UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
Commission file number 0-27737
Canglobe International, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 77-0454856
------------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
#206, 10458 Mayfield Road, Edmonton, AB, Canada T5P 4P4
(Address of Principal Executive Offices)
(780) 444-7133
(Issuer's telephone number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date: November 4, 2003 2,350,007
Transitional Small Business Disclosure Format (check one). Yes ; No X
PART I
Item 1. Financial Statements
INDEPENDENT ACCOUNTANT'S REPORT
Canglobe International, Inc.
(A Development Stage Company)
We have reviewed the accompanying balance sheet of Canglobe
International, Inc. (A Development Stage Company) as of September 30, 2003, and
the related statements of operations for the three and nine months ended
September 30, 2003 and 2002, and cash flows for the nine months ended September
30, 2003 and 2002. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. 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 generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for them to be
in conformity with accounting principles generally accepted in the United States
of America.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance sheet of
Canglobe International, Inc.(A Development Stage Company) as of December 31,
2002, and the related statements of operations, cash flows, and stockholders'
equity for the year then ended (not presented herein); and in our report dated
April 14, 2003, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
balance sheet as of December 31, 2002, is fairly stated, in all material
respects, in relation to the balance sheet from which it has been derived.
Note 1 of the Company's audited financial statements as of December 31,
2002, and for the year then ended discloses that the Company has suffered
recurring losses from operations and has no established source of revenue at
December 31, 2002. Our auditors' report on those financial statements includes
an explanatory paragraph referring to the matters in Note 1 of those financial
statements and indicating that these matters raised substantial doubt about the
Company's ability to
continue as a going concern. As indicated in Note 1 of the Company's unaudited
interim financial statements as of September 30, 2003, and for the nine months
then ended, the Company has continued to suffer recurring losses from operations
and still has no established source of revenue at September 30, 2003. The
accompanying interim consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Respectfully Submitted,
\s\ Robison, Hill & Co
Certified Public Accountants
Salt Lake City, Utah
November 4, 2003
F - 1
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
September 30, December 31,
2003 2002
----------------- -----------------
Assets:
Cash and Cash Equivalents $ - $ -
----------------- -----------------
Total Current Assets - -
----------------- -----------------
Property and Equipment:
Computer Equipment 4,664 4,664
Furniture and Equipment 417 417
----------------- -----------------
5,081 5,081
Less Accumulated Depreciation (4,905) (4,905)
----------------- -----------------
Net Property and Equipment 176 176
----------------- -----------------
Total Assets $ 176 $ 176
================= =================
Liabilities and Shareholders' Equity
Liabilities:
Accounts Payable and Accrued Liabilities $ 16,459 $ 10,491
----------------- -----------------
Total Current Liabilities 16,459 10,491
Due to Shareholders 282,339 249,418
----------------- -----------------
Total Liabilities 298,798 259,909
----------------- -----------------
Stockholders' Equity:
Common Stock, Par value $.001, Authorized
100,000,000 shares, Issued 2,350,007
at September 30, 2003 and December 31, 2002 2,350 2,350
Paid-In Capital 244,121 244,121
Retained Deficit (273,432) (273,432)
Deficit Accumulated During the
Development Stage (271,661) (232,772)
----------------- -----------------
Total Stockholders' Equity (298,622) (259,733)
----------------- -----------------
Total Liabilities and Stockholders' Equity $ 176 $ 176
================= =================
================= =================
The accompanying notes are an integral part of these financial
statements.
F - 2
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
Since
December 1,
2001
For the Three Months Ended For the Nine Months Ended Inception of
September 30, September 30, Development
----------------------------------- -----------------------------------
2003 2002 2003 2002 Stage
----------------- ---------------- ---------------- ----------------- ----------------
Revenues $ - $ - $ - $ - $ -
Expenses:
General and Admin. 8,199 113,255 38,889 154,592 271,661
----------------- ---------------- ---------------- ----------------- ----------------
Total Expenses 8,199 113,255 38,889 154,592 271,661
----------------- ---------------- ---------------- ----------------- ----------------
Net Loss $ (8,199) $ (113,255) $ (38,889) $ (154,592) $ (271,661)
================= ================ ================ ================= ================
Basic & Diluted
Earnings per Share $ - $ (0.05) $ (0.02) $ (0.07)
================= ================ ================ =================
Weighted Average Shares 2,350,007 2,350,000 2,350,007 2,158,791
================= ================ ================ =================
The accompanying notes are an integral part of these financial
statements.
