U.S. Securities and Exchange Commission

Washington, D.C. 20549

 

Form 10-QSB

[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES    EXCHANGE ACT OF 1934

For the quarter ended June 30, 2006

 

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES    EXCHANGE ACT OF 1934

For the transition period from to 

Commission File No. 1-32032

 

WANNIGAN VENTURES INC

(Name of Small Business Issuer in its Charter**)**
NEVADA 83-0375241
--------------- --------------------

(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)

incorporation or organization)

1172 Manitou Dr., PO Box 363

Fox Island, WA 98333

-----------------------------

(Address of Principle Executive Offices)

Issuer's Telephone Number: (253) 549-4336

Check whether the Issuer (1) filed all reports required to be filed by    section 13 or 15(d) of the Exchange Act during the past 12 months (or for    such shorter period that the Company was required to file such reports). And    (2) has been subject to such filing requirements for the past 90 days.

(1) Yes X No (2) Yes X No

---- ---- ---- ----

Indicate by check mark whether the registrant is a shell company (as    defined in Rule 12b-2 of the Exchange Act) Yes [X] No [ ]

 

(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 practicable date:

June 30, 2006: Common Stock - 49,000

DOCUMENTS INCORPORATED BY REFERENCE

A description of any "Documents Incorporated by Reference" is contained    in Item 6 of this report.

Transitional Small Business Issuer Format Yes No X

----- ----- 

 

 

WANNIGAN VENTURES INC 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION PAGE

Item 1. Financial Statements (unaudited): 4

Balance Sheet as of June 30, 2006 5

Statements of Operations for the six months ended

June 30, 2006 and 2005, and from Inception through

June 30, 2006 6

 

Statements of Cash Flows for the six months ended

June 30, 2006 and 2005, and from Inception through

June 30, 2006 7

 

Notes to Financial Statements (unaudited) 8 

Item 2. Management's Plan of Operations 9-10

Item 3. Controls and Procedures 10

PART II. OTHER INFORMATION

Item 1. Legal Proceedings 10

Item 2. Changes in Securities 10

Item 3. Defaults upon Senior Securities 10

Item 4. Submission of Matters to a Vote of Securities Holders 10

Item 5. Other Information 11

Item 6. Exhibits and Reports on Form 8 - K 11

Signatures 11

Certifications 12

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The Financial Statements of the Company required to be filed with this    10-QSB Quarterly Report were prepared by management and commence on the    following page, together with related Notes. In the opinion of management,    these Financial Statements fairly present the financial condition of the    Company, but should be read in conjunction with the Financial Statements of    the Company for the period ended December 31, 2005 previously filed in a    Form 10-KSB with the Securities and Exchange Commission.
****
 

 

 

 

 

 

 

 

 

 
***WANNIGAN VENTURES, INC.*
(A Development Stage Company)
* ***
Unaudited Financial Statements
** **
For the three and six months Ended June 30, 2006

and

the Period of August 15, 2003 (inception) through June 30,2006
** 

 

 ****Wannigan Ventures,    Inc.

(A Development    Stage Company)

Notes to Financial    Statements

For the Six Months    Ended June 30, 2006**
 
**1. Organization and Summary of Significant Accounting Policies**
This summary of significant accounting policies of WanniganVentures, Inc. (a development stage company) (the Company) is presented toassist in understanding the Company's financial statements. These accountingpolicies conform to accounting principles generally accepted in the UnitedStates of America and have been consistently applied in the preparation of theaccompanying financial statements. The Company has not realized revenues fromits planned principal business purpose and, accordingly, is considered to be inits development stage.

