ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
As of the date of this 10-k, there are 755,000 outstanding shares of our common stock.
The Company's common stock does not trade, nor is it admitted to quotation, on any stock exchange or other trading facility. Management has no present plan, proposal, arrangement or understanding with any person with regard to the development of a trading market in any of our securities. We cannot assure you that a trading market for our common stock will ever develop. The Company has not registered its class of common stock for resale under the blue sky laws of any state and current management does not anticipate doing so. The holders of shares of common stock, and persons who may desire to purchase shares of our common stock in any trading market that might develop in the future, should be aware that
significant state blue sky law restrictions may exist which could limit the ability of stockholders to sell their shares and limit potential purchasers from acquiring our common stock.
All outstanding shares of our common stock are “restricted securities,” as that term is defined under Rule 144 promulgated under the Securities Act, because they were issued in a private transaction not involving a public offering. All of our outstanding shares of our common stock are held by affiliates. As to shares of our common stock held by affiliates and their permitted transferees, the Securities and Exchange Commission has taken the position that Rule 144 is not available for the resale of securities held by those persons, either before and after a Business Combination, despite technical compliance with the requirements of Rule 144 because those persons would be acting as "underwriters"
under the Securities Act when reselling their securities. Accordingly, resale transactions of shares held by our affiliates and their permitted transferees, would need to be made through a registered offering of such securities. The Company is not obligated to register any shares of capital stock for public resale under the Securities Act of 1933, as amended.
Neither the Company nor its officer and director has any present plan, proposal, arrangement, understanding or intention of selling any unissued or outstanding shares of common stock in the public market subsequent to a Business Combination. Nevertheless, in the event that a substantial number of shares of our common stock were to be sold in any public market that may develop for our securities subsequent to a Business Combination, such sales may adversely affect the price for the sale of the Company's common stock securities in any such trading market. We cannot predict what effect, if any, market sales of currently restricted shares of common stock or the availability of such shares for sale will have on
the market prices prevailing from time to time, if any.
Dividends
We have not paid any dividends on our common stock to date and do not presently intend to pay cash dividends prior to the consummation of a Business Combination. It is the present intention of our management to retain all earnings, if any, for use in our business operations.
The payment of any dividends subsequent to a Business Combination will be within the discretion of our then seated board of directors. Current management cannot predict the factors which any future board of directors would consider when determining whether or when to pay dividends.
EQUITY COMPENSATION PLAN INFORMATION
|
|
Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights (a)
|
|
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
(b)
|
|
|
Number of securities
remaining available
for future issuances
under equity
compensation plans
(excluding securities
reflected in column
(a)) (c)
|
|
Equity compensation plans approved by security holders
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Equity compensation plans not approved by security holders
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Total
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Recent Sales of Unregistered Securities
None.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations which are not historical facts are forward-looking statements such as statements relating to future operating results, existing and expected competition, financing and refinancing sources and availability and plans for future development or expansion activities and capital expenditures. Such forward-looking statements involve a number of risks and uncertainties that may significantly affect our liquidity and results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to,
those related to effects of competition, maintaining sufficient working capital for our operations, and the general economic conditions and environment in which we operate. The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report.
Overview
The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this prospectus. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this prospectus, particularly in the section entitled "Risk Factors".
Management’s Discussion and Analysis of Financial Statements and Results of Operations.
Results of Operations
For the period ended August 31, 2011 and 2010
There were no revenues for the period ended August 31, 2012 or for the period ended August 31, 2011. Expenses for the period ended August 31, 2012 were $2,754 compared to $1,466 for the period ended August 31, 2011. These expenses were related to professional fees related to this S- 1 1 registration statement.
Liquidity and Capital Resources
The Company had $2,754 in unrestricted cash as of August 31, 2012 and $1,466 in unrestricted cash as of August 31, 2011. The investigation of prospective financing candidates involves the expenditure of capital. The Company will likely have to look to Mr. Kepe or to third parties for additional capital. There can be no assurance that the Company will be able to secure additional financing or that the amount of any additional financing will be sufficient to conclude its business objectives or to pay ongoing operating expenses. We will also seek to finance the purchase of real properties with bank financing that may be available.
In the past, Mr. Kepe has provided any cash needed for operations, including any cash needed for this Offering. To date, Mr. Kepe has lent the Company $20,980 which is documented by a promissory note. The note carries a 0% interest rate and is due on demand. Mr. Kepe intends to lend the Company additional capital to pay the accounts payable and to cover any additional costs related to this Offering. The Note that Mr. Kepe currently has with the Company is a non-interest bearing, unsecured, and has no term of repayment.
