UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended: September 30, 2009
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to _____________
Commission File No. 333-141022
WES CONSULTING, INC. |
(Exact name of small business issuer as specified in its charter) |
FLORIDA | 59-3581576 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Tax. I.D. No.) |
2745 Bankers Industrial Drive Atlanta, GA 30360 |
(Address of Principal Executive Offices) |
(770) 246-6400 |
(Registrant’s Telephone Number, Including Area Code) |
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ | Accelerated filer ¨ | |
Non-accelerated filer ¨ | Smaller reporting company x | |
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of November 13, 2009, there were 61,915,981 shares outstanding of the registrant’s common stock.
Page No. | ||
Explanatory Note | 3 | |
Part I – Financial Information | 4 | |
Item 1. Financial Statements (Unaudited) | 4 | |
Item 2. Management’s Discussion And Analysis Or Plan Of Operation | 9 | |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 11 | |
Item 4. Controls And Procedures | 11 | |
Part II – Other Information | 11 | |
Item 1. Legal Proceedings | 11 | |
Item 2. Unregistered Shares Of Equity Securities And Use Of Proceeds | 11 | |
Item 4. Submission Of Matters To A Vote Of Security Holders | 12 | |
Item 5. Other Information | 12 | |
Item 6. Exhibits | 12 | |
Signatures | 13 |
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EXPLANATORY NOTE
This Amendment No. 1 to our quarterly report on Form 10-Q (“Form 10-Q/A”) for the quarter ended September 30, 2009 is filed to (i) make consistent our use of the defined term “Company,” (ii) make consistent our reference to different closing dates throughout the filing, (iii) revise the financial information and section on “Management’s Discussion And Analysis Or Plan Of Operation” to present the historical financial information of WES Consulting, Inc. and not of Liberator, Inc., and (iv) re-file the exhibits required by Item 601(b)(31) of Regulation S-K ensuring that such exhibits are exactly as those specified in such item. The foregoing changes were made in response to a letter from the Commission dated December 23, 2009. We also updated the exhibit table under Part II, Item 6.
Except as required to reflect the changes noted above, this Form 10-Q/A does not attempt to modify or update any other disclosures set forth in our quarterly report on Form 10-Q. Additionally, this Form 10-Q/A does not purport to provide a general update or discussion of any other developments of the registrant subsequent to the original filing. The filing of this Form 10-Q/A shall not be deemed an admission that the original filing, when made, included any untrue statement of material fact or omitted to state a material fact necessary to make a statement not misleading.
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ITEM 1. FINANCIAL STATEMENTS
Wes Consulting, Inc.
Balance Sheet
As of
September 30, 2009 | December 31, 2008 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash & Cash Equivalents | — | $ | 2,613 | |||||
Accounts Receivable | — | 15,000 | ||||||
Total Current Assets | — | 17,613 | ||||||
Fixed Assets | ||||||||
Computer & Office Equipment | $ | 4,044 | 4,044 | |||||
Accumulated Depreciation | (3,679 | ) | (3,350 | ) | ||||
Total Fixed Assets | 365 | 694 | ||||||
TOTAL ASSETS | $ | 365 | $ | 18,307 | ||||
LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
Liabilities | ||||||||
Current Liabilities | ||||||||
Due To American Express | — | 50 | ||||||
Accrued Expenses | — | 100 | ||||||
Loan From Stockholder | — | 26,860 | ||||||
Total Current Liabilities | — | 27,010 | ||||||
Total Liabilities | — | 27,010 | ||||||
Stockholders' Equity | ||||||||
Common Stock, $.01 Par Value, 175,000,000 shares authorized, 983,000 and 1,200,000 shares issued and outstanding on September 30, 2009 and December 31, 2008, respectively. | $ | 9,830 | 12,000 | |||||
Paid in Capital | 205,665 | 1,487 | ||||||
Retained Earnings | (215,130 | ) | (22,190 | ) | ||||
Total Equity | 365 | (8,703 | ) | |||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 365 | $ | 18,307 |
See accompanying notes to unaudited condensed financial statements.
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Wes Consulting, Inc.
