U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended September 30, 2010





 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from





Commission File No.000-52850





AFH HOLDING IV, INC.


(Name of Small Business Issuer in its charter)





Delaware

26-1365023(State or other jurisdiction of incorporation or formation)

(I.R.S. employer identification number)





9595 Wilshire Blvd.


Suite 700


Beverly Hills, CA 90212


(Address of principal executive offices)





Issuer’s telephone number:
(310) 492-9898Issuer’s facsimile number:
(310) 492-9926





N/A


(Former name, former address and former


fiscal year, if changed since last report)





Copies to: The Sourlis Law Firm
 Virginia K. Sourlis, Esq.
 214 Broad Street
 Red Bank, New Jersey 07701
 T: (732) 530-9007
 F: (732) 530-9008
 www.SourlisLaw.com





Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


x Yes ̈ No








Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


o Yesx No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large accelerated filer
 ̈
Accelerated filer
 ̈Non-accelerated filer
 ̈
Smaller reporting company
x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


x Yes ̈ No





State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date: As of November 15, 2010, there were 5,087,500 shares of common stock, par value $0.001 per share, of the Registrant issued and outstanding.





Table of Contents




TABLE OF CONTENTS





PagePART I - FINANCIAL INFORMATION
1Item 1.
Financial Statements
1Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
2Item 3.
Quantitative and Qualitative Disclosures About Market Risk
5Item 4T.
Controls and Procedures
5PART II - OTHER INFORMATION
6Item 1.
Legal Proceedings
6Item 1A.
Risk Factors
6Item 2.
Unregistered Sale of Equity Securities and Use of Proceeds
10Item 3.
Defaults Upon Senior Securities
10Item 4.
Submission of Matters to a Vote of Security Holders
10Item 5.
Other Information
10Item 6.
Exhibits
10SIGNATURES
11





Table of Contents




PART I – FINANCIAL INFORMATION





Item 1.
Financial Statements.
  AFH HOLDING IV, INC.
 (A DEVELOPMENT STAGE COMPANY)
 (A DELAWARE CORPORATION)
 Beverly Hills, CA
 
 FINANCIAL REPORTSATSEPTEMBER 30, 2010
   1
 Table of Contents
  AFH HOLDING IV, INC.
 (A DEVELOPMENT STAGE COMPANY)
 (A DELAWARE CORPORATION)
 Beverly Hills, CA
 
 
 TABLE OF CONTENTS
 
 
 Balance Sheets at September 30, 2010 (Unaudited) and December 31, 2009
F-1Statement of Changes in Stockholders’ Equity for the Period from Date of Inception (April 16, 2007) through September 30, 2010 (Unaudited)
F-2Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009 and for the Period from Date of Inception (April 16, 2007) through September 30, 2010 (Unaudited)
F-3Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009 and for the Period from Date of Inception (April 16, 2007) through September 30, 2010 (Unaudited)
F-4Notes to Financial Statements
F-5 - F-8
  Table of Contents


AFH HOLDING IV, INC.(A DEVELOPMENT STAGE COMPANY)(A DELAWARE CORPORATION)Beverly Hills, CABALANCE SHEETS(Unaudited)September 30,


December 31,2010


2009ASSETSDue from Parent

$
175,000


$
175,000LIABILITIES AND STOCKHOLDERS' EQUITYLiabilitiesAccrued Expenses

$
775


$
8,216Due to Parent


13,878



1,750Total Liabilities


14,653



9,966Stockholders' EquityPreferred Stock:
$.001 Par; 20,000,000 Shares Authorized,-0- Issued and Outstanding


—



—Common Stock:
$.001 Par; 100,000,000 Shares Authorized;5,087,500 Issued and Outstanding


5,088



5,088Additional Paid-In-Capital


176,933



176,933Deficit Accumulated During Development Stage


(21,674
)


(16,987
)Total Stockholders' Equity


160,347



165,034Total Liabilities and Stockholders' Equity

$
175,000


$
175,000
 F-1
 Table of Contents





AFH HOLDING IV, INC.(A DEVELOPMENT STAGE COMPANY)(A DELAWARE CORPORATION)Beverly Hills, CASTATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE PERIOD FROMDATE OF INCEPTION (APRIL 16, 2007) THROUGH SEPTEMBER 30, 2010 - UNAUDITEDDeficitAccumulatedCommon Stock


