REPORT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board Directors
Golden
Valley Development, Inc.
Bakersfield,
California
We
have
audited the accompanying consolidated balance sheet of Golden Valley
Development, Inc. as of December 31, 2007 and the related consolidated
statements of operations, shareholders’ deficit, and cash flows for the years
ended December 31, 2007 and 2006. These consolidated financial statements
are
the responsibility of Golden Valley Development, Inc.'s management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform an audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. Golden
Valley is not required to have, nor were we engaged to perform, an audit
of its
internal control over financial reporting. Our audits included consideration
of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of
expressing an opinion on the effectiveness of Golden Valley’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit
also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the
overall financial statement presentation. We believe that our audits provide
a
reasonable basis for our opinion.
In
our
opinion, the consolidated financial statements referred to above present
fairly,
in all material respects, the financial position of Golden Valley Development,
Inc. as of December 31, 2007 and the results of operations and cash flows
for
the two years then ended, in conformity with accounting principles generally
accepted in the United States of America.
The
accompanying consolidated financial statements have been prepared assuming
that
Golden Valley Development, Inc. will continue as a going concern. As discussed
in Note 2 to the consolidated financial statements, Golden Valley Development,
Inc. suffered recurring losses from operations and has a working capital
deficiency, which raises substantial doubt about its ability to continue
as a
going concern. Management’s plans regarding those matters also are described in
Note 2. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Malone
& Bailey, P.C.
www.malone-bailey.com
Houston,
TX
March
5,
2008
GOLDEN
VALLEY DEVELOPMENT, INC.
CONSOLIDATED
BALANCE SHEET
December
31, 2007
ASSETS
|
|
|
|
|
|
|
|
Cash
|
|
$
|
13,200
|
|
Total
current
assets
|
|
$
|
13,200
|
|
|
|
|
|
|
LIABILITIES
& STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Accrued
Interest
|
|
$
|
1,342
|
|
Note
payable to related party
|
|
|
50,000
|
|
Total
liabilities
|
|
|
51,342
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT
|
|
|
|
|
Common
stock, $.001 par value, 75,000,000 shares
|
|
|
|
|
authorized,
42,400,000 shares issued and outstanding
|
|
|
42,400
|
|
Additional
paid-in capital
|
|
|
(15,166
|
)
|
Accumulated
deficit
|
|
|
(65,376
|
)
|
TOTAL
STOCKHOLDERS’ DEFICIT
|
|
|
(38,142
|
)
|
TOTAL
LIABILITIES & STOCKHOLDERS’ DEFICIT
|
|
$
|
13,200
|
|
See
summary of significant accounting
policies
and notes to financial statements.
GOLDEN
VALLEY DEVELOPMENT, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
Years
Ended December 31, 2007 and 2006
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
Revenue
|
|
$
|
14,533
|
|
|
$
|
5,058
|
|
|
|
|
|
|
|
|
|
|
General
&
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
38,950
|
|
|
|
27,158
|
|
Interest
expense
|
|
|
3,629
|
|
|
|
3,514
|
|
Total
expenses
|
|
|
(42,579
|
)
|
|
|
(30,672
|
)
|
Net
Loss
|
|
$
|
(28,046
|
)
|
|
$
|
(25,614
|
)
|
Basic
and diluted net
|
|
|
|
|
|
|
|
|
loss
per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average
|
|
|
|
|
|
|
|
|
shares
outstanding
|
|
|
41,000,000
|
|
|
|
40,000,000
|
|
See
summary of significant accounting
policies
and notes to financial statements.
GOLDEN
VALLEY DEVELOPMENT, INC.
