UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] | ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2008
[ ] | TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission file number 333-131084
FLEURS DE VIE, INC.
(Name of small business issuer in its charter)
Nevada | 20-2388650 |
(State of organization) | (I.R.S. Employer Identification No.) |
C/O AMERICAN UNION SECURITIES
100 WALL STREET 15TH FLOOR NEW YORK, NY 10005
(Address of principal executive offices)
(212) 232-0120
(Registrant's telephone number)
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:
NONE
SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:
COMMON STOCK, $0.001 PAR VALUE PER SHARE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No x
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 report(s)), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
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 definitions of “large accelerated filer,” “accelerated filer,” and smaller reporting companies in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o | 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). Yes x No o
The issuer's revenues for its most recent fiscal year were $0.
The aggregate market value of the issuer's voting and non-voting common equity held by non-affiliates computed by reference to the average bid and ask price of such common equity as of April 9, 2009, was $1,965,700.
At April 9, 2009, there were 1,857,000 shares of the Issuer's common stock outstanding.
TABLE OF CONTENTS
PART I | ||||
ITEM 1. DESCRIPTION OF BUSINESS | 2 | |||
ITEM 2. DESCRIPTION OF PROPERTY | 4 | |||
ITEM 3. LEGAL PROCEEDINGS | 4 | |||
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 4 | |||
PART II | ||||
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS | 5 | |||
ITEM 6. SELECTED FINANCIAL DATA | 8 | |||
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION | 8 | |||
ITEM 8. FINANCIAL STATEMENTS | 13 | |||
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 25 | |||
ITEM 9A(T). CONTROLS AND PROCEDURES | 25 | |||
ITEM 9B. OTHER INFORMATION | 26 | |||
PART III | ||||
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT | 26 | |||
ITEM 11. EXECUTIVE COMPENSATION | 27 | |||
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 27 | |||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 29 | |||
ITEM 14. EXHIBITS | 30 | |||
ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES. | 31 | |||
SIGNATURES | 32 |
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PART I
FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K, CONSTITUTE "FORWARD LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1934, AS AMENDED, AND THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (COLLECTIVELY, THE "REFORM ACT"). CERTAIN, BUT NOT NECESSARILY ALL, OF SUCH FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES", "EXPECTS", "MAY", "SHOULD", OR "ANTICIPATES", OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF FLEURS DE VIE, INC. ("FLEURS", "FDV," "THE COMPANY", "WE", "US" OR "OUR") TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-K, UNLESS ANOTHER DATE IS STATED, ARE TO DECEMBER 31, 2008.
OVERVIEW
Fleurs De Vie, Inc. (the "Company," "we," and "us") was incorporated in Nevada on April 15, 2005 as "Fleurs De Vie." On June 9, 2005, we filed a Certificate of Correction with the State of Nevada to have our registered name corrected to "Fleurs De Vie, Inc." In the course of our day-to-day business operations in the State of Texas, we are operating under the approved assumed name of "FDV, Inc." We ceased operations in September 2007. Prior to ceasing operations, we provided upscale custom floral design services and finished natural floral products to the general public. We custom-designed and produced projects as small as single floral vases or as large as floral arrangements and services for large events such as weddings, parties and banquets.
Our services included:
o | Pre-event conferences and surveys with clients to inventory the needs and wishes of the client; |
o | Determining budget constraints and developing design schemes within those budget constraints; |
o | Pricing for custom designed and specified floral arrangements tailored to the client's wishes and needs; |
o | Developing coherent floral themes for events. Refining the client's ideas into tangible concepts and designs; |
o | Defining the physical and logistical scope of client events; |
o | Preparing detailed pricing and budgets; |
o | Personal review of event venue(s) where necessary; |
o | Individual hand selection of floral materials, containers and accoutrements; |
o | Production, delivery and placement of arrangements and accessories; and |
o | Unique floral decorating of special client venue features such as wedding cakes, registry tables, dinner tables, buffet tables, platforms, podiums, stages, windows, walkways, runways and any other potential opportunities for floral display. |
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The individual products which we offer for sale to our customers include:
o | Various individual floral arrangements in containers as small as bud vases to large baskets; |
o | Various table and general decorating flower arrangements; |
o | Handheld arrangements including bouquets and nosegays; |
o | Adornment items such as corsages, boutonnieres and headdresses; |
o | Household decorations such as holiday wreaths and decorated garlands; and |
o | Large display items such as floral sprays, large centerpieces and large containers. |
On or about September 29, 2007, a change of control occurred when certain majority shareholders of FDV, including Harold A. Yount, Jr. and Brenda P. Yount, FDV’s Chief Executive Officer and Vice President, respectively, Loev Corporate Filings, Inc. and David M. Love, entered into a Stock Purchase Agreement with Huaqin Zhou, Xiaojin Wang and Huakang Zhou (the “Acquirers”) and certain other third parties, pursuant to which the Sellers sold an aggregate of 1,440,000 restricted shares of FDV’s common stock which they held, representing approximately 77.5% of FDV’s outstanding common stock to the Acquirers. The purchase price paid to the Sellers for the Restricted Shares was $564,103 of which $50,000 had previously been received from the Acquirers in connection with the parties’ entry into a Letter of Intent. Additionally, finders and consulting fees paid out of the purchase price received by the Sellers totaled approximately $170,000.
It is anticipated that the Acquirors will enter into a Share Exchange Agreement or other agreement in the future whereby American D&C Investment, Inc., a Delaware company (“American D&C”), will become our wholly owned subsidiary and that moving forward our sole business operations will be those of American D&C, however there can be no assurance such Share Exchange or other agreement will be entered into shortly after the filing of this report, if at all.
About American D&C Investment, Inc.
American D&C Investment, Inc. was organized under the laws of the State of Delaware on October 29, 2007. In June 2008, American D&C Investment, Inc. acquired 100% of the registered capital of DaQing Yueyu Oilfield Underground Technology Service Co., Ltd, a holding company that owns 95% of the registered capital of Jilin Yifeng Energy Sources Co., Ltd. (“Jilin Yifeng”), a corporation organized under the laws of People’s Republic of China. DaQing Yueyu is engaged in the business of developing, extracting and manufacturing of crude oil through its 95% owned subsidiary Jilin Yifeng in Jinlin Province.
We have generated nominal revenues since inception, and had an accumulated deficit of $192,857 and negative net working capital of $54,668 as of December 31, 2008. Our auditors have expressed that these factors among others indicate that we may be unable to continue as a going concern, particularly in the event that we cannot obtain additional financing and/or attain profitable operations.
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We were unable to obtain additional financing and therefore, unable to achieve any of the goals set forth in our business plan and as a result ceased operations in September of 2007.