Additional


During


TotalNumber





Paid-In


Development


Stockholders'of Shares


Value


Capital


Stage


EquityBalance - April 16, 2007


—


$
—


$
—


$
—


$
—Common Stock Issued in Lieu of Services


5,000,000



5,000



—



—



5,000Contributed Capital for Services


—



—



2,021



—



2,021Net Loss


—



—



—



(7,021
)


(7,021
)Balance - December 31, 2007


5,000,000



5,000



2,021



(7,021
)


—Common Stock Issued for Cash


87,500



88



174,912



—



175,000Net Loss


—



—



—



(3,550
)


(3,550
)Balance - December 31, 2008


5,087,500



5,088



176,933



(10,571
)


171,450Net Loss


—



—



—



(6,416
)


(6,416
)Balance - December 31, 2009


5,087,500



5,088



176,933



(16,987
)


165,034Net Loss for the Period


—



—



—



(4,687
)


(4,687
)Balance - September 30, 2010


5,087,500


$
5,088


$
176,933


$
(21,674
)

$
160,347




F-2
 Table of Contents





AFH HOLDING IV, INC.(A DEVELOPMENT STAGE COMPANY)(A DELAWARE CORPORATION)Beverly Hills, CASTATEMENTS OF OPERATIONS - UNAUDITEDPeriod FromDate of InceptionFor the Nine Months Ended


For the Three Months Ended


(April 16, 2007)September 30,


September 30,


Through2010


2009


2010


2009


September 30, 2010Revenues

$
—


$
—


$
—


$
—


$
—ExpensesGeneral and Administrative


2,937



3,175



775



1,025



18,659Interest


—



15



—



15



15Total Expenses

$
2,937


$
3,190


$
775


$
1,040


$
18,674Net Loss for the Period Before Taxes

$
(2,937
)

$
(3,190
)

$
(775
)

$
(1,040
)

$
(18,674
)Franchise Tax

$
1,750


$
75


$
—


$
75


$
3,000Net Loss for the Period After Taxes

$
(4,687
)

$
(3,265
)

$
(775
)

$
(1,115
)

$
(21,674
)Loss per Share - Basic and Diluted

$
(0.00
)

$
(0.00
)

$
(0.00
)

$
(0.00
)

$
(0.00
)Weighted Average Common Shares Outstanding


5,087,500



5,087,500



5,087,500



5,087,500



5,055,182


F-3
 Table of Contents





AFH HOLDING IV, INC.(A DEVELOPMENT STAGE COMPANY)(A DELAWARE CORPORATION)Beverly Hills, CASTATEMENTS OF CASH FLOWS - UNAUDITEDPeriod FromDate of InceptionFor the Nine Months Ended


(April 16, 2007)September 30,


Through2010


2009


September 30, 2010Cash Flows from Operating ActivitiesNet Loss

$
(4,687
)

$
(3,265
)

$
(21,674
)Non Cash Adjustments:Common Stock Issued in Lieu of Services


—



—



5,000Contributed Capital for Services


—



—



2,021Changes in Assets and Liabilities:Accrued Expenses


(7,441
)


3,265



775Net Cash Flows from Operating Activities


(12,128
)


—



(13,878
)Net Cash Flows from Investing Activities


—



—



—Cash Flows from Financing ActivitiesCash Advance by Parent


12,128



—



13,878Net Change in Cash and Cash Equivalents


—



—



—Cash and Cash Equivalents - Beginning of Period


—



—



—Cash and Cash Equivalents - End of Period

$
—


$
—


$
—SUPPLEMENTAL NON-CASH DISCLOSURESCommon Stock Proceeds Held by Parent

$
—


$
—


$
175,000Cash Paid During the Period for:Interest

$
—


$
—


$
—Franchise Tax

$
—


$
—


$
—


F-4
 Table of Contents





AFH HOLDING IV, INC.


(A DEVELOPMENT STAGE COMPANY)


(A DELAWARE CORPORATION)


Beverly Hills, CA





NOTES TO FINANCIAL STATEMENTS




Note A
The Company


AFH Holding IV, Inc., a development stage company (the “Company”), was incorporated under the laws of the State of Delaware on April 16, 2007.  The Company is 98.3% owned by AFH Holding & Advisory, LLC (the “Parent”).  The financial statements presented represent only those transactions of AFH Holding IV, Inc.  The Company is looking to acquire an existing company or acquire the technology to begin operations.





