SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
July 31, 2006 000-27211
MEDINA INTERNATIONAL HOLDINGS, INC.
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(Name of Registrant)
Colorado 84-1469319
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(State of incorporation) (I.R.S. Employer
Identification No.)
10088 6th Street, Suite G, Rancho Cucamonga, CA 91730
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(303)741-5785
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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
28,988,391 common shares as of July 31, 2006
Part I: FINANCIAL INFORMATION
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
INDEX OF FINANCIAL STATEMENTS
Page
Auditors Review Report -Jaspers + Hall, PC F - 1
Balance Sheets F - 2
Statements of Operations F - 3
Statements of Cash Flows F - 4
Notes to Financial Statements F - 5
Jaspers + Hall, PC
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Medina International Holdings, Inc.
Rancho Cucamonga, California
We have reviewed the accompanying balance sheet of Medina International
Holdings, Inc. as of July 31, 2006 and the related statements of operations for
the three-month periods ended July 31, 2006 and 2005, and the cash flows for the
three-months ended July 31, 2006 and 2005 included in the accompanying
Securities and Exchange Commission Form 10-QSB for the period ended July 31,
2006. These financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the Public
Company Accounting Oversight Board (PCAOB). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards of the PCAOB, the objective of which is the expression
of an opinion regarding the financial statements as a whole. Accordingly, we do
not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be 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 discussed in Note 2, conditions
exist which raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Jaspers + Hall, PC
Denver, Colorado
August 28, 2006
F - 1
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Balance Sheets
(Unaudited)
July 31, April 30,
2005 2006
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ASSETS:
Current Assets:
Cash $ - $ 1,968
Inventory 19,168 11,428
Prepaid expenses 200 800
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Total Current Assets 19,368 14,196
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Other Assets:
Mold for fire rescue boat 219,074 188,910
Investment in Genesis 25,000 25,000
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Total Other Assets 244,074 213,910
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TOTAL ASSETS $ 263,442 $ 228,106
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LIABILITIES AND STOCKHOLDERS' DEFICIT:
Liabilities:
Bank overdraft $ 200 $ -
Accounts payable and accrued expenses 69,563 79,784
Lines of credit 27,394 25,765
Advance from customer 20,500 -
Notes payable - 17,000
Short-term borrowings from stockholders 144,769 129,991
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TOTAL LIABILITIES 262,426 252,540
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Stockholders' Deficit:
Common stock, $.0001 par value, 100,000,000
shares authorized, 28,988,391 and 28,988,391 shares
issued and outstanding, respectively 2,899 2,899
Share committed to be issued 51,225 -
Additional paid-in capital 1,110,460 1,110,459
Deficit accumulated during the development stage (1,163,568) (1,137,792)
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Total Stockholders' Deficit 1,016 (24,434)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 263,442 $ 228,106
============== ================
See Accountants' Review Report
F-2
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
Three Months Ended March 16, 1998
July 31, (Inception) to
2006 2005 July 31, 2006
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INCOME $ - $ - $ 25,000
OPERATING EXPENSES:
Professional fees 8,480 3,245 117,343
Bank charges 92 94 868
Telephone 378 1,200 5,464
Travel 1,966 1,744 16,985
Settlement of debt - - 17,000
Stock compensation - - 995,713
Miscellaneous expenses 13,966 676 33,787
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Total Operating Expenses 24,882 6,959 1,187,160
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OTHER INCOME (EXPENSES)
Interest expense (894) (96) (1,460)
other income 52
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(894) (96) (1,408)
Net Loss from Operations $ (25,776) $ (7,055) $ (1,163,568)
=============== ================= ==================
Weighted average number of
shares outstanding 28,988,391 26,832,614
Net Loss Per Share $ (0.0009) $ (0.0003)
=============== =================
See Accountants' Review Report
F-3
MEDINA INTERNATIONAL HOLDINGS, INC.
(A Development Stage Company)
Statements of cash flows
(Unaudited)
March 16, 1998
Three Months Ended (Inception) to
July 31, July 31,
2005 2004 2005
---------------- ------------- ---------------
Cash Flows From Operating Activities:
Adjustments to reconcile net loss to net cash
used in operating activities:
Net (Loss) $ (25,776) $ (7,055) $ (1,163,568)
Non-cash items included in loss:
Stock issued for services 9,526 5,904 998,558
Settlement of Debt 18,700
Changes in assets and liabilities:
Decrease (Increase) in prepaid expenses 600 (75) (200)
Increase in inventory (7,740) - (19,168)
Increase in accounts payable and accrued expenses (10,221) (4,102) 69,563
Increase in customer deposits 20,500 - 20,500
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Total adjustments 31,365 1,727 1,069,253
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Net Cash Used in Operating Activities 5,589 (5,328) (94,315)
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Cash Flow From Investing Activities:
Mold cost (30,164) - (219,074)
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Net Cash Provided By Investing Activities (30,164) - (219,074)
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Cash Flow From Financing Activities:
Bank overdraft 200 - 200
Proceeds (payments) to/from short-term borrowings (2,222) (2,726) 144,769
Increase from line of credit 1,629 - 27,394
Issuance of common stock 23,000 10,700 141,026
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Net Cash Provided By Financing Activities 22,607 7,974 313,389
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Increase (Decrease) in Cash (1,968) 2,646 -
Cash and Cash Equivalents - Beginning of period 1,968 180 -
---------------- ------------- ---------------
Cash and Cash Equivalents - End of period $ - $ 2,826 $ -
================ ============= ===============
Supplemental Cash Flow Information:
Cash paid for :
Interest paid $ - $ - $ -
================ ============= ===============
Taxes paid $ - $ - $ -
================ ============= ===============
See Accountants' Review Report
F-4
MEDINA INTERNATIONAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Presentation of Interim Information
In the opinion of the management of Medina International Holdings,
Inc., the accompanying unaudited financial statements include all normal
adjustments considered necessary to present fairly the financial position as of
July 31, 2006, and the results of operations for the three months periods ended
July 31, 2006 and 2005, and cash flows for the three months ended July 31, 2006
and 2005. Interim results are not necessarily indicative of results for a full
year.
