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, 2004
[ ] 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 8, 2004 3,050,577
Transitional Small Business Disclosure Format (check one). Yes ; No X
PART I
ITEM 1. FINANCIAL STATEMENTS
CANGLOBE INTERNATIONAL, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
September 30, December 31,
2004 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 $ 82,426 $ 25,626
Due to shareholders 7,954 2,537
----------------- ------------------
Total Liabilities 90,380 28,163
----------------- ------------------
Stockholders' Equity:
Common Stock, Par value $.001, Authorized
100,000,000 shares, Issued 3,050,577
at September 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 (343,647) (281,430)
----------------- ------------------
Total Stockholders' Equity (90,380) (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)
Cumulative
Since
December 1,
2001
For the Three Months Ended For the Nine Months Ended Inception of
September 30, September 30, Development
--------------------------------- ----------------------------------
2004 2003 2004 2003 Stage
---------------- ---------------- ---------------- ----------------- -----------------
Revenues $ - $ - $ - $ - $ -
---------------- ---------------- ---------------- ----------------- -----------------
Expenses:
General and Administrative 43,031 8,199 62,051 38,889 343,481
---------------- ---------------- ---------------- ----------------- -----------------
Total Expenses 43,031 8,199 62,051 38,889 343,481
---------------- ---------------- ---------------- ----------------- -----------------
Operating Loss (43,031) (8,199) (62,051) (38,889) (343,481)
Other Expense:
Interest Expense (79) - (166) - (166)
---------------- ---------------- ---------------- ----------------- -----------------
Total Other Expense (79) - (166) - (166)
---------------- ---------------- ---------------- ----------------- -----------------
Net Loss $ (43,110)$ (8,199) $ (62,217)$ (38,889)$ (343,647)
================ ================ ================ ================= =================
Loss per Share, Basic &
Diluted $ (0.01) $ - $ (0.02) $ (0.02)
================ ================ ================ =================
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)
Cumulative
Since
December 1,
2001
For the Nine Months Ended Inception of
September 30, Development
-----------------------------------
2004 2003 Stage
----------------- ---------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss for the Period $ (62,217) $ (38,889)$ (343,647)
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 56,800 5,968 65,027
Increase (Decrease) in Accrued Interest 79 - 166
----------------- ---------------- ------------------
Net Cash Used in operating activities (5,338) (32,921) (49,107)
----------------- ---------------- ------------------
----------------- ---------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
----------------- ---------------- ------------------
Purchase of property and equipment - - -
----------------- ---------------- ------------------
Net cash provided by investing activities - - -
----------------- ---------------- ------------------
----------------- ---------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
----------------- ---------------- ------------------
Proceeds from shareholders 5,338 32,921 48,366
----------------- ---------------- ------------------
Net Cash Provided by Financing Activities 5,338 32,921 48,366
----------------- ---------------- ------------------
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 $617,000 for the period from April 7, 1997 (inception) to
September 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 September 30, 2004 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 and
nine 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 September 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 September 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 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, 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 September 30, 2004 and December
31, 2003, the Company owed $7,954 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 September 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 nine
months ended September 30, 2004 and 2003.
The Company had no selling and marketing expenses for the three and
nine months ended September 30, 2004 and 2003. General and administrative
expenses were $43,031 and $62,051 for the three and nine months ended September
30, 2004 and $8,199 and $38,889 for the three and nine months ended September
30, 2003.
The Company recorded a net loss of $43,110 and $62,217 for the three
and nine months ended September 30, 2004 compared to a net loss of $8,199 and
$38,889 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.
ITEM 3. CONTROLS AND PROCEDURES
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.
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.
(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.
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 15, 2004 By: /s/ Heinz Leuders
-----------------------------------------
Heinz Leuders
President and Director
(Principal Executive Officer)
Date: November 15, 2004 By: /s/ Charles Spooner
-----------------------------------------
Charles Spooner
Director, Treasurer and Secretary
(Principal Financial Officer)