As a blank check company, the Company’s business is to pursue a business combination through acquisition, or merger with, an existing company. As of the date of the financial statements, the Company is not conducting negotiations with any target business. No assurances can be given that the Company will be successful in locating or negotiating with any target company.





Since inception, the Company has been engaged in organizational efforts.





The condensed financial statements of AFH Holding IV, Inc., (the “Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the annual audited financial statements and the notes thereto included in the Company’s registration statement on Form 10-K, and other reports filed with the SEC.





The accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented.  The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. Certain information that is not required for interim financial reporting purposes has been omitted.


Note B
Summary of Significant Accounting Policies


Method of Accounting


The Company maintains its books and prepares its financial statements on the accrual basis of accounting.





Development Stage


The Company has operated as a development stage enterprise since its inception by devoting substantially all of its efforts to financial planning, raising capital, research and development, and developing markets for its services.  The Company prepares its financial statements in accordance with the requirements of FASB ASC 915 (prior authoritative literature, FAS No. 7 “Accounting and Reporting by Development Stage Enterprises”).





F-5
 Table of Contents





AFH HOLDING IV, INC.


(A DEVELOPMENT STAGE COMPANY)


(A DELAWARE CORPORATION)


Beverly Hills, CA





NOTES TO FINANCIAL STATEMENTS




Note B
Summary of Significant Accounting Policies – continued


Cash and Cash Equivalents


Cash and cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less.  The Company maintains cash and cash equivalents at financial institutions, which periodically may exceed federally insured amounts.





Loss Per Common Share


Loss per common share is computed in accordance with FASB ASC 260-10 (prior authoritative literature, FAS No. 128 “Earnings Per Share”) by dividing income (loss) available to common stockholders by weighted average number of common shares outstanding for each period.  The calculations of diluted net loss per share gives effect to common stock equivalents, however, potential common shares are excluded if their effect is anti-dilutive.





Use ofEstimates


The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results can differ from those estimates.





Income Taxes


The Company accounts for income taxes in accordance with FASB ASC 740 (prior authoritative literature, FAS No. 109, “Accounting for Income Taxes”) using the asset and liability approach, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of such assets and liabilities.  This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences are expected to reverse and gives immediate effect to changes in income tax rates upon enactment.  Deferred tax assets are recognized, net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards.  Deferred income tax expense represents the change in net deferred assets and liability balances.





Financial Instruments


The Company’s financial instruments consist of cash and due to parent. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.  The fair value of these financial instruments approximates their carrying value, unless otherwise noted.





Recent Pronouncements


The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.








F-6
 Table of Contents





AFH HOLDING IV, INC.


(A DEVELOPMENT STAGE COMPANY)


(A DELAWARE CORPORATION)


Beverly Hills, CA





NOTES TO FINANCIAL STATEMENTS




Note C
Equity Securities
 Holders of shares of common stock shall be entitled to cast one vote for each common share held at all stockholder’s meetings for all purposes, including the election of directors.  The common stock does not have cumulative voting rights.





The preferred stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time.





No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.


Note D
Going Concern
 The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations.  As a result, there is an accumulated deficit of $21,674 at September 30, 2010.





The Company’s continued existence is dependent upon its ability to raise capital or acquire a marketable company. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.




Note E
Due to Parent
 Due to parent represents cash advances from AFH Holding & Advisory LLC.  AFH Holding & Advisory LLC is related to the Company through common ownership. There are no repayment terms.





Note F
Stock Transactions and Due from Parent
 AFH Holding IV, Inc. (the “Company”) previously reported that it commenced a private placement (the “Offering”) of shares (the “Shares”) of its common stock, par value $.001 per share (the “Common Stock”) on a best efforts basis with expected gross proceeds of up to $700,000 on February 26, 2008.   While the Company intended to commence the Offering on such date, the Offering was delayed and commenced on April 14, 2008.





- continued -


F-7
 Table of Contents
  AFH HOLDING IV, INC.


