ITEM 1. BUSINESS
History and Organization
At the Company’s inception, Your Event, Inc. focused on becoming an event planning company. Its goal included the planning of corporate events such as conventions, business conferences, and product launches, as well as social events such as weddings, reunions, and anniversaries, and develop and implement a marketing and sales program to sell these event planning services.
Your Event’s management has strategically changed the Company’s business focus. The company has positioned itself to sell and market products under a well-known licensed brand, specifically, Hello Kitty. Your Event signed a Distribution Agreement with Sanrio as their exclusive wholesaler and distributor of Hello Kitty apparel and hard goods that will be sold through 27 of the 30 the Major League Baseball ("MLB") teams. The products will be available for sale in each of the baseball park's gift stores and through the Major League Baseball's website. The co-branded products are to be approved and manufactured by Sanrio. Sales of such products are limited to the following retail channels:
a) Retail stores on the premise of "MLB" ballparks;
b) Retail stores owned by and directly controlled by MLB;
c) Online stores directly operated by MLB
Our website is: http://yevn.us
Our Mission
“Our mission is to build a multi-generational fan base.” Our mission is accomplished by assisting professional sports teams in acquiring fans from the younger generation. As these younger fans develop a loyalty to the team, it is anticipated that these young fans eventually pass their team-specific enthusiasm to their children and grandchildren.
Our Business
We plan to market and sell Hello Kitty apparel and merchandise at a wide range of retail sales prices. Our Hello Kitty apparel products consist of:
· T-Shirts
· Outerwear
· Fleece Jackets
· Adjustable Baseball Caps (baseball caps that are sized, fitted and adjustable)
We also plan to market and sell Hello Kitty hard goods that consist of:
· tote bags
· coin purses
· cell phone covers
· pins
· ball point pens
· eyeglass frames
· plush seat cushions
· plush dolls
· keychains
· stickers, all with the Hello Kitty likenesses.
Manufacturing and Sourcing
We arrange for the production of products from independent manufacturers located primarily in Shenzen and Shanghai, China.
Our headquarters in California provide the liaison offices with production orders stating the quantity, quality, delivery time and types of products to be produced. We assist in the negotiation and placement of orders with manufacturers. In allocating production among independent suppliers, we consider a number of criteria, including, but not limited to, quality, availability of production capacity, pricing and ability to meet changing production requirements.
The manufacture of the substantial majority of our products is performed manually. A pattern is used in cutting fabric to panels that are assembled in the factory. All sub-materials are also added at this time. The products are inspected throughout this process to insure that the design and quality specifications of the order are being maintained as the garment is assembled. After pressing, cleaning and final inspection, the product is labeled and ready for shipment.
Our company is solely responsible for all matters pertaining to the conceptual design and development of all merchandise co-branded between Hello Kitty Merchandise and Major League Baseball, however the final approvals on these designs and products lies with Major League Baseball and Sanrio, the Licensors.
As is customary, we have not entered into any long-term contractual arrangements with any vendor or manufacturer. We believe that the production capacity of foreign manufacturers with which we have developed, or are developing, a relationship is adequate to meet our production requirements for the foreseeable future. We believe that alternative foreign manufacturers are readily available.
A majority of all finished goods manufactured for us is drop-shipped to our customers and/or distribution facilities or to designated third party facilities for final inspection and allocation. The goods are delivered to our customers by independent shippers. We choose the form of shipment (principally ship, truck or air) based upon a customer’s needs, cost and timing considerations.
Our Pricing Plan
We plan to market our products at multiple price points allowing us to provide products to a broad range of consumers. As a result of our broad distribution platform, we are a licensee and supplier of a premier branded name product. Our strategy is to seek sports licenses that will enable us to offer a range of products targeting different price points and different distribution channels.
Marketing and Sales Plan
The Company's Marketing and Sales Plan produces three main revenue sources that include:
1. Retail Stores on the Premise of MLB Ballparks Owned by and Directly Controlled by MLB.
Our products are sold primarily in sports stores, which are owned, operated and located in the Major League Baseball stadiums located in the United States and Canada. For this reason, our sales are seasonable, whereby they increase during the regular baseball season, and decrease during the off-season.
2. Premium Giveaway Events & Other Special Promotions.
During the regular baseball season, we organize premium giveaway events with MLB. For example, we organized at the Dodger Stadium, Los Angeles, CA, a Hello Kitty bobble head giveaway event and a Hello Kitty travel mug giveaway for a particular game. We also had Hello Kitty Day at AT&T Park in San Francisco. These events are an integrated part of our marketing effort to raise awareness of Hello Kitty with MLB fans, and to establish our brand identity. We are also planning on selling limited edition products. The main goal of special edition items is to create a brand loyalty in the market and generate consumer awareness for our brand.
3. Online Stores Directly Operated by MLB (MLB.com)
An e-commerce MLB website overcomes geographical limitations. It also allows us to gain new customers with search engine visibility. MLB is one of the most successful brands in the world. MLB.com makes it possible for us to reach thousands of Hello Kitty/MLB fans. This distribution channel is another revenue source for the Company. In addition to MLB.com, we are looking into other online stores to sell our items.
Seasonality
The retail sales of our products are seasonal in nature. Sales of sports apparel constitute a significant portion of our sales. Since our primary customers will consist of major league baseball teams, we expect during the off-season, we will generate limited revenues as compared to when the baseball season is in session
Competition
We have numerous competitors with respect to the sale of our products, including distributors that import products from abroad and domestic retailers with established foreign manufacturing capabilities. Some of our competitors have greater financial and marketing resources and greater manufacturing capacity than we do. In addition, many of these competitors have significantly greater experience than we do in their respective fields. We also compete with vertically integrated manufacturers that also own retail stores. Our retail business competes against a diverse group of retailers, including, among others, other outlet stores, department stores, specialty stores, warehouse clubs and e-commerce retailers. Sales of our products are affected by style, price, quality, brand reputation and general fashion trends.
Patent, Trademark, License and Franchise Restrictions and Contractual Obligations and Concessions
We do not have any trademarks, patents, or other intellectual property.
We plan to rely on trade secrets, technical know-how, and on-going design development to build and maintain our competitive position. We will take security measures to protect our trade secrets, proprietary know-how and technologies, and confidential data and continue to explore further methods of protection. Our policy is to execute confidentiality agreements with our employees and consultants upon the commencement of an employment or consulting arrangement with us. These agreements generally require that all confidential information developed or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and not disclosed to any third parties. These agreements also generally provide that any designs or product development conceived by the individual in the course of rendering services to us shall be our exclusive property.
Research and Development Activities and Costs
Research and Development activities are no applicable to our business model.
Effect of Government Regulation on Business
We are subject to federal, state and local laws and regulations affecting our business, including those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission and various environmental laws and regulations.
Employees
The Company has four employees and eight Directors, two of whom are also Officers of the Company. Our Officers perform all of the job functions for the Company. The Company has no intention at this time to add employees until it can become a profitable entity. The Company from time to time may retain independent consultants in connection with its operations.
(i) The Company's performance is dependent on the performance of its officers. In particular, the Company's success depends on their ability to develop a business strategy which will be successful for the Company.
(ii) The Company does not carry key person life insurance on any of its personnel. The loss of the services of any of its executive officers or other key employees could have a material adverse effect on the business, results of operations and financial condition of the Company. The Company's future success also depends on its ability to retain and attract highly qualified technical and managerial personnel.
(iii) There can be no assurance that the Company will be able to retain its key managerial and technical personnel or that it will be able to attract and retain additional highly qualified technical and managerial personnel in the future. The inability to attract and retain the technical and managerial personnel necessary to support the growth of the Company's business, due to, among other things, a large increase in the wages demanded by such personnel, could have a material adverse effect upon the Company's business, results of operations and financial condition.
Item 1A.
Item 1A. Risk Factors.