 
**Business activity**
Wannigan Ventures, Inc. (the Company) is a Nevada corporationlocated in Las Vegas, Nevada. The Company was organized on August 15, 2003 tofunction as a holding company for making business acquisitions in variousindustries and providing business development services for those entities. TheCompany has elected a fiscal year end of December 31st.
**Income taxes**
The Company recognizes the tax effects of transactions in theyear in which such transactions enter into the determination of net income,regardless of when reported for tax purposes. Deferred taxes are provided in thefinancial statements under Financial Accounting Standards Board Statement No.109 to give effect to the resulting temporary differences which may arise fromdifferences in the bases of fixed assets, depreciation methods, allowances, andstart-up costs based on the income taxes expected to be payable in future years.Minimal development stage deferred tax assets arising as a result of netoperating loss carryforwards have been offset completely by a valuationallowance due to the uncertainty of their utilization in future periods. Taxoperating loss carryforwards generated during the period from August 15, 2003(date of inception) through June 30, 2006 of approximately $49,868 will begin toexpire in 2023. Accordingly, deferred tax assets of approximately $17,454 wereoffset by a full valuation allowance, which increased by $4,886 and $4,925during the six months ended June 30, 2006 and 2005, respectively.
* 
**Estimates***
Preparation of financial statements in accordance with accounting principlesgenerally accepted in the United States of America requires the use ofestimates. Actual amounts may differ from those reported.
**Cash and Cash Equivalents**
For the purpose of the statements of cash flows, the Companyconsiders all highly liquid debt instruments purchased with a maturity of threemonths or less to be cash equivalents. The Company had $13 and $97 in cash orcash equivalents at June 30, 2006 and December 31, 2005, respectively.
**Earnings Per Share**
The Company adopted Statement of Financial AccountingStandard No. 128 (SFAS No. 128), *"Earnings per Share"*, which is effectivefor annual periods ending after December 15, 1997. Earnings per share (EPS) arecomputed based on the weighted average number of shares actually outstanding.The Company's convertible debt (Note 2) is a potentially dilutive security, butdoes not impact the computation of fully diluted EPS because its effect would beantidilutive. Accordingly, basic earnings per share and fully diluted earningsper share are the same.
**Wannigan Ventures,Inc.

(A Development StageCompany)

Notes to FinancialStatements

For the Six MonthsEnded June 30, 2006**** 

1. Organization and Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements**
In November 2004, the FASB issued SFAS No. 151, "InventoryCosts-an amendment of ARB No. 43, Chapter 4." This statement requires thatabnormal amounts of idle facility expense, freight, handling costs, and wastedmaterial (spoilage) be recognized as current-period charges regardless ofwhether they meet the criterion of "so abnormal." SFAS No. 150 was effective forfinancial statements entered into or modified after May 31, 2003 and otherwisewas effective and adopted by the Company in 2003.

In December 2004, the FASB issued SFAS No. 152, "Accountingfor Real Estate Time-Sharing Transactions-an amendment of FASB Statement No. 66and 67." This statement amends FASB Statement No. 66 and 67 to state that theguidance for (a) incidental operations and (b) costs incurred to sell realestate projects does not apply to real estate time-sharing transactions. Thisstatement is effective for financial statements for fiscal years beginning afterJune 15, 2005.

In December 2004, the FASB issued SFAS No. 153, "Exchanges ofNonmonetary Assets-an amendment of APB Opinion No. 29." This statement amendsOpinion 29 to eliminate the exception for nonmonetary exchanges of similarproductive assets and replaces it with a general exception for exchanges ofnonmonetary assets that do not have commercial substance. This statement iseffective as of the beginning of the first interim or annual reporting periodthat begins after December 15, 2005.

In December 2004, the FASB issued a revision of SFAS No. 123,"Share-Based Payment." This statement establishes standards for the accountingfor transactions in which an entity exchanges its equity instruments for goodsor services. This statement is effective as of the beginning of the firstinterim or annual reporting period that begins after December 15, 2005.

In May 2005, the FASB issued SFAS No. 154, "AccountingChanges and Error Corrections, a replacement of APB Opinion No. 20 and FASBStatement No. 3."This statement changes the requirements for the accounting forand reporting of a change in accounting principle. This statement requiresretrospective application to prior periods' financial statements of changes inaccounting principle, when practicable.

In February 2006, the FASB issued SFAS No. 155 "Accountingfor Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133and 140." This statement improves financial reporting by eliminating theexemption from applying Statement 133 to interests in securitized financialassets so that similar instruments are accounted for similarly regardless of theform of the instruments. This statement is effective for all financialinstruments acquired or issued after the beginning of an entity's first fiscalyear that begins after September 15, 2006.
**Wannigan Ventures,Inc.

(A Development StageCompany)

Notes to FinancialStatements

For the Six MonthsEnded June 30, 2006

 

1. Organization and Summary of Significant Accounting Policies (continued)**
In March 2006, the FASB issued SFAS No. 156 "Accounting forServicing of Financial Assets-an amendment of FASB Statement No. 140." Thisstatement requires that all separately recognized servicing assets and servicingliabilities be initially measured at fair value, if practicable. STAS No. 156states that an entity should adopt this statement as of the beginning of itsfirst fiscal year that begins after September 15, 2006.

