SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to
Fiscal Year Ended April 30, 2006
Commission file number 000-27211
MEDINA INTERNATIONAL HOLDINGS, INC
-------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1469319
-------- ----------
(State of incorporation) (I.R.S. Employer Identification No.)
10088 6th Street, Suite G, Rancho Cucamonga, CA 91730
-----------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 422-8127
--------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
------------
Title of each class
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
Yes [X ] No
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.
Yes [ ] No [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [__] No [X]
State issuer's revenues for its most recent fiscal year. $0
There were 28,938,391 shares of the Registrant's common stock outstanding as of
April 30, 2006.
The aggregate market value of the 6,589,282 shares of voting common stock held
by non-affiliates of the Registrant is approximately $$2,240,355 based on last
price on August 10, 2006.
TABLE OF CONTENTS
PART I
Item 1. Description of Business 1
Item 2. Description of Property 2
Item 3. Legal Proceedings 2
Item 4. Submission of Matters to a Vote of Security Holders 2
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters 2
Item 6. Management's Discussion and Analysis or Plan of
Operation 3
Item 7. Financial Statements 6
Item 8. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 6
Item 8A. Controls and Procedures 7
Item 8B Other Information 7
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act 7
Item 10. Executive Compensation 10
Item 11. Security Ownership of Certain Beneficial Owners and
Management 11
Item 12. Certain Relationships and Related Transactions 11
Item 13. Exhibits and Reports on Form 8-K 12
Item 14. Principal Accountant Fees and Services 12
SIGNATURES 13
PART I
Item 1. DESCRIPTION OF BUSINESS
-----------------------
MEDINA INTERNATIONAL HOLDINGS, INC (the "Company") was formed on June
23, 1998. The Company contracted to purchase the low power television license
and station serving Estates Park, Colorado. It planned to operate the station to
broadcast local programming mixed with appropriate national programming. The
Company was unable to complete purchase arrangements and withdrew from the
contract.
The Company was seeking other low power station opportunities in market areas in
the western US. On April 17, 2000, the Company entered into a Letter of Intent
to purchase a low power television license of Station K68CW owned by County
Service Area 29 in Lucerne, California. The Letter of Intent was extended
several times and subsequently, the Company assigned its right under the Letter
of Intent to a third party for assumption of the obligations.
On January 28, 2002, the Registrant entered into an Asset Purchase Agreement
with Mako Communications, LLC to sell its low power television station, W67AF of
Rock Harbor, Florida, subject to FCC approval of the license change for $25,000.
The license transfer was approved and the sale occurred on March 28, 2002. The
Company sold its Monroe County contract for $25,000 in 2002.
The Company now has commenced Boat manufacturing business operations and is
seeking capital to operate. Management intends to manufacture and sell
recreational, Fire CAT and Rescue CAT boats, and has taken the following actions
during the year ended 4-30-2006.
1. Management has signed a licensing agreement on February 23, 2005 with Mr.
Albert Mardikian to Manufacture and sell recreational boats.
2. Management has signed a license agreement on January 24, 2006 with Mr. Albert
Mardikian to use the Water Pump Patent for boats designed by Medina
International Holdings, Inc. and/or 12' V bottom boats designed by Albert
Mardikian,.
3. Management has signed a licensing agreement on June 15, 2006 with Mr. Albert
Mardikian to manufacture and sell 15' Fire Rescue boats designed by Mr. Albert
Mardikian.
1
ITEM 2. DESCRIPTION OF PROPERTIES
-------------------------
a) Facilities
----------
The Company has no property. The Company does not currently maintain an office
or any other facilities. It does currently maintain a mailing address at 10088
6th Street Suite G, Rancho Cucamonga, CA 91730. The Company pays nominal rent of
$50 rent for the use of this mailing address. The Company does not believe that
it will need to maintain an office at any time in the foreseeable future in
order to carry out its plan of operations described herein.
b) Real Property
-------------
None
ITEM 3. LEGAL PROCEEDINGS
-----------------
As of April 30, 2006, the Company was not a party to any legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
----------------------------------------------------------------------
Company received Symbol `MIHI' to be traded on the Bulletin Board on May 31,
2006.
As of the date of this report, there had been no trading or quotation of the
Company's common stock. The range of high and low trade quotations for each
fiscal quarter since the last report, as reported by the National Quotation
Bureau Incorporated, was as follows:
2006 High Low
First quarter * No Quote
Second quarter * No Quote
Third quarter .34 .00
2
2005 High Low
First quarter * No Quote
Second quarter * No Quote
Third quarter * No Quote
Fourth quarter * No Quote
As of April 30, 2006, there were 82 shareholders of the Company's common Stock.