Risk Factors Relating to Our Company
RISK FACTORS RELATING TO OUR FINANCIAL CONDITION
1. We have limited historical financial information upon which you may evaluate our performance.
We have a limited history and we are subject to all risks inherent in a developing business enterprise. Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered by a development stage company. You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, that are in our early stages of development. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point investors may lose their entire investment. Even if we accomplish these objectives, we may not generate positive cash flows or profits we anticipate in the future.
2. As we have recognized LIMITED revenues since our inception, there is no assurance that we will be able to continue as a going concern.
Our financial statements included with this Form 10-K have been prepared assuming that we will continue as a going concern. Our auditors have made reference to the substantial doubt as to our ability to continue as a going concern in their audit report on our audited financial statements for the year ended August 31, 2014. Because the Company has been issued an opinion by its auditors that substantial doubt exists as to whether the Company can continue as a going concern, it may be more difficult for the Company to attract investors. Since our auditor’s have raised a substantial doubt about our ability to continue as a going concern, this typically results greater difficulty to obtain loans than businesses that do not have a qualified auditors opinion. Additionally, any loans we might obtain may be on less advantageous terms. If we plan to seek additional funds through private placements of our common stock, you may be investing in a company that will not have the funds necessary to continue to deploy its business strategies. If we are not able to achieve sufficient revenues to cover our costs or find financing, then we likely will be forced to cease operations and investors will likely lose their entire investment, investors may lose their entire investment.
3. The failure to maintain our license agreements could cause us to lose significant revenues and have a material adverse effect on our results of operations.
We will be dependent on sales of licensed product for a substantial portion of our revenues. In order to maintain our licensing agreements we need to make periodic payments and receive prior approval of the licensor as to all design and other elements of a product prior to production. License agreements also may restrict our ability to enter into other license agreements for competing products. If we do not satisfy these requirements, a licensor usually will have the right to terminate our license. Even if we comply with all the terms of a license agreement, we cannot be sure that we will be able to renew an agreement when it expires even if we desire to do so. The failure to maintain our license agreements could cause us to lose significant revenue and have a material adverse effect on our results of operations.
4. Our success is dependent on the strategies and reputation of our licensors
Our business strategy is to offer our products on a multiple price point basis. As a part of this strategy, we licensed the names and brands of a recognized company and designer. In entering into this license agreement, we plan our products to be targeted towards different market segments based on consumer demographics, design, suggested pricing and channel of distribution. If any of our licensors decides to “reposition” its products under the brands we license from them, introduce similar products under similar brand names or otherwise change the parameters of design, pricing, distribution, target market or competitive set, we could experience a significant downturn in that brand’s business, adversely affecting our sales and profitability. In addition, as licensed products may be personally associated with designers or celebrities, our sales of those products could be materially and adversely affected if any of those individuals’ images, reputations or popularity were to be negatively impacted.
5. We have significant customer concentration, and the loss of one of our large customers could adversely affect our business.
We expect the MLB teams to be our largest customers. We do not have long-term contracts with any customers, and sales to customers generally occur on an order-by-order basis that may be subject to cancellation or rescheduling by the customer. A decision by our major customers to decrease the amount of merchandise purchased from us, increase the use of their own private label brands, sell a national brand on an exclusive basis or change the manner of doing business with us could reduce our revenues and materially adversely affect our results of operations. The loss of any of our large customers, or the bankruptcy or serious financial difficulty of any of our large customers, could have a material adverse effect on us.
6. The cyclical nature of the apparel industry and uncertainty over future economic prospects and consumer spending could have a material adverse effect on our results of operations.
The apparel industry is cyclical. Purchases of outerwear, sportswear, and other apparel tend to decline during recessionary periods and may decline for a variety of other reasons, including changes in fashion trends and the introduction of new products or pricing changes by our competitors. Uncertainties regarding future economic prospects may affect consumer-spending habits and could have an adverse effect on our results of operations. Uncertainty with respect to consumer spending as a result of weak economic conditions has, at times, caused our customers to delay the placing of initial orders and to slow the pace of reorders during the seasonal peak of our business. Weak economic conditions have had a material adverse effect on our results of operations at times in the past and could have a material adverse effect on our results of operations in the future as well.
7. The competitive nature of the apparel industry may result in lower prices for our products and decreased gross profit margins.
The apparel business is highly competitive. We have numerous competitors with respect to the sale of apparel, including distributors that import apparel from abroad and domestic retailers with established foreign manufacturing capabilities. Many of our competitors have greater financial and marketing resources and greater manufacturing capacity than we do. We also compete with vertically integrated apparel manufacturers that also own retail stores. The general availability of contract manufacturing capacity also allows ease of access by new market entrants. The competitive nature of the apparel industry may result in lower prices for our products and decreased gross profit margins, either of which may materially adversely affect our sales and profitability. Sales of our products are affected by style, price, quality, brand reputation and general fashion trends.
8. Fluctuations in the price, availability and quality of materials used in our products could have a material adverse effect on our cost of goods sold and our ability to meet our customers’ demands.
Fluctuations in the price, availability and quality of raw materials used in our products could have a material adverse effect on our cost of sales or our ability to meet our customers’ demands. We compete with numerous entities for supplies of materials and manufacturing capacity. Raw materials are vulnerable to adverse climate conditions, animal diseases and natural disasters that can affect the supply and price of raw materials. We may not be able to pass on all or any portion of higher material prices to our customers. Any raw material price increase or increase in costs related to the transport of our products (primarily petroleum costs) could increase our cost of sales and decrease our profitability unless we are able to pass higher prices on to our customers. In addition, if one or more of our competitors is able to reduce its production costs by taking greater advantage of any reductions in raw material prices, favorable sourcing agreements or new manufacturing technologies (which enable manufacturers to produce goods on a more cost-effective basis) we may face pricing pressures from those competitors and may be forced to reduce our prices or face a decline in net sales, either of which could have an adverse effect on our business, results of operations or financial condition.
9. Our business is highly seasonal and our results of operations will most likely suffer during the baseball off-season.
Retail sales of baseball apparel have traditionally been seasonal in nature. Sales of baseball apparel and hard good will constitute a significant portion of our sales. Any difficulties we may encounter during this period as a result of weather or disruption of manufacturing or transportation of our products will have a magnified effect on our net sales and net income for the year could have a material adverse effect on our results of operations. Our quarterly results of operations for our retail business also may fluctuate based upon such factors as the timing of certain holiday seasons, the acceptability of seasonal merchandise offerings, the timing and level of markdowns, competitive factors, weather and general economic conditions.
10. If new legislation restricting the importation or increasing the cost of textiles and apparel produced abroad is enacted, our business could be adversely affected.
Legislation that would restrict the importation or increase the cost of textiles and apparel produced abroad has been periodically introduced in Congress. The enactment of new legislation or international trade regulation, or executive action affecting international textile or trade agreements, could adversely affect our business. International trade agreements that can provide for tariffs and/or quotas can increase the cost and limit the amount of product that can be imported.
China’s accession agreement for membership in the World Trade Organization provides that member countries, including the United States, may impose safeguard quotas on specific products. We are unable to assess the potential for future action by the United States government with respect to any product category in the event that the quantity of imported apparel significantly disrupts the apparel market in the United States. Future action by the United States in response to a disruption in its apparel markets could limit our ability to import apparel and increase our costs.
11. The effects of war, acts of terrorism or natural disasters could adversely affect our business and results of operations.
The continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest has, at times, disrupted commerce and intensified concerns regarding the United States economy. Any further acts of terrorism or new or extended hostilities may disrupt commerce and undermine consumer confidence, which could negatively impact our sales and results of operations. Similarly, the occurrence of one or more natural disasters, such as hurricanes, fires, floods or earthquakes could result in the closure of one or more of our distribution centers, our corporate headquarters or a significant number of stores or impact one or more of our key suppliers. In addition, these types of events could result in increases in energy prices or a fuel shortage, the temporary or long-term disruption in the supply of product, disruption in the transport of product from overseas, delay in the delivery of product to our factories, our customers or our stores and disruption in our information and communication systems. Accordingly, these types of events could have a material adverse effect on our business and our results of operations.