We are continuing our efforts to locate a merger candidate for the purpose of a merger. It is possible that we will be successful in locating such a merger candidate and negotiating such a merger. However, if we cannot effect a non cash transaction, we may have to raise funds through an offering of our securities. There is no assurance that we will be able to raise such funds.
We will attempt to locate and negotiate with a business entity for the combination of that target company with us. The combination will commonly take the form of a merger, stock for stock exchange or stock for assets exchange. No assurances can be given that we will be successful in locating or negotiating with any such target company.
A business combination with a target company will normally involve the transfer to the target company of the majority of our issued and outstanding common stock and the substitution by the target company of its own management and board of directors.
No assurances can be given that we will be able to enter into a business combination, or the terms of the business combination, or as the nature of the target company.
PATENTS AND TRADEMARKS
We do not have any patents or trademarks and do not see the need for any in the near future.
LICENSE AND GOVERNMENT APPROVAL
We are not currently required to have licenses nor do we require governmental approval.
RESEARCH AND DEVELOPMENT
We do not currently engage in any research and development.
NUMBER OF EMPLOYEES
Currently, we have two unpaid employees, our president and chief executive officer, Changming Zhang and our chief financial officer, Yongjun Wang. We do not have an employment agreement in place with either Mr. Zhang or Mr. Wang.
Our offices in the United States are currently located at 100 Wall Street c/o American Union Securities New York, NY 10005. American Union Securities serves as the Company’s agent and does not receive any remuneration for the use of its property. In the near future we do not anticipate requiring additional office space and additional personnel in the United States.
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.
None.
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PART II
"Bid" and "asked" offers for our common stock are listed on the NASDAQ OTC-Bulletin Board published by the National Quotation Bureau, Inc.
In July 2006, our common stock began being quoted on the OTC-Bulletin Board under the symbol "FDVE." Our common stock currently has extremely low volume on the OTC-Bulletin Board and as a result, is subject to extreme fluctuations as shown by the table below.
The following table sets forth the high and low bid prices for the Company's common stock for the periods indicated as reported by the NASDAQ OTC-Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Closing Bid | ||||||||
YEAR 2006 | High Bid | Low Bid | ||||||
3rd Quarter Ended September 30 (1) | $ | 0.45 | $ | 0.05 | ||||
4th Quarter Ended December 31 | $ | 0.40 | $ | 0.25 | ||||
YEAR 2007 | High Bid | Low Bid | ||||||
1st Quarter Ended March 31 | $ | 1.10 | $ | 1.005 | ||||
2nd Quarter Ended June 30 | $ | 1.75 | $ | 1.75 | ||||
3rd Quarter Ended September 30 | $ | 3.28 | $ | 0.342 | ||||
4th Quarter Ended December 31 | $ | 1.85 | $ | 1.10 | ||||
YEAR 2008 | High Bid | Low Bid | ||||||
1st Quarter Ended March 31 | $ | 2.30 | $ | 1.30 | ||||
2nd Quarter Ended June 30 | $ | 2.30 | $ | 0.55 | ||||
3rd Quarter Ended September 30 | $ | 1.00 | $ | 0.40 | ||||
4th Quarter Ended December 31 | $ | 1.25 | $ | 0.35 | ||||
YEAR 2009 | High Bid | Low Bid | ||||||
1st Quarter Ended March 31 | $ | 1.15 | $ | 0.45 | ||||
Period Ended April 9 | $ | 1.10 | $ | 1.10 |
(1) The first reported sale of the Company’s common stock on the OTC-Bulletin Board was July 10, 2006.
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AUTHORIZED STOCK
We have authorized capital stock consisting of 140,000,000 shares of Common Stock, $0.001 par value per share ("Common Stock") and 10,000,000 shares of preferred stock, $0.001 par value per share ("Preferred Stock"). As of April 9, 2009, we had 1,857,000 shares of Common Stock issued and outstanding and - 0 - shares of Preferred Stock issued and outstanding.
COMMON STOCK
The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of the election of directors then standing for election. The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of our company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors. Each outstanding share of Common Stock is, and all shares of Common Stock to be outstanding upon completion of this Offering will upon payment therefore be, duly and validly issued, fully paid and non-assessable.
PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or more series, each of which shall have such distinctive designation or title as shall be determined by our Board of Directors ("Board of Directors") prior to the issuance of any shares thereof. Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of our capital stock entitled to vote generally in the election of the directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.
The issuance of such Preferred Stock could adversely affect the rights of the holders of Common Stock and, therefore, reduce the value of the Common Stock. It is not possible to state the actual effect of the issuance of any shares of Preferred Stock on the rights of holders of the Common Stock until the board of directors determines the specific rights of the holders of the Preferred Stock. However, these effects may include:
o | Restricting dividends on the Common Stock; |
o | Diluting the voting power of the Common Stock; |
o | Impairing the liquidation rights of the Common Stock; and |
o | Delaying or preventing a change in control of the Company without further action by the stockholders. |
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RECENT SALES OF UNREGISTERED SECURITIES
On or about June 29, 2007 (the “Closing”), certain majority shareholders of Fleurs de Vie, Inc. (the “Company,” “we,” and “us”), including Harold A. Yount, Jr. and Brenda P. Yount, our Chief Executive Officer and Vice President, respectively, Loev Corporate Filings, Inc. and David M. Loev (the “Sellers”), entered into a Stock Purchase Agreement with Huaqin Zhou, Xiaojin Wang and Huakang Zhou (the “Acquirers”) and certain other third parties (the “Third Parties”), pursuant to which the Sellers sold an aggregate of 1,440,000 restricted shares of our common stock which they held (the “Restricted Shares”), representing approximately 77.5% of our outstanding common stock to the Acquirers (the “Stock Purchase”). The purchase price paid to the Sellers for the Restricted Shares was $564,103 of which $50,000 had previously been received from the Acquirers in connection with the parties’ entry into a Letter of Intent. Additionally, finders and consulting fees paid out of the purchase price received by the Sellers totaled approximately $170,000.
In connection with the Stock Purchase, the Sellers retained an aggregate of 210,000 shares of our common stock, which they held, which are subject to a “put” option. Pursuant to the “put” option, the Sellers will be able to sell any part of the 210,000 shares back to us during a period of sixty (60) days beginning on July 1, 2008, for consideration of $1.00 per share. If we are unable to pay the Sellers in connection with the “put” option, for a period of five (5) days following any exercise of the “put” option by the Sellers, the Sellers have the right to require us to issue them additional shares of common stock equal to three (3) times the times the total amount of money owed pursuant to the “put” option divided by the closing price of our common stock on the day the “put” option was defaulted,. For instance, if the value of our common stock was $0.10 per share on the day we fail to pay the Sellers in connection with their exercise of 100,000 shares pursuant to the “put” option (for $100,000 owed to the Sellers), we would owe such Sellers $100,000/($0.10) * 3 = 3,000,000 shares.