In the event that we are unable to raise a substantial amount of the proceeds through this offering, our officer and director, RobertKepe will lend the cash needed for operating costs or will seek out alternative sources of financing, such as financing from both traditional sources such as a bank, and then hard money loans for the down payments required on properties. In the past, Mr. Kepe has used his own personal credit in order to obtain real estate financing from financial institutions.
If Mr. Kepe is unable to lend additional funds to the Company in the event that Company needs additional funds, we may need to deploy a plan to sell additional shares or look to a third party to lend funds to the Company. If the Company is to borrow funds from a third party, the terms and conditions of such a loan will most likely not be on terms as favorable as the terms offered by Mr. Kepe in the past. If we are unable to address our liquidity issues, there is a great chance that the Company will not have adequate funding to continue its business plan and will thus, fail.
We will require as much as $10,000 in order to develop and deploy our website so that it may start generating revenues. We currently only have $2,754. Therefore, the cash currently available to us may not enable us to develop the site. If we are to generate revenues prior to needing any additional funding, we will immediately reinvest such revenues into further development our site and deployment of our business plan.
Equity Distribution to Management
Since our incorporation, we have raised capital through private sales of our common equity. As of December 20, 2012, we have issued 430,000 shares of our common stock to various shareholders and our manager, Robert Kepe, in exchange for cash of and services. Specifically, Mr. Kepe received 275,000 shares in exchange for services relating to our organization, and development or our business plan.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Policies and Estimates
Our critical accounting policies are disclosed in our Form 10-K and the financial statements included in the 10-K. During the three months ended August 31, 2012 there have been no significant changes in our critical accounting policies.
Recent Accounting Pronouncements
Recent accounting pronouncements are disclosed in our Form 10-K and the financial statements included with the 10-K. During the three months ended August 31, 2012 there have been no new accounting pronouncements which are expected to significantly impact our consolidated financial statements.
ITEM 8. FINANCIAL STATEMENTS
RJD GREEN INC
(A DEVELOPMENT STAGE COMPANY)
Notes to the Financial Statements
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
|
|
|
11
|
|
|
|
|
|
|
Balance Sheet as of August 31, 2012
|
|
|
12
|
|
|
|
|
|
|
Statement of Operations for the period from September 10, 2009 (Inception) to August 31, 2012
|
|
|
13
|
|
|
|
|
|
|
Statement of Changes in Stockholders’ Equity for the Period from September 10, 2009 (Inception) to August 31, 2012
|
|
|
14
|
|
|
|
|
|
|
Statement of Cash Flows for the period from September 10, 2009 (Inception) to August 31, 2012
|
|
|
15
|
|
|
|
|
|
|
Notes to Financial Statements
|
|
|
16
|
|
|
CERTIFIED PUBLIC ACCOUNTANTS
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
RJD Green Inc (a development stage company)
We have audited the accompanying balance sheet of RJD Green Inc (the "Company") as of August 31, 2012, and the related statement of operations, stockholders’ equity and cash flows for the period from September 10, 2009 (Inception) through August 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Company as of August 31, 2011 was audited by other auditors, whose report dated November 21, 2011, expressed an unqualified opinion on that financial statement.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company was not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit 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 Company's internal control over financial reporting. Accordingly, we
express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 financial statements referred to above present fairly, in all material respects, the financial position of the Company as of August 31, 2012 and the results of its operations and its cash flows for the period from September 10, 2009 (Inception) through August 31, 2012, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has had no revenues and income since inception. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans concerning these matters are also described in Note 2, which includes the raising of additional equity financing or merger with another entity. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Anton & Chia LLP
Newport Beach, CA
December 6, 2012
RJD Green Inc.
|
( a Development Stage Company)
|
Balance Sheet
|
|
|
August 31,
2012
|
|
|
August 31,
2011
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
2,754
|
|
|
$
|
1,466
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
2,754
|
|
|
$
|
1,466
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Deficit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to related party
|
|
$
|
20,980
|
|
|
$
|
10,513
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
20,980
|
|
|
$
|
10,513
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, 75,000,000 shares authorized ( par value $.001) and 755,000 shares issued and outstanding as of August 31, 2012 and August 31, 2011, respectively
|
|
|
755
|
|
|
|
755
|
|
Additional Paid in capital
|
|
|
20,520
|
|
|
|
20,520
|
|
Discount on Common Stock
|
|
|
(275
|
)
|
|
|
(275
|
)
|
Accumulated Deficit
|
|
|
(39,226
|
)
|
|
|
(30,047
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,226
|
)
|
|
|
(9,047
|
)
|
Total Liabilities and Shareholders' Deficit
|
|
$
|
2,754
|
|
|
$
|
1,466
|
|
The accompanying notes are an integral part of these financial statements.
