UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 2010
[ ] 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 0-52269
A.G. VOLNEY CENTER, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE | 13-4260316 | |
(State of other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
124 LINCOLN AVENUE SOUTH
LIVERPOOL, NY 13088
(Address of principal executive offices)
315-457-4729
(Issuer's telephone number)
Check 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 is a shell company (as defined by Rule 12b-2 of the Exchange Act).
Yes ( ) No (X)
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 17,330,000 shares of Common Stock, par value $0.001 per share, as of March 31, 2010.
Transitional Small Business Disclosure Format (check one): Yes ( ) No ( X)
1
A.G. VOLNEY CENTER, INC. | ||
MARCH 31, 2010 | ||
PART I – FINANCIAL INFORMATION | Page | |
Item 1. | Financial Statements | |
Balance Sheets as March 31, 2010 (Unaudited) and December 31, 2009 | 3 | |
Statements of Operations For the three months ended March 31, 2010 (Unaudited) and March 31, 2009 (Unaudited) For the cumulative period from March 6, 1997 (Inception) to March 31, 2010 (Unaudited) | 4 | |
Statements of Cash Flows For the three months ended March 31, 2010 (Unaudited) and March 31, 2009 (Unaudited) For the cumulative period from March 6, 1997 (Inception) to March 31, 2010 (Unaudited) | 5 | |
Notes to Financial Statements | 6 | |
Item 2. | Management’s Discussion and Analysis or Plan of Operation | 17 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 21 |
Item 4. | Controls and Procedures | 21 |
PART II – OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 22 |
Item 1A. | Risk Factors | 22 |
Item 2. | Unregistered Sale of Equity Securities and Use of Proceeds | 26 |
Item 3. | Defaults Upon Senior Securities | 26 |
Item 4. | Submission of Matters to a Vote of Security Holders | 26 |
Item 5. | Other Information | 26 |
Item 6. | Exhibits | 27 |
SIGNATURES |
2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS
A.G. VOLNEY CENTER, INC. | ||||||||
(A Development Stage Company) | ||||||||
BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 103,085 | $ | 23 | ||||
Accounts Receivable | - | 3,063 | ||||||
Total Current Assets | 103,085 | 3,086 | ||||||
TOTAL ASSETS | $ | 103,085 | $ | 3,086 | ||||
LIABILITIES & EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts Payable | $ | 13,990 | $ | 17,956 | ||||
Related Party Payable | 7,800 | 6,700 | ||||||
Sales Tax Payable | 92 | 92 | ||||||
Shareholder Loans | 154,596 | 35,722 | ||||||
Interest Payable | 8,486 | 6,387 | ||||||
Total Current Liabilities | 184,964 | 66,857 | ||||||
Total Liabilities | 184,964 | 66,857 | ||||||
Stockholders' Equity | ||||||||
Preferred Stock- $.001 par value; 10,000,000 shares | ||||||||
authorized; 0 shares outstanding | ||||||||
as of March 31, 2010 and December 31, 2009 | - | - | ||||||
Common Stock- $.001 par value; 100,000,000 shares | ||||||||
authorized; 17,330,000 shares outstanding | ||||||||
as of March 31, 2010 and December 31, 2009 | 17,330 | 17,330 | ||||||
Additional Paid-In Capital | 36,270 | 36,270 | ||||||
Deficit Accumulated During the Development Stage | (135,479 | ) | (117,371 | ) | ||||
Total Stockholders' Equity | (81,879 | ) | (63,771 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 103,085 | $ | 3,086 | ||||
The accompanying notes are an integral part of these financial statements |
3
A.G. VOLNEY CENTER, INC. | ||||||||||||
(A Development Stage Company) | ||||||||||||
STATEMENTS OF OPERATIONS | ||||||||||||
(Unaudited) | ||||||||||||
For the Three Months Ended | Cumulative Since | |||||||||||
March 31, | March 6, 1997 | |||||||||||
2010 | 2009 | (Inception) | ||||||||||
Revenues: | ||||||||||||
Sales Revenue | $ | - | $ | - | $ | 64,598 | ||||||
Related Party Sales Revenue | - | 24 | 816 | |||||||||
Less: Cost of Goods Sold | - | (19 | ) | (54,353 | ) | |||||||
Gross Profit | - | 5 | 11,061 | |||||||||
Expenses: | ||||||||||||
General and Administrative | 172 | 102 | 4,150 | |||||||||
Accounting Fees | 13,399 | - | 66,447 | |||||||||
Related Party Accounting Fees | 1,100 | 1,150 | 14,863 | |||||||||
Legal Fees | - | - | 60,395 | |||||||||
Outside Services | 1,135 | 169 | 19,946 | |||||||||
Total Expenses | 15,806 | 1,421 | 165,801 | |||||||||
Operating Income (Loss) | (15,806 | ) | (1,416 | ) | (154,740 | ) | ||||||
Other Income (Expense) | ||||||||||||
Extinguishment of Liabilities | - | - | 30,000 | |||||||||
Interest, Net | (2,099 | ) | (988 | ) | (9,308 | ) | ||||||
Total Other Income (Expense) | (2,099 | ) | (988 | ) | 20,692 | |||||||
Net Loss Before Taxes | (17,905 | ) | (2,404 | ) | (134,048 | ) | ||||||
Franchise Tax | (203 | ) | (60 | ) | (1,431 | ) | ||||||
Net Income (Loss) | $ | (18,108 | ) | $ | (2,464 | ) | $ | (135,479 | ) | |||
Basic & Diluted Loss per Share | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
Weighted Average Shares | ||||||||||||
Outstanding | 17,330,000 | 17,330,000 | ||||||||||
The accompanying notes are an integral part of these financial statements |
4
A.G. VOLNEY CENTER, INC. | ||||||||||||
(A Development Stage Company) | ||||||||||||
STATEMENT OF CASH FLOWS | ||||||||||||
(Unaudited) | ||||||||||||
Cumulative | ||||||||||||
since | ||||||||||||
For the Three Months Ended | March 6, | |||||||||||
March 31, | 1997 | |||||||||||
2010 | 2009 | (Inception) | ||||||||||
