UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 10-QSB
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[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarterly period ended July 31, 2007
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
For the period ended July 31, 2007
Commission File Number 000-27211
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MEDINA INTERNATIONAL HOLDINGS, INC.
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(Name of small business issuer in its charter)
COLORADO 84-1469319
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10088 6th Street, Suite G,
Rancho Cucamonga, CA 91730
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(Address of principal executive offices) (Zip Code)
(909)522-4414
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(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to the filing requirements for the past 90
days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of September 18, 2007 there were 31,988,541 shares of the registrant's sole
class of common shares outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Report of Independent Registered Public Accounting Firm F-1
Consolidated Balance Sheet - July 31, 2007 and April 30, 2007 F-2
Consolidated Statement of Operations - Three months ended July 31,
2007 and 2006 and from October 22, 2002 (Inception) to
July 31, 2007 F-3
Consolidated Statement of Changes in Stockholders' Equity (Deficit) -
From October 22, 2002 (Inception) to July 31, 2007 F-4
Consolidated Statement of Cash Flows - Three months ended July 31, 2007
and 2006 and From October 22, 2002 (Inception) to
July 31, 2007 F-6
Notes to Consolidated Financial Statements F-7
Item 2. Management's Discussion and Analysis 1
Item 3. Controls and Procedures 3
Item 3A(T). Controls and Procedures 3
PART II - OTHER INFORMATION
Item 1. Legal Proceedings -Not Applicable 4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 4
Item 3. Defaults Upon Senior Securities - Not Applicable 4
Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable 5
Item 5. Other Information - Not Applicable 5
Item 6. Exhibits 5
SIGNATURES 6
PART I
ITEM 1. FINANCIAL STATEMENTS
MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
Financial Statements
For the period ended July 31, 2007
(Unaudited)
JASPERS + HALL, PC
CERTIFIED PUBLIC ACCOUNTANTS
9175 Kenyon Avenue, Suite 100
Denver, CO 80237
303-796-0099
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Medina International Holdings, Inc.
We have reviewed the accompanying consolidated balance sheet of Medina
International Holdings, Inc., a development stage company, as of July 31, 2007
and the related consolidated statement of operations for the three-months ended
July 31, 2007 and 2006, and the related consolidated statement of cash flows for
the three-months ended July 31, 2007 and 2006. These financial statements are
the responsibility of the Company's management.
We conducted our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 the standards of the Public Company Accounting Oversight Board (United
States), 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 consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2,
conditions exists 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.
/s/Jaspers + Hall, PC
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Jaspers + Hall, PC
September 19, 2007
MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Balance Sheet
July 31, April 30,
2007 2007
--------------- ---------------
(Unaudited) (Audited)
ASSETS:
Current Assets:
Cash $ - $ 5,136
Other receivables 118 118
Inventory 29,599 54,557
--------------- ---------------
Total current assets 29,717 59,811
--------------- ---------------
Fixed Assets:
Watercraft molds 342,941 320,465
Office equipment 20,740 -
Manufacturing tools 12,050 -
--------------- ---------------
375,731 320,465
Accumulated depreciation (3,794) -
--------------- ---------------
Net fixed assets 371,937 320,465
--------------- ---------------
Other Assets:
Prepaid expenses 24,000 -
Investment 25,000 25,000
--------------- ---------------
Total other assets 49,000 25,000
--------------- ---------------
TOTAL ASSETS $ 450,654 $ 405,276
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT):
Current liabilities:
Accounts payable and accrued interest $ 155,657 $ 144,738
Bank overdraft 24,899 -
Lines of Credit 7,288 28,805
Customer Deposit 20,500 20,500
Notes payable 10,000 10,000
Related Parties - short-term borrowings from shareholders 237,865 261,588
--------------- ---------------
Total current liabilities 456,209 465,631
--------------- ---------------
Stockholders' equity (deficit):
Preferred stock, $.00001 par value, 10,000,000 shares
authorized, none issued and outstanding - -
Common stock, $0.00001 par value, 100,000,000 shares
authorized, 31,988,541 and 30,324,541 shares
issued and outstanding on July 31, 2007 and April 30, 2007, 3,199 3,032
respectively
Additional paid-in capital 2,122,184 1,697,101
Shares committed to be issued 303,938 30,625
Subscription receivable (4,000) (4,000)
Accumulated deficit during the development stage (2,430,876) (1,787,113)
--------------- ---------------
Total stockholders' equity (deficit) (5,555) (60,355)
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 450,654 $ 405,276
=============== ===============
See accountants' review report and notes to these consolidated financial
statements.
MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
Three Months Ended March 16, 1998
July 31, (Inception) to
2007 2006 July 31, 2007
------------------------------------ ----------------------
Revenue:
Sales $ 192,800 - $ 217,800
Cost of goods sold 86,994 - 86,994
------------------------------------ ----------------------
Gross Profit 105,806 - 130,806
------------------------------------ ----------------------
Operating Expenses:
Professional fees 12,907 8,480 160,060
Stock compensation expense 665,311 - 2,171,023
Commission expense 26,509 - 26,509
Administrative expenses 37,071 16,402 199,883
------------------------------------ ----------------------
Loss From Operations (635,992) (24,882) (2,426,669)
Other Income and (Expense):
Interest income - - 26,580
Interest expense, related party (7,771) (894) (30,787)
------------------------------------ ----------------------
(7,771) (894) (4,207)
Net Loss $ (643,763) $ (25,776) $ (2,430,876)
==================================== ======================
Weighted average number of
common shares outstanding 31,077,839 28,988,391
====================================
Net loss per share $ (0.02) $ *
====================================
* Less than $(0.01) per share.
See accountants' review report and notes to these consolidated financial
statements.
MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)
March 16, 1998
Three Months Ended (Inception) to
July 31, July 31,
2007 2006 2007
-------------- ------------- -----------------
Cash Flows From Operating Activities:
Net Loss $ (643,763) $(25,776) $ (2,430,876)
Adjustments to reconcile net loss to net cash
used in operating activities:
Common stock issued for services 666,563 9,526 2,163,822
Settlement of debt 2,000 18,700 20,700
Depreciation 3,794 - 3,794
Changes in operating assets and liabilities:
Increase in other receivable - - (118)
Decease (increase) in inventory 24,958 (7,740) (29,599)
Decease in prepaid expenses/advances - 600 -
Increase (decrease) in accounts payable 10,919 (10,221) 155,656
Increase in customer deposits - 20,500 20,500
-------------- ------------- -----------------
Total adjustments 708,234 31,365 2,334,755
-------------- ------------- -----------------
Net Cash Provided (Used) by Operating Activities 64,471 5,589 (96,121)
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Cash Flows From Investing Activities:
Purchase of fixed assets (55,266) (30,164) (375,731)
-------------- ------------- -----------------
Net Cash Used in Investing Activities (55,266) (30,164) (375,731)
-------------- ------------- -----------------
Cash Flows From Financing Activities:
Proceeds (payment) on notes payables, related party (23,723) - 237,865
Proceeds from note payable - - 10,000
Increase in bank overdraft 24,899 200 24,899
Proceeds (payments) on lines of credit (21,517) (593) 7,288
Proceeds from the issuance of common stock 6,000 23,000 191,800
-------------- ------------- -----------------
Net Cash (Used) Provided by Financing Activities (14,341) 22,607 471,852
-------------- ------------- -----------------
Net Decrease in Cash and Cash Equivalents (5,136) (1,968) -
Cash and Cash Equivalents - Beginning of Period 5,136 1,968 -
-------------- ------------- -----------------
Cash and Cash Equivalents - End of Period $ - $ - $ -
============== ============= =================
Supplemental Disclosure of Cash Flow Information:
Interest paid $ - $ - $ -
============== ============= =================
Taxes paid $ - $ - $ -
============== ============= =================
Supplemental Schedule of Non-Cash Investing and
Financing Activities Information:
Equipment purchased from related party $ 32,790 $ - $ 32,790
-------------- ------------- -----------------
Stock issued for prepaid expenses $ 24,000 $ - $ 24,000
-------------- ------------- -----------------
See accountants' review report and notes to these consolidated financial
statements.
MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
July 31, 2007
Note 1. Organization, Basis of Presentation and Summary of Significant
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Accounting Policies:
-------------------
Organization
Medina International Holdings, Inc. and subsidiary (the "Company") was formed on
June 23, 1998. The Company contracted to purchase a low power television license
and the station serving Estes Park, Colorado.. The Company, in 2002, ceased all
activities involving low power television business. The Company is now focused
on the design, manufacturing and sale of recreational and commercial boats
through its wholly-owned subsidiary, Medina Marine, Inc. ("Medina Marine"). The
Company intends to focus its efforts on marketing its commercial watercraft to
fire, rescue and law enforcement agencies and those other agencies involved in
water rescue and water patrol.
