ITEM 1.
BUSINESS
Business Development, History and Organization
We incorporated in the State of Nevada on June 17, 2004 as The Andina Group, Inc. for the purpose of selling multi-media marketing services and other related services to network marketing groups and small businesses. Specifically, we assist our clients in using marketing tools such as public relations, advertising, direct mail, electronic communication and promotion as tools to increase product and service awareness. We also provide those services including business plan formation to other small businesses. We started conducting our operations in 2004, began pursuing our operations on a more substantive basis in 2006. We have only had limited revenues and operate at a loss.
Our Business
Principal Services
We specialize in offering multi-dimensional marketing services to small businesses, especially network marketers, to promote sales of their products or services and grow their business. Specifically, we offer small companies specially tailored, professionally written business development and marketing plans. Our goal with each client is to provide overall marketing strategies for their business along with marketing support services such as ad design, ad placement, website development, event promotions, relationship building and network development.
Our procedure is to begin with a consultation with a potential client to determine the client’s needs and goals; we then formulate a plan customized to the individual needs of the client utilizing one or more of our services. Currently, our business consists of three primary services which are provided by our president or by subcontractors:
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public relations and event promotions
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print advertising services, and
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multi-media marketing services
Public Relations and Event Promotions - public relations includes arranging and conducting programs to facilitate contact between organization representatives and the public such as setting up speaking engagements, including speech preparation; event promotions include developing marketing strategies for events from trade shows and exhibitions to smaller house parties always with a focus on achieving as wide an audience as possible.
Print Advertising Services - we work with print advertisers such as community newspapers, small production specialized magazines, and fliers to get our clients’ information out to their market. We also prepare newsletters and establish direct marketing campaigns.
Media Marketing Services - offers services for Internet, television, radio, and print advertising including graphic design and educational media with the ultimate goal of connecting companies to their target audience through innovative, non-traditional media and marketing properties.
Through the end of the calendar year 2007, all of our services had been provided to a single client, KAATN of Wyoming, a company controlled by our sole officer/director. KAATN is a network marketing distributor of MonaVie, a health juice product. The services we provided KAATN specifically consisted of designing marketing brochures, scheduling training, organizing conference calls, setting up email “drip” campaigns, designing and facilitating online market orientations, and creating recruitment plans. From December 2007 through June 30, 2010, we have increased our client base and provided services such as business plans, marketing campaigns, and website design to other small business enterprises. We have also expanded our services to focus on international network marketers.
Our Market
Our market consists of small businesses and individuals especially those involved in network marketing. Management has determined to target this market because it is a rapidly growing market and because management’s own expertise in network marketing sales will provide an advantage in both soliciting and satisfying clients and increasing their sales results. We will rely on the following to attract clientele:
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reputation,
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word-of-mouth,
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experience,
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competitive prices,
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participation in trade shows that are attended by network marketing distributors
We also offer our services to other small businesses when and if opportunities arise and may re-focus on such broader markets in the future if the network marketers niche does not meet our growth expectations.
Competitive Business Conditions; Competitive Position; Methods of Competition
The market for comprehensive advertising and marketing services is highly fragmented and intensely competitive. In order to compete effectively in the advertising and marketing services industry, a company must provide a wide range of quality services and products at a reasonable cost. In seeking clients and providing our services, we will compete mostly with local advertising and marketing firms such as Crowell Advertising, MWI, Redstone Advertising Design, Jibe Media, Kim Brown Associates, Andrews Marketing Partners, Action Leadership, Delamere Marketing, Love Communications, Davinci Advertising. Although we do not know if any of these companies specialize in marketing for network/multilevel marketing companies, they do have the ability to provide the same sort of services we provide such as web site design, email drip-programs or event promotion; they also have greater financial resources than we have, as well as more experience and presence in the industry. In addition, many of these companies can offer bundled, value-added or additional services not provided by us. Most have greater name recognition. Our competitors may have the luxury of sacrificing profitability in order to capture a greater portion of the market for advertising and marketing services. They may also be in a position to pay higher prices than we would for the same expansion and development opportunities. Consequently, we may encounter significant competition in our efforts to achieve our objectives.
Because we are a small company with few resources we are at a competitive disadvantage. To date we intended to focus on a very specific niche market and grow with that market, that of network marketers. However, we have not yet aggressively pursued that market niche and currently pursue a more generalized and flexible approach. We will continue to pursue the network marketing niche because our experience in the industry could provide us with some competitive advantages; however we will also pursue providing other marketing related services to small businesses.
Distribution Methods of our Service
Our clients are serviced through telephone, Internet and on-site
Dependence on one or a few major customers
Up through December 31, 2007 we had only one client, a related party under the control of our sole/officer director. Since our inception in 2006 through 2007, all of our revenues had been achieved through that one client. Since then, we have begun achieving revenues from a few additional small business clients that are non-related parties. We therefore rely on a very limited number of clients to generate revenues. Although Management is actively soliciting new customers, we continue to seek clients from a fairly narrow and limited market segment. Because we have a small number of clients and provide services on an individualized, per-job basis, the completion of a job or the loss of any one client would have a substantial negative impact our cash flows. In addition, although we negotiate fees based on what we believe are normal and usual in the market for the type of service rendered, there is the risk that a conflict could arise which may not be resolved in our favor. We have had no contracts, formal or otherwise with our clients regarding our services.
Patents, trademarks, licenses, franchises, concessions, royalty agreements, labor contracts
None.
Need for government approval
None.
Effects of existing or probable governmental regulations
None.
Research and development in the last two years
During the past two years, we spent no money on research. All funds attributed to the development of our business have been included with our other operating expenses.