The financial statements and notes are presented as permitted by Form
10-QSB, and do not contain certain information included in the Company's audited
financial statements and notes for the fiscal year ended April 30, 2006.
2. Going Concern
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States, which
contemplates continuation of the Company as a going concern. The Company's
current liabilities exceeds its current assets by $243,058.
Also, the Company's operations generated no income during the current
period ended and the Company's deficit is $1,163,568.
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.
3. Inventory
At July 31, 2006, inventory consisted of $19,168 of finished goods.
4. Short-term Borrowings - related parties
At July 31, 2006, short-term borrowings - related parties consisted of advances
from president and Chief Financial Officers of Company of $144,769 for
operational expenses. These advances are unsecured, bear no interest, and due on
demand.
5. Capital stock transactions.
The following stock transactions happened during the three months period
ended July 31, 2006:
June 30, 2006 Company collected 23,000 for sale of stock. Company has committed
to issue shares to directors 18,750 common shares to three directors for
services, 300 common shares towards rent of office space to Holy Touch
Corporation and 100,000 common shares in Settlement of note for the amount of
$18,700 to John Schlie.
F - 5
ITEM 2. MANAGEMENT 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-QSB contains
forward-looking statements. The presentation of future aspects of Medina
International Holding, Inc. ("Medina International Holding, 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 Medina International Holding, Inc. actual
results to be materially different from any future results expressed or implied
by Medina International Holding, Inc. in those statements. Important facts that
could prevent Medina International Holding, 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;
(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 technology 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 in 2006 and any Current Reports on Form 8-K filed by the
Company.
The trend of losses can be expected to continue for the foreseeable
future as the Company attempts to commerce some business.
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.
Mold for the Fire Rescue and Rescue jet with Cat bottom has been completed.
Manufacture of the first Fire Cat boat is in progress.
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.
RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED JULY 31, 2006 COMPARED TO
SAME PERIOD ENDED JULY 31, 2005.
The Company had no revenues in the three-month period ended July 31, 2006 or
2005. The Company is seeking financing for an attempt to acquire companies. The
Company has started the manufacture of 21' Cat bottom Fire rescue Jet. The
Company incurred operating expenses of $24,882 for the first quarter ended July
31, 2006 and $6,959 for the first quarter ended July 31, 2005. The Company had a
loss on operations of ($25,776) for the first quarter ended July 31, 2006
compared to ($7,055) in 2005 in the same quarter. The loss per share was
($.0009) and ($.0003) in the first quarter ended July 31, 2006 and July 31, 2005
respectively.
The trend of losses can be expected to continue for the foreseeable
future as the Company attempts to manufacture Fire Rescue Jets with Cat bottom.
LIQUIDITY AND CAPITAL
The Company has no cash as of July 31, 2006, which is insufficient for
any operations of significance. The Company will need to raise capital through
loans or private placements in order to carry out any operational plan. The
Company has no sources of such capital at this time.
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 $350,000 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.
"GOING CONCERN" QUALIFICATION
The Company's auditor has issued a "going concern" qualification as part of
their opinion in the audit report for the year ended April 30, 2006. There is
substantial doubt about the ability of the Company to continue as a "going
concern." The Company has limited business activity, limited capital, debt in
excess of $262,000, all of which is current, no cash, nominal other assets, and
no capital commitments. The effects of such conditions could easily be to cause
the Company's bankruptcy.
Management hopes to develop its business plan and will need, at which 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
$350,000.
ITEM 3. CONTROLS AND PROCEDURES
a. Evaluation of Disclosure Controls and Procedures:
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
June 30, 2006 and have concluded that the disclosure controls internal controls
and procedures are adequate and effective based upon their evaluation as of the
evaluation date.
b. Changes in Internal Control over Financial Reporting:
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 last fiscal quarter that has
materially affected or is reasonable likely to materially affect, the small
business issuers internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company had Preferred Stock authorized in its original Articles of
Incorporation. Board has designated Series A Convertible Preferred Stock and
authorized 50 shares designated as Series A Convertible Preferred Stock. No
Series A was issued authorized or outstanding as of July 31, 2006.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits:
SIGNATURES
Pursuant to the requirements 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.
Date: August 28, 2006
MEDINA INTERNATIONAL HOLDINGS, INC.
/s/Daniel Medina, President
--------------------------
Daniel Medina, President
CERTIFICATION PURSUANT TO SECTION
302 OF THE SARBANES OXLEY ACT