UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_______________
FORM
10-Q
_______________
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended June 30, 2008
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the transition period from
______to______.
EL
MANIEL INTERNATIONAL, INC.
(Exact
name of registrant as specified in Charter
NEVADA
|
|
333-148988
|
|
562672870
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(Commission
File No.)
|
|
(IRS
Employee Identification No.)
|
7424
Brighton Village Drive, Raleigh, NC 27616
(Address
of Principal Executive Offices)
_______________
(919)
538-2305
(Issuer
Telephone number)
_______________
(Former
Name or Former Address if Changed Since Last Report)
Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2)has been
subject to such filing requirements for the past 90 days. Yes
x
No
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
See definition of “accelerated filer” and “large accelerated filer”
in Rule 12b-2 of the Exchange Act (Check one):
Large
Accelerated Filer
o
Accelerated
Filer
o
Non-Accelerated
Filer
o
Smaller
Reporting Company
x
Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act. Yes
x
No
o
State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of as of August 5, 2008: 6,865,000 shares of Common Stock.
EL
MANIEL INTERNATIONAL, INC.
FORM
10-Q
June
30, 2008
INDEX
PART
I-- FINANCIAL INFORMATION
Item
1.
|
Financial
Statements
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition
|
Item
3
|
Quantitative
and Qualitative Disclosures About Market Risk
|
Item
4T.
|
Control
and Procedures
|
PART
II-- OTHER INFORMATION
Item
1
|
Legal
Proceedings
|
Item
1A
|
Risk
Factors
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
Item
3.
|
Defaults
Upon Senior Securities
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
and Reports on Form 8-K
|
SIGNATURE
Item 1. Financial
Information
EL
MANIEL INTERNATIONAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
CONTENTS
|
|
|
PAGE
|
1
|
CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2008 (UNAUDITED) AND SEPTEMBER
30, 2007.
|
|
|
|
PAGE
|
2
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
JUNE 30, 2008 AND FOR THE PERIOD FROM JULY 24, 2007 (INCEPTION) TO JUNE
30, 2008 (UNAUDITED).
|
|
|
|
PAGE
|
3
|
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY) FOR
THE PERIOD FROM JULY 24, 2007 (INCEPTION) TO JUNE 30, 2008
(UNAUDITED).
|
|
|
|
PAGE
|
4
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30,
2008 AND FOR THE PERIOD FROM JULY 24, 2007 (INCEPTION) TO JUNE 30, 2008
(UNAUDITED).
|
|
|
|
PAGES
|
5 -
10
|
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED).
|
|
|
|
El
Maniel International, Inc. and Subsidiary
|
|
(A
Development Stage Company)
|
|
Balance
Sheets
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
June
30, 2008
|
|
|
September
30,
|
|
|
|
(Unaudited)
|
|
|
2007
|
|
Current
Assets
|
|
|
|
|
|
|
Cash
|
|
$
|
70,320
|
|
|
$
|
55
|
|
Prepaid
expense
|
|
|
750
|
|
|
|
-
|
|
Inventory
|
|
|
2,250
|
|
|
|
-
|
|
Total
Current Assets
|
|
|
73,320
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
1,454
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
74,774
|
|
|
$
|
55
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
2,588
|
|
|
$
|
12,932
|
|
Loan
payable - related party
|
|
|
1,603
|
|
|
|
1,603
|
|
Total Liabilities
|
|
|
4,191
|
|
|
|
14,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity (Deficiency)
|
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value; 110,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
6,865,000 and 5,100,000 issued and outstanding,
respectively
|
|
|
6,865
|
|
|
|
5,100
|
|
Additional
paid-in capital
|
|
|
189,606
|
|
|
|
10,971
|
|
Less: Stock subscription receivable
|
|
|
-
|
|
|
|
(10,000
|
)
|
Deficit
accumulated during the development stage
|
|
|
(125,888
|
)
|
|
|
(20,551
|
)
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity (Deficiency)
|
|
|
70,583
|
|
|
|
(14,480
|
)
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity (Deficiency)
|
|
$
|
74,774
|
|
|
$
|
55
|
|
|
|
|
|
|
|
|
|
|
El
Maniel International, Inc. and Subsidiary
|
|
(A
Development Stage Company)
|
|
Condensed
Consolidated Statement of Operations
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
|
|
|
For the Nine
|
|
|
For the period from July 24,
2007
|
|
|
|
Months Ended
June 30,
2008