Costs and effects of compliance with environmental laws
None.
Number of employees
We have no employees except our officer/director who performs both administrative services and sales services. This individual does not devote full time efforts to Andina Group. Currently, Burke Green devotes approximately 10-20 hours per week. We have no intention of hiring any additional personnel until warranted.
Reports to Security Holders
You may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also find all of the reports that we have filed electronically with the SEC at their internet site www.sec.gov.
ITEM 1A.
ITEM 1A.
RISK FACTORS
In any business venture, there are substantial risks specific to the particular enterprise which cannot be ascertained until a potential acquisition, reorganization or merger candidate has been specifically identified; however, at a minimum, our present and proposed business operations will be highly speculative, and will be subject to the same types of risks inherent in any new or unproven venture, and will include those types of risk factors outlined below, among others that cannot now be determined.
Risks Related to Our Financial Condition
We operate at a loss and our cash flows are insufficient to grow our business; we will likely need capital to increase and expand our operations. Additional capital may not be available to us; accordingly, an inability to raise additional funds would limit growth opportunities and could ultimately result in our inability to continue in business.
We have suffered net losses from operations consistently since inception with losses from operations of $6,323 and $2,794 for our June 30, 2009 and 2010 fiscal years, respectively. We expect to experience additional losses in the near future. Income from operations is not sufficient to fund our day-to-day operations and, therefore, it is not sufficient to promote any expansion. Although we have no immediate plans of raising additional capital, we will need to raise additional funds in the future to fund our losses, expand our business, promote more aggressive marketing programs and/or for the acquisition of complementary businesses. The amount of funding we will require has not yet been determined and depends on many factors not the least of which is the amount of revenues we generate, whether or not management will be able to continue to reduce our operating expenses and how aggressively we market our services in the next twelve months. Our revenues have been inconsistent making it difficult to analyze our cash needs and we have not yet made a determination as to how much additional financing we will need. In the past we have relied on sales of our common stock to fund operations but may also look to other forms of debt or equity financing. We may also rely on loans from related or non-related parties. The success of raising capital is dependent on:
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market and economic conditions;
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our financial condition and operating performance; and
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investor sentiment.
These factors may make the timing, amount, terms and conditions of additional financing unattractive for us and we may not be successful in raising additional capital when we need it. The inability to raise capital when needed could result in our inability to continue in business.
We incur substantial costs and expenses to comply with SEC reporting requirements; these costs place a substantial burden on our cash flows and may negatively impact our financial condition
We incur substantial legal and accounting costs associated with compliance with various reporting requirements imposed by the Securities and Exchange Act of 1934. Legal and accounting costs related to financial reporting utilize a relatively high percentage of our cash flows placing a substantial burden on them. We will incur additional expenses within the next year associated with interactive reporting requirements. If we incur these expenses at a time when cash flows from operations are reduced or unavailable it could force us to postpone or abandon business development or marketing at a critical time or borrow money under unfavorable terms. Our financial condition may be negatively impacted by the costs associated with our reporting requirements.
Our auditors have expressed concern as to whether we can continue as a going concern
We are unable to fund our day-to-day operations through revenues alone and we will incur operating losses in the near future while we try to increase our market share and number of clients, or expand our market into other similar areas. We may be unable to increase our revenues sufficiently to achieve profitability. Our auditors have expressed concern as to whether we can continue as a going concern in their report.
Risks Related to our Business
We may not be able to compete successfully because we have little market share and we have identified at least 10 local agencies we must compete with in our efforts to increase our market presence; there are also national and international companies which are well-established and aggressively pursuing business throughout the United States including our geographic locale.
Although management believes we can operate successfully in Utah, Nevada and throughout the United States for a reasonable price, other marketing companies are aggressively pursuing business in our locale and in similar markets. In our efforts to increase our market presence and achieve additional clientele we will experience competition from several local and regional companies that offer similar services and have substantially greater financial resources, experience and marketing organizations. We have identified at least ten such firms that we will compete with in our effort to increase our client base. We will also experience some competition from national companies that are well established and aggressively pursuing business throughout the US, including our specific locale. In order to compete, we have chosen to pursue a particular and relatively narrow market which is not limited to a specific locale, that is small businesses especially network marketers. Our ability to compete will depend on our ability to obtain customers by attracting them to our services from that narrow market. Although we do not know if any of our competitors specialize in multilevel/network marketing companies, we are at a competitive disadvantage because we are a small company with limited resources. We may not be able to compete successfully or achieve profits.
Our director and officer is inexperienced in the management of public companies and devotes part time efforts to our business which may not be sufficient to successfully develop it; both this lack of experience and potential conflicts of interest for both time or corporate opportunity could have a negative impact on our growth potential.
The amount of time which our officer and director devotes to the business is limited. Burke Green devotes about 25-50% of his time. Mr. Green has other business interests including his own business, which until the quarter ended March 2008, was our sole source of revenues. The hours he devotes to our business may not be sufficient to fully develop our business or fully manage the reporting requirements of being a public company without outside assistance. In addition, Mr. Green has no experience managing a public company or acting in the capacity of principal accounting or financial officer of a public company and therefore is heavily reliant on outside services to assist him in all aspects of our financial reporting. This places additional financial burdens on our company. Furthermore, there exists potential conflicts of interest, including, among other things, time, effort and corporate opportunity involved with participation in other business entities. We have no agreements with our officer and director as to how he will allocate his time to us or how he will handle corporate opportunities.
We have a narrow target market which could negatively impact our growth opportunities and our revenues if we do not successfully capture it, or if we are not sufficiently flexible to adjust our business plan as the need dictates. Failure to achieve a larger client base or adjust or expand our target market could result in a total lack of revenues and the inability to continue operations.
