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UNITED STATES FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from
_________ to __________Commission file number
333-101133________________________
Highland Clan Creations Corp. |
(Exact name of small business issuer as specified in its charter) |
Nevada |
98-0379351 |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Suite 219 - 10654 82 Ave NW, Edmonton, Alberta, Canada T6E 2A7 |
(Address of principal executive offices) |
(778) 863-3079 |
(Issuer's telephone number) |
n/a |
(Former name, former address and former fiscal year, if changed since last report) |
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
2,682,500 common shares issued and outstanding as at January 1, 2004
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I
Item 1. Financial Statements
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
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HIGHLAND CLAN CREATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
November 30, 2004 |
||
ASSETS |
||
Current assets |
||
Cash |
$ 28,128 |
|
Deposits |
12,533 |
|
Other current assets |
622 |
|
Total current assets |
41,283 |
|
Property & equipment, net |
3,050 |
|
Total Assets |
$ 44,333 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||
Current Liabilities |
||
Accounts payable and accrued expenses |
$ 3,511 |
|
Advances - shareholders |
3,600 |
|
Total current liabilities |
7,111 |
|
STOCKHOLDERS' EQUITY: |
||
Common stock, $.001 par value, 100,000,000 shares |
2,683 |
|
Additional paid in capital |
110,117 |
|
Accumulated other comprehensive income |
19 |
|
Deficit accumulated during the development stage |
(75,597) |
|
Total Stockholders' Equity |
37,222 |
|
|
$ 44,333 |
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HIGHLAND CLAN CREATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended November 30, 2004 and 2003,
and for the Period from April 1, 2002 (Inception) through November 30, 2004
Three Months Ended |
Inception through |
||||
2004 |
2003 |
2004 |
|||
General and administrative |
$ 44,076 |
$ 3,465 |
$ 75,597 |
||
________ |
________ |
________ |
|||
Net loss |
$ (44,076) |
$ (3,465) |
$ (75,597) |
||
Net loss per share: |
|||||
Basic and diluted |
$ (0.02) |
$ (0.00) |
|||
Weighted average shares outstanding: |
|||||
Basic and diluted |
2,673,159 |
1,950,000 |
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HIGHLAND CLAN CREATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended November 30, 2004 and 2003,
and for the Period from April 1, 2002 (Inception) through November 30, 2004
|
Three Months Ended |
Inception through |
|||
2004 |
2003 |
2004 |
|||
CASH FLOWS FROM OPERATING |
|||||
Net loss |
$ (44,076) |
$ (3,465) |
$ (75,597) |
||
Adjustments to reconcile net |
|||||
Depreciation and amortization |
277 |
- |
277 |
||
Expenses paid by Shareholder |
- |
- |
1,000 |
||
Shares issued for services |
7,500 |
- |
7,500 |
||
Change in current assets and liabilities: |
|||||
Deposits |
(12,533) |
- |
(12,533) |
||
Other current assets |
(401) |
- |
(622) |
||
Accounts payable & accrued expenses |
2,333 |
3,385 |
3,511 |
||
CASH FLOWS USED IN OPERATING |
(46,900) |
(80) |
(76,464 ) |
||
CASH FLOWS FROM INVESTING |
|||||
Capital expenditures |
(902 ) |
- |
(3,327 ) |
||
CASH FLOWS FROM FINANCING |
|||||
Issuance of common stock |
- |
- |
104,300 |
||
Advances by shareholders |
- |
- |
3,600 |
||
|
- |
- |
107,900 |
||
Effect of exchange rate changes on cash |
185 |
- |
19 |
||
NET DECREASE IN CASH |
(47,617) |
(80) |
28,128 |
||
Cash, beginning of period |
75,745 |
276 |
- |
||
Cash, end of period |
$ 28,128 |
$ 196 |
$ 28,128 |
||
SUPPLEMENTAL CASH FLOW INFORMATION |
|||||
Interest paid |
$ - |
$ - |
$ - |
||
Income taxes paid |
$ - |
$ - |
$ - |
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HIGHLAND CLAN CREATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Highland Clan Creations Corp. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's registration statement filed with the SEC on Form 10-KSB. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year end August 31, 2004 as reported in Form 10-KSB, h ave been omitted.
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Item 2. Management's Discussion and Analysis and Plan of Operation.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars and all references to "common shares" refer to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our", and "Highland Clan" mean Highland Clan Creations Corp., unless otherwise indicated.
