UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended January 31, 2016

 

OR

 

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

For the transition period from _____________ to ___________________.

 

 

Commission file number: 000-27211

 

 

MEDINA INTERNATIONAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

Colorado

84-1469319

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

191 Kettering Dr., Ontario, CA 92880

(Address of principal executive offices)

 

(909) 522-4414

(Registrant's telephone number, including area code)

 

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 past 12 months (or for such shorter period that the registrant was required to file such reports),  and (2) has been subject to the filing  requirements for the past 90 days.       

       

Yes

[X]

No

[_]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

      

Yes

[_]

No

[_]

 



Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

[_]

Accelerated filer

[_]

Non-accelerated filer

[_]

Smaller reporting company

[X]

(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes

[_]

No

[X]

Indicate the number of share  outstanding  of each of the  issuer's  classes of common stock, as of the latest practicable date.

As of January 31, 2016, there were 56,090,117 shares of the registrant's common stock issued and outstanding.



Table of Contents

 

PART I - FINANCIAL INFORMATION

     

Item 1.

Financial Statements (Unaudited)

2

     

Consolidated Balance Sheets - January 31, 2016 and April 30, 2014 (Audited)

3

     

Consolidated Statements of Operations - Three Months and Nine Months Ended January 31, 2016 and 2014

4

Consolidated Statements of Cash Flows - Nine Months Ended January 31, 2016 and 2014

5

     

Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Nine Months Ended January 31, 2016

6

     

Notes to Consolidated Financial Statements

7

     

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

24

     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

     

Item 4.

Controls and Procedures

28

     

PART II - OTHER INFORMATION  

     

Item 1.

Legal Proceedings

30

     

Item 1A.

Risk Factors

30

     

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

30

     

Item 3.

Defaults Upon Senior Securities

30

     

Item 4.

Mine Safety Disclosures

30

     

Item 5.

Other Information

30

     

Item 6.

Exhibits

30

     

SIGNATURES

32

-1-

 



PART I. - FINANCIAL INFORMATION

 

 

-2-



 

MEDINA INTERNATIONAL HOLDINGS, INC.         
AND SUBSIDIARY        
Consolidated Balance Sheets        
         
    January   April 30,
    2016   2015
    (Un-Audited)   (Audited)
ASSETS        
         
Cash   $        33,822 $          11,092
Inventory        240,966            79,910
Other receivables        237,718          237,718
Reserve       (237,718)         (237,718)
Total other receivables                 -                    -  
Total current assets    274,788            91,002
         
Fixed Assets:        745,742          745,640
Accumulated depreciation       (717,686)         (697,281)
Total property & equipment          28,056            48,359
         
Prepaid expenses  & deposits            8,589             8,589
         
TOTAL ASSETS $  311,433 $        147,950
         
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)        
         
Accounts payable $      349,426 $        658,791
Accrued liabilities     1,582,672       1,465,792
Short term debt          94,640          110,481
Bank overdraft                 -                    -  
Customer Deposit        535,488          306,025
Stock committed to be issued                 -              11,375
Notes payable        489,842          219,500
Related party payable                 -                    -  
Related Parties - short-term borrowings from shareholders      492,730          471,112
Total current liabilities     3,544,798       3,243,076
         
Total Liabilities     3,544,798       3,243,076
         
  Series A  preferred  stock,  $0.01 par value,  50 shares  authorized,  30 shares issued and outstanding on January 31, 2016 and April 30, 2015        360,000          360,000
                  -                    -  
Common stock, $0.0001 par value, 500,000,000 shares authorized          5,609             5,609
56,090,117  shares issued and outstanding on January 31, 2016 and April 30, 2015
Additional paid-in capital     4,907,950       4,907,950
Accumulated deficit    (8,506,926)      (8,368,685)
Total stockholders' equity (deficit)    (3,233,367)      (3,095,126)
         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $   311,431 $        147,950
         
         
The accompanying notes are an integral part of these financial statements

 

-3-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statement of Operations
(Unaudited)
           
  For the three months ended January 31,   For the nine months ended January  31,
  2016 2015   2016 2015
           
Sales, net  $                                            -  $                          161,331    $                       27,645  $                    239,059
Cost of Goods Sold                                            995                              103,706                             74,521                        215,744
  Gross Profit (Loss)                                          (995)                                57,625                            (46,876)                          23,315
           
General and administrative expenses                                         7,606                                91,540   159,118 299,478
Selling and marketing expenses                                       (1,700)                                  9,431                                  960                          24,852
  Income (Loss)  from operations                                       (6,901)                               (43,346)                          (206,954)                       (301,015)
             
Other income                                       87,825                                12,953                             94,038                          19,177
Interest expense                                       (4,817)                               (21,450)   (25,325) (66,162)
Net other (loss)                                       83,008                                 (8,497)                             68,713                         (46,985)
                                          -    
Loss before income tax (expense) benefit                                       76,107                               (51,843)                          (138,241)                       (348,000)
Income tax (expense) benefit                                              -                                          -                                       -                                    -  
           
Net Income (Loss)  $                                 76,107  $                         (51,843)    $                 (138,241)  $                (348,000)
Net loss per share (Medina International Holdings, Inc.):           
Basic  $                                       0.00  $                               (0.00)    $                          (0.00)  $                         (0.01)
Diluted  $                                       0.00  $                               (0.00)    $                          (0.00)  $                         (0.01)
           
Weighted average number of shares outstanding:          
Basic 56,090,117 56,090,117   56,090,117 56,090,117
Diluted 56,090,117 56,090,117   56,090,117 56,090,117
           
           
           
The accompanying notes are an integral part of these financial statements.