Basis of Presentation
---------------------
Development Stage Company:
The Company has not earned any significant revenues from its 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 operation, stockholders'
equity (deficit) and cash flows disclose activity since the date of the
Company's inception.
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,
2007, and the results of operations for the three-months ended July 31, 2007 and
2006, and cash flows for the three-months ended July 31, 2007 and 2006. 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, 2007.
Issuance of Shares for Services
The Company accounts for the issuance of equity instruments to acquire goods and
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
measurable.
Basic and Diluted Net Loss per Share
Net loss per share is calculated in accordance with the Statement of Financial
Accounting Standards No. 128 (SFAS No. 128), "Earnings per Share". SFAS No. 128
superseded Accounting Principles Board Opinion No.15 (APB No. 15). Net loss per
share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.
Note 2. Going Concern and Managements' Plan
--------------------------------------------
In view of the matters described above, recoverability of a major portion of the
recorded asset amounts shown in the accompanying balance sheet is dependent upon
continued operations of the Company, which in turn is dependent upon the
Company's ability to raise additional capital, obtain financing and to succeed
in its future operations. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be necessary
should the company be unable to continue as a 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
operations recognized revenues of $192,800 and net losses of $643,763 during the
three-months ended July 31, 2007. The Company's accumulated deficit is
$2,430,876 and current liabilities exceed current assets by $426,492 at July 31,
2007.
Management has taken various steps to revise its operating and financial
requirements, which we believe are sufficient to provide the Company with the
ability to continue on in the subsequent year. Management devoted considerable
effort during the three months ended July 31, 2007 towards management of
liabilities and improving the Company's operations. Management believes that the
above actions will allow the Company to continue its operations through the next
fiscal year.
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 3. Inventory
-----------------
At July 31, 2007, inventory consisted of the following:
Parts $29,599
-------
Total $29,599
Note 4. Fixed Assets:
--------------------
At July 31, 2007, fixed assets consisted of the following:
Mold - 12' Fire/Rescue boat (WIP)- $7,628
Mold - 15' Fire/Rescue boat - 66,778
Mold - 21' Fire/Rescue boat - 268,535
Office Equipment- 20,740
Manufacturing Tools - 12,050
-------
Total Fixed Assets $375,731
-------
The Company purchased office equipment and manufacturing tools valued at $32,790
from Mr. Daniel Medina, the President and a Director of the Company.
Note 5. Investment:
-------------------
The Company purchased 500,000 shares of the common stock of Genesis Companies
Group, Inc. (a Delaware Corporation) in exchange for 50,000 shares of the
Company's common stock valued at $25,000 ($0.50/share).
Note 6. Lines of Credit
-----------------------
The Company has available a demand bank line of credit totaling $15,000, under
which the Company may borrow on an unsecured basis at the bank's prime rate. As
of July 31, 2007, $141 was outstanding under this line of credit.
The Company has available a demand bank line of credit totaling $10,000, under
which the Company may borrow on an unsecured basis at the bank's prime rate. As
of July 31, 2007, $7,043 was outstanding under this line of credit.
Medina Marine, Inc., the Company's wholly-owned subsidiary, has a credit card
totaling $5,000, under which Medina Marine may borrow on an unsecured basis at
the bank's prime rate. As of July 31, 2007, $104 was owed on the credit card.
Note 7. Customer Deposit
------------------------
The Company has received $20,500 from a customer as deposit for purchase of
Vortex recreational boat.
Note 8. Related Party - Short-term Borrowings
---------------------------------------------
As of current period ended July 31, 2007, short-term borrowings from related
parties consisted of the following:
President and Director $ 103,283
CFO and Director 134,582
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Total $ 237,865
==========
These notes are unsecured; bear interest at 8.5%, and due on demand.
Note 9. Stockholders' Equity (Deficit):
--------------------------------------
The Company issued 1,664,000 shares of its restricted common stock during the
three months ended July 31, 2007. As of July 31, 2007, the Company has
31,988,541 shares of its common stock issued and outstanding. The following
presents the purpose of stock issuance during the three months ended July 31,
2007:
Shares Issued Value
------------- ------
Stock issued for consulting 1,600,000 $400,000
Stock issued for royalties 2,500 500
Stock issued Directors 37,000 18,750
Stock issued for cash 24,000 6,000
------------------------
Total 1,664,000 $425,250
Shares Committed
During the three months ended July 31, 2007, the Company has committed to
issuing the following shares, which had not been issued on July 31, 2007.
- 18,750 shares of common stock to be issued to directors as compensation.
The shares have a total value of $4,688 ($0.25 per share).