(A DEVELOPMENT STAGE COMPANY)


(A DELAWARE CORPORATION)


Beverly Hills, CA





NOTES TO FINANCIAL STATEMENTS





Note F
Stock Transactions and Due from Parent – continued
 The Company is offering a minimum of 70 investment units (the “Units”), each Unit consisting of 2,500 Shares at a per Unit price of $5,000 (the “Minimum Offering”) and a maximum of 140 Units (the “Maximum Offering”). The offering period during which the Company will accept subscriptions to purchase Shares (the “Offering Period”) commenced on April 14, 2008 and will continue until the earliest of: (i) the sale of the Minimum Offering; (ii) 60 days from April 14, 2008 (subject to extension by the Company for an additional 60 days with no notice to stockholders); and (iii) the termination of the Offering Period by the Company.  The total amount of shares sold in the offering was 87,500 with gross proceeds of $175,000.  These funds are held by the Company’s parent.


The Shares are expected to be issued to accredited investors under an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and any investors would be prohibited from offering or selling the Shares purchased in the Offering in the absence of an effective registration statement or an applicable exemption from registration requirements.


F-8
 Table of Contents





Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.





Overview





AFH Holding IV, Inc. ("we", "us", "our" or the "Registrant") was incorporated in the State of Delaware on April 16, 2007, and maintains its principal executive offices at 9595 Wilshire Blvd., Suite 700, Beverly Hills, CA 90212. Since the Registrant’s inception, it has been engaged in organizational efforts and obtaining initial financing. The Registrant was formed as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. The Registrant filed a registration statement on Form 10-SB with the U.S. Securities and Exchange Commission (the "SEC") on October 5, 2007, and since its effectiveness, the Registrant has focused its efforts to identify a possible business combination. Since the effective date of the Registrant’s Form 10-SB, the Registrant has been a reporting company and required to file periodic and current reports with the SEC under the Exchange Act.





Plan of Operation





The Registrant will attempt to locate and negotiate with a business entity for the combination of that target company with the Registrant. The combination will normally take the form of a merger, stock-for-stock exchange or stock-for- assets exchange (the "business combination"). In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. As of the date of this report, the Registrant has identified an undisclosed potential target company for a possible business combination.  The Registrant is currently engaged in preliminary negotiations with the target company.  No assurances can be given that the Registrant will be successful in locating or negotiating with any target company.





The Registrant has not restricted its search for any specific kind of businesses, and it may acquire a business which is in its preliminary or development stage, which is already in operation, or in essentially


any stage of its business life. It is impossible to predict the status of any business in which the Registrant may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Registrant may offer.





In implementing a structure for a particular business acquisition, the Registrant may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity.





It is anticipated that any securities issued in any such business combination would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, the Registrant may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, it will be undertaken by the surviving entity after the Registrant has entered into an agreement for a business combination or has consummated a business combination. The issuance of additional securities and their potential sale into any trading market which may develop in the Registrant's securities may depress the market value of the Registrant's securities in the future if such a market develops, of which there is no assurance. However, if the Registrant cannot effect a non-cash acquisition, the Registrant may have to raise funds from a private offering of its securities under Rule 506 of Regulation D. There is no assurance the Registrant would obtain any such equity funding.





The Registrant will participate in a business combination only after the negotiation and execution of appropriate agreements. Negotiations with a target company will likely focus on the percentage of the Registrant which the target company shareholders would acquire in exchange for their shareholdings.





Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing and will include miscellaneous other terms. Any merger or acquisition effected by the Registrant can be expected to have a significant dilutive effect on the percentage of shares held by the Registrant's shareholders at such time.





2
 Table of Contents


GOING CONCERN





In our accountant’s report for the fiscal year ended December 31, 2009, they expressed their doubt as to the Registrant’s ability to continue as a going concern.  The financial statements included in this Annual Report have been prepared assuming that the Registrant will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business.





At September 30, 2010, the Registrant had $0 cash on hand. The Registrant has had no revenue and has incurred an accumulated deficit from April 16, 2007 (inception) through the period ended September 30, 2010 of $21,674.  The Registrant’s development activities since inception have been financially sustained through equity financings and a loan from AFH Holding & Advisory, LLC, the Registrant’s parent company and of which the Registrant’s officer and director, Amir F. Heshmatpour, is the Management Member.





The ability of the Registrant to continue as a going concern is dependent upon its ability to find a suitable acquisition/merger candidate, raise additional capital from the sale of common stock, and receive additional paid-in capital from its shareholder and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Registrant be unable to recover the value of its assets or satisfy its liabilities.