|
|
|
Months Ended
June 30,
2008
|
|
|
(inception) to
June 30,
2008
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
205
|
|
|
$
|
14,205
|
|
|
$
|
14,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Revenue
|
|
|
-
|
|
|
|
(12,995
|
)
|
|
|
(12,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
205
|
|
|
|
1,210
|
|
|
|
1,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
|
|
32,984
|
|
|
|
88,964
|
|
|
|
101,064
|
|
Advertising
expense
|
|
|
281
|
|
|
|
6,381
|
|
|
|
6,381
|
|
General
and administrative
|
|
|
3,255
|
|
|
|
11,202
|
|
|
|
19,653
|
|
Total
Operating Expenses
|
|
|
36,520
|
|
|
|
106,547
|
|
|
|
127,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from Operations
|
|
|
(36,315
|
)
|
|
|
(105,337
|
)
|
|
|
(125,888
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
FROM OPERATIONS BEFORE INCOME TAXES
|
|
|
(36,315
|
)
|
|
|
(105,337
|
)
|
|
|
(125,888
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Income Taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(36,315
|
)
|
|
$
|
(105,337
|
)
|
|
$
|
(125,888
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss Per Share - basic and diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
during
the period - basic and diluted
|
|
|
6,865,000
|
|
|
|
6,785,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A
Development Stage Company)
|
|
Condensed
Consolidated Statement of Stockholders' Equity
(Deficiency)
|
|
For the period from July 24, 2007 (Inception) to
June 30, 2008
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
|
|
|
accumulated
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
during
|
|
|
|
|
|
Stockholder's
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
Equity
(Deficiency)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
July 24, 2007
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for services to founder ($0.001)
|
|
|
5,000,000
|
|
|
|
5,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for cash ($0.10/ per share)
|
|
|
100,000
|
|
|
|
100
|
|
|
|
9,900
|
|
|
|
-
|
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
kind contribution of cash
|
|
|
-
|
|
|
|
-
|
|
|
|
100
|
|
|
|
-
|
|
|
|
-
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
kind contribution of services
|
|
|
-
|
|
|
|
-
|
|
|
|
971
|
|
|
|
-
|
|
|
|
-
|
|
|
|
971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period July 24, 2007 (inception) to September 30,
2007
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(20,551
|
)
|
|
|
-
|
|
|
|
(20,551
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
September 30, 2007
|
|
|
5,100,000
|
|
|
|
5,100
|
|
|
|
10,971
|
|
|
|
(20,551
|
)
|
|
|
(10,000
|
)
|
|
|
(14,480
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
collected on susbscriptoin receivable
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for cash ($0.10/ per share)
|
|
|
1,765,000
|
|
|
|
1,765
|
|
|
|
174,735
|
|
|
|
-
|
|
|
|
-
|
|
|
|
176,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
kind contribution of services
|
|
|
-
|
|
|
|
-
|
|
|
|
3,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss, for the nine months ended June 30, 2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(105,337
|
)
|
|
|
-
|
|
|
|
(105,337
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
June 30, 2008
|
|
|
6,865,000
|
|
|
$
|
6,865
|
|
|
$
|
189,606
|
|
|
$
|
(125,888
|
)
|
|
$
|
-
|
|
|
$
|
70,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El
Maniel International, Inc. and Subsidiary
|
|
(A
Development Stage Company)
|
|
Condensed
Consolidated Statement of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the Nine
|
|
|
For the Period From July 24,
2007
|
|
|
|
Months Ended
June 30,
2008
|
|
|
(Inception) to
June 30,
2008
|
|
Cash
Flows Used In Operating Activities:
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(105,337
|
)
|
|
$
|
(125,888
|
)
|
Adjustments
to reconcile net loss to net cash used in operations
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
46
|
|
|
|
46
|
|
Common
stock issued for services
|
|
|
-
|
|
|
|
5,000
|
|
In-kind
contribution of services
|
|
|
3,900
|
|
|
|
4,871
|
|
In-kind
contribution of cash
|
|
|
-
|
|
|
|
100
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
(Increase)/Decrease
in prepaid expense
|
|
|
(750
|
)
|
|
|
(750
|
)
|
(Increase)/Decrease
in inventory
|
|
|
(2,250
|
)
|
|
|
