Item 1. DESCRIPTION OF BUSINESS
Company Background
We are a Delaware corporation and we originally had the name Imperial Group I, Ltd. ("the Company"). We were incorporated in the State of Delaware on January 20, 1987. At the time of our formation, we sought to become a public shell and to acquire one or more operating businesses. To this end, we conducted a self-underwritten public offering of $112,500 of our common stock commencing on September 18, 1987. Following the offering and through April 1991, we remained without any operations and was unsuccessful in acquiring any operating business.
In March 1991 we changed our name to Ancona Group, Ltd. and in May 1991 our Board of Directors approved the exchange of 3,250,000 shares of our common stock to acquire 100% of the outstanding common stock of Summit Fine Arts, Inc. and Valparaiso Industries, Inc. from Harlan, Michael, & Edwards ("HME"). As a result, HME held a controlling interest in the Company at that time. Throughout the period from January 20, 1987 through December 31, 1992, we remained a development-stage company. During the first six months of 1993, the Company was successful in selling artwork that it acquired from Summit Fine Arts, Inc. At the time, the Company specialized in the art liquidation and brokerage and resale business. This strategy was founded on efforts to obtain discounts from multiple art publishers that would allow the Company to offer discounts ranging from 30% to 50% on gallery art to the general public. On June 30, 1993 and through our subsidiary, Summit Fine Arts, Inc., we liquidated all of our inventory and rights to produce art work in exchange for certain notes receivable.
Following the liquidation of our artwork assets and through an action approved by a majority of the stockholders on September 30, 1993, we changed our name to American Home Alliance Corporation. Although we changed our name, we pursued a strategy of entering the business of real estate development and construction, through our wholly-owned subsidiary, Valparaiso Industries, Inc. while also pursuing potential acquisitions of one or more operating companies since we remained and we currently are a public "shell company" (as that term is defined in Rule 144(i) of the Securities Act of 1933). We are, and have been throughout this period insolvent in that our Total Liabilities exceeds our Total Assets.
As a "shell company," our stockholders are not able to claim or use the exemption provided by Rule 144. As a result, unless or until we file the required "Form 10-type information" with the Commission and, at the same time, have non-cash assets (or operations) that are not nominal and thereafter for a period of at least one year after the filing of the "Form 10 type information", we will not we said to have "cured" our shell company status. Further to "cure" the shell company status, we will also need to prepare and file with the Commission all of our Form 10-Qs and our Form 10-Ks and maintain non-cash assets (or operations) that are not nominal for a period of at least one year thereafter. For as long as the Company remains a "shell company," all stockholders of the Company cannot use or claim the exemption provided by Rule 144. In effect, that means that stockholders will not have an effective ability to undertake any public re-sale of any of the Company's common stock.
During 2014, we continued our existence as a "public shell" company. As a result, we sought to either merge with or acquire an operating company with operating history and assets. The exact form and nature of any investment or activity that we may undertake has not yet been determined. In our current condition, the Securities and Exchange Commission has defined and designated our company as a "blind pool" and "blank check" company with all of the unfortunate aspects of that moniker. We are also insolvent since our Total Liabilities exceed our Total Assets as of December 31, 2014.
If we do not successfully pursue some form of operating business, then the primary activity of the Company will likely involve seeking merger or acquisition candidates with whom it can either merge or acquire. We have not selected any company for acquisition or merger and does not intend to limit potential acquisition candidates to any particular field or industry, but does retain the right to limit acquisition or merger candidates, if it so chooses, to a particular field or industry. Our plans are in the conceptual stage only and we may or may not pursue any specific investments or business activity. We have not received any commitment from any person that would reasonably suggest that our financial condition and our financial prospects will improve at any time in the near future.
We anticipate that we will not restrict its search to any specific business, industry or geographical location, and we may participate in a business venture of virtually any kind or nature. The discussion of the proposed business under this caption is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities.
To the extent that our limited management and market conditions allow, we intend to obtain funds in one or more private placements to finance the operation of any acquired business. Since we are a "shell company," that will likely inhibit any interest on the part of any investor in providing us with necessary capital. Persons purchasing securities in these placements and other shareholders will likely not have the opportunity to participate in the decision relating to any acquisition. Our proposed business is sometimes referred to as a "blind pool" because any investors will entrust their investment monies to the Company's management before they have a chance to analyze any ultimate use to which their money may be put. Consequently, our potential success is heavily dependent on our management, who likely will have virtually unlimited discretion in searching for and entering into a business opportunity. There can be no assurance that we will be able to raise any funds in private placements.
Management anticipates that it will only participate in one potential business venture which may or may not involve the residential housing industry. This lack of diversification should be considered a substantial risk in investing in the Company because it will not permit us to offset potential losses from one venture against gains from another.
We may seek a business opportunity with a firm which only recently commenced operations, or a developing company in need of additional funds for expansion into new products or markets, or seeking to develop a new product or service, or an established business which may be experiencing financial or operating difficulties and is in the need for additional capital which is perceived to be easier to raise by a public company. In some instances, a business opportunity may involve the acquisition or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock. If circumstances allow, we may purchase assets and establish wholly owned subsidiaries in various businesses or purchase existing businesses as subsidiaries.
