UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[x]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 2014
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period from __________ to _________
Commission file number:000-27831
MILWAUKEE IRON ARENA FOOTBALL, INC.
(Exact name of registrant as specified in its charter)
Nevada | | 91-1947658 |
(State or other jurisdiction of incorporation or organization) | | (IRS Employer Identification No.) |
11415 NW 123 Lane, Reddick, Florida | | 32686 |
(Address of principal executive offices) | | (zip code) |
(786) 236-6434
(Registrant’s telephone number, including area code)
(Former Name, former address and former fiscal year, if changed since last report)
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 for 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. Yes [x] 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).
Yes [ ] 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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] | Accelerated filer | [ ] |
Non-accelerated filer | [ ] | Smaller reporting company | [x] |
(Do not check if a smaller reporting company) | | | |
Indicate by check mark whether the issuer is a shell company (as defined in rule 12b-2 of the Exchange Act) Yesx Noo
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of April 30, 2014, there were 155,892 shares of the Registrant's Common Stock outstanding.
MILWAUKEE IRON ARENA FOOTBALL, INC.
For The Quarterly Period Ended March 31, 2014
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION | | | 1 | |
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Item 1. | Financial Statements | | | 1 | |
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Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | | | 7 | |
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Item 3. | Quantitative and Qualitative Disclosures about Market Risk | | | 9 | |
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Item 4. | Controls and Procedures | | | 9 | |
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PART II - OTHER INFORMATION | | | | |
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Item 1. | Legal Proceedings | | | 11 | |
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Item 1A. | Risk Factors | | | 11 | |
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Item 2. | Unregistered Sales Of Equity Securities And Use Of Proceeds. | | | 11 | |
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Item 4. | (Removed and Reserved). | | | 11 | |
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Item 5. | Other Information | | | 11 | |
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Item 6. | Exhibits | | | 11 | |
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SIGNATURES | | | 12 | |
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENTS AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MILWAUKEE IRON ARENA FOOTBALL, INC. |
(A DEVELOPMENT STAGE COMPANY) |
BALANCE SHEETS |
(Unaudited) |
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ASSETS | | | | | | | | |
| | | March 31, 2014 | | | | September 30, 2013 | |
CURRENT ASSETS | | | | | | | | |
Cash | | $ | 270 | | | $ | 270 | |
TOTAL CURRENT ASSETS | | | 270 | | | | 270 | |
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TOTAL ASSETS | | $ | 270 | | | $ | 270 | |
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LIABILITIES AND STOCKHOLDERS' (DEFICIT)
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CURRENT LIABILITIES | | | | | | | | |
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Accounts payable and accrued expenses | | $ | 8,696 | | | $ | 11,474 | |
Loan payable - related party | | | 40,928 | | | | 35,578 | |
TOTAL CURRENT LIABILITIES | | | 49,624 | | | | 47,052 | |
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TOTAL LIABILITIES | | | 49,624 | | | | 47,052 | |
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STOCKHOLDERS' EQUITY (DEFICIT) | | | | | | | | |
Preferred stock A, $.001 par value; 5,000,000 shares authorized issued and outstanding | | | 5,000 | | | | 5,000 | |
Preferred stock B, $.001 par value; 5,000,000 shares authorized issued and outstanding | | | 5,000 | | | | 5,000 | |
Common stock, $.001 par value; 500,000,000 shares authorized 155,892 | | | | | | | | |
shares issued and outstanding | | | 156 | | | | 156 | |
Additional paid-in capital | | | 4,204,067 | | | | 4,204,067 | |
Accumulated deficit | | | (4,263,577 | ) | | | (4,261,005 | ) |
TOTAL STOCKHOLDERS' (DEFICIT) | | | (49,354 | ) | | | (46,782 | ) |
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TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | | $ | 270 | | | $ | 270 | |
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| | | — | | | | — | |
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The accompanying notes are an integral part of the condensed financial statements. | | | | | | | | |
MILWAUKEE IRON ARENA FOOTBALL, INC. |
(A DEVELOPMENT STAGE COMPANY) |
STATEMENTS OF OPERATIONS |
(Unaudited) |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | Three Months Ended March 31, | | Six Months Ended March 31, | | From re-entry of Development Stage on November 23, 2010 to March |
| | 2014 | | 2013 | | 2014 | | 2013 | | 31, 2013 |
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OPERATING EXPENSES (INCOME) | | | | | | | | | | | | | | | | | | | | |
General and administrative expenses | | | 1,500 | | | | 2,100 | | | | 2,572 | | | | 2,100 | | | | 58,801 | |
Reimbursment of expenses | | | — | | | | — | | | | — | | | | — | | | | (40,000 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total operating expenses (income) | | | 1,500 | | | | 2,100 | | | | 2,572 | | | | 2,100 | | | | 18,801 | |