Plan of Operation





The Registrant has not realized any revenues from operations since inception, and its plan of operation for the next twelve months is to locate a suitable acquisition or merger candidate and consummate a business combination. The Registrant may need additional cash advances from its stockholder or loans from other parties to pay for operating expenses until the Registrant consummates a merger or business combination with a privately-held operating company. Although it is currently anticipated that the Registrant can satisfy its cash requirements with additional cash advances or loans from other parties, if needed, for at least the next twelve months, the Registrant can provide no assurance that it can continue to satisfy its cash requirements for such period.





Since our formation on April 16, 2007, our purpose has been to effect a business combination with an operating business which we believe has significant growth potential. We are currently considered to be a “blank check” company in as much as we have no specific business plans, no operations, revenues or employees. We currently have no definitive agreements or understanding with any prospective business combination candidates and have not targeted any business for investigation and evaluation nor are there any assurances that we will find a suitable business with which to combine. The implementation of our business objectives is wholly contingent upon a business combination and/or the successful sale of securities in the Registrant.





As a result of our limited resources, we expect to effect only a single business combination. Accordingly, the prospects for our success will be entirely dependent upon the future performance of a single business. Unlike certain entities that have the resources to consummate several business combinations or entities operating in multiple industries or multiple segments of a single industry, we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. A target business may be dependent upon the development or market acceptance of a single or limited number of products, processes or services, in which case there will be an even higher risk that the target business will not prove to be commercially viable.





Our officers and directors are only required to devote a very limited portion of their time to our affairs on a part-time or as-needed basis. We expect to use outside consultants, advisors, attorneys and accountants as necessary, none of which will be hired on a retainer basis. We do not anticipate hiring any full-time employees so long as we are seeking and evaluating business opportunities.





We expect our present management to play no managerial role in the Registrant following a merger or business combination. Although we intend to scrutinize closely the management of a prospective target business in connection with our evaluation of a business combination with a target business, our assessment of management may be incorrect. We cannot assure you that we will find a suitable business with which to combine.


3
 Table of Contents
  Results of Operations





The Company has not conducted any active operations since inception, except for its efforts to locate a suitable acquisition or merger transaction. No revenue has been generated by the Company during such period, and it is unlikely the Company will have any revenues unless it is able to effect an acquisition of or merger with another operating company, of which there can be no assurance.





Assets





At September 30, 2010 and December 31, 2009, the Company had no cash and no other assets.





Liabilities





The Company’s total current liabilities at September 30, 2010 and December 31, 2009 were $14,653 and $9,966, respectively, comprised of Due to Parent and accrued expenses. The increase in liabilities was due to accounting fees.





Stockholders’ Deficit





At September 30, 2010, the Company had a stockholders’ deficit of $21,674 compared to $16,987 at December 31, 2009. The increase was due to increased liabilities.





Revenues





To date, the Company has not generated any revenues.





Net Loss





For the three month periods ended September 30, 2010 and 2009, the Company had a net loss of $775 and $1,115, respectively. For the nine month periods ended September 30, 2010 and 2009, the Company had a net loss of $4,687 and $3,265, respectively. From April 16, 2007 (Inception) to September 30, 2010, the Company had a net loss of $21,674.





Expenses





For the three months ended September 30, 2010, the Company had expenses of $775, compared to $1,115 for the three month period ended September 30, 2009. The decrease was due to the Company’s streamline of accounting and filing costs.  For the nine months ended September 30, 2009, the Company had expenses of $4,687, compared to $3,265 for the nine month period ended September 30, 2009. This increase was primarily due to franchise costs of $1,750.  For the period from April 16, 2007 (Inception) to September 30, 2010, the Registrant had operating expenses of $21,674 (includes franchise tax of $3,000). These expenses were due to accounting, audit, franchise tax and SEC filing fees incurred in relation to the filing of the Registrant’s Registration Statement on Form 10-SB filed on October 5, 2007 and annual and quarterly reports filed since the effectiveness of such registration statement.


