclosure controls are controls and other procedures that are designed to
ensure that information that we are required to disclose in the reports we file
pursuant to the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported.
Limitations on the Effectiveness of Controls
Our management does not expect that our disclosure controls or our internal
controls over financial reporting will prevent all error and fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
but no absolute, assurance that the objectives of a control system are met.
Further, any control system reflects limitations on resources, and the benefits
of a control system must be considered relative to its costs. These limitations
also include the realities that judgments in decision-making can be faulty and
that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people or by management override of a control. A design
of a control system is also based upon certain assumptions about potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and may not be detected.
Conclusions
Based upon their evaluation of our controls, William Stewart, our chief
executive officer and principal accounting officer, has concluded that, subject
to the limitations noted above, the disclosure controls are effective providing
reasonable assurance that material information relating to us is made known to
management on a timely basis during the period when our reports are being
prepared. There were no changes in our internal controls that occurred during
the quarter covered by this report that have materially affected, or are
reasonably likely to materially affect our internal controls.
PART II- OTHER INFORMATION
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Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not
aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
None.
<page>
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 Report on Form 8-K
31.1 Certification pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934
31.2 Certification pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
We did not file any current reports on Form 8-K during the period.
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.
May 11, 2006
Host Ventures Inc.
/s/ William Stewart
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William Stewart, President