12. Our management controls a large block of our common stock that will allow them to control the Company.
As of December 15, 2014, our officers and directors owned approximately 38% of our outstanding common stock. As a result, our officers/directors, along with the few of the major shareholders, will have the ability to control substantially all matters submitted to our stockholders for approval including:
a) election of our board of directors;
b) removal of any of our directors;
c) amendment of our Articles of Incorporation or bylaws; and
d) adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.
As a result of their ownership and positions, our officers and directors have the ability to influence all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. In addition, the future prospect of sales of significant amounts of shares held by our director and executive officer could affect the market price of our common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of your investment in the company may decrease. Management's stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
Investors will own a minority percentage of the Company’s common stock and will have minority voting rights. Investors will not have the ability to control either a vote of the Company’s Shareholders or Board of Directors.
RISK FACTORS RELATING TO OUR COMMON STOCK
13. ALTHOUGH OUR STOCK IS QUOTED ON THE OTC QB, A LIMITED trading market HAS DEVELOPED FOR OUR STOCK AND purchasers of our securities may have difficulty selling their shares.
Although our stock is quoted on the OTC QB, few trades in our stock have taken place, to-date, and an active trading market in our securities may not develop, or if developed, may not be sustained. If no active market is ever developed for our common stock, it will be difficult for you to sell any shares you purchase in our Company. In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without considerable delay, if at all. In addition, if no trading develops, your common stock will not have a quantifiable value and it may be difficult, if not impossible, to ever resell your shares, resulting in an inability to realize any value from your investment.
14. Future sales of shares by existing Controlling stockholders could cause our stock price to decline. FURTHER, Certain shares of our common stock are restricted from immediate resale.
If our existing controlling stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. As of December 15, 2014, we have 24,243,835 common shares issued and outstanding. Our officers/directors own 9,770,000 common shares. If in the future, if they decide to sell their shares or if it is perceived that they will be sold, to the extent permitted by the Rules 144 and 701 under the Securities Act, the trading price of our common stock could decline.
The 9,770,000 shares of common stock, owned by our officers/directors are restricted from immediate resale in the public market. The restricted shares are restricted in accordance with Rule 144, which states that if unregistered, restricted securities are to be sold, a minimum of one year must elapse between the later of the date of acquisition of the securities from the issuer or from an affiliate of the issuer, and any resale of those securities in reliance on Rule 144. The Rule 144 restrictive legend remains on the stock until the holder of the stock holds the stock for longer than six months (unless an affiliate) and meets the other requirements of Rule 144 to have the restriction removed. The sale or resale of those shares in the public market, or the market’s expectation of such sales, may result in an immediate and substantial decline in the market price of our shares. Such a decline will adversely affect our investors, and make it more difficult for us to raise additional funds through equity offerings in the future.
15. We have never declared dividends on our common stock and do not plan to do so in the foreseeable future.
We intend to retain any future earnings to finance the operation and expansion of its business and do not anticipate paying any cash dividends in the foreseeable future. As a result, stockholders will need to sell shares of common stock in order to realize a return on their investment, if any. You should not rely on an investment in our company if you require dividend income. The only possibility of any income to investors would come from any rise in the market price of your stock, which is uncertain and unpredictable.
A holder of common stock will be entitled to receive dividends only when, as, and if declared by the Board of Directors out of funds legally available therefore. We have never issued dividends on our common stock. Our Board of Directors will determine future dividend policy based upon our results of operations, financial condition, capital requirements, and other circumstances.
16. Holders of our common stock have a risk of potential dilution if we issue additional shares of common stock in the future.
Although our Board of Directors intends to utilize its reasonable business judgment to fulfill its fiduciary obligations to our then existing stockholders in connection with any future issuance of our common stock, the future issuance of additional shares of our common stock would cause immediate, and potentially substantial, dilution to the net tangible book value of those shares of common stock that are issued and outstanding immediately prior to such transaction. Any future decrease in the net tangible book value of our issued and outstanding shares could have a material effect on the market value of the shares.
17. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud and as a result, investors may be misled and lose confidence in our financial reporting and disclosures, and the price of our common stock may be negatively affected.
The Sarbanes-Oxley Act of 2002 requires that we report annually on the effectiveness of our internal control over financial reporting. A "significant deficiency" means a deficiency or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting. A "material weakness" is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
As of August 31, 2014 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
In addition, in connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover "material weaknesses" in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Failure to provide effective internal controls may cause investors to lose confidence in our financial reporting and may negatively affect the price of our common stock. Moreover, effective internal controls are necessary to produce accurate, reliable financial reports and to prevent fraud. If we have deficiencies in our internal controls over financial reporting, these deficiencies may negatively impact our business and operations.
18. LOW-PRICED STOCKS MAY AFFECT THE RESELL OF OUR SHARES.
Penny Stock Regulation Broker-dealer practices in connection with transactions in "Penny Stocks" are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risk associated with the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock; the broker-dealer must make a written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure 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. The Company’s stock is currently quoted on the OTC QB with limited trading activity to date; therefore, the stock will has a trading price of less than $5.00 per share and is subject to the penny stock rules and investors may find it more difficult to sell their securities, should they desire to do so.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2.
Item 2. Properties.
Our offices are currently leasing office space located at 1601 Pacific Coast Highway Suite 250, Hermosa Beach, CA 90254. Management believes that its current leased facilities are adequate for its current needs.
Item 3.
Item 3. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
We held our Annual Meeting of Shareholders on March 31, 2014. At the Meeting, the shareholders: 1) approved the election of eight directors; 2) approved the 2014 stock option plan; 3) ratified the appointment of our independent registered public accounting firm; and 4) provided approval for an advisory vote on the Company's Executive Compensation Plan.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
(a) Market Information
Your Event Common Stock, $0.001 par value, is quoted on the OTC QB under the stock symbol: YEVN.
There are limited trades of the Company’s stock, there are no assurances that an active market will ever develop for the Company's stock.
(b) Holders of Common Stock
As of December 15, 2014, there were approximately fifty (50) holders of record of our Common Stock and 23,243,835 shares issued and outstanding.
(c) Dividends
In the future we intend to follow a policy of retaining earnings, if any, to finance the growth of the business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be the sole discretion of board of directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.
(d) Securities Authorized for Issuance under Equity Compensation Plans
There are no outstanding grants or rights or any equity compensation plan in place.
(e) Recent Sales of Unregistered Securities
On or about December 4, 2013, the Company issued 1,000,000 restricted common shares to a consultant for services. The shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act. We believed that Section 4(2) was available because the offer and sale did not involve a public offering and there was not general solicitation or general advertising involved in the offer or sale. The consultant has a long-term pre-existing business relationship with the Company. We did not engage in any form of general solicitation or general advertising in connection with this transaction. The consultant was provided access to all material information, which he requested and all information necessary to verify such information and was afforded access to our management in connection with this transaction. These securities were acquired for investment and not with a view toward distribution. The consultant understood the ramifications of his actions. The shares of common stock issued contained a legend restricting transferability absent registration or applicable exemption.
(f) Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the years ended August 31, 2014 or August 31, 2013.
Item 6.
Item 6. Selected Financial Data.
Not applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Overview of Current Operations
Results of Operations for the fiscal year ended August 31, 2014
For the fiscal year ending August 31, 2014, the Company has generated $1,290,972 in revenues as compared to $138,563 for the same period last year. The increase in revenues was due to an increase in distribution of its licensed products at the major league baseball parks.
During the fiscal year ended August 31, 2014, the Company had $121,842 in cash, prepaid expense of $3,293, accounts receivable of $314,914, inventory of $1,582,694, advance payment of 190, and deposits of $3,792 for total current assets of $2,026,725 as compared to cash of $101,484 accounts receivable of $6,764, inventory of $138,563, and deposits of $4,322 for total current assets of $337,627 for total current assets of $337,627 for the year ended August 31, 2013.