Liquidity and Capital Resources





As of September 30, 2010 and 2009, the Registrant had cash on hand of $0 and total assets equal to $175,000. Such assets consist of monies held by the Registrant’s parent company, AFH Holding & Advisory, LLC, and are the net proceeds of the sale of the Registrant’s shares of common stock in a Private Placement Offering which commenced in April 2008 and which is discussed below. The Registrant’s current liabilities as of September 30, 2010, totaled $14,653, comprised Accrued Expenses of $775 and $13,878 owed AFH Holding & Advisory, LLC, the majority owner of the Registrant. The loan does not have any repayment terms. In their report for the fiscal year ended December 31, 2009, the Registrant’s principal accountants expressed their doubt as to our ability to continue as a going concern.
 In April 2008, the Company commenced a private placement (the "Offering") of up to 350,000 shares (the "Shares") of Common Stock at a purchase price of $2.00 per Share on a “best efforts” basis with expected gross proceeds of up to $700,000 to “accredited investors” (as defined in Rule 501 promulgated under Regulation D under the Securities Act of 1933, amended (the “Securities Act”)) pursuant to Rule 506 of Regulation D under the Securities Act. The total amount of Shares sold in the Offering was 87,500 with gross proceeds of $175,000. These funds are held by the Company's parent.
  4
 Table of Contents
  The ability of the Registrant to continue as a going concern is dependent upon its ability to find a suitable acquisition/merger candidate, raise additional capital from the sale of common stock, and receive additional paid-in capital from its shareholder and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Registrant be unable to recover the value of its assets or satisfy its liabilities.


The following is a summary of the Company's cash flows from operating, investing, and financing activities:





For the Nine

Months Ended


For the Period

April 16, 2007

(Inception) toSeptember 30, 2010


September 30, 2009


September 30, 2010Net Cash Used in Operating Activities

$
(12,128
)

$
—


$
(13,878
)Net Cash Provided by Investing Activities


—



—



—Net Cash Provided by Financing Activities

$
12,128


$
—


$
13,878Net Effect on Cash

$
—


$
—


$
—





The Registrant has nominal assets and has generated no revenues since inception. The Registrant is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. If continued funding and capital resources are unavailable at reasonable terms, the Registrant may not be able to implement its plan of operations.





Off-Balance Sheet Arrangements





The Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.





Item 3.
Quantitative and Qualitative Disclosures About Market Risk.





N/A





Item 4T.
Controls and Procedures.





Evaluation of Disclosure Controls and Procedures





Our Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2010. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure.





Changes in Internal Controls.





There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the three months ended September 30, 2010, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.


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PART II – OTHER INFORMATION





Item 1.
Legal Proceedings.





The Registrant is not party to any legal proceedings nor is it aware of any investigation, claim or demand made on the Registrant that may reasonably result in any legal proceedings.





Item 1A.
Risk Factors.





An investment in our securities is highly speculative and subject to numerous and substantial risks. These risks include those set forth below and elsewhere in this Form 10-Q. Readers are encouraged to review these risks carefully before making any investment decision.





AN INVESTMENT IN THE REGISTRANT IS HIGHLY SPECULATIVE IN NATURE AND INVOLVES AN EXTREMELY HIGH DEGREE OF RISK.





There may be conflicts of interest between our management and our non-management stockholders.





Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of other investors. A conflict of interest may arise between our management’s personal pecuniary interest and its fiduciary duty to our stockholders. Further, our management’s own pecuniary interest may at some point compromise its fiduciary duty to our stockholders. In addition, our officers and directors are currently involved with other blank check companies and conflicts in the pursuit of business combinations with such other blank check companies with which they and other members of our management are, and may be the future be, affiliated with may arise. If we and the other blank check companies that our officers and directors are affiliated with desire to take advantage of the same opportunity, then those officers and directors that are affiliated with both companies would abstain from voting upon the opportunity. In the event of identical officers and directors, the officers and directors will arbitrarily determine the Registrant that will be entitled to proceed with the proposed transaction.





OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE NO OPERATING HISTORY.





As we have no operating history or revenue and only minimal assets, there is a risk that we will be unable to continue as a going concern and consummate a business combination. We have had no recent operating history nor any revenues or earnings from operations since inception. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss that will increase continuously until we can consummate a business combination with a profitable business opportunity. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination.





THERE IS COMPETITION FOR THOSE PRIVATE COMPANIES SUITABLE FOR A MERGER TRANSACTION OF THE TYPE CONTEMPLATED BY MANAGEMENT.





We are in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.


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FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF MANAGEMENT TO LOCATE AND ATTRACT A SUITABLE ACQUISITION.





The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.





THE REGISTRANT HAS NO EXISTING AGREEMENT FOR A BUSINESS COMBINATION OR OTHER TRANSACTION.





We have no arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity. No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management has not identified any particular industry or specific business within an industry for evaluation. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that funds allocated to the purchase of our shares will not be invested in a company with active business operations.