F - 3
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
Since
December 1,
2001
For the Nine Months Ended Inception of
September 30, Development
------------------------------------
2003 2002 Stage
----------------- ----------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
----------------- ----------------- ------------------
Net Loss for the period $ (38,889) $ (154,592) $ (271,661)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation - 1,230 2,912
Common Stock Issued for Services - 160,259 226,259
Changes in Operating Assets and Liabilities
Increase (Decrease) in Accounts Payable 5,968 (9,982) (940)
----------------- ----------------- ------------------
Net Cash Used in operating activities (32,921) (3,085) (43,430)
----------------- ----------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- - -
----------------- ----------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Amounts due to Shareholders 32,921 1,485 42,689
----------------- ----------------- ------------------
Net Cash Provided by Financing Activities 32,921 1,485 42,689
----------------- ----------------- ------------------
Net (Decrease) Increase in
Cash and Cash Equivalents - (1,600) (741)
Cash and Cash Equivalents
at Beginning of Period - 2,086 741
----------------- ----------------- ------------------
Cash and Cash Equivalents
at End of Period $ - $ 486 $ -
================= ================= ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ - $ -
Franchise and income taxes $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
The accompanying notes are an integral part of these financial
statements.
F - 4
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN
The accompanying financial statements have been prepared on the basis
of accounting principles applicable to a "going concern", which assume that the
Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.
Several conditions and events cast doubt about the Company's ability to
continue as a "going concern". The Company has incurred net losses of
approximately $545,000 for the period from April 7, 1997 (inception) to
September 30, 2003, has a liquidity problem, and requires additional financing
in order to finance its business activities on an ongoing basis. The Company is
actively pursuing alternative financing and has had discussions with various
third parties, although no firm commitments have been obtained.
The Company's ability to survive will depend on numerous factors
including, but not limited to, the Company's receiving continued financial
support, completing public equity financing, or generating profitable operations
in the future.
These financial statements do not reflect adjustments that would be
necessary if the Company were unable to continue as a "going concern". While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful.
If the Company were unable to continue as a "going concern", then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported revenues and expenses, and the
balance sheet classifications used.
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Canglobe International, Inc. is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
F - 5
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Continued)
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Interim Financial Statements
The unaudited financial statements as of September 30, 2003 and for the
three and nine months then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three
months. Operating results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
April 7, 1997. The Company ceased all operating activities during the period
from April 7, 1997 to July 9, 1999 and was considered dormant. On July 9, 1999,
the Company obtained a Certificate of renewal from the State of Nevada. During
2000 the Company developed an Internet website which provided community, content
and commerce for the sportbike and motorcycle enthusiast. During November 2001
the Company abandoned the internet business and since December 2001, the Company
is in the development stage, and has not commenced planned principal operations.
On March 19, 2002 the Company's name was changed from eSportbike.com, Inc. to
Red Butte Energy, Inc. to reflect the new focus of the Company. On January 16,
2003, the Company changed its name to Canglobe International, Inc.
Nature of Business
The company has no products or services as of September 30, 2003. The
Company was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company.
Subsequent to the name change and change of direction of the Company,
it has been pursuing opportunities in the tire recycling and rubber reclamation
industry, based upon licensed technology available from its largest shareholder,
Canglobe Development, Inc. Canglobe Development has a patented process of
devulcanizing rubber and reactivating the crumb rubber resulting from the
majority of tire shredding activities.