The Company has not declared or paid any cash dividends on its
common stock and does not anticipate paying dividends for the foreseeable
future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Cautionary and Forward Looking Statements
In addition to statements of historical fact, this Form 10-KSB contains
forward-looking statements. The presentation of future aspects of Medina
International Holdings, Inc. ("Medina International Holdings, Inc." the
"Company" or "issuer") found in these statements is subject to a number of risks
and uncertainties that could cause actual results to differ materially from
those reflected in such statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"intend," or "could" or the negative variations thereof or comparable
terminology are intended to identify forward-looking statements.
These forward-looking statements are subject to numerous assumptions, risks
and uncertainties that may cause the Company's actual results to be materially
different from any future results expressed or implied by Medina International
Holdings, Inc. in those statements. Important facts that could prevent Medina
International Holdings, Inc. from achieving any stated goals include, but are
not limited to, the following:
Some of these risks might include, but are not limited to, the
following:
(a) volatility or decline of the Company's stock price;
(b) Potential fluctuation in quarterly results;
(c) Failure of the Company to earn revenues or profits;
3
(d) Inadequate capital to continue or expand its business,
inability to raise additional capital or financing to
implement its business plans;
(e) Failure to achieve a business;
(f) Rapid and significant changes in markets;
(g) Litigation with or legal claims and allegations by
outside parties;
(h) Insufficient revenues to cover operating costs.
There is no assurance that the Company will be profitable, the Company may
not be able to successfully develop, manage or market its products and services,
the Company may not be able to attract or retain qualified executives and
personnel, the Company's products and services may become obsolete, government
regulation may hinder the Company's business, additional dilution in outstanding
stock ownership may be incurred due to the issuance of more shares, warrants and
stock options, or the exercise of warrants and stock options, and other risks
inherent in the Company's businesses.
The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
Readers should carefully review the factors described in other documents the
Company files from time to time with the Securities and Exchange Commission,
including the Quarterly Reports on Form 10-QSB and Annual Report on Form 10-KSB
filed by the Company and any Current Reports on Form 8-K filed by the Company.
Financial Condition and Changes in Financial Condition
-------------------------------------------------------
Liquidity and Capital Resources
-------------------------------
The Company had total assets of $1,968 in cash at year ended April 30, 2006 and
liabilities of $252,540 The Company has insufficient assets and cash to carry on
any operations and will have to sell stock or borrow money to achieve any
capital. The Company has no source for any such capital, whatsoever.
4
Results of Operations
----------------------
Results of Operation for the Year ended April 30, 2006 is compared to year ended
April 30, 2005.
--------------------------------------------------------------------------------
The Company had no revenues for the year ended April 30, 2006 and for year ended
April 30, 2005. The company incurred $1,039,501 in administrative expenses in
year ended April 30, 2006 compared to $61,427 in the year ended April 30,2005.
In the year ended April 30, 2006, the Company had an operating loss of
($1,039,512) including interest accrual, compared to the prior year's loss of
($61,682). Net loss per share in year ended April 30, 2006 was ($.038) per
share compared to a loss in the prior fiscal year of ($.0022) per share.
The trend of losses can be expected to continue for the foreseeable future as
the Company attempts to commerce some business.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. Lack of its existing
capital may be a sufficient impediment to prevent it from accomplishing the goal
of expanding its operations. There is no assurance, however, that without funds
it will ultimately allow company to carry out its business.
The Company will need to raise additional funds to expand its business
activities in the future, and s preparing a private offering memorandum to
attempt to raise $250,000 in operating capital.
The Company has established a $20,000 Line of Credit for working capital.
No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any additional funds
will be available to the Company to allow it to cover its expenses as they may
be incurred.
Irrespective of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.
5
GOING CONCERN
The Company's auditor has issued a "going concern" qualification as part of his
opinion in the Audit Report. There is substantial doubt about the ability of the
Company to continue as a "going concern." The Company has no revenue, limited
capital, debt in excess of $252,540, no significant cash, minimal other assets,
and no capital commitments.
Management hopes to seek and obtain funding, via loans or private placements of
stock for operations, debt and to provide working capital. Management has plans
to seek capital in the form of loans or stock private placements in the next
year of approximately $100,000.
ITEM 7. Financial Statements
--------------------
Please refer to pages F-1 through F-8.
ITEM 8 CHANGES IN ACCOUNTANTS AND DISAGREEMENTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company changed accountants from Michael Johnson & Co. to Jaspers + Hall PC
as a result of the purchase of Michael Johnson & Co. by Jaspers + Hall PC.
The Change of Accountants was approved by the Board of Directors. No audit
committee exists other than the members of the Board of Directors.
In connection with audit of the two most recent fiscal years and through the
date of termination of the accountants, no disagreements exist with any former
accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure, which disagreements if not
resolved to the satisfaction of the former accountant would have caused them to
make reference in connection with his report to the subject of the
disagreement(s).