Our current business plan focuses mainly on a narrow target market, small businesses especially independent distributors of network marketing companies and start-up enterprises. Our success is directly tied to both the success of the respective products in the marketplace as well as the success and growth of the individual distributors and/or small business. If the product(s) or service(s) fail to succeed or if we fail to sell our service to the network marketing distributors, both our revenues and our growth opportunities will be negatively impacted. We currently do not have sufficient cash flows from operations derived from our market niche and may never have sufficient growth opportunities from it. Lack of cash flows could prohibit us from continuing our business operations.
We are dependent on limited number of clients to provide revenues in any given quarter; we do not have any long-term agreements or contracts, written or otherwise, with any of our clients regarding our services; the loss of our clients’ business could result in a total lack of revenues unless we are able to continually attract additional clients.
We have provided services to a limited number of clients during the last 12 months. We do not have written contracts with any of these clients. We will continue to seek new and additional clients. With minimal clientele and no long-term arrangements or agreements with those clients, our future operations could be seriously affected especially if we fail to continue to secure additional and new clients. This could result in a total lack of revenues and would negatively impact our cash flows.
Risks Related Our Stock Price, and Corporate Control
Although are shares are quoted on the OTC Bulletin Board, no market has developed and there is no assurance one will develop or that we will be able to maintain our listing; you may have difficulty liquidating your investment.
Although our stock is now quoted on the Over-the Counter Bulletin Board (OTCBB) under the symbol of “AAUI”, no market for our common shares has yet developed. If a market develops, there can be no assurance that the price of our shares in the market will be equal to or greater than the price per share paid by investors. In fact, the price of our shares in any market that may develop could be significantly lower. In addition, recent rule changes impose the requirement that if we fail to file our quarterly and annual reports in accordance with SEC time constraints more than two times in a two year period, we will lose our “listing” for one year during which time we must file each and every report on time before we can be quoted again. Therefore, if a market fails to develop or if we are suspended from quotation on the OTCBB, you will have difficulty liquidating your investment.
Our shares may be considered a “penny stock” within the meaning of Rule 3a-51-1 of the Securities Exchange Act which will affect your ability to sell your shares; “penny stocks” often suffer wide fluctuations and have certain disclosure requirements which make resale in the secondary market difficult.
Our shares will be subject to the Penny Stock Reform Act, which will affect your ability to sell your shares in any secondary market, which may develop. If our shares are not listed on a nationally approved exchange or NASDAQ, do not meet certain minimum financing requirements, or have a bid price of at least $5.00 per share, they will likely be defined as a “penny stock”. Broker-dealer practices, in connection with transactions in “penny stocks”, are regulated by the SEC. Rules associated with transactions in penny stocks include the following:
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the delivery of standardized risk disclosure documents;
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the provision of other information such as current bid/offer quotations, compensation to be provided broker-dealer and salesperson, monthly accounting for penny stocks held in the customers’ account;
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written determination that the penny stock is a suitable investment for purchaser;
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written agreement to the transaction from purchaser; and
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a two-business day delay prior to execution of a trade
These disclosure requirements and the wide fluctuations that “penny stocks” often experience in the market may make it difficult for you to sell your shares in any secondary market which may develop.
We have never paid cash or stock dividends on our common shares and this could discourage potential investors from purchasing our shares.
Investors should not anticipate receiving any dividends from our common stock. We intend to retain future earnings to finance our growth and development and do not plan to pay cash or stock dividends. This lack of dividend potential may discourage potential investors from purchasing our common stock.
Our officer and director controls a significant portion of our stock which gives him significant influence on all matters requiring stockholder approval; they could prevent transactions which would be in the best interests of the other stockholders.
Our sole director and officer, whose interests may differ from other stockholders, has the ability to exercise significant control over us. This individual beneficially owns approximately 81.38% of our common stock. This stockholder is able to exercise significant influence over all matters requiring approval by our stockholders, including the election of directors, the approval of significant corporate transactions, and any change of control of Andina Group. This individual could prevent transactions which would be in the best interests of the other shareholders. The interests of our officer and director may not necessarily be in the best interests of the shareholders in general.
ITEM 1B:
ITEM 1B:
UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2:
ITEM 2:
PROPERTIES
Our executive offices are located at 179 South 1950 East, Layton, Utah 84040. The telephone number is (801) 558-2110.
The registered and records office of the company is located at 5017 Wild Buffalo Ave., Las Vegas, Nevada, 89131.
The executive office is currently being given to the company at no charge and there are no leases in place. Until such time as it becomes necessary to hire staff, the company has no plans to lease space or purchase any property. Management utilizes space in their own homes to complete day-to-day administrative tasks.
ITEM 3:
ITEM 3:
LEGAL PROCEEDINGS
There are no legal proceedings or pending litigation to which we are a party, or against any of our officers or directors as a result of their capacities with us, and we are not aware of any threat of such litigation. We are not aware of any proceeding involving us that a governmental authority may be contemplating.
ITEM 4:
ITEM 4:
[REMOVED AND RESERVED]
PART II
ITEM 5:
ITEM 5:
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
OTC Bulletin Board ; Market For Our Shares
Our stock became eligible for quotation on the Over-the-Counter Bulletin Board (“OTCBB”) on August 9, 2010 under the symbol of “AAUI”. However, as of the date of this Annual Report, no market for our common shares has developed and there can be no assurance that a trading market will ever develop, or, if developed, that it will be sustained. Furthermore, the shares are not marginal and it is unlikely that a lending institution would accept the shares as collateral for a loan.
