SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
December 31, 2010
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
file number: 0-27511
(Exact Name Of Registrant
As Specified In Its Charter)
|(State of Incorporation)
Wall Street, 20th Floor, New York, NY
|(Address of Principal
Telephone Number, Including Area Code: (212) 400-7198
Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
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 ¨
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) or a smaller
reporting company .
||Accelerated filer ¨
On December 31,
2010, the Registrant had 524,200 shares of common stock outstanding.
PART I - FINANCIAL INFORMATION
1. FINANCIAL STATEMENTS Back to
Table of Contents
The Registrant's unaudited interim financial statements
are attached hereto. Unaudited
Interim Financial Statements
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION Back to Table of
Some of the statements contained in this quarterly
report of Peregrine Industries, Inc. (hereinafter the "Company", "We"
or the "Registrant") discuss future expectations, contain projections of our
plan of operation or financial condition or state other forward-looking information.
Forward-looking statements give our current expectations or forecasts of future events.
You can identify these statements by the fact that they do not relate strictly to
historical or current facts. They use of words such as "anticipate,"
"estimate," "expect," "project," "intend,"
"plan," "believe," and other words and terms of similar meaning in
connection with any discussion of future operating or financial performance. From time to
time, we also may provide forward-looking statements in other materials we release to the
Plan of Operation
We have no present operations or
revenues and our current activities are related to seeking new business opportunities,
including seeking an acquisition or merger with an operating company. The Registrant does
not intend to limit itself to a particular industry and has not established any particular
criteria upon which it shall consider and proceed with a business opportunity.
If the Company seeks to acquire another
business or pursue a business opportunity, management would have substantial flexibility
in identifying and selecting a prospective business. Registrant would not be obligated nor
does management intend to seek pre-approval by our shareholders. Under the laws of the
State of Florida, the consent of holders of a majority of the issued and outstanding
shares, acting without a shareholders meeting, can approve an acquisition.
The Registrant is entirely dependent on
the judgment of management in connection with the selection process for a target company.
In evaluating a prospective business opportunity, we would consider, among other factors,
the following: (i) costs associated with effecting a transaction; (ii) equity interest in
and opportunity to control the prospective candidate; (iii) growth potential of the target
business; (iv) experience and skill of management and availability of additional
personnel; (v) necessary capital requirements; (vi) the prospective candidate's
competitive position; (vii) stage of development of the business opportunity; (viii) the
market acceptance of the business its products or services; (ix) the availability of
audited financial statements of the potential business opportunity; and (x) the regulatory
environment that may be applicable to any prospective business opportunity.
The foregoing criteria are not intended
to be exhaustive and there may be other criteria that management may deemed relevant. In
connection with an evaluation of a prospective or potential business opportunity,
management may be expected to conduct a due diligence review.
We had operating expenses of $19,875 and
$16,950 during the three-month periods ended December 31, 2010 and 2009, respectively,
consisting mainly of accounting fees, professional fees and general and administrative
expenses. The Company does not expect its operating expenses to increase significantly
until it starts to pursue a new business opportunity or enters into a business
Liquidity and Capital Resources
We are dependent upon interim funding
provided by management and/or related parties to pay professional fees and other expenses.
We have no written finance agreement with management and/or related parties to provide any
On December 31, 2010, we had no assets
and $278,601 in liabilities.
part of our intent to seek new business opportunities, we may determine to seek to raise
funds from the sale of equity or debt securities. We have no agreements to issue any debt
or equity securities and cannot predict whether equity or debt financing will become
available at terms acceptable to us, if at all.
We anticipate that in connection with
the commencement of a new business opportunity or consummation of a business combination,
we will issue a substantial number of additional restricted shares or other securities. If
such additional securities are issued, our shareholders will experience a dilution in
their ownership interest in the Company. If a substantial number of shares are issued in
connection with a business combination, a change in control may be expected to occur.
are no limitations in our articles of incorporation on our ability to borrow funds or
raise funds through the issuance of restricted common stock to pursue new business
opportunities. Our limited resources and lack of operating history may make it difficult
to do borrow funds or raise capital. Our inability to borrow funds or raise funds through
the issuance of restricted common stock required to facilitate new business opportunities
may have a material adverse effect on our financial condition and future prospects.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of
We have not entered
into, and do not expect to enter into, financial instruments for trading or hedging
CONTROLS AND PROCEDURES Back to Table of
Evaluation of disclosure controls and procedures.
