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 (State or other jurisdiction of Incorporation or organization) |
77-0454856 (I.R.S. Employer Identification No.) |
#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: July 28, 2004 3,050,577
Transitional Small Business Disclosure Format (check one). Yes ; No X
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
BALANCE SHEETS
(Unaudited)
| June 30, 2004 |
December 31, 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | (5,081 | ) | (5,081 | ) | ||||
| Net Property and Equipment | -- | -- | ||||||
| Total Assets | $ | -- | $ | -- | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 41,251 | $ | 25,626 | ||||
| Total current liabilities | 41,251 | 25,626 | ||||||
| Due to shareholders | 6,020 | 2,537 | ||||||
| Total liabilities | 47,271 | 28,163 | ||||||
| Stockholders' Equity: | ||||||||
| Common Stock, Par value $.001, Authorized | ||||||||
| 100,000,000 shares, Issued 3,050,577 | ||||||||
| at June 30, 2004 and December 31, 2003 | 3,051 | 3,051 | ||||||
| Paid-In Capital | 523,648 | 523,648 | ||||||
| Retained Deficit | (273,432 | ) | (273,432 | ) | ||||
| Deficit Accumulated During the | ||||||||
| Development Stage | (300,538 | ) | (281,430 | ) | ||||
| Total Stockholders' Equity | (47,271 | ) | (28,163 | ) | ||||
| Total Liabilities and Stockholders' Equity | $ | -- | $ | -- | ||||
The accompanying notes are an integral part of these financial statements.
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
STATEMENTS OF
OPERATIONS
(Unaudited)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
Cumulative Since December 1, 2001 Inception of Development | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
2004 |
2003 |
Stage | |||||||||||||
| Revenues | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||
| Expenses: | |||||||||||||||||
| General and Administrative | 7,937 | 22,999 | 19,021 | 30,690 | 300,451 | ||||||||||||
| Total Expenses | 7,937 | 22,999 | 19,021 | 30,690 | 300,451 | ||||||||||||
| Operating Loss | (7,937 | ) | (22,999 | ) | (19,021 | ) | (30,690 | ) | (300,451 | ) | |||||||
| Other Expense: | |||||||||||||||||
| Interest Expense | (60 | ) | -- | (87 | ) | -- | (87 | ) | |||||||||
| Total Other Expense | (60 | ) | -- | (87 | ) | -- | (87 | ) | |||||||||
| Net Loss | $ | (7,997 | ) | $ | (22,999 | ) | $ | (19,108 | ) | $ | (30,690 | ) | $ | (300,538 | ) | ||
| Loss per Share, Basic & | |||||||||||||||||
| Diluted | $ | -- | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||
| Weighted Average Shares | |||||||||||||||||
| Outstanding | 3,050,577 | 2,350,007 | 3,050,577 | 2,350,007 | |||||||||||||
The accompanying notes are an integral part of these financial statements.
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
STATEMENTS OF CASH
FLOWS
(Unaudited)
| For the Six Months Ended June 30, |
Cumulative Since December 1, 2001 Inception of Development | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
Stage | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net Loss for the Period | $ | (19,108 | ) | $ | (30,690 | ) | $ | (300,538 | ) | ||
| Adjustments to reconcile net loss to net cash | |||||||||||
| provided by operating activities: | |||||||||||
| Depreciation and amortization | -- | -- | 3,088 | ||||||||
| Common Stock Issued for Services | -- | -- | 226,259 | ||||||||
| Changes in Operating Assets and Liabilities | |||||||||||
| Increase (Decrease) in Accounts Payable | 15,625 | (119 | ) | 23,852 | |||||||
| Increase (Decrease) in Accrued Interest | 87 | -- | 87 | ||||||||
| Net Cash Used in operating activities | (3,396 | ) | (30,809 | ) | (47,252 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchase of property and equipment | -- | -- | -- | ||||||||
| Net cash provided by investing activities | -- | -- | -- | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from shareholders | 3,396 | 30,809 | 46,511 | ||||||||
| Net Cash Provided by Financing Activities | 3,396 | 30,809 | 46,511 | ||||||||
| Net (Decrease) Increase in Cash | -- | -- | (741 | ) | |||||||
| Cash at Beginning of Period | -- | -- | 741 | ||||||||
| Cash at End of Period | $ | -- | $ | -- | $ | -- | |||||
| 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: | |||||||||||
| Note Payable Converted to Stock | $ | -- | $ | -- | $ | 280,228 | |||||
The accompanying notes are an integral part of these financial statements.