 

 

-4-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statement of Cash Flows

(Unaudited)
             
             
        For Nine Months Ended
        January 31,
             
        2016   2015
             
             
Cash flows from operating activities:      
Net loss

$

     (138,241)  $       (348,000)
Adjustments to reconcile net loss to net cash      
  used in operating activities:      
    Stock subscription payable/Issued for services         (11,375)              2,999
    Depreciation expenses          20,303            71,165
Changes in operating assets and liabilities:      
    Decrease (Increase) in accounts receivable      
    Decrease (Increase) in other receivable                  -                     -  
    Decrease (Increase) in inventory      (161,054)                   -  
    Increase (decrease) in accounts payable and accrued liabilities           63,540          160,551
    Increase (decrease) in customer deposits        229,463          299,025
                         -                     -  
       Total adjustments        140,877          533,740
    Net cash (used) received in operating activities           2,636        185,740
             
Cash flows from investing activities:      
Purchase of property and equipment                  -                     -  
    Net cash used in investing activities                  -                     -  
             
Cash flows from financing activities:      
Bank overdraft                       -  
             
Proceeds/(Payments) from  note payable          14,317              4,630
Proceeds/(Payments) from related party note payable shareholders          21,618          (34,926)
Proceeds/(Payments) on lines of credit & credit cards        (15,841)          (11,972)
             
    Net cash provided (used) by financing activities        20,094        (42,268)
             
Net increase (decrease) in cash and cash equivalents        22,730        143,472
             
Cash and cash equivalents - beginning of period          11,092                   27
Cash and cash equivalents - end of period $        33,822  $       143,499
             
Supplemental disclosure of cash flow information:      
Interest Paid $   $  
Taxes Paid $            9,289 $          20,149
                         -                     -  
             
             
             
    The accompanying notes are an integral part of these financial statements    

5-



                 
Medina International Holdings, Inc. and Subsidiary
Consolidated Statements of Shareholders' Equity (Deficit)
                 
                 
            Additional    
Common Stock   Preferred Stock Series A   Preferred Stock Series B   Paid-In Accumulated  
Shares Amount Shares Amount Shares Amount Capital Deficit Totals
Balance - April 30, 2012     55,890,117  $     5,589               30  $     360,000               20  $  20,000  $ 4,880,270  $(7,256,062)  $ (1,990,203)
                 
Net loss                 (417,276.00)           (417,276)
Balance - April 30, 2013     55,890,117  $     5,589               30  $     360,000               20  $  20,000  $ 4,880,270  $(7,673,338)  $ (2,407,479)
                 
Stock issued to Directors            200,000               20                       7,680                   7,700
Net gain (loss)                          (44,455)             (44,455)
Balance - April 30, 2014     56,090,117         5,609               30         360,000               20       20,000      4,887,950    (7,717,793)      (2,444,234)
                 (20)    (20,000)        20,000    
Net gain (loss)                          -                  -                       -  $   (650,892)           (650,892)
Balance - April 30, 2015     56,090,117         5,609               30         360,000                -                  -        4,907,950    (8,368,685)      (3,095,126)
                 
Net gain (loss)                $   (138,241)           (138,241)
Balance - January 31, 2016     56,090,117         5,609               30         360,000                -                  -        4,907,950    (8,506,926)      (3,233,367)
                 
                 
                 
 The accompanying notes are an integral part of the financial statements
                 

 

-6-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

 

NOTE 1. BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Medina International Holdings, Inc. ("Company," "Medina," "we," "us," "our") was incorporated in 1998 as Colorado Community Broadcasting, Inc. The Company intended to purchase low power television licenses or stations and planned to broadcast local programming mixed with appropriate national programming. The Company changed the name of the business in 2005 to Medina International Holdings, Inc.

The Company, under its wholly owned subsidiary Harbor Guard Boats, Inc. plans to manufacture and sell recreational and commercial boats. The Company formed Medina Marine, Inc., as a wholly owned subsidiary of the Company, on May 22, 2006 to manufacture and sell fire rescue, rescue and recreational boats which is subsequently sold.

The Company acquired Modena Sports Design, LLC, as a wholly owned subsidiary of the Company on June 18, 2008. Modena Sports Design, LLC was formed in the State of California in 2003 to produce fire rescue, rescue and recreational boats. Modena Sports Design, LLC reorganized as a California corporation on January 7, 2009 changed its name to Harbor Guard Boats, Inc.

Presentation of Interim Information

 

In the opinion of the  management  of the Company,  the  accompanying  unaudited financial  statements  include all normal  adjustments  considered  necessary to present fairly the financial  position and operating  results of the Company for the periods  presented.  The financial  statements  and notes are  presented as permitted by Form 10-Q, and do not contain certain information included in the Company's  Annual  Report on Form 10-K for the fiscal year ended  April 30, 2014. It is management's  opinion that when the interim financial statements are read in conjunction with the April 30, 2015 Annual Report on Form 10-K, the disclosures  are  adequate to make the  information  presented  not  misleading. Interim results are not necessarily indicative of results for a full year or any future period. The accompanying consolidated financial statements of Medina International Holdings, Inc. and its subsidiaries were prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and include the assets, liabilities, revenues, and expenses of subsidiaries, Harbor Guard Boats, Inc. All intercompany balances and transactions have been eliminated in consolidation.

 

Going Concern

 

Recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

-7-

 



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplates continuation of the Company as a going concern. On January 31, 2016, the Company's current liabilities exceeded its current assets by $3,270,010. Also, the Company's operations generated $27,645 revenue during the nine months ended January 31, 2016 and the Company's accumulated deficit at January 31, 2016 is $8,506,926.

Management takes various steps to revise its operating and financial requirements, which we believe are sufficient to provide the Company with the ability to continue on in the subsequent year. Management devoted considerable effort during the period ended January 31, 2016 towards management of liabilities and improving our operations. Management believes that the above actions will allow the Company to continue its operations through the next fiscal year.

The future success of the Company is likely dependent on its ability to attain additional capital to develop its proposed products and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will obtain positive cash flow.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Consolidation

 

The  accompanying  consolidated  financial  statements  of Medina  International Holdings,  Inc. and its subsidiary  were prepared in accordance with generally accepted  accounting  principles  in the United  States of America  ("GAAP") and include the assets, liabilities,  revenues, and expenses of wholly owned subsidiary Harbor Guard Boats, Inc. All intercompany balances and transactions have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent  assets and liabilities at the date of the consolidated  financial statements,  and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but are not limited to;

 

1)       Revenue recognition;

2)       Allowance for doubtful accounts;

3)       Inventory costs;

4)       Asset impairments;

5)       Depreciable lives of assets;

6)       Income tax reserves and valuation allowances;

7)       Fair value of stock options;

 

 

-8-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

 

8)       Allocation of direct and indirect cost of sales;

9)       Contingent liabilities; and

10)     Warranty liabilities.

 

Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require exercise of judgment.  We base our estimates on historical  experience,  available  market  information,  appropriate  valuation methodologies,   and  on  various  other  assumptions  that  we  believe  to  be reasonable.  We evaluate and update our  assumptions and estimates on an ongoing basis  and  may  employ  outside  experts  to  assist  in our  evaluation,  when necessary. Actual results could differ materially from these estimates.

