UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

 

**FORM10-QSB/A**

**(Amendment No. 1)**

 

[X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OFTHE SECURITIES EXCHANGE ACT OF 1934

 

[] TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

 

Forthe quarterly period ended: March 31, 2004

 

Commissionfile number 333-84568

 

DOGSINTERNATIONAL

(Exactname of small business issuer as specified in its charter)

 

| **Nevada   **
** 90-0006843**
(State      or other jurisdiction of   
 (I.R.S.      Employer
incorporation      or organization)   
 Identification      Number)
**   **
**   **
**408      S. Daytona   **
**   **
**Flagler      Beach, Florida   **
** 32136**
(Address      of Principal Executive Offices)   
 (Zip      Code)
 
**(386)439-4006**
(Issuer'stelephone number, including area code)

 

Checkwhether the issuer (1) filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the last 12 months (orfor such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days.

 

Yes   X        No ____

 

Thenumber of shares of Common Stock, $0.001 par value, outstanding on March 31,2004, was 20,100,000 shares.

 

TransitionalSmall Business Disclosure Format (check one):

 

Yes             No     X    
 

 
***We are filing thisAmendment No. 1 to Form 10-QSB to amend our Quarterly Report on Form 10-QSB for theperiod ended March 31, 2004 (the "Original Filing") filed on May 25, 2004,with the Securities and Exchange Commission in order to revise Item 3. Controlsand Procedures to disclose the conclusions of Rosemary Williams, our Presidentand Chief Accounting Officer, regarding the effectiveness of our disclosurecontrols and procedures as of the end of the period covered by this report.Further, we have replaced the Section 302 certification of Ms. Williams toinclude a new Exhibit 31.

In conformity withSEC Release 34-47986, we have removed all language from Ms. Williams'certification pertaining to establishing and maintaining internal control overfinancial reporting.

This Amendment doesnot amend any other information previously filed in the Original Filing. TheOriginal Filing is hereby superseded and amended with respect to Item 3 andExhibit 31 set forth in this Amendment No. 1.**
 

 

ITEM1. FINANCIAL STATEMENTS

 

DOGSINTERNATIONAL AND SUBSIDIARY

(aNevada Corporation)

CONSOLIDATEDBALANCE SHEET

(unaudited)

 

 

 

March      31, 2004

(unaudited)
December      31, 2004

(audited)
CURRENT      ASSETS:
          Cash
$      -
$      -
               TOTAL CURRENT ASSETS
-
-
 

 

 

OTHER      ASSETS:
          Fixed Assets, Net
483,079
491,116
          Goodwill
18,269
18,269
                 TOTAL OTHER ASSETS
501,348
496,641
               TOTAL ASSETS
$      501,348
$      509,385
LIABILITIES      AND STOCKHOLDERS' EQUITY
 

 

CURRENT      LIABILITIES
 

 

          Checks issued in excess of cash available
$      4,298
$      424
          Accruals
1,752
4,633
          Short-term loan
6,279
6,279
               TOTAL CURRENT LIABILITIES
12,329
11,336
Long      Term Liabilities
 

 

          Installment Loans
12,723
13,872
          Mortgages Payable
169,349
173,973
          Mortgages Payable - related party
200,000
200,000
          Interest Payable - related party
10,750
7,750
               TOTAL LONG TERM LIABILITIES
392,822
395,595
 

 

 

STOCKHOLDERS'      EQUITY
          Preferred stock, $.001 par value authorized 20,000,000 shares; 28,334      issued and outstanding at March 31, 2004 and December 31, 2003
 

28
 

28
          Common stock, $.001 par value, authorized 100,000,000 shares; 20,100,000      issued and outstanding at March 31, 2004 and December 31, 2003
 

20,100
 

20,100
 

 

 

          Additional paid-in capital
207,372
207,372
 

 

 

          Deficit accumulated during development stage
(131,303)
(125,046)
 

 

 

                TOTAL STOCKHOLDER'S EQUITY (DEFICIT)
96,197
102,454
                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$      501,348
$      509,385
 

Theaccompanying notes are an integral part of these financial statements

2

DOGSINTERNATIONAL AND SUBSIDIARY

(aNevada Corporation)

CONSOLIDATEDSTATEMENT OF OPERATIONS

(unaudited)

