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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 EXCHANGEACT OF 1934

For the quarter ended March 31, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGEACT OF 1934

For the transition period from to 

Commission File No. 1-32032

 

WANNIGAN VENTURES  INC
(Name of SmallBusiness Issuer in its Charter**)**

 

NEVADA                    83-0375241
---------------                    --------------------

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

incorporation ororganization)                                                   

 

1109 7thCourt

Fox Island, WA 98333

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

(Address of PrincipleExecutive Offices)

 

Issuer's TelephoneNumber: (253) 549-4336

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

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

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(APPLICABLE ONLY TO CORPORATE ISSUERS)

State the number of shares outstanding of each Issuer'sclasses of common equity, as of the latest practicable date:

March 31, 2005: Common Stock - 49,000

DOCUMENTS INCORPORATED BY REFERENCE

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

Transitional Small Business Issuer Format            Yes             No X

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WANNIGAN VENTURES INC 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION                                                                                                            PAGE

Item 1. Financial Statements: 

Balance sheet as of March 31, 2005                                                                                           4
Statements ofoperations for the three months ended

March 31, 2005and 2004, and from August 15, 2003 

(date ofinception) through March 31, 2005******                                                                                                           **5

 

Statements ofcash flows for the three months ended

March 31, 2005****and 2004, and from August 15, 2003 

(date ofinception) through March 31, 2005**                                                                                                            **6

 

Notes to Financial Statements                                                                                                                              7-8

Item 2. Management's Planof Operations                                                                                                        9-10

Item 3. Controls and Procedures                                                                                                                           10

PART II. OTHER INFORMATION

Item 1. Legal Proceedings                                                                                                                                      10

Item 2. Changesin Securities                                                                                                                                 11

Item 3. Defaults uponSenior Securities                                                                                                               11

Item4. Submission of Matters to a Vote of Securities Holders                                                                        11

Item 5. Other Information                                                                                                                                        11

Item 6. Exhibits andReports on Form 8 - K                                                                                                         11

Signatures                                                                                                                                                                 11

Certifications                                                                                                                                                       Attached

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The Financial Statements of the Company required to be filed with this 10-QSBQuarterly Report were prepared by management and commence on the following page,together with related Notes. In the opinion of management, these FinancialStatements fairly present the financial condition of the Company, but should beread in conjunction with the Financial Statements of the Company for the periodended December 31, 2004 previously filed in a Form 10-KSB with the Securitiesand Exchange Commission.
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Wannigan Ventures, Inc.

(A Development StageCompany)

Condensed Notes toUnaudited Interim Financial Statements

Note 1 Condensed Interim Financial Statements

The accompanying unaudited condensed financial statementsinclude the accounts of Wannigan Ventures, Inc. (a development stage company)(the Company). These statements are condensed and, therefore, do not include alldisclosures normally required by accounting principles generally accepted in theUnited States of America. These statements should be read in conjunction withthe Company's most recent annual financial statements for the period frominception, August 15, 2003, through December 31, 2004, included in a previouslyfiled Form 10-KSB filed with the U.S. Securities and Exchange Commission. In theopinion of management, all adjustments necessary for a fair presentation havebeen included in the accompanying condensed financial statements and consist ofonly normal recurring adjustments. The results of operations presented in theaccompanying condensed financial statements for the period ended March 31, 2005are not necessarily indicative of the operating results that may be expected forthe full year ending December 31, 2005.

Note 2 Organization and Summary of Significant Accounting Policies
****
This summary of the Company's significant accounting policiesis presented to assist in understanding the Company's financial statements.These accounting policies conform to accounting principles generally accepted inthe United States of America and have been consistently applied in thepreparation of the accompanying financial statements. The Company is consideredto be in its development stage and has presented its financial statements inaccordance with SFAS No. 7.

Business activity

Wannigan Ventures, Inc. is a Nevada corporation located inWashington State. The Company was organized on August 15, 2003 to function as aholding company for making business acquisitions in various industries andproviding business development services for those entities. The Company iswholly owned by a public company (the Parent).  Since the Companyis recognized by the Securities and Exchange Commission as a separateregistrant, it is required to report as a stand-alone entity.  TheCompany will also be reported as a subsidiary in the Parent's consolidatedfinancial statements.