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Net Income (Loss) | | | (1,500 | ) | | | (2,100 | ) | | | (2,572 | ) | | | (2,100 | ) | | | (18,801 | ) |
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NET LOSS PER BASIC AND DILUTED SHARES | | | (0.01 | ) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) | | | | |
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WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING | | | | | | | | | | | | | | | | | | | | |
BASIC AND DILUTED | | | 155,892 | | | | 155,892 | | | | 155,892 | | | | 155,892 | | | | | |
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The accompanying notes are an integral part of the condensed financial statements. | | | | | | | | | | | | | | | | | | | | |
MILWAUKEE IRON ARENA FOOTBALL, INC. |
(A DEVELOPMENT STAGE COMPANY) |
STATEMENTS OF CASH FLOWS |
(Unaudited) |
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| | | 2014 | | | | 2013 | | | | From re-entry of Development Stage on November 23, 2010 to December 31, 2013 | |
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CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | |
Net income (loss) | | $ | (2,572 | ) | | $ | (4,200 | ) | | $ | (18,801 | ) |
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Adjustments to reconcile net income (loss) to net cash | | | | | | | | | | | | |
provided by (used in) operating activities: | | | | | | | | | | | | |
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Changes in assets and liabilities: | | | | | | | | | | | | |
Increase (decrease) in liabilities | | | | | | | | | | | | |
Increase (decrease) in accounts payable and accrued expenses | | | (2,778 | ) | | | 4,200 | | | | (7,204 | ) |
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Total adjustments | | | (2,778 | ) | | | 4,200 | | | | (7,204 | ) |
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Net cash used in operating activities | | | (5,350 | ) | | | — | | | | (26,005 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
Proceeds from related party loan | | | 5,350 | | | | — | | | | 25,928 | |
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Net cash provided by financing activities | | | 5,350 | | | | — | | | | 25,928 | |
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DECREASE IN CASH | | | — | | | | — | | | | (77 | ) |
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CASH - BEGINNING OF PERIOD | | | 270 | | | | 270 | | | | 347 | |
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CASH - END OF PERIOD | | $ | 270 | | | $ | 270 | | | $ | 270 | |
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The accompanying notes are an integral part of the condensed financial statements. | | | | | | | | | | | | |
1 – Basis of Presentation
The unaudited, condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These unaudited condensed financial statements have been prepared in accordance with the accounting policies described in our audited financial statements included in our Annual Report on Form 10-K filed with the SEC for the fiscal year ended September 30, 2013 and do not include all information and footnote disclosures included in our audited financial statements. In the opinion of management, the accompanying unaudited, condensed financial statements include all adjustments, consisting of normal recurring adjustments and accruals, necessary to present fairly, in all material respects, the financial condition, results of operations and cash flows for the periods presented. Operating results for the three and six months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the full fiscal year ending September 30, 2014 or any other period. Where necessary, information for prior periods has been reclassified to conform to the financial statement presentation in the current fiscal year. These unaudited condensed financial statements should be read in conjunction with our audited financial statements and accompanying notes included in our 2013 Annual Report on Form 10-K.
2 – Nature of Operations
Milwaukee Iron Arena Football Inc., formerly known as Genesis Capital Corporation of Nevada, (the “Company”), was incorporated in the State of Colorado in 1983.
We are a shell company whose business strategy is to enter into a reverse merger with an operating business or develop an operating business through internal growth and/or targeted acquisitions of specific businesses.
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Accounting Policy
The Company is considered a development stage company as defined in ASC 915. As a result of an Unwind Agreement from a previous reverse merger on November 23, 2010, the Company re-entered the development stage on this date
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-confirming events. Accordingly, the actual results could differ significantly from estimates.
Fair Value of Financial Instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants.
As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:
| • | | Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| • | | Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| • | | Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
The Company's financial instruments consisted primarily of cash and loans from officer. The carrying amounts of the Company's financial instruments generally approximate their fair values as of March 31, 2014 and September 30, 2013, respectively, due to the short-term nature of these instruments.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.