Sales of Unregistered Securities
There were no sales of unregistered securities by Andina during the period covered by this report.
Use of Proceeds
Not applicable as we will receive no proceeds for any shares sold under our Registration Statement in effect.
Effect of Penny Stock Reform Act and Rule 15g-9
When and if we have a market for our common stock, shares will be subject to the Penny Stock Reform Act which may affect your ability to sell your shares in any secondary market.
Penny Stock Reform Act. In October 1990 Congress enacted the Penny Stock Reform Act of 1990 to counter fraudulent practices common in penny stock transactions. Under Rule 3a51-1 of the Exchange Act a security will be defined as a “penny stock” unless it is:
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listed on approved national securities exchanges;
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a security registered or approved for registration and traded on a national securities exchange that meets specific guidelines, where the trade is effected through the facilities of that national exchange;
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a security listed on NASDAQ;
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a security of an issuer that meets minimum financial requirements; or
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a security with a price of at least $5.00 per share in the transaction in question or that has a bid quotation, as defined in the Rule, of at least $5.00 per share.
Under the Penny Stock Reform Act, brokers and/or dealers, prior to effecting a transaction in a penny stock, will be required to provide investors with written disclosure documents containing information concerning various aspects involved in the market for penny stocks as well as specific information about the subject security and the transaction involving the purchase and sale of that security. Subsequent to the transaction, the broker will be required to deliver monthly or quarterly statements containing specific information about the subject security. These added disclosure requirements will most likely negatively affect the ability of purchasers herein to sell their securities in any secondary market.
Rule 15g-9 promulgated under the Exchange Act imposes additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Consequently, the rule may also affect the ability of purchasers in this offering to sell their securities in any secondary market. Newly adopted regulations will require a two-business day delay prior to execution of a trade in a penny stock by
a broker dealer. These requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules.
Possible Issuance of Additional Securities
We may need additional financing to grow our proposed business. If we are able to raise additional funds and we do so by issuing equity securities, existing shareholders may experience significant dilution of their ownership interest and holders of the new securities issued may have rights senior to those of the holders of our common stock. If we obtain additional financing by issuing debt securities, the terms of these securities could restrict or prevent us from paying dividends and could limit our flexibility in making business decisions.
Purchases of Equity Securities by Us and Affiliated Purchasers
We did not purchase any of our securities during the period covered by this Annual Report.
Holders
We currently have 48 shareholders.
Dividends
We have never paid dividends on our common stock. The Board of Directors presently intends to pursue a policy of retaining earnings, if any, for use in our operations and to finance expansion of our business. Any declaration and payment of dividends in the future, of which there can be no assurance, will be determined by our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements and other factors. There are presently no dividends accrued or owing with respect to our outstanding stock. No assurance can be given that dividends will ever be declared or paid on our common stock in the future.
Securities Authorized for Issuance under Equity Compensation Plans
None.
ITEM 6:
ITEM 6:
SELECTED FINANCIAL DATA
The following chart summarizes our financial statements for the years ended June 30, 2010 and 2009 and should be read in conjunction with the financial statements, and notes thereto, included with this Annual Report at Part II, Item 8, below.
ITEM 7:
ITEM 7:
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
Safe Harbor for Forward-Looking Statements
When used in this Annual Report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act and Section 21e of the Exchange Act regarding events, conditions, and financial trends that may affect the Andina’s future plans of operations, business strategy, operating results, and financial position. Persons reviewing this Annual Report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such factors are discussed under “Item 1A. Risk Factors”, and also include general economic factors and conditions that may directly or indirectly impact our financial condition or results of operations.
Executive Overview
We were founded in 2004. We have had only limited revenues and have operated at a loss. We provide multi-media marketing services to small business and network marketing groups. Management intends to focus on this relatively small market in hopes our business will grow as this particular segment grows. We will continue to provide services for other small businesses when and if the opportunity arises.
Market Focus
The determination to concentrate our business on network marketers was based on Management’s belief this focus could ultimately result in more and regular clients if we can manage to grow with the respective distributor networks. We also considered that our president has experience in that industry as a former network marketer making him better qualified to serve that market segment as well as other network marketers, rather than small businesses in general. A third factor in this decision is Management’s belief that competition will be less intense than for business in the broader small business arena if we specialize in and capture this relatively small market niche where we will be able to rely more heavily on referrals, reputation, and word-of-mouth to increase business. During the past year we have especially focused on expanding into international markets, mainly Korea and Indonesia. However, Management also provides marketing services to small businesses as the opportunity arises and will remain flexible and open to all small business marketing opportunities.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principals 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates, based on historical experience, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
Results of Operations for the Fiscal Years Ended June 30, 2010 and 2009
The following discussions are based on the financial statements for the fiscal years ended June 30, 2010 (“FYE2010”) and June 30, 2009 (“FYE2009”). The discussions are summary and should be read in conjunction with the financial statements and notes included in this report.
Comparison of June 30, 2010 and 2009 Operations
Revenues
Revenues are generated by marketing services provided to our clients and are recognized as earned at the time the services are provided. Services are provided, and fees negotiated on an individualized per job basis usually at prices normal and usual in the industry. We do not have service contracts with clients but perform services in accordance with the clients’ needs and budget.
Management’s efforts to increase cash flows resulted in $125,317 in revenues during FYE2010 compared with $31,580 during our FYE2009. During the current fiscal year our revenues were derived from 10 non-related party clients and one related party client who provided us with a approximately 8% of our revenue stream. During FYE2009 all revenues were from 4 non-related party clients. Our related party client is KAATN of Wyoming (KAATN), a network marketing company controlled by our sole officer/director, Burke Green.
