marinegrowth_10q-033108.htm

0001361106-08-000116.txt : 20080514 0001361106-08-000116.hdr.sgml : 20080514 20080513180618 ACCESSION NUMBER: 0001361106-08-000116 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20080331 FILED AS OF DATE: 20080514 DATE AS OF CHANGE: 20080513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINE GROWTH VENTURES INC CENTRAL INDEX KEY: 0001334794 STANDARD INDUSTRIAL CLASSIFICATION: [9995] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-128077 FILM NUMBER: 08828907 BUSINESS ADDRESS: STREET 1: 405-A ATLATIS RD CITY: CAPE CANAVERAL STATE: FL ZIP: 32920 BUSINESS PHONE: 321-783-1744 MAIL ADDRESS: STREET 1: 405-A ATLATIS RD CITY: CAPE CANAVERAL STATE: FL ZIP: 32920 10-Q 1 marinegrowth_10q-033108.htm QUARTERLY REPORT marinegrowth_10q-033108.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2008

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________________ to _______________

333-128077

(Commission file number)

MARINE GROWTH VENTURES, INC.

(Exact name of small business issuer as specified in its charter)

Delaware	20-0890800
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

405-A Atlantis Road

Cape Canaveral, Florida 32920

(Address of principal executive offices)

(321) 783-1744

(Issuer's telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by a check mark 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 o

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of March 31, 2008 – 21,739,500 shares of common stock

Indicate by a check mark whether the registrant is (check one):

an accelerated filer o

a non accelerated filer o

or a smaller reporting company x

MARINE GROWTH VENTURES, INC.

FORM 10-Q

QUARTERLY PERIOD ENDED March 31, 2008

TABLE OF CONTENTS

PART 1	FINANCIAL STATEMENTS	3

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheet as of March 31, 2008 (Unaudited) and December 31, 2007 (Audited)	4

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2008 and 2007 (Unaudited)	5

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007 (Unaudited)	6

	Notes to Condensed Consolidated Financial Statements as of March 31, 2008 (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13

Item 4.	Controls and Procedures	14

PART II	OTHER INFORMATION	15

Item 1.	Legal Proceedings	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	15

Item 4.	Submission of Matters to a Vote of Security Holders	15

Item 5.	Other Information	15

Item 6.	Exhibits	15

SIGNATURES		19

CERTIFICATIONS

	Certification of CEO Pursuant to 13a-14(a) under the Exchange Act

	Certification of CFO Pursuant to 13a-14(a) under the Exchange Act

	Certification of the CEO Pursuant to 18 U.S.C. Section 135023

	Certification of the CFO Pursuant to 18 U.S.C. Section 135024

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Marine Growth Ventures, Inc and Subsidiaries
Consolidated Balance Sheet


ASSETS
	March 31, 2008 (Unaudited)			December 31, 2007 (Audited)
CURRENT ASSETS
Cash	$	4,355		$	-
Escrow		6,500			-
Accounts Receivable		12,000			6,000
Other Receivables		-			501
Prepaid Expenses		523			719
Other Receivables, Net of Allowance		-			180,000
Total Current Assets		23,378			187,220

FIXED ASSETS, NET		1,503,400			1,504,301

PREPAID FINANCING COSTS		15,240			20,781

OTHER ASSETS
Accounting Retainer		5,000			5,000
Other Deposits		2,181			2,181
Loan Reserve		67,916			67,916
Total Other Assets		75,097			75,097
TOTAL ASSETS	$	1,617,115		$	1,787,399
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accrued Payroll	$	634,237		$	581,414
Accounts Payable		321,192			376,290
Cash Overdraft		-			17,343
Accrued Interest Payable		186,441			135,905
Accrued Expenses		350,663			261,226
Deferred Expenses		19,166			19,166
Other Payables		-			180,000
Note Payable – Greystone		249,996			270,833
Note Payable – Stockholder		769,050			769,050
Note Payable – Other		500,000			275,500
Total Current Liabilities		3,030,745			2,886,727

LONG TERM LIABILITIES
Greystone Note Payable		1,168,321			1,168,150
Total Long Term Liabilities		1,168,321			1,168,150

TOTAL LIABILITIES		4,199,066			4,054,877
STOCKHOLDERS' DEFICIENCY
Preferred Stock, $0.001 par value, 5,000,000
shares authorized, none issued or outstanding
Common Stock, $0.001 par value, 100,000,000
shares authorized, 21,739,500 issued and outstanding		21,740			21,740
Additional Paid-In Capital		558,136			555,699
Accumulated Deficit		(3,131,153	)		(2,811,864	)
Accumulated Other Comprehensive Income (Loss)		(30,674	)		(33,053	)
Total Stockholders' Deficiency		(2,581,951	)		(2,267,478	)
TOTAL LIABILITIES & STOCKHOLDERS'
DEFICIENCY	$	1,617,115		$	1,787,399