The audit report by Michael Johnson & Co., LLC.for the period ended April 30,
2004and April 30, 2003 contained an opinion which included a paragraph
discussing uncertainties related to continuation of the Registrant as a going
concern. Otherwise, the audit report by Michael Johnson & Co., LLC for the
period April 30, 2004, and April 30, 2003, did not contain an adverse opinion or
disclaimer of opinion, nor was qualified or modified as to uncertainty, audit
scope, or accounting principles.
The audit report by Jaspers + Hall, PC for the period ended April 30, 2005
contains an opinion which included a paragraph discussing uncertainties related
to continuation of the Registrant as a going concern. Otherwise, the audit
report by Jaspers + Hall, PC for the period April 30, 2005 did not contain an
adverse opinion or disclaimer of opinion, nor was qualified or modified as to
uncertainty, audit scope, or accounting principles.
6
The principal accountant's report on the financial statements for any
of the past two years contained no adverse opinion or a disclaimer of opinion
nor was qualified as to uncertainty, audit scope or accounting principles.
ITEM 8a CONTROLS AND PROCEDURES
Evaluation of Internal and Disclosure Controls
----------------------------------------------
The management of the company has evaluated the effectiveness of the
issuer's disclosure controls and procedures as of the end of the period of the
report (evaluation date) and have concluded that the disclosure controls
internal controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.
There were no changes in the small business issuers internal control over
financial reporting identified in connection with the Company evaluation
required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange act
that occurred during the small business issuers fourth fiscal quarter that has
materially affected or is reasonable likely to materially affect, the small
business issuers internal control over financial reporting.
ITEM 8B.
Other Information
-----------------
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND COMPLIANCE WITH
SECTION 16(A)
--------------------------------------------------------------------------------
The directors and executive officers of the Company as of April 30, 2006, are as
follows:
Name Age Position Term
---- --- -------- ----
1. Daniel Medina 52 President/Director Annual
2. Madhava Rao Mankal 55 Chief Financial Officer/Director Annual
3. Mike Swanson 49 Director Annual
4. Tony Eshiet 48 Director Annual
5. Arun Madhav 44 Director Annual
No appointee for a director position has been subject of any civil
regulatory proceeding or any criminal proceeding in the past five years.
7
Daniel Medina 52: Mr. Medina started as a Sales Rep/ Production Manager in
1973-1985 with Rosemary's Draperies. Daniel Medina owned Lavey Craft Boat Co.
from 1985-1992. Mr. Medina was also a partner in California Cool Custom Boats
from 1992- June 1997. He was the designer and manufacturer of all of their
boats. Mr. Medina served as Director of Sales and Marketing and Production
Manager for Sonic Jet Performance, Inc. since October 1999 to October 2001 and
successfully increased the company revenue by 50%. He has extensive experience
in every phase of sales, marketing and manufacturing.
Madhava Rao Mankal 55: Mr. Mankal has more than 28 years of experience as an
executive. He has served as President/CFO of Force Protection, Inc. ( formerly
Sonic Jet Performance, Inc.) since May 1999 to December 31, 2003. He was a
member of the Board of Directors of Force Protection, Inc until September 30,
2004. He has over 25 years of senior financial management experience which
includes the position of controller, chief financial officer and financial
advisor. He is a Certified Chartered Accountant from India and Cost Accountant
from India, and Certified Management Accountant from USA. He is member of the
Institute of Chartered Accountants of India, Institute of Cost and Works
Accountants of India and Institute of Management Accountants, USA. He has
Bachelor Degree in Commerce from Bangalore University.
Michael Swanson 49: Michael Swanson has worked for the City of Orange Fire
Department since 1983 and his present position is Fire Captain. Prior to that,
he worked for the Federal Fire Department, for four years. He is an active
member of the Orange Fire Department Medical Core Committee, Safety Committee,
and Physical Fitness Committee. He is also a member of the International
Association of Fire Fighters Local 2386, and a member of the California
Professional Firefighters. He has received the Valor Award in 1999 from the
Orange Rotary Club for saving the life of a child. Michael Swanson is a
Certified Instructor at Saddleback College Paramedic School 1999, Spinal
Immobilization Instructor 1998, Advanced Airway Instructor 1995, Emergency
Technician Instructor 1989, State Paramedic 1986, State Fire Officer (on going),
Haz Mat, Trench, Swift Water, Confined Space First Responder (on going).
8
Tony A. Eshiet 48: Tony Eshiet has been the Chief Operating Officer of
HollyTouch Corporation since August 2001. Prior to his current position, Mr.