Expenses/Loss from Operations
Spending during FYE2010, especially during our third and fourth quarters, reflects Management’s efforts to increase revenues with a specific concentration on network marketers expanding into international markets, such as Korea and Indonesia. Increased revenues, however, were not sufficient to offset our general and administrative expenses of $128,111 during FYE2010 and resulted in a loss from operations of $2,794. General and administrative costs were much lower during FYE2009 at $37,900.
Expenses during our FYE2010 included marketing costs of $48,085, nearly three times higher than the $16,689 spent last year as we made a concerted effort to increase our market presence in international markets. Consulting fees were also considerably higher this year when we spent approximately $27,000 compared to only $1,000 last year. Consulting fees in both years are a result of outsourcing certain services. Consultants helped with training and event promotion as well as helping us to secure new clients and analyze their needs. Our consulting expenses this fiscal year were paid to non-related parties except $5,000 paid to KAATN, a company controlled by our sold officer director. Legal, accounting and professional fees primarily associated with our registration process and SEC compliance were approximately $15,600 during FYE2009 and reduced to approximately $8,000 during FYE2010. We expect our legal and accounting fees to be the same or higher the next fiscal year as we continue to comply with various SEC rules and reporting requirements and begin preparing for compliance with interactive filing requirements. We also incurred development fees of $8,000, telemarketing costs of $9,600, and travel costs of $9,500 during FYE2010; we had no such comparable costs during FYE2009. Overall we spent significantly more during the June 30, 2010 fiscal year in marketing, consulting and development costs with management taking advantage of increased cash flows to make a more concerted effort to penetrate our market niche.
Net Loss
We had a net loss of $2,794.in FYE2010 compared to net loss of. $6,323 during FYE2009
Balance Sheet Information
The chart below presents a summary of our balance sheet at June 30, 2010 and June 30, 2009:
We had only $19 in cash as of June 30, 2010. We had $960 in cash and accounts receivable of $5,000 as of June 30, 2009. Our liabilities decreased this year to $9,031 and consisted of accounts payables mostly due to professionals for legal and accounting and other services associated with our reporting requirements. Last year liabilities of $12,178 consisting mostly of accounts payable due to professionals for legal and accounting.
Commitment and Contingencies
We have no leases in place.
Off-Balance Sheet Arrangements
None.
Liquidity and Capital Resources/ Plan of Operation for the Next Twelve Months
Cash Flows and Capital Resources
Overall, our revenues have not reached a level to support our operations nor provide for additional business development and expansion. However, during this fiscal year revenues were sufficient to support operations and provide for some business development expenditures. Operations used $941 in cash; during our year ended June 30, 2010 whereas operations consumed $4,972 in cash in our year ended June 30, 2009. Our primary sources of capital during our last three years are as follows:
§
During our fiscal year ended June 30, 2010, we had no financing or investing activities; increased revenues along with available cash were sufficient to fund operations;
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During our fiscal year ended June 30, 2009, we had no financing or investing activities and our expenses exceeded our revenues. Revenues of $31,980 however, along with available cash provided sufficient cash to operate the business during the year.
§
During our fiscal year ended June 30, 2008 we had no financing activities; cash flows from operations generated sufficient income to operate our business during the year.
Our Plan of Operation for the Next Year
We had losses from operations during our recent fiscal year and have incurred losses since inception. We have an accumulated deficit at June 30, 2010 of $121,269 and we have $19 in cash. Although we have increased our clients, we continue to rely on a small number of clients. In addition, although our revenues have increased, they are inconsistent and we do not have sufficient cash to fund our operations and pursue business development and expansion.
We have an immediate need for cash to fund operations. During the next twelve months we must find ways to reduce our operating expenses and while continuing to increase cash flows. Outside accounting services are responsible for reviewing and analyzing the completeness of the accounting information provided by our CFO and then compiling it into a financial statement prior to submission to our independent public accountant for review. We anticipate professional fees will cost us approximately $5,000 - $7,000 per quarter. In addition, these increased fees have not been relieved now that we are public because we continue to require assistance to comply with our reporting obligations under the 1934 Act. These fees will likely increase substantially as new rules are implemented especially XBRL filing requirements.
Management is pursuing its business plan aggressively. And, even though revenues have now increased due to Management’s recent efforts to secure new clients, we significantly increased our spending during this year in an effort to further increase our number of clients and revenues and develop marketing strategies for international markets. These efforts may not result in consistently higher revenues. Historically we have operated at a loss. Management has an immediate need for cash and must continue to increase cash flows from operations significantly. We must continue to pursue our niche market more aggressively while at the same time pursuing other small business marketing opportunities. In light of our deteriorating financial condition, Management has determined that it is critical that we:
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Increase cash flows by increasing our client base - we began this effort in the quarter ended March 31, 2008, increased it significantly in the current quarter and will continue this throughout the next 12 months
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Analyze the effectiveness of the various marketing services performed for KAATN, and utilize results, if positive, to (1) attract additional network marketing clients; and (2) adjust services offered this niche market based on the results - we have begun this process and will implement our findings during the next three months;
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Expand our market to include more small businesses as the opportunity allows; we began this in the quarter ended March 31, 2008;
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Develop marketing services and strategies for network markets expanding into international markets; we began this in September of 2009, continued it aggressively in the last three quarters and will continue to pursue this niche to take advantage of these emerging markets;
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Develop more long term and/or repeat relationships with clients;
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Analyze results of operations quarterly to compare revenues from multi-level marketing clients to revenues from general small business clients and adjust our marketing strategy accordingly; and
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Reduce operating expenses where possible
Management does not know if it will be successful in these efforts especially in light of the current economic slowdown. And, as a result, Management cannot say if it will be successful in generating sufficient cash flows to support its operations over the next 12 months. Therefore, we may seek other means of funding our operations although management has not determined at this time how much money it will need to raise. We could attempt to receive loans from either related parties such as shareholders or directors, or we could receive loans from unrelated third parties. However, there are no written agreements with any party regarding loans or advances. If these parties do provide loans or advances, we may repay them, or we may convert them into common stock. We do not, however, have any commitments or specific understandings from any of the parties or from any individual, in writing or otherwise, regarding any loans or advances or the amounts.