We anticipate that the selection of a business opportunity in which to participate will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, management believes that there are numerous firms seeking the benefits of a publicly traded corporation. Such perceived benefits of a publicly traded corporation may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for the principals of a business, creating a means for providing incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes) for all shareholders, and other factors. Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
As is customary in the industry, we may pay a finder's fee for locating an acquisition prospect. If any such fee is paid, it will be approved by the Company's Board of Directors and will be in accordance with the industry standards. Such fees are customarily between 1% and 5% of the size of the transaction, based upon a sliding scale of the amount involved. The exact amount of such fees are not known at this time.
We are currently insolvent and we have insufficient capital with which to provide the owners of business opportunities with any significant cash or other assets. However, management believes the Company will offer owners of business opportunities the opportunity to acquire a controlling ownership interest in a public company at substantially less cost than is required to conduct an initial public offering.
The owners of the business opportunities will, however, incur significant post-merger or acquisition registration costs in the event they wish to register a portion of their shares for subsequent sale. The Company will also incur significant legal and accounting costs in connection with the acquisition of a business opportunity including the costs of preparing post-effective amendments, Forms 8-K, agreements and related reports and documents, nevertheless, the officers and directors of the Companies have not conducted market research and are not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity.
We do not intend to make any loans to any prospective merger or acquisition candidates or to unaffiliated third parties but this may change if circumstances require.
Evaluation of Opportunities
Since the Company has, in the past, pursued diverse business activities without success, the Company anticipates that any analysis of new business opportunities will be undertaken by or under the supervision of our officers and directors. Management intends to concentrate on identifying prospective business opportunities which may be brought to its attention through present associations with management. In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operation, if any; prospects for the future; present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors. Officers and directors of each Company will meet personally with management and key personnel of the firm sponsoring the business opportunity as part of their investigation. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors.
We will not acquire or merge with any company for which audited financial statements cannot be obtained. It may be anticipated that any opportunity in which the Company participates will present certain risks. Many of these risks cannot be adequately identified prior to selection of the specific opportunity, and the Company's shareholders must, therefore, depend on the ability of management to identify and evaluate such risk. In the case of some of the opportunities available to the Company, it may be anticipated that the promoters thereof have been unable to develop a going concern or that such business is in its development stage in that it has not generated significant revenues from its principal business activities prior to the Company's participation.
There is a clear risk, even after the Company's participation in the activity and the related expenditure of the Company's funds, that the combined enterprises will still be unable to become a going concern or advance beyond the development stage. Many of the opportunities may involve new and untested products, processes, or market strategies which may not succeed. Such risks will be assumed by the Company and, therefore, its shareholders.
We will not restrict its search for any specific kind of business, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is currently impossible to predict the status of any business in which the Company may become engaged, in that such business may need additional capital, may merely desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. We may also purchase stock or assets of an existing business. On the consummation of a transaction, it is possible that the present management and shareholders of the Company will not be in control of the Company. In addition, a majority or all of our officers and directors may, as part of the terms of the acquisition transaction, resign and be replaced by new officers and directors without a vote of the Company's shareholders.
It is anticipated that any securities issued in any such reorganization would be issued in reliance on exemptions from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of this transaction, the Company may agree to register such securities either at the time the transaction is consummated, under certain conditions, or at a specified time thereafter. The issuance of substantial additional securities and their potential sale into any trading market which may develop in the Company's Common Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the we may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called "tax-free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"). In order to obtain tax free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, the shareholders of the Company, including investors in this offering, would retain less than 20% of the issued and outstanding shares of the surviving entity, which could result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the Company will likely need to meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check reference of management and key personnel, and take other reasonable investigative measures, to the extent of the Company's limited financial resources and management expertise.
The manner in which each company participates in an opportunity will depend on the nature of the opportunity, the respective needs and desires of the Company and other parties, the management of the opportunity, and the relative negotiating strength of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with target company management will be expected to focus on the percentage of the Company which target company shareholders would acquire in exchange for their shareholdings in the target company. Depending upon, among other things, the target company's assets and liabilities, the Company's shareholders will in all likelihood hold a lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires a target company with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilative effect on the percentage of shares held by the Company's then shareholders, including purchasers in this offering. (See "Risk Factors.")
We are currently insolvent and we will not likely have sufficient funds (unless we able to raise funds in a private placement) to undertake any significant development, marketing and manufacturing of any products which we may acquire. Accordingly, following the acquisition of any such product, we may, in all likelihood be required to either seek debt or equity financing or obtain funding from third parties, in exchange for which we would probably be required to give up a substantial portion of our interest in any acquired product. There is no assurance that we will be able either to obtain additional financing or interest third parties in providing funding for the further development, marketing and manufacturing of any products acquired.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs therefore incurred in the related investigation would not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business incurred.
Employees
We have one part-time employee (our sole officer and director) who serves in management and administrative capacities without any salary.