CASH FLOWS FROM OPERATING | ||||||||||||
ACTIVITIES: | ||||||||||||
Net Loss | $ | (18,108 | ) | $ | (2,464 | ) | $ | (135,479 | ) | |||
Stock Issued for Organizational Costs | - | - | 13,300 | |||||||||
(Increase) Decrease in Accounts Receivable | 3,063 | 6,433 | - | |||||||||
(Increase) Decrease in Inventory | - | 19 | - | |||||||||
Increase (Decrease) in Accounts Payable | (3,966 | ) | (12,217 | ) | 13,990 | |||||||
Increase (Decrease) in Related Party Payable | 1,100 | 650 | 7,800 | |||||||||
Increase (Decrease) in Sales Tax Payable | - | 2 | 92 | |||||||||
(Increase) Decrease in Accrued Interest | 2,099 | 988 | 8,486 | |||||||||
Net Cash Used in Operating Activities | (15,812 | ) | (6,589 | ) | (91,811 | ) | ||||||
CASH FLOWS FROM INVESTING | ||||||||||||
ACTIVITIES | ||||||||||||
Net Cash Provided by Investing Activities | - | - | - | |||||||||
CASH FLOWS FROM FINANCING | ||||||||||||
ACTIVITIES: | ||||||||||||
Common Stock Issued for Cash | - | - | 40,300 | |||||||||
Payment on Shareholder Loan | - | - | (22,950 | ) | ||||||||
Proceeds from Shareholder Loan | 118,874 | 6,654 | 177,546 | |||||||||
Net Cash Provided by Financing Activities | 118,874 | 6,654 | 194,896 | |||||||||
Net (Decrease) Increase in | ||||||||||||
Cash and Cash Equivalents | 103,062 | 65 | 103,085 | |||||||||
Cash and Cash Equivalents | ||||||||||||
at Beginning of Period | 23 | 829 | - | |||||||||
Cash and Cash Equivalents | ||||||||||||
at End of Period | $ | 103,085 | $ | 894 | $ | 103,085 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||
Cash paid during the year for: | ||||||||||||
Interest | $ | - | $ | - | $ | 1,121 | ||||||
Franchise and Income Taxes | $ | 203 | $ | 60 | $ | 1,431 | ||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||||||
Stock Issued for Services | $ | - | $ | - | $ | 13,300 | ||||||
The accompanying notes are an integral part of these financial statements |
5
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for A.G. Volney Center, Inc. (a development stage company) is presented to assist in understanding the Company's financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Interim Financial Statements
The unaudited financial statements as of March 31, 2010 and the three months then ended, reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of the operations for all three months. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years.
Nature of Operations and Going Concern
The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that A. G. Volney Center, Inc. (hereto referred to as the “Company”) will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations.
Several conditions and events cast doubt about the Company’s ability to continue as a “going concern.” The Company has incurred net losses of approximately $135,000 for the period from March 6, 1997 (inception) to March 31, 2010, has an accumulated deficit, has recurring losses, has minimal revenues and requires additional financing in order to finance its business activities on an ongoing basis. The Company’s future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses. Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide them with the opportunity to continue as a “going concern”
6
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a “going concern”. While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful. If the Company were unable to continue as a “going concern,” then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported revenues and expenses, and the balance sheet classifications used.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Delaware on March 6, 1997 under the name Lottlink Technologies, Inc. On July 29, 2003 the Articles of Incorporation were amended to change the Company’s name to A.G. Volney Center, Inc. The Company is to serve as a vehicle to effect a merger, exchange of capital stock, asset acquisition, or other business combination with a domestic or foreign private business. Since March 6, 1997, the Company is in the development stage, and has not commenced planned principal operations. The Company has a December 31 year end.
Nature of Business
The Company was formed for the purpose of acquiring products from manufacturers (factory overruns) and retailers (overstocks) and marketing the lower priced merchandise to the retail public and wholesalers. It is anticipated that we can sell the products at a substantial discount below wholesale prices for similar products.
The Company’s principal executive offices are located at 124 Lincoln Ave. South Liverpool, NY 13088. Our telephone number is (315) 703-9012.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
7
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue Recognition
The Company generates revenues by selling products purchased at a discount. The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition." SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions. The Company recognizes revenue when the earnings process is complete. That is, when the arrangements of the goods are documented, the pricing becomes final and collectibility is reasonably assured. An allowance for bad debt is provided based on estimated losses. For revenue received in advance for goods, the Company records a current liability classified as either deferred revenue or customer deposits. As of December 31, 2009 and March 31, 2010, there was no deferred revenue.