Eshiet was a Executive Vice President and Financial Center Manager of CITIBANK
from June 2000 to August 2001. Prior to joining Citibank Mr. Eshiet was the
Vice-President and Branch Manager of WELLS FARGO BANK from September 1991 to
June 2000, managed high-level branches in Century City, Long Beach and Monterey
Park in California, USA. The bank had recognized Mr. Eshiet as a "Circle of
Stars Performer on many occasions, he has also received Wells Fargo's "Golden
Coach Award" as number one top Branch Manager in sales and customer service. Mr.
Eshiet has a Bachelor of Science degree in Banking and Finance from Johnson C.
Smith University in Charlotte, North Carolina where he was honored as an
"Outstanding Student of the Year". Mr. Eshiet also has his Master Degree in
Business Administration (M.B.A) from the University of Phoenix. Mr. Eshiet holds
a number of licenses in the financial and investment field: Series 7, Series 24,
Series 63 and also Life and Health. Mr. Eshiet serves on Corporate Board of
Directors of S & P Investment Inc. and American Film Venture Group.
Arun Madhav 44 is a founder - director of Eka Technologies, Inc, a product
design and development company from May 2003. Prior to founding Eka, Arun held
various positions at Interlink Electronics, Inc. between April 1997 - May 2003.,
with the most recent being that of Director of Product Marketing at Interlink
Electronics, Inc (LINK). During his tenure at Interlink, he introduced several
new and innovative products ranging from RF remotes to signature pads. Prior to
Intelink, he introduced several new system level products in the field of
Non-Destructive testing for companies such as Physical Acoustics, Nuson and
Ultran Laboratories. Arun has a BS in Mechanical Engineering from Bangalore
University, an MS in Engineering Science and Mechanics from Virginia Tech, and
an MBA from California State University, Northridge.
No appointee for a director position has been subject of any civil
regulatory proceeding or any criminal proceeding in the past five years.
The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director or officer
has been previously employed is an affiliate, parent or subsidiary of the
Company.
9
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than 10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) filings. The Company believes required filings have been made.
ITEM 10. EXECUTIVE COMPENSATION
- -------------------------------
The Company paid or accrued a total of $0 in compensation to the executive
officers as a group for services rendered to the Company in all capacities
during the fiscal year ended April 30, 2006 and 2005. No one executive officer
received, or has accrued for his benefit, in excess of $60,000 for the year. No
cash bonuses were or are to be paid to such persons.
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
- -----------------------------------------------------------------------------------------------------------------------
Name and Principal Year Salary ($) Bonus ($) Other Annual Restricted Stock Securities
Position Compensation ($) Award(s) Underlying Options/
($) SARs (#)
- -----------------------------------------------------------------------------------------------------------------------
Daniel Medina, 2004 0 0 0 12,000,0000 0
President and 2005 0 0 0 0 0
Director 2006 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------
Madhava Rao Mankal 2004 0 0 0 12,000,0000 0
Chief Financial Officer 2005 0 0 0 0 0
and Director 2006 0 0 0 0 0
-------------------------------------------------------------------------------------------------------------------------
Mike Swanson 2004 0 0 0 0 0
2005 0 0 0 11,453 0
Director 2006 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------
Tony Eshiet 2004 0 0 0 0 0
2005 0 0 0 11,453 0
Director 2006 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------
Arun Madhav 2004 0 0 0 0 0
2005 0 0 0 11,453 0
Director 2006 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------
All Officers 2004 0 0 0 0 0
as a group (2) 2005 0 0 0 0 0
2006 0 0 0 0 0
10
Directors are not paid
50 Preferred shares of `A' series to two directors have been approved by the
independent members of the Board on May 20, 2005, but have not been issued.
The Company has no employee incentive stock option plan.
There are no plans pursuant to which cash or non-cash compensation was
paid or distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the executive officers of the Company. No other
compensation not described above was paid or distributed during the last fiscal
year to the executive officers of the Company. There are no compensatory plans
or arrangements, with respect to any executive officer of the Company, which
resulted or will result from the resignation, retirement or any other
termination of such individual's employment with the Company or from a change in
control of the Company or a change in the individual's responsibilities
following a change in control.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End option/SAR value
(None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table sets forth information, as of April 30, 2006, with
respect to the beneficial ownership of the Company's no par value common stock
by each person known by the Company to be the beneficial owner of more than five
percent of the outstanding common stock, and by officers and directors.
Number of Percentage of
Name Shares Owned Class
------------------------------------- ---------------- -------------
Daniel Medina 11,099,000 38.28
Madhava Rao Mankal 11,245,000 38.80
Mike Swanson 17,703 0.06
Tony Eshiet 17,703 0.06
Arun Madhav 19,703 0.07
Officers and Directors as a group 22,399,109 77.27
PART IV
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------
The Company has adopted a policy under which any consulting or finder's fee that
may be paid to a third party or affiliate for consulting services to assist
management in evaluating a prospective business opportunity would be paid in
stock or in cash. Any such issuance of stock would be made on an ad hoc basis.