See Accompanying Notes to Condensed Consolidated Financial Statements

Marine Growth Ventures, Inc and Subsidiaries
Consoldiated Statement of Operations
(Unaudited)
	Three Months Ended
	March 31,
	2008			2007
REVENUE
Ship Management Fees and Consulting Income	$	12,000		$	33,898

Cost of Sales		64,063			-

GROSS PROFIT (LOSS)		(52,063	)		33,989

EXPENSES
Payroll and Related Expenses		76,460			88,552
Professional Fees		51,970			56,234
General and Administrative Expenses		14,490			14,878
Selling Expenses		1,360			-
Operating Expenses		42,020			17,995
Total Expenses		186,300			177,659

LOSS FROM OPERATIONS		(238,363	)		(143,761	)

OTHER EXPENSE
Interest		62,385			6,355
Loan Service Fee		8,659			-
Amortization		5,542			-
Sales Tax		-			81,000
Other		4,345			1,858
Total Other Expense		80,931			89,213

NET LOSS	$	( 319,294	)	$	(232,974	)

Basic and diluted loss per common share	$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding - basic and diluted		21,739,500			21,739,500

See Accompanying Notes To Condensed Consolidated Financial Statements

Marine Growth Ventures, Inc and Subsidiaries
Consolidated Statement of Cash Flows
(Unaudited)

	Three Months Ended
	March 31,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(319,294	)	$	(232,974	)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation & Amortization		5,638			92
Donated Rent & Services		2,438			937
Changes in Operation Assets & Liabilities:
Accounts Receivables		(6,000	)		-
Sales Tax Receivable		501			-
Other Receivables		(6,500	)		-
Prepaid Insurance		196			(3,240	)
Cash Overdraft		(17,343	)		-
Accrued Payroll		52,822			60,738
Accounts Payable		(34,913	)		(13,349	)
Accrued Interest Payable		50,536			6,355
Accrued Expenses		69,257			36,514
Deferred Rent		-			(1,888	)
Net Cash Used by Operating Activities		(202,662	)		(146,815	)

CASH FLOWS FROM INVESTING ACTIVITIES
Legal Fees on Ship Purchase		-			(69,891	)
Net Cash Provided by Investing Activities		-			(69,891	)

CASH FLOWS FROM FINANCING ACTIVITIES
Loan Costs		-			(13,000	)
Payment on Note Payable – Greystone		(20,666	)		-
Proceeds From Note Payable-Stockholder (net)		-			263,700
Proceeds From Note Payable – Related Party		224,500			-
Net Cash Provided by Financing Activities		203,834			250,700

Currency Conversion Gain/Loss		3,183			(32,335	)

NET INCREASE (DECREASE) IN CASH:		4,355			1,659

BEGINNING CASH		-			3,947

ENDING CASH	$	4,355		$	5,606

SUPPLEMENTAL DISCLOSURES OF CASH ITEMS
Interest Paid	$	11,849		$	-
Income Taxes Paid		-			-
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING & FINANCING ACTIVITES
Purchase of Fixed Assets	$	-		$	1,350,000
Loan Costs		-			(20,250	)
Loan Reserve		-			(67,916	)
Reserve Legal Fees		-			(61,834	)
Note Payable – Ship Purchase		-			1,500,000

See Accompanying Notes To Condensed Consolidated Financial Statements

Marine Growth Ventures, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

As of March 31, 2008 (Unadudited)

Note 1 – Organization and Operations and Going Concern

Marine Growth Ventures, Inc. (“MGV”) was formed and incorporated in the state of Delaware on November 6, 2003. MGV is a holding company that conducts its operations primarily through a wholly-owned subsidiary, Sophlex Ship Management, Inc. (“Sophlex”). MGV, Sophlex and MGV’s other subsidiaries are referred to collectively herein as the “Company”.

The Company had no significant business operations until its acquisition of Sophlex on September 1, 2004. Sophlex, which was founded in 1999, provides ship crewing and management services to vessel owners and operators in the United States and abroad. The founder and the sole shareholder of Sophlex at the time of the acquisition is the current Chief Operating Officer of the Company. At the time acquisition both companies were private entities.

The Company is also currently pursuing opportunities in a new industry referred to as cruise timeshares, which combines traditional real estate timeshares with commercial cruise vacations. Purchasers of cruise timeshares will receive the right to a seven-day cruise each year for up to 15 years aboard a cruise ship purchased by the Company.

In addition, the Company is pursuing other opportunities in the shipping industry.