On April 27, 2004 we established a wholly owned subsidiary, Legacy Bodysentials Inc., which subsequently changed its name to Bodysentials Health & Beauty Inc. ("Bodysentials"). Bodysentials produces and sells a nutritional beverage for youth in the form of an orange drink and a milkshake. Bodysentials also owns several nutritional supplement formulas and products that we intend to market and sell. This is compatible with our original business plan to offer nutritional supplement drinks, as well as related health products. We intend to add these to our product offering and are also considering additional means in which to market and sell our products, specifically via network marketing.
Our business plan is to offer nutritional drinks, supplements and related health products. Originally we intended to offer our beverages and related products only through the establishment of up to two stores, (or, if we raised less money, up to two food court kiosks). However, we have conducted market research since then and, based in large part on the past experiences of our president, Brent McMullin, we have determined that our products can be cost effectively and efficiently sold through additional means, specifically via network marketing. Initially, we intend to feature two nutritional beverages in the form of an orange drink and a milkshake. These beverages were developed by our president, Brent McMullin, and will be produced and sold by our subsidiary, Bodysentials. Subject to our ability to raise additional financing for our current and additional products, we also intend to offer an herbal supplement known as ASDEW and a skin care product line known as Mei Sing, both of which were developed by o ur president, Brent McMullin, and his wholly owned company Legacy Manufacturing Inc. We will require additional funds to offer these additional products, as well as for the manufacture and sale of our current products. We intend to compete against other health product companies by establishing name brand recognition and providing unique products which we believe are as good as, if not superior to, those of our competition.
We raised a total of $102,300 pursuant to our SB2 registration statement, which was declared effective on September 26, 2003. The offering had a minimum of $80,000. We closed the offering on March 26, 2004. Management did not purchase shares in the offering in order to reach the minimum. We have now commenced operations but we require additional financing to proceed with our current product offering and for additional products we intend to offer.
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Business Operations
We have recently commenced operations. Since completion of our offering we have established a wholly owned subsidiary, Bodysentials. Bodysentials produces and sells a nutritional beverage in the form of an orange drink and a milkshake, as well as several nutritional supplements which may be added to our beverages or sold separately. This is compatible with our original business plan to offer natural beverages and smoothies, as well as related health products. We intend to add items to our initial product offering and are also considering additional means in which to market and sell our products. These nutritional drinks and products will be marketed and sold for use by children, adults and seniors. Although we originally intended to market and sell our products in stores, we have since determined it is cost effective to offer our products through our new fully functional e-commerce website at
www.bodysentials.com and through network marketing. We are currently d eveloping a marketing plan with the assistance of an experienced marketing consultant.We anticipate commencing sales of our products within the next several months. We have not yet sold any products and have no revenues to date. We require additional funding to continue our operations and make additions to our product lines. We require additional funding before we anticipate significant sales of any of our products.
Marketing, Advertising and Promotion
Originally we intended to offer our beverages and related products only through the establishment of up to two stores, (or, if we raised less money, up to two food court kiosks). However, we have conducted market research since then and, based in large part on the past experiences of our new president, Brent McMullin, we have determined that our products can also be cost effectively and efficiently sold through additional means, specifically via our secure order platform on our website at
www.bodysentials.com and through network marketing. We intend to operate the network marketing segment of our business through Bodysentials or another subsidiary. As part of our plan of operations, we also plan to engage in a marketing program to build our brand name. We may consider reasonably priced advertising on cable television and radio, possibly combined with a direct mail campaign.Properties
We currently lease office and warehouse space in Langley, British Columbia. On September 28, 2004 our wholly owned subsidiary, Bodysentials, entered into a lease agreement for a term of 3 years commencing November 1, 2004. The lease is for office and warehouse space necessary to operate our business and includes suitable space for office administration, storage of inventory, packaging and labelling products, and carrying out other corporate functions. We pay approximately $1500 per month. We have two website addresses, our original site
www.highlandsmoothies.com as well as our new site www.bodysentials.com.Competition
The nutritional supplement and health products business is also highly competitive with respect to price, product offering, formulations and quality, and there are many well-established competitors. Certain factors, such as substantial price discounting, increased costs and the availability of experienced management and employees may adversely affect the industry in general and us in particular. We will compete with a large number of health related product companies. Most of the potential competitors have financial resources superior to ours, so there can be no assurance that our projected income will not be affected by our competition. We expect this competition to increase.