Management also anticipates that additional capital may also be provided by private placements of our common stock. We would issue such stock pursuant to exemptions provided by federal and state securities laws. The purchasers and manner of issuance would be determined according to our financial needs and the available exemptions. We do not intend to do a private placement of our common stock at this time.
At this time, we have no commitments from anyone for financing of any type nor have we had any discussions with any party regarding the same nor have we planned any private placement or public offering of our common stock. Mr. Burke Green, our sole officer/director has indicated his willingness to contribute funds, if necessary to support operations, if not available from another source; however, there is no formal written agreement with Mr. Green regarding any such contribution nor is there any specific amount that he is obligated or willing to provide.
We have not, however, as of this date, made any significant effort to investigate or secure additional sources of financing.
ITEM 7A:
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
THE ANDINA GROUP, INC.
(a Development Stage Company)
Audited Financial Statements
JUNE 30, 2010
MADSEN & ASSOCIATES, CPA's INC.
684 East Vine St, # 3
Certified Public: Accountants and Business Consultants
Murray, Utah 84107
Telephone 801 268-2632
Fax 801·262-3978
Board of Directors
The Andina Group, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying balance sheets of The Andina Group, Inc. (development stage company) at June 30, 2010 and 2009, and the related statements of operations, stockholders' equity, and cash flows for the years ended June 30, 2010 and 2009 and the period June 17, 2004 (date of inception) to June 30, 2010. 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.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to 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 for the 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 audit provides 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 Andina Group Inc. at June 30, 2010 and 2009 and the results of operations, and cash flows for the years ended June 30, 2010 and 2009 and the period June 17, 2004 (date of inception) to June 30, 2010, 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. The Company will need additional working capital for its planned activity and to service its debt, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in the notes to the financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty
Murray, Utah
August 19, 2010 s/Madsen & Associates, CPA’s Inc.
THE ANDINA GROUP, INC.
(A Development Stage Company)
BALANCE SHEETS
The accompanying notes are an integral part of these financial statements
THE ANDINA GROUP, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the Years Ended June 30, 2010 and 2009 and the
Period June 17, 2004 (Inception) to June 30, 2010
The accompanying notes are an integral part of these financial statements
THE ANDINA GROUP, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period June 17, 2004 (Date of Inception) to June 30, 2010
The accompanying notes are an integral part of these financial statements
THE ANDINA GROUP, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Years Ended June 30, 2010 and 2009 and the
Period June 17, 2004 (Inception) to June 30, 2010
The accompanying notes are an integral part of these financial statements
THE ANDINA GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
1.
ORGANIZATION
The Company was incorporated under the laws of the state of Nevada on June 17, 2004 with authorized common stock of 50,000,000 shares with a par value of $.001 and 10,000,000 preferred shares with a par value of $.001. None of the preferred shares have been issued and the terms have not been established.
The Company is in the business of offering integrated multi-media promotional services to small network marketing organizations and other small businesses to promote sales of their products or services. The Company assists them in using marketing tools such as public relations as well as developing and utilizing such services as advertising, direct mail, electronic communication, and promotions to increase product and service awareness. The Company offers quality marketing strategies and services for their business along with marketing support services, such as ad design, ad placement strategies, advertising sales, website development, marketing plans, focus groups, and media buying
The company has not reached full operations and is in the development stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.
On June 30, 2010, the Company had a net operating loss available for carry forward of $121,269. The income tax benefit of approximately $36,000 from the carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company has been unable to project a reliable estimated net income for the future. The net operating loss will expire starting in 2024 through 2030.
THE ANDINA GROUP, INC.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2010
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial and Concentrations Risk
The Company does not have any concentration or related financial credit risk.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.
Statement of Cash Flows
For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.
Revenue Recognition
Revenue is recognized on the sale and delivery of a product or the completion of a service provided.
Advertising and Market Development
The company expenses advertising and market development costs as incurred.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.
THE ANDINA GROUP, INC.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2010
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments
The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short-term maturities.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
3. CAPITAL STOCK
From its inception the Company has issued 6,010,000 private placement common shares for services valued at $2,000 and 136,600 private placement common shares for cash of $99,600.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officer/directors own 81% of the outstanding common capital stock and have made contributions to capital of $12,657.
A portion of the Company’s revenues have been derived from a related party, KAATN of Wyoming, a company controlled by the Company’s sole officer/director, Burke Green. The Company is paid for each service it provides to KAATN at a rate that is usual in the industry and the same as what the Company charges its other clients.
5. GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have sufficient working capital for its planned activity, and to service its debt, which raises substantial doubt about its ability to continue as a going concern.
Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective, through short term related party loans, long term financing, and additional equity funding, which will enable the Company to operate for the coming year. In addition, Mr. Burke Green, the Company’s sole officer/director has indicated his willingness to contribute funds, if necessary to support operations, if not available from another source.
6. SUBSEQUENT EVENTS
There have been no material subsequent events, from June 30, 2010 to the date of this report, to report.
