The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the fiscal years ended April 30, 2012 and 2011.
As of and for the two year period ended April 30, 2012, our auditors have issued a going concern opinion on our financial statements.
For the fiscal year ended April 30, 2012, the Company had a net loss of $26,559 comprised of general and administrative expenses including legal, accounting, audit, and other professional service fees incurred in relation to the filing of the Company’s periodic reports on Form 10-K and Form 10-Q.
Audited financial statements begin on the following page of this report.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 30, 2012, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 30, 2011 and 2010 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
As of April 30, 2012, the Company is a shell company as defined in Rule 12b-2 of the Exchange Act. The Company’s business is to pursue a business combination through acquisition, or merger with, an existing company. No assurances can be given that the Company will be successful in locating or negotiating with any target company.
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) 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 could differ from those estimates.
The Company maintains cash balances in a non-interest bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. As of April 30, 2012, there were no cash equivalents.
The fair value of cash and cash equivalents and accounts payable approximates the carrying amount of these financial instruments due to their short maturity.
As of April 30, 2012, the Company recognizes compensation cost based upon the fair value of stock options at the grant date using the Black-Scholes pricing model. During the years ended April 30, 2012 and 2011, the Company did not issue any shares for services nor did the Company issue any options as stock based compensation to any officers, directors, or non-employees.
As of April 30, 2012, the Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or results of operations.
During the year ended April 30, 2011, the Company did not issue any shares of common or preferred stock.
As of April 30, 2012, Mr. Goldsmith holdswarrants that areexercisable into 100,000 common shares of the Company at an exercise price of $1.00 per share post-reverse stock split effective April 27, 2011. Pursuant to the agreement with Mr. Goldsmith of March 8, 2010, the exercise period for the warrants that Mr. Goldsmith holdswas extended to April 30, 2013.
As of April 30, 2011, the Company’s Chief Executive Officer, Alan P. Donenfeld, as a beneficial owner for securities held by Paragon Capital LP, held warrants that were exercisable into 1,750,000 common shares of the Company as adjusted for the reverse stock split effective April 27, 2011. The $185,000 paid by Paragon Capital LP for the right to exercise these warrants is reflected in the additional paid in capital on the Company’s balance sheet.
As of April 30, 2012, the Company maintains office space in New York, New York with the Company’s majority shareholder at no cost to the Company. For the year ended April 30, 2012 and 2011, the rent expense was zero.
As of April 30, 2012, the Company had a federal net operating loss carryforward of approximately $775,000, which expires through 2032. This carryforward is limited due to the change in control that took place in the year ended April 30, 2008 and maybe further limited in the future upon change(s) in control of the Company in accordance with the provisions under Internal Revenue Code Section 381.
As of April 30, 2012, the Company determined it was more likely than not the deferred tax assets would not be realized and recorded a full valuation allowance.
As of April 30, 2012 and 2011, the total amount of gross unrecognized tax benefits and gross interest and penalties were zero.
As of April 30, 2012 and 2011, the Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.
As of April 30, 2012, the Company is a shell company as defined in Rule 12b-2 of the Exchange Act. The Company’s current business is to pursue a business combination through acquisition, or merger with, an existing company. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, locate and complete a merger with another company and ultimately achieve profitable operations. No assurances can be given that the Company will be successful in locating or negotiating with any target company
For the year ended April 30, 2012, the Company reported a net loss of $26,559 and has reported an accumulated deficit of $4,225,703.