Since its inception, the Company has been dependent upon the proceeds of loans from its stockholders and the receipt of capital investments to fund its continuing activities. The Company has incurred operating losses since its inception. The Company expects to incur significant increasing operating losses over the next several years, primarily due to the expansion of its business. There is no assurance that the Company’s developmental and marketing efforts will be successful. The Company will continue to require the infusion of capital or loans until operations become profitable. There can be no assurance that the Company will ever achieve any revenues or profitable operations from the sale of its proposed products. The Company is seeking additional capital at this time. During the three months ended March 31, 2008, the Company had a net loss of $319,294 and a negative cash flow from operations of $202,622 and as March 31, 2008, the Company had a working capital deficiency of $3,007,367 and a stockholders’ deficiency of $2,579,694. As a result of the above, the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2 - Summary of Significant Accounting Policies

(A)	Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Marine Growth Ventures, Inc. and its wholly-owned subsidiaries, Marine Growth Finance & Charter, Inc., Inc., Sophlex Ship Management, Inc., Marine Growth Freight, Inc., Marine Aggregates, Inc., Gulf Casino Cruises, Inc., Ship Timeshare Management, Inc., Marine Growth Canada, Ltd., Fractional Marine, Inc., Cruiseship Share Owners Association, Inc. and Pacific Aurora Cruise Association, Inc. All material inter-company accounts and transactions have been eliminated in consolidation.

(B)	Use of Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates.

(C)	Loss per Share

Net loss per share (basic and diluted) has been computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during each period. Common stock equivalents were not included in the calculation of diluted loss per share as there were none outstanding during the periods presented as well as their effect would be anti-dilutive.

(D)	Interim Condensed Consolidated Financial Statements

The condensed consolidated financial statements as of March 31, 2008 and for the three months ended March 31, 2008 and 2007 are unaudited. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair representation of the consolidated financial position and the consolidated results of operations. The consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year end December 31, 2007 appearing in Form 10KSB filed on April 11, 2008.

(E)	Recent Accounting Pronouncements

In the opinion of management, there are no recent accounting pronouncements that will have a material effect the Company’s consolidated financial statements.

Note 3- Related Party Transactions

Revolving Note “A” issued on January 5, 2006

For the period ended March 31, 2008 the company renegotiated the maturity date from February 20, 2008 to December 15, 2008. The balance at March 31, 2008 was $853,150 ($769,050 in principal and $84,100 in accrued interest).

Revolving Note “B” issued on August 1, 2007

For the period ended March 31, 2008 the Company increased the availability on the revolving note from $300,000 to 500,000. As of May 8, 2008, the Company increased the availability on the revolving note from $500,000 to $650,000. The balance at March 31, 2008 was $516,903 ($500,000 in principal and $16,903 in accrued interest)

The Company utilizes space in Milwaukee, Wisconsin owned by an entity controlled by the Chairman of the Board of Directors. The fair market value of this rent is $250 per month and is recorded as $750 rent expense and a corresponding related party liability for the three month ended March 31, 2008 and 2007. On March 31, 2008, this debt was forgiven and converted into additional paid in capital.

The Company utilizes employees of an entity controlled by the Chairman of the Board of Directors. The value of the work done by the employees of the entity controlled by the Chairman of the Board of Directors equated to $1,688 during the three months ending March 31, 2008. These services and a corresponding related party liability was recorded. On March 31, 2008, this debt was forgiven and converted into additional paid in capital.

The company is using a company owned by a stockholder, who is also the majority member of the LLC that is the majority owner of the Company for consulting services. During the twelve months ended December 31, 2007, the Company was charged $77,500 in consulting fees. For the three months ended March 31, 2008 there were no fees incurred.

Note 4 - Concentration of Credit Risk

One customer accounted for the total revenue for the three months ended March 31, 2008 and 2007.

Note 5 – M/V Pacific Aurora

On March 15, 2007, Marine Growth Canada Ltd., a wholly-owned subsidiary of MGV entered into a Sale and Purchase Agreement with British Columbia Discovery Voyages, Inc., T. Jones Enterprises, Inc. and Trevor Jones, pursuant to which the Company purchased the Pacific Aurora, a Canadian flagged vessel, for an aggregate purchase price of $1,350,000. In accordance with the Sale and Purchase Agreement the Company completed the sale on March 27, 2007 and Marine Growth Ventures acquired the Pacific Aurora for use in its intended cruise timeshare business operations. In conjunction with the purchase of the ship, the Company capitalized $131,725 worth of professional fees bringing the total value of the ship to $1,481,725.

Note 6 – Fixed Assets

Fixed assets as of March 31, 2008 consisted of:

Office Furniture	$	1,286
Computer Equipment		1,827
Ship		1,481,725
Ship Furnishings		20,186
Less: Accumulated Depreciation		(1,624	)

Fixed Assets, net	$	1,503,400

Depreciation expense for the three months ended March 31, 2008 and 2007 amounted to $97 and $263, respectively. No depreciation has been taken on the ship, as it was not yet operational as of March 31, 2008

Note 7 – M/V Babe

On December 15, 2006 an order appointing substitute custodian was signed appointing Sophlex Ship Management, Inc. the custodian of M/V Babe. The boat was arrested on January 5, 2007.