As of December 31, 2010, the Company's chief executive officer/chief financial officer
conducted an evaluation regarding the effectiveness of the Company's disclosure controls
and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act.
Based upon the evaluation of these controls and procedures, our chief executive officer
and chief financial officer concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this report.
Changes in internal controls.
During the quarterly period covered by this report, no changes occurred in our internal
control over financial reporting that materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL
PROCEEDINGS Back to Table of
RISK FACTORS Back to
Table of Contents
In addition to the other
information set forth in this report, you should carefully consider the factors discussed
in Part I, Item 1. Description of Business, subheading Risk Factors in
our Annual Report on Form 10-K for the year ended June 30, 2010, which could
materially affect our business, financial condition or future results. The risks described
in our Annual Report on Form 10-K are not the only risks facing our company.
Additional risks and uncertainties not currently known to us or that we currently deem to
be immaterial also may materially adversely affect our business, financial condition
and/or operating results.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of
3. DEFAULTS UPON SENIOR SECURITIES Back to Table of
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Back to Table of
5. OTHER INFORMATION Back to Table of
6. EXHIBITS Back to Table of
(a) The following documents
are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any
document incorporated by reference is identified by a parenthetical reference to the SEC
filing that included such document.
||Certification of President
and CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
||Certification of President
and CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
PEREGRINE INDUSTRIES, INC.
Notes to Unaudited Interim Financial Statements
December 31, 2010
1. Basis of Presentation
Peregrine Industries, Inc. (the "Company") was formed on
October 1, 1995 for the purpose of manufacturing residential pool heaters. On March 29,
2004, the U.S. Bankruptcy Court confirmed the sale of the Peregrine corporate shell
entity. The accounts of the former subsidiaries were not included in the sale and have not
been carried forward.
The Financial Statements presented herein have been prepared by us in
accordance with the accounting policies described in our June 30, 2010 Annual Report on
Form 10-K and should be read in conjunction with the Notes to Financial Statements which
appear in that report.
The preparation of these financial statements in conformity with
accounting principles generally accepted in the United States requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities. On an on going
basis, we evaluate our estimates, including those related intangible assets, income taxes,
insurance obligations and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from other
resources. Actual results may differ from these estimates under different assumptions or
In the opinion of management, the information furnished in this Form
10-Q reflects all adjustments necessary for a fair statement of the financial position and
results of operations and cash flows as of and for the six-month periods ended December 31, 2010 and 2009. All such adjustments are of a normal recurring nature. The
Financial Statements have been prepared in accordance with the instructions to Form 10-Q
and therefore do not include some information and notes necessary to conform with annual
Fresh Start Accounting: On September 4, 2002 all assets
were transferred to the chapter 7 trustee in settlement of all outstanding corporate
obligations. We adopted "fresh-start" accounting as of September 5, 2002 in
accordance with procedures specified by AICPA Statement of Position ("SOP") No.
90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy
On March 29, 2004, the U.S. Bankruptcy Court for the Southern District
of Florida confirmed the order previously granted on March 15, 2004 for the sale of
Peregrine as a shell entity. All results for periods including and subsequent to September
5, 2002 are referred to as those of the "Successor Company".
In accordance with SOP No. 90-7, the reorganized value of the Company
was allocated to the Company's assets based on procedures specified by SFAS No. 141,
"Business Combinations". Each liability existing at the plan sale date, other
than deferred taxes, was stated at the present value of the amounts to be paid at
appropriate market rates. It was determined that the Company's reorganization value
computed immediately before September 5, 2002 was $0. We adopted "fresh-start"
accounting because holders of existing voting shares immediately before filing and
confirmation of the sale received less than 50% of the voting shares of the emerging
entity and its reorganization value is less than its post-petition liabilities and allowed
The accounts of the former subsidiaries were not included in the
bankruptcy sale and have not been carried forward.