ITEM 9:
ITEM 9:
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A(T):
ITEM 9A(T):
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our President, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, our President concluded that our disclosure controls and procedures as of the end of the period covered by this Annual Report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Our management, with the participation of the President, evaluated the effectiveness of our internal control over financial reporting as of June 30, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework. Based on this evaluation, our management, with the participation of the President, concluded that, as of June 30, 2010, our internal control over financial reporting was effective.
This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Security and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.
Changes in internal control over financial reporting
There have been no changes in internal control over financial reporting.
ITEM 9B:
ITEM 9B:
OTHER INFORMATION
Our Form S-1 Registration Statement was declared effective by the U.S. Securities and Exchange Commission on April 8, 2009. We filed our Form 8A12G on July 15, 2010. We were cleared for trading on the OTCBB on August 9, 2010 under the symbol of “AAUI.”
PART III
ITEM 10:
ITEM 10:
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Identification of Officers and Directors
Our executive officers and directors and their respective ages, positions and biographical information are set forth below.
Name
Age
Position
Director Since
Burke Green
President, Director, Secretary, CEO, CFO
July 2006
Background
Burke Green is our President, Sole Director, and Secretary. He also acts as our principal executive and financial officer. Mr. Green graduated from Ricks College in 1988 with a degree in Business. Mr. Green currently runs his own network marketing firm, KAATN of Wyoming. He was an independent distributor for the network marketing company USANA Health Sciences from 1992 until early 2005 when be became an independent distributor for the network marketing company Monavie in April 2005. From 1988 until the present, Mr. Green has been working in the network marketing and business development industry.
Directorships in Other Public Companies
Our sole director does not serve as a director of any other reporting company.
No Involvement in Certain Legal Proceedings
During the past 10 years, to our knowledge, none of our present or former directors, executive officers or persons nominated to become directors or executive officers has been the subject of any of the following:
(1) A petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two (2) years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two (2) years before the time of such filing;
(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
(4) Such person was the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than sixty (60) days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
(5) Such person was found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated;
(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
(7) Such person was the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
(i) Any federal or state securities or commodities law or regulation; or
(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Term of Office
The term of office for our directors is one year, or until a successor is elected and qualified at the Company’s annual meeting of shareholders, subject to ratification by the shareholders. The term of office for each officer is one year or until a successor is elected and qualified and is subject to removal by the Board.
Family Relationships
None.
Section 16(a) Beneficial Ownership Reporting Compliance
Our common shares are registered under the Exchange Act and therefore our officers, directors and holders of more than 10% of our outstanding shares are subject to the provisions of Section 16(a) which requires them to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and our other equity securities. Officers, directors and greater than ten-percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based on our review of copies of such forms furnished to us all such beneficial owners have timely filed his or her reports of ownership.
Code of Ethics
We have adopted a code of ethics for our principal executive and financial officers. Our code of ethics was filed with our Annual Report on 10K for the year ended June 30, 2009.
Corporate Governance
Nominating Committee
We have not established a Nominating Committee because, due to our lack of operations and the fact that we only have one director and executive officers, we believe that we are able to effectively manage the issues normally considered by a Nominating Committee. Following the entry into any business or the completion of any acquisition, merger or reorganization, a further review of this issue will no doubt be necessitated and undertaken by new management.
If we do establish a Nominating Committee, we will disclose this change to our procedures in recommending nominees to our board of directors.
Audit Committee
We have not established an Audit Committee because, due to our lack of operations and the fact that we only have two directors and executive officers, we believe that we are able to effectively manage the issues normally considered by an audit committee. Following the entry into any business or the completion of any acquisition, merger or reorganization, a further review of this issue will no doubt be necessitated and undertaken by new management.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION
All Compensation
None of our named officers and directors (Burke Green) has received any compensation (including deferred compensation, restricted stock compensation, long term incentive compensation or other) during the last three completed fiscal years
(1)
This table represents annual compensation only for the fiscal years ended June 30, 2010, 2009, and 2008; there was no long-term compensation paid during the last three years.
Director Compensation
We do not have any standard arrangement for compensation of our directors for any services provided as director, including services for committee participation or for special assignments. Our sole director received no compensation for service as a director for the year ended June 30, 2009.
Outstanding Equity Awards
None.
Options/SAR Grants in the Last Fiscal Year
None. We have no outstanding options or stock appreciation rights.
Options/SAR Exercises in the Last Fiscal Year
None. We have no outstanding options or stock appreciation rights.
Long Term Incentive Plan Awards in the Last Fiscal Year
None. We have no long-term incentive plans.
Employment Contracts
We currently have no employment agreements or compensatory plan or arrangement in effect with our sole officer/director.
Termination of Employment or Change in Control Arrangements
None.
ITEM 12:
ITEM 12:
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Ownership of Management and 5% Holders
The following table sets forth certain information regarding the beneficial ownership of our common stock as of the most recent practicable date, August 31, 2010, (i) each person known to us to be the beneficial owner of more than five percent of the outstanding shares of our common stock, (ii) each director and executive officer, and (iii) all directors and executive officers as a group, and is based on 6,146,600 shares issued and outstanding at that date.
OWNERSHIP OF MANAGEMENT AND 5% HOLDERS
Amount & Nature
Percent
Title of
Of Beneficial
Of
Name and Address
Class
Ownership(1)
Class
Burke Green
Common
5,002,300(2)
81.38%
179 So. 1950 East
Layton, UT 84040
Director, 5% Owner, CEO, CFO, President, Secretary,
All officers and directors as a group (1)
Common
5,000,300(2)
81.38%
(1)
The term “beneficial owner” refers to both the power of investment (the right to buy and sell) and rights of ownership (the right to receive distributions from the Company and proceeds from sales of the shares).