RJD Green Inc.
|
( a Development Stage Company)
|
Statement of Operations
|
|
|
For the Year Ended August 31, 2012
|
|
|
For they Year Ended August 31, 2011
|
|
|
Cumulative from Sept 10, 2009 ( the date of inception) to August 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organization Fees
|
|
|
900
|
|
|
|
233
|
|
|
|
3,507
|
|
Filing Fees
|
|
|
114
|
|
|
|
-
|
|
|
|
423
|
|
Legal and audit
|
|
|
147
|
|
|
|
2,952
|
|
|
|
6,282
|
|
Professional Services
|
|
|
7,890
|
|
|
|
18,998
|
|
|
|
28,676
|
|
Bank Fees
|
|
|
128
|
|
|
|
122
|
|
|
|
338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses:
|
|
|
9,179
|
|
|
|
22,305
|
|
|
|
39,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(9,179
|
)
|
|
|
(22,305
|
)
|
|
|
(39,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(9,179
|
)
|
|
$
|
(22,305
|
)
|
|
$
|
(39,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share ( basic and diluted)
|
|
$
|
(0.012
|
)
|
|
$
|
(0.030
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares (basic and diluted)
|
|
|
755,000
|
|
|
|
751,301
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
RJD Green Inc.
|
( a Development Stage Company)
|
Statement of Shareholders' Deficit
|
|
|
Common Shares
|
|
|
Amount
|
|
|
Additional Paid-In Capital
|
|
|
Discount on Common Stock
|
|
|
Deficit Accumulated during development stage
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 10, 2009
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Issued for Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$.01 per share, Oct 2009
|
|
|
200,000
|
|
|
|
200
|
|
|
|
1,800
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock issued to founder, April 2010
|
|
|
275,000
|
|
|
|
275
|
|
|
|
-
|
|
|
|
(275
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Issued for Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$.01 per share, May 2010
|
|
|
100,000
|
|
|
|
100
|
|
|
|
900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Issued for Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$.10 per share, August 2010
|
|
|
130,000
|
|
|
|
130
|
|
|
|
12,870
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,742
|
)
|
|
|
(7,742
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of August 31, 2010
|
|
|
705,000
|
|
|
$
|
705
|
|
|
$
|
15,570
|
|
|
$
|
(275
|
)
|
|
$
|
(7,742
|
)
|
|
$
|
8,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for Cash $.10 per share, Sept 2010
|
|
|
50,000
|
|
|
|
50
|
|
|
|
4,950
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(22,305
|
)
|
|
|
(22,305
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of August 31, 2011
|
|
|
755,000
|
|
|
$
|
755
|
|
|
$
|
20,520
|
|
|
$
|
(275
|
)
|
|
$
|
(30,047
|
)
|
|
$
|
(9,047
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,179
|
)
|
|
|
(9,179
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of August 31, 2012
|
|
|
755,000
|
|
|
$
|
755
|
|
|
$
|
20,520
|
|
|
$
|
(275
|
)
|
|
$
|
(39,226
|
)
|
|
$
|
(18,226
|
)
|
The accompanying notes are an integral part of these financial statements.
RJD Green Inc.
|
( a Development Stage Company)
|
Statements of Cash Flows
|
|
|
For the Year ended August 31, 2012
|
|
|
For the Year ended August 31, 2011
|
|
|
Cumulative since September 10, 2009 (inception) to August 31, 2012
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(9,179
|
)
|
|
$
|
(22,305
|
)
|
|
$
|
(39,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash used in operations
|
|
|
(9,179
|
)
|
|
|
(22,305
|
)
|
|
|
(39,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Common Stock
|
|
|
-
|
|
|
|
5,000
|
|
|
|
21,000
|
|
Due to related party
|
|
|
10,467
|
|
|
|
7,000
|
|
|
|
20,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
10,467
|
|
|
|
12,000
|
|
|
|
41,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
1,288
|
|
|
|
(10,305
|
)
|
|
|
2,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at the Beginning of the Period:
|
|
|
1,466
|
|
|
|
11,771
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at the End of the Period
|
|
$
|
2,754
|
|
|
$
|
1,466
|
|
|
$
|
2,754
|
|
The accompanying notes are an integral part of these financial statements.