 

 

Three      Months Ended

March      31, 2004
Three      Months Ended

March      31, 2003
January      23, 2002 (inception) to March 31, 2004
 

 

 

 

Income
 

 

 

          Sales
$      34,912
$      -
$      119,908
          Less:      Cost of Good Sold
2,339
-
7,087
 

32,573
-
112,821
Expenses:
 

 

 

          Depreciation
8,037
-
28,819
          Operating,      general and administrative expenses
27,794
27,000
204,555
 

35,831
27,000
233,374
 

 

 

 

Other      (Expenses):
 

 

 

          Interest      (expense)
-
-
-
          Interest      (expense) - related party
3,000
-
10,750
               Total      other (expenses)
3,000
-
10,750
 

 

 

 

Net      (loss)
$      (6,257)
$      (27,000)
$      (131,303)
 

 

 

 

Weighted      average number of
 

 

 

common      shares outstanding
20,100,000
9,032,951
 

 

 

 

 

Net      (loss) per share
$      (0.00)
$      (0.00)
 

 

Theaccompanying notes are an integral part of these financial statements

 3

DOGSINTERNATIONAL AND SUBSIDIARY

(aNevada Corporation)

CONSOLIDATEDSTATEMENT OF CASH FLOWS

(unaudited)

 

     
Three      Months Ended

March      31, 2004
Three      Months Ended

March      31, 2003
January      23, 2002 (inception) to March 31, 2004**OPERATING      ACTIVITIES
          Net      (loss)
$      (6,257)
$      (27,000)
$      (131,303)
          Subscription      Payable
-
25,000
-
          Adjustments      to reconcile Net (Loss)
          to      net cash (used) by operations:
               Depreciation
8,037
-
28,819
               Interest      Payable - related party
3,000
-
10,750
               Accruals
(2,881)
-
1,751
Net      cash (used) by Operating Activities
1,899
(2,000)
(89,983)**INVESTING      ACTIVITIES
          Assets      Acquired
-
-
(511,898)
          Goodwill      Purchased
-
-
(18,269)
Net      cash (used) by Investing Activities
-
-
(530,167)**FINANCING      ACTIVITIES
          Check      issued in excess of cash available
4,298
-
4,298
          Short-term      loan
-
-
6,279
          Installment      Loans Payable
(1,149)
-
12,724
          Mortgages      Payable
(4,624)
-
169,349
          Mortgages      Payable - related party
-
-
200,000
          Common      Stock
-
-
20,100
          Preferred      Stock
-
-
28
          Additional      Paid In Capital
-
-
207,372
Net      cash provided by Financing Activities
(1,475)
-
**Net      cash increase (decrease) for period
424
(2,000)
-
Cash      at beginning of period
(424)
24,340
-
Cash      at end of period
$      -
$      22,340
$      -
Interest      paid
$      -
$      -
$      -
Taxes      paid
$      -
$      -
$      -
 

Theaccompanying notes are an integral part of these financial statements

 4
**DOGSINTERNATIONAL AND SUBSIDIARY

(aNevada Corporation)

Notesto Financial Statements

 

Note1 - Basis of Presentation

 **
Theunaudited condensed financial statements include the accounts of DogsInternational (the "Company") consolidated with its subsidiary Bed andBiscuit Inns of America, Inc. a Nevada corporation, and have been prepared inaccordance with United States generally accepted accounting principles forinterim financial information and with the instructions to Form 10-QSB andreflect all adjustments which, in the opinion of management, are necessary for afair presentation. All such adjustments are of a normal recurring nature. Theresults of operations for the interim period are not necessarily indicative ofthe results to be expected for a full year. Certain amounts in the prior yearstatements have been reclassified to conform to the current year presentations.The statements should be read in conjunction with the financial statements andfootnotes thereto included in the Company's Form 10-KSB for the year endedDecember 31, 2003.