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 SFAS No. 109 to give effect to the resultingtemporary differences which may arise from differences in the bases of fixedassets, depreciation methods, allowances, and start-up costs based on the incometaxes expected to be payable in future years. Minimal development stage deferredtax assets arising as a result of net operating loss carry forwards have beenoffset completely by a valuation allowance due to the uncertainty of theirutilization in future periods. Operating loss carry forwards generated duringthe period from August 15, 2003 (date of inception) through March 31, 2005 ofapproximately $15,544 will begin to expire in 2022. Accordingly, deferred taxassets of approximately $5,285 were offset by a valuation allowance, whichincreased by $2,437 during 2005. 

Estimates

Preparation of financial statements in accordance withaccounting principles generally accepted in the United States of Americarequires the use of estimates. 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 $224 in cash or cashequivalents at March 31, 2005.

Earnings Per Share

The computation of net income (loss) per share of commonstock is based on the weighted average number of shares outstanding during theperiods presented.

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Reclassification

Certain items have been reclassified from prior periods toconform to current quarter presentation. The reclassifications do not materiallyaffect the presentation of the Company's balances at March 31, 2005 or theresults of the Company's operations or cashflows for the quarter then ended.

Note 3 Related Party Transactions

Accounts Payable

The Company entered into a consulting agreement with its onlyshareholder (the Shareholder) for the period of one year commencing October 1,2004. At the end of this term, the agreement will be automatically renewed foranother year. The Shareholder will act as the office manager and managementconsultant for the Company, and will be compensated $2,000 per month, plusreasonable out-of-pocket expenses. At March 31, 2005, the Company had incurredsix months of consulting expense totaling $12,000, $6,000 of which was incurredduring the current quarter. The entire balance of $12,000 was payable to theShareholder at March 31, 2005.

Notes Payable

On November 17, 2003, the Company entered into a $500non-interest bearing note payable with the Shareholder, repayment of which isdue January 1, 2006. The Shareholder retains the option to convert this loan to500,000 shares at $.001 per share, the fair market value of which is negligibleat March 31, 2005. The remaining $1,978 consists of non-interest bearingadvances from the Shareholder. The advances are due on demand and do not have aconversion option. Interest on the loans has not been imputed due to theinsignificant impact on the financial statements. The funds were used to payaudit, accounting, and other operating expenses.

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Item 2. Management's Planof Operations

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

Wannigan may seek a combination with a firm which only recently commencedoperations, or a developing company in need of additional funds to expand intonew products or markets or seeking to develop a new product or service, or anestablished business which may be experiencing financial or operatingdifficulties and needs additional capital which is perceived to be easier toraise by a public company. In some instances, a business opportunity may involveacquiring or merging with a corporation which does not need substantialadditional cash but which desires to establish a public trading market for itscommon stock. Wannigan may purchase assets and establish wholly ownedsubsidiaries in various businesses or purchase existing businesses assubsidiaries.