At the Closing, several of our non-affiliated shareholders also sold an aggregate of 105,000 free trading shares of our common stock to the Acquirers.
Pursuant to the Stock Purchase, the Acquirers agreed not to affect a reverse stock split of our outstanding common stock for a period of 12 months from any subsequent business combination which we may undertake. Additionally, the Sellers agreed not to sell the 210,000 shares subject to the “put” option for a period of one (1) year following the Closing. As of December 31, 2008, the Sellers exercised their put option. FDV was able to arrange third party purchase of 210,000 shares directly from the Sellers.
On or about July 30, 2007, the parties to the Stock Purchase entered into a First Amendment to Stock Purchase Agreement (the “First Amendment to SPA”). The First Amendment to SPA added a new section to the original Stock Purchase, which provided that our then Chief Executive Officer and Director, Harold A. Yount, Jr. would remain a member of the Board of Directors for at least three (3) months from the date of the Stock Purchase, and for such additional period as the parties to the Stock Purchase agree. Additionally, the First Amendment to the SPA provided that Mr. Yount would serve as our officer and Director and continue to prepare and file all Company reports with the Commission for as long as the Acquirers request, subject to Mr. Yount’s agreeing to continue to serve the Company in such positions (the “Services”). In consideration for Mr. Yount agreeing to perform the Services on our behalf pursuant to the terms of the First Amendment to SPA, we agreed to pay Mr. Yount two thousand dollars ($2,000) per month during which he performs Services on our behalf, prorated for any partial month, for as long as he continues to perform Services on our behalf.
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ITEM 6. SELECTED FINANCIAL DATA
The following statements of income data for each of the two years ended December 31, 2008 and 2007 derived from our audited financial statements. Historical results are not necessarily indicative of the results of operations for future years. The following data is qualified in its entirety by and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this Form 10-K.
Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
Revenues | $ | - | $ | - | ||||
Cost of Goods Sold | - | - | ||||||
Gross Profit | - | - | ||||||
Expenses | ||||||||
General & administrative expenses | 29,873 | - | ||||||
Interest expenses | 3,595 | 6,726 | ||||||
Loss from continuing operations | (33,469 | ) | (6,726 | ) | ||||
Loss from discontinued operations | - | (60,618 | ) | |||||
Net loss | (33,469 | ) | (67,344 | ) |
PLAN OF OPERATIONS
Management believes that since we have ceased operations, the fact that our expenses are limited, and that our officers, Directors and employees do not draw a salary, that we will have sufficient funding to meet our working capital, capital expenditures and business development needs for approximately the next six months if no additional financing is raised. On December 10, 2007, FDV entered into a revolving line of credit with its president and chief executive officer, Mr. Changming Zhang. Under this arrangement, FDV can borrow up to $50,000. The note is unsecured and bears no interest. Any unpaid principal is due on December 10, 2010. Past due amounts will bear interest of 0%.
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We will rely on the commitment of our President and Chief Executive Officer, Mr. Changming Zhang. Mr. Zhang has provided us with working capital in the form of an open line of credit totaling $50,000. On December 10, 2008, the Company amended its resolving line of credit with its president and chief executive officer, Mr. Changming Zhang by increasing the total line of credit up to $60,000 with other terms unchanged. FDV has imputed interest of $3,595 and $1,032 for the year ended December 2008 and 2007 respectively.
We are continuing our efforts to locate a merger candidate for the purpose of a merger. We have entered into negotiations with American D&C Investment, Inc., a Delaware company (“American D&C”) regarding entering into a Share Exchange Agreement or other agreement in the future whereby, will become our wholly owned subsidiary and that moving forward our sole business operations will be those of American D&C, however there can be no assurance such Share Exchange or other agreement will be entered into shortly after the filing of this report, if at all.
No assurances can be given that we will be able to enter into a business combination, or the terms of the business combination, or as the nature of the target company.
We are determined to take advantage of the prospects for this re-organization. We will continue as a fully reporting company.
COMPARISON OF OPERATING RESULTS
YEAR ENDED DECEMBER 31, 2008 COMPARED TO THE YEAR ENDED DECEMBER 31, 2007
Through September 2007, the Company provided upscale custom floral design services and finished natural floral products to the general public. We custom-designed and produced projects as small as single floral vases or as large as floral arrangements and services for large events such as weddings, parties and banquets. In September 2007, a change of control occurred and all operations related to our floral business ceased.
LIQUIDITY AND CAPITAL RESOURCES
We had total assets of $200 as of December 31, 2008.
We had total liabilities of $54,868 as of December 31, 2008, which consisted of $51,368 of line of credit, related party, which represented our line of credit with our Chief Executive Officer and President, Changming Zhang. We entered into a master revolving line of credit with Mr. Zhang, in December 2007. Upon a revolving line of credit agreement the Company entered into with its president and chief executive officer, Mr. Changming Zhang on December 10, 2008, we can borrow up to $60,000. The note is unsecured and bears no interest. Any unpaid principal is due on December 10, 2010. Past due amounts will bear interest of 0%.
We had negative working capital of $54,668 and a total accumulated deficit of $192,857 as of December 31, 2008.
In the future, we may be required to seek additional capital by selling debt or equity securities, or otherwise be required to bring cash flows in balance when it approaches a condition of cash insufficiency. The sale of additional equity securities, if accomplished, may result in dilution to our shareholders. We cannot be assured however, that financing will be available in amounts or on terms acceptable to us, or at all.
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RISK FACTORS
You should carefully consider the following risk factors and other information in this annual report on Form 10-K before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent.
The business and the value of our common stock are subject to the following Risk Factors:
WE HAVE FUTURE CAPITAL NEEDS AND WITHOUT RAISING ADEQUATE CAPITAL, WE MAY BE UNABLE TO EFFECTUATE A BUSINESS COMBINATION.
Our President, Changming Zhang has committed up to $60,000 in capital to us via a non-interest bearing unsecured line of credit of which $51,368 had been advanced as of December 31, 2008. If financing is available, it may involve issuing securities senior to our then existing shareholders or equity financings that are dilutive to holders of our existing stock. In addition, in the event we are not able to raise additional capital, there is every likelihood that we may be unable to locate an attractive business combination, which may make any investment in us worthless.
OUR AUDITOR HAS RAISED DOUBT AS TO WHETHER WE CAN CONTINUE AS A GOING CONCERN.
We have generated nominal revenues since inception; had an accumulated deficit of $192,857 and negative working capital of $54,668 as of December 31, 2008. This factor among others indicate that we may be unable to continue as a going concern, particularly in the event that we cannot obtain additional financing and/or attain profitable operations. We ceased operations in September of 2007 and are now looking for a merger candidate. There can be no assurances that we will be successful in locating a merger candidate.