During the fiscal year ended August 31, 2014, the Company had total operating expenses of $2,153,960, as compared to total operating expenses of $1,936,027 for the same period last year. The increase in expenses represented accounting fees of $51,580, advertising fees of $140,361, general and administrative expenses of $1,845,414, and general and administrative expenses - related party of $116,605. The net loss for the fiscal ended August 31, 2014 was $(1,657,836) or $(0.07) per share as compared to a net loss of $(1,937,164) or $(0.17) per share for the same period last year. The Company’s net and operating expenses increased based on building its infrastructure and distribution of its products.
The Company used net cash in operations of $843,738 and $662,936 during the twelve month period ended August 31, 2014 and the period from inception to August 31, 2014, respectively; used net cash in investing activities of $123,489 and 298,802 during the twelve month period ended August 31, 2014; and the period from inception to August 31, 2014, respectively; and generated cash of $987,585 and $935,234 from financing activities during the twelve month period ended August 31, 2014 and the period from inception to August 31, 2014, respectively. The funds generated from financing activities were from related party financing, advances from an office, from a former stockholder and a bank loan.
Plan of Operation
Management does not believe that the Company will be able to generate any significant profit during the coming year. The Company's need for capital may change dramatically if it can generate additional revenues from its operations. There are no assurances additional capital will be available to the Company on acceptable terms.
Future funding could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company's business, results of operations and financial condition. Any future funding might require the Company to obtain additional equity or debt financing, which might not be available on terms favorable to the Company, or at all, and such financing, if available, might be dilutive.
Going Concern
The Company experienced operating losses of $(4,222,621) since its inception on October 30, 2007 through the period ended August 31, 2014. The financial statements have been prepared assuming the Company will continue to operate as a going concern which contemplates the realization of assets and the settlement of liabilities in the normal course of business. No adjustment has been made to the recorded amount of assets or the recorded amount or classification of liabilities which would be required if the Company were unable to continue its operations. (See Financial Footnote 3.)
Liquidity and Capital Resources
As of August 31, 2014, the Company had total current assets of $2,026,725, total current liabilities of $3,206,866. The Company has limited financial resources available, which has had an adverse impact on the Company's liquidity, activities and operations. These limitations have adversely affected the Company's ability to obtain certain projects and pursue additional business. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. In order for the Company to remain a Going Concern it will need to find additional capital. Additional working capital may be sought through additional debt or equity private placements, additional notes payable to banks or related parties (officers, directors or stockholders), or from other available funding sources at market rates of interest, or a combination of these. The ability to raise necessary financing will depend on many factors, including the nature and prospects of any business to be acquired and the economic and market conditions prevailing at the time financing is sought. Management has been seeking outside funding for the Company with little success. The current economic downturn has made it difficult to find new capital sources for the Company. No assurances can be given that any new financing can be obtained to further the Company's business plan.
Future Financings
We anticipate continuing to rely on loans from one of our officers and/or equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing to fund our research and development activities.
Summary of any product research and development that we will perform for the term of our plan of operation.
We do not plan any product research nor development, based on our current business operations.
Expected purchase or sale of property and significant equipment
We do not anticipate the purchase or sale of any property or significant equipment; as such items are not required by us at this time.
Significant changes in the number of employees
As of December 15, 2014, we had four employees and two officers. We are dependent upon our officers and directors for our future business development. As our operations expand we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material
to investors.
Critical Accounting Policies and Estimates
Revenue Recognition: The Company recognizes revenue on an accrual basis as it invoices for services. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured.
Recent Pronouncements
The Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these financial statements and does not believe that any of these pronouncements will have a material impact on the Company's financial position and results of operations.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Financial Statements of Your Event:
Page
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of August 31, 2014 and August 31, 2013
Consolidated Statements of Operations for years ended August 31, 2014 and August 31, 2013
Consolidated Statement of Stockholders' Deficit for the years ended August 31, 2013 and August 31, 2014
Consolidated Statement of Cash Flows for years ended August 31, 2014 and August 31, 2013
Consolidated Notes to the Financial Statements
Seale & Beers, CPAs
Certified Public Accountants
PCAOB Registered Auditors - www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Your Event, Inc.
We have audited the accompanying balance sheets of Your Event, Inc. as of August 31, 2013 and August 31, 2014, and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended August 31, 2014. Your Event, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 11 to the accompanying consolidated financial statements, Your Event, Inc. has restated its financial statements for the year ended August 31, 2013.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Your Event, Inc. as of August 31, 2013 and 2014, and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended August 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has negative working capital at August 31, 2014, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Seale and Beers, CPAs
Seale and Beers, CPAs
Las Vegas, Nevada
December 15, 2014
8250 W Charleston Blvd, Suite 100 - Las Vegas, NV 89117
Phone: (888)727-8251 Fax: (888)782-2351
Your Event, Inc.
Consolidated Balance Sheets
The accompanying notes are an integral part of these financial statements.
Your Event, Inc.
Consolidated Statements of Operations
The accompanying notes are an integral part of these financial statements.
Your Event, Inc.
Consolidated Statements of Stockholders’ Equity (Deficit)
The accompanying notes are an integral part of these financial statements.
Your Event, Inc.
Consolidated Statements of Cash Flows
The accompanying notes are an integral part of these financial statements.
Your Event, Inc.
Consolidated Notes to Financial Statements
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Your Event, Inc. (the "Company") was incorporated under the laws of the state of Nevada on October 30, 2007. The Company was organized to conduct any lawful business. The company entered into a Distribution Agreement with Sanrio, a Japanese company, as their exclusive wholesaler and distributor of Hello Kitty apparel and hard goods that will be sold through a licensing agreement with the Major League Baseball ("MLB") teams, initially in California. The co-branded products are to be approved by MLB and Sanrio, then manufactured by Sanrio.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Basis of Accounting
The financial statements present the balance sheet, statements of operations, stockholders' equity (deficit) and cash flows of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.
Revenue and Cost Recognition
The Company recognizes revenue from product sales once all of the following criteria for revenue recognition have been met: pervasive evidence that an agreement exists; the services have been rendered; the fee is fixed and determinable and not subject to refund or adjustment; and collection of the amount due is reasonably assured.
Inventory
The Company is a wholesaler/distributor that receives orders from clients and then places the order needed from the factory supplier. Merchandise is then shipped directly from the factory supplier to the client. A portion of the orders are purchased directly by the client upon delivery, with the remainder on consignment. Inventories are stated at the lower of cost or market. Cost is computed on a first-in, first-out basis. The Company provides inventory write-downs based on excess and obsolete inventories determined primarily by future demand forecasts. The write-down is measured as the difference between the cost of the inventory and market based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost of sales.
Fixed Assets
Furniture, fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on a straight-line basis.
Acquisition Costs
Costs incurred to acquire new businesses, new product lines or similar assets are expensed when incurred.
Your Event, Inc.
Consolidated Notes to Financial Statements
Earnings per Share
Historical net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity, but these potential common stock equivalents were determined to be antidilutive.
Calculation of net loss per share is as follows:
Dividends
The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the years ended August 31, 2014 and 2013.
Income Taxes
The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.
Year-end
The Company has selected August 31 as its year-end.
Advertising
Advertising is expensed when incurred. Advertising expenses of $140,361 were incurred during the year ended August 31, 2014, as compared to $6,000 for the year ended August 31, 2013.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.
Your Event, Inc.
Consolidated Notes to Financial Statements
Reclassification
Certain amounts included in the prior financial statements have been reclassified to conform to the current presentation. The reclassifications have no effect on total assets, total liabilities, stockholders’ equity (deficit), or net loss as previously reported.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred an accumulated deficit of $(4,222,621). The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities.