Item 1A.
Item 1A. FACTORS THAT MAY AFFECT FUTURE RESULTS.
1. Comparable to a New Company: No Revenues from Operation; Losses; Risk of Loss. The Company faces all of the risks inherent in a new business, coupled with the risks involved with a blind pool/blank check company. Since the Company, subject to shareholder approval, has sold its existing businesses, there is no information at this time upon which to base an assumption that its plans will either materialize or prove successful. During the past eighteen years we have experienced continued losses and we have no basis to believe that we will achieve any profitability in the foreseeable future. We also are insolvent as our Total Liabilities exceed our Total Assets. There can be no assurance that any of the Company's business activities will result in any operating revenues or profits. Investors should be aware that they may lose all or substantially all of their investment.
2. State of Insolvency; Total Liabilities Exceed Total Assets. We had $238,654 in Total Current Liabilities compared to only $184 in Total Assets as of December 31, 2014. As a result, the Company is insolvent. While we believe that our current financial condition carries significant risks that we may need to file for bankruptcy protection, we are hopeful that we may be able to obtain financing from a suitable source. However, we have not entered into or undertaken any negotiations to obtain any financing and there can be no assurance that we will obtain financing from a source that will allow us to reduce our liabilities or, if we do so, that any such financing can be obtained on a reasonable basis in light of our current circumstances. For these and other reasons, any investor who purchases our common stock should be prepared for the event that the Company may file for bankruptcy protection and the investor will lose all of their investment.
3. Dormant Company & Likelihood of Continuing Challengers and Difficulties. The Company has largely been a dormant company since 1995. Thus, for more than eighteen years the Company has had a minimal existence and with no operations, assets, or full-time management oversight with respect to its affairs. In this context, the Company anticipates that it will experience and incur significant costs and potential difficulties to meet its corporate and securities obligations under the laws. While the Company believes it can meet these challenges, there can be no assurance that the Company will be successful or that these matters can be addressed without protracted problems and expenses. Further, in the event that we may be able to revive our corporate fortunes, we will incur costs and expenses to comply with current FINRA filings and compliance with Section 14 of the Securities Exchange Act of 1934, as amended. These expenses are likely to be significant.
4. No Full-Time Employees. The Company has no full-time employees and management and none of its officers devote their full time to the Company's proposed business affairs. Our sole officer and director receives no salary, but she is reimbursed for any expenses they may incur in the activities of the Company. Due to the fact that no salaries are paid to officers of the Company and that members of management are engaged in activities outside the operation of the Company, the ability and speed for the Company to effect a merger or acquisition may be significantly impaired.
5. Reliance Upon One Officer; Limited Time to Devote to Company Business. The Company is dependent upon the personal efforts and abilities of its sole officer and director, who devotes only limited time to the affairs of the Company. She has certain business experience but has almost no experience in acquisition or merger activities. The officer and director has not agreed to expend any specific amount of time on behalf of the Company, but will devote only such time as necessary to identify and consummate a merger or acquisition.
6. Auditor's Opinion: Going Concern. The Company's independent auditors, Chang Park, CPA, have expressed substantial doubt about the Company's ability to continue as a going concern since the Company is an early-stage company, the Company has minimal assets, and there exists only a limited history of operations.
7. Limited Financial Resources; Need for Additional Financing. The Company's financial resources are minimal. The Company needs to obtain additional financing from the sale of the Company's Common Stock, debt, or some combination thereof in order to undertake further business plans. The Company's ability to operate as a going concern is contingent upon its receipt of additional financing through private placements or by loans. The Company has, as of December 31, 2014, an outstanding Note Payable of $200,616. This Note Payable is to a related party. Moreover, the transactions with a related party may be viewed as transactions that are the product of a conflict of interest. A conflict of interest arises whenever a person has an interest on both sides of a transaction. While the Company believes that the transaction the related party were fair and reasonable and likely at no more costs than that which the Company would obtain from an independent, unrelated third party, there can be no guarantee of that. The Company's business may require additional funds in the future. There can be no assurance that if additional funds are required they will be available, or, if available, that they can be obtained on terms satisfactory to Management. In the event the Company elects to issue stock to raise additional capital, any rights or privileges attached to such stock may either (i) dilute the percentage of ownership of the already issued common shares or (ii) dilute the value of such shares. No rights or privileges have been assigned to the stock and any such rights and privileges will be at the total discretion of the Board of Directors of the Company. There can be no guarantee that the Company will be able to obtain additional financing, or if successful, that it will be able to do so on terms that are reasonable in light of current market conditions.
8. No Existing Trading Market for Common Stock & None will Likely Exist in the Foreseeable Future. The Company's Common Stock is currently not traded in any market. If any trading were to commence in the near future (a highly unlikely event) such trading would likely be limited to the non-OTC Markets. In prior years trading for the stock was sporadic and there was only a limited market for the Company's Common Stock. At the present time, there is no public market for the Company's Common Stock, and there can be no assurance that a market will in fact develop. Even if a market does develop, it may not be sustained and, given the Company's lack of resources, there is a substantial likelihood that the Company's common stock will not to trade in any public market in the foreseeable future absent the Company receiving additional significant financial resources.