Accordingly, the Company is unable to predict whether or in what amount such a
stock issuance might be made.
Although there is no current plan in existence, it is possible that the Company
will adopt a plan to pay or accrue compensation to its officers and directors
for services related to seeking business opportunities and completing a merger
or acquisition transaction.
11
Although management has no current plans to cause the Company to do so, it is
possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's current stockholders to the acquisition candidate or principals
thereof, or to other individuals or business entities, or requiring some other
form of payment to the Company's current stockholders, or requiring the future
employment of specified officers and payment of salaries to them. It is more
likely than not that any sale of securities by the Company's current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition involving the Company would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
Transactions with Management and Others
----------------------------------------
There were no transactions or series of transactions during the Registrant's
last fiscal year or the current fiscal year, or any currently proposed
transactions or series of transactions of the remainder of the fiscal year, in
which the amount involved exceeds $60,000 and in which to the knowledge of the
Registrant, any director, executive officer, nominee, future director, five
percent shareholder, or any member of the immediate family of the foregoing
persons, have or will have a direct or indirect material interest, except as
follows:
53,109 restricted common shares issued to three directors for Services
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
The following documents have been filed during the year ended April 30, 2006:
Reports on Form 8-K:
8K - filed January 30, 2006
8K - filed July 14, 2006
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Company has provide for Audit services $2,500 for the year ended April 30, 2005.
General. Jaspers + Hall, PC is the Company's principal auditing/ accountant
firm. The Company's Board of directors has considered whether the provisions of
audit services is compatible with maintaining Jaspers + Hall, PC's independence.
Audit Fees. Our former auditor Michael Johnson & Co, LLC billed the
Company $8,000 for the following professional services: audit of the annual
financial statement of the Company for the fiscal years ended April 30, 2003,
2004, 2005 and review of the interim financial statements included in quarterly
reports on Form 10-QSB for the periods ended July 31, 2003, October 31, 2003,
January 31, 2004, July 31, 2004, October 31, 2004, January 31, 2005, July 31,
2005, October 31, 2005 and January 31, 2006.
Jaspers + Hall billed $4,000 for review services in fiscal 2005, ended
April 30, 2006.
There were no audit related fees paid in 2002, 2003, 2004 or 2005.
There were no tax fees or other fees in 2003, 2004, 2005 or 2006 paid to
Auditors or Auditors affiliates.
The Company's Board acts as the audit committee and had no "pre-approval
policies and procedures" in effect for the auditors" engagement for the audit
year 2003, 2004, 2005 and 2006.
12
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE
-------
INDEPENDENT AUDITOR'S REPORT............................ F-1
BALANCE SHEET................................................F-2
STATEMENT OF OPERATIONS .....................................F-3
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)..................F-4
STATEMENT OF CASH FLOWS......................................F-5
NOTES TO FINANCIAL STATEMENTS.............................F-6 - F-8
MEDINA INTERNATIONAL HOLDINGS, INC
(A Development Stage Company)
Financial Statements
April 30, 2006
JASPERS + HALL, PC
CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------------------------------------
9175 Kenyon Avenue, Suite 100
Denver, CO 80237
303-796-0099
REPORT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM
To the Board of Directors
of Medina International Holdings, Inc.
We have audited the accompanying balance sheets of Medina International
Holdings, Inc., as of April 30, 2006, and 2005, and the related statements of
operations, cash flows, and changes in stockholders' equity for the years then
ended, and for the period March 16, 1998 (date of inception) to April 30, 2006.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Medina International
Holdings, Inc. at April 30, 2006, and 2005, and the results of its operations
and its cash flows for the years then ended, and for the period March 16, 1998
(date of inception) to April 30, 2006, in conformity with accounting principles
generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 1 to the
financial statements, conditions exists which raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 5. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
July 20, 2006
F-1
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Balance Sheets
April 30,
2006 2005
------------- -------------
ASSETS:
Current Assets:
Cash $ 1,968 $ 180
Inventory 11,428 -
Prepaid Expenses 800 -
------------- -------------
Total Current Assets 14,196 180
------------- -------------
Other Assets: Mold for Fire Rescue Boat 188,910 -
------------- -------------
TOTAL ASSETS $ 203,106 $ 180
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Liabilities:
Accounts payable and accrued interest $ 79,784 $ 62,473
Lines of credit 25,765 -
Note payable 17,000 -
Related parties - short-term borrowings from shareholders 129,991 6,825
------------- -------------
TOTAL LIABILITIES 252,540 69,298
------------- -------------
Stockholders' (Deficit):
Preferred stock, $.001 par value, 10,000,000
shares authorized, none issued or outstanding - -
Common stock, $.0001 par value, 100,000,000
shares authorized, 28,938,391 and 26,820,000
shares issued and outstanding 2,894 2,682
Additional paid-in capital 1,085,464 26,480
Deficit accumulated during the development stage (1,137,792) (98,280)
------------- -------------
Total Stockholders' Deficit (49,434) (69,118)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 203,106 $ 180
============= =============
The accompanying notes are an integral part of theses financial statements.