Management has plans to seek additional capital through private placements and public offerings of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
NOTE 4. STOCKHOLDERS' EQUITY (DEFICIT)
The Company is authorized to issue up to 5,000,000 shares of $0.001 par value preferred stock and up to 70,000,000 shares of $0.001 par value common stock.
Preferred Stock
There are no issued shares of preferred stock as of August 31, 2014 and 2013.
Your Event, Inc.
Consolidated Notes to Financial Statements
NOTE 4. STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
Common Stock
On October 30, 2007 (inception), the Company issued 10,000,000 shares of its $0.001 par value common stock to its founders for $10,000.
The Company filed a registration statement with the U. S. Securities and Exchange Commission. The registration was deemed effective on April 10, 2008. The Company coordinated the registration with the Securities Division of the State of Nevada. When the offering was closed on June 30, 2008, 1,000,000 shares of the Company's 0.001 par value common stock were sold to twenty-nine (29) investors at a price of $0.005 per share pursuant to a self-underwritten offering in conjunction with the registered offering for an aggregate of $5,000.00.
An officer of the Company loaned the Company $979,275. In December 2012, $739,375 of this debt was converted into a Convertible Note due and payable on December 31, 2014. The $240,000 difference in loans were converted under a separate arrangement. Interest on the unpaid principal balance of this Note shall be calculated at the rate of one point five percent (1.5%) per annum with accrued and unpaid interest being payable on the Maturity Date. The Note Holder may elect to convert all or part of the principal of this Convertible Note and any accrued and unpaid interest at any time before December 31, 2014. The conversion price shall be at a price of $0.20 per unregistered restricted common share. The Company has analyzed the Convertible Note for a beneficial conversion feature and found that no beneficial conversion feature should be recognized, as both the stock price on the commitment date and the conversion price are the same.
On April 30, 2013, the Board authorized the conversion of $270,561.34 principal debt and $1,438.66 interest to 1,360,000 restricted common shares of the Company. In addition, the sum of $1,062.35, representing the outstanding interest owed on the December 2012 notes, was paid.
On July 31, 2013 the Company issued 500,000 unregistered restricted stock to one shareholder pursuant to a Regulation S offering for cash of $100,000.
On August 2, 2013 the Company underwent a change of control of ownership whereby the existing controlling shareholders collectively sold their ownership of 5,868,993 restricted common shares to an unaffiliated shareholder, in a private transaction, that amounted to $1,173,798.60.
On August 30, 2013, Your Event, Inc. (the “Company” or the “Registrant”) issued 6,000,000 unregistered restricted shares of common stock to three shareholders of Infinity Holdings, a Japanese Company, to satisfy a debt obligation between the Company and Infinity Holdings. On March 20, 2013, the Corporation entered into a Business Consulting Agreement with Infinity Holdings, a Japanese company. Pursuant to the terms of the Agreement the Corporation is obligated to pay Infinity One Million Two Hundred Thousand ($1,200,000) Dollars. Infinity Holdings agreed to take this payment in the form of stock in the Corporation. The Board of Directors approved the issuance of 6,000,000 restricted shares to satisfy this obligation with Infinity Holdings.
Your Event, Inc.
Consolidated Notes to Financial Statements
NOTE 4. STOCKHOLDERS' EQUITY (DEFICIT) (Continued)
Further to this agreement, Infinity Holdings has a stock option to purchase 2,000,000 restricted shares of common stock at an exercise price of $1.00 per share at any time during the five years from the date of execution of the agreement. The Company has used Black-Scholes calculations, with inputs as follows:
Stock Volatility at 80%
Exercise Price at $1.00
Market Price at $0.20
On August 30, 2013, the Company issued 2,020,000 unregistered restricted shares of common stock to Gaku Uehara in exchange for the forgiveness of a $468,713 debt the Company owed to Mr. Uehara. Mr. Uehara has agreed to tender the original note, marked paid and satisfied, upon the issuance of Company's shares.
On August 30, 2013, the Company issued 2,363,835 unregistered restricted shares of common stock to satisfy a debt obligation of $472,767 between the Company and Infinity Holdings. The debt holder agreed to tender their original note, marked paid and satisfied, upon the issuance of Your Event shares.
On March 20, 2013, the Company entered into an agreement with Infinity Holdings as Consultant, whereby Infinity Holdings would be entitled to receive 1,000,000 shares of common stock upon such time as the Company completes equity financing from third parties. Upon completion of the equity financing, these shares were subsequently issued on December 4, 2013.
There were no other issuances of common or preferred stock or equivalents since October 30, 2007 (inception) through August 31, 2014. The Company had 24,243,835 and 23,243,835 common shares issued and outstanding as of August 31, 2014 and 2013.
NOTE 5. CONTRIBUTED CAPITAL
On December 3, 2007, a director of the Company contributed capital of $200 to provide working capital to the Company.
On February 27, 2009, a director of the Company contributed capital of $2,500 to provide working capital to the Company for audit fees.
On November 24, 2009, a director of the Company contributed capital of $5,000 to provide working capital to the Company for audit fees.
On December 9, 2009, a director of the Company contributed capital of $550 to provide working capital to the Company for transfer fees.
On January 11, 2010, a director of the Company contributed capital of $2,500 to provide working capital to the Company for audit fees.
Your Event, Inc.
Consolidated Notes to Financial Statements
NOTE 5. CONTRIBUTED CAPITAL
On April 2, 2010, a director of the Company contributed capital of $100,000 to provide working capital.
The director believed it was in the best interest of the Company's shareholders to contribute the above capital in order to provide the Company with the necessary working capital to pay for its accounting and transfer agent fees for the near future until such time, if any, that the Company can generate sufficient revenues to cover expenses.
During the fiscal year ended August 31, 2009, the Company's corporate counsel agreed to prepare, write, EDGARize and provide legal opinion for the Company's interim reports and Form 10-K filing, which the law firm valued at $10,000.
The law firm decided to contribute this capital based on its recommendation that the Company engage the services of an auditor, who had his licensed revoked and was not able to complete the Company's audit for the past fiscal year. Based on this decision, the Company needed to engage a new auditor. The Company's corporate counsel believes this action will help build goodwill for its law firm.
NOTE 6. RELATED PARTY TRANSACTIONS
An officer of the Company loaned the Company $979,275. In December 2012, $739,375 of this debt was converted into a Convertible Note due and payable on December 31, 2014. The $240,000 difference in loans were converted under a separate arrangement. Interest on the unpaid principal balance of this Note shall be calculated at the rate of one point five percent (1.5%) per annum with accrued and unpaid interest being payable on the Maturity Date. The Note Holder may elect to convert all or part of the principal of this Convertible Note and any accrued and unpaid interest at any time before December 31, 2014. The conversion price shall be at a price of $0.20 per unregistered restricted common share. The Company has analyzed the Convertible Note for a beneficial conversion feature and found that no beneficial conversion feature should be recognized, as both the stock price on the commitment date and the conversion price are the same.
On April 30, 2013, the Board authorized the conversion of $270,561.34 principal debt and $1,438.66 interest to 1,360,000 restricted common shares of the Company. In addition, the sum of $1,062.35, representing the outstanding interest owed on the December 2012 notes, was paid.
Your Event, Inc.
Consolidated Notes to Financial Statements
On August 30, 2013, the Company issued 6,000,000 unregistered restricted shares of common stock to three shareholders of Infinity Holdings, a Japanese Company, to satisfy a debt obligation between the Company and Infinity Holdings. On March 20, 2013, the Corporation entered into a Business Consulting Agreement with Infinity Holdings, a Japanese company. Pursuant to the terms of the Agreement the Corporation is obligated to pay Infinity One Million Two Hundred Thousand ($1,200,000) Dollars [One Hundred and Twenty Million (¥120,000,000) Yen]. Infinity Holdings agreed to take this payment in the form of stock in the Corporation. The Board of Directors approved the issuance of 6,000,000 restricted shares to satisfy this obligation with Infinity Holdings.