9. Limited Facilities and Location. The Company presently maintains initial principal offices at the offices of its President. The office space is supplied at no cost. The Company pays its own charges for long distance telephone calls and other miscellaneous secretarial, photocopying and similar expenses.
10. Lack of Revenues And Development Stage Company. The Company faces all of the risks inherent in a new business. There is no information at this time upon which to base an assumption that its plans will either materialize or prove successful. The Company may or may not pursue any business in the residential housing industry. The Company's present business and plans have not been determined. There can be no assurance that any of the Company's business activities will result in any operating revenues or profits. Investors should be aware that they may lose all or substantially all of their investment.
11. Status as a Shell Company & Rule 144(i). We are a "shell company" as that term is defined in Rule 144(i) of the Securities Act of 1933, as amended. As a result, unless or until we file the required "Form 10-type information" with the Commission and, at the same time, have non-cash assets (or operations) that are not nominal and thereafter for a period of at least one year after the filing of the "Form 10 type information", we will not we said to have "cured" our shell company status. Further to "cure" the shell company status, we will also need to prepare and file with the Commission all of our Form 10-Qs and our Form 10-Ks and maintain non-cash assets (or operations) that are not nominal for a period of at least one year thereafter. For as long as the Company remains a "shell company," all stockholders of the Company cannot use or claim the exemption provided by Rule 144. In effect, that means that stockholders will not have an effective ability to undertake any public re-sale of any of the Company's common stock.
12. Lack of Dividends. The company has not paid dividends and does not contemplate paying dividends in the foreseeable future. The Company has only minimal assets and no operations.
13. Uncertain DTC Eligibility. Since we have been a "dormant" public company and our filings with the Securities and Exchange Commission became and remain delinquent, there can be no assurance that the Company and its common stock will regain eligibility with the Depositary Trust Company (DTC). While our common stock is not traded currently, should our common stock regain tradability, we will need to reapply to DTC and obtain DTC eligibility so that our holders can effectuate non-certificated or electronic transfers. If we are not successful, any later trading in our common stock would likely be limited.
14. Competition. The Company is an insignificant participant among firms which engage in business combinations with, or financing of, development stage enterprises. There are many established management and financial consulting companies and venture capital firms which have significantly greater financial and personnel resources, technical expertise and experience than the Company. In view of the Company's limited financial resources and management availability, the Company will continue to be at significant competitive disadvantage vis-avis the Company's competitors.
15. Regulation & Taxes. The Investment Company Act of 1940 defines an "investment company" as an issuer which is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading of securities. While the Company does not intend to engage in such activities, the Company could become subject to regulation under the Investment Company Act of 1940, as amended in the event the Company obtains or continues to hold a minority interest in a number of development stage enterprises. The Company could be expected to incur significant registration and compliance costs if required to register under the Investment Company Act of 1940, as amended. Accordingly, management will continue to review the Company's activities from time to time with a view toward reducing the likelihood the Company could be classified as an "investment company." The Company intends to structure a merger or acquisition in such manner as to minimize Federal and State tax consequences to the Company and to any target company.
17. Possible Stock Sales. A large portion of the Company's outstanding Common Stock are "restricted securities" and if the Company is effectively able to "cure" its shell status (as described above), these restricted securities may be sold only in compliance with Rule 144 adopted under the Securities Act of 1933 or other applicable exemptions from registration. Rule 144 provides that a person holding restricted securities for a period of at least six months may thereafter sell these securities (if the requirements of Rule 144(c) have been satisfied. Possible or actual sales of the Company's Common Stock by present shareholders under Rule 144 may have a depressive effect on the price of the Company's Common Stock in any market which may develop.
18. Risks of Low Priced Stocks. Currently, the Company's common stock is not trading in any market and there is no certain prospect that the Company's common stock will regain any trading in any organized market. In the past, the Company's common stock had only limited and sporadic trading in the so-called "pink sheets," and before that, on the NASD's "Electronic Bulletin Board." As a result and due to the absence of a market, a shareholder may find it more difficult to dispose of, or to obtain accurate quotations as to the price of, the Company's securities. In the absence of a security being quoted on NASDAQ, or the Company having $2,000,000 in net tangible assets, trading in the Common Stock is covered by Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as amended for non-NASDAQ and non-exchange listed securities. Under such rule, broker/dealers who recommend such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with their spouse) must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to sale.
Securities are also exempt from this rule if the market price is at least $5.00 per share, or for warrants, if the warrants have an exercise price of at least $5.00 per share. The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure related to the market for penny stocks and for trades in any stock defined as a penny stock. The Commission has recently adopted regulations under such Act which define a penny stock to be any NASDAQ or non-NASDAQ equity security that has a market price or exercise price of less than $5.00 per share and allow for the enforcement against violators of the proposed rules.