None of the above new pronouncements has current applicationto the Company, but may be applicable to the Company's future financialreporting.
** **
Reclassifications

Certain amounts in the accompanying financial statements havebeen reclassified to conform to the current quarter presentation.
**Related Party Transactions**
 
*Convertible Note Payable*
On November 17, 2003, the Company entered into a $500non-interest bearing note payable with its only shareholder, repayment of whichwas originally due January 1, 2005 but has been extended by the shareholder toJanuary 1, 2007. The shareholder retains the option to convert this loan to500,000 shares at $.001 per share, the fair market value of which is negligibleat December 31, 2005. Because of the negligible benefit of converting the debtto shares at the conversion price of $.001, (which management has determinedwill approximate the actual current fair value of the company's shares) nobeneficial conversion feature has been recorded. No principal payments have beenmade on the note, and interest has not been imputed due to the insignificantimpact on the financial statements. The funds were used to pay audit fees andmaintain a Company bank account.

 

Notes Payable

At June 30, 2006, the Company has entered into notes payablewith its shareholder totaling $46,254. Funds totaling $10,254 were used to payfor audit and accounting fees and other general and administrative expenses,while the remaining $36,000 is an accrual for consulting expense incurred withthe shareholder as explained below. The notes bear no interest and will be paidback once the Company establishes profitable operations.

 

Consulting Agreement

The Company entered into a consulting agreement with itsshareholder for the period of one year commencing October 1, 2004. At the end ofthis term, the agreement will be automatically renewed for another year. Theshareholder will act as the office manager and management consultant for theCompany, and will be compensated $2,000 per month, plus reasonable out-of-pocketexpenses. At June 30, 2006, the Company had incurred six months of consultingexpense totaling $12,000. The fees have not been paid to the shareholder and areincluded in the notes payable balance of $46,254 as explained in the previousparagraph.
** 

Wannigan Ventures,Inc.

(A Development StageCompany)

Notes to FinancialStatements

For the Six MonthsEnded June 30, 2006

3. Stockholders' Deficit**
Upon inception, the Company issued 49,000 shares of its unrestricted commonstock at $.01 per share for total cash of $490. The proceeds were used to payfor incorporation and filing fees.
**Going Concern**
The accompanying financial statements have been prepared inconformity with accounting principles generally accepted in the United States ofAmerica, which contemplate continuation of the Company as a going concern.However, the Company has incurred losses since its inception and has not yetbeen successful in establishing profitable operations. These factors raisesubstantial doubt about the ability of the Company to continue as a goingconcern. Unanticipated costs and expenses or the inability to generate revenuescould require additional financing, which would be sought through bankborrowings, equity or debt financing, or asset sales. To the extent financing isnot available, the Company may not be able to, or may be delayed in, developingits services and meeting its obligations. The Company will continue to evaluateits projected expenditures relative to its available cash and to evaluateadditional means of financing in order to satisfy its working capital and othercash requirements. The accompanying financial statements do not reflect anyadjustments that might result from the outcome of these uncertainties.

Item 2. Management's Discussion and Analysis or Plan of Operation.

Wannigan's plan is to seek acquisition opportunities, investigate, and if    such investigation warrants, acquire an interest in one or more business    opportunities presented to it by persons or firms desiring the perceived    advantages of a publicly held corporation. At this time, Wannigan has no    plan, proposal, agreement, understanding, or arrangement to acquire or merge    with any specific business or company, and Wannigan has not identified any    specific business or company for investigation and evaluation. No member of    Management or any promoter of Wannigan, or an affiliate of either, has had    any material discussions with any other company with respect to any    acquisition of that company. Wannigan will not restrict its search to any    specific business, industry, or geographical location, and may participate    in business ventures of virtually any kind or nature. Discussion of the    proposed business under this caption and throughout this Quarterly Statement    is purposefully general and is not meant to restrict Wannigan's virtually    unlimited discretion to search for and enter into a business combination.

Wannigan may seek a combination with a firm which only recently commenced    operations, or a developing company in need of additional funds to expand    into new products or markets or seeking to develop a new product or service,    or an established business which may be experiencing financial or operating    difficulties and needs additional capital which is perceived to be easier to    raise by a public company. In some instances, a business opportunity may    involve acquiring or merging with a corporation which does not need    substantial additional cash but which desires to establish a public trading    market for its common stock. Wannigan may purchase assets and establish    wholly owned subsidiaries in various businesses or purchase existing    businesses as subsidiaries.