Allowance for Doubtful Accounts
The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. Bad debt reserves are maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. As of December 31, 2009 and March 31, 2010, the Company has determined an allowance for doubtful accounts is not necessary.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company had cash and cash equivalents of $23 and $103,085 as of December 31, 2009 and March 31, 2010 all of which was fully covered by federal depository insurance.
8
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Loss per Share
Basic loss per share has been computed by dividing the loss for the year applicable to the common stockholders’ by the weighted average number of common shares outstanding during the years. There were no common equivalent shares outstanding at December 31, 2009 and March 31, 2010.
Major Supplier
During the year ended December 31, 2009 and three months ended March 31, 2010 the company did not make any purchases. In previous years one supplier, Seven Oceans Enterprises, Inc., accounted for 100% of the inventory purchased. The loss of this supplier would adversely impact the business of the Company.
Major Customers
During the year ended December 31, 2009, one major customer accounted for 85% of the Company’s revenues. The Company had revenues of $2,602 from Fountain Treats. The total revenues for December 31, 2009 were $3,067.
During the three months ended March 31, 2010 the Company did not have any customers. The total revenues for March 31, 2010 were $0.
Financial Instruments
The Company’s financial assets and liabilities consist of cash, accounts receivable, and accounts payable. Except as otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values due to the short-term maturities of these instruments.
9
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The Company accounts for income taxes under the provisions of SFAS No.109, “Accounting for Income Taxes.” SFAS No.109 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities.
Reclassification
Certain reclassifications have been made in the 2009 financial statements to conform to the March 31, 2010 presentation.
In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2009-13 (ASU 2009-13), which provided an update to ASC 605. ASU 2009-13 addresses how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting in multiple-deliverable arrangements. The amendments in this update will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact that this update will have on its Financial Statements.
In June 2009, the FASB created the Accounting Standards Codification, which is codified as ASC 105. ASC 105 establishes the codification as the single official non-governmental source of authoritative accounting principles (other than guidance issued by the SEC) and supersedes and effectively replaces previously issued GAAP hierarchy framework. All other literature that is not part of the codification will be considered non-authoritative. The codification is effective for interim and annual periods ending on or after September 15, 2009. The Company has applied the codification, as required, beginning with the 2009 Form 10-K. The adoption of the codification did not have a material impact on the Company’s financial position, results of operations or cash flows.
10
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Standards (Continued)
In June 2009, the FASB updated ASC 855, which established principles and requirements for subsequent events. This guidance details the period after the balance sheet date which the Company should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which the Company should recognize events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. ASC 855 is effective for interim and annual periods ending after June 15, 2009. The implementation of ASC 855 did not have a material effect on the Company’s financial statements. The Company adopted ASC 855, and has evaluated all subsequent events through April 23 2010.
In April 2009, the FASB updated ASC 820 to provide additional guidance for estimating fair value when the volume and level of activity for the asset or liability have decreased significantly. ASC 820 also provides guidance on identifying circumstances that indicate a transaction is not orderly. The implementation of ASC 820 did not have a material effect on the Company’s financial statements.
In April 2009, the FASB updated ASC 825 regarding interim disclosures about fair value of financial instruments. ASC 825 requires disclosures about fair value of financial instruments in interim reporting periods of publicly traded companies that were previously only required to be disclosed in annual financial statements. The implementation of ASC 825 did not have a material effect on the Company’s financial statements.
In April 2009, the FASB updated ASC 320 for proper recognition and presentation of other-than-temporary impairments. ASC 320 provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. The implementation of ASC 320 did not have a material effect on the Company’s consolidated financial statements.
11
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 2 - INCOME TAXES
As of December 31, 2009, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $104,000 that may be offset against future taxable income through 2029. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carry-forwards will expire unused. Accordingly, the potential tax benefits of the loss carry-forwards are offset by a valuation allowance of the same amount.
2009 | 2008 | |||||||
Net Operating Losses | $ | 15,600 | $ | 15,000 | ||||
Valuation Allowance | (15,600 | ) | (15,000 | ) | ||||
$ | - | $ | - |
The provision for income taxes differs from the amount computed using the federal US statutory income tax rate as follows:
2009 | 2008 | |||||||
Provision (Benefit) at US Statutory Rate | $ | 600 | $ | 5,861 | ||||
Increase (Decrease) in Valuation Allowance | (600 | ) | (5,861 | ) | ||||
$ | - | $ | - |
The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and causes a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a development stage company, the Company will have recurring losses during its development stage. The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.
12
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 – UNCERTAIN TAX POSITIONS
Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The adoption of the provisions of FIN 48 did not have a material impact on the company’s financial position and results of operations. At January 1, 2008, the company had no liability for unrecognized tax benefits and no accrual for the payment of related interest.
Interest costs related to unrecognized tax benefits are classified as “Interest expense, net” in the accompanying statements of operations. Penalties, if any, would be recognized as a component of “Selling, general and administrative expenses”. The Company recognized $0 of interest expense related to unrecognized tax benefits during 2008. In many cases the company’s uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities.