- 2,500 shares of common stock to be issued as payment on licensing
royalty fees. The shares have a total value of $500 ($0.20 per share).
- 35,000 shares of common stock to be issued for cash of $7,000. The shares
will have an issuance price of $0.20 per share.
- 258,750 shares of common stock to be issued in connection with
services provided by third parties. The shares have a total value of $51,750
($0.20 per share).
- 20 shares of Series A Preferred Stock to be issued to two of the
Company's directors for a purchase price of $240,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
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Cautionary Statement Concerning Forward-Looking Statements
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
Results of Operation
Results of operations for the three-month period ended July 31, 2007 compared to
the same period ended July 31, 2006
Sales
We generated $192,800 in revenue during the three months ended July 31, 2007.
The Company did not recognize any revenues during the three months ended July
31, 2006. The Company sold two 15' fire rescue watercrafts to two customers.
Cost of Sales
The cost of sales for the three months ended July 31, 2007 was $86,994. There
were not any costs of sales recognized during the three months ended July 31,
2006.
Gross Profit
The gross profit for the three months ended July 31, 2007 was $105,806 or 45.12%
on sales.
Operating Expenses
The Company incurred total operating expenses of $741,798 for the three months
ended July 31, 2007, as compared to operating expenses $24,882 for the three
months ended July 31, 2006. The increase of $716,916 in operating expenses is
primarily a result of $665,311 in stock compensation expenses. The operating
expenses for the three months ended July 31, 2007, primarily included $12,907 in
professional fees, $665,311 in stock compensation and $37,071 in general and
administration expenses and $26,509 in marketing expenses. The operating
expenses for the three months ended July 31, 2006, included $8,480 in profession
fees and $16,402 for general and administration expenses.
The Company recognized an interest expense of $7,771 for the three months ended
July 31, 2007, compared to an interest expense of $894 for the three months
ended of July 31, 2006. The increase of $6877 is due to an increase of funds
loaned to the Company.
Net Loss
The Company recognized a net loss of $643,763 for the three months ended July
31, 2007, compared to a net loss of $25,776 for the three months ended July 31,
2006. The increase of $617,987 was due to the $716,916 increase in operating
expenses, caused by the $665,311 increase in stock compensation expense. The net
loss per share for the three months ended July 31, 2007 was $0.021 compared to
$0.001 for the three months ended July 31, 2006.
Liquidity and Capital Resources
As of July 31, 2007, the Company had no cash, an inventory (consisting of parts
for Vortex and 21' Fire Rescue Boat) of $29,599 and fixed assets (consisting of
molds for the 12', 15' and 21' fire rescue jet, office equipment and
manufacturing tools) of $375,731. The Company's total current liabilities were
$456,209 as of July 31, 2007, which was represented mainly accounts payable and
accrued interest payable of $155,657, advances from customers of $20,500, lines
of credits totaling $7,288 and short-term loans from stockholders totaling
$237,865. At July 31, 2007, the Company's current liabilities exceeded current
assets by $426,492.
The Company used $64,471 in operating activities for the three months ended July
31, 2007 compared to $5,589 during the three months ended July 31, 2006.
The Company used cash of $55,266 in investing activities during the three months
ended July 31, 2007 on the manufacturing of molds for the fire and rescue
watercrafts. During the three months ended July 31, 2006, the Company used cash
$30,164 in investing activities, such activities were the manufacturing of the
molds for the fire and rescue watercrafts.
During the three months ended July 31, 2007, the Company used $45,341 under
financing activities, which included the $21,517 in payments on the lines of
credits held by the Company and $23,723 in payments on related party, notes
payable. In addition, the Company sold shares of its common stock for $6,000
during the three months ended July 31, 2007. During the three months ended July
31, 2006, the Company received $22,607 from financing activities.
The Company has an accumulated deficit at July 31, 2007, of $2,430,876. The
Company does not have capital sufficient to meet its cash needs, including the
costs of compliance with the continuing reporting requirements of the Securities
Exchange Act of 1934. Management will have to seek loans or equity placements to
cover such cash needs and cover outstanding payables. Lack of existing capital
may be a sufficient impediment to prevent us from accomplishing the goal of
expanding operations. There is no assurance, however, that without funds we will
ultimately be able to carry out our business. We will need to raise additional
funds to expand our business activities in the future, and prepare a private
offering memorandum to attempt to raise operating capital. No commitments to
provide additional funds have been made by our management or other stockholders.