 

Revenue Recognition

 

Revenue Recognition is recognized when earned. The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104. ASC 650 "Revenue Recognition." Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied, are recorded as unearned revenue.

             

Cash and Cash Equivalents

 

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. The Company maintains its cash in bank deposit accounts that may exceed federally insured limits. The Company has not experienced any losses in such accounts.

 

Accounts receivable

 

The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary.

 

Inventory

 

We carry our inventories at the lower of its cost or market value. Cost is determined using first-in, first-out ("FIFO") method. Market is determined based on net realizable value. We also provide due consideration to obsolescence, excess quantities, and other factors in evaluating net realizable value.

 

Fixed Assets

 

Capital assets are stated at cost. Fixed assets consist of tools (molds), office equipment, fire extinguishers and manufacturing tools and are stated at cost. Depreciation of fixed assets is provided using the straight-line method over the estimated useful lives (3-7 years) of the assets. Expenditures for maintenance and repairs are charged to expense as incurred.

 

-9-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

 

Long Lived Assets

The Company adopted codification ASC 350 "Accounting for the Impairment or Disposal of Long-Lived Assets", The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 350. ASC 350 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced.

Comprehensive Loss

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income.  Certain  statements,  however,  require entities  to  report  specific  changes  in  assets  and  liabilities,  such  as unrealized  gains and  losses on  available-for-sale  securities,  as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income.

Issuance of Shares for Service

The Company accounts for employee and non-employee stock awards, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable

Fair Value Of Financial Instruments

Disclosures about fair value of financial instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying, as financial instruments are a reasonable estimate of fair value.

Foreign Currency Translation And Hedging

The Company is exposed to foreign currency fluctuations due to international trade. The management does not intend to enter into forward exchange contracts or any derivative financial investments for trading purposes. The management does not currently hedge foreign currency exposure.

 

-10-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

Basic and Diluted Net Loss per Share

Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised.

Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Products and services, geographic areas and major customers

The Company earns revenue from the sale of commercial and recreational boats. The Company's products were sold domestically and internationally. The Company does not separate sales activities into different operating segments.

Recently issued accounting pronouncements

There were accounting standards and interpretations issued during the nine months ended January 31, 2016, none of which are expected to have a material impact on the Company's financial position, operations or cash flows.

NOTE 3. INVENTORY

As of January 31, 2016  inventory consisted of the following:

 

January 31,

Item

2016

Work in progress

           240,966

Total Inventory

$         240,966

 

NOTE 4. OTHER RECEIVABLES

 

As of January 31, 2016, other receivables consisted of the following:

 

Disposal of Subsidiary

$237,718

Reserve

(237,718)

 

Total Receivables

0

 

 

-11-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

 

Entry in Settlement Agreement - Disposition of Subsidiary

On March 28, 2012, ROK Global, PLC ("ROK") entered into a Settlement Agreement and Mutual Release ("the Settlement Agreement") the Company, Wintec Protective Systems, Inc. ("Wintec"), Mr. Daniel Medina, and Mr. Madhava Mankal Rao. Mr. Medina and Mankal are officers and directors of the Company.

In 2011, the Company, Wintec and ROK entered into agreements that provided for the Company to provide funding to Wintec and to contribute 3,000,000 shares of its common stock in exchange for 20,400,000 shares of Wintec. As a result of the agreements, Wintec had become the Company's 51% held subsidiary.

The Settlement Agreement provides for the agreements entered into in 2011 to be terminated and cancelled, effective immediately. All parties agree to the termination of the agreements without remedy and resolve each party of any claims or liabilities arising out of such agreements. As a result of the termination, Wintec is no longer a subsidiary of the Company. The Company transferred back to Wintec the 20,400,000 shares of Wintec in exchange for $1. Wintec transferred 3,000,000 shares of the Company's common stock issued in 2011, in exchange for $1.

Wintec per agreement to pay to the Company $237,718 within two years of the date of the Settlement Agreement, which we have reserved at 100% of total receivable due to non availability of financial  of Wintec Protective Systems, Inc.

NOTE 5. FIXED ASSETS

 

As of January 31, 2016 Property and equipment consisted of the following:

 

January 31,

Property and Equipment

2016

Machinery and equipment, including molds & tools

$  722,616

Computers

           13,535

Furniture and fixtures

             3,611

Office equipment

             5,480

Fire extinguisher

               500

   

Total property and equipment

          745,742

Less: Accumulated Depreciation

         (717,686)

Total Property and equipment

$ 28,056

 

 

 

-12-

 

 



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

NOTE 6. PREPAID EXPENSES AND OTHER ASSETS

 

As of January 31, 2016 prepaid expenses and other assets included prepaid operating expenses and vendor deposit in the amount of $8,589.

 

NOTE 7. ACCRUED LIABILITIES

 

As of January 31, 2016 accrued liabilities consisted of the following:

 

       January 31,

Accrued Liabilities

           2016

Interest on shareholders loan

$ 156,543

Interest - notes payable

             82,405

Payroll and taxes

          1,317,724

Warranty liabilities

               26,000

Total Accrued liabilities

$ 1,582,672

 

NOTE 8. SHORT-TERM DEBT

 

As of January 31, 2016  short term debt consisted of the following:

 

January 31,

Short-Term Debt

2016

Line of credit - CITI

$        66,944

Credit cards

          27,696

Total

$        94,640

 

As of January 31, 2016, the Company had a line of credit totaling $100,000, under which the Company may borrow on an unsecured basis at an interest rate of 8.75% monthly. The outstanding balance as of January 31, 2016 was $66,944.

 

The Company's remaining credit cards carry various interest rates and require monthly payments, and are substantially held in the name of or guaranteed by related parties.

 

-13-

 



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

 

NOTE 9. RISK MANAGEMENT ACTIVITIES

 

Foreign Currency

 

The majority of our business is denominated in U.S. dollars and fluctuations in the foreign currency markets will have a minimal effect on our business.

 

Commodity Prices

 

We are exposed to market risk from changes in commodity prices. The cost of our products could increase, if the prices of fiberglass and/or aluminum increases significantly, further decreasing our ability to attain profitable operations. We are not involved in any purchase commitments with any of our vendors.

 

Insurance

 

We are exposed to several risks, including fire, earthquakes, theft, and key person liabilities. We do not carry any insurance for these risks, other than general liability insurance, which will adversely affect our operations if any of these risks materialize.

 

NOTE 10. RELATED PARTY TRANSACTIONS

 

The Company has various license agreements with a  allowing its technology to be utilized in the manufacture of its boats. The license agreements typical provide for $1,500 royalty payment on every boat manufactured by the company except on boats manufactured where Mr. Albert Mardikian's patents are not used.