On January 9, 2007 Greystone Business Credit, the plaintiff in the case against the M/V Babe, signed a maintenance and caretaking proposal of the M/V Babe with Sophlex Ship Management, Inc. This contract ended in July, 2007.

On July 30, 2007, Fractional Marine, Inc., a wholly owned subsidiary of Marine Growth Ventures, Inc. entered into a Bareboat Charter with Greystone Maritime Holdings, LLC pursuant to which the Company would hire a ship owned by Greystone Maritime, the M/V Babe for a period of 365 days, for a monthly cost of $21,354.17, with the intent that the Company would sell the ship to a third party. The Company has an option to sell the Vessel to a third party or to purchase the Vessel itself or thru an affiliate. If the ship is sold to a third party, the purchase price of the ship will be $2,500,000 payable to Greystone Maritime. If the amount received for the ship is greater than $2,500,000 the Company will keep the additional funds, if the sales price for the ship is less than $2,500,000, the Company will be responsible for the shortfall which can be paid in twenty-four equal installments with interest to be calculated at the prime rate established by the Wall Street Journal during the month that the Company exercises its option to purchase, plus 2%. If the Company elects to purchase the Vessel, the sales price shall be $2,500,000 less the received charter hire month payments of $21,354.17. The purchase price shall be payable over a sixty month period. The interest rate shall be 10.25%.

On August 28, 2007, Fractional Marine, Inc., a wholly owned subsidiary of Marine Growth Ventures, Inc., entered into a Bareboat Sub-Charter with an individual pursuant to which that individual will charter hire the M/V Babe for $6,000 per month until February 1, 2008 upon which time the individual has a purchase option. As part of this agreement, the individual was to place a $180,000 security deposit for the boat. The deposit would be non-refundable if the individual did not purchase the boat. The individual had until Feb 1st, 2008 to secure separate financing for the security deposit and the purchase of the M/V Babe. In conjunction with this agreement, the individual was required to secure collateral for the $180,000 through a third party. As of March 31, 2008, the individual has not paid the monthly lease payment for January and February 2008, the security deposit, or secured financing for the purchase of the ship. The individual is in default of the bareboat sub-charter. On April 21, 2008, the M/V Babe was repossessed by the Company. The individual is in talks with the Company regarding payment of the outstanding amounts. The Company has prepared the required documentation to foreclose on the collateral for the security deposit, if an agreement is not reached. The Company has taken a full reserve against the $180,000 based upon the possible collectability of the money owed to the Company and the costs that will be incurred to collect these funds.

Note 8 – Greystone Business Credit II, LLC

To obtain funding for the purchase the Pacific Aurora, a Canadian flagged vessel, on March 27, 2007, Marine Growth Canada, Ltd. and Marine Growth Finance & Charter, Inc., wholly-owned subsidiaries of Marine Growth Ventures, Inc., entered into a Loan and Security Agreement with Greystone Business Credit II LLC. Pursuant to the terms of the Loan and Security Agreement, Marine Growth Canada, Ltd. and Marine Growth Finance & Charter, Inc. issued a Term Note to Greystone Business Credit II, LLC in the aggregate principal amount of $1,500,000 for a term of two years. The Term Note bears interest at a rate of 2.25%, plus the prime interest rate. The principal is being amortized over six years with a balloon payment in two years.

Marine Growth Canada, Ltd. and Marine Growth Finance & Charter, Inc. granted a security interest in all of its assets, including the Pacific Aurora, to Greystone Business Credit II, LLC as security for the financing facility. Marine Growth Canada, Ltd., and Marine Growth Finance & Charter, Inc. paid a commitment fee of $22,500 and will pay a loan servicing fee of .2% each month based on the outstanding principal of the Term Note.

In addition, the Company executed a Guaranty in favor of Greystone Business II, LLC to guaranty the full payment of all obligations due under the Term Note. Interest expense of $33,065 and loan services fees of $8,659 were recorded for the period ended March 31, 2008. In conjunction with this, a stockholder, who is also the majority member of the LLC that is the majority owner of the Company, pledged 300,000 shares of his common stock of an unrelated public company.

As of March 31, 2008, the Company is past due in its payments to Greystone Business II, LLC. The balance on the note as of March 31, 2008 is $1,418,317.