In addition, unless exempt, the rules require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule prepared by the Commission explaining important concepts involving the penny stock market, the nature of such market, terms used in such market, the broker/dealer's duties to the customer, a toll-free telephone number for inquiries about the broker/dealer's disciplinary history, and the customer's rights and remedies in case of fraud or abuse in the sale.
Disclosure also must be made about commissions payable to both the broker/dealer and the registered representative, current quotations for the securities, and if the broker/dealer is the sole market-maker, the broker/dealer must disclose this fact and its control over the market.
Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. While many NASDAQ stocks are covered by the proposed definition of penny stock, transactions in NASDAQ stock are exempt from all but the sole market-maker provision for (i) issuers who have $2,000,000 in tangible assets ($5,000,000 if the issuer has not been in continuous operation for three years), (ii) transactions in which the customer is an institutional accredited investor and (iii) transactions that are not recommended by the broker/dealer. In addition, transactions in a NASDAQ security directly with the NASDAQ market-maker for such securities, are subject only to the sole market-maker disclosure, and the disclosure with regard to commissions to be paid to the broker/dealer and the registered representatives.
Finally, all NASDAQ securities are exempt if NASDAQ raised its requirements for continued listing so that any issuer with less then $2,000,000 in net tangible assets or stockholder's equity would be subject to delisting. These criteria are more stringent than the proposed increased in NASDAQ's maintenance requirements.
The Company's securities are subject to the above rules on penny stocks and the market liquidity for the Company's securities could be severely affected by limiting the ability of broker/dealers to sell the Company's securities.
Item 1B.
Item 1B. UNRESOLVED STAFF COMMENTS.
None.
Item 2.
Item 2. PROPERTIES
Executive Offices
The Company's current office is 706 Orchid Drive, Suite D, Bakersfield, California 93308 which is provided rent-free by the Company's President, Lisa Norman.
Item 3.
Item 3. LEGAL PROCEEDINGS
The Company is not currently the subject of any existing litigation.
Item 4.
Item 4. [REMOVED AND RESERVED]
PART II
Item 5.
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
The Company's Common Stock is not traded on any market and the Company believes that there has been no trading in the stock since the year 1991. Further, the Company believes that there is no clear prospect that trading in the Company's common stock will suddenly re-occur. Further, should any market or trading activity commence, it is unlikely that any liquid trading market will evolve for the reasons stated in Section 1.A. of this Form 10-K. For these and other reasons, the Company's Common Stock must be viewed as a highly speculative and extremely risky investment and an investor should be willing to loose all or substantially all of their investment. The Company's Common Stock is not an investment that is suitable for any investor who seeks to preserve the principal value of their investment or who seeks a safe and secure investment.
High ($)
Low ($)
No Trading
No Trading
No Trading
No Trading
No Trading
No Trading
The Company has followed the policy of reinvesting earnings in the business and, consequently, has not paid any cash dividends. At the present time, no change in this policy is under consideration by the Board of Directors. The payment of cash dividends in the future will be determined by the Board of Directors in light of conditions then existing, including the Company's earnings, financial requirements and condition, opportunities for reinvesting earnings, business conditions and other factors. The number of shareholders of record of Common Stock on December 31, 2014 was approximately 77.
Item 6.
Item 6. SELECTED FINANCIAL INFORMATION.
The Company had, as of December 31, 2014
an aggregate of $184 in Total Assets and $238,654 in Total Liabilities. The Company had no business and no operations of any sort.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
During the fiscal years ending December 31, 2014 and 2013, the Company had minimal assets and no business operations.
Results of Operations
Fiscal Year Ending December 31, 2014 and Fiscal Year Ending December 31, 2013
Total Revenues for the year ended December 31, 2014 ("Fiscal 2014") were $0. The lack of revenues reflected the absence of any business activity by the Company during Fiscal 2014. By comparison, during the fiscal year ending December 31, 2013 ("Fiscal 2013"), the Company had $0 revenues as well. During Fiscal 2013, the Company similarly had no business activity.
Operating Expenses were composed of $17,421 in Administrative Expenses and Legal Fees during Fiscal 2014. This compares to $11,077 in Administrative Expenses and Legal Fees of $0 in Fiscal 2013. The increase in Administrative Expenses and Legal Fees during 2014 reflected management's continued efforts to attend to the Company's corporate affairs to ensure that the Company's books and records are maintained.
During Fiscal 2014 and Fiscal 2013, we had Interest Expense of $5,821 and $5,256, respectively. The Company had a note payable of $200,616 and $184,966 outstanding during Fiscal 2014 and Fiscal 2013, respectively.
As a result, the Company recorded a Net Loss of $23,242 in Fiscal 2014 compared to a Net Loss of $16,333 in Fiscal 2013. The Company's Loss Per Share in Fiscal 2014 was $0.01 compared to a Loss Per Share of $0.00 in Fiscal 2013
Liquidity and Capital Resources
During Fiscal 2014, the Company had only minimal assets and no material business activity. We carried a Note Payable of $200,616 (which was issued to a related party). Overall, we are insolvent as our Total Assets were $184 and our Total Liabilities were $238,654 as of December 31, 2014. This state of insolvency carries significant risks for us and poses a daunting challenge to our sole officer and director, Ms. Lisa Norman, who only provides part-time services to us, to address this matter.