 
**Note2 - Going Concern

 **
Theaccompanying condensed financial statements have been prepared using thegenerally accepted accounting principles applicable to a going concern, whichcontemplates the realization of assets and liquidation of liabilities in thenormal course of business. The ability of the Company to continue as a goingconcern is dependent upon the ability in its endeavors to seek additionalsources of capital, and in attaining future profitable operations. Management iscurrently initiating their business plan and in the process of raisingadditional capital. The accompanying financial statements do not include anyadjustments that might be necessary should the Company be unable to continue asa going concern.
** 

Note 3-Fixed assets**
Fixedassets consists of the following:

 
 

March      31, 2004
Land
$      137,000
Vehicles
95,256
Furniture      and fixtures
8,253
Operating      equipment
11,650
Buildings      and improvements
259,738
 

511,898
Less      accumulated depreciation
(28,819)
Total
$      483,079
 

Depreciationexpense totaled $28,819 and $-0- for the period ended March 31, 2004 and 2003,respectively.
** 

Note4 - Long Term Liabilities

 **
TheCompany has a 5 year note payable in the principal amount of $200,000 with aninterest rate of 6% to the Company's President pursuant to the Real EstateAcquisition Contract for the purchase of the Bed & Biscuit Inn facilityin Flagler Beach. During the three months ended March 31, 2004, the Company hadaccrued interest payable of $10,750.

 

TheCompany has a first and second mortgage payable on the Bed & Biscuit Innfacility in Flagler Beach in the amount of $169,349.

 

5
**Item2. Management's Discussion and Analysis of Financial Condition and Result ofOperations**
 

Thisreport contains forward-looking statements. Actual results and events coulddiffer materially from those projected, anticipated, or implicit, in theforward-looking statements as a result of the risk factors set forth below andelsewhere in this report.

 

Withthe exception of historical matters, the matters discussed herein areforward-looking statements that involve risks and uncertainties. Forward-lookingstatements include, but are not limited to, statements concerning anticipatedtrends in revenues and net income, projections concerning operations andavailable cash flow. Our actual results could differ materially from the resultsdiscussed in such forward-looking statements. The following discussion of ourfinancial condition and results of operations should be read in conjunction withour financial statements and the related notes thereto appearing elsewhereherein.

 
**CriticalAccounting Policies**
 

Thepreparation of our consolidated financial statements in conformity withaccounting principles generally accepted in the United States requires us tomake estimates and judgments that affect our reported assets, liabilities,revenues, and expenses, and the disclosure of contingent assets and liabilities.We base our estimates and judgments on historical experience and on variousother assumptions we believe to be reasonable under the circumstances. Futureevents, however, may differ markedly from our current expectations andassumptions. While there are a number of significant accounting policiesaffecting our consolidated financial statements; we believe the followingcritical accounting policies involve the most complex, difficult and subjectiveestimates and judgments:
-  stock-based compensation.revenue recognition*Stock-Based    Compensation*
 

InDecember 2002, the FASB issued SFAS No. 148 - Accounting for Stock-BasedCompensation - Transition and Disclosure. This statement amends SFAS No. 123 -Accounting for Stock-Based Compensation, providing alternative methods ofvoluntarily transitioning to the fair market value based method of accountingfor stock based employee compensation. FAS 148 also requires disclosure of themethod used to account for stock-based employee compensation and the effect ofthe method in both the annual and interim financial statements. The provisionsof this statement related to transition methods are effective for fiscal yearsending after December 15, 2002, while provisions related to disclosurerequirements are effective in financial reports for interim periods beginningafter December 31, 2002.

 

TheCompany elected to continue to account for stock-based compensation plans usingthe intrinsic value-based method of accounting prescribed by APB No. 25,"Accounting for Stock Issued to Employees," and relatedinterpretations. Under the provisions of APB No. 25, compensation expense ismeasured at the grant date for the difference between the fair value of thestock and the exercise price.

 

6
*RevenueRecognition*
 

Forrevenue from product sales, the Company recognizes revenue in accordance withSEC Staff Accounting Bulletin No. 101, "Revenue Recognition in FinancialStatements" ("SAB 101"). SAB 101 requires that four basiccriteria must be met before revenue can be recognized: (1) persuasive evidenceof an arrangement exists; (2) delivery has occurred; (3) the selling price isfixed and determinable; and (4) collectibility is reasonably assured.Determination of criteria (3) and (4) are based on management's judgmentsregarding the fixed nature of the selling prices of the products delivered andthe collectibility of those amounts. Provisions for discounts and rebates tocustomers, estimated returns and allowances, and other adjustments are providedfor in the same period the related sales are recorded. The Company defers anyrevenue for which the product has not been delivered or is subject to refunduntil such time that the Company and the customer jointly determine that theproduct has been delivered or no refund will be required.