 

NOTE 11. CUSTOMER DEPOSIT

 

As of January 31, 2016 customer deposit consisted of the following:

 

January 31,

Customer Deposits

2016

Deposit for commercial boats

$535,488

Total customer deposits

$535,488

-14-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

NOTE 12. NOTE PAYABLE

As of January 31, 2016 notes payable consisted of the following:

Srikrishna Mankal

$

50,000

Pavan Mankal

 

59,000

Michael   10,020
Regreen International   4,297
CS Sheshadri   110,500

Mike Littman

 

256,025

Total

 

489,842

At January 31, 2016, the Company had an unsecured note payable to Mr. Mike Littman, non-affiliate, in the amount of $256,025, which bears an 1% interest per annum and currently due. Note dated June 18, 2015 shall be converted at the Holders option, to Common Stock, in whole or part at 60% of the volume weighted average price for 5 days prior to conversion so long as the conversion does not cause the Holder to become an affiliate, 10% or greater shareholder.

At October 31, 2014, the Company had an unsecured note payable to Mr. Srikrishna Mankal, non-affiliate, in the amount of $50,000, which bears an 8% interest per annum and currently due. Interest accrued to date on this note payable is $7,000. Due to negotiation with Mr. Srikrishna Mankal, the accrual for interest on the said loan was mutually agreed to cease from August 1, 2012. Note was amended on July 1, 2014 to include conversion feature to common stock with 25% discount on the closing market bid price or par value whichever is lower at the time of conversion to cover loan and interest.

At April 30, 2014, the Company had an unsecured note payable to Mr. Pavan Mankal, non-affiliate, in the amount of $59,000, which bears an 8% interest per annum and currently due. Note was amended July 1, 2014 to include conversion feature to common stock with 25% discount on the closing market bid price or par value whichever is lower at the time of conversion to cover loan and interest.

The convertible notes for $52,500 issued to Asher Enterprises, Inc. ("Asher") in June 24, 2011. This note carries interest of 8% per annum. $ 4,500 of the note principal was converted in to common shares. The remaining balance of $48,500 is payable on demand and has been transferred in the name of C S Sheshadri. This note are convertible at the election of CS Seshadri from time to time after the issuance date. In the event of non payment the loan will be in default and principal and interest will become payable immediately at 150% of the outstanding balance. The note agreements contain covenants requiring CS Seshadri's written consent for certain activities not in existence or not committed to by the Company on the issue date of the notes, as follows: dividend distributions in cash or shares, stock repurchases, borrowings, sale of assets and certain advances and loans in excess of $100,000. Outstanding note principal and interest accrued thereon can be converted in whole, or in part, at any time by CS Seshadri after the issuance date into an equivalent of the Company's common stock determined by 60% of the average of the three lowest closing bid prices of the Company's common stock during the ten trading days prior to the date the conversion notice is sent by CS Seshadri.  We have provided $35,000 as interest expense loss on the above transaction. The note contains a BCF amount of $ 35,000 which is being amortized over the term of the loan.

The convertible notes for $42,500 issued to Asher in August 1, 2011. This note carries  interest of 8% per annum This note has been transferred in the name of C S Sheshadri and is payable on demand. This note is convertible at the election of CS Seshadri from time to time after the issuance date. In the event of default, the amount of principal and interest not paid and the notes become immediately due and payable. Should that occur, the Company is liable to pay CS Seshadri 150% of

 

-15-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

the then outstanding principal and interest. The note agreements contain covenants requiring CS Seshadri's written consent for certain activities not in existence or not committed to by the Company on the issue date of the notes, as follows: dividend distributions in cash or shares, stock repurchases, borrowings, sale of assets and certain advances and loans in excess of $100,000. Outstanding note principal and interest accrued thereon can be converted in whole, or in part, at any time by CS Seshadri after the issuance date into an equivalent of the Company's common stock determined by 60% of the average of the three lowest closing bid prices of the Company's common stock during the ten trading days prior to the date the conversion notice is sent by CS Seshadri. We have provided $28,333 as interest expense loss on the above transaction. The note contains a BCF amount of $ 28.333 which is being amortized over the term of the loan.

The Company has another Note payable for $20,000 which bears no interest and is payable on demand.

 

NOTE 13. SHAREHOLDERS' LOANS

 

As of January 31, 2016 shareholders loans consisted of the following:

 

January 31,

Shareholders' Loans

2016

Daniel Medina, President & Director

$300,912

Madhava Rao Mankal, Chief Financial Officer & Director

 191,818

Total Shareholders' Loans

$492,730

 

Shareholder's loan from shareholder of the Company, unsecured, accrued at 10% interest per annum and due on demand.

 

NOTE 14. STOCKHOLDERS' EQUITY

 

150,000 common shares were issued during the nine months period to independent board of directors for services.

 

NOTE 15. COMMITMENTS AND CONTINGENCIES

Rental Leases

As of January 31, 2016, we did not own any properties. We moved our Company's activities, including all SUBSIDIARY, from Corona, California to Ontario, California in April 2013. Our management signed a three-year lease for a 13,045 sq. ft. building in the city of Ontario, California, effective May 1, 2013. The address for this location is 191 Kettering Dr., Corona, CA, 91761. This building is owned by unrelated parties. The lease to the Corona facility expires on June 30, 2016, and calls for monthly payments, initially of $5,610 per month plus $495 costs, escalating over the term of the lease to $5,950 per month plus costs.

-16-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

The Company has various license agreements with a related party allowing its technology to be utilized in the manufacture of its boats. The license agreements typical provide for $1,500 royalty payment on every boat manufactured by the company except on boats manufactured where Mr. Albert Mardikian's patents are not used.

NOTE 16. LITIGATION

NONE

NOTE 17. SUBSEQUENT EVEN

Acquisition Agreement - April 20, 2016

On April 20, 2016, Medina International Holdings, Inc. (the "Company") entered into an Acquisition and Purchase Agreement with Medical Innovation Holdings, a Joint Venture ("MedHold") whereby all of the assets of MedHold would be acquired by the Company from MedHold.

Medical Innovation Holdings, a Joint Venture, is establishing a nationwide, state by state, multi-disciplinary medical specialist provider/practice network, staffed by 16 types of Physician Specialists who serve the rural patient population via a seamless, comprehensive, sophisticated telemedicine program.