Despite these actions, we lack liquidity and we lack access to any significant source of capital or financing needed to support its corporate existence. The Company is dependent upon the gratuitous interest of a few stockholders who may or may not have any interest in supporting the Company and ensuring that its corporate existence is maintained.
There can be no assurance that we will overcome our current insolvency or that we will have or receive sufficient financial resources that will enable it to continue its corporate charter, continue its filings required under the Securities Exchange Act of 1934, as amended, or otherwise continue as a corporation.
The Company's existence is entirely tenuous and uncertain. The Company's management believes that it will likely require approximately $18,000 to $25,000 or more in financing per year to maintain its corporate existence and the Company has mot received any indication that such financing is or will become available. We have a note outstanding to a related party in the amount of $200,616 and there can be no assurance that the Company will continue to obtain funds in the future. Further, all transactions with any related party carry with them the possibility that the transaction may be viewed as unfair and the product of a conflict of interest. A conflict of interest arises whenever a party has an interest on both sides of a transaction. While the Company believes that the transactions were undertaken on fair and reasonable terms - similar to that which the Company could obtain from an independent unrelated third party, there can be no assurance that the Company's transactions were obtained on terms that were no more than that from an independent third party.
Impact of Inflation
Inflation has not had a significant effect on the Company's operations during the three years ending December 31, 2014.
Item 7A.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have no existing operations, assets or business but our Common Stock is subject to a number of substantial risks, including those described Item 1A above. If any of these or other risks actually occur, the Company's business, financial condition and operating results, as well as the trading price or value of its securities could be materially adversely affected. No attempt has been made to rank these risks in the order of their likelihood or potential harm. In addition to those general risks enumerated elsewhere in Item 1A, any purchaser of the Company's common stock should also consider the following risk factors:
Status as a "Public Shell" Company. We are an insolvent public shell company and as such, we are subject to continuing uncertainties and risks due to the lack of assets, business, and any operations.
Insufficient Financial Resources. We have no material or liquid assets and we are dependent upon our one officer and director, Lisa Norman, for financial support including, but not limited to, the essential support necessary to support our very corporate existence. To that extent, we cannot assure you that we will remain a public company or, for that matter, maintain our corporate charter in Delaware in good standing.
Regulatory Burdens as a "Public Shell" Company. Since our Common Stock is registered under Section 12(g) of the Securities Exchange Act of 1934, as ameneded, we are burdened by many reporting, disclosure, and filing obligations and we anticipate that these burdens will continue to increase in the future. While we have every effort to meet our compliance obligations, we cannot assure you that we have always satisfied these obligations and that we will continue to do so in the future. The costs and necessary cash outlays needed to meet these burdens is substantial and far exceeds our existing financial resources and any financial resources that we may have in near future.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and related financial information required to be filed hereunder are indexed on page of this report and are incorporated herein by reference.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None during 2014.
Item 9A.
Item 9A. CONTROLS AND PROCEDURES
During 2014, the Company had no material financial transactions or any significant business operations. The Company believes that its then existing financial controls and procedures and disclosure controls and procedures were sufficient to meets its then existing level of activity.
(a) Evaluation of Disclosure Controls and Procedures.
Our Chief Executive Officer who is also our Chief Financial Officer is responsible for establishing and maintaining adequate internal control over our financial reporting. The framework that our sole officer uses relies primarily upon the framework indicated by our independent accountants and the advice that we receive from them. We are aware that the regulations promulgated by the Securities and Exchange Commission (the "Commission') under the Securities Exchange Act of 1934 (the "Exchange Act") require public companies to maintain "disclosure controls and procedures," which are defined as controls and other procedures that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
We carried out a limited evaluation, under the supervision and with the participation of the Company's sole officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) under the Exchange Act. Based upon that evaluation, the Chief Executive and Chief Financial Officer (one person) concluded that as of December 31, 2014, the Company's disclosure controls and procedures are effective in timely alerting her to material information required to be included in the Company's periodic SEC filings relating to the Company. Notwithstanding the above:
1. Our Board of Directors does not have a formal audit committee since we have only one Director.
2. We do not have any independent directors or one or more directors with significant financial expertise to allow us to make assessments of our accounting systems and controls.
3. Our accounting systems are limited since we do not have any assets or any operations.
To address these issues our sole officer and director, Lisa Norman, has undertaken additional steps and actions, upon the advice of our accountants so as to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.
(b) Changes in Internal Controls.
We did not make any changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, during our most recently completed fiscal year which that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The Company has no basis to believe that its controls and procedures were inadequate in view of its circumstances.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
None.
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSON; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors and Executive Officers
The names and ages of the Directors and Executive Officers of the Company are as follows:
Name
Age
Position
Since
Lisa Norman
Chairman, President, & CEO
January 1, 1995
The Directors serve until the next annual meeting of shareholders or until their successors are elected.