With few exceptions, the company is generally no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2004. The following describes the open tax years, by major tax jurisdiction, as of January 1, 2009:
United States (a) | 2004– Present |
(a) | Includes federal as well as state or similar local jurisdictions, as applicable. |
NOTE 5 – EXTINGUISHMENT OF LIABILITIES
During the year ended December 31, 2009, the Company negotiated a $30,000 reduction in accounts payable for legal services accrued in 2007. This reduction has been recorded as a reduction to accounts payable on the accompanying balance sheet as of December 31, 2009 and as an extinguishment of liabilities on the accompanying statements of operations and cash flows for the year ended December 31, 2009.
13
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMITMENTS
As of March 31, 2010, all activities of the Company have been conducted by corporate officers from either their homes or business offices. Currently, there are no outstanding debts owed by the company for the use of these facilities and there are no commitments for future use of the facilities.
NOTE 7 – RELATED PARTY TRANSACTIONS
During the year ended December 31, 2009, Inna Sheveleva, shareholder of the Company and David Stever, President and shareholder of the Company, were customers of the Company accounting for 15% of the sales revenue during that period. As of March 31, 2010 the Company had no sales revenue for the current three month period.
As of March 31, 2010, two major shareholders, Joseph C. Passalaqua and Mary Passalaqua, loaned the Company $154,596. These loans are payable on demand and carry a simple interest rate between 8% and 18% per annum. In 2008, a partial repayment to Joseph C. Passalqua was made to both principle and interest. As of March 31, 2010 there was $8,486 of interest due on the notes. These loans to the Company will cover future liabilities to insure that the Company will continue operations.
As of March 31, 2010, the Company currently has a Related Party Accounts Payable in the amount of $7,800 due to Lyboldt-Daly, Inc. for Bookkeeping expenses. Joseph Passalaqua (a major shareholder and an in-law to Stephanie Passalaqua officer of the Company) is President and Sole Director of Lyboldt-Daly, Inc. Total bookkeeping services for the three month period ended March 31, 2010 were $1,100.
During 2003, the Company issued 400,000 shares to David F. Stever, President of the Company/ Director, for services rendered.
During 2003, the Company issued 400,000 shares to Samantha Ford, Secretary of the Company/ Director, for services rendered.
During 2003, the Company issued 400,000 shares to John J. Connolly, Director of the Company, for services rendered.
NOTE 8- COMMON STOCK TRANSACTIONS
On March 6, 1997, the Company issued 1,210 shares of no par common stock for services. Shares were valued at $10 per share.
14
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 8- COMMON STOCK TRANSACTIONS (Continued)
On April 7, 1997, the Board of Directors amended the Certificate of Incorporation by changing the total authorized stock to 25 million shares with a par value of $.001 per share. This Amendment was not filed or effective until July 29, 2003.
On July 29, 2003, the Board of Directors authorized a 10,000 for 1 forward stock split.
On July 31, 2003, the Company issued 1,200,000 shares to the Directors of the Company for services rendered. Shares were issued for $.001 per share
On February 26, 2004, the Company issued 100,000 shares of common stock for cash. Shares were issued for $.01 per share
On March 02, 2004, the Company issued 500,000 shares of common stock for cash. Shares were issued for $.01 per share
On March 12, 2004, the Company issued 100,000 shares of common stock for cash. Shares were issued for $.01 per share
On October 23, 2005, the Company issued 100,000 shares of common stock for cash. Shares were issued for $.01 per share.
On October 31, 2005, the Company issued 100,000 shares of common stock for cash. Shares were issued for $.01 per share.
On February 13, 2006, the Company issued 100,000 shares of common stock for cash. Shares were issued for $.01 per share.
On April 11, 2008, the Company issued 1,030,000 shares of common stock for cash. Shares were issued for $.01 per share.
On April 22, 2008, the Company issued 1,000,000 shares of common stock for cash. Shares were issued for $.01 per share.
On April 23, 2008, the Company issued 500,000 shares of common stock for cash. Shares were issued for $.01 per share.
On April 24, 2008, the Company issued 500,000 shares of common stock for cash. Shares were issued for $.01 per share.
15
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 9 – SUBSEQUENT EVENTS
A. G. Volney Center, Inc. evaluated all events subsequent to March 31, 2010 through April 23, 2010, the financial statement issuance date, and concluded that there are no significant or material transactions to be reported for the period from March 31, 2010 to April 23, 2010
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
FORWARD LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements that involve risks and uncertainties. You can identify these statements by the use of forward-looking words such as "may," "will," "expect," "anticipate," "estimate," "continue," or other similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or financial condition or state other "forward-looking" information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are unable to accurately predict or control. Those events as well as any cautionary language in this registration statement provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should be aware that the occurrence of the events described in this Form 10-Q could have a material adverse effect on our business, operating results and financial condition.
BASIS OF PRESENTATION
The unaudited financial statements of A.G. Volney Center, Inc., a Delaware corporation (“AG”, “A.G. Volney”, “the Company”, “our”, or “we”), should be read in conjunction with the notes thereto. In the opinion of management, the unaudited financial statements presented herein reflect all adjustments (consisting only of normal recurring adjustments) necessary for fair presentation. Interim results are not necessarily indicative of results to be expected for the entire year.
We prepare our financial statements in accordance with U.S. generally accepted accounting principals, which require that management make estimates and assumptions that affect reported amounts. Actual results could differ from these estimates.