Note 9 – Subsequent Events

On April 21, 2008, the Company repossessed the M/V Babe from the individual with whom the Company had a Bareboat Sub-Charter. As of March 31, 2008, the individual has not paid the monthly lease payment for January and February 2008, the security deposit, or secured financing for the purchase of the ship. The individual is in default of the bareboat sub-charter. The individual is in talks with the Company regarding payment of the outstanding amounts. The Company has prepared the required documentation to foreclose on the collateral for the security deposit, if an agreement is not reached. The Company has taken a full reserve against the $180,000 based upon the possible collectability of the money owed to the Company and the costs that will be incurred to collect these funds.

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS

Forward-Looking Statements

This Quarterly Report of Form 10-Q, including this discussion and analysis by management, contains or incorporates forward-looking statements. All statements other than statements of historical fact made in report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations. The potential risks and uncertainties that could cause our actual results to differ materially from those expressed or implied herein are set forth in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Background

We were formed and incorporated in the state of Delaware on November 6, 2003. We are a holding company and conduct our current operations solely through a wholly-owned subsidiary, Sophlex Ship Management, Inc. (“Sophlex”).

We had no significant business operations until our acquisition of Sophlex on September 1, 2004. Sophlex, which was founded in 1999, provides ship crewing and management services to vessel owners and operators in the United States and abroad. Our Chief Operating Officer was the founder and the sole shareholder of Sophlex prior to the acquisition.

We are also currently pursuing opportunities to develop cruise vessels for a new industry referred to as cruise timeshares, which combines traditional real estate timeshares with commercial cruise vacations. Purchasers of cruise timeshares will receive the right to a seven-day cruise each year for up to a period of 15 years aboard a cruise ship purchased by the Company.

Results of Operations

Since our inception, we have been dependent upon the proceeds of loans from our stockholders and the receipt of capital investment to fund our continuing activities. We have incurred operating losses since our inception. We expect to incur significant increasing operating losses over the next several years, primarily due to the expansion of our business. We will continue to require the infusion of capital until operations become profitable. We had a net loss of $319,294 and a negative cash flow from operations of $202,662 for the three months ended March 31, 2008.

Three Months Ended March 31, 2008 and 2007:

Revenue: Revenue was $12,000 for the three months ended March 31, 2008 compared to $33,898 earned in the three months ended March 31, 2007. The difference is due to the different income sources. On August 28, 2007, Fractional Marine, Inc., a wholly owned subsidiary of Marine Growth Ventures, Inc., entered into a Bareboat Sub-Charter with an individual pursuant to which that individual will charter hire the M/V Babe for $6,000 per month until February 1, 2008 upon which time the individual has a purchase option. Additionally, Sophlex Ship Management, Inc., was appointed as the substitute custodian of M/V Babe. This boat was arrested on January 5, 2007. On January 9, 2007 Greystone Business Credit, the plaintiff in the case against the M/V Babe, signed a maintenance and caretaking proposal of the M/V Babe with Sophlex Ship Management, Inc. The final custodial payment was made in July, 2007 and no further fees will be charged to Greystone on a monthly basis in 2007.

Payroll and Related Expenses: Payroll and related expenses were $76,460 for the three months ended March 31, 2008 compared to $88,552 for the three months ended March 31, 2007. The decrease of $12,092 was due to several officer waiving their payroll as of March 1, 2008.

Professional Fees: Professional fees were $51,970 for the three months ended March 31, 2008 compared to $56,234 for the three months ended March 31, 2007. The net decrease of $4,264 is due to a net decrease in accounting fees of $17,576, and an increase of legal and consulting fees of 13,312. The accounting fees decreased due to a switch in auditors and the increase of the legal and consulting fees is because the Company is currently pursuing opportunities in a new industry referred to as cruise timeshares, which combines traditional real estate timeshares with commercial cruise vacations.

General and Administrative Expenses: General and administrative expenses were $14,490 and $14,878 for the three months ended March 31, 2008 and 2007, respectively. General and administrative expenses decreased by $388 in the three months ended March 31, 2008 as compared to the three months ended March 31, 2007.

Operating Expenses: Operating expenses were $42,020 for the three months ended March 31, 2008 compared to $17,995 for the three months ended March 31, 2007. This increase of $24,025 was due to the operating expenses of the Pacific Aurora.

Other Income (Expenses): Other Income was ($80,931) for the three months ended March 31, 2008 and other expenses was ($89,212) for the three months ended March 31, 2007. Other income (expenses) decreased by $8,281 for the three months ended March 31, 2008. For the three months ended March 31, 2008, bank fees were $879, finance charges were $3,466, interest expense was $62,385, loan service fees were $8,659, and amortization was $5,542. For the three months ended March 31, 2007, bank fees were $210, finance charges were $538, interest expense was $6,355, ship sales tax was $81,000, and organizational costs were $1,109.