F-2
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Statement of Operations
March 16, 1998
Year Ended (Inception) to
April 30, April 30,
2006 2005 2006
--------------- --------------- -----------------
INCOME $ - $ - $ 25,000
OPERATING EXPENSES:
Professional Fees 17,185 34,075 108,863
Bank Charges 270 20 776
Telephone 2,647 2,389 5,086
Travel 10,799 1,009 15,019
Settlement of debt - 17,000 17,000
Stock compensation 993,313 2,400 995,713
Miscellaneous expenses 15,287 4,534 19,821
--------------- --------------- -----------------
Total Operating Expenses 1,039,501 61,427 1,162,278
--------------- --------------- -----------------
Other Income(Expense)
Interest expense (63) (255) (566)
Other income 52 - 52
--------------- --------------- -----------------
Net Other Income (11) (255) (514)
--------------- --------------- -----------------
Net Loss from Operations $ (1,039,512) $ (61,682) $ (1,137,792)
=============== =============== =================
Weighted average number of
shares outstanding 27,368,869 26,820,000
Net Loss Per Share $ (0.038) $ (0.002)
=============== ===============
* Less than $0.01 per share * *
The accompanying notes are an integral part of these financial sstatements.
F-3
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
Deficit Accum.
Additional During the
Common Stock Paid-In Subscription Development
Shares Amount Capital Receivable Stage Totals
-------------- ---------- ------------ ------------- -------------- --------------
Balance - March 16, 1998 - $ - $ - $ - $ - $ -
Stock issued for services 2,400,000 240 1,760 - - 2,000
Stock issued for cash 300,000 30 24,970 (10,500) - 14,500
Net loss for year (2,793) (2,793)
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 1999 2,700,000 270 26,730 (10,500) (2,793) 13,707
-------------- ---------- ------------ ------------- -------------- --------------
Cash payment of subscription receivable - - - 10,250 - 10,250
Net loss for year - - - - (5,253) (5,253)
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 2000 2,700,000 270 26,730 (250) (8,046) 18,704
-------------- ---------- ------------ ------------- -------------- --------------
Net loss for year - - - - (21,426) (21,426)
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 2001 2,700,000 270 26,730 (250) (29,472) (2,722)
-------------- ---------- ------------ ------------- -------------- --------------
Net income for year - - - - 4,881 4,881
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 2002 2,700,000 270 26,730 (250) (24,591) 2,159
-------------- ---------- ------------ ------------- -------------- --------------
Net loss for year - - - - (4,610) (4,610)
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 2003 2,700,000 270 26,730 (250) (29,201) (2,451)
-------------- ---------- ------------ ------------- -------------- --------------
Net loss for year - - - - (7,397) (7,397)
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 2004 2,700,000 270 26,730 (250) (36,598) (9,848)
-------------- ---------- ------------ ------------- -------------- --------------
Stock issued for services 24,120,000 2,412 - - - 2,412
Subscription receivable - - (250) 250 - -
Net loss for year - - - - (61,682) (61,682)
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 2005 26,820,000 2,682 26,480 - (98,280) (69,118)
-------------- --------------------------------------------------------------------------
Stock issued for services 2,042,291 204 2,792 - - 2,996
Stock issued for cash 126,100 13 63,037 - - 63,050
Net loss for year - - - - (46,362) (46,362)
-------------- ---------- ------------ ------------- -------------- --------------
Balance - April 30, 2006 28,988,391 $ 2,899 $ 92,309 $ - $ (144,642) $ (49,434)
============== ========== ============ ============= ============== ==============
Stock issued for services 1,954,109 195 976,860 - - 977,055
Stock issued for royalties 3,600 1 1,799 - - 1,800
Stock issued for rent 1,250 - 625 - - 625
Stock issued foir license 33,332 3 16,663 - - 16,666
Stock issued for consideration 50,000 5 24,995 - - 25,000
Stock issued for cash 126,100 13 63,037 - - 63,050
Net loss for year - - - - $(1,039,512) (1,064,512)
-------------- ---------- ----------- ------------ -------------- --------------
Balance - April 30, 2006 28,988,391 $ 2,899 $ 110,459 $ - $(1,137,792) $ (49,434)
============= ========== =========== ============ ============== ==============
The accompanying notes are an integral part of these financial statements.