Selecting a business opportunity will be complex and extremely risky. Becauseof general economic conditions, rapid technological advances being made in someindustries, and shortages of available capital, management believes that thereare numerous firms seeking the benefits of a publicly-traded corporation. Suchperceived benefits of a publicly-traded corporation may include facilitating orimproving the terms on which additional equity financing may be sought,providing liquidity for the principals of a business, creating a means forproviding incentive stock options or similar benefits to key employees,providing liquidity (subject to restrictions of applicable statutes) for allshareholders, and other items. Potentially available business opportunities mayoccur in many different industries and at various stages of development, all ofwhich will make the task of comparative investigation and analysis of suchbusiness 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 involvesacquiring a business while incurring significant indebtedness for a largepercentage of the purchase price of that business. Through leveragedtransactions, Wannigan would be required to use less of its available funds toacquire a target company and, therefore, could commit those funds to theoperations of the business, to combinations with other target companies, or toother activities. The borrowing involved in a leveraged transaction willordinarily be secured by the assets of the acquired business. If that businessis not able to generate sufficient revenues to make payments on the debtincurred by Wannigan to acquire that business, the lender would be able toexercise the remedies provided by law or by contract. These leveragingtechniques, while reducing the amount of funds that Wannigan must commit toacquire a business may correspondingly increase the risk of loss to Wannigan. Noassurance can be given as to the terms or availability of financing for anyacquisition by Wannigan. During periods when interest rates are relatively high,the benefits of leveraging are not as great as during periods of lower interestrates, because the investment in the business held on a leveraged basis willonly be profitable if it generates sufficient revenues to cover the related debtand other costs of the financing. Lenders from which Wannigan may obtain fundsfor purposes of a leveraged buy-out may impose restrictions on the futureborrowing, distribution, and operating policies of Wannigan. It is not possibleat this time to predict the restrictions, if any, which lenders may impose, orthe impact thereof on Wannigan.

Wannigan has insufficient capital with which to provide the owners ofbusinesses significant cash or other assets. Management believes Wannigan willoffer owners of businesses the opportunity to acquire a controlling ownershipinterest in a public company at substantially less cost than is required toconduct an initial public offering. The owners of the businesses will, however,incur significant post-merger or acquisition registration costs in the eventthey wish to register a portion of their shares for subsequent sale. Wanniganwill also incur significant legal and accounting costs in connection with theacquisition of a business opportunity, including the costs of preparingpost-effective amendments, Forms 8-K, agreements, and related reports anddocuments. Nevertheless, the officers and directors of Wannigan have notconducted market research and are not aware of statistical data that wouldsupport the perceived benefits of a merger or acquisition transaction for theowners of a business. Wannigan does not intend to make any loans to anyprospective merger or acquisition candidates or to unaffiliated third parties.

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

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

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

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

Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company's chief executive officer and chief financial officer haveevaluated the effectiveness of the design and operation of the Company'sdisclosure controls and procedures (as defined in Exchange Act Rule 13a-14c) asof a date within 90 days of the filing date of this quarterly report. Based onthat evaluation, the chief executive officer and chief financial officer haveconcluded that the Company's disclosure controls and procedures are effective toensure that material information relating to the Company is made known to suchofficers by others within these entities, particularly during the period thisquarterly report was prepared, in order to allow timely decisions regardingrequired disclosure.

Changes in Internal Controls

There have not been any significant changes in the Company's internalcontrols or in other factors that could significantly affect these controlssubsequent to the date of their evaluation.

PART II - OTHER INFORMATION 

Item 1. Legal Proceedings.

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

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Item.2. Changesin Securities and Use of Proceeds.

During the first quarter of 2005, the Company issued no shares of commonstock. 

Item 3. Defaults UponSenior Securities.

None.

Item4. Submission of Matters to a Vote of Security Holders. 

None.

Item 5. Other Information. 

There is currently 1 shareholder of Wannigan. Wannigan Capital Corp. wasissued 49,000 shares in 2003 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, withany prospective market maker concerning the participation of such market makerin the after-market for Wannigan's securities and management does not intend toinitiate any such discussions until such time as Wannigan has consummated amerger or acquisition. There is no assurance that a trading market will everdevelop or, if such a market does develop, that it will continue. After a mergeror acquisition has been completed, Wannigan's officer and director will mostlikely be the person to contact prospective market makers. It is also possiblethat persons associated with the entity that merges with or is acquired byWannigan will contact prospective market makers. Wannigan does not intend to useconsultants to contact market makers.

 

Item 6. Exhibits andReports 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 theSecurities Exchange Act of 1934, as amended. 

32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 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, theRegistrant has duly caused this Report to be signed on its behalf by theundersigned thereunto duly authorized. 
**WANNIGAN VENTURES INC**
Date: 5/13/05                                                                                                                                                By: /s/ Kevin M. Murphy

President, CEO, CFO, and Director

 

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