Net Loss: Net loss before income taxes was $319,294 and $232,974 for the three months ended March 31, 2008 and 2007, respectively. The increase in net loss is attributed to expenses related to the purchase of the M/V Pacific Aurora.

Liquidity and Capital Resources

For the three months ended March 31, 2008, we had a negative cash flow from operations of $202,662 compared to a negative cash flow of $146,815 as of March 31, 2007, an increase in the negative cash flow of $55,847. Since inception, we have been dependent upon proceeds of loans from our stockholders and receipt of capital investment to fund our continuing activities.

For the three months ended March 31, 2008, we had a net loss of $319,294 compared to a net loss of $232,974 for the three months ended March 31, 2007, an increase in the net loss of $86,3620.

One customer accounted for the total revenue for the three months ended March 31, 2008 and 2007.

For the period ended March 31, 2008, the company renegotiated the maturity date from February 20, 2008 to December 15, 2008 on Revolving Note “A” issued on January 5, 2006. The balance at March 31, 2008 was $853,150 ($769,050 in principal and $84,100 in accrued interest).

For the period ended March 31, 2008 the Company increased the availability on the Revolving Note “B” issued n August 1, 2007, from $300,000 to 500,000. As of May 8, 2008, the Company increased the availability on the revolving note from $500,000 to $650,000. The balance at March 31, 2008 was $516,903 ($500,000 in principal and $16,903 in accrued interest).

We currently do not have sufficient cash reserves to meet all of our anticipated obligations for the next twelve months and there can be no assurance that we will ultimately close on the necessary financing. In addition to any third-party financing we may obtain, we currently expect that loans from our stockholders may be a continuing source of liquidity to fund our operations. Accordingly, we will need to seek funding in the near future.

Our ability to continue as a going concern is dependent on our ability to obtain additional funds through debt and equity funding as well as from sales of various services. The Company expects to begin timeshare sales in the 2nd quarter of 2008, which is expected to produce positive income and cash flow for the company. With these sales the Company anticipates that it will become less reliant on short-term financing.

Off-Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

Critical Accounting Policies

Going Concern:

Concentrations of Credit Risk

One customer accounted for the total revenue for the three months ended March 31, 2008 and 2007.

Revenue Recognition

The Company recognizes ship management and consulting revenue when earned. At the time of the transaction, the Company assesses whether the fee is fixed and determinable based on the payment terms associated with the transaction and whether collectibility is reasonably assured. If a significant portion of a fee is due after the normal payment terms, the Company accounts for the fee as not being fixed and determinable. In these cases, the Company recognizes revenue as the fees become due. Where the Company provides a service at a specific point in time and there are no remaining obligations, the Company recognizes revenue upon completion of the service. The Company recognizes charter revenue on the first of the month when the fee is billed.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

ITEM 4 – CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) our disclosure controls and procedures were effective as of March 31, 2008 and (ii) no change in internal controls over financial reporting occurred during the quarter ended March 31, 2008, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Disclosure controls and procedures and other procedures are designed to ensure that information required to be disclosed in our reports or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period 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 Securities Exchange Act of 1934 is accumulated and communicated to management including our president and financial officer as appropriate, to allow timely decisions regarding required disclosure.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings - None

Item 2. Unregistered Sales of Equity 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

On January 5, 2006 the Company entered into a Revolving Note (“Note 1”) with an aggregate principal amount of $50,000 to Frank Crivello. Funds are advanced to us as needed to pay for ongoing operations. Note 1 had a maturity date of June 30, 2006. As a result of eleven amendments to Note 1, the principal amount of Note 1 was increased to $800,000 and the maturity date of Note 1 was extended to February 20, 2009. Note 1 has an interest rate of 10% and as of March 31, 2008, the principal balance was $769,050.

On August 1, 2007, the Company issued a revolving note (“Note 2”), with an aggregate principal amount of $100,000 to an entity that is controlled by the Chairman of the Board of Directors. Funds are advanced to the Company, as needed, to finance ongoing operations. Note 2 had a maturity date of July 31, 2008. It has been agreed that the maturity date will extend to December 31, 2008 unless the lender notifies the borrower, in writing, thirty days prior to the maturity date. Note 2 bears an interest rate of 10%. On September 6, 2007 a first amendment was issued on Note 2 increasing the aggregate amount to $200,000. On November 27, 2007 a second amendment was issued on Note 2 increasing the aggregate amount to $300,000. On January 4, 2008 a third amendment was issued on Note 2 increasing the aggregate amount to $400,000. On February 11, 2008 a fourth amendment was issued on Note 2 increasing the aggregate amount to $500,000. On April 16, 2008, a fifth amendment was issued on Note 2 increasing the aggregate amount to $650,000, confirming the maturity date of Note 2 as December 31, 2008 and waiving all accrued and unpaid interest on Note 2 in the event of a repayment of Note 2 in full prior to September 30, 2008. The principal balance on Note 2 was $500,000 as of March 31, 2008.