Selecting a business opportunity will be complex and extremely risky.    Because of general economic conditions, rapid technological advances being    made in some industries, and shortages of available capital, management    believes that there are numerous firms seeking the benefits of a    publicly-traded corporation. Such perceived benefits of a publicly traded    corporation may include facilitating or improving the terms on which    additional equity financing may be sought, providing liquidity for the    principals of a business, creating a means for providing incentive stock    options or similar benefits to key employees, providing liquidity (subject    to restrictions of applicable statutes) for all shareholders, and other    items. Potentially available business opportunities may occur in many    different industries and at various stages of development, all of which will    make the task of comparative investigation and analysis of such business    opportunities extremely difficult and complex.

Management believes that Wannigan may be able to benefit from the use of    "leverage" to acquire a target company. Leveraging a transaction involves    acquiring a business while incurring significant indebtedness for a large    percentage of the purchase price of that business. Through leveraged    transactions, Wannigan would be required to use less of its available funds    to acquire a target company and, therefore, could commit those funds to the    operations of the business, to combinations with other target companies, or    to other activities. The borrowing involved in a leveraged transaction will    ordinarily be secured by the assets of the acquired business. If that    business is not able to generate sufficient revenues to make payments on the    debt incurred by Wannigan to acquire that business, the lender would be able    to exercise the remedies provided by law or by contract. These leveraging    techniques, while reducing the amount of funds that Wannigan must commit to    acquire a business may correspondingly increase the risk of loss to Wannigan.    No assurance can be given as to the terms or availability of financing for    any acquisition by Wannigan. During periods when interest rates are    relatively high, the benefits of leveraging are not as great as during    periods of lower interest rates, because the investment in the business held    on a leveraged basis will only be profitable if it generates sufficient    revenues to cover the related debt and other costs of the financing. Lenders    from which Wannigan may obtain funds for purposes of a leveraged buy-out may    impose restrictions on the future borrowing, distribution, and operating    policies of Wannigan. It is not possible at this time to predict the    restrictions, if any, which lenders may impose, or the impact thereof on    Wannigan.

Wannigan has insufficient capital with which to provide the owners of    businesses significant cash or other assets. Management believes Wannigan    will offer owners of businesses the opportunity to acquire a controlling    ownership interest in a public company at substantially less cost than is    required to conduct an initial public offering. The owners of the businesses    will, however, incur significant post-merger or acquisition registration    costs in the event they wish to register a portion of their shares for    subsequent sale. Wannigan will also incur significant legal and accounting    costs with the acquisition of a business opportunity, including the costs of    preparing post-effective amendments, Forms 8-K, agreements, and related    reports and documents. Nevertheless, the officers and directors of Wannigan    have not conducted market research and are not aware of statistical data    that would support the perceived benefits of a merger or acquisition    transaction for the owners of a business. Wannigan does not intend to make    any loans to any prospective merger or acquisition candidates or to    unaffiliated third parties.

Wannigan will seek a potential business opportunity from all known    sources, but will rely principally on personal contacts of its officers and    directors as well as indirect associations between them and other businesses    and professionals. It is not presently anticipated that Wannigan will engage    professional firms specializing in business acquisitions or reorganizations.

Management, while not especially experienced in matters relating to the    new business of Wannigan, will rely upon their own efforts and, to a much    lesser extent, the efforts of Wannigan's shareholder, in accomplishing the    business purposes of Wannigan. It is not anticipated that any outside    consultants or advisors, other than Wannigan's legal counsel and    accountants, will be utilized by Wannigan to effectuate its business    purposes described herein. However, if Wannigan does retain such an outside    consultant or advisor, any cash fee earned by such party will need to be    paid by the prospective merger/acquisition candidate, as Wannigan has no    cash assets with which to pay such obligation. There have been no    discussions, understandings, contracts or agreements with any outside    consultants and none are anticipated in the future. In the past, Wannigan's    management has never used outside consultants or advisors in connection with    a merger or acquisition.