 
**Overview**
 

DogsInternational was originally incorporated in the State of Nevada in January of2002 under the name Juris Travel. On March 24, 2003, we changed our name to"DOGS INTERNATIONAL". On April 9, 2003, we incorporated a newwholly-owned subsidiary, Bed and Biscuit Inns of America, Inc., a Nevadacorporation, which our future pet facility operations will be conducted through.

 

Thename change was prompted by a change in our business strategy as a result of ourexecution of an "Intellectual Property Assignment Agreement," (the"IP Agreement") on March 14, 2003. Pursuant to the terms of the IPAgreement we received the worldwide rights, title, and interest in certainintellectual property, most notably the names Bed & Biscuit Inn andGroomingdale's in exchange for 100,000 (post split) shares of restricted commonstock.

 

Weare primarily focused on building/acquiring a chain of upscale pet carefacilities under the name "Bed & Biscuit Inn". On May 7, 2003,we completed the acquisition of our first Bed & Biscuit Inn facility inFlagler Beach, Florida. Situated on approximately 5 acres, the facility housesnumerous indoor/outdoor pet suites, an onsite pet bakery and Groomingdale's,which provides full service grooming to guests.

 

OnAugust 20, 2003, we executed a letter of intent with PetsUnited LLC, a LimitedLiability Company formed under the laws of the State of Pennsylvania ("PetsUnited").The letter of intent outlines the proposal by which we will acquire 100% of themembership interest of PetsUnited. The Agreement provides for us to issue sharesof our preferred stock in exchange for 100% of the membership interest andoperational control of PetsUnited, with assets mainly consisting of The Dog'sOutfitter and Allpets.com, which are operating divisions of PetsUnited,(collectively referred to as the "Acquirees").

 

TheDog's Outfitter operates a distribution center in Hazleton, Pennsylvania thatincludes a call center, a catalog design department, and a warehouse operationthat stocks more than 14,000 SKU's. The Dog's Outfitter operations, whichemploys approximately 35 individuals, are supported by a sophisticatedmanagement information system and a communications platform that integratesorder entry, order payment, fulfillment, tracking, and customer care withinventory/mailing list management, accounting and financial reporting, andmarketing analysis.

 

7

Allpets.comis a premier online and catalog retailer providing valuable information,education, and pet products to both the consumer and business markets.

 

Theletter of intent does not constitute a legally binding agreement nor does itcreate any rights or interests in favor of the parties, it being understood thatany rights and obligations which the parties may have, to each other, remain tobe set forth in a definitive acquisition agreement into which the letter ofintent and all prior discussions shall merge.

 
***Satisfactionof our cash obligations for the next 12 months. We intend to buildand/or acquire upscale pet care facilities. Our cash obligations are anticipatedto increase substantially over the next 12 months. The cash would be utilizedfor operational expenses, including the acquisition and leasing of facilities tobe utilized for high-end pet facilities. We intend for these fundingrequirements to be fulfilled through either equity or debt financing.

 

Inthe event we are successful in completing the Pets United transaction, we willrequire additional capital over the next 12 months for operational purposes;however at this time it is unknown what amount of capital will be required forthe Pets United transaction, if and when we complete the transaction.
** 
*Summaryof any product research and development that we will perform for the term of theplan. We do not anticipate performing any significant product researchand development under our revised plan of operation.

 
***Expectedpurchase or sale of plant and significant equipment. We do anticipatepurchasing or leasing pet care facilities in the next twelve months; however,the purchase is subject to our receipt of sufficient funds from borrowings orequity financing to enable such acquisition or leases. At this point in time weare unable to accurately determine an estimate for the amount of funds needed toaccomplish a purchase or lease of a facility. Additionally, the acquisition ofPets United entails the acquisition of 10,000 square feet of leased plant andwarehouse facilities along with certain required equipment.