Item 6. Exhibits

Number	Description

3.1	Registrant's Certificate of Incorporation (incorporated by reference to the exhibits to Registrant’s Form SB-2 filed on September 2, 2005).

3.2	Certificate of Amendment to Registrant's Certificate of Incorporation (incorporated by reference to the exhibits to Registrant’s Form SB-2 filed on September 2, 2005).

3.3	Certificate of Amendment to Registrant's Certificate of Incorporation (incorporated by reference to the exhibits to Registrant’s Form SB-2 filed on September 2, 2005).

3.4	Certificate of Amendment to Registrant's Certificate of Incorporation (incorporated by reference to the exhibits to Registrant’s Form SB-2 filed on September 2, 2005).

3.5	Registrant's By-Laws (incorporated by reference to the exhibits to Registrant’s Form SB-2 filed on September 2, 2005).

5.1	Opinion of Sichenzia Ross Friedman Ference LLP (incorporated by reference to Exhibit 5.1 to Registrant’s Form SB-2/A filed on April 14, 2006).

10.1	Employment agreement dated July 1, 2004 between the Registrant and Craig Hodgkins (incorporated by reference to the exhibits to Registrant’s Form SB-2 filed on September 2, 2005).

10.2	Employment agreement dated July 1, 2004 between the Registrant and Capt. Timothy Levensaler (incorporated by reference to the exhibits to Registrant’s Form SB-2 filed on September 2, 2005).

10.3	Seaman Engagement Contract between Sophlex Ship Management Co. Ltd. And Xiamen Zhonglianyang Seaman Service Co., Ltd. (incorporated by reference to Exhibit 10.3 to Registrant’s Form SB-2/A filed on April 14, 2006).

10.4	$500,000.00 Revolving Secured Note, dated May 5, 2004, issued by Marine Growth Ventures Inc., Marine Growth Charter, Inc., Marine Growth Finance, Inc., Marine Growth Freight, Inc., Marine Growth Real Estate, Inc. and Gulf Casino Cruises, Inc. to Frank P. Crivello (incorporated by reference to Exhibit 10.4 to Registrant’s Form SB-2/A filed on April 14, 2006).

10.5	$2,00,000.00 Promissory Note, dated October 21, 2004, issued by King Crown International Co. Ltd. to Marine Growth Finance, Inc. (incorporated by reference to Exhibit 10.5 to Registrant’s Form SB-2/A filed on April 14, 2006).

10.6	Settlement Stipulation, dated April 7, 2005, between King Crown International Co. Ltd., Marine Growth Finance, Inc., Oceans Five Cruises, Inc. and Lee Young Union Ltd. (incorporated by reference to Exhibit 10.6 to Registrant’s Form SB-2/A filed on April 14, 2006).

10.7	$50,000.00 Revolving Note, dated January 5, 2006, issued by Marine Growth Ventures Inc., Marine Growth Charter, Inc., Marine Growth Finance, Inc., Marine Growth Freight, Inc., Marine Growth Real Estate, Inc. and Gulf Casino Cruises, Inc. to Frank P. Crivello (incorporated by reference to Exhibit 10.1 to Form 10-QSB filed on March 31, 2006).

10.8	Sale and Purchase Agreement, by and between British Columbia Discovery Voyages, Inc., T. Jones Enterprises, Inc. and Trevor Jones, as sellers, and Marine Growth Ventures, Inc., as buyer. (incorporated by reference to Exhibit 10.1 of Form 8-K filed March 28, 2007).

10.9	Loan and Security Agreement between Greystone Business Credit II LLC, Marine Growth Canada, Ltd. and Marine Growth Finance & Charter, Inc., dated as of March 27, 2007 (incorporated by reference to Exhibit 10.2 of Form 8-K filed March 28, 2007).

10.10	Guaranty in favor of Greystone Business Credit II LLC, by and among Marine Growth Ventures, Inc., Marine Growth Canada, Ltd. and Marine Growth Finance & Charter, Inc., dated as of March 27, 2007 (incorporated by reference to Exhibit 10.3 of Form 8-K filed March 28, 2007).

10.11	Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.4 of Form 8-K filed March 28, 2007).

10.12	First Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.5 of Form 8-K filed March 28, 2007).

10.13	Second Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.6 of Form 8-K filed March 28, 2007).

10.14	Third Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.7 of Form 8-K filed March 21, 2007).

10.15	Forth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.8 of Form 8-K filed March 28, 2007).

10.16	Fifth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.9 of Form 8-K filed March 28, 2007).

10.17	Sixth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello. (incorporated by reference to Exhibit 10.10 of Form 8-K filed March 28, 2007).