(2,250
|
)
|
Increase/(Decrease)
in accounts payable and accrued expenses
|
|
|
(10,344
|
)
|
|
|
2,588
|
|
Net
Cash Used In Operating Activities
|
|
|
(114,735
|
)
|
|
|
(116,283
|
)
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
Payment
for property and equipment
|
|
|
(1,500
|
)
|
|
|
(1,500
|
)
|
Net
Cash Used In Investing Activities
|
|
|
(1,500
|
)
|
|
|
(1,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds
from loan payable- related party
|
|
|
-
|
|
|
|
1,603
|
|
Proceeds
from issuance of common stock
|
|
|
186,500
|
|
|
|
186,500
|
|
Net
Cash Provided by Financing Activities
|
|
|
186,500
|
|
|
|
188,103
|
|
|
|
|
|
|
|
|
|
|
Net
Increase in Cash
|
|
|
70,265
|
|
|
|
70,320
|
|
|
|
|
|
|
|
|
|
|
Cash
at Beginning of Period
|
|
|
55
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash
at End of Period
|
|
$
|
70,320
|
|
|
$
|
70,320
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash
paid for taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
EL
MANIEL INTERNATIONAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30,
2008
(UNAUDITED)
NOTE
1
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES AND
ORGANIZATION
|
(A) Basis of
Presentation
The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in The
United States of America and the rules and regulations of the Securities and
Exchange Commission for interim financial information. Accordingly,
they do not include all the information necessary for a comprehensive
presentation of financial position and results of operations.
It is
management's opinion, however that all material adjustments (consisting of
normal recurring adjustments) have been made which are necessary for a fair
financial statements presentation. The results for the interim period
are not necessarily indicative of the results to be expected for the
year.
Activities
during the development stage include developing the business plan and raising
capital.
(B) Principles of
Consolidation
The
accompanying unaudited consolidated financial statements include the accounts of
El Maniel International, Inc. from July 24, 2007 (inception) and its 100% owned
subsidiary El Maniel Cigar Company. All inter-company accounts have
been eliminated in the consolidation (See Note 3(E)).
(C) Use of
Estimates
In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period. Actual results could differ from
those estimates.
(D) Cash and Cash
Equivalents
The
Company considers all highly liquid temporary cash investments with an original
maturity of three months or less to be cash equivalents. At June 30, 2008 and
September 30, 2007 the Company had no cash equivalents.
EL
MANIEL INTERNATIONAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30,
2008
(UNAUDITED)
(E) Website Development
Costs
The
Company has adopted the provisions of EITF 00-2,
"Accounting for Web Site Development
Costs."
Costs incurred in the planning stage of a website are
expensed while costs incurred in the development stage are capitalized and
amortized over the estimated three-year life of the asset. For the period
ended June 30, 2008, the Company paid $1,500 to develop its
website.
(F) Loss Per
Share
Basic and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by Financial Accounting Standards No. 128,
“Earnings Per Share.” As of June 30, 2008 there were no common share equivalents
outstanding.
(G) Income
Taxes
The
Company accounts for income taxes under the Statement of Financial Accounting
Standards No. 109, “
Accounting
for Income Taxes
” (“SFAS 109”). Under SFAS 109, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under
SFAS 109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date
(H) Business
Segments
The
Company operates in one segment and therefore segment information is not
presented.
(I) Revenue
Recognition
The
Company recognized revenue on arrangements in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in
Financial Statements” and No. 104, “Revenue Recognition”. In all
cases, revenue is recognized only when the price is fixed and determinable,
persuasive evidence of an arrangement exists, the service is performed and
collectability of the resulting receivable is reasonably
assured. Revenue is recognized when products are received and
accepted by the customer. Risk of loss transfers from the
manufacturer to the Company upon shipment of product from the
warehouse.