Lisa Norman was elected Secretary, Treasurer, and Director of the Company on January 1, 1995 and was elected Chairman and President on the same date. From 2001 to 2004, Ms. Norman has been Senior Vice President and CFO of Homecrete Homes, Inc. a real estate and construction company in Bakersfield, California and Senior Vice President, Secretary, and Treasurer of ICW Walls, Inc., a company that builds insulated, concrete walls in California and Florida for the building industry. From 1993 to 1997, Ms. Norman was Vice President, Secretary, and Treasurer of American Home Alliance, Inc., a real estate and construction company of Bakersfield, California. From 1992 to the present, Ms. Norman has been Vice President, Secretary, and Treasurer of American Tree Farms, Inc. and Vice President, Secretary, and Treasurer of Great Life, Inc. From 1991 to the present, Ms. Norman has been Vice President, Secretary, and Treasurer of American Home Alliance Industries, Ltd., a public company traded on the Electronic Bulletin Board (OTC) and its subsidiary, American Home Alliance, Inc., a real estate and construction company. From 1978 to 1994, Ms. Norman was Vice President and Secretary of Victorian Mortgage of Mission Veijo and San Clemente, California. From 1969 to 1978, Ms. Norman was Assistant to the President and CEO of Rocca Finanz AG, Glarus, Switzerland. From 1967 to 1969 she was Executive Secretary and Translator for Booz, Allen, Hamilton Management Consultants in Dusseldorf, Germany. From 1963 to 1967 she was Executive Secretary to the Personnel Manager of American Celanese Corporation at various locations throughout Europe. Ms. Norman is also President and CFO of Insulcrete, Inc.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires the Company's directors, executive officers and persons who own more than 10% of the Company's Common Stock (collectively "Covered Persons") to file initial reports of ownership (Form 3) and reports of changes in ownership of Common Stock (Forms 4 and Forms 5) with the Securities and Exchange Commission (the "Commission") as well as the Company and any exchange upon which the Company's Common Stock is listed.
The Company is required to identify Covered Persons that the Company knows have failed to file or filed late Section 16(a) reports during the previous fiscal year. To the Company's knowledge, the following Covered Persons during the fiscal year ended December 31, 2013 failed to file on a timely basis reports required by Section 16(a) of the Exchange Act:
Item 11.
Item 11. EXECUTIVE COMPENSATION.
Compensation Discussion and Analysis
For the fiscal year ending December 31, 2014, the Company did not pay and did not have the resources to pay any salary or other remuneration to the Company's sole officer and director. As a result, the Company has not undertaken any effort to structure any compensation program or otherwise offer or pay any incentive or other compensation thereby.
The Company's Board of Directors has authorized the compensation of its officers with the following annual cash salaries:
SUMMARY COMPENSATION TABLE (1)
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership as of December 31, 2014 of the Company's Common Stock, by any person who is known to the Company to be the beneficial owner of more than 5% of the Company's voting securities and by each Director and by Officers and Directors of the Company as a group. The Company has only one class of common stock. The percentages shown below are computed based on 3,707,500 shares of the Company's Common Stock outstanding as of December 31, 2014.
Name and Address
Number of Shares
Percentage of Class
Lisa Norman.
2,410,000
65.00%
706 Orchid Drive, Suite D
Bakersfield, California 93308
All Officers and
Directors as a Group (1 person)
2,410,000
65.00%
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPEDENCE
The Company did not have any related party transactions during fiscal years 2014 and 2013 and the Company does not have any independent directors.
Item 14.
Item 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES
The aggregate fees billed for the 2014 fiscal year for professional services rendered by our accountants, PLS CPA, A Professional Corp. for the audit of the Company's annual financial statements and review of financial statements included in the Company's Form 10-K (17 CFR 249.308a) or 10-Q (17 CFR 249.308b) or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for such period were $6,400.
The aggregate fees billed for the 2014 fiscal year for professional services rendered by PLS CPA, A Professional Corp for the audit of the Company's annual financial statements and review of financial statements included in the Company's Form 10-K (17 CFR 249.308a) or 10-Q (17 CFR 249.308b) or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for such period were $15,000.
There were no fees billed for the 2014 and 2013 fiscal year for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company's financial statements.
There were no fees billed for the 2014 and 2013 fiscal year for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
Item 15.
Item 15. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
Exhibit No.