4 – GOING CONCERN
As reflected in the accompanying financial statements, the Company has sustained net losses, has a working capital deficit of $49,354 and a stockholders’ deficit of $49,354 at March 31, 2014. In addition, the Company has no operating business.
The ability of the Company to continue as a going concern is dependent on its ability to obtain debt or equity based financing and upon future commencement of operations from the development of its planned business.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
5 – RELATED PARTY
The loan payable – related party represents amounts advanced to the Company from its Chief Executive Officer. These amounts are non-interest bearing and are due on demand.
6 – STOCKHOLDERS’ EQUITY (DEFICIT)
As of March 31, 2014 and September 30, 2013, respectively, the Company had issued 5,000,000 of its preferred stock series A shares and 5,000,000 of its preferred stock series B shares.
There were 500,000,000 shares of common stock authorized, with 155,892 shares issued and outstanding at March 31, 2014 and September 30, 2013, respectively. The par value for the common stock is $.001 per share.
7 – INCOME TAXES
| | March 31, 2014 | | September 30, 2013 |
| | | | | | | | |
Deferred tax assets | | $ | (1,022,200 | ) | | $ | (1,021,300 | ) |
Deferred tax valuation allowance | | | 1,022,200 | | | | 1,021,300 | |
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Net deferred tax assets | | $ | — | | | $ | — | |
Due to the uncertainty of utilizing the approximate $2,920,640 and $2,918,068 in net operating losses, for the years ended March 31, 2014 and September 30, 2013, and recognizing the deferred tax assets, an offsetting valuation allowance been provided.
The Company files tax returns that are subject to audit by tax authorities beginning with the year ended September 30, 2009. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.
8 – SUBSEQUENT EVENTS
In accordance with ASC Topic 855-10, The Company has analyzed its operations subsequent to March 31, 2014 to the date these financial statements were issued, and has determined that it does not have material subsequent events to disclose in these financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS AND OTHER FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS REPORT.
General
Milwaukee Iron Arena Football Inc., formerly known as Genesis Capital Corporation of Nevada (the “Company” or “we” or “us” or “our”), was incorporated in the State of Colorado in 1983, under the name Bugs, Inc., for the purpose of using microbial and other agents, including metallurgy, to enhance oil and natural gas production and to facilitate the recovery of certain metals. Since November 23, 2010, we have been a shell company.
We have entered into an Agreement and Plan of Merger,dated as of March 25,2014 (the “Merger Agreement”), by and among ourselves, MWKI Acquisition, Inc., an Illinois corporation and our wholly-owned subsidiary, (“Merger Sub”), and EV CHARGING USA, CORP., an Illinois corporation (“EV”). Pursuant to this agreement, Merger Sub will be merged with and into EV, with EV being the surviving corporation (the “Merger”), EV will become our wholly owned subsidiaries and the shareholders of EV will become our controlling shareholders. The closing under the Merger Agreement is subject to the satisfaction of a number of conditions.
Upon the closing under the Merger Agreement and the filing of a merger certificate in respect of the merger with the Secretary of State of the State of Illinois, we will acquire the operations of EV and will cease to be a shell company
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2014
COMPARED TO THREE MONTHS ENDED MARCH 31, 2013
Revenues
Revenues for the three months ended March 31, 2014, were $0.00 compared to $0.00 for the three months ended March 31, 2013.
Operating Expenses
Operating expenses for the three months ended March 31, 2014, were $1,500 compared to $2,100 for the three months ended March 31, 2013. Operating expenses decreased due to lower general and administrative expenses.
Net Loss
We had a net loss from continuing operations of $1,500 for the three month period ended March 31, 2014 as compared to a loss from continuing operations of $2,100 for the three month period ended March 31, 2013. Our net loss decreased due to lower general and administrative expenses.
SIX MONTHS ENDED MARCH 31, 2014
COMPARED TO SIX MONTHS ENDED MARCH 31, 2013
Revenues
Revenues for the six months ended March 31, 2014, were $0.00 compared to $0.00 for the six months ended March 31, 2013.
Operating Expenses
Operating expenses for the six months ended March 31, 2014, were $2,572 compared to $2,100 for the six months ended March 31, 2013. Operating expenses increased due to higher general and administrative expenses.