EL
MANIEL INTERNATIONAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30,
2008
(UNAUDITED)
(J)
Inventories
Inventories
are valued at the lower of cost or market. Cost is determined using
the first-in, first-out (FIFO) method. Provision for potentially obsolete or
slow moving inventory is made based on management's analysis of inventory levels
and future sales forecasts.
(K) Advertising and
Promotional Expense
Advertising
and other product-related costs are charged to expense as incurred. For the
three and nine months ended June 30, 2008 advertising expense was $281, and
$6,381, respectively.
(
L)
Reclassification
Certain
amounts from prior period have been reclassified to conform to the current
period presentation.
(M) Recent Accounting
Pronouncements
In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests in Consolidated Financial Statements – an
amendment of ARB No. 51”. This statement improves the relevance, comparability,
and transparency of the financial information that a reporting entity provides
in its consolidated financial statements by establishing accounting and
reporting standards that require; the ownership interests in subsidiaries held
by parties other than the parent and the amount of consolidated net income
attributable to the parent and to the noncontrolling interest be clearly
identified and presented on the face of the consolidated statement of income,
changes in a parent’s ownership interest while the parent retains its
controlling financial interest in its subsidiary be accounted for consistently,
when a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary be initially measured at fair value,
entities provide sufficient disclosures that clearly identify and distinguish
between the interests of the parent and the interests of the noncontrolling
owners. SFAS No. 160 affects those entities that have an outstanding
noncontrolling interest in one or more subsidiaries or that deconsolidate a
subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods
within those fiscal years, beginning on or after December 15, 2008. Early
adoption is prohibited. The adoption of this statement is not expected to have a
material effect on the Company's financial statements.
EL
MANIEL INTERNATIONAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30,
2008
(UNAUDITED)
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS
161). This statement is intended
to improve transparency in financial reporting by requiring enhanced disclosures
of an entity’s derivative instruments and hedging activities and their effects
on the entity’s financial position, financial performance, and cash flows.
SFAS
161 applies to all derivative
instruments within the scope of SFAS 133, “Accounting for Derivative Instruments
and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated
derivatives, and nonderivative instruments that are designated and qualify as
hedging instruments. Entities with instruments subject to
SFAS
161 must provide more robust
qualitative disclosures and expanded quantitative disclosures.
SFAS
161 is effective prospectively for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application permitted. We are currently
evaluating the disclosure implications of this statement.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP. The current GAAP hierarchy has been criticized because it is directed
to the auditor rather than the entity, it is complex, and it ranks FASB
Statements of Financial Accounting Concepts, which are subject to the same level
of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process. The Board believes the GAAP hierarchy should be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP.
SFAS No.
162 is effective 60 days after it receives approval from the Securities and
Exchange Commission.
The adoption of FASB 162 is not expected to have a
material impact on the Company’s financial position.
In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. The adoption of FASB 163 is not expected to
have a material impact on the Company’s financial position.
NOTE
2
|
PROPERTY AND
EQUIPMENT
|
At June
30, 2008 property and equipment is as follows:
EL
MANIEL INTERNATIONAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30,
2008
(UNAUDITED)
|
|
2008
|
|
|
|
|
|
Website
costs
|
|
1,500
|
|
Less
accumulated amortization
|
|
(46)
|
|
|
|
|
|
|
$
|
1,454
|
|
Amortization
expense for the nine months ended June 30, 2008 was $46.
NOTE
3
|
STOCKHOLDERS’
EQUITY
|
(A) Common Stock Issued for
Cash
As of
December 31, 2007 the Company issued 1,765,000 shares of common stock for
$176,500 ($0.10/share).
For the
period from July 24, 2007 (inception) through September 30, 2007, the Company
issued 100,000 shares of commons stock for a subscription receivable of $10,000
($0.10/share). The subscription receivable was collected during the
period ending December 31, 2007.
(B) In-Kind Contribution of
services
As of
June 30, 2008 a shareholder of the Company contributed services having a fair
value of $3,900 (See Note 5).