As is customary in the industry, Wannigan may pay a finder's fee for    locating an acquisition prospect. If any such fee is paid, it will be    approved by Wannigan's Board of Directors and will be in accordance with the    industry standards. Such fees are customarily between 1% and 5% of the size    of the transaction, based upon a sliding scale of the amount involved. Such    fees are typically in the range of 5% on a $1,000,000 transaction ratably    down to 1% in a $4,000,000 transaction. Management has adopted a policy that    such a finder's fee or real estate brokerage fee could, in certain    circumstances, be paid to any employee, officer, director or 5% shareholder    of Wannigan, if such person plays a material role in bringing a transaction    to Wannigan.

Wannigan will not have sufficient funds to undertake any significant    development, marketing, and manufacturing of any products that may be    acquired. Accordingly, if it acquires the rights to a product, rather than    entering into a merger or acquisition, it most likely would need to seek    debt or equity financing or obtain funding from third parties, in exchange    for which Wannigan would probably be required to give up a substantial    portion of its interest in any acquired product. There is no assurance that    Wannigan will be able either to obtain additional financing or to interest    third parties in providing funding for the further development, marketing    and manufacturing of any products acquired.

There has been no business activity during the three month period ending    June 30, 2006 nor from August 15, 2003 (inception) through June 30, 2006    other than incidental expenses which have been accrued. 

Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report,    Wannigan carried out an evaluation of the effectiveness of the Company's    disclosure controls and procedures (as defined by Rule 13-15(e) under the    Securities Exchange Act of 1934) under the supervision and with the    participation of Wannigan's Chief Executive Officer and Chief Financial    Officer. Based on and as of the date of such evaluation, the aforementioned    officers have concluded that Wannigan's disclosure controls and procedures    were effective.

Wannigan also maintains a system of internal accounting    controls that is designed to provide assurance that assets are safeguarded    and that transactions are executed in accordance with management's    authorization and properly recorded. This system is continually reviewed and    is augmented by written policies and procedures, the careful selection and    training of qualified personnel and an internal audit program to monitor its    effectiveness.

Changes in Internal Controls

There were no significant changes in Wannigan's internal controls or in    other factors that could significantly affect these controls as of the end    of the period covered by the report and up to the filing date of this    Quarterly Report on Form 10-QSB. There were no significant deficiencies or    material weaknesses, and therefore there were no corrective actions taken.    It should be noted that any system of controls, however well designed and    operated, can provide only reasonable, and not absolute, assurance that the    objectives of the system are met. In addition, the design of any control    system is based in part upon certain assumptions about the likelihood of    future events. Because of these and other inherent limitations of control    systems, there can be no assurance that any design will succeed in achieving    its stated goals under all potential future conditions, regardless of how    remote.

PART II - OTHER INFORMATION 

Item 1. Legal Proceedings.

Wannigan is not a party to any material pending legal proceedings and, to    the best of its knowledge, no such action by or against Wannigan has been    threatened. Wannigan Capital Corp., Wannigan's sole shareholder is a party    to a S.E.C. civil action and there are material pending legal proceedings    and, to the best of its knowledge, no additional action by or against    Wannigan Capital Corp. has been threatened by other parties.

Item.2. Changes in 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. 

There is currently 1 shareholder of Wannigan. Wannigan Capital Corp. was    issued 49,000 shares for providing the capital to form this corporation.

Wannigan's common stock is not traded on any exchange or OTC market.    Management has not undertaken any discussions, preliminary or otherwise,    with any prospective market maker concerning the participation of such    market maker in the after-market for Wannigan's securities and management    does not intend to initiate any such discussions until such time as Wannigan    has consummated a merger or acquisition. There is no assurance that a    trading market will ever develop or, if such a market does develop, that it    will continue. After a merger or acquisition has been completed, Wannigan's    officer and director will most likely be the person to contact prospective    market makers. It is also possible that persons associated with the entity    that merges with or is acquired by Wannigan will contact prospective market    makers. Wannigan does not intend to use consultants to contact market    makers.

 

Item 6. Exhibits and Reports on Form 8-K. 

(a) Exhibits

The following exhibits are filed herewith:

31.1 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the    Securities Exchange Act of 1934, as amended. 

32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

Reports on Form 8-K.

None

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the    Registrant has duly caused this Report to be signed on its behalf by the    undersigned thereunto duly authorized. 
**WANNIGAN VENTURES INC.**
Date: August 14, 2006                                                               By:   ***/s/ Kevin Murphy               ***

                                                                                                 President, CEO, CFO, and Director