F-4
MEDINA INTERNATIONAL HOLDING, INC.
(A Development Stage Company)
Statements of Cash Flows
Indirect Method
March 16, 1998
Year Ended (Inception) to
April 30, April 30,
2006 2005 2006
------------- ------------- ---------------
Cash Flows From Operating Activities:
Net (Loss) $ (1,039,512) $ (61,682) $ (1,137,792)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock issued for services 996,,146 2,412 998,558
Changes in assets and liabilities:
Increase in inventory (11,428) - (11,428)
Increase in prepaid expenses (800) - (800)
Increase in accounts payables 17,311 59,450 79,784
------------- ------------- ---------------
1,001,229 61,862 1,066,114
------------- ------------- ---------------
Net Cash Used in Operating Activities (38,283) 180 (71,678)
------------- ------------- ---------------
Cash Flows From Investing Activities:
Purchase of mold (188,910) - (188,910)
------------- ------------- ---------------
Net Cash Used in Investing Activities (188,910) - (188,910)
------------- ------------- ---------------
Cash Flow From Financing Activities:
Increase in lines of credit 25,765 - 25,765
Proceeds from note payable 17,000 - 17,000
Proceeds (payments) from advances by shareholders 123,166 - 129,991
Issuance of common stock for cash 63,050 - 89,800
------------- ------------- ---------------
Net Cash Provided By Financing Activities 228,981 - 262,556
------------- ------------- ---------------
Increase (Decrease) in Cash 1,788 180 1,968
Cash and Cash Equivalents - Beginning of period 180 - -
------------- ------------- ---------------
Cash and Cash Equivalents - End of period $ 1,968 $ 180 $ 1,968
============= ============= ===============
Supplemental Cash Flow Information:
Interest paid $ - $ - $ -
============= ============= ===============
Taxes paid $ - $ - $ -
============= ============= ===============
The accompanying notes are an integral part of these financial statements.
F-5
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Notes To Financial Statements
April 30, 2006
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations
MEDINA INTERNATIONAL HOLDINGS, INC (the "Company") was incorporated on March 16,
1998 in the state of Colorado. The Company is primarily engaged in raising
capital funds from investors and is developing internally a Fire Cat boat. The
Company has licenses to manufacture "Twelve Feet and Fifteen Feet Fire Rescue
Jet and recreational boats".
The Company's fiscal year end is April 30.
Basis of Presentation - Development Stage Company
The Company has not earned any significant revenue from limited principal
operations. Accordingly, the Company's activities have been accounted for as
those of a "Development Stage Enterprise" as set forth in Financial Accounting
Standards Board Statement No. 7 ("SFAS 7").
Among the disclosures required by SFAS 7 are that the Company's financial
statements be identified as those of a development stage company, and that the
statements of operations, stockholders' equity (deficit) and cash flows disclose
activity since the date of the Company's inception.
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of
accounting in accordance with U.S. generally accepted accounting principles.
Estimates
The preparation of financial statements in conformity with U.S generally
accepted accounting principles requires management to make estimates and
assumptions that effect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considered all cash and
other highly liquid investments with initial maturities of three months or less
to be cash equivalents.
Inventories
Inventories are stated at lower of cost (FIFO) or market. Inventories consists
primarily of Hull & Deck Fiberglass parts and based on replacement cost.
Other Assets
Other asset consists of the cost of the Mold for 21 Feet Fire Rescue cat boat.
Net earning (loss) per share
Net loss per share is based on the weighted average number of common shares and
common share equivalents outstanding during the period. There were no
equivalents during period.
Income Taxes
The Company accounts for income taxes under SFAS No. 109, which requires the
asset and liability approach to accounting for income taxes. Under this method,
deferred tax assets and liabilities are measured based on differences between
financial reporting and tax bases of assets and liabilities measured using
enacted tax rates and laws that are expected to be in effect when differences
are expected to reverse.
F-6
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
------------------------------------------
Other Comprehensive Income
The Company has no material components of other comprehensive income (loss) and,
accordingly, net loss is equal to comprehensive loss in all periods.
Fair Value of Financial Instruments
The carrying amount of accounts payable and advances payable are considered to
be representative of its respective fair value because of the short-term nature
of this financial instrument.
NOTE 2 - CAPITAL STOCK TRANSACTIONS:
The authorized capital stock of the Company is 100,000,000 shares of common
stock at $.0001 par value. The Company has issued 28,988,391 shares to eighty
two individuals for $87,800 and services.
1. 1,250 restricted common shares issued to Hollytouch Corporation in lieu of
$625 rent for office address for a period of twelve months.