Government Regulation
We are subject to government regulations in respect of our products and operations. Any locations selling Highland and Bodysentials products may be subject to regulation by federal agencies and to licensing and regulation by provincial and local health, sanitation, safety, fire and other departments. Difficulties or failures in obtaining any required licensing or approval could result in delays or cancellations in the opening of new locations. We are also be subject to employment standards legislation and other laws governing such matters as minimum wages, overtime and other working conditions. We may also be subject to certain guidelines, codes and regulations that require stores to provide full and equal access to persons with physical disabilities. We will also be subject to various evolving
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federal, provincial and local environmental laws governing, among other things emissions to the air, discharge to waters and the generation, handling, storage, transportation, treatment and disposal of hazardous and no-hazardous substances and wastes. Our direct selling networking program must also comply with federal, state and provincial laws in any jurisdictions in which our products are sold. Our products themselves must also comply with laws regulating the sale of health foods and supplements.
INITIAL PRODUCTS
Our initial product line will include our nutritional supplement drink mix developed for youth, GP 4.0. This product comes in two varieties, an Orange Drink for use in the morning and a Milk Shake for use in the afternoon. GP 4.0 was developed with the assistance of Dr. Bruce Woolley, Doctor of Pharmacy, Professor of Nutrition and Post Doctorate Fellow of the University of Southern California. The British Columbia government then provided funds to help Bodysentials with the development of these beverages. British Columbia Research, located at the University of British Columbia, developed the delivery system, in the form of the Orange Drink in the morning before school and the Milk Shake for use after school. Bodysentials then engaged the assistance of a specialist in biochemistry (Masters Degree) who assembled and selected the active ingredients for youth effectiveness. Although developed for youth, GP 4.0 can also be used by adults and seniors who want to obtain added nutritional bene fits.
Health Related Products
We may also decide to offer other products including nutritional supplement drinks, vitamins, supplements, energy bars, hair and skin care products and other health related products. In particular, we are adding to our product line an herbal supplement known as ASDEW and a skin care line known as Mei Sing, both of which were developed by our president, Brent McMullin and his wholly owned company, Legacy Manufacturing Inc. We will require additional funds to offer these additional products, as well as for the manufacture and sale of our current products.
Product Research and Development
We do not anticipate that we will expend any significant funds on research and development over the twelve months ending November 30, 2005.
Employees
Currently there are no full time or part-time employees of our company. However, our president, Brent McMullin, is a full time consultant of our company, and our secretary, Brett Stewart, is a part time consultant of our company. In addition, Brad McMullin who is the son of Brent McMullin, our president, is a full time consultant of our company. We expect an increase in the number of employees over the next 12 month period depending upon the growth of our business. If business is successful and we experience rapid growth, our current officers and directors may be required to hire new personnel to improve, implement and administer our operational, management, financial and accounting systems.
Purchase or Sale of Equipment
Other than purchasing computer and office equipment necessary for operating our business, we do not intend to purchase any significant equipment over the twelve months ending November 30, 2005.
Results of Operations
Our company posted losses of $44,076 for the three months ending November 30, 2004, losses of $3,465 for the three months ending November 30, 2003 and losses of $75,597 since inception to November 30, 2004. The principal component of the losses were for general and administrative expenses.
Operating expenses for the three months ending November 30, 2004 were $44,076 compared to our operating expenses for the three months ending November 30, 2003 of $3,465 and our expenses from inception to November 30, 2004 which were $75,597.
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Financial Condition, Liquidity and Capital Resources
At November 30, 2004, we had working capital of $34,172.
At November 30, 2004, our company's total assets of $41,283, which consisted mainly of cash of $28,128.
At November 30, 2004, our company's total liabilities were $7,111.
We have not had revenues from inception. We require proceeds from our current offering to satisfy our ongoing cash requirements. We do not expect to purchase or sell any significant equipment. We do not expect any significant changes in the number of our employees.
Our company has no long-term debt and does not regard long-term borrowing as a good, prospective source of financing.
Plan of Operation
Our primary objectives over the 12 months ending November 30, 2005, will be to commence our juice, smoothie and health products business operations to sell our juices, milk shakes and health products. We also intend to develop our website and marketing materials and to commence our marketing efforts to attract customers. We may also use multi-level marketing channels to distribute our products.