 
***Significantchanges in number of employees. The number of employees required tooperate our business is currently 7 full-time persons. As a result of ourbusiness plan we are anticipating a substantial change in the number ofemployees required to operate our facilities. These increases will occurconcurrent with our acquisition and/or lease of facilities; however, we willrequire a substantial infusion of capital prior to commencement of suchacquisition. We will substantially increase the number of employees should we besuccessful in the Pets United acquisition.
** **
8
**Resultsof Operations for the Three Months Ended March 31, 2004 and 2003 Compared.**
 

Three      Months Ended

March      31, 2004
Three      Months Ended

March      31, 2003
Revenues
$      34,912
$      -
 

 

 

Cost      of Goods Sold
2,339
-
 

 

 

Operating      Expenses
35,831
27,000
 

 

 

Other      Expense
3,000
-
 

 

 

Net      Loss
$      (6,257)
$      (27,000)
 
**Revenue

 ****Increase/(decrease)**      2004          2003          $    
For      the three months ended March 31:
 

 

 

Revenue
$      34,912
$      -
$      34,912
 

Revenuesfor the three months ended March 31, 2004 were $34,912 compared to revenues of$0 in the three months ended March 31, 2003. This resulted in an increase inrevenues of $34,912, from the same period one year ago. The increase in revenueswas due to the change in our business plan from a travel company to thecompleted acquisition of our first Bed & Biscuit Inn facility in FlaglerBeach, Florida.

 
**Costof goods sold**
 
**Increase/(decrease)**      2004          2003          $    
For      the three months ended March 31:
 

 

 

Cost      of goods sold
$      2,339
$      -
$      2,339
 

Costof goods sold for the three months ended March 31, 2004 was $2,339, an increaseof $2,330 from $0 for the same period ended March 31, 2003. The increase in costof goods sold was primarily due to the increase in revenues and the change inour business plan from a travel company to the completed acquisition of ourfirst Bed & Biscuit Inn facility in Flagler Beach, Florida.

 
**Generaland Administrative expenses**
 
**Increase/(decrease)**      2004          2003          $    
For      the three months ended March 31:
 

 

 

General      & Administrative expenses
$      35,831
$      27,000
$      8,831
 

9

Generaland administrative expenses were $35,831 for the three months ended March 31,2004 versus $27,000 for the three months ended March 31, 2003, which resulted inan increase of $8,831. The increase in general and administrative expenses wasprimarily due to the increase in the Company adding additional operational andadministrative personnel, legal and other professional assistance with thechange in our business plan from a travel company to the completed acquisitionof our first Bed & Biscuit Inn facility in Flagler Beach, Florida.

 
**NetIncome (Loss)

 ****Increase/(decrease)**      2004          2003          $    
For      the three months ended March 31:
 

 

 

Net      Income (loss)
$      (6,257)
$      (27,000)
$      (20,743)
 

Thenet loss for the three months ended March 31, 2004 was $6,257, versus a net lossof $27,000 for the three months ended March 31, 2003, a change in net loss of$20,743. The substantial decrease in the net loss was primarily due to thesubstantial increase in sales attributed with the change in our business planfrom a travel company to the completed acquisition of our first Bed &Biscuit Inn facility in Flagler Beach, Florida.
** 

Off-BalanceSheet Arrangements**
 

Wedo not have any off-balance sheet arrangements that have or are reasonablylikely to have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that is material to investors.

 
**Liquidityand Capital Resources**
 

Thefollowing table summarizes total assets, accumulated deficit and stockholders'equity for the three months ended March 31, 2004.

 

 

March      31, 2004
 

 

Total      Assets
$501,348
 

 

Accumulated      Deficit
$(131,303)
 

 

Stockholders'      Equity (Deficit)
$96,197
 

Acritical component of our operating plan impacting our continued existence isthe ability to obtain additional capital through additional equity and/or debtfinancing. Cash increased primarily due to the receipt of funds from a SB-2offering that were used to help offset our near term cash requirements. Sinceinception, we have financed our cash flow requirements through issuances ofcommon stock. As we expand our activities, we may continue to experience netnegative cash flows from operations, pending receipt of sales revenues.

10

Additionally,we anticipate obtaining additional financing to fund operations through commonstock offerings and bank borrowings, to the extent available, or to obtainadditional financing to the extent necessary to augment our working capital. Inthe event we cannot obtain the necessary capital to pursue our strategic plan,we may have to cease or significantly curtail our operations. This wouldmaterially impact our ability to continue operations.