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
NOTES TO FINANCIAL
STATEMENTS
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 $574,000 for the period from April 7, 1997 (inception) to June 30, 2004, 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.
Interim Financial Statements
The unaudited financial statements as of June 30, 2004 and for the three and six 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 and six months. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years.
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
NOTES TO FINANCIAL
STATEMENTS
(Continued)
NOTE 2 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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. 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 June 30, 2004. The Company 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.
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.
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
NOTES TO FINANCIAL
STATEMENTS
(Continued)
NOTE 2 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 June 30, 2004 and 2003.
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 translations are included in income.
Reclassifications
Certain reclassifications have been made in the 2003 financial statements to conform with the 2004 presentation.
Advertising Expense
Advertising costs are expensed when the services are provided.
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.
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
NOTES TO FINANCIAL
STATEMENTS
(Continued)
NOTE 2 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 Furniture and equipment |
3 years 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 June 30, 2004, 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.
NOTE 4 — SHAREHOLDER ADVANCES
Shareholders of the Company have advanced the Company money in order to pay general and administrative expenses. As of June 30, 2004 and December 31, 2003, the Company owed $6,020 and $2,537 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,
CANGLOBE
INTERNATIONAL, INC.
(A Development Stage
Company)
NOTES TO FINANCIAL
STATEMENTS
(Continued)
NOTE 5 — STOCK SPLIT (Continued)
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.
On October 31, 2003, the board of directors approved a debt to equity transaction, where $280,228 in debt was converted into 700,570 shares of restricted common stock.
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.
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.
For the quarter ended June 30, 2004 compared to the same period in 2003 are not necessarily indicative of the results that may be expected for the year ended December 31, 2004.
The Company had no sales and sales revenues for the three and six months ended June 30, 2004 and 2003.
The Company had no selling and marketing expenses for the three and six months ended June 30, 2004 and 2003. General and administrative expenses were $7,937 and $19,021 for the three and six months ended June 30, 2004 and $22,999 and $30,690 for the three and six months ended June 30, 2003.
The Company recorded a net loss of $7,996 and $19,108 for the three and six months ended June 30, 2004 compared to a net loss of $22,999 and $30,690 for the same periods in 2003.
Liquidity and Capital Resources
The Company requires working capital principally to fund its current operations. There are no formal commitments from banks or other lending sources for lines of credit or similar short-term borrowings..
During the next twelve months we believe that our current cash needs can be met by loans from our director, officers and stockholders based on understandings we have with these individuals. We may repay these loans and advancements on our behalf, or we may convert them into common stock. We do not, however, have any commitments from any of these individuals, in writing or otherwise, regarding any loans or advances.
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.
The Company’s President has concluded, based on an evaluation conducted within 90 days prior to the filing date of this Quarterly Report on Form 10-QSB, 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-QSB 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-QSB, and |
| (ii) | the financial statements, and other financial information included in this Quarterly Report on Form 10-QSB, 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-QSB. |
There have been no significant changes in the Company’s internal controls or in other factors since the date of the President’s evaluation that could significantly affect these internal controls, including any corrective actions with regards to significant deficiencies and material weaknesses.
(a) The following exhibits are included as part of this report:
| Exhibit Number |
Title of Document |
|---|---|
| 2.1 3.1 3.2 3.3 31.1 31.2 32.1 32.2 |
Change in Control Agreement dated January 15, 2001 (1) Articles of Incorporation (2) Amended Articles of Incorporation (2) Bylaws (2) Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| (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.
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.
| Date: July 30, 2004 | By: /s/ Heinz Leuders Heinz Leuders President and Director (Principal Executive Officer) | |
Date: July 30,2004 |
By: /s/ Charles Spooner Charles Spooner Director, Treasurer and Secretary (Principal Financial Officer) |