Cash Requirements
Over the next twelve months we intend to use funds to continue and complete the development of our website and marketing materials and commence our marketing efforts, as follows:
Estimated Funding Required During the Next Twelve Months
General and Administrative |
$25,000 |
|
Capital Expenditures |
$5,000 |
|
Operations |
||
Marketing & Sales |
$40,000 |
|
Working Capital |
$55,000 |
|
Total |
$80,000 |
As November 30, 2004, we had working capital of $34,172. We anticipate that we will have to raise additional cash of a minimum of $50,000 no later than February 15, 2005, to allow us to commence the marketing of our services and provide us with approximately $55,000 in working capital to continue our normal operations. We plan to raise the capital required to meet these short-term needs, and additional capital required to meet the balance of our estimated funding requirements for the twelve months through sales of our securities in secondary offerings or private placements. We recently completed a financing in which we raised $102,300 pursuant to an SB-2 registration statement, declared effective September 26, 2003, by selling 682,500 shares of common stock at a price of $0.15 per share.
There are no assurances that we will be able to obtain additional funds required for our continued operations. In such event that we do not raise sufficient additional funds by secondary offering or private placement, we will consider alternative financing options, if any, or be forced to scale down or perhaps even cease our operations.
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Going Concern
The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
We have historically incurred losses, and through November 30, 2004 have incurred losses of $75,597 from our inception. Because of these historical losses, we will require additional working capital to develop our business operations.
We intend to raise additional working capital through private placements, public offerings and/or bank financing. As of January 14, 2005, we were in discussions with several potential investors, however no definitive agreements have been reached.
There are no assurances that we will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.
These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Our independent auditor's report on our audited financial statements, in our Form 10-KSB for the fiscal year ended August 31, 2004, contained a going concern qualifier. The qualifier explanatory paragraph contained in their audit report should be read in connection with our management's discussion of our financial condition, liquidity and capital resources.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our unaudited financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States of America for interim financial statements. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.
Our company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
RISK FACTORS
Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward-looking statements". Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the
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direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Such estimates, projections or other "forward-looking statements" involve various risks and uncertainties as outlined below. We caution readers of this quarterly report that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward-looking statements". In evaluating us, our business and any investment in our business, readers should carefully consider the following factors.
If we do not raise additional funds and if we are unable to generate sufficient revenues for our nutritional supplement and health & beauty products business, we may go out of business.
We must generate sufficient revenues to operate our business profitably and if we do not we may have to cease operations. We have nominal assets and very limited operations with which to create operating capital. We recently raised $102,300 pursuant to an SB2 registration statement declared effective on September 26, 2003. We anticipate needing approximately $50,000 in additional capital by February 15, 2005. If we do not generate sufficient revenues from our operations or raise additional financing to allow us to continue operations we may have to cease operations.
We need additional financing to continue our business operations and to commence the marketing and sale of our initial products, as well as to add additional products to our line. If we do not raise at least $50,000 by February 15, 2005 we may cease operations. We may incur unexpected costs, delays or difficulties in developing or marketing our markets which may result in us requiring additional funds and which may result in our failure to continue our operations.
We will have future capital needs and may not be able to obtain additional funding; as a result, we may not be able to continue operating if we cannot meet these funding requirements. To achieve and maintain the competitiveness of our services, and to conduct costly marketing activities and infrastructure development, we may need to raise additional funds. Our anticipation of the time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties. Actual results could vary as a result of a number of factors, including those described in these risk factors. We recently raised $102,300 pursuant to an SB2 registration statement declared effective on September 26, 2003. We anticipate needing approximately $50,000 in additional capital by February 15, 2005. In addition, we may need to arrange for additional funding beyond this amount. We do not have any commitments for any additional funding. We expect to raise addi tional working capital through offerings of our common stock or through loans. There is no guarantee that we will be able to arrange for equity financings or obtain loans on favorable terms or on any terms at all. If we are not able to raise additional working capital, our ability to expand and raise revenue will be harmed.
Competition in the nutritional and health products industry is highly competitive and there is no assurance that we will be successful in our business plan.
The nutritional and health products industry is highly competitive with respect to price, service, location and quality, products, and there are many well-established competitors. Certain factors, such as substantial price discounting, increased food, supplement, labor and benefits costs and the availability of experienced management and hourly employees may adversely affect the industry in general and us in particular. We will compete with a large number of national and regional companies, many of which are franchises. Most of the potential competitors have financial resources superior to ours, so there can be no assurance that our projected income will not be affected by our competition.