Also on August 30, 2013, the Company issued 2,020,000 unregistered restricted shares of common stock to Gaku Uehara in exchange for the forgiveness of a $468,713 debt the Company owed to Mr. Uehara. Mr. Uehara has agreed to tender the original note, marked paid and satisfied, upon the issuance of Company's shares. Further, the Company issued 2,363,835 unregistered restricted shares of common stock to satisfy a debt obligation of $472,767 between the Company and Infinity Holdings. The debt holder agreed to tender their original note, marked paid and satisfied, upon the issuance of Your Event shares.
On November 1, 2013, the Company entered into a Promissory Note with C-Five Management, a Japanese corporation for the principal sum of $1,000,000 USD (the Credit Limit), or such lesser amount. The Company promises to pay to C-Five Management a simple rate per annum equal to one point five percent (1.5%) per annum. The outstanding principal amount of the Note and all accrued interest thereon shall be due and payable on or before December 31, 2014. Any principal and interest not paid when due, and any other amount payable by our company and not paid when due, shall bear interest at the simple rate of fourteen point size percent (14.6%). There is no arrangement to maintain compensating balances with a bank in relation with this line of credit. The Company received $165,000 on October 8, 2013, $45,000 on November 25, 2013, $40,000 on December 10, 2013, $50,000 on December 24, 2013, $60,000 on December 26, 2013, $45,000 on February 28, 2014, $95,000 on March 12, and $150,000 on April 3 for an outstanding balance of $650,000 as of August 31, 2014.
The Company received a loan of $140,000 on March 26, 2014, and additional loans of $50,000 on May 7, 2014 and $110,144.93 on June 10, 2014 from Triple A Investment Co. (formerly known as Billion Sino (Asia)), a Hong Kong Company. On June 16, 2014, the Company repaid $112,592.59, the principal amount of the June 10, 2014 loan, including handling fees. The Company promised to pay to Triple A Investment Co. a simple rate per annum equal to one point five percent (1.5%) per annum. These loans become due and payable on December 31, 2014, and represent advances on a $1,000,000 Line of Credit, for which the Company is in the process of negotiating with Triple A Investment Co.
Your Event, Inc.
Consolidated Notes to Financial Statements
On January 20, 2014, the Company entered into a Loan Agreement with Million Win Investments Limited, a Hong Kong corporation for the principal sum of $160,000 USD. The Company promised to pay to Million Win Investments Limited a simple rate per annum equal to one point five percent (1.5%) per annum. The Company and Million Win agreed to extend the date to December 31, 2014, when the outstanding principal amount of the Note and all accrued interest thereon becomes due and payable. Million Win Investments has recently assigned this Note to RxTrading, a Hong Kong company. Any principal and interest not paid when due, and any other amount payable by our company and not paid when due, shall bear interest at the simple rate of fourteen point size percent (14.6%). There is no arrangement to maintain compensating balances with a bank in relation with this line of credit. The Company has an outstanding balance of $160,000 as of August 31, 2014.
NOTE 7. PROVISION FOR INCOME TAXES
The Company accounts for income taxes under ASC 740, "Accounting for Income Taxes", which requires use of the liability method. ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (35.0%)
Valuation reserve 35.0%
Total 0%
Income tax benefits as of August 31, 2014 and August 31, 2013, are calculated
as follows:
Your Event, Inc.
Consolidated Notes to Financial Statements
NOTE 7. PROVISION FOR INCOME TAXES
During the year ended August 31, 2014, the Company recorded a valuation allowance of $(580,243), as compared to $(678,007) for the previous year, on the deferred tax assets to reduce the total to an amount that management believes will ultimately be realized. 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. There was no other activity in the valuation allowance account during the years ended August 31, 2014 and 2013. The net operating loss (the “NOL”) for the year ended August 31, 2014 will expire in 2034 and for the year ended August 31, 2013 will expire in 2033.
NOTE 8. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three months or less to be cash equivalents.
NOTE 9. RECENT ACCOUNTING PRONOUNCEMENTS
The Company has evaluated all recent accounting pronouncements and believes that none of them will have a material effect on the Company's financial statements.
NOTE 10 - SUBSIDIARY
On September 3, 2012, the Company incorporated a newly formed a wholly-owned subsidiary, named YEVN JAPAN, Inc., in Japan. The Company’s management formed this subsidiary in order to facilitate the future business operations in Japan. The proposed focus of this new subsidiary was to plan, operate and administer major events in Japan, not limited to conducting public exhibitions.
On October 12, 2012, the Company moved its corporate headquarters from Intex Bldg. 2F, 2-7-11 Nishi Gotanda, Shinagawa-Ward, Tokyo, Japan 141-0031 to 1601 Pacific Coast Highway Suite 250, Hermosa Beach, CA 90254. Management believes California is where the new business opportunity lies for the Company. Management is currently working to establish and grow its business there. Upon moving its corporate headquarters to California, management concluded the Company no longer needed a subsidiary in Japan. Prior to closing the subsidiary, all liabilities were settled and the subsidiary had no assets.
Your Event, Inc.
Consolidated Notes to Financial Statements
NOTE 11. RESTATEMENT
During the year ended August 31, 2013, the Company did not record its share based compensation to employees in accordance with ASC 718. GAAP states that when issuing equity instruments to employees, the company should expense the compensation over the vesting period. Therefore, a restatement has been made whereby prepaid consulting fees has been adjusted to be expensed during the period.
The following is a summary of the impact of the adjustment on the Company’s consolidated balance sheet as of August 31, 2013:
Your Event, Inc.
Consolidated Notes to Financial Statements
The following is a summary of the impact of the adjustment on the Company’s consolidated statement of operations as of August 31, 2013:
Your Event, Inc.
Consolidated Notes to Financial Statements
The following is a summary of the impact of the adjustment on the Company’s consolidated statement of cash flows as of August 31, 2013:
Your Event, Inc.
Consolidated Notes to Financial Statements
NOTE 12. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through December 15, 2014, the date on which the financial statements were available to be issued.
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 disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the SEC, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.
Management, with the participation of the Chief Executive Officer and the Chief Financial Officer, who is also the sole member of our Board of Directors, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-K.
Based on such evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of August 31, 2014, our disclosure controls and procedures were not effective. Our disclosure controls and procedures were not effective because of the "material weaknesses" described below under "Management's annual report on internal control over financial reporting," which are in the process of being remediated as described below under "Management Plan to Remediate Material Weaknesses."
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in rules promulgated under the Exchange Act, is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and affected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:
· pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
· provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and
· provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Further, over time control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of August 31, 2014. In making its assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on its assessment, management has concluded that we had certain control deficiencies described below that constituted material weaknesses in our internal controls over financial reporting. As a result, our internal control over financial reporting was not effective as of August 31, 2014.
A "material weakness" is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis by the company's internal controls. As a result of management's review of the investigation issues and results, and other internal reviews and evaluations that were completed after the end of fiscal year ending August 31, 2014 related to the preparation of management's report on internal controls over financial reporting required for this annual report on Form 10-K, management concluded that we had material weaknesses in our control environment and financial reporting process consisting of the following:
· lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
We do not believe the material weaknesses described above caused any meaningful or significant misreporting of our financial condition and results of operations for the fiscal year ended August 31, 2014. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Management Plan to Remediate Material Weaknesses
Management is pursuing the implementation of corrective measures to address the material weaknesses described below. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:
We plan to appoint an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.
We believe the remediation measures described above will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to diligently and vigorously review our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
This annual report does not include an attestation report of the Corporation's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Corporation's registered public accounting firm pursuant to temporary rules of the SEC that permit the Corporation to provide only the management's report in this quarterly report.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Director, Executive Officer and Corporate Governance.
The following table sets forth certain information regarding our current directors and executive officers. Our executive officers serve one-year terms. Set forth below are the names, ages and present principal occupations or employment, and material occupations, positions, offices or employments for the past five years of our current director and executive officer.