WE ARE HIGHLY DEPENDENT ON CHANGMING ZHANG, OUR CHIEF EXECUTIVE OFFICER AND YONGJUN WANG, OUR CHIEF FINANCIAL OFFICER, RESPECTIVELY.
Our performance is substantially dependent on the performance of Changming Zhang, our Chief Executive Officer, and Yongjun Wang, our Chief Financial Officer. The loss of the services of either Mr. Zhang or Mr. Wang will have a material adverse effect on our business, results of operations and financial condition.
WE HAVE NOT AND DO NOT ANTICIPATE PAYING ANY CASH DIVIDENDS ON OUR COMMON STOCK AND BECAUSE OF THIS OUR SECURITIES COULD FACE DEVALUATION IN THE MARKET.
We have paid no cash dividends on our Common Stock to date and it is not anticipated that any cash dividends will be paid to holders of our Common Stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that any earnings will be retained to finance our future expansion. As an investor, you should take note of the fact that a lack of a dividend can further affect the market value of our stock, and could significantly affect the value of any investment in us.
WE HAVE CEASED OPERATIONS AND ARE CURRENTLY ATTEMPTING TO LOCATE VARIOUS MERGER AND ACQUISITION OPPORTUNITIES.
We are currently looking for a merger candidate. In the event that we do enter into a merger and/or acquisition with a separate company in the future, our majority shareholders will likely change and new shares of common stock could be issued resulting in substantial dilution to our then current shareholders. As a result, our new majority shareholders will likely change the composition of our Board of Directors and replace our current management. The new management will likely change our business focus and we can make no assurances that our new management will be able to properly manage our direction or that this change in our business focus will be successful. If we do enter into a merger or acquisition, and our new management fails to properly manage and direct our operations, we may be forced to scale back or abandon our operations, which will cause the value of our common stock to decline or become worthless. We have not entered into any merger or acquisition agreements as of the date of this filing.
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OUR BYLAWS PROVIDE FOR INDEMNIFICATION OF OUR OFFICERS AND DIRECTORS, SO IT WILL BE DIFFICULT TO SEEK DAMAGES FROM OUR OFFICERS AND/OR DIRECTORS IN A LAWSUIT.
Our Bylaws provide that our officers and Directors will only be liable to us for acts or omissions that constitute actual fraud, gross negligence or willful and wanton misconduct. Thus, we may be prevented from recovering damages for certain alleged errors or omissions by our officers and Directors for liabilities incurred in connection with their good faith acts on our behalf. Additionally, such an indemnification payment on behalf of our officers and/or Directors may deplete our assets. Investors who have questions respecting the fiduciary obligations of our officers and Directors should consult with their own independent legal counsel prior to making an investment in us. Additionally, it is the position of the Securities and Exchange Commission that exculpation from and indemnification for liabilities arising under the 1933 Act and the rules and regulations thereunder is against public policy and therefore unenforceable.
NEVADA LAW AND OUR ARTICLES OF INCORPORATION AUTHORIZE US TO ISSUE SHARES OF PREFERRED STOCK, WHICH SHARES MAY HAVE RIGHTS AND PREFERENCES GREATER THAN OUR COMMON STOCK.
Pursuant to our Articles of Incorporation, we have 140,000,000 shares of Common Stock and 10,000,000 shares of preferred stock ("Preferred Stock") authorized. As of the filing of this report, we have 1,857,000 shares of Common Stock issued and outstanding and - 0 - shares of Preferred Stock issued and outstanding. As a result, our Board of Directors have the ability to issue a large number of additional shares of Common Stock without shareholder approval, which if issued would cause substantial dilution to our then shareholders. Additionally, shares of Preferred Stock may be issued by our Board of Directors without shareholder approval with voting powers, and such preferences and relative, participating, optional or other special rights and powers as determined by our Board of Directors. As a result, shares of Preferred Stock may be issued by our Board of Directors which cause the holders to have super majority voting power over our shares, provide the holders of the Preferred Stock the right to convert the shares of Preferred Stock they hold into shares of our Common Stock, which may cause substantial dilution to our then Common Stock shareholders and/or have other rights and preferences greater than those of our Common Stock shareholders. Investors should keep in mind that the Board of Directors has the authority to issue additional shares of Common Stock and Preferred Stock, which could cause substantial dilution to our existing shareholders. Additionally, the dilutive effect of any Preferred Stock, which we may issue may be exacerbated given the fact that such Preferred Stock may have super majority voting rights and/or other rights or preferences which could provide the preferred shareholders with voting control over us subsequent to this offering and/or give those holders the power to prevent or cause a change in control. As a result, the issuance of shares of Common Stock and/or Preferred Stock, may cause the value of our securities to decrease and/or become worthless.
THE MARKET FOR OUR COMMON STOCK IS HIGHLY ILLIQUID AND WE ANTICIPATE THE MARKET FOR SUCH STOCK TO CONTINUE TO BE ILLIQUID AND HIGHLY VOLATILE IN THE FUTURE.
Our Common Stock is currently traded on the Over-The-Counter Bulletin Board under the symbol "FDVE," however; we have had little to no trading in our Common Stock to date. If there is a market for our Common Stock in the future, we anticipate that such market would be illiquid and would be subject to wide fluctuations in response to several factors, including, but not limited to:
(1) actual or anticipated variations in our results of operations;
(2) our ability or inability to generate new revenues;
(3) increased competition; and
(4) conditions and trends in the floral services industry.
Furthermore, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance which include stock market fluctuations, general economic, political and overall global market conditions, such as recessions, interest rates or international currency fluctuations. Any and all of these factors, while unrelated directly to us, may adversely affect the market price and liquidity of our Common Stock.
11
IF WE ARE LATE IN FILING OUR QUARTERLY OR ANNUAL REPORTS WITH THE SEC, WE MAY BE DE-LISTED FROM THE OVER-THE-COUNTER BULLETIN BOARD.
Pursuant to Over-The-Counter Bulletin Board ("OTCBB") rules relating to the timely filing of periodic reports with the SEC, any OTCBB issuer which fails to file a periodic report (Form 10-QSB's or 10-KSB's) by the due date of such report (not withstanding any extension granted to the issuer by the filing of a Form 12b-25), three (3) times during any twenty-four (24) month period is automatically de-listed from the OTCBB. Such removed issuer would not be re-eligible to be listed on the OTCBB for a period of one-year, during which time any subsequent late filing would reset the one-year period of de-listing. If we are late in our filings three times in any twenty-four (24) month period and are de-listed from the OTCBB, our securities may become worthless and we may be forced to curtail or abandon our business plan.