For the
period from July 24, 2007 (inception) through September 30, 2007, the
shareholder of the Company contributed services having a fair value of $971.
(See Note 5)
(C) In-Kind Contribution of
cash
As of
June 30, 2008 the shareholder of the Company contributed cash of $100 to cover
the costs of setting up the subsidiary.
(D) Stock Issued for
Services
On July
24, 2007, the Company issued 5,000,000 shares of common stock to its founders
having a fair value of $5,000 ($0.001/share) in exchange for services
provided.
EL
MANIEL INTERNATIONAL, INC. AND SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30,
2008
(UNAUDITED)
(E) Acquisition
Agreement
On
September 28, 2007, El Maniel International, Inc. consummated an agreement with
El Maniel Cigar Company, pursuant to which EL Maniel Cigar Company exchanged all
of its members’ interest for 5,000,000 shares or approximately 100% of the
common stock of El Maniel International, Inc. The Company has
accounted for the transaction as a combination of entities under common control
and accordingly, recorded the merger at historical cost.
NOTE
4
COMMITMENTS
On
October 15, 2007 the Company entered into a consulting agreement to receive
administrative and other miscellaneous services. The Company is
required to pay $5,000 a month. The agreement is in effect until
cancelled by either party.
NOTE
5
RELATED PARTY
TRANSACTIONS
As of
June 30, 2008 the shareholder of the Company contributed services having a fair
value of $3,900 (See Note 3(B)).
For the
year ended September 30, 2007, the Company received $1,603 from a principal
stockholder. Pursuant to the terms of the loan, the loan is non interest bearing
and due on demand.
For the
year ended September 30, 2007 the shareholder of the Company contributed
services having a fair value of $971 (See Note 3(B)).
As of
June 30, 2008 the shareholder of the Company contributed cash of $100 to cover
the costs of setting up the subsidiary (See Note 3(C).
NOTE
6
GOING
CONCERN
As
reflected in the accompanying financial statements, the Company is in the
development stage with minimal operations, used cash in operations of $116,283
from inception and has a net loss since inception of $125,888. This raises
substantial doubt about its ability to continue as a going
concern. The ability of the Company to continue as a going concern is
dependent on the Company’s ability to raise additional capital and implement its
business plan. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern.
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The
information contained in Item 2 contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Actual results may
materially differ from those projected in the forward-looking statements as a
result of certain risks and uncertainties set forth in this report. Although
management believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual results
will not be different from expectations expressed in this report.
Plan of
Operation
We have
not begun operations, and we require outside capital to implement our business
model. We believe we can begin to implement our plan to purchase and sell
premium cigars. All functions will be coordinated and managed by our founder,
including marketing, finance and operations.
We are in
negotiations to finish the cigar box that will be used for the final product. We
are also working to finish the web site which will be an important tool for the
sale of the product. We have already begun to introduce the cigars to different
consumer groups seeking to get some interest in the cigars. We hope to have the
cigar box design finished and in production in the next 90 days. Once the cigar
box is completed and the web site is operational we will begin to selectively
introduce the product to various consumer groups. Our initial efforts will be to
firms in the financial services industry. We will also work on wedding planners
which we see as another source of early introduction. We have hired a marketing
consultant who is planning a roll out of the product in the first 90 days after
the web site is operational in an effort to have the product available for the
holiday market.
Our
intent is to engage a third-party order and fulfillment partner with all the
necessary licenses to sell and deliver cigar products in the U.S. and Canada.
This will allow us the fastest access to the markets through a well-established
and experienced fulfillment organization. To launch the PLC™ Cigars product line
in the next 90 days, we will begin by making a news announcement and targeting
media coverage in a select list of cigar industry media. At launch, a small
number of commissioned sales representatives will begin “seeding” select markets
with sample boxes of our product along with marketing materials promoting the
brand and driving prospective buyers to the web site or a toll-free telephone
number for placing orders.
Over the
next 12 months our target is to place approximately 100-200 units with opinion
leaders, media professionals and prospective customers to start to generate
awareness of the PLC Cigars product line and initiate the sales effort; conduct
at least three direct email blasts to targeted contacts from cigar industry
media subscriber lists; sponsor at least two small events in conjunction with
cigar industry events, such as the industry’s annual trade show and convention
in July; and place advertising on three targeted cigar industry online
media.