Net Loss
We had an operating loss from continuing operations of $2,572 for the six month period ended March 31, 2014, as compared to a loss from continuing operations of $2,100 for the six month period ended March 31, 2013. Net loss increased due to higher general and administrative expenses
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2014, we had: (i) total assets of $270, consisting of cash, (ii) total liabilities of $49,624, comprised primarily of an officer loan (iii) a working capital deficit of $49,354 and (iv) an accumulated deficit of $4,263,577.
As of March 31, 2013 we owed our officer $40,928, which represents amounts advanced to, or on behalf of, the Company. This debt has no specific repayment terms and is due on demand.
We have obtained working capital from related party debt, and will require additional capital from the sale of our securities, debt and/or from other sources in order to pay our current obligations. There can be no assurance that we will be successful in these efforts.
Net cash used in operating activities for the six months ended March 31, 2014, was $5,350, compared to net cash used in operating activities of $0 for the six months ended March 31, 2013.
Net cash provided by financing activities for the six months ended March 31, 2014, was $5,350, compared to net cash provided by financing activities for the six months ended March 31, 2013 of $0.
Cash Requirements
At March 31, 2014, we had an accumulated deficit of $4,263,577. The report of our independent registered public accounting firm on our audited financial statements at September 30, 2013, contains an explanatory paragraph regarding doubt as to our ability to continue as a going concern. As discussed earlier in this report, we are seeking to acquire assets or shares of an entity actively engaged in business which generates revenues, in exchange for our securities. We cannot predict when, if ever, we will be successful in this venture and, accordingly, we may be required to cease operations at any time. We do not have sufficient working capital to pay our operating costs for the next 12 months and we will require additional funds to pay our legal, accounting and other fees associated with our company and its filing obligations under federal securities laws, as well as to pay our other accounts payable generated in the ordinary course of our business. We have no commitments from any party to provide such funds to us. If we are unable to obtain additional capital as necessary until such time as we are able to conclude a business combination, we will be unable to satisfy our obligations and otherwise continue to meet our reporting obligations under federal securities laws. In that event, our stock would no longer be quoted on the OTC Bulletin Board and our ability to consummate a business combination with upon terms and conditions which would be beneficial to our existing stockholders would be adversely affected.
We currently plan to satisfy our cash requirements for the next 12 months until the Merger by borrowing directly from our officers and directors and we believe we can satisfy our cash requirements up to the Merger so long as we are able to obtain financing from these parties. After the Merger, we may seek funds from banks by way of loans or in the public markets by the issuance of debt or equity securities; no assurance can be given that we will be able to raise funds in any of these ways. We currently expect that money borrowed up to the Merger will be used to satisfy our operating costs, professional fees and for general corporate purposes, including consummating the Merger and will be used after the Merger principally to further the business of EV.
Off-Balance Sheet Arrangements.
We currently do not have any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of March 31, 2013. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of such date, at a reasonable level of assurance, in ensuring that the information required to be disclosed by the Company in the reports we file or submit under the Exchange Act is: (i) accumulated and communicated to our management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, management has concluded that our internal control over financial reporting was not effective as of March 31, 2014. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting pursuant to temporary rules of the Securities and Exchange Commission.
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 our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with our assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we identified the following material weaknesses in our internal control over financial reporting as of March 31, 2014:
• | | We have difficulty in accounting for complex accounting transactions particularly in relation to complex equity transactions. |
• | | Documented processes do not exist for several key processes |
Because of the material weaknesses noted above, we have concluded that we did not maintain effective internal control over financial reporting as of March 31, 2014, based onInternal Control over Financial Reporting – Guidance for Smaller Public Companies issued by COSO.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any pending legal proceedings nor is any of our property the subject of any pending legal proceedings.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. (REMOVED AND RESERVED).
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
EXHIBIT NUMBER | | DESCRIPTION |
| | |
10.1 | | Agreement and Plan of Merger,dated as of March 25,2014, is entered into by and among the Registrant,MWKI ACQUISITION, INC.,an Illinois corporation and the wholly-owned subsidiary of MWKI, andEV CHARGING USA, CORP.,an Illinois corporation |
31.1 | | Certification of Principal Executive Officer pursuant to Sarbanes-Oxley Section 302 |
| | |
32.1 | | Certification of Chief Executive Officer pursuant to Sarbanes-Oxley Section 906 |
SIGNATURES
Pursuant to the requirements 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.
| By: | /s/ RICHARD ASTROM | |
Date: May 20, 2014 | | Name: Richard Astrom | |
| | Title: Chief Executive Officer, Principal Accounting Officer, President, Director | |
| | | |