INVESTORS MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF OUR COMMON STOCK DUE TO FEDERAL REGULATIONS OF PENNY STOCKS.
We are subject to the SEC’s “penny stock” rules as our shares of common stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in 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, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer's confirmation.
In addition, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.
FLEURS DE VIE, INC.
CONTENTS
PAGE | F-1 | REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM—PARITZ & COMPANY, P.A. |
PAGE | F-2 | REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM—MALONE & BAILEY, P.C. |
PAGE | F-3 | BALANCE SHEETS AS OF DECEMBER, 2008 AND 2007 |
PAGE | F-4 | STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 |
PAGE | F-5 | STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 |
PAGE | F-6 | STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 |
PAGES | F-7-F-11 | NOTES TO FINANCIAL STATEMENTS |
13
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Fleurs De Vie, Inc.
(A Development Stage Company)
New York, NY
We have audited the accompanying balance sheet of Fleurs De Vie, Inc. (the “Company”) as of December 31, 2008 and the related statement of operations, changes in stockholders’ deficiency and cash flows for the year then ended. We did not audit the statements of operations and changes in stockholders’ deficiency and cash flows of the Company from inception (September 29, 2007) to December 31, 2007 (not presented separately herein). Those statements were audited by other auditors whose report has been furnished to us, and our opinion insofar as it relates to amounts included for that period is based solely on the report of the other auditors. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has not earned any revenues from continuing operations in the years ended December 31, 2008 and 2007. In addition, the Company has a stockholders’ deficiency and negative working capital of $54,668 as of December 31, 2008. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be result from the outcome of this uncertainty.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Fleurs De Vie, Inc. as of December 31, 2008, and the results of its operations and its cash flows for the year ended December 31, 2008 and for the period from inception (September 29, 2007) to December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.
/s/Paritz & Company, P.A.
Hackensack, New Jersey
April 13, 2009
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board Directors
Fleurs De Vie, Inc.
New York, NY
We have audited the accompanying balance sheet of Fleurs De Vie, Inc. (“Fleurs”) as of December 31, 2007 and the related statements of operations, shareholders’ deficit, and cash flows for year then ended. These financial statements are the responsibility of Fleurs’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Fleurs 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 Fleurs’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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Fleurs as of December 31, 2007 and the results of operations and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/Malone & Bailey, P.C.
www.malone-bailey.com
Houston, TX
March 25, 2008
F-2
FLEURS DE VIE, INC | ||||||||
(A Development Stage Company) | ||||||||
BALANCE SHEETS | ||||||||
Year ended December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 200 | $ | - | ||||
Total Current Assets | 200 | - | ||||||
TOTAL ASSETS | $ | 200 | $ | - | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Accrued expenses | $ | 3,500 | $ | - | ||||
Put option | - | 210,000 | ||||||
Short term debt | - | 1,194 | ||||||
Line of credit - related party | 51,368 | 24,795 | ||||||
Total Current Liabilities | 54,868 | 235,989 | ||||||
- | - | |||||||
STOCKHOLDERS' DEFICIENCY | ||||||||
Preferred stock, $.001 par value; 10,000,000 shares | ||||||||
authorized, none issued and outstanding | - | - | ||||||
Common stock, $.001 par value; 140,000,000 shares | ||||||||
authorized, 1,857,000 issued and outstanding | 1,856 | 1,856 | ||||||
Additional paid-in capital | 136,332 | (78,457 | ) | |||||
Deficit accumulated during development stage | (35,150 | ) | (1,682 | ) | ||||
Accumulated deficit | (157,707 | ) | (157,707 | ) | ||||
Total Stockholders' deficiency | (54,668 | ) | (235,989 | ) | ||||
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | 200 | $ | - |
F-3
FLEURS DE VIE, INC | |
(A Development Stage Company) | |
STATEMENTS OF OPERATIONS |
Year ended | From | |||||||||||
December 31, | September 29, 2007 | |||||||||||
2008 | 2007 | to December 31, 2008 | ||||||||||
Revenues | $ | - | $ | $ | ||||||||
General and administrative expenses | 29,874 | - | 29,874 | |||||||||
Interest expense | 3,595 | 6,726 | 5,276 | |||||||||
LOSS FROM CONTINUING OPERATIONS | (33,469 | ) | (6,726 | ) | (35,150 | ) | ||||||
Loss from discontinued operations | - | (60,618 | ) | - | ||||||||
NET LOSS | $ | (33,469 | ) | $ | (67,344 | ) | $ | (35,150 | ) | |||
BASIC AND DILUTED LOSS PER COMMON SHARE | ||||||||||||
-continuing operations | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
-discontined operations | $ | - | $ | (0.03 | ) | $ | - | |||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 1,857,000 | 1,857,000 | 1,857,000 | |||||||||
See notes to financial statements |
F-4
FLEURS DE VIE, INC | |
(A Development Stage Company) | |
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY |
Deficit accumulated during | ||||||||||||||||||||
development stage and | ||||||||||||||||||||
Common Stock | Additional | Accumulated | Total | |||||||||||||||||
Shares | Amount | Paid-in Capital | Deficit | |||||||||||||||||
Balance, December 31, 2006 | 1,857,000 | $ | 1,856 | $ | 32,053 | $ | (92,044 | ) | $ | (58,135 | ) | |||||||||
Forgiveness of debt and related interest by related party | - | - | 83,834 | 83,834 | ||||||||||||||||
Contributions to capital | - | - | 14,624 | 14,624 | ||||||||||||||||
Put option | - | - | (210,000 | ) | (210,000 | ) | ||||||||||||||
Imputed interest | 1,032 | 1,032 | ||||||||||||||||||
Net Loss | - | - | - | (67,344 | ) | (67,344 | ) | |||||||||||||
Balance, December 31, 2007 | 1,857,000 | 1,856 | (78,457 | ) | (159,388 | ) | (235,989 | ) | ||||||||||||
Forgiveness of debt and related interest by related party | 1,194 | 1,194 | ||||||||||||||||||
Put option | 210,000 | 210,000 | ||||||||||||||||||
Imputed interest on related party line of credit | 3,595 | 3,595 | ||||||||||||||||||
Net Loss | (33,469 | ) | (33,469 | ) | ||||||||||||||||
Balance, December 31, 2008 | 1,857,000 | $ | 1,856 | $ | 136,332 | $ | (192,857 | ) | $ | (54,668 | ) | |||||||||
See notes to financial statements |
F-5
FLEURS DE VIE, INC | |
(A Development Stage Company) | |
STATEMENTS OF CASH FLOWS |
Year ended | From | |||||||||||
December 31, | September 29, 2007 | |||||||||||
2008 | 2007 | to December 31, 2008 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net loss | $ | (33,469 | ) | $ | (67,344 | ) | $ | (35,150 | ) | |||
Adjustments to reconcile net loss to cash | ||||||||||||
used in operating activities: | ||||||||||||
Imputed interest | 3,595 | - | 5,277 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accured expenses | 3,500 | - | 3,500 | |||||||||
Net Loss from discontinued operations | - | 67,344 | - | |||||||||
NET CASH USED IN OPERATING ACTIVITIES | (26,373 | ) | - | (26,373 | ) | |||||||
NET CASH USED IN DISCONTINUED OPERATIONS FROM OPERATING ACTIVITIES | - | (77,330 | ) | - | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Net change in line of credit to related party | 26,573 | 33,817 | 26,573 | |||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 26,573 | 33,817 | 26,573 | |||||||||
NET CASH PROVIDED BY DISCONTINUED OPERATIONS | - | 43,319 | - | |||||||||
NET INCREASE (DECREASE) IN CASH | 200 | (194 | ) | 200 | ||||||||
CASH, beginning of the period | - | 194 | - | |||||||||
CASH, end of the period | $ | 200 | $ | - | $ | 200 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid for interest | $ | - | $ | 6,538 | $ | - | ||||||
Non-cash financing activity - | ||||||||||||
Put option on common shares | $ | (210,000 | ) | $ | 210,000 | $ | (210,000 | ) | ||||
Forgiveness of debt and accrued interest by related party | $ | 1,194 | $ | 83,834 | $ | 1,194 | ||||||
See notes to financial statements |
F-6
FLEURS DE VIE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. BUSINESS DESCRIPTION AND HISTORY
Fleurs De Vie, Inc. (“FDV”) was incorporated in Nevada on April 15, 2005. Prior to April 2005, FDV was a sole proprietorship. The Company designed custom florals with one store located in Boerne, Texas which ceased operations in September 2007. The results of operations of the store are classified as discontinued operations on the accompany statement of operations.