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
RJD Green Inc. (the "Company") was incorporated under the laws of the State of Nevada on September 10, 2009 and has been inactive since inception. The Company intends to develop an Internet based e-commerce venture.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - DEVELOPMENT STAGE COMPANY AND GOING CONCERN
The Company has not earned any revenue from operations since inception. Accordingly, the Companys activities have been accounted for as those of a "Development Stage Enterprise" as set forth in ASC 915, "Development Stage Entities." Among the disclosures required by ASC 915, are that the Companys financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.
The preparation of 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
The Company sustained operating losses during the years ended August 31, 2012 and 2011. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
USE OF ESTIMATE
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of August 31, 2012 and 2011, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 820-10, (formerly SFAS No.157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. FASB ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of
observable inputs, where available.
INCOME TAXES
Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of August 31, 2012 and 2011, there are no outstanding dilutive securities.
IMPACT OF NEW ACCOUNTING STANDARDS
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.
NOTE 3 INDEBTNESS TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS
The Company received funds from related parties during the development period of $20,980 and the amount due do not bear interest and is due on demand.
The Company neither owns nor leases any real or personal property. An officer of the corporation provides office space without charge to the Company.
NOTE 4 COMMON STOCK
The Company is currently issuing only one class of Common Stock, this has been issued at two different prices since inception. The Company is authorized to issue 75,000,000 shares of common stock. As of August 31, 2012, 755,000 shares of common stock were issued and outstanding.
On October, 2009, there were 200,000 shares issued at $0.01 per share for $2,000 in cash, resulting in additional paid-in capital of $1,800.
On April, 2010, there were 275,000 shares issued to the owner at a discount of $275 as founder’s shares.
On May, 2010, there were 100,000 shares issued at $0.01 per share for $1,000 in cash, resulting in additional paid-in capital of $900.
On August, 2010, there were 130,000 shares issued at $0.10 per share for $13,000 in cash, resulting in additional paid-in capital of $12,870.
On September, 2010, there were 50,000 shares issued at $0.10 per share for $5,000 in cash, resulting in additional paid-in capital of $4,950.
NOTE 5 INCOME TAXES
The items accounting for the difference between income taxes computed at the federal statutory rate and the benefit for income taxes were as follow:
|
|
August 31, 2012
|
|
|
August 31, 2011
|
|
Provision computed at federal statutory rate
|
|
|
34.00
|
%
|
|
|
34.00
|
%
|
State tax, net of federal tax benefit
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
Valuation allowance
|
|
|
-34.00
|
%
|
|
|
-34.00
|
%
|
Effective income tax rate
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
Deferred tax assets resulting from the net operating losses are reduced by a valuation allowance, when, in the opinion of management, utilization is not reasonably assured. The following summarizes the deferred tax assets as of August 31, 2012 and August 31, 2011:
|
|
August 31, 2012
|
|
|
August 31, 2011
|
|
Net operating losses
|
|
$
|
(9,179
|
)
|
|
$
|
(22,305
|
)
|
Less: valuation allowance
|
|
|
(9,179
|
)
|
|
|
(22,305
|
)
|
Net deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
Due to a potential change in ownership under IRC 382, the amount of net operating loss that the Company may utilize in a future year may be limited under IRC Section 382.
The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by a valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not.
The Company considers many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to us for tax reporting purposes, and other relevant factors.
At August 31, 2012, based on the weight of available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets would not be realized. Accordingly, the Company has recorded a valuation allowance equivalent to 100% of its cumulative deferred tax assets.
As a result of the implementation of certain provisions of ASC 740 the Company performed an analysis of its previous tax filings and determined that there were no positions taken that it considered materially uncertain. Therefore, there was no provision for uncertain tax positions for the years ended August 31, 2012 and 2011. Future changes in uncertain tax positions are not expected to have an impact on the effective tax rate due to the existence of the valuation allowance.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our principal executive officer and chief financial officer. Based on this evaluation, we have concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required
disclosure.
Management's Report on Internal Control over Financial Reporting
Our company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our company’s internal control over financial reporting is designed to provide reasonable assurance, not absolute assurance, regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that our company’s receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As required by Rule 13a-15(c) promulgated under the Exchange Act, our management, with the participation of our Chief Executive Officer and Principal Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2010. Management’s assessment was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control over Financial Reporting — Guidance for Smaller Public Companies. In performing the assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2010.
Changes in Internal Controls over Financial Reporting.
There was no change in our internal control over financial reporting during our fourth quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.