Description of Exhibit
31.1
Certification
31.2
Certification
32.1
Certification
32.2
Certification
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant):
AMERICAN HOME ALLIANCE CORPORATION
By: /s/Lisa Norman
Lisa Norman
President, Chief Executive Officer
& Chairman of the Board
Date: April 15, 2015
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
By: /s/Lisa Norman
Lisa Norman
President, Chief Executive Officer
& Chairman of the Board
Date: April 15, 2015
AMERICAN HOME ALLIANCE CORPORATION
(A Development Stage Company)
Index to Financial Information
Independent Auditors' Report
F 2
Balance Sheets
As of December 31, 2014 and 2013
F 3
Statements of Operations
For the Year Ended December 31, 2014 and 2013
F 4
Statement of Changes in Stockholders' Equity (Deficit)
From January 20, 1987 (inception) through December 31, 2014
F 5
Statements of Cash Flows
For the Year Ended December 31, 2014 and 2013
F 6
Notes to Consolidated Financial Statements
F 7
F 1
PLS CPA, A PROFESSIONAL CORP.
t
4725 MERCURY STREET #210 t SAN DIEGO t CALIFORNIA 92111t
t TELEPHONE (858) 722-5953 t FAX (858) 761-0341 t FAX (858) 433-2979
t E-MAIL changgpark@gmail.com t
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
American Home Alliance Corporation
We have audited the accompanying balance sheets of American Home Alliance Corporation (A Development Stage "Company") as of December 31, 2014 and 2013 the related statements of operations, changes in shareholders' equity and cash flows for the years ended 2014 and 2013, and period from January 20, 1987 (inception) to December 31, 2014. 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 audits.
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. 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 statements 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 American Home Alliance Corporation as of December 31, 2014 and 2013, the result of its operations and its cash flows for the period from the years ended December 31, 2014 and 2013, and period from January 20, 1987 (inception) to December 31, 2014 conformity with U.S. generally accepted accounting principles.
The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company's losses from operations raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ PLS CPA
PLS CPA, A Professional Corp.
April 15, 2015
San Diego, CA. 92111
Registered with the Public Company Accounting Oversight Board
F 2
See Notes to Financial Statements
F 3
See Notes to Financial Statements
F 4
See Notes to Financial Statements
F 5
See Notes to Financial Statements
F 6
AMERICAN HOME ALLIANCE CORPORATION
(A Development Stage Company)
Notes to Financial Statements
As of December 31, 2014
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
American Home Alliance Corporation (the Company) was incorporated under the laws of the State of Delaware on January 20, 1987.
The Company has not generated revenues from its planned principal operations and is considered a development stage company as that term is defined by Financial Accounting Standard Board ("FASB") Accounting Standards Codification ("ASC") 915, Development Stage Entities.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Accounting
The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31, year-end.
b. Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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. The Company regularly evaluates estimates and assumptions related to the useful life and valuation of long-lived assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
c. Basic Earnings per Share
The basic earnings (loss) per share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.
Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.
d. Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
e. Stock Based Compensation
We follow ASC 718-10, "Stock Compensation", which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. SC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options. The Company granted stock awards, at par value, to its officers, directors and advisors for services rendered in its formation. Accordingly, stock-based compensation has been recorded to date.
f. Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted rates in effect in the years during which the differences are expected to reverse and upon the possible realization of net operating loss carry-forwards. Additionally, the Company has not recognized any amount for a tax position taken or expected to be taken on its tax return, or for any interest or penalties.
g. New Accounting Pronouncements:
In January 2013, the FASB issued ASU No.
2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities". This ASU clarifies that the scope of ASU No. 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities." applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. In February 2013, the FASB issued ASU No.
2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013. In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No.
2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date." This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. In March 2013, the FASB issued ASU No.
2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. In March 2013, the FASB issued ASU
2013-07, "Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting." The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity's governing documents from the entity's inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity's inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity's expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted. In June 2014, the FASB issued ASU 2014-10, "Development Stage Entities (Topic 915): Elimination of Certain Financial Requirements" The objective of the amendments in this Update is to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities. Users of financial statements of development stage entities told the Board that the development stage entity distinction, the inception-to-date information, and certain other disclosures currently required under U.S. generally accepted accounting principles (GAAP) in the financial statements of development stage entities provide information that has limited relevance and is generally not decision useful. As a result, the amendments in this Update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information.
In August 2014, the FASB issued ASU 2014-15 "Presentation of Financial Statements - Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements-Liquidation Basis of Accounting.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
NOTE 3. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of common.
NOTE 4. GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $2,919,041 during the period from January 20, 1987(inception) to December 31, 2014. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management plans to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be able to raise any capital through any type of offerings.
NOTE 5. RELATED PARTY TRANSACTION
The Company neither owns nor leases any real or personal property. A director provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities as they become available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.
As of December 31, 2014 the Company has a note payable due to International Credit Bureau, Inc. (a related party) in the amount of $200,616. This is an unsecured loan with an interest rate of 3%. Total interest recorded for the year ended December 31, 2014 was $5,821. As of December 31, 2014 accrued interest is $34,038.
NOTE 6. INCOME TAXES
Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.
NOTE 7.
STOCK TRANSACTIONS Transactions, other than employees' stock issuance, are in accordance with FASB ASC 505-50. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employee's stock issuance are in accordance with FASB ASC 718. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more readily determinable.
As of December 31, 2014 the Company had 3,707,500 shares of common stock issued and outstanding.
NOTE 8. STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes of capital stock as of December 31, 2014:
· Common stock, $ 0.001 par value: 50,000,000 shares authorized; 3,707,500 shares issued and outstanding.