CONSOLIDATED
STATEMENT OF CHANGES IN
STOCKHOLDERS’ EQUITY
Years
Ended December 31, 2007 and
2006
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Paid-in
|
|
|
Retained
|
|
|
|
|
|
|
Shares
|
|
|
$
|
|
|
Capital
|
|
|
Earnings
|
|
|
Totals
|
|
Balances,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2005
|
|
|
40,000,000
|
|
|
$
|
40,000
|
|
|
$
|
(33,399
|
)
|
|
$
|
(11,716
|
)
|
|
$
|
(5,115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-forgiveness
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accrued
interest
|
|
|
-
|
|
|
|
-
|
|
|
|
3,121
|
|
|
|
-
|
|
|
|
3,121
|
|
-rent
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
4,660
|
|
|
|
-
|
|
|
|
4,660
|
|
-imputed
interest
|
|
|
-
|
|
|
|
-
|
|
|
|
3,509
|
|
|
|
-
|
|
|
|
3,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(25,614
|
)
|
|
|
(25,614
|
)
|
Balances,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2006
|
|
|
40,000,000
|
|
|
|
40,000
|
|
|
|
(22,109
|
)
|
|
|
(37,330
|
)
|
|
|
(19,439
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-rent
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
4,658
|
|
|
|
-
|
|
|
|
4,658
|
|
-imputed
interest
|
|
|
-
|
|
|
|
-
|
|
|
|
2,285
|
|
|
|
-
|
|
|
|
2,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for
services
|
|
|
2,400,000
|
|
|
|
2,400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(28,046
|
)
|
|
|
(28,046
|
)
|
|
|
|
42,400,000
|
|
|
$
|
42,400
|
|
|
$
|
(15,166
|
)
|
|
$
|
(65,376
|
)
|
|
$
|
(38,142
|
)
|
See
summary of significant accounting
policies
and notes to financial statements.
GOLDEN
VALLEY DEVELOPMENT, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
Years
Ended December 31, 2007 and December 31, 2006
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(28,046
|
)
|
|
$
|
(25,614
|
)
|
Adjustments
to reconcile net loss
|
|
|
|
|
|
|
|
|
to
cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Imputed
rent and interest
expense
|
|
|
6,943
|
|
|
|
11,290
|
|
Stock
issued for
services
|
|
|
2,400
|
|
|
|
-
|
|
Changes
in:
|
|
|
|
|
|
|
|
|
Prepaid
and other current
assets
|
|
|
1,180
|
|
|
|
1,200
|
|
Accrued expenses
|
|
|
1,342
|
|
|
|
(3,121
|
)
|
NET
CASH USED IN OPERATING ACTIVITIES
|
|
|
(16,181
|
)
|
|
|
(16,245
|
)
|
NET
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds
from loan from related party
|
|
|
644,650
|
|
|
|
60,000
|
|
Payments
on loan from related party
|
|
|
(704,650
|
)
|
|
|
-
|
|
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
(60,000
|
)
|
|
|
60,000
|
|
NET
CHANGE IN CASH
|
|
|
(76,181
|
)
|
|
|
43,755
|
|
Cash
balance, beginning of the
period
|
|
|
89,381
|
|
|
|
45,626
|
|
Cash
balance, ending of the period
|
|
$
|
13,200
|
|
|
$
|
89,381
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
|
|
Taxes
paid
|
|
$
|
-
|
|
|
$
|
-
|
|
Interest
paid
|
|
|
-
|
|
|
|
-
|
|
See
summary of significant accounting
policies
and notes to financial statements.
NOTES
TO
FINANCIAL STATEMENTS
NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature
of
Business. Golden Valley Development, Inc. (“Golden Valley”) was incorporated in
Nevada on July 26, 2004. Golden Valley is a commodities broker. In
late December, 2007, Golden Valley incorporated a wholly-owned subsidiary,
Central Valley Commodity Brokers Inc. The subsidiary had no assets,
liabilities or operations as of December 31, 2007.
Cash
and
Cash Equivalents. For purposes of the statement of cash flows, Golden Valley
considers all highly liquid investments purchased with an original maturity
of
three months or less to be cash equivalents.
Use
of
Estimates. In preparing financial statements, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities in the
balance sheet and revenue and expenses in the statement of expenses. Actual
results could differ from those estimates.
Revenue
Recognition. Golden Valley recognizes revenue when persuasive evidence of an
arrangement exists, services have been rendered, the sales price is fixed or
determinable, and collectibility is reasonably assured. Golden Valley performs
as a broker without assuming the risks and rewards of ownership of the goods,
therefore sales are reported on a net basis. After receiving an order, Golden
Valley will locate and inspect the desired item. The item will be shipped
directly to the customer from the supplier by Golden Valley or the customer
can
arrange for pickup at the supplier. The item must meet certain industry
standards prior to customer acceptance. If the industry standards are not met,
the loss carries back to the supplier. If the item meets industry standards
and
the customer were to reject the item, the loss belongs to the customer. Golden
Valley recognizes revenues at the time the customer accepts the
item.
Advertising.
In accordance with Accounting Standards Executive Committee Statement of
Position 93-7, costs incurred for producing and communicating advertising of
Golden Valley are charged to operations as incurred. Advertising expense for
two
years ended December 31, 2007 and 2006 was $0.