Pursuant to the Asset Acquisition Agreement, the closing of the Acquisition was effective April 20, 2016 although completed later.

Per the Acquisition and Purchase Agreement, the following items occurred:

 

(1)     The Company approved the issuance of 351,000,000 shares of the Company's restricted common stock to MedHold's designees;

(2)     30 shares of Class A Preferred Convertible Stock (Super Majority Voting) of Medina International Holdings, Inc. from Madhava Rao Mankal and Daniel Medina shall be conveyed for $100 to MedHold;

(3)     A total of 35,000,000 common shares owned by Madhava Rao Mankal, Daniel Medina and Albert Mardikian, and MGS Grand Sports, Inc. shall be conveyed under separate Share Purchase Agreements to retire to treasury for $100 each;

 

 

-17-



MEDINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(Unaudited)

 

(4)     The outstanding notes for legal fees for a total of $256,025, approximately, plus accrued interest thereon, were assumed and agreed to be paid in accordance with the terms thereof, without defenses or disagreements thereto at the time of closing.  The outstanding balances due to the auditor (approximately $20,000, including current quarter review fees) and transfer agent (approximately $1,600) shall be paid as the earnest money; and

(5)     Assignment of the Assets were issued in the form of a Bill of Sale duly executed.

Settlement Agreement and Release

 Medina International Holdings, Inc. (the "Company") entered into a Settlement Agreement and Release with Chenji Srinivasan Seshadri ("Debtholder") and Harbor Guard Boats, Inc., a California Corporation ("Harbor Guard").

The Agreement compromises, settles and otherwise resolves all claims for common shares, subscriptions, or Notes, or debts, relating to the Company and Debtholder as to any and all claims or causes of action whatsoever against the Company by Debtholder for any matter, action, or representation as the Company, any debt or Note, the subscription, by the subscriber, and other potential claims and causes of action arising from any relationship, agreement, subscription, debt, or Note, or actions of the Company or its management which may be claimed by Debtholder up to the date hereof. The Agreement requires payment of the sum of $60,000 to effectuate the release.

Divestiture of Harbor Guard Boats, Inc.

On April 20, 2016, the Company entered into an Acquisition Agreement with Daniel Medina and Rao Mankal, whereby they acquired the Harbor Guard Boats, Inc. stock from Medina, by assuming the debt related to Harbor Guard, totaling$1,819,091, and providing releases of liability for all of such debt, and retiring a total of 35 million shares of common stock of Medina to the treasury.  The Board made a determination that the assets were totally impaired, (which assets were fully impaired on the books) as no significant revenue was generated for over two years from the assets, and the assets had no net value exceeding even a portion of the debt relieved, and the company had no capital for recommencing business and had no sales. Further the debt relief to the company, was significant to allow the company to recapitalize.  Mr.  Mankal and Mr. Medina were affiliates and officers and directors and have concurrently tendered their resignations as officers and directors effective with the closing.  Two new directors are appointed and the four disinterested directors have approved the divestiture as being in the best interests of the Company, and its shareholders, in conjunction with the new business of the Company in the health care field.

This subsequent event has to be read in conjunction with the 8K filed concurrently here with.

-18-



Proforma :

On April 20, 2016 we agreed to an acquisition of the assets and business plan of Medical Innovation Holdings, Joint Venture for 351,000,000 shares and  to immediately sell our subsidiary Harbor Guard Boats, Inc. to Mr. Daniel Medina and Madhava Rao Mankal.  A definitive Stock Purchase Agreement was closed on April 26, 2016  During our consideration of the terms and further discussion we received $20,000 cash for payment of certain fees to auditors but no cash for the sale of Harbor Guard Boats, Inc.  The principals purchasing the Harbor Guard assets provided the retirement of 35, 000,000 shares of common stock of Medina and the assumption and release of a total of $1,225,192 in liabilities formerly consolidated with the medina financial statements.

Cash Payment

In the total consideration paid to us for the sale of Harbor Guard Boats Inc. we received no cash.  The terms of the sale provided that we receive for payment of Audit fees. 

Medina International Holdings, Inc. Liabilities

At the time of the closing Medina International Holdings, Inc. held approximately $1,819,091 of liabilities.  These liabilities included approximately $23,677 on a line of credit with Wells Fargo Bank and Advanta, $176,163 of accounts payable,  $478,929 Notes Payable to various parties, and  $1,140,311 to Daniel Medina and Madhava Rao Mankal. 

Harbor Guard Boats, Inc. Liabilities

At the time of the closing, Harbor Guard Boats, Inc. held approximately $1,225,192 of liabilities.  These liabilities included approximately $71,491 on a line of credit with Citi Bank, $173,264 of accounts payable,   $177,411 of Accrued Payroll Liabilities, $535,487 of Customer deposit, $69,020 of notes payable, $172,519 of shareholders loan and $26,000 in other liabilities.

Medina International Holdings, Inc.'s outstanding liabilities of accounts payable and promissory notes  amounting to $176,163 (detail this number) and $256,025 respectively remained on the books of  Medina International Holdings, Inc. All other liabilities in the sale of Harbor Guard Boats, Inc., being assumed by the Daniel Medina and Madhava Rao Mankal.

Divestiture Considerations

The terms of the sale did provide us  reduction of our overall debt by approximately $1,386,893, or approximately 76% of our total liabilities.  In addition, a future deferred payment of nearly $432,188 in outstanding notes may further reduce our liabilities by another 24% of our total liabilities if and when paid.  In total, the sale of Harbor Guard Boats, Inc. facilitates the reduction of our total liabilities as of the time of this report by approximately 76%.

Harbor Guard Boats, Inc. specialized in developing Rescue and Fire Rescue boats.

-19-



In evaluating the offer and sale of Harbor Guard Boats, Inc.. we considered many important factors including the current and on going negative cash flow of the operations, the difficulties encountered raising additional working capital in such a condition, including the extremely high cost of such capital, and the additional time and working capital needed to achieve positive cash flow and more favorable operating conditions. In addition to the operating factors, we also considered the approximately $1,140,311 of Officers payroll liabilities, $222,904.55 of notes payable relief to various parties, and $23,677 for additional credit card debt relief included as part of the consideration in the sale of Harbor Guard Boats, Inc. as relevant to our decision.

We believe that the sale of Harbor Guard Boats, Inc. may help shareholder value by allowing the company to refocus on new business .

Assumed Debt from which Medina International Holdings, Inc. has been released

The specific notes assumed by Daniel Medina and Madhava Rao Mankal in connection with the sale of Harbor Guard Boats, Inc. are summarized below, and has been released by the parties as to Medina.