We have
budgeted $150,000 for expenses over the next twelve months. This essentially
covers the cost of inventory to fulfill orders that may come from the marketing
efforts. We have a cost for each box of $21.50 and a replaceable placard for
personalizing the boxes at $2.80 per box. We plan to initially order 1,000 units
for inventory which will cost $24,300 with out the cost of shipping and
handling. There will be an additional cost to fulfill the orders. We do not
expect to have to carry much inventory if any of the cigars since the company
making them will also be fulfilling orders. We expect the cost for each 1,000
units inclusive of everything except the cigar to be approximately $30,000. We
have budgeted $40,000 to cover the up front cost for 1,000 units and some extra
for unforeseen costs as well as the other overhead necessary for operations. If
we are not able to recoup the initial cost of the 1,000 units by the end of
2008 we will have to find additional money to meet ongoing obligations or cut
back on our budget.
We expect
the total cost of the marketing program for the first nine months to range up to
$50,000. Within 90-120 days of the initiation of our marketing campaign, we
believe that we will begin to generate additional business and an interest in
our premium hand-rolled cigars. We have already made an initial sale
and are currently implementing the initial product launch and marketing plan
based upon feedback from this sale. We will assess efforts at the six-month mark
to determine if additional funding is required to broaden advertising, seeding
and marketing efforts to generate revenue levels necessary to begin to support
operations.
At the
12-month mark, we plan to make another assessment of marketing and sales efforts
and results. News announcements, email blasts, seeding efforts and event
sponsorship are expected to continue as the primary marketing and promotion
efforts to drive sales and revenue growth.
If we are
unable to market effectively our premium cigars, we may have to suspend or cease
our efforts. If we cease our previously stated efforts, we do not
have plans to pursue other business opportunities. If we cease
operations, investors will not receive any return on their
investments.
Limited Operating
History
The
initial efforts of our founders to establish a cigar company began in early
2007. We were formed in July 2007 and we have no operations upon
which an evaluation of our company and our prospects can be
based. There can be no assurance that our management will be
successful in completing our product development programs, implementing the
corporate infrastructure to support operations at the levels called for by our
business plan, conclude a successful sales and marketing plan to attain
significant penetration of the premium cigar market segment or that we will
generate sufficient revenues to meet its expenses or to achieve or maintain
profitability.
Results of
Operation
For the
three month period ended June 30, 2008, we had $205 in revenue. Expenses for the
period totaled $36,520 resulting in a loss of $36,315. Expenses of $36,520 for
the period consisted of $3,255 for general and administrative expenses, $281 for
advertising expenses and $32,984 for professional fees.
For the
period from inception through June 30, 2008, we had $14,205 in revenue. Expenses
for the period totaled $127,098 resulting in a loss of $(125,888). Expenses of
$127,098 for the period consisted of $19,653 for general and administrative
expenses, $6,381 for advertising and $101,064 for professional
fees.
Capital Resources and
Liquidity
As of
June 30, 2008 we had $70,320 in cash.
We
believe that we will need additional funding to satisfy our cash requirements
for the next twelve months. Completion of our plan of operations is subject to
attaining adequate revenue or financing. We cannot assure investors that we will
generate the revenues needed or that additional financing will be available. In
the absence of attaining adequate revenue or additional financing, we may be
unable to proceed with our plan of operations.
We
anticipate that our operational, and general and administrative expenses for the
next 12 months will total approximately $150,000. We do not anticipate the
purchase or sale of any significant equipment. We also do not expect any
significant additions to the number of employees. The foregoing represents our
best estimate of our cash needs based on current planning and business
conditions. The exact allocation, purposes and timing of any monies raised in
subsequent private financings may vary significantly depending upon the exact
amount of funds raised and our progress with the execution of our business plan.
We anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, our auditors
have raised substantial doubt about our ability to continue as a going
concern.