F - 6
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Continued)
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue Recognition
Revenue is recognized as services are performed
Loss per Share
Basic loss per share has been computed by dividing the loss for the
year applicable to the common stockholders by the weighted average number of
common shares outstanding during the years. There were no common equivalent
shares outstanding at September 30, 2003 and 2002.
Foreign Currency Translation
The Company's primary functional currency is the U.S. dollar. Monetary
assets and liabilities resulting from transactions with foreign suppliers and
customers are translated at year-end exchange rates while income and expense
accounts are translated at average rates in effect during the year. Gains and
losses on translation are included in income.
Advertising Expense
Advertising costs are expensed when the services are provided.
F - 7
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Continued)
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Income Taxes
The Company has a net operating loss for income taxes. Due to the
regulatory limitations in utilizing the loss, it is uncertain whether the
Company will be able to realize a benefit from these losses. Therefore, a
deferred tax asset has not been recorded. There are no significant tax
differences requiring deferral.
Concentrations of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements.
Depreciation
Fixed assets are stated at cost. Depreciation and amortization is
calculated on a straight-line basis over the estimated useful lives of the
assets as follows:
Asset Rate
------------------------------------------------ -----------------
Computer equipment 3 years
Furniture and equipment 5 years
Maintenance and repairs are charged to operations; betterments are
capitalized. The cost of property sold or otherwise disposed of and the
accumulated depreciation thereon are eliminated from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.
NOTE 3 - COMMITMENTS
As of September 30, 2003 all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the facilities.
F - 8
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Continued)
NOTE 4 - SHAREHOLDER ADVANCES
Shareholders of the Company have advanced the Company money in order to
pay general and administrative expenses. As of September 30, 2003 and December
31, 2002, the Company owed $282,339 and $249,418, respectively, relating to
these notes.
NOTE 5 - STOCK SPLIT
On May 6, 1999, the Board of Directors authorized 1,000 to 1 stock
split, changed the authorized number of shares to 100,000,000 shares and the par
value to $.001 for the Company's common stock. As a result of the split, 999,000
shares were issued.
On February 23, 2000, the Board of Directors authorized the acceptance
of 800,000 shares of restricted common stock returned to the Company by and on
behalf of Mr. Daniel L. Hodges, formerly the sole Officer and Director of the
Company. The 800,000 shares were canceled immediately upon receipt. Also on
February 23, 2000 the Board of Directors authorized a 27 to 1 stock split. As a
result of this split the Company issued 5,200,000 shares of common stock.
On March 19, 2002, the Board of Directors approved a 1 for 8 reverse
stock split. All references in the accompanying financial statements to the
number of common shares and per-share amounts have been restated to reflect the
stock split and cancellation of shares.
NOTE 6 - COMMON STOCK TRANSACTIONS
On June 24, 2002, the Company issued 300,000 shares of common stock for
$198,000 in consulting services to be performed over a six month period.
NOTE 7 - SUBSEQUENT EVENTS
On October 31, 2003, the board of directors approved a debt to equity
transaction, where $280,228 in debt will be converted into 700,570 shares of
restricted common stock.
F - 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the information in
Item 7, Financial Statements, and other information regarding our financials
performance for the period covered by this report included elsewhere in this
report. The following discussions and other parts of this report may contain
forward-looking statements that involve risks and uncertainties. Our actual
results may differ significantly from the results discussed in those
forward-looking statements. Factors that might cause such differences include,
but are not limited to, our history of unprofitability and the uncertainty of
our profitability, our ability to develop and introduce new services and
products, the uncertainty of market acceptance of those services or products,
our potential reliance on collaborative partners, our limited sales and
marketing experience, the highly competitive industries in which we operate and
general economic and business conditions, some or all of which may be beyond our
ability to control.
Plan of Operations
The Company was organized for the purpose of creating a corporate
vehicle to seek, investigate and, if such investigation warrants, acquire an
interest in one or more business opportunities presented to it by persons or
firms who or which desire to seek perceived advantages of a publicly held
corporation.