Certain statements contained below are forward-looking statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
DESCRIPTION OF BUSINESS
A.G. Volney Center is a development stage company which was incorporated under the laws of the state of Delaware on March 6, 1997 under the name Lottlink Technologies, Inc. The intent was to operate vending machines that would sell lottery tickets. On April 7, 1997, the board of directors decided to change the name of the company to A.G. Volney Center, Inc. and restate the par value of the Company’s shares of common stock at per share to $0.001 per share. On the same date, in a stockholders’ meeting (the “Stockholders Meeting”), the proposed changes of the Company’s name and common stock’s par value were approved, but the amendment the Company’s Certificate of Incorporation effecting such changes was never filed with the Secretary of State of the State of Delaware. On December 31, 1997, the Company’s Certificate of Incorporation was suspended in Delaware for non-payment of franchise taxes. The Company was dormant until July 18, 2003. On that date, Lottlink Technologies, Inc. filed a renewal of the Company’s Articles of Incorporation in Delaware. On July 29, 2003, the Company filed an amendment of the Company’s Articles of Incorporation with the Secretary of State of the State of Delaware effecting a change of Company’s name Lottlink Technologies, Inc. to A.G. Volney Center, Inc. as approved in the stockholders’ Meeting.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(CONTINUED)
DESCRIPTION OF BUSINESS (CONTINUED)
A. G. Volney Center was reinstated in the State of Delaware to develop relationships with companies which purchase factory overruns from manufacturers and distressed merchandise from retailers at discounts. As a result, it is hoped that these companies can offer us new high quality products in quantity whereby the costs to us is substantially discounted (generally around 30% of the standard wholesale cost for the same product). It is anticipated that we will primarily sell to retailers; however, we also intend to engage in retail sales on a limited basis.
We have purchased factory overrun and bulk merchandise and continued to make sales. Our primary business objective is to satisfy and fulfill the demand of retailers for high quality merchandise at below wholesale costs. We intend to purchase new, high quality items in quantity whereby we can sell these items immediately to retailers for an amount which includes a profit to us. We believe we can maximize net profits by minimizing fixed overhead such as salary and employee benefits.
We anticipate selling nationwide, but our initial focus will be in New York, Pennsylvania, Connecticut and Vermont.
We are currently looking to find a suitable merger candidate and alternative financing. Although we have had discussions with various third parties, no firm commitments have been obtained to date. See “Liquidity and Capital Resources.”
On October 19, 2006, we filed a Registration Statement on Form 10SB (File No.: 0-52269), or the Registration Statement, with the Securities and Exchange Commission, or the SEC, to register our common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The Registration Statement went effective by operation of law on December 18, 2006, or the Effective Date, and we are in the process of amending the Registration Statement to answer the SEC’s comments regarding the Registration Statement. Since the Effective Date of the Registration Statement, we have become a reporting company under the Securities Exchange Act and are responsible for preparing and filing periodic and current reports under the Exchange Act with the SEC.
Any person or entity may read and copy our reports with the Securities and Exchange Commission at the SEC's Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Room by calling the SEC toll free at 1-800-SEC-0330. The SEC also maintains an Internet site at http://www.sec.gov where reports, proxies and informational statements on public companies may be viewed by the public.
GOING CONCERN QUALIFICATION
In their Independent Auditor's Report for the fiscal years ending December 31, 2009, Robison, Hill & Co. stated that several conditions and events cast substantial doubt about our ability to continue as a “going concern.” We have incurred net loses of approximately $(117,000) from our inception on March 6, 1997 to December 31, 2009. At December 31, 2009, we had $23 cash on hand, $3,063 in accounts receivable and an accumulated deficit of $(117,371). We have incurred net losses of approximately $(135,000) from our inception on March 6, 1997 to March 31, 2010. At March 31, 2010, we had $103,085 cash on hand, $0 in accounts receivable and an accumulated deficit of $(135,479). See “Liquidity and Capital Resources.”
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2010, we had $103,085 cash on hand and an accumulated deficit of $(135,479). Our primary source of liquidity for the current quarter has been from borrowings from Joseph C. Passalaqua, a principal stockholder. In addition to the loans made for current expenses, further loans to the Company have been made by Joseph C. Passalaqua and Mary Passalaqua, both major shareholders to cover future expenses and liabilities to insure that the Company will continue operations. As of March 31, 2010 we have notes payable to Joseph C. Passalaqua in the amount $145,196 and notes payable to Mary Passalaqua in the amount of $9,400. These notes bear a simple interest rate between 8% and 18% per annum and are payable upon demand. As of March 31, 2010 the accrued interest on both the notes to Mary Passalaqua and Joseph Passalaqua are $8,486.
Net cash used in operating activities was $15,812 during the three-month period ended March 31, 2010.
Net cash provided by investing activities was $0 during the three-month period ended March 31, 2010.
Net cash provided by financial activities was $118,874 during the three-month period ended March 31, 2010.
Our expenses to date are largely due to professional fees that include accounting and legal fees.
To date, we have had minimal revenues; and we require additional financing in order to finance our business activities on an ongoing basis. Our future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. We are actively pursuing alternative financing and have had discussions with various third parties, although no firm commitments have been obtained to date. In the interim, shareholders of the Company have committed to meet our minimal operating expenses. We believe that actions presently being taken to revise our operating and financial requirements provide them with the opportunity to continue as a “going concern,” although no assurances can be given.