Since September 2007, FDV has been working on developing a new business and has not earned any revenue from operations. Accordingly, FDV’s activities have been accounted for as those of a Development Stage Enterprise, as set forth in Financial Accounting Standards Board Statement No. 7 (“SFAS 7”). Among the disclosures required by SFAS 7 are that FDV’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders’ equity and cash flows disclose activity since the date of FDV’s inception.
On or about September 29, 2007, certain majority shareholders of FDV, entered into a Stock Purchase Agreement with Huaqin Zhou, Xiaojin Wang and Huakang Zhou (the “Acquirers”) and certain other third parties, pursuant to which the Sellers sold an aggregate of 1,440,000 restricted shares of FDV’s common stock which they held, representing approximately 77.5% of FDV’s outstanding common stock to the Acquirers. The purchase price paid to the Sellers for the Restricted Shares was $564,103 of which $50,000 had previously been received from the Acquirers in connection with the parties’ entry into a Letter of Intent.
F-7
FLEURS DE VIE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 2. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has not earned any revenues from continuing operations in the years ended December 31, 2008 and 2007. In addition, the Company has a stockholders’ deficiency and negative working capital of $54,668 as of December 31, 2008. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be result from the outcome of this uncertainty.
Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
Use of estimates
In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities of less than ninety days at the date of purchase.
The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s accounts at these institutions may, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts.
F-8
FLEURS DE VIE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred income taxes
The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109) which requires that deferred tax assets and liabilities be recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, SFAS 109 requires recognition of future tax benefits, such as carryforwards, to the extent that realization of such benefits is more likely than not and that a valuation allowance be provided when it is more likely than not that some portion of the deferred tax asset will not be realized.
Earnings per share
The Company computes earnings per share (“EPS’) in accordance with Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS No. 128”), and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
Recent accounting pronouncements
In December 2007, Statement of Financial Accounting Standards No. 141(R), Business Combinations, was issued. SFAS No. 141R replaces SFAS No. 141, Business Combinations. SFAS 141R retains the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. This replaces SFAS 141’s cost-allocation process, which required the cost of acquisition to be allocated to the individual assets acquired and liabilities assumed based on their estimated fair values. SFAS 141R also requires the acquirer in a business combination achieved in stages (sometimes referred to as a step acquisition) to recognize the identifiable assets and liabilities, as well as the non-controlling interest in the acquiree, at the full amounts of their fair values (or other amounts determined in accordance with SFAS 141R). SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2007 An entity may not apply it before that date. SFAS 141 (R) will significantly affect the accounting for future business combinations and we will determine the accounting as new combinations occur.
F-9
FLEURS DE VIE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In December 2007, the FASB issued SFAS No. 160,“Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51” (“SFAS 160”), which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent’s ownership interest and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. The Statement also establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS 160 is effective for fiscal years beginning after December 15, 2007. We do not believe the adoption of SFAS No. 160 will have a material impact on our consolidated financial statements.
In February 2008, the FASB issued Staff Position No. 157-2 (FSP 157-2), which delays the effective date of FAS 157 one year for all nonfinancial assets and nonfinancial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis. FSP 157-2 is effective for us beginning January 1, 2009. We do not believe the adoption of FSP 157-2 will have a material impact on our consolidated financial statements.
In March 2008, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No. 161 is effective beginning January 1, 2009. We are currently assessing the potential impact that adoption of SFAS No. 161 may have on our financial statements.
In April 2008, the FASB issued FASB Staff Position FAS 142-3, “Determination of Useful Life of Intangible Assets” (FSP 142-3). FSP 142-3 amends the factors that should be considered in developing the renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS 142, “Goodwill and Other Intangible Assets.” FSP 142-3 also requires expanded disclosure regarding the determination of intangible asset useful lives. FSP 142-3 is effective for fiscal years beginning after December 15, 2008. Earlier adoption is not permitted. We do not believe the adoption of FSP 142-3 will have a material impact on our consolidated financial statements.
F-10
FLEURS DE VIE, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
On December 10, 2007 FDV entered into an unsecured revolving line of credit with its president and chief executive officer, Mr. Changming Zhang. Under this arrangement, FDV can borrow up to $50,000 with noninterest bearing and due on December 10, 2010.
On December 10, 2008, FDV amended the unsecured resolving line of credit with its president and chief executive officer by increasing the total line of credit up to $60,000 with other terms unchanged. FDV has imputed interest of $3,595 and $1,032 for the year ended December 2008 and 2007 respectively.
Note 5. PUT OPTION
In connection with the change of control in 2007, the Sellers retained an aggregate of 210,000 shares of FDV common stock, which were subject to a “put” option. Pursuant to the “put” option, the Sellers can elect to sell any part of the 210,000 shares back to FDV during a period of sixty (60) days beginning on July 1, 2008, for consideration of $1.00 per share. If elected and FDV is unable to pay the Sellers in connection with the “put” option, for a period of five (5) days following any exercise of the “put” option by the Sellers, the Sellers have the right to require FDV to issue them additional shares of common stock equal to three (3) times the total amount of money owed pursuant to the “put” option divided by the closing price of our common stock on the day the “put” option is defaulted.