MANAGEMENT INTENDS TO DEVOTE ONLY A LIMITED AMOUNT OF TIME TO SEEKING A TARGET COMPANY WHICH MAY ADVERSELY IMPACT OUR ABILITY TO IDENTIFY A SUITABLE ACQUISITION CANDIDATE.





While seeking a business combination, management anticipates devoting no more than a few hours per week to the Registrant’s affairs. Our officers have not entered into written employment agreements with us and are not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify and consummate a successful business combination.





THE TIME AND COST OF PREPARING A PRIVATE COMPANY TO BECOME A PUBLIC REPORTING COMPANY MAY PRECLUDE US FROM ENTERING INTO A MERGER OR ACQUISITION WITH THE MOST ATTRACTIVE PRIVATE COMPANIES.





Target companies that fail to comply with SEC reporting requirements may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including certified financial statements for the Registrant acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially preclude consummation of an acquisition. Otherwise suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.





THE REGISTRANT MAY BE SUBJECT TO FURTHER GOVERNMENT REGULATION WHICH WOULD ADVERSELY AFFECT OUR OPERATIONS.





Although we will be subject to the reporting requirements under the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), since we will not be engaged in the business of investing or trading in securities. If we engage in business combinations which result in our holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the Securities and Exchange Commission as to our status under the Investment Company Act and, consequently, violation of the Act could subject us to material adverse consequences.


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ANY POTENTIAL ACQUISITION OR MERGER WITH A FOREIGN COMPANY MAY SUBJECT US TO ADDITIONAL RISKS.





If we enter into a business combination with a foreign concern, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency and balance of payments positions, and in other respects.





THERE IS CURRENTLY NO TRADING MARKET FOR OUR COMMON STOCK.





Outstanding shares of our Common Stock cannot be offered, sold, pledged or otherwise transferred unless subsequently registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. These restrictions will limit the ability of our stockholders to liquidate their investment.





OUR BUSINESS WILL HAVE NO REVENUES UNLESS AND UNTIL WE MERGE WITH OR ACQUIRE AN OPERATING BUSINESS.





We are a development stage company and have had no revenues from operations. We may not realize any revenues unless and until we successfully merge with or acquire an operating business.





THE REGISTRANT INTENDS TO ISSUE MORE SHARES IN A MERGER OR ACQUISITION, WHICH WILL RESULT IN SUBSTANTIAL DILUTION.





Our certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Common Stock, and up to 20,000,000 shares of Preferred Stock. Any merger or acquisition effected by us may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of Common Stock or Preferred Stock are issued in connection with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of Common Stock might be materially adversely affected.





OUR STOCKHOLDER MAY ENGAGE IN A TRANSACTION TO CAUSE THE REGISTRANT TO REPURCHASE ITS SHARES OF COMMON STOCK.





In order to provide an interest in the Registrant to a third party, our stockholders may choose to cause us to sell our securities to third parties, with the proceeds of such sale being utilized by us to repurchase shares of common stock held by our stockholders. As a result of such transaction, our management, stockholders and Board of Directors may change.





THE REGISTRANT HAS CONDUCTED NO MARKET RESEARCH OR IDENTIFICATION OF BUSINESS OPPORTUNITIES, WHICH MAY AFFECT OUR ABILITY TO IDENTIFY A BUSINESS TO MERGE WITH OR ACQUIRE.





We have neither conducted nor have others made available to us results of market research concerning prospective business opportunities. Therefore, we have no assurances that market demand exists for a merger or acquisition as contemplated by us. Our management has not identified any specific business combination or other transactions for formal evaluation by us, such that it may be expected that any such target business or transaction will present such a level of risk that conventional private or public offerings of securities or conventional bank financing will not be available. There is no assurance that we will be able to acquire a business opportunity on terms favorable to us. Decisions as to which business opportunity to participate in will be unilaterally made by our management, which may act without the consent, vote or approval of our stockholders.


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  BECAUSE WE MAY SEEK TO COMPLETE A BUSINESS COMBINATION THROUGH A “REVERSE MERGER”, FOLLOWING SUCH A TRANSACTION WE MAY NOT BE ABLE TO ATTRACT THE ATTENTION OF MAJOR BROKERAGE FIRMS.