REVENUE RECOGNITION POLICIES
The Company generates revenues by selling products purchased at a discount. The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition." SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions. The Company recognizes revenue when the earnings process is complete. That is, when the arrangements of the goods are documented, the pricing becomes final and collectability is reasonably assured. An allowance for bad debt is provided based on estimated losses. For revenue received in advance for goods, the Company records a current liability classified as either deferred revenue or customer deposits. As of the year ended December 31, 2009 and the three months ended March 31, 2010, there was no deferred revenue.
COSTS RELATED TO OUR OPERATION
The principle costs related to the ongoing operation of the Company’s business consists of payments made by the Company to wholesale distributors for merchandise.
NET LOSS FROM OPERATIONS
The Company has a cumulative net loss after taxes of $(135,479) as of March 31, 2010. The company had net loss after taxes of $(18,108) for the current three months ending March 31, 2010 as compared to a net loss after taxes of $(2,464) for the three months ended March 31, 2009.
WORKING CAPTIAL
We had total assets of $3,086 and total liabilities of $66,857 resulting in a working capital deficit of $(63,771) for the year ended December 31, 2009. We had total assets of $103,085 and total liabilities of $184,964, which results in working capital deficit of $(81,879) for the three months ended March 31, 2010.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2010 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2009
REVENUES
Our total revenue decreased by $24, or approximately 100%, from $24 in the three months ended March 31, 2009 to $0 in the three months ended March 31, 2010. This decrease was attributable to the decline in demand from our major customers for our products and a decline in sales during the three months in 2010 over the same period in 2009. The sold merchandise consisted of various types of overstock merchandise, including candles purchased on the internet.
COST OF SALES
Our overall cost of sales decreased by $19, or approximately 100%, from $19 in the three months ended March 31, 2009 to $0 in the three months ended March 31, 2010. This decrease in cost of sales was a direct effect of a decline in total sales during the three months in 2010 over the same period in 2009. Due to the decline in demand, the Company did not purchase any inventory in 2009 or 2010.
OPERATION AND ADMINISTRATIVE EXPENSES
Operating expenses increased by $14,390, from $1,416 in the three months ended March 31, 2009 to $15,806 in the three months ended March 31, 2010. The increase was due to professional fees for accounting during the current quarter. Operating expenses primarily consist of general and administrative expenses (G&A) and professional fees. G&A expenses, made up primarily of office expense and postage and delivery expenses, increased by $70, from $102 in the three months ended March 31, 2009 to $172 in the three months ended March 31, 2010. Professional fees, made up of accounting and legal fees increased by $13,349, from $1,150 in the three months ended March 31, 2009 to $14,499 in the three months ended March 31, 2010. These are fees we pay to accountants and attorneys throughout the year for performing various tasks. The bulk of the increase in expense was due to accounting fees in 2010 when comparing the same three month period in 2009.
COMMON STOCK
Our board of directors is authorized to issue 100,000,000 shares of common stock, with a par value of $0.001. There are an aggregate of 17,330,000 shares of Common Stock issued and outstanding, which are held by 61 stockholders as of the date of this Quarterly Report. All shares of our common stock have one vote per share on all matters, including election of directors, without provision for cumulative voting. The common stock is not redeemable and has no conversion or preemptive rights. The common stock currently outstanding is validly issued, fully paid and non-assessable. In the event of liquidation of the Company, the holders of common stock will share equally in any balance of the Company's assets available for distribution to them after satisfaction of creditors and preferred stockholders, if any. The holders of our common stock are entitled to equal dividends and distributions per share with respect to the Common Stock when, as and if, declared by the board of directors from funds legally available.
PREFERRED STOCK
Our Original Certificate of Incorporation did not provide for the issuance of Preferred Stock. On May 19, 2008, a Certificate of Amendment was filed with the State of Delaware that stated that the Corporation shall have the authority to issue 110,000,000 shares of capital stock, of which 10,000,000 shares are authorized as Preferred Stock with the par value of .$0.001 per share. There are an aggregate of 0 shares of Preferred Stock issued and outstanding as of the date of this Quarterly Filing.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from the fact that the area in which we do business is highly competitive and constantly evolving. We face competition from the larger and more established companies -- from companies that develop new technology, as well as the many smaller companies throughout the country.
We face competition from the larger and more established companies, from companies that develop new technology, as well as the many smaller companies throughout the country. For example, the last several years have shown an increase in the use of larger online sources such as Overstock.com and Ebay.com. These increases cut into our potential customer base. Companies who have a larger sales force, more money, larger manufacturing capabilities and greater ability to expand their markets also cut into our potential customers. Many of our competitors have longer operating histories, significantly greater financial strength, nationwide advertising coverage, brand identification and other resources that we do not have. Our competitors might introduce less expensive or more improved merchandise. These, as well as other factors, can negatively impact our business strategy. The competition from larger overstock companies is a very serious threat that can result in substantially less revenue.
Milestones
We have set the following milestones to implement our business plan.