All directors hold office until the next annual meeting of stockholders of the Company and until their successors have been elected and qualified. Directors currently receive no fees for services provided in that capacity. The officers of the Company are elected annually and serve at the discretion of the Board of Directors.
Set forth below is a brief description of the background and business experience of our sole officer and director.
June Tsukamoto, Chairperson
2001: Resigned from Mitsutomo International, Inc.
1995: Was appointed Chairperson and Executive Director of Mitsutomo International, Inc.
1986: Incorporated Mitsutomo, Inc. and was appointed President
1979: Incorporated KJ International, Inc.
Education
1964: Graduated from Nile C Kinnick High School, entered Sophia University in Japan, studied International Comparative Literature.
Takahito Yasuki, CEO, CFO, Director
2003 - Present: Incorporated PLAYPHONE, Inc., a mobile social game developing company in San Jose. He accepted a position as a Director on the Board of Directors and continues to hold the Director position until the present.
2001: Folded ROMSTAR, Inc.
1984 - 2001: Incorporated ROMSTAR, Inc., (Game selling company) in California and assumed the President position.
Education
Once studied at Osaka University of Commerce
Noboru Okuda, Secretary, Director
April, 2011 - Present, Director, C Five Holdings, Pte. Ltd., Director
President January, 2011 - Present, C Five Management, Inc.
November, 2010 - Present, STS Singapore, Ltd., President
May, 2009 - Present, Initia Star Asset Management, Inc., President
October, 2008 - May, 2011, STS Travel Inc. (Present: STS Inc.), President
2006 - 2007, Solid Acoustics Co., Ltd., President
2005 - 2008, Solid Human Technologies Inc., Chairman (Present: SHT Co., Ltd.)
2004 - 2005, NEXTGATE Inc., President
2001 - 2004, WebCAT Co., Ltd., President
1998 - 2000, NAC Communications Inc., Chairman
1995 - 1998, Astro Inc. / Be-Tech Inc. Vice President, President
1989 - 1995, NIKKO Commercial, Inc. (Present: JALUX Inc.)
1986 - 1989, Kokusai Kogyo Co., Ltd.
Education
Tokyo Institute of Tourism (Professional College), Shinjuku ward Tokyo
Graduated School March, 1986
Tokyo Metropolitan Chitosegaoka High School, Setagaya ward Tokyo
Graduated School March, 1983
Kioko Tsukamoto, Director
2007-Present COO EXAMU Inc.(Tokyo, Japan)
2003 - 2006 Universal Music K.K. (Tokyo, Japan) Secretary to Managing Director of domestic division.
2002- 2010 Apple Computer Japan Co., Ltd. (Tokyo, Japan) Administrative Assistant
Personal assistant to a marketing manager.
1995 - 2002 G.P.M. Production Co., Ltd. (Tokyo, Japan) Secretary/ PR Assistant/ President.
Education
1991- 1995 Toyo Eiwa University Major in Social Sciences, Japan
Keiichi Tsukamoto, Director
1991 - 2000 Acquired Vancouver Canadians, a 3A team of L.A. Angels.
1988 - 1999 Chairman of Mitomi Co. Ltd. Women’s fashion line “Intrigue”
1988 - 1990 Sponsored a Japan-US Baseball Summit in Tokyo. Attended by many coaches and players including commissioners. With cooperation from Japanese players and coaches, an interchange occurred to improve baseball in Japan and the US.
1988 - Incorporated Japan Sports System Corporation
1988 - Acquired Visalia Oaks, 1A team of Colorado Rockies
1988 - Managed Yomiuri Giants’ camp in Palm Springs. Entrusted with players from Chunichi
Dragons, Lotte Marines and Yomiuri Giants in 1A, and provided a nurturing program.
Aiki Kobayashi, Director
2007- Present, CEO of Million Win Investment Ltd (Hong Kong), Japanese junket services at 11F Galaxy Star World(Macau VIP Club) &Wynn Resort Hotel(Gold Moon Club).
2005-2007, General Manager of Macau Resort Ltd., Japanese junket services at Galaxy Waldo(Carnival Club) & Galaxy grand Waldo(Sino VIP Club)
1999-2004, CEO of Shinwa Finance (Consumer Finance)
1991-1999, CEO of Oriental Homes (Developer & Sales of Real Estate In Including House & Land Etc.)
1989-1991, Sales Manager of Toyo Fudosan Co Ltd (Sales of Real Estate In Including House & Land Etc.)
1983-1988, Sales of TV PR of San Crieat Co Ltd (TV PR Production)
Education
1983. Graduated TOHO Gakuen (TV Producing Program), Japan
1981. Graduated IKUTA HIGASHI High School in Kanagawa, Japan
Fumio Sebata, External Director
December, 2001 - Present, Incorporated ADNESS Co, Ltd. in Tokyo and was appointed President/CEO
February, 2007 - Present Incorporated Adness Entertainment (in Los Angeles) and was appointed President/CEO.
Education
March, 1983 Graduated from Ashikaga Gakuen High School
Yasuo Matsuo, External Director
2008 - Present Viajes Japon, Mexico City, Mexico
1988 - 2007 Matsuo Corporation, Osaka, Japan
1981 - 1987 Cloverway, Inc. Long Beach, CA, U.S.A.
1974 - 1981 Adness Entertainment, LLC, Los Angeles, CA, U.S.A.
Education
Kyoto University of Foreign Studies, Kyoto, Japan. Spanish Major, graduated in 1974.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our executive officer and director, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based upon a review of the copies of such forms furnished to us and written representations from our executive officer and director, we believe that as of the date of this report they were not current in his 16(a) reports.
Board of Directors
Our board of directors currently consists of eight members. Our directors serve one-year terms.
Audit Committee
The company does not presently have an Audit Committee. The sole member of the Board sits as the Audit Committee. No qualified financial expert has been hired because the company is too small to afford such expense.
Committees and Procedures
1. The registrant has no standing audit, nominating and compensation committees of the Board of Directors, or committees performing similar functions. The Board acts itself in lieu of committees due to its small size.
2. The view of the board of directors is that it is appropriate for the registrant not to have such a committee because its directors participate in the consideration of director nominees and the board and the company are so small.
3. The members of the Board who acts as nominating committee is not independent, pursuant to the definition of independence of a national securities exchange registered pursuant to section 6(a) of the Act (15 U.S.C. 78f(a).
4. The nominating committee has no policy with regard to the consideration of any director candidates recommended by security holders, but the committee will consider director candidates recommended by security holders.
5. The basis for the view of the board of directors that it is appropriate for the registrant not to have such a policy is that there is no need to adopt a policy for a small company.
6. The nominating committee will consider candidates recommended by security holders, and by security holders in submitting such recommendations.
7. There are no specific, minimum qualifications that the nominating committee believes must be met by a nominee recommended by security holders except to find anyone willing to serve with a clean background.
8. The nominating committee's process for identifying and evaluation of nominees for director, including nominees recommended by security holders, is to find qualified persons willing to serve with a clean backgrounds. There are no differences in the manner in which the nominating committee evaluates nominees for director based on whether the nominee is recommended by a security holder, or found by the board.
Code of Ethics
We have not adopted a Code of Ethics for the Board and any salaried employees.
Limitation of Liability of Directors
Pursuant to the Nevada General Corporation Law, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives an improper personal benefit. This exclusion of liability does not limit any right which a Director may have to be indemnified and does not affect any Director's liability under federal or applicable state securities laws. We have agreed to indemnify our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he acted in good faith and in a manner he believed to be in our best interests.
Nevada Anti-Takeover Law and Charter and By-law Provisions
The anti-takeover provisions of Sections 78.411 through 78.445 of the Nevada Corporation Law apply to Your Event Section 78.438 of the Nevada law prohibits the Company from merging with or selling more than 5% of our assets or stock to any shareholder who owns or owned more than 10% of any stock or any entity related to a 10% shareholder for three years after the date on which the shareholder acquired the Your Event shares, unless the transaction is approved by Your Event's Board of Directors. The provisions also prohibit the Company from completing any of the transactions described in the preceding sentence with a 10% shareholder who has held the shares more than three years and its related entities unless the transaction is approved by our Board of Directors or a majority of our shares, other than shares owned by that 10% shareholder or any related entity. These provisions could delay, defer or prevent a change in control of Your Event
Item 11.