The Company may incur significant post-merger or acquisition
registration costs in the event management wishes to register a portion of their
shares for subsequent sale. The Company will also incur significant legal and
accounting costs in connection with the acquisition including the costs of
preparing post- effective amendments, Forms 8-K, agreements and related reports
and documents.
The Company will not have sufficient funds (unless it is able to raise
funds in a private placement) to undertake any significant development,
marketing and manufacturing of the products acquired. Accordingly, following the
acquisition, the Company will, in all likelihood, be required to either seek
debt or equity financing or obtain funding from third parties, in exchange for
which the Company may be required to give up a substantial portion of its
interest in the acquired product. There is no assurance that the Company will be
able either to obtain additional financing or interest third parties in
providing funding for the further development, marketing and manufacturing of
any products acquired.
On March 19, 2002, the Board of Directors approved a 1 for 8 reverse
stock split. As well on the same date the Company changed it's name to Red Butte
Energy, Inc. On January 16, 2003, the Company changed its name to Canglobe
International, Inc. And the direction the Company is going. The Company will not
proceed with the development of any software business in Asia. Similarly the
Company has decided not to operate any web based business related to sportbikes
or any other products. The Company will concentrate on opportunities in the tire
reclamation and rubber recycling industries.
F - 10
Results of Operations
From April 7, 1997 to July 9, 1999 the Company was an inactive
corporation. From July 9, 1999 the Company was a development stage company and
had not begun principal operations. During 2001 and 2000 the Company attempted
to provide an internet web site that has since proved uneconomical and has been
abandoned. Accordingly, comparisons with prior periods are not meaningful.
LIQUIDITY AND CAPITAL RESOURCES
The Company has met its capital requirements through the sale of its
Common Stock.
Since the Company's re-activation in July 9, 1999, the Company's
principal capital requirements have been the funding of the development of the
Company.
The Company expects future development and expansion will be financed
through cash flow from operations and other forms of financing such as the sale
of additional equity and debt securities, capital leases and other credit
facilities. There are no assurances that such financing will be available on
terms acceptable or favorable to the Company.
Government Regulations
The Company is subject to all pertinent Federal, State, and Local laws
governing its business. The Company is subject to licensing and regulation by a
number of authorities in its Province (State) or municipality. These may include
health, safety, and fire regulations. The Company's operations are also subject
to Federal and State minimum wage laws governing such matters as working
conditions and overtime.
Item 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer have concluded, based on an evaluation
conducted within 90 days prior to the filing date of this Quarterly Report on
Form 10-Q, that the Company's disclosure controls and procedures have functioned
effectively so as to provide those officers the information necessary whether:
(i) this Quarterly Report on Form 10-Q contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this
Quarterly Report on Form 10-Q, and
(ii) the financial statements, and other financial information
included in this Quarterly Report on Form 10-Q, fairly present
in all material respects the financial condition, results of
operations and cash flows of the Company as of, and for, the
periods presented in this Quarterly Report on Form 10-Q.
F - 11
There have been no significant changes in the Company's internal
controls or in other factors since the date of the Chief Executive Officer's
evaluation that could significantly affect these internal controls, including
any corrective actions with regards to significant deficiencies and material
weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included as part of this report:
Exhibit
Number Title of Document
2.1 Change in Control Agreement dated January 15, 2001 (1)
3.1 Articles of Incorporation (2)
3.2 Amended Articles of Incorporation (2)
3.3 Bylaws (2)
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
F - 12
(1) Incorporated by reference to the Registrant's quarterly report on Form
10-QSB filed on May 21, 2001.
(2) Incorporated by reference to the Registrant's registration statement on
Form 10-SB filed on October 20, 1999.
(b) Reports on Form 8-K filed.
No reports on Form 8-K were filed during the prior quarter.
F - 13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.
Canglobe International, Inc.
Date: November 10 , 2003 By: /s/ Heinz Leuders
Heinz Leuders
President and Director
By: /s/ Charles Spooner
Charles Spooner
Director, Treasurer and Secretary
F - 14