Accordingly, there can be no assurance that any additional funds will be
available to us to allow us to cover our expenses as they may be incurred.
Irrespective of whether our cash assets prove to be inadequate to meet our
operational needs, we might seek to compensate providers of services by
issuances of stock in lieu of cash.
Plan of Operation
We have one full time employee in Medina International Holdings, Inc. and
Subsidiary. We intend to develop strategies for the growth of our business, both
nationally and internationally through the formulation of strategic enterprise
partnerships, cooperative alliances and joint ventures. We would search out
those business relationships which allow us to augment our current design and
manufacturing capabilities and thereby expand our market opportunities. In
addition, we will seek out relationships that would allow us to increase our
marketing, sales and delivery capabilities.
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;
July 31, 2007 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
------------------------------
The Company made the following unregistered sales of its securities from May 1,
2007 through July 31, 2007.
DATE OF SALE TITLE OF SECURITIES NO. OF SHARES CONSIDERATION CLASS OF PURCHASER
------------ ------------------- ------------- ------------- ------------------
------------------ -------------------------- ---------------- -------------------------------- ----------------------------------
5/15/07 Common Stock 850,000 Consulting Services Business Associates
------------------ -------------------------- ---------------- -------------------------------- ----------------------------------
5/15/07 Common Stock 2,500 License Royalty Fee Business Associate
------------------ -------------------------- ---------------- -------------------------------- ----------------------------------
5/15/07 Common Stock 37,500 Services Directors
------------------ -------------------------- ---------------- -------------------------------- ----------------------------------
5/15/07 Common Stock 24,000 Cash Business Associate
------------------ -------------------------- ---------------- -------------------------------- ----------------------------------
6/22/07 Common Stock 750,000 Consulting Services Business Associates
------------------ -------------------------- ---------------- -------------------------------- ----------------------------------
Exemption From Registration Claimed
All of the sales by the Company of its unregistered securities were
made by the Company in reliance upon Section 4(2) of the Securities Act of 1933,
as amended (the "1933 Act"). All of the individuals and/or entities listed above
that purchased the unregistered securities were almost all existing
shareholders, all known to the Company and its management, through pre-existing
business relationships, as long standing business associates, friends, and
employees. All purchasers were provided access to all material information,
which they requested, and all information necessary to verify such information
and were afforded access to management of the Company in connection with their
purchases. All purchasers of the unregistered securities acquired such
securities for investment and not with a view toward distribution, acknowledging
such intent to the Company. All certificates or agreements representing such
securities that were issued contained restrictive legends, prohibiting further
transfer of the certificates or agreements representing such securities, without
such securities either being first registered or otherwise exempt from
registration in any further resale or disposition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
----------------------------------------
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
NONE
ITEM 5. OTHER INFORMATION
--------------------------
Amended License Agreements
The Company has amended the License Agreements with Mr. Albert Mardikian for the
12' and 15' Fire/Rescue Jet and Fire Pump. The license agreements provide for
the design and patent used by the Company in the manufacturing of its various
fire/rescue jets. Agreement also provides the Company with exclusive rights on
12' and 15' boat design and Non exclusive rights on Fire Pump technology. The
Company intends to offer the design for 15 feet fire rescue boats based on the
technology as part of its fire/rescue boat sales efforts.
The amended license agreement provides for payment of a royalty that is 2% of
any sales resulting from use of the design and patent, to be determined on a
quarterly basis. The amended license agreement provides for a minimum royalty
payment of $500 per quarter. The amended license agreement has a term of 10
years, starting August 1, 2007 and expiring on July 31, 2017.
Distributor Agreement
On August 22, 2007, the Company entered into an agreement with Kelly Space and
Technology, Inc., a California Corporation, to be the Company's exclusive
distributor of the watercraft sales to the United States Department of Defense,
if any such sales can be achieved. The Agreement also provides Kelly Space and
Technology, Inc. with a non-exclusive distributorship for other customers, both
inside and outside of the United States.
The agreement between the Company and Kelly Space and Technology, Inc. will be
effective for a period of five (5) years from the date of the signed agreement
with an option for Kelly Space and Technology, Inc. to renew agreement for an
additional five (5) year period.
ITEM 6. EXHIBITS -
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-QSB. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-B.
Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act
Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
Exhibit 32.2 Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and 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. AND SUBSIDIARY
(Registrant)
Dated: September 19, 2007
By:
/s/Daniel Medina
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Daniel Medina, President
By:
/s/Madhava Rao Mankal
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Madhava Rao Mankal,
Chief Financial Officer &
Chief Accounting Officer