· Locate suitable retailers to whom we can resell overstock merchandise purchased by us over the internet. We’ve commenced locating suitable retailers in May 2006. The Company established three major customers; Wisteria Antiques, Fountain Treats and Kim’s Country Classics which accounted for $ 60,917 of the total accumulated sales of $65,414 or 93% of the total accumulated sales of the Company to date. As of March 31, 2010 there were no transactions of sales to customers for the three months.
· Increase volume of inventory purchases and resale utilizing retained earnings from the past 12 to 24 months. The estimated date is December 2010.
To date, we have not been able to conduct these business affairs without further capital.
We do not anticipate hiring any additional personnel or consultants unless and until further capital is raised.
ITEM 4. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer is responsible for establishing and maintaining disclosure controls and procedures for the Company.
Evaluation of Disclosure Controls and Procedures |
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our Chief Executive Officer and Chief Financial Officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(f) and 15d-15(f) as of the end of the period covered by this report and have concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our Chief Executive Officer and Chief Financial Officer.
Changes in Internal Controls over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
In addition to the other information in this report, the following risks should be considered carefully in evaluating our business and prospects:
WE HAVE A LIMITED OPERATING HISTORY WHICH MAY NOT BE AN INDICATOR OF OUR FUTURE RESULTS.
As a result of our limited operating history, our plan for rapid growth, and the increasingly competitive nature of the markets in which we operate, the historical financial data is of limited value in evaluating our future revenue and operating expenses. Our planned expense levels will be based in part on expectations concerning future revenue, which is difficult to forecast accurately based on current plans of expansion and growth. We may be unable to adjust spending in a timely manner to compensate for any unexpected shortfall in revenue. Further, general and administrative expenses may increase significantly as we expand operations. To the extent that these expenses precede, or are not rapidly followed by, a corresponding increase in revenue, our business, operating results, and financial condition will suffer.
WE MAY HAVE TO DISCONTINUE OPERATIONS.
If we are unable to achieve or sustain profitability, or if operating losses increase in the future, we may have to discontinue operations. Our expenses have historically exceeded our revenues and we have had losses in all fiscal years of operation, including those in fiscal years 2005 through 2009, and the losses are projected to continue in 2010. Our net losses were $4,080 and $39,067 for fiscal years ended 2009 and 2008, respectively. We have been concentrating on the development of our products, services and business plan. There is no assurance that we will be successful in implementing our business plan or that we will be profitable now or in the future.
WE MAY NOT SUCCEED OR BECOME PROFITABLE.
We will need to generate significant revenues to achieve profitability and we may be unable to do so. Even if we do achieve profitability, we may not be able to sustain or increase profitability in the future. We expect that our expenses will continue to increase and there is no guarantee that we will not experience operating losses and negative cash flow from operations for this fiscal year or for the foreseeable future. If we do not achieve or sustain profitability, then we may be unable to continue our operations.
THE COMPANY’S OFFICERS AND DIRECTORS HAVE LIMITED TIME TO DEVOTE AND LACK SALES EXPERIENCE
Our current officers and directors have some experience in retail but not wholesale sales and have limited time to devote.
The amount of time officers and directors devote to our business may be limited:
Officer/Director | Percent (%) of time to be dedicated to Company |
David F. Stever - President, CEO, CFO, and Director | 30% |
Samantha Ford - Secretary and Director | 10% |
Until we sustain operations and achieve profitability, we will be unable to retain the full time services of these individuals or pay either one of them monetary compensation for their services. The loss of either of them would have a material adverse effect on our business operations.
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ITEM 1A. RISK FACTORS (Continued)
WE WILL NEED ADDITIONAL CAPITAL FINANCING IN THE FUTURE.
We will be required to seek additional financing in the future to respond to increased expenses or shortfalls in anticipated revenues, accelerate product development and deployment, respond to competitive pressures, and develop new or enhanced products. We cannot be certain we will be able to find such additional financing on reasonable terms, or at all. If we are unable to obtain additional financing when needed, we could be required to modify our business plan in accordance with the extent of available financing.
IF WE ENGAGE IN ACQUISITIONS, WE MAY EXPERIENCE SIGNIFICANT COSTS AND DIFFICULTY ASSIMILATING THE OPERATIONS OR PERSONNEL OF THE ACQUIRED COMPANIES, WHICH COULD THREATEN OUR FUTURE GROWTH.
If we make any acquisitions, we could have difficulty assimilating the operations, technologies and products acquired or integrating or retaining personnel of acquired companies. In addition, acquisitions may involve entering markets in which we have no or limited direct prior experience. The occurrence of any one or more of these factors could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition, pursuing acquisition opportunities could divert our management's attention from our ongoing business operations and result in decreased operating performance.
Moreover, our profitability may suffer because of acquisition-related costs or amortization of acquired goodwill and other intangible assets. Furthermore, we may have to incur debt or issue equity securities in future acquisitions. The issuance of equity securities would dilute our existing stockholders.
IF WE CANNOT ATTRACT, RETAIN, MOTIVATE AND INTEGRATE ADDITIONAL SKILLED PERSONNEL, OUR ABILITY TO COMPETE WILL BE IMPAIRED.
Many of our current and potential competitors have more employees than we do. Our success depends in large part on our ability to attract, retain and motivate highly qualified management and technical personnel. We face intense competition for qualified personnel. The industry in which we compete has a high level of employee mobility and aggressive recruiting of skilled personnel. If we are unable to continue to employ our key personnel or to attract and retain qualified personnel in the future, our ability to successfully execute our business plan will be jeopardized and our growth will be inhibited.