Our operations are subject to government regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.
Our business will be subject to government regulation. Each of our locations will be subject to regulation by federal agencies and to licensing and regulation by provincial and local health, sanitation, safety, fire and other departments.
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Difficulties or failures in obtaining any required licensing or approval could result in delays or cancellations in our operations.
Because our directors have foreign addresses this may create potential difficulties relating to service of process in the event that you wish to serve them with legal documents.
Neither of our current directors and officers have resident addresses in the United States (although we are currently seeking additional management in the United States). Our current directors are both resident in Canada. Because our officers and directors have foreign addresses this may create potential difficulties relating to the service of legal or other documents on any of them in the event that you wish to serve them with legal documents. This is because the laws related to service of process may differ between Canada and the US. Similar difficulties could not be encountered in serving the company, proper, since our registered address is located in the United States at 880 - 50 West Liberty Street, Reno, Nevada, 89501.
Because the SEC imposes additional sales practice requirements on brokers who deal in our shares which are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty in reselling your shares and may cause the price of the shares to decline.
Our shares qualify as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement prior to making a sale to you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
Mr. McMullin and Mrs. Stewart own more than 50% of the outstanding shares of our company, so they are able to decide who are the directors and you may not be able to elect any directors.
Mr. McMullin and Mrs. Stewart own more than 50% of the issued and outstanding shares of our company and because of this they are able to elect all of our directors and control our operations.
Item 3. Controls and Procedures.
As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this report, being November 30, 2004, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, including our president and chief executive officer. Based upon that evaluation, our president and chief executive officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report. There have been no significant changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 2. Recent Sales of Unregistered Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits
Exhibits required by Item 601 of Regulation S-B
(3) Articles of Incorporation and By-laws
3.1 Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2, filed on November 12, 2002).
3.2 Bylaws (incorporated by reference from our Registration Statement on Form SB-2, filed on November 12, 2002).
(31) Section 302 Certification
31.1 Certification of Brent McMullin
31.2 Certification of Brett Stewart
(32) Section 906 Certification
32.1 Certification of Brent McMullin
32.2 Certification of Brett Stewart
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HIGHLAND CLAN CREATIONS CORP.
By: /s/ Brent McMullin
Brent McMullin, President and Director
(Principal Executive Officer)
Date: January 20, 2005
By: /s/ Brett Stewart
Brett Stewart, Secretary, Treasurer and Director
(Principal Financial Officer and Principal Accounting Officer)
Date: January 20, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Brent McMullin
Brent McMullin, President and Director
Date: January 20, 2005
By: /s/ Brett Stewart
Brett Stewart, Secretary, Treasurer and Director
Date: January 20, 2005
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brent McMullin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Highland Clan Creations Corp.
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to date 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this quarterly report;
4. The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer 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 small business issuer, 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) evaluated the effectiveness of the small business issuer'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
(c) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's control over financial reporting.
5. The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer'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 small business issuer'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 small business issuer's internal controls and procedures for financial reporting.
Date: January 20, 2005
/s/ Brent McMullin
Signature: Brent McMullin
Title: President and Director
(Principal Executive Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brett Stewart, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Highland Clan Creations Corp.
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to date 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this quarterly report;
4. The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer 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 small business issuer, 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) evaluated the effectiveness of the small business issuer'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
(c) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's control over financial reporting.
5. The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer'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 small business issuer'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 small business issuer's internal controls and procedures for financial reporting.
Date: January 20, 2005
/s/ Brett Stewart
Signature: Brett Stewart
Title: Secretary Treasurer and Director
(Principal Financial Officer and
Principal Accounting Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Highland Clan Creations Corp. (the "Company") on Form 10-QSB for the period ended November 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brent McMullin, the President and Director (Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Dated: January 20, 2005
Brent McMullin
/s/ Brent McMullin______________________
President and Director
(Principal Executive Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Highland Clan Creations Corp. (the "Company") on Form 10-QSB for the period ended November 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brett Stewart, the Secretary, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer) of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Dated: January 20, 2005
Brett Stewart
/s/ Brett Stewart______________________
Secretary, Treasurer and Director
(Principal Financial Officer and
Principal Accounting Officer)