10.18	Seventh Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.11 of Form 8-K filed March 28, 2007).

10.19	Share Ship Agreement, date April 11, 2007, by and between Euro Oceans, Ltd., Marine Growth Ventures, Inc., Marine Growth Canada, Ltd., Sophlex Ship Management, Inc. and Ship Timeshare Management, Inc. (incorporated by reference to Exhibit 10.1 of Form 8-K filed April 17, 2007).

10.20	Eighth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.1 of Form 8-K filed May 17, 2007).

10.21	Ninth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.10 of Form 8-K filed July 5, 2007).

10.22	Bareboat Charter by and between Fractional Marine, Inc. and Greystone Maritime Holdings LLC, dated July 30, 2007 (incorporated by reference to Exhibit 10.1 of Form 8-K filed August 7, 2007).

10.23	Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated August 1, 2007 (incorporated by reference to Exhibit 10.2 of Form 8-K filed August 7, 2007).

10.24	First Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated September 6, 2007 (incorporated by reference to Exhibit 10.2 of Form 8-K filed September 10, 2007).

10.25	Tenth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.11 of Form 8-K filed September 25, 2007).

10.26	Second Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated November 27, 2007 (incorporated by reference to Exhibit 10.3 of Form 8-K filed November 28, 2007).

10.27	Third Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated January 4, 2008 (incorporated by reference to Exhibit 10.4 of Form 8-K filed January 8, 2008).

10.28	Forth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated February 11, 2008 (incorporated by reference to Exhibit 10.5 of Form 8-K filed February 14, 2008).

10.29	Fifth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated April 16, 2008 (incorporated by reference to Exhibit 10.6 of Form 8-K filed April 17, 2008).

10.30	Eleventh Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello, dated March 19, 2008 (filed herewith).

10.31	Third Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated January 4, 2008 (incorporated by reference to Exhibit 10.4 of Form 8-K filed January 8, 2008).

10.32	Forth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated February 11, 2008 (incorporated by reference to Exhibit 10.5 of Form 8-K filed February 14, 2008).

31.1	Certification of CEO Pursuant to 13a-14(a) under the Exchange Act.

31.2	Certification of the CFO Pursuant to 13a-14(a) under the Exchange Act.

32.1	Certification of the CEO pursuant to 18 U.S.C Section 1350.

32.2	Certification of the CFO pursuant to 18 U.S.C. Section 1350.

SIGNATURES

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

	MARINE GROWTH VENTURES, INC.


Dated: May 13, 2008	By:	/s/ Craig Hodgkins
		Craig Hodgkins
		(Principal Executive Officer)


Dated: May 13, 2008	By:	/s/ Katherine Ostruszka
		Katherine Ostruszka
		Chief Financial Officer and Controller
		(Principal Financial Officer)

EX-31.1 2 marinegrowth_10q-ex3101.htm CERTIFICATION marinegrowth_10q-ex3101.htm

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Craig Hodgkins, certify that:

1. I have reviewed this quarterly report for the period ended March 31, 2008, on Form 10-Q of Marine Growth Ventures, Inc.;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report;

4. The registrant’s other certifying officer 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)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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 annual report is being prepared;

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;

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, and evaluated the effectiveness of our internal control over financial reporting, and printed in this report our conclusions about the effectiveness of our internal control over financial reporting, as of the end of the period covered by this report based on such evaluation;

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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: May 13, 2008	By:	/s/ Craig Hodgkins
		Craig Hodgkins President & Director (Principal E xecutive O fficer)

EX-31.2 3 marinegrowth_10q-ex3102.htm CERTIFICATION Unassociated Document

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUTING OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Katherine A. Ostruszka, certify that:

1. I have reviewed this quarterly report for the period ended March 31, 2008, on Form 10-Q of Marine Growth Ventures, Inc.;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: May 13, 2008	By:	/s/ Katherine A Ostruszka
		Katherine A Ostruszka Chief Financial Officer & Controller (Principal Financial O fficer)

EX-32.1 4 marinegrowth_10q-ex3201.htm CERTIFICATION marinegrowth_10q-ex3201.htm

EXHIBIT 32.1

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 Annual Report of Marine Growth Ventures, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Craig Hodgkins, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(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 results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. section 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Date: May 13, 2008	By:	/s/ Craig Hodgkins
		Craig Hodgkins President and Director (Principal Executive Officer)

EX-32.2 5 marinegrowth_10q-ex3202.htm CERTIFICATION Unassociated Document

EXHIBIT 32.2

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 Annual Report of Marine Growth Ventures, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Katherine A Ostruszka, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(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 results of operations of the Company.

Date: May 13, 2008	By:	/s/ Katherine A Ostruszka
		Katherine A Ostruszka Chief Financial Officer & Controller (Principal Financial Officer)