BECAUSE OUR OFFICERS AND DIRECTORS ARE INDEMNIFIED AGAINST CERTAIN LOSSES, WE MAY BE EXPOSED TO COSTS ASSOCIATED WITH LITIGATION.
If our officers or directors become exposed to liabilities invoking the indemnification provisions, we could be exposed to additional un-reimbursable costs, including legal fees. Our bylaws provide that our directors and officers will not be liable to us or to any shareholder and will be indemnified and held harmless for any consequences of any act or omission by the directors and officers unless the act or omission constitutes gross negligence or willful misconduct. Extended or protracted litigation could have a material adverse effect on our cash flow.
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ITEM 1A. RISK FACTORS (Continued)
OUR STOCK PRICE MAY BE VOLATILE.
There is currently no trading market for our securities, and there is a chance that a trading market may never develop. However, in the event that we do develop a trading market for our common stock, the market price of our common stock will likely fluctuate significantly in response to the following factors, some of which are beyond our control:
· | Variations in our quarterly operating results; |
· | Changes in financial estimates of our revenues and operating results by securities analysts; |
· | Announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; |
· | Additions or departures of key personnel; |
· | Future sales of our common stock; |
· | Stock market price and volume fluctuations attributable to inconsistent trading volume levels of our stock; |
· | Commencement of or involvement in litigation. |
In addition, the equity markets have experienced volatility that has particularly affected the market prices of equity securities issued by wholesale companies and that often has been unrelated or disproportionate to the operating results of those companies. These broad market fluctuations may adversely affect the market price of our common stock.
WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS ON OUR COMMON STOCK.
We have not paid any dividends on our Common Stock since inception and do not anticipate paying any dividends on our Common Stock in the foreseeable future. Instead, we intend to retain any future earnings for use in the operation and expansion of our business.
WE LACK OPERATING HISTORY
We have no operating history so it will be difficult for you to evaluate an investment in our common stock.
We were formed in 1997 as a vending machine business under the name of Lottlink Technologies, Inc. but did not commence business at that time. Our business activities have been limited to amending the Articles of the Corporation on July 29, 2003 to amend the corporate name to A.G. Volney Center, Inc., and contacting companies that acquire and warehouse inventory from factory overruns and retailers with overstocks in New York, Pennsylvania, Vermont and Ohio. There is no assurance that we will be successful in acquiring factory overruns or overstock merchandise for sale at discount prices.
We do not have an established source of revenue sufficient to cover our operating costs to allow us to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to successfully compete, operate profitably and/or raise additional capital through other means.
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ITEM 1A. RISK FACTORS (Continued)
CURRENTLY THERE IS NO MARKET FOR OUR COMMON STOCK.
Currently, there is no market for our common stock. We intend to request that a broker-dealer / market maker submit an application to make a market for the Company's shares on the OTC Bulletin Board. However, there can be no assurance that the application will be accepted or that any trading market will ever develop or be maintained on the OTC Bulletin Board, pink sheets or any other recognized trading market or exchange. Any trading market for the common stock that may develop in the future will most likely be very volatile, and numerous factors beyond the control of the Company may have a significant effect on the market. Only companies that report their current financial information to the SEC may have their securities included on the OTC Bulletin Board. In the event that the Company loses this status as a "reporting issuer," any future quotation of its common stock on the OTC Bulletin Board maybe jeopardized.
OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
* that a broker or dealer approve of a person’s account for transactions in penny stocks; and
* that the broker or dealer received from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
* obtain financial information and investment experience objectives of the person; and
* make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. | |
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
* sets forth the basis on which the broker or dealer made the suitability determination; and
* that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
WE WILL ENCOUNTER SUBSTANTIAL COMPETITION
The discount market for wholesale and retail merchandise is highly competitive and involves a high degree of risk and there is no assurance that we will be able to operate profitably. In the retail segment of our business, which will be minimal, we will experience substantial competition with other entities such as Dollar Discounts, All-A-Dollar, Dollar General and Discount Houses in the sale and marketing of merchandise all of which have greater name recognition and experience.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the year ended December 31, 2009 and the three months ended March 31, 2010 there were no sales of unregistered securities.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION
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PART III EXHIBITS.
The following exhibits required by Item 601 of Regulation S-B are attached.
Exhibit No. | Description |
Certificate of Incorporation* | |
3.1 | Certificate of Renewal and Revival of Certificate of Incorporation* |
3.2 | Certificate of Amendment of Certificate of Incorporation* |
3.3 | By-laws* |
4.1 | Form of Common Stock Certificate* |
31.1 | Certification of the Principal Executive Officer and Principal Financial Officer of Registrant pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended |
32.1 | Certification of the Principal Executive Officer and Principal Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
*Previously Submitted and incorporated by reference herein.
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In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
A.G. VOLNEY, INC. | |||
Date: April 23, 2010 | /s/ David F. Stever | ||
Name: David F. Stever Title: President, Chief Executive Officer, and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) | |||
Date: April 23, 2010 | /s/ Samantha F. Ford | ||
Name: Samantha F. Ford Title: Secretary and Director |
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