 

Webelieve that existing capital and anticipated funds from operations will not besufficient to sustain operations and planned expansion over the next twelvemonths. We anticipate substantial increases in our cash requirements; which willrequire additional capital generated from either the sale of common stock, thesale of preferred stock, or debt financing. Consequently, we will be required toseek additional capital in the future to fund growth and expansion throughadditional equity or debt financing or credit facilities. No assurance can bemade that such financing would be available, and if available it may take eitherthe form of debt or equity. In either case, the financing could have a negativeimpact on our financial condition and our Stockholders. We currently have noagreements which would provide for either loans to us, or the sale of oursecurities.

 

Theamount of cash required to operate our business is significantly dependent uponour success in completing the Pets United transaction, in addition to other petfacilities.

 

Weanticipate that we will incur operating losses in the next twelve months. Ourlack of operating history makes predictions of future operating resultsdifficult to ascertain. Our prospects must be considered in light of the risks,expenses and difficulties frequently encountered by companies in their earlystage of development, particularly companies in new and rapidly evolvingmarkets. Such risks for us include, but are not limited to, an evolving andunpredictable business model and the management of growth. To address theserisks, we must, among other things, obtain a customer base, implement andsuccessfully execute our business and marketing strategy, respond to competitivedevelopments, and attract, retain and motivate qualified personnel. There can beno assurance that we will be successful in addressing such risks, and thefailure to do so can have a material adverse effect on our business prospects,financial condition and results of operations.
*** *
RiskFactors

 **
Muchof the information included in this quarterly report includes or is based uponestimates, projections or other "forward-looking statements". Suchforward-looking statements include any projections or estimates made by us andour management in connection with our business operations. While theseforward-looking statements, and any assumptions upon which they are based, aremade in good faith and reflect our current judgment regarding the direction ofour business, actual results will almost always vary, sometimes materially, fromany estimates, predictions, projections, assumptions or other future performancesuggested herein.

 

Suchestimates, projections or other "forward-looking statements" involvevarious risks and uncertainties as outlined below. We caution the reader thatimportant factors in some cases have affected and, in the future, couldmaterially affect actual results and cause actual results to differ materiallyfrom the results expressed in any such estimates, projections or other"forward-looking statements".

 

11

Ourcommon shares are considered speculative. Prospective investors should considercarefully the risk factors set out below.

 
***Weare uncertain we will be able to obtain additional capital necessary to continueour business.***
 

Wehave incurred an accumulated deficit for the year ended December 31, 2003 of$(125,046), and for the period ended March 31, 2004 of $(131,303). As a resultof these losses and negative cash flows from operations, our ability to continueoperations will be dependent upon the availability of capital from outsidesources unless and until we achieve profitability.

 

Wewill depend almost exclusively on outside capital to pay for the deficit in ourworking capital. Such outside capital may include the sale of additional stock,loans from our officers and directors, and/or commercial borrowing. There can beno assurance that capital will continue to be available if necessary to meetthese continuing operational costs or, if the capital is available, it will beon terms acceptable to our company. The issuances of additional equitysecurities by our company could result in a significant dilution in the equityinterests of our current stockholders. Obtaining commercial loans, assumingthose loans would be available, will increase our company's liabilities andfuture cash commitments. If we are unable to obtain financing in the amounts andon terms deemed acceptable, our business and future success may be adverselyaffected.

 

Asa result of our deficiency in working capital at March 31, 2004 and otherfactors, our auditors have included a paragraph in their report regardingsubstantial doubt about our ability to continue as a going concern. Our plans inthis regard are to seek additional funding through this offering and futureequity private placements or debt facilities.

 
***Sinceour shares are thinly traded, and trading on the OTC Bulletin Board may besporadic because it is not an exchange, stockholders may have difficultyreselling their shares..

 

Ourcommon shares are currently listed for public trading on the Over-the-CounterBulletin Board. The trading price of our common shares has been subject to widefluctuations. Trading prices of our common shares may fluctuate in response to anumber of factors, many of which will be beyond our control. The stock markethas generally experienced extreme price and volume fluctuations that have oftenbeen unrelated or disproportionate to the operating performance of companieswith limited business operations. There can be no assurance that trading pricesand price earnings ratios previously experienced by our common shares will bematched or maintained. These broad market and industry factors may adverselyaffect the market price of our common shares, regardless of our operatingperformance.