MIHI recorded a gain on forgiveness of debt of $ 3,243,077 and $3,112,601 for the year ended April 30, 2015 and the nine months ended January 31, 2016, respectively on a pro forma basis as a result of the forgiveness of debt.

Pro forma financial information.

Medina International Holdings, Inc.

EXPLANATORY NOTE TO PRO FORMA FINANCIAL STATEMENTS

As of April 26, 2016, the Company completed  agreement pursuant to which the Company sold 100% of its interest in its subsidiary Harbor Guard Boats, Inc.,  to Daniel Medina and Madhava Rao Mankal, retiring 35,000,000 common shares of certain shareholders, obtaining releases of debt, and by which Medical Innovation Holdings Joint Venture acquired control of the company concurrent with vending in its business plan, assets, intellectual property and licenses for 351,000,000 restricted common shares. Company business plan, intellectual property and license is valued at $989,434 and it is written off due to impairment of asset. The pro forma financial information presented below has been derived from the financial statements of MIHI as of January 31, 2016 for balance sheet purposes as if the transaction took place on January 31, 2016. The pro forma statements of operations have been derived from the audited statement of operation for the year ended April 30, 2015 and the unaudited statement of operations for the nine months ended January 31, 2016 as if the transactions took place on May 1, 2014 and May 1, 2015. 

 

-20-



  MEDINA INTERNATIONAL HOLDINGS, INC.             
Proforma  Balance Sheets            
             
             
      January 31, 2016 Proforma Proforma Proforma April 26, 2016
      (Un-Audited) Adjustments Adjustments Adjustments Post Closing
      Pre-Closing MIHI HGB MEDHOLD MIHI
  ASSETS            
Cash $                             33,822  $                         33,822  $                                  -  
Inventory                             240,966                        240,966                                   -  
  Total current assets                             274,788                        274,788                                   -  
               
Fixed Assets:                             745,742       412,729 333,013                                   -  
Accumulated depreciation                            (717,686)   (412,729)                      304,957                                   -  
  Total property & equipment                               28,056                          28,056                                   -  
             
Prepaid expenses  & deposits            8,589    8,589                                   -  
  TOTAL ASSETS $         311,433  $                           -            311,433  $                                  -  
               
  LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)            
Accounts payable $          349,427                        173,254                         176,173
Accrued liabilities            1,582,672                   1,140,311                      442,361    
Short term debt                     94,640                        23,677                        70,963                                   -  
Customer Deposit                             535,488                        535,488                                   -  
Notes payable                             489,842                      233,817                           256,025
Related Parties - short-term borrowings from shareholders                             492,730                        492,730                                   -  
  Total current liabilities                          3,544,799                   1,397,805                   1,714,796                         432,198
  Shareholders Equity            
Series A  preferred  stock,  $0.01 par value,  50 shares  authorized,  30 shares issued and outstanding on January 31, 2016                             360,000                             360,000
Common stock, $0.0001 par value, 500,000,000 shares authorized 56,090,117 shares issued and outstanding on January 31, 2016                                 5,609                          3,500                       35,100                         37,209
Additional paid-in capital                          4,907,950                 (1,401,305)                    (684,297)                   954,334                    6,579,292
Accumulated deficit                         (8,506,925)                     2,087,660                  (989,434)                  (7,408,699)
  Total stockholders' equity (deficit)                         (3,233,366)                 (1,397,805)                   1,403,363                             -                       (432,198)
  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $                         311,433                                -                        311,433  $                                  -  

-21-

 

 



  MEDINA INTERNATIONAL HOLDINGS, INC.           
  Proforma  Statement of Operations          
  For the 12 Months Ended April 30, 2015          
             
   

12 Months Ended

       
    4/30/2015 Proforma  Proforma  Proforma  Proforma
    Pre Closing Adjustment Adjustment Adjustment Post Closing
    CONSOLIDATED HGB MEDHOLD Note A MIHI
Sales, net    $               239,059  $           239,059 0    $ -  
Cost of Goods Sold                   258,409               258,409 0    $-  
  Gross Profit (Loss)                   (19,350)                 19,350 0                           -  
             
General and administrative expenses 376,788               333,339 0    $ 43,449
Selling and marketing expenses                   34,303                 34,303 0    $ -  
Write off Inventory                   93,949                 93,949 0    $  -  
Write of Intangible Assets                   73,765                         -              989,434    $ 1,063,199
  Income (Loss)  from operations                  (598,155)             (480,941)           (989,434)              1,106,648
             
Other income                    30,347                 30,347 0    $  -  
Forgiveness of debt                3,243,077  $  3,243,077
Interest expense (83,085)               (28,043) 0    $ (55,042)
  Net other (loss)                   (52,738)                 (2,304)                      -           3,243,077            3,188,035
                              -          
Loss before income tax (expense) benefit                  (650,893)             (478,637)           (989,434)         3,243,077            2,081,387
Income tax (expense) benefit                           -          
             
Net Income (Loss)  $              (650,893)             (478,637)           (989,434)         3,243,077            2,081,387
Net loss per share (Medina International Holdings, Inc.):           
  Basic  $                   (0.01)  $                     -    $                  -      $  -  
  Diluted  $                   (0.01)  $                     -    $                  -      $  -  
             
Weighted average number of shares outstanding:          
  Basic 56,090,117          56,090,117     372,090,117          372,090,117
  Diluted 56,090,117          56,090,117     372,090,117          372,090,117
             
Note A:  $3,243,077 liability was transferred to Harbor Guard Boats is recorded as extinguishment of debt.     
  There is no tax liability because of Medina has net operating losses carried forward .      