Item 11. Executive Compensation
The following table sets forth certain compensation information for: (i) each person who served as the chief executive officer of our company at any time during the year ended August 31, 2014, and August 31, 2013 regardless of compensation level, and (ii) each of our other executive officers, other than the chief executive officer, serving as an executive officer at any time during the year end August 31, 2014. The foregoing persons are collectively referred to herein as the "Named Executive Officers." Compensation information is shown for fiscal years 2014 and 2013.
Your Event Summary Compensation Table
We do not maintain key-man life insurance for our executive officers/directors. At this time, we do not have any long-term compensation plans, stock option plans or employment agreements with our executive officers/directors.
Stock Option Grants
We did not grant any stock options to the executive officers or directors from inception through fiscal year end August 31, 2014.
Outstanding Equity Awards at 2014 Fiscal Year-End
We did not have any outstanding equity awards as of August 31, 2014 or August 31, 2013.
Option Exercises for Fiscal 2014
There were no options exercised by our named executive officers in fiscal 2014 or 2013.
Potential Payments Upon Termination or Change in Control
We have not entered into any compensatory plans or arrangements with respect to our named executive officers, which would in any way result in payments to such officer(s) because of their resignation, retirement, or other termination of employment with us or our subsidiaries, or any change in control of, or a change in their responsibilities following a change in control.
Director Compensation
Our directors were not paid any compensation during the fiscal year ending August 31, 2014 or August 31, 2013.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table presents information, to the best of our knowledge, about the ownership of our common stock on December 15, 2014 relating to those persons known to beneficially own more than 5% of our capital stock and by our named executive officer and sole director.
Beneficial ownership is determined in accordance with the rules of the U. S. Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes shares of common stock that the stockholder has a right to acquire within 60-days after December 15, 2014 pursuant to options, warrants, conversion privileges or other right.
The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the U. S. Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of Your Event's common stock.
1) Percent of Class is based on 25,593,835 common shares issued and outstanding.
2) The number of shares does not include 600,000 common shares owned by Junko Top, the daughter of June Tsukamoto. Note, Kioko Tsukamoto, is the daughter of June Tsukamoto.
3) Noboru Okuda, is President of C-Five Management that beneficially owns 1,520,000 shares of Your Event.
4) Keiichi Tsukamoto is the husband of June Tsukamoto and father of Kioko Tsukamoto, both of whom are Board members. Mr. Tsukamoto is entitled to receive 1,500,000 million common shares, which he will receive via a stock option.
5) Aiki Kobayashi is an owner of Million Win Investments, a former Your Event shareholder, before they transferred their shares to their affiliated company Triple A Investment Co. that owns 1,651,007, shares not included in Mr. Kobayashi ownership numbers.
6) Yoshiharu Uchida, 2-26-25 Kasuga-cho Nerima-Ward, Tokyo, Japan.
7) Triple A Investment Co., Ltd. (formerly known as Billion Sino), 602/3 Bonham Trade Center 50,, Bonham Strand E Sheung Wan, Hong Kong, P.R.C.. Atsushi Hirokawa, CEO of Triple A Investment Co. is the beneficial owner who has the ultimate voting control over the shares held this entity.
8) Tooru Sugino, 2-8-13-306 Minami Kasai Edgawa-Ku, Tokyo 134-0085 Japan.
We are not aware of any arrangements that may result in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-B.
We believe that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table. Under the rules of the U. S. Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
On November 1, 2013, the Company entered into a Promissory Note with C-Five Management, a Japanese corporation for the principal sum of $1,000,000 USD (the Credit Limit), or such lesser amount. The Company promises to pay to C-Five Management a simple rate per annum equal to one point five percent (1.5%) per annum. The outstanding principal amount of the Note and all accrued interest thereon shall be due and payable on or before December 31, 2014. Any principal and interest not paid when due, and any other amount payable by our company and not paid when due, shall bear interest at the simple rate of fourteen point size percent (14.6%). There is no arrangement to maintain compensating balances with a bank in relation with this line of credit. The Company received $165,000 on October 8, 2013, $45,000 on November 25, 2013, $40,000 on December 10, 2013, $50,000 on December 24, 2013, $60,000 on December 26, 2013, $45,000 on February 28, 2014, $95,000 on March 12, and $150,000 on April 3 for an outstanding balance of $650,000 as of August 31, 2014.
The Company received a loan of $140,000 on March 26, 2014, and additional loans of $50,000 on May 7, 2014 and $110,144.93 on June 10, 2014 from Triple A Investment Co., a Hong Kong Company. On June 16, 2014, the Company repaid $112,592.59, the principal amount of the June 10, 2014 loan, including handling fees. The Company promised to pay to Triple A Investment Co. a simple rate per annum equal to one point five percent (1.5%) per annum. These loans become due and payable on December 31, 2014, and represent advances on a $1,000,000 Line of Credit, for which the Company is in the process of negotiating with Triple A Investment Co.
On January 20, 2014, the Company entered into a Loan Agreement with Million Win Investments Limited, a Hong Kong corporation for the principal sum of $160,000 USD. The Company promised to pay to Million Win Investments Limited a simple rate per annum equal to one point five percent (1.5%) per annum. The Company and Million Win agreed to extend the date to December 31, 2014, when the outstanding principal amount of the Note and all accrued interest thereon becomes due and payable. Million Win Investments has recently assigned this Note to RxTrading, a Hong Kong company. Any principal and interest not paid when due, and any other amount payable by our company and not paid when due, shall bear interest at the simple rate of fourteen point size percent (14.6%). There is no arrangement to maintain compensating balances with a bank in relation with this line of credit. The Company has an outstanding balance of $160,800 as of August 31, 2014.
Item 14.
Item 14. Principal Accountant Fees and Services.
Seale and Beers, CPAs served as our principal independent public accountants for reporting fiscal years ending August 31, 2014 and Somerset CPAs, P.C. served as our principal independent public auditors for the year ended August 31, 2013. Aggregate fees billed to us for the years ended August 31, 2014 and August 31, 2013 for audit fees were as follows:
For Year Ended August 31,
For the Year Ended August 31
(1) Audit Fees (1) $21,200
$20,000
(2) Audit-Related Fees
(3) Tax Fees
(4) All Other Fees -
-
Total fees paid or accrued to our principal auditor
(1) Audit Fees include fees billed and expected to be billed for services performed to comply with Generally Accepted Auditing Standards (GAAS), including the recurring audit of the Company's financial statements for such period included in this Annual Report on Form 10-K and for the reviews of the quarterly financial statements included in the Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.
(2) Other fees include fees billed for services performed related to due diligence services rendered related to the potential acquisition of several Japanese businesses.
Audit Committee Policies and Procedures
We do not have an audit committee; therefore our sole director pre-approves all services to be provided to us by our independent auditor. This process involves obtaining (i) a written description of the proposed services, (ii) the confirmation of our Principal Accounting Officer that the services are compatible with maintaining specific principles relating to independence, and (iii) confirmation from our securities counsel that the services are not among those that our independent auditors have been prohibited from performing under SEC rules. Our directors then makes a determination to approve or disapprove the engagement of Seale and Beers, CPAs for the proposed services. In the fiscal year ending August 31, 2014, all fees paid to Seale and Beers, CPAs were unanimously pre-approved in accordance with this policy.
Less than 50 percent of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
The following information required under this item is filed as part of this report:
(a) 1. Financial Statements
Page
Management's Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
(b) Financial Statement Schedules
None.
(c) Exhibit Index
* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the city of Hermosa Beach, State of California.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.