(2)
Includes 2,000 shares held of record by his wife, Brandi Green, and 300 shares in the names of their 3 minor children of 100 shares each.
SEC Rule 13d-3 generally provides that beneficial owners of securities include any person who, directly or indirectly, has or shares voting power and/or investment power with respect to such securities, and any person who has the right to acquire beneficial ownership of such security within 60 days. Any securities not outstanding which are subject to such options, warrants or conversion privileges exercisable within 60 days are treated as outstanding for the purpose of computing the percentage of outstanding securities owned by that person. Such securities are not treated as outstanding for the purpose of computing the percentage of the class owned by any other person. At the present time there are no outstanding options or warrants.
Securities Authorized for Issuance under Equity Compensation Plans
None. We have no equity compensations plans.
Changes in Control
We do not have any arrangements that would result in any change in control of our company. However, there are no provisions in our Articles of Incorporation or Bylaws that would delay, defer or prevent a change in control.
ITEM 13:
ITEM 13:CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The following information summarizes transactions we have either engaged in during the last three years, or propose to engage in, involving our executive officers, directors, more than 5% stockholders, promoters or founders, or immediate family members of these persons, or promoter or founder, or immediate family of such persons, which equals either $120,000 or an aggregate one percent of the average of our total assets at the year end of our last two fiscal years, whichever is less:
Transactions with Management and Others
Our entire board of directors is comprised of one member, Burke Green. During the last three fiscals years, the following transactions, series of similar transactions, currently proposed transactions, or series of currently proposed similar transactions, to which we were or are to be a party, in which the amount involved exceeded either $120,000 or one percent of the average of our total assets at the year end of our last three fiscal years, whichever is less, and in which any director or executive officer, or any security holder who is known to us to own of record or beneficially more than five percent of our common stock, or any member of the immediate family of any of the foregoing persons is a party are as follows:
Burke Green, our sole director, President, Secretary and Principal Executive and Financial Officer and a promoter:
§
served as a founder of Andina and purchased 6,000,000 shares of our stock for $2,000 at inception which equaled approximately 98% of our then outstanding stock
§
does not get compensated for services performed on behalf of clients
§
donates a limited space in his home for use in completing various administrative tasks associated with this business
§
gifted 6,000 of his shares: 4,000 to 3 individuals in November of 2006; the three individuals are non-related parties; and 2,000 shares to his wife Brandi Green in January of 2007
§
sold 994,000 shares of his shares on November 1, 2007 for $9,994, in a private transaction, to 5 individuals reducing his position to approximately 81%; two of the five individuals are relatives of Mr. Green
§
is a principal in KAATN of Wyoming, a networking marketing firm which was our principle source of revenue and our sole client up through December 31, 2007; KAATN provided no revenues to us during FYE2009; KAATN was paid $5,000 for consulting services and provided $9,300 in revenues during FYE2010
Rebecca Foulger, former President, a founder and a promoter of Andina through July 2006:
§
made contributions to capital of approximately $10,657 for which there has been no repayment.
Resolving Conflicts of Interest
Our directors must disclose all conflicts of interest and all corporate opportunities to the entire board of directors. Any transaction involving a conflict of interest will be conducted on terms not less favorable than that which could be obtained from an unrelated third party. Our entire Board of Directors consists of Mr. Burke Green who is also a principal of our sole client through December 31, 2007, KAATN of Wyoming. KAATN and Andina are therefore considered under common control. Although we provided only a limited amount of services in 2010 and none in 2009, if we do so in the future, there is a potential for conflicts of interest. We had no service contract with KAATN and we would likely not have a contract if we provide additional services at a later date. If we do provide additional services in the future we will charge KAATN, as in the past, for each service provided in accordance with fees that we believe are similar to what is normal and customary in the industry for the service provided.
Director Independence
We do not have any independent directors serving on our board of directors.
ITEM 14:
ITEM 14:
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following is a summary of the fees billed to us by our principal accountants during the fiscal years ended June 30, 2010 and 2009:
Audit Fees - Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements included in our Forms 10-K or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.
Audit-related Fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.”
Tax Fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.
All Other Fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
We have not adopted an Audit Committee; therefore, there is no Audit Committee policy in this regard. However, we do require approval in advance of the performance of professional services to be provided to us by our principal accountant. Additionally, all services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.
ITEM 15:
ITEM 15:
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1)(2)
Financial Statements. See the audited financial statements for the year ended June 30,
2010 contained in Item 8 above which are incorporated herein by this reference.
(a)(3)
Exhibits: Identification of management contract or compensatory plan or arrangement filed with
(b) below: NONE.
(b)
Exhibits filed with this report
Exhibit No. Description
3.1
Amended Restated Articles, filed on January 28, 2008 with the State of Nevada (1)
3.2
By-laws (1)
Code of Ethics(2)
31.1
Certification (Filed herewith)
32.1
Certification (Filed herewith)
(1)
Incorporated by reference to exhibits 3.1 and 3.2 filed with FORM SB-2 on January 31, 2008.
(2)
Incorporated by reference to exhibit 14 filed with our FORM 10K for June 30, 2009 on January 6, 2010
(c)
Financial Statement Schedules and other financial statements: NONE
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date September 1, 2010
THE ANDINA GROUP, INC.
/s/ Burke Green
Burke Green
President, Director
Principal Executive, Financial and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.
Date: September 1, 2010
/s/ Burke Green
Burke Green
President, Director
Principal Executive, Financial and Accounting Officer