Change of Control: On February 12, 2004, the Trustee for Peregrine
and Park Avenue Group, Inc. entered into a contract resulting in a change in control of
Peregrine. On March 15, 2004, the Bankruptcy Court granted an order approving the contract
and finding that Park Avenue Group is a good faith purchaser within the meaning of 11 USC
Section 363(m). On March 29, 2004, the U.S. Bankruptcy Court for the Southern District of
Florida confirmed the order previously granted on March 15, 2004.
The confirmed Court order provided that the existing officers and
directors were deemed removed from office and also authorized the following: (i)
the appointment of new members to the board of directors; (ii) the amendment of the
Article of Incorporation to increase the number of authorized shares to 100,000,000
shares; (iii) the issuance of up to 30,000,000 shares of common stock, par value $0.0001
to the new management;(iv) the authority to implement a reverse split of the issued and
outstanding shares in a ratio to be determined by the board of directors; (v) the
cancellation and extinguishment of all common share conversion rights of any kind,
including without limitation, warrants, options, convertible bonds, other convertible debt
instruments and convertible preferred stock; and (vi) the cancellation and extinguishment
of all preferred shares of every series and accompanying conversion rights of any kind.
2. Earnings/Loss Per Share
Basic earnings per share is computed by dividing income available to
common shareholders (the numerator) by the weighted-average number of common shares
outstanding (the denominator) for the period. Diluted earnings per share assume that any
dilutive convertible securities outstanding were converted, with related preferred stock
dividend requirements and outstanding common shares adjusted accordingly. It also assumes
that outstanding common shares were increased by shares issuable upon exercise of those
stock options for which market price exceeds the exercise price, less shares which could
have been purchased by us with the related proceeds. In periods of losses, diluted loss
per share is computed on the same basis as basic loss per share as the inclusion of any
other potential shares outstanding would be anti-dilutive.
3. New Accounting Standards
In December 2007, the Financial Accounting Standards Board issued FASB Statement
No. 141 (Revised 2007), Business Combinations (SFAS 141R). SFAS 141R
provides additional guidance on improving the relevance, representational faithfulness,
and comparability of the financial information that a reporting entity provides in its
financial reports about a business combination and its effects. This Statement
applies prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008.
In December 2007, the Financial Accounting Standards Board issued FASB Statement
No. 160, Noncontrolling Interests in Consolidated Financial Statementsan
amendment of ARB No. 51 (SFAS 160). SFAS 160 amends ARB No. 51
to establish accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. This Statement is effective
for fiscal years and interim periods within those fiscal years, beginning on or after
December 15, 2008. The Company is currently evaluating the impact of adopting SFAS
160 on our financial statements.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. SFAS 162 identifies the sources of accounting principles
and the framework for selecting the principles used in the preparation of financial
statements of nongovernmental entities that are presented in conformity with generally
accepted accounting principles (GAAP) in the United States. SFAS 162 is effective 60 days
following the SECs approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. Our Company is currently evaluating the
impact of SFAS 162 on its financial statements but does not expect it to have a material
Management does not anticipate that the adoption of these standards will have a
material impact on the financial statements.
5. Related Party
Transactions not Disclosed Elsewhere
Due Related Parties: Amounts
due related parties consist of corporate reinstatement expenses paid by the principal
shareholder, cash advances made to the company as well as the fair value of services
provided without cost and the use of office space provided without cost. Such items
totaled $243,000 at December 31, 2010. We expensed the fair value of services by an
accrual of $32,000 for the six month interim period ended December 31, 2010.
6. Going Concern
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and settlement of liabilities
and commitments in the normal course of business for the foreseeable future. Since adopting
"fresh-start" accounting as of September 5, 2002, the Company has
accumulated losses aggregating to $436,485 and has insufficient working capital to meet
operating needs for the next twelve months as of June 30, 2010, all of which raise
substantial doubt about the Company's ability to continue as a going concern.