Additional risks may exist since we will assist a privately held business to become public through a “reverse merger.” Securities analysts of major brokerage firms may not provide coverage of our Company since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf of our post-merger company in the future.





WE CANNOT ASSURE YOU THAT FOLLOWING A BUSINESS COMBINATION WITH AN OPERATING BUSINESS; OUR COMMON STOCK WILL BE LISTED ON NASDAQ OR ANY OTHER SECURITIES EXCHANGE.





Following a business combination, we may seek the listing of our common stock on NASDAQ or the American Stock Exchange. However, we cannot assure you that following such a transaction, we will be able to meet the initial listing standards of either of those or any other stock exchange, or that we will be able to maintain a listing of our common stock on either of those or any other stock exchange. After completing a business combination, until our common stock is listed on the NASDAQ or another stock exchange, we expect that our common stock would be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the “pink sheets,” where our stockholders may find it more difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock. In addition, we would be subject to an SEC rule that, if it failed to meet the criteria set forth in such rule, imposes various practice requirements on broker-dealers who sell securities governed by the rule to persons other than established customers and accredited investors. Consequently, such rule may deter broker-dealers from recommending or selling our common stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital following a business combination.





THERE IS NO PUBLIC MARKET FOR OUR COMMON STOCK, NOR HAVE WE EVER PAID DIVIDENDS ON OUR COMMON STOCK.





There is no public trading market for our common stock and none is expected to develop in the foreseeable future unless and until we complete a business combination with an operating business and such business files a registration statement under the Securities Act. Additionally, we have never paid dividends on our Common Stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Registrant to further its business strategy.





OUR CERTIFICATE OF INCORPORATION AUTHORIZES THE ISSUANCE OF UP TO 5,000,000 SHARES OF PREFERRED STOCK WITH DESIGNATIONS, RIGHTS AND PREFERENCES DETERMINED FROM TIME TO TIME BY ITS BOARD OF DIRECTORS WITHOUT STOCKHOLDER APPROVAL.





Our Certificate of Incorporation authorizes the issuance of up to 20,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors without stockholder approval. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Registrant. Although we have no present intention to issue any shares of its authorized preferred stock, there can be no assurance that the Registrant will not do so in the future. If a market were to develop for our common stock, the prevailing price of our common to stock might suppress the volume and price of our common stock.





CONTROL BY MANAGMENT





Amir F. Heshmatpour, our sole executive officer and director, beneficially owns approximately 93.4% of all the issued and outstanding capital stock of the Registrant. Consequently, management has the ability to influence control of our operations and, acting together, will have the ability to influence or control substantially all matters submitted to stockholders for approval, including:


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●
Election of the board of directors;





●
Removal of any directors;





●
Amendment of our certificate of incorporation or bylaws; and





●
Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination.





Amir F. Heshmatpour will control our management and affairs and other stockholders of the Registrant possess no practical ability to remove management or effect the operations of the business of the Registrant. Accordingly, this concentration of ownership by itself may have the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the common stock.





Item 2.
Unregistered Sale of Equity Securities and Use of Proceeds.





In April 2008, the Company commenced a private placement (the "Offering") of up to 350,000 shares (the "Shares") of  Common Stock at a purchase price of $2.00 per share on a “best efforts” basis with expected gross proceeds of up to $700,000 to “accredited investors” (as defined in Rule 501 promulgated under Regulation D under the Securities Act of 1933, amended (the “Securities Act”)) pursuant to Rule 506 of Regulation D under the Securities Act. The total amount of Shares sold in the Offering was 87,500 with gross proceeds of $175,000.





Item 3.
Defaults Upon Senior Securities.





None.





Item 4.
Submission of Matters to a Vote of Security Holders.





None.





Item 5.
Other Information.





None.





Item 6.
Exhibits.





Exhibit No.

Description31.1

Certification by Amir F. Heshmatpour, the Principal Executive Officer and Principal Financial and Accounting Officer of AFH Holding IV, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.32.1

Certification by Amir F. Heshmatpour, the Principal Executive Officer and Principal Financial and Accounting Officer of AFH Holding IV, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





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SIGNATURES





In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.





Dated: November 15, 2010





AFH HOLDING IV, INC.(Registrant)/s/ Amir F. HeshmatpourAmir F. HeshmatpourPresident, Secretary and Sole Director(Principal Executive Officer)

(Principal Financial and Accounting Officer)