-22-

 

 



  MEDINA INTERNATIONAL HOLDINGS, INC.                 
  Proforma  Statement of Operations                
  For the Nine Months Ended January 31, 2016                
  (Unaudited)                
    9 Months Ended              
    1/31/2016   Proforma   Proforma   Proforma Proforma
    Pre Closing   Adjustment   Adjustment   Adjustment Post Closing
    CONSOLIDATED   HGB   MEDHOLD   Note A MIHI
Sales, net    $                             27,645                        (27,645)   0                                         -  
Cost of Goods Sold                                 74,521                        (74,521)   0                                         -  
  Gross Profit (Loss)                                (46,876)                          46,876   0                                         -  
                   
General and administrative expenses 159,118                      (152,125)   0                                   6,993
Selling and marketing expenses                                      960                             (960)   0                                         -  
Impairment of Assets                                         -                                    -                          989,434                               989,434
  Income (Loss)  from operations                              (206,954)                        199,961                        989,434                               996,427
                   
Other income                                 94,038                        (94,038)   0                                         -  
Forgiveness of debt                                  3,112,601                        3,112,601
Interest expense (25,325)                        (10,782)   0                                (14,543)
  Net other (loss)                                 68,713                        (83,256)   0                       3,112,601                        3,098,058
                                            -                
Loss before income tax (expense) benefit                               138,241                        116,705                        989,434                       3,112,601                        2,101,631
Income tax (expense) benefit                
                   
Net Income (Loss)  $                         138,241                        116,705                        989,434                     (3,112,601)                        2,101,631
Net loss per share (Medina International Holdings, Inc.):                 
  Basic  $                                 0.00 $ 0.00 $ 0.00     0.00
  Diluted  $                                 0.00 $ 0.00 $ 0.00     0.00
                   
Weighted average number of shares outstanding:                
  Basic 56,090,117                   56,090,117                 351,000,000                        372,090,117
  Diluted 56,090,117                   56,090,117                 351,000,000                        372,090,117
                   
Note A:  $3,243,077 liability was transferred to Harbor Guard Boats is recorded as extinguishment of debt.           
  There is no tax liability because of Medina has net operating losses carried forward .              

-23-



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements.,

The independent registered public accounting firm's report on the Company's financial statements as of April 30, 2015, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern.

The Company, under its two wholly owned SUBSIDIARY, Harbor Guard Boats, Inc. and Medina Marine, Inc., plans to manufacture and sell recreational and commercial boats.

The Company engages approximately nine full time employees. Our President and Chief Financial Officer have been engaged on full time to work with Harbor Guard Boats, Inc.

Our securities are currently not liquid. There are limited market makers in our securities and it is not anticipated that any market will develop for our securities until such time as we successfully implement our business plan of producing and marketing our Fire and Rescue boats. We presently have no liquid financial resources to offer such a candidate and must rely upon an exchange of our stock to complete such a merger or acquisition.

RESULTS OF OPERATION

For the Three Months Ended January 31, 2016 Compared to the Three Months Ended January 31, 2015

 

The Company recognized no revenues during the three months ended January 31, 2016 as compared to $161,331 for the three months period ended January 31, 2015, resulting in a decrease in sales during the quarter of 100%.

-24-

 



Our cost of goods sold for the three months ended January 31, 2016 was $995 compared to $103,706 during the three months ended January 31, 2015. The decrease in cost of goods sold of was a result of decrease in corresponding sales activities.

 

During the three months ended January 31, 2016, we incurred general and administrative expenses of $7,606 compared to $91,540 during the three months ended January 31, 2015. The decrease in general and administrative expenses for the three months period ended January 31, 2016 of $83,934 or 91.69% was mainly due to the decrease in management salary.

 

During the three months ended January 31, 2016, the Company reversed selling and marketing expenses of $1,700 provided compared to $9,431 during the three months ended January 31, 2015. The decrease of $11,131 or 118.02% in selling expenses was primarily due to the decrease in selling commissions and marketing expenses.

 

Interest expense decreased by $16,633 or 77.54% for the three month period ended January 31, 2016. The Company incurred $4,817 for the three month period ended January 31, 2016 compared to $21,450 for the three month period ended January 31, 2015. Decreases in interest expenses was mainly due to credit card interest and shareholders loan interest.

 

During the three months ended January 31, 2016, the Company recognized a net profit of $76,107 compared to net loss of $51,843 during the three months ended January 31, 2015. Decrease in net loss of $127,950 was result of decrease in gross sales and gross profit

 

For the Nine Months Ended January 31, 2016 Compared to the Nine Months Ended January 31, 2015

 

The Company recognized $27,645 in revenue during the nine months period ended January 31, 2016 as compared to $239,059 for the nine months period ended January 31, 2015 resulting in an decrease in sales during the period of $211,424 or 88.44%. We sold parts during the nine months ended January 31, 2016 compared to one during the nine months ended January 31, 2015.

 

Our cost of goods sold for the nine months ended January 31, 2016 was $74,521 compared to $215,744 during the nine months ended January 31, 2015. The decrease in cost of goods sold of $141,233 or 65.46% was a result due to decrease in sales.

 

During the nine months ended January 31, 2016, we incurred general and administrative expenses of $159,118 compared to $299,478 during the nine months ended January 31, 2015. The decrease in general and administrative expenses for the nine months period ended January 31, 2016 of $140,360 or 46.87% mainly due to management salary and insurance. 

 

During the nine months ended January 31, 2016, the Company incurred selling and marketing expenses of $960 compared to $24,852 during the nine months ended January 31, 2015. The decrease of $23,892 or 96.14% was primarily due to the marketing, consulting and sales commission.

 

-25-

 



Interest expense decreased by $40,837 or 61.72% for the nine month period ended January 31, 2016. The Company incurred $25,325 for the nine month period ended January 31, 2016 compared to $66,162 for the nine month period ended January 31, 2015. Decreases in interest expense is mainly due to decrease in interest on credit card and on shareholders loan.

 

During the nine months ended January 31, 2016, the Company recognized a net loss of $138,241 compared to net loss of $348,000 during the nine months ended January 31, 2015. Decrease in net loss of $209,759 mainly due to decrease in sales.

LIQUIDITY AND CAPITAL RESOURCES

As of January 31, 2016, the Company had $33,822 cash on hand, an inventory of $240,966 and net property and equipment of $28,056. The Company's total current liabilities were $3,544,798 as of January 31, 2016, which was represented mainly accounts payable of $349,426, accrued liabilities of $1,582,672, deposits from customers of $535,488, short-term debt of $94,640, notes payable of $489,842 and short-term borrowings from shareholders totaling $492,730. At January 31, 2016, the Company's current liabilities exceeded current assets by $3,270,010.

The Company received $2,636 in operating activities for the nine months period ended January 31, 2016 compared to $185,740 provided for nine month period ended January 31, 2015.

The Company did not have any investment activities during the period of nine months ended January 31, 2015 and 2016. 

During the nine months period ended January 31, 2016, the Company provided $20,094 in financing activities includes loan in the amount of, $14,317 from party and $21,618 from shareholders. The Company made payments includes $15,841 towards the lines of credits and credit cards.  