The put option expired, as extended in December 2008.
Note 6. INCOME TAXES
FDV has a net operating loss carry-forwards approximately $193,000 which expire between 2020 and 2023.
FDV has a deferred tax asset resulting from the tax loss carry-forwards of approximately $67,000 for which FDV has provided a 100% valuation allowance.
Due to the change of control, the net operating loss through that date will be limited under section 382 of the Internal Revenue Service.
F-11
The Company engaged Paritz & Company, P.A. on January 27, 2009, as its new independent registered public accounting firm to audit and review the Company’s financial statements effective December 31, 2008. Prior to such engagement, the Company had not consulted with Paritz & Company, P.A. regarding either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the financial statements of the Company.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures are not effective because of the identification of a material weakness in our internal control over financial reporting which is identified below, which we view as an integral part of our disclosure controls and procedures.
Changes in Internal Controls over Financial Reporting
Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. There has been no change in the Company’s internal control over financial reporting during the year ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Management’s Report on Internal Controls over Financial Reporting
The Company’s management, including the Company’s CEO and CAO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on its evaluation, our management concluded that there is a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by an external consultant with no oversight by a professional with accounting expertise. Our President does not possess accounting expertise and our company does not have an audit committee. This weakness is due to the company’s lack of working capital to hire additional staff. To remedy this material weakness, we intend to engage another accountant to assist with financial reporting as soon as our finances will allow.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to the attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
The Company’s management carried out an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008. The Company’s management based its evaluation on criteria set forth in the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission. Based on that assessment, management has concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2008.
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None.
PART III
The following table sets forth the names, positions and ages of our executive officers and directors. All of our directors serve until the next annual meeting of stockholders or until their successors are elected and qualify. Officers are elected by the board of directors and their terms of office are, except to the extent governed by employment contract, at the discretion of the board of directors.
Name | Title | Age |
Changming Zhang | President, Chief Executive Officer, Director | 54 |
Yongjun Wang | Chief Financial Officer, Chief Accounting Officer, Secretary, Director | 55 |
Mr. Changming Zhang. Since 2004, Mr. Zhang has been employed as president and incorporator of Harbin D&C Electric Sci-tech Joint Stock Co. Ltd. He graduated from Northeast Forestry University engineering department in 1983 where he earned his bachelor’s degree.
Mr. Yongjun Wang. From 2000 to 2006, Mr. Wang was Manager of the Heilongjiang Chengyong Investment Company. Before that, he was Vice Manager of Heilongjiang Securities Company and an official of the Harbin municipal government.
Our officers and Directors may receive compensation as determined by us from time to time by vote of the Board of Directors. Such compensation might be in the form of stock options. Directors may be reimbursed by us for expenses incurred in attending meetings of the Board of Directors. Vacancies in the Board are filled by majority vote of the remaining directors.
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Section 16(a) Beneficial Ownership Reporting
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that directors, executive officers and persons who own more than 10% of the outstanding common stock of certain reporting companies file initial reports of ownership and reports of changes in ownership in such common stock with the Securities and Exchange Commission ("SEC"). Officers, directors and stockholders who own more than 10% of the outstanding common stock of certain reporting companies are required by the SEC to furnish such companies with copies of all Section 16(a) reports they file. We are required to comply with Section 16(a). Accordingly, stock ownership information contained in this report is based on what is known to us.
Code of Ethics
We have has adopted a Code of Ethics applicable to our Chief Executive Officer and Chief Financial Officer. This Code of Ethics is filed incorporated herein by reference.
The following table shows the compensation paid over the past three fiscal years with respect to: (i) the chief executive officer as of the end of the 2007, 2006 and 2005 fiscal years; (ii) the two other most highly compensated executive officers (in terms of salary and bonus) serving at the end of the 2007, 2006, and 2005 fiscal years whose annual salary and bonus exceeded $100,000; and (iii) up to two additional individuals who would be in category (ii) but for the fact that the individual was not serving as an executive officer of the Company at the end of the last completed fiscal year (the “named executive officers”):
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Totals ($) | |||||||||||||||
Changming Zhang, Chief Executive Officer | 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Yongjun Wang, Chief Financial Officer | 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Harold Yount (1) Former Chief Executive Officer | 2007 2006 2006 | 0 0 0 | 0 0 $500(2) | 0 0 0 | 0 0 0 | 0 0 0 | 0 0 0 | $6,000 0 0 | $6,000 0 0 | |||||||||||||||
(1) Harold Yount resigned as our officer and director on September 30, 2007 | ||||||||||||||||||||||||
(2) Mr. Yount was issued 500,000 shares of our Common Stock in April 2005, which shares of common stock was valued at $500 or $0.001 per share, in consideration for services rendered to the Company in connection with the Company's formation and with his positions as Chief Executive Officer and Director of the Company. |
The following table provides the names and addresses of each person known to own directly or beneficially more than 5% of our outstanding Common Stock (as determined in accordance with Rule 13d-3 under the Exchange Act) as of April 9, 2009, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
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NUMBER OF SHARES OF | ||
COMMON STOCK | ||
NAME AND ADDRESS | BENEFICIALLY OWNED | PERCENTAGE OF |
OF BENEFICIAL OWNERS | PERCENTAGE OF OWNERSHIP(1) | OWNERSHIP(1) |
Harold A. Yount , Jr. Former President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director 206 East Roosevelt Ave. Boerne, Texas, 78006 | 70,000 | 3.7% |
Changming Zhang President, Chief Executive Officer, and Director c/o American Union Securities 100 Wall Street 15th Floor New York, NY 10005 | 0 | 0.0% |
Yongjun Wang Chief Financial Officer and Director c/o American Union Securities 100 Wall Street 15th Floor New York, NY 10005 | 0 | 0.0% |
_________________________________ | ___________ | ________________ |
ALL OFFICERS AND DIRECTORS | ||
AS A GROUP (2 PERSONS) | 70,000 | 3.7% |
(1) Using 1,857,000 shares of Common Stock outstanding as of April 9, 2009.
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In September 2002, FDV entered into a revolving line of credit with the owner. Under this arrangement, FDV can borrow up to $25,000. The note is unsecured and bears no interest. Any unpaid principal is due on December 31, 2007. As a result of the change of control described in Note 3, this Note was forgiven and cancelled in September 2007.
In May 2005, FDV signed an unsecured promissory note for $25,000 of services. The note was due in May 2006, bears 0% interest if paid by maturity and 10% interest if paid thereafter. Interest of 10% was being imputed and expensed as a contribution to capital up to May 15, 2006. Subsequent to the due date, interest was accrued and charged to expense. As of December 31, 2007, $1,194 was due under this note.