Income
taxes. Golden Valley recognizes deferred tax assets and liabilities based on
differences between the financial reporting and tax bases of assets and
liabilities using the enacted tax rates and laws that are expected to be in
effect when the differences are expected to be recovered. Golden Valley provides
a valuation allowance for deferred tax assets for which it does not consider
realization of such assets to be more likely than not.
Basic
and
diluted net loss per share calculations are presented in accordance with
Financial Accounting Standards Statement 128, and are calculated on the basis
of
the weighted average number of common shares outstanding during the
year. They include the dilutive effect of common stock equivalents in
years with net income. Basic and diluted loss per share is the same
due to the absence of common stock equivalents.
Recently
issued accounting pronouncements. Golden Valley does not expect the
adoption of recently issued accounting pronouncements to have a significant
impact on Golden Valley’s results of operations, financial position or cash
flow.
NOTE
2 – GOING CONCERN
As
shown
in the accompanying financial statements, Golden Valley incurred recurring
net
losses for the years ended December 31, 2007 and 2006, has an accumulated
deficit and a working capital deficit as of December 31, 2007. These
conditions raise substantial doubt as to Golden Valley’s ability to continue as
a going concern. Management is trying to raise additional capital
through sales of stock. The financial statements do not include any
adjustments that might be necessary if Golden Valley is unable to continue
as a
going concern.
NOTE
3 - RELATED PARTY TRANSACTIONS
On
October 1, 2004, Golden Valley entered into an unsecured note agreement with
a
company controlled by Golden Valley’s majority shareholder. This note, which
carried no interest rate, was repaid in 2006. Interest was imputed at 5%.
Accrued interest of $3,121 owed to the related party was forgiven in 2006 and
accounted for as a contribution to capital.
During
2006, Golden Valley entered into four similar unsecured notes with the same
related party. These notes, dated May 14, 2006, May 5, 2006, September 25,
2006
and December 26, 2006, were unsecured and carried no interest rate. The
principal amounts borrowed under these notes were $173,000, $80,000, $50,000
and
$60,000, respectively. These loans were primarily used in the operations to
purchase products. The $173,000 and $80,000 notes were repaid during 2006 from
the proceeds received in a brokering arrangement and the remaining notes were
repaid during 2007.
During
2007, Golden Valley entered into 5 similar notes with the same related party.
These notes dated January, 12 2007, January 17, 2007, February 2, 2007, June
11,
2007, and September 4, 2007 were unsecured and carried an interest rate of
5%.
The principal amounts were $7,000, $228,000, $202,850, $166,800 and
$40,000. These loans were primarily used in the operations to
purchase products. The $7,000, $228,000 and $202,850 notes were repaid during
the year from the proceeds received in a brokering arrangement. All
of the notes except for $10,000 of the $166,800 loan and the entire $40,000
loan
were repaid in 2007. The loan interest on the notes for $7,000,
$228,000, $202,850 was imputed at 5%. The loan interest on the notes for
$166,800 and $40,000 has an interest rate of 5%
Golden
Valley is using office space provided by a related party on a rent-free, month
to month basis. The fair value of the office space is $388 per month. Golden
Valley had $4,658 and $4,660 of rent expense for the years ended December 31,
2007 and 2006, respectively. The rent is contributed to capital by a
related party as a credit to additional paid in capital.
NOTE
4 - INCOME TAXES
Golden
Valley uses the liability method, where deferred tax assets and liabilities
are
determined based on the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
and income tax reporting purposes. During fiscal 2007 Golden Valley
incurred a net loss and, therefore, has no tax liability. The net
deferred tax asset generated by the loss carry-forward has been fully
reserved. The cumulative net operating loss carry-forward is
approximately $40,000 at December 31, 2007, and will expire in the year
2027.
At
December 31, 2007, deferred tax assets consisted of the following:
Deferred
tax assets
|
|
|
|
Net
operating
losses
|
|
$
|
6,000
|
|
Less: valuation
allowance
|
|
|
(6,000
|
)
|
|
|
|
|
|
Net
deferred tax
asset
|
|
$
|
-
|
|
|
|
|
|
|
NOTE
5 - COMMITMENTS
At
December 31, 2007, Golden Valley had no commitments other than those recorded
on
the balance sheet or disclosed in the accompanying notes.
NOTE
6 – MAJOR CUSTOMERS
All
2007
revenues were from 2 customers.
NOTE
7 – COMMON STOCK
In
2007,
Golden Valley issued 2,400,000 shares valued at $2,400 for consulting
services.