During the nine months period ended January 31, 2015, the Company used $42,268 in financing activities includes loan in the amount of, $4,630 from party. The Company made payments includes $11,972 towards the lines of credits and credit cards and $34,926 towards shareholders loans. 

The Company has an accumulated deficit, as of January 31, 2016, of $8,506,926 compared to $8,368,685 as of April 30, 2015.

Going Concern

The Company's auditors have issued a "going concern" qualification independent registered public accounting firm's report on the Company's financial statements as part of their opinion in the Audit Report. For the year ended April 30, 2015 and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability of the Company to continue as a "going concern."

-26-



Short Term.

On a short-term basis, we do not generate revenues sufficient to cover operations. Based on prior history, we will continue to have insufficient revenue to satisfy current and recurring liabilities as we continue to develop our operations. For short term needs we will be dependent on receipt, if any, of offering proceeds.

Need for Additional Financing

We do not have capital sufficient to meet our cash needs. We will have to seek loans or equity placements to cover such cash needs. No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred.

 

There is no assurance that the Company will be profitable, the Company may not be able to successfully develop, manage or market its products and services, the Company may not be able to attract or retain qualified executives and personnel, the Company's products and services may become obsolete, government regulation may hinder the Company's business, additional dilution in outstanding stock ownership may be incurred due to the issuance of more shares, warrants and stock options, or the exercise of warrants and stock options, and other risks inherent in the Company's businesses.

 

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed by the Company and any Current Reports on Form 8-K filed by the Company.

 

Contractual Obligations and Other Commercial Commitments

 

The Company does not have sufficient capital to meet its cash needs, including the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934. Management will have to seek loans or equity placements to cover such cash needs and cover outstanding payables. Lack of existing capital may be a sufficient impediment to prevent the Company from accomplishing its goal of expanding operations. There is no assurance that the Company will be able to carry out our business. No commitments to provide additional funds have been made by the Company's management or other shareholders. Accordingly, there can be no assurance that any additional funds will be available to the Company to cover its expenses as they are incurred.

 

Irrespective of whether the Company's cash assets prove to be inadequate to meet its operational needs, the management might seek to compensate providers of services by issuances of stock in lieu of cash.

 

-27-



Off-Balance Sheet Arrangements

 

In accordance with the definition under SEC rules, the following qualify as off-balance sheet arrangements:

 

a)      Any obligation under certain guarantees or contracts;

b)      A retained or contingent interest in assets transferred to an unconsolidated entity or similar entity or similar arrangement that serves as credit, liquidity, or market risk support to that entity for such assets;

c)      Any obligation under certain derivative instruments; and

d)      Any obligation under a material variable interest held by the registrant in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to the registrant, or engages in leasing, hedging, or research and development services with the registrant.

 

The following will address each of the above items pertaining to the Company.

 

As of January 31, 2016, we do not have any obligation under certain guarantees or contracts as defined above.

                    

As of January 31, 2016, we do not have any retained or contingent interest in assets as defined above.

 

As of January 31, 2016, we do not hold derivative financial instruments.

 

Accounting for Derivative Instrument and Hedging Activities, as amended.

 

As of January 31, 2016, we did not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities ("SPEs"), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of January 31, 2016 and April 30, 2015, we were not involved in any unconsolidated SPE transactions.

 

Dividends

 

The Company has not declared or paid any cash dividend on its common stock and does not anticipate paying dividends for the foreseeable future.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not Applicable

 

-28-



 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosures Controls and Procedures

 

We have adopted and maintained disclosure controls and procedures (as such term is defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

 

As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are not effective in timely alerting them to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure as a result of the deficiency in our internal control over financial reporting discussed below.

 

Management's assessment of the effectiveness of the small business issuer's internal control over financial reporting is as of the quarter ended January 31, 2016. We believe that internal control over financial reporting is not effective because of the small size of the business. We have not identified any, current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.

 

There was no change in our internal control over financial reporting that occurred during the quarter ended January 31, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

-29-



PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

None

ITEM 1A. RISK FACTORS.

None

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. MINE SAFETY DISCLOSURES.

None  

ITEM 5 OTHER INFORMATION.

None

ITEM 6. EXHIBITS.

 

Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

 

Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act

Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act

Exhibit 32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act

Exhibit 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

 

-30-



101.INS

XBRL Instance Document (1)

101.SCH

XBRL Taxonomy Extension Schema Document (1)

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document (1)

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document (1)

101.LAB

XBRL Taxonomy Extension Label Linkbase Document (1)

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document (1)

 

(1)  Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

-31-



SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

MEDINA INTERNATIONAL HOLDINGS, INC.

(Registrant)

     
     

Dated: May 2, 2016

By:/s/ Daniel Medina

Daniel Medina,

President

(Principal Executive Officer)

     
     
     

Dated: May 2, 2016

By:/s/ Madhava Rao Mankal

Madhava Rao Mankal,

Chief Financial Officer

(Principal Accounting Officer)

-32-

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

 

I, Daniel Medina, certify that:

 

1.                   I have reviewed this quarterly report on Form 10-Q of Medina International Holdings, Inc.;

 

2.                   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.                   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.                   I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)                Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)                Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)                Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)                Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 



5.                   I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

 

(a)                All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)                Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Dated: May 2, 2016

 

Signature: 

 

/s/ Daniel Medina

                                               

Daniel Medina,

President and Principal Executive Officer

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

 

I, Madhava Rao Mankal, certify that:

 

1.                   I have reviewed this quarterly report on Form 10-Q of Medina International Holdings, Inc.;

 

2.                   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.                   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.                   I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)                Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)                Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)                Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)                Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 



5.               I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

 

(a)                All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)                Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Dated: May 2, 2016

 

Signature: 

 

/s/ Madhava Rao Mankal

                                               

Madhava Rao Mankal,

Chief Financial Officer and Principal Financial Officer

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Daniel Medina, President and Principal Executive Officer of Medina International Holdings, Inc. (the Company), certify, that pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code:

 

1.         The Company's Quarterly Report on Form 10-Q for the period ended January 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2.         Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

 

/s/ Daniel Medina

                                               

Daniel Medina

President and Principal Executive Officer

 

Dated:   May 2, 2016

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Madhava Rao Mankal, Chief Financial Officer and Principal Financial Officer of Medina International Holdings, Inc. (the Company), certify, that pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code:

 

1.         The Company's Quarterly Report on Form 10-Q for the period ended January 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2.         Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

 

/s/ Madhava Rao Mankal

                                               

Madhava Rao Mankal

Chief Financial Officer and Principal Financial Officer

 

Dated:   May 2, 2016