Critical Accounting
Policies
The
Company’s financial statements and related public financial information are
based on the application of accounting principles generally accepted in the
United States (“GAAP”). GAAP requires the use of estimates; assumptions,
judgments and subjective interpretations of accounting principles that have an
impact on the assets, liabilities, revenue and expense amounts reported. These
estimates can also affect supplemental information contained in our external
disclosures including information regarding contingencies, risk and financial
condition. We believe our use if estimates and underlying accounting assumptions
adhere to GAAP and are consistently and conservatively applied. We base our
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions or conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements.
Our
significant accounting policies are summarized in Note 1 of our financial
statements. While all of these significant accounting policies impact the
Company’s financial condition and results of operations, we view certain of
these policies as critical. Policies determined to be critical are those
policies that have the most significant impact on the Company and require
management to use a greater degree of judgment and estimates. Actual
results may differ from those estimates. Our management believes that given
current facts and circumstances, it is unlikely that applying any other
reasonable judgments or estimate methodologies would cause effect on
our financial position or liquidity, results of operations or cash flows
for the periods presented.
Recent Accounting
Pronouncements
In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “
Noncontrolling Interests
in Consolidated Financia
l Statements
–
an amendment of ARB No.
51
”. This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. SFAS
No. 160 affects those entities that have an outstanding noncontrolling
interest in one or more subsidiaries or that deconsolidate a
subsidiary. SFAS No. 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
Early adoption is prohibited. The adoption of this statement is not expected to
have a material effect on the Company's financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP. The current GAAP hierarchy has been criticized because it is directed
to the auditor rather than the entity, it is complex, and it ranks FASB
Statements of Financial Accounting Concepts, which are subject to the same level
of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process. The Board believes the GAAP hierarchy should be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP. SFAS No. 162 is effective 60 days
after it receives approval from the Securities and Exchange Commission. The
adoption of FASB 162 is not expected to have a material impact on the Company’s
financial position.
In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. The adoption of FASB 163 is not expected to
have a material impact on the Company’s financial position.
Off Balance Sheet
Transactions
We have
no off-balance sheet arrangements.
Item
3. Quantitative and Qualitative Disclosures About Market Risk
The
Company is subject to certain market risks, including changes in interest rates
and currency exchange rates. The Company does not undertake any specific
actions to limit those exposures.
Item
4T. Controls and Procedures
Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Accounting Officer (“CAO”) (the Company’s principal financial and accounting
officer), of the effectiveness of the Company’s disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the
end of the period covered by this report. Based upon that evaluation, the
Company’s CEO and CAO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed
by the Company in the reports that the Company files or submits under the
Exchange Act, is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to the Company’s management, including the
Company’s CEO and CAO, as appropriate, to allow timely decisions regarding
required disclosure.
Management
’
s Report on Internal
Controls over Financial Reporting
Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of consolidated financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles. There has been no change in
the Company’s internal control over financial reporting during the quarter ended
June 30, 2008 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
The
Company’s management, including the Company’s CEO and CAO, does not expect that
the Company’s disclosure controls and procedures or the Company’s internal
controls will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation of the
controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected.
Management
conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in
Internal Control
–
Inte
grated Framework
issued by
the Committee of Sponsoring Organizations of the Treadway Commission. Based on
this evaluation, management concluded that the company’s internal control over
financial reporting was effective as of June 30, 2008.
This
quarterly report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only
management's report in this quarterly report.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings.
Currently
we are not aware of any litigation pending or threatened by or against the
Company.
Item
1A. Risk Factors
None
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
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 of Form 8-K.
(a) Exhibits
31.1
Certifications pursuant to Section 302 of Sarbanes Oxley Act of
2002
32.1
Certifications pursuant to Section 906 of Sarbanes Oxley Act of
2002
(b) Reports
of Form 8-K
None.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
EL
MANIEL INTERNATIONAL, INC.
|
|
|
Date:
August 5, 2008
|
By:
|
/s/
Barbara Tejeda
|
|
|
Barbara
Tejeda
|
|
|
Founder,
Chairman, Chief Executive Officer,
Chief
Financial Officer, Chief Accounting Officer
and
Director
|
El Maniel (CE) (USOTC:EMLL)
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