 

Inthe past, following periods of volatility in the market price of a company'ssecurities, securities class-action litigation has often been instituted. Suchlitigation, if instituted, could result in substantial costs for us and adiversion of management's attention and resources.
* 
**Becauseour common stock is deemed a low-priced "Penny" stock, an investmentin our common stock should be considered high risk and subject to marketabilityrestrictions.***
 

Sinceour common stock is a penny stock, as defined in Rule 3a51-1 under theSecurities Exchange Act, it will be more difficult for investors to liquidatetheir investment. Until the trading price of the common stock rises above $5.00per share, if ever, trading in the common stock is subject to the penny stockrules of the Securities Exchange Act specified in rules 15g-1 through 15g-10.Those rules require broker-dealers, before effecting transactions in any pennystock, to:

 

12
-  Deliver to the customer, and obtain a written receipt for, a    disclosure document;Disclose certain price information about the stock;Disclose the amount of compensation received by the broker-dealer or    any associated person of the broker-dealer;Send monthly statements to customers with market and price    information about the penny stock; andIn some circumstances, approve the purchaser's account under certain    standards and deliver written statements to the customer with information    specified in the rules.
Consequently,the penny stock rules may restrict the ability or willingness of broker-dealersto sell the common stock and may affect the ability of holders to sell theircommon stock in the secondary market and the price at which such holders cansell any such securities. These additional procedures could also limit ourability to raise additional capital in the future.
** 

GoingConcern

 **
Thefinancial statements included in this filing have been prepared in conformitywith generally accepted accounting principles that contemplate the continuanceof the Company as a going concern. The Company's cash position may be inadequateto pay all of the costs associated with testing, production and marketing ofproducts. Management intends to use borrowings and security sales to mitigatethe effects of its cash position, however no assurance can be given that debt orequity financing, if and when required will be available. The financialstatements do not include any adjustments relating to the recoverability andclassification of recorded assets and classification of liabilities that mightbe necessary should the Company be unable to continue existence.
** 

Item3. Controls and Procedures

 **
We maintainsdisclosure controls and procedures designed to ensure that information requiredto be disclosed in reports filed under the Securities Exchange Act of 1934, asamended, is recorded, processed, summarized and reported within the specifiedtime periods. As of the end of the period covered by this report, RosemaryWilliams, our Chief Executive and Principle Accounting Officer, evaluated theeffectiveness of our disclosure controls and procedures. Based on theevaluation, which disclosed no significant deficiencies or material weaknesses,Ms. Williams concluded that our disclosure controls and procedures areeffective. There were no changes in our internal control over financialreporting that occurred during our most recent fiscal quarter that havematerially affected, or are reasonably likely to materially affect, internalcontrol over financial reporting.

 

13
**PARTII--OTHER INFORMATION

 

Item 1.Legal Proceedings**
 

None
** 

Item 2.Changes in Securities**
 

None

 
**Item 3.Defaults by the Company upon its Senior Securities**
 

None
** 

Item 4.Submission of Matters to a Vote of Security Holders**
 

None
** 

Item 5.Other Information**
 

OnJanuary 21, 2004, Shaun P. Herness resigned from our Board of Directors, andSecretary/Treasurer leaving Rosemary Williams as the sole Officer and Directorof the Company.

 
**Item 6.Exhibits and Reports of Form 8-K**
 

(a)Exhibits
 

31*
Certification      of Rosemary Williams pursuant to Section 302 of the Sarbanes-Oxley Act
32**
Certification      of Rosemary Williams pursuant to Section 906 of the Sarbanes-Oxley Act
*Filed herewith

**Filed in Form 10-QSB on May 25, 2004

 

(b)Form 8-K
 

NONE

14

SIGNATURES

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

DOGSINTERNATIONAL

(Registrant)

 

By:/s/RosemaryWilliams                     
     RosemaryWilliams

    ChiefFinancial Officer

   (Onbehalf of the registrant and as

   principalaccounting officer)

 

 

Date:January 27, 2004*********************** |
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