On or about June 29, 2007 (the “Closing”), certain majority shareholders of Fleurs de Vie, Inc. (the “Company,??“we,” and “us”), including Harold A. Yount, Jr. and Brenda P. Yount, our Chief Executive Officer and Vice President, respectively, Loev Corporate Filings, Inc. and David M. Loev (the “Sellers”), entered into a Stock Purchase Agreement with Huagin Zhou, Xiaojin Wang and Huakang Zhou (the “Acquirers”) and certain other third parties (the “Third Parties”), pursuant to which the Sellers sold an aggregate of 1,440,000 restricted shares of our common stock which they held (the “Restricted Shares”), representing approximately 77.5% of our outstanding common stock to the Acquirers (the “Stock Purchase”). The purchase price paid to the Sellers for the Restricted Shares was $564,103 of which $50,000 had previously been received from the Acquirers in connection with the parties’ entry into a Letter of Intent. Additionally, finders and consulting fees paid out of the purchase price received by the Sellers totaled approximately $170,000,
In connection with the Stock Purchase, the Sellers retained an aggregate of 210,000 shares of our common stock, which they held, which are subject to a “put” option. Pursuant to the “put” option, the Sellers will be able to sell any part of the 210,000 shares back to us during a period of sixty (60) days beginning on July 1, 2008, for consideration of $1.00 per share. If we are unable to pay the Sellers in connection with the “put” option, for a period of five (5) days following any exercise of the “put” option by the Sellers, the Sellers have the right to require us to issue them additional shares of common stock equal to three (3) times the times the total amount of money owed pursuant to the “put” option divided by the closing price of our common stock on the day the “put” option was defaulted,. For instance, if the value of our common stock was $0.10 per share on the day we fail to pay the Sellers in connection with their exercise of 100,000 shares pursuant to the “put” option (for $100,000 owed to the Sellers), we would owe such Sellers $100,000/($0.10) * 3 = 3,000,000 shares.
At the Closing, several of our non-affiliated shareholders also sold an aggregate of 105,000 free trading shares of our common stock to the Acquirers.
As of December 31, 2008, the Sellers exercised their put option. FDV was able to arrange third party purchases of 210,000 shares directly from the Sellers.
On or about July 30, 2007, the parties to the Stock Purchase entered into a First Amendment to Stock Purchase Agreement (the “First Amendment to SPA”). The First Amendment to SPA added a new section to the original Stock Purchase, which provided that our then Chief Executive Officer and Director, Harold A. Yount, Jr. would remain a member of the Board of Directors for at least three (3) months from the date of the Stock Purchase, and for such additional period as the parties to the Stock Purchase agree. Additionally, the First Amendment to the SPA provided that Mr. Yount would serve as our officer and Director and continue to prepare and file all Company reports with the Commission for as long as the Acquirers request, subject to Mr. Yount’s agreeing to continue to serve the Company in such positions (the “Services”). In consideration for Mr. Yount agreeing to perform the Services on our behalf pursuant to the terms of the First Amendment to SPA, we agreed to pay Mr. Yount two thousand dollars ($2,000) per month during which he performs Services on our behalf, prorated for any partial month, for as long as he continues to perform Services on our behalf.
On December 10, 2008, FDV entered into a revolving line of credit with its president and chief executive officer, Mr. Changming Zhang. Under this arrangement, FDV can borrow up to $60,000. The note is unsecured and bears no interest. Any unpaid principal is due on December 10, 2010. Past due amounts will bear interest of 0%. As of December 31, 2008, $5,132 was available for borrowing under the line of credit.
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a) Exhibits.
EXHIBIT INDEX
The following exhibits are incorporated by reference or included as part of this report:
Exhibit No. | Description |
3.1(1) | Articles of Incorporation |
3.2(1) | Certificate of Correction |
3.3(1) | By-Laws of Fleurs De Vie, Inc. |
10.1(1) | Line of Credit with Harold A. Yount, Jr. ($25,000) |
10.2(2) | Promissory Note with David M. Loev |
10.3(3) 10.4(4) 14.1(4) | Line of Credit with Harold A. Yount, Jr. ($5,000) Line of Credit with Changming Zhang ($50,000) Code of Ethics |
31.1* | Certificate of the Chief Executive Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1* | Certificate of the Chief Executive Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
(1) Filed as Exhibits to our Form SB-2 Registration Statement filed with the Commission on January 18, 2006, and incorporated herein by reference.
(2) Filed as Exhibits to our Form SB-2A Registration Statement filed with the Commission on March 21, 2006, and incorporated herein by reference.
(3) Filed as Exhibits to our Form 10K-SB report filed with the Commission on March 16, 2007, and incorporated herein by reference.
(4) Filed as Exhibits to our Form 10K-SB report filed with the Commission on March 28, 2008, and incorporated herein by reference.
* Filed Herein.
b) Reports on Form 8-K:
On January 27, 2009, the Company filed a report on Form 8K disclosing a change in the Company’s Certifying Accountant.
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Set forth below is a summary of the fees we paid our principal auditor for professional services rendered for the years ended December 31, 2008 and 2007. All of the audit fees were approved by the board of directors acting as the company's audit committee.
Audit Fee
The aggregate fees billed for professional services rendered by Paritz & Company for the audit of our annual financial statements for the fiscal year ended December 31, 2008 was $3,500.
The aggregate fees billed for professional services rendered by Malone & Bailey, PC for the audit of our annual financial statements and review of financial statements for the fiscal years ended December 31, 2007 was $16,000.
Audit-Related Fees
Paritz & Company did not render any audit-related services to us for the fiscal year ended December 31, 2008. Malone & Bailey PC, did not render any audit-related services to us for the fiscal year ended December 31, 2007.
Tax Fees
Paritz & Company did not render any tax services to us for the fiscal year ended December 31, 2008. Malone & Bailey, PC did not render any tax services to us for the fiscal year ended December 31, 2007.
All Other Fees
Paritz & Company did not render any other services to us for the fiscal year ended December 31, 2008. Malone & Bailey, PC did not render any other services to us for the fiscal year ended December 31, 2007.
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In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FLEURS DE VIE, INC.
By: /s/ Changming Zhang
Name: Changming Zhang
Title: Chief Executive Officer
By: /s/ Yongjun Wang
Name: Yongjung Wang
Title: Chief Financial Officer
(Principal Accounting Officer)
Date: April 15, 2009
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE | TITLE | DATE |
/s/ Changming Zhang | Chief Executive Officer | April 15, 2009 |
Changming Zhang | ||
/s/ Yongjun Wang | Chief Financial Officer | April 15, 2009 |
Yongjun Wang | ||
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