2. 3,600 restricted common shares were issued to Albert Mardikian in lieu of
royalty for a $1,800 royalty for period of twelve months.
3. 126,100 restricted common shares issued for $63,050 in cash as part of a
Private Placement.
4. 53,109 restricted common shares issued to three directors for Services
5. 1,901,000 restricted common shares issued to 12 persons for Services.
6. 33,332 restricted common shares issued to Point of View for License.
NOTE 3 - INCOME TAXES
There has been no provision for U.S. federal, state, or foreign income taxes for
any period because the Company has incurred losses in all periods and for all
jurisdictions.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
deferred tax assets are as follows:
Deferred tax assets
Net operating loss carryforwards $1,137,792
Valuation allowance for deferred tax assets (1,137,792)
--------
-------
Net deferred tax assets $ -
=======
========
Realization of deferred tax assets is dependent upon future earnings, if any,
the timing and amount of which are uncertain. Accordingly, the net deferred tax
assets have been fully offset by a valuation allowance. As of April 30, 2006,
the Company had net operating loss carryforwards of approximately $1,137,792 for
federal and state income tax purposes. These carryforwards, if not utilized to
offset taxable income begin to expire in 2007. Utilization of the net operating
loss may be subject to substantial annual limitation due to the ownership change
limitations provided by the Internal Revenue Code and similar state provisions.
The annual limitation could result in the expiration of the net operating loss
before utilization.
NOTE 4 - Related Party Transactions:
Officers of the Company have provided services and advanced cash in the amount
of $129,991 to the Company for operations. These advances are unsecured, bear no
interest, and due on demand.
F-7
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Notes To Financial Statements
April 30, 2006
NOTE 5 - GOING CONCERN:
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. The Company's current liabilities exceeds current
assets in the amount of $238,344 and its current accumulated deficit is
1,137,792.
The future success of the Company is likely dependent on its ability to attain
additional capital to develop its proposed products and ultimately, upon its
ability to attain future profitable operations. There can be no assurance that
the Company will be successful in obtaining such financing, or that it will
attain positive cash flow from operations.
NOTE 6 - NOTE PAYABLE
At April 30, 2006, note payable consists of the following:
Note payable to individual, 6% interest,
secured by common stock, due on demand $17,000
=======
NOTE 7 - SUBSEQUENT EVENT
1. Mold for the Fire Rescue and Rescue jet with Cat bottom has been completed.
Manufacture of the first Fire Cat boat is in progress.
2. Company received Symbol `MIHI' to be traded on the Bulletin Board on May
31, 2006.
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENT
In March 2005, the FASB issued FASB Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations" ("FIN 47"). FIN 47 provides guidance
relating to the identification of and financial reporting for legal obligations
to perform an asset retirement activity. The Interpretation requires recognition
of a liability for the fair value of a conditional asset retirement obligation
when incurred if the liability's fair value can be reasonably estimated. FIN 47
also defines when an entity would have sufficient information to reasonably
estimate the fair value of an asset retirement obligation. The provision is
effective no later than the end of fiscal years ending after December 15, 2005.
The Company will adopt FIN 47 beginning the first quarter of fiscal year 2006
and does not believe the adoption will have a material impact on its
consolidated financial position or results of operations or cash flows.
In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections" ("SFAS 154") which replaces Accounting Principles Board Opinions
No. 20 "Accounting Changes" and SFAS No. 3, "Reporting Accounting Changes in
Interim Financial Statements-An Amendment of APB Opinion No. 28." SFAS 154
provides guidance on the accounting for and reporting of accounting changes and
error corrections. It establishes retrospective application, or the latest
practicable date, as the required method for reporting a change in accounting
principle and the reporting of a correction of an error. SFAS 154 is effective
for accounting changes and a correction of errors made in fiscal years beginning
after December 15, 2005 and is required to be adopted by the Company in the
first quarter of 2006. The Company is currently evaluating the effect that the
adoption of SFAS 154 will have on its results of operations and financial
condition but does not expect it to have a material impact.
In June 2005, the Emerging Issues Task Force, or EITF, reached a consensus on
Issue 05-6, Determining the Amortization Period for Leasehold Improvements,
which requires that leasehold improvements acquired in a business combination or
purchased subsequent to the inception of a lease be amortized over the lesser of
the useful life of the assets or a term that includes renewals that are
reasonably assured at the date of the business combination or purchase. EITF
05-6 is effective for periods beginning after July 1, 2005. We do not expect the
provisions of this consensus to have a material impact on the financial
position, results of operations or cash flows.
F-8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
MEDINA INTERNATIONAL HOLDINGS,INC.
(Registrant)
Date: July 20, 2006
/s/ Daniel Medina
------------------------------
Daniel Medina, President
13