Statement of Operations
For the:
3 months ended | 3 months ended | 9 months ended | 9 months ended | |||||||||||||
September 30, 2009 | September 30, 2008 | September 30, 2009 | September 30, 2008 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Revenue: | ||||||||||||||||
Consulting Income-NTT Quaris | 0 | 15,000 | 15,000 | 45,000 | ||||||||||||
Property Management Fees-Note C | 4,300 | 5,250 | 17,200 | 15,750 | ||||||||||||
Total Income | 4,300 | 20,250 | 32,200 | 60,750 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Automobile Expense | 350 | 200 | 850 | 1,000 | ||||||||||||
Bank Service Charges | 45 | 45 | 135 | 75 | ||||||||||||
Depreciation Expense | 110 | 193 | 329 | 571 | ||||||||||||
Dues and Subscriptions | 50 | 75 | 398 | 393 | ||||||||||||
Internet & Computer | 110 | 246 | 385 | 466 | ||||||||||||
Meals and Entertainment | 411 | 491 | 835 | 1,151 | ||||||||||||
Office Supplies | 171 | 45 | 473 | 547 | ||||||||||||
Officer's Salary | 6,560 | 18,500 | 43,560 | 53,000 | ||||||||||||
Licenses and Permits | 0 | 189 | 297 | 348 | ||||||||||||
Travel Expense | 0 | 2,551 | 324 | 2,551 | ||||||||||||
Postage and Delivery | 0 | 0 | 0 | 10 | ||||||||||||
Professional Fees | 0 | 200 | 2,982 | 200 | ||||||||||||
Professional Fees-Auditor | 0 | 750 | 1,500 | 2,250 | ||||||||||||
Rent | 500 | 750 | 2,000 | 2,250 | ||||||||||||
Telephone | 113 | 179 | 293 | 477 | ||||||||||||
Total Expense | 8,420 | 24,414 | 54,361 | 65,289 | ||||||||||||
Loss from operations | (4,120 | ) | (4,164 | ) | (22,161 | ) | (4,539 | ) | ||||||||
Other Income (Expense): | ||||||||||||||||
Interest expense | (203 | ) | 0 | (203 | ) | 0 | ||||||||||
Gain on forgiveness of debt | 31,382 | 0 | 31,382 | 0 | ||||||||||||
Expenses related to sale of majority control to Liberator, Inc. | (201,958 | ) | 0 | (201,958 | ) | 0 | ||||||||||
Total other expense, net | (170,779 | ) | 0 | (170,779 | ) | 0 | ||||||||||
Net Loss | (174,899 | ) | (4,164 | ) | (192,940 | ) | (4,539 | ) | ||||||||
Net loss per share-Note D | $ | (0.15 | ) | $ | 0.00 | $ | (0.16 | ) | $ | 0.00 | ||||||
Weighted Average Shares Basic and Diluted | 1,137,435 | 1,200,000 | 1,179,557 | 1,200,000 |
See accompanying notes to unaudited condensed financial statements.
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Wes Consulting, Inc.
Statement of Cash Flows
For the Nine Months Ended September 30,
(UNAUDITED)
2009 | 2008 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net Loss | $ | (192,940 | ) | $ | (4,539 | ) | ||
Adjustments to reconcile Net Income to net cash provided by operations: | ||||||||
Depreciation Expense | 329 | 571 | ||||||
Gain on forgiveness of debt | (31,382 | ) | 0 | |||||
Non-cash expenses related to the sale of majority control to Liberator, Inc. | 201,958 | 0 | ||||||
Increase (Decrease) in: | ||||||||
Accounts Receivable | 15,000 | 0 | ||||||
Accrued Expenses | (150 | ) | (2,022 | ) | ||||
Net cash provided (used) by Operating Activities | (7,185 | ) | (5,990 | ) | ||||
INVESTING ACTIVITIES: | ||||||||
Net cash provided (used) by Investing Activities | 0 | 0 | ||||||
FINANCING ACTIVITIES: | ||||||||
Issuance of common stock | 50 | |||||||
Shareholder Loans | 4,522 | 6,746 | ||||||
Net cash provided (used) by Financing Activities | 4,572 | 6,746 | ||||||
Net increase(decrease) in cash & cash equivalents | (2,613 | ) | 756 | |||||
Cash & cash equivalents at beginning of period | 2,613 | 1,875 | ||||||
Cash & cash equivalents at end of period | $ | 0 | $ | 2,631 |
See accompanying notes to unaudited condensed financial statements.
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WES CONSULTING, INC.
Notes to Financial Statements
September 30, 2009 and September 30, 2008
(UNAUDITED)
NOTE A – ORGANIZATION AND NATURE OF BUSINESS
Overview – The Company was incorporated February 25, 1999 in the State of Florida.
On September 2, 2009, the Company’s majority shareholder, Belmont Partner LLC, a Virginia limited liability company (“Belmont”) sold 972,000 shares of the issued and outstanding common stock of the Company in accordance with a common stock purchase agreement by and among Liberator, Inc., a Nevada corporation (“Liberator”), Belmont and the Company. Liberator acquired 972,000 shares (80.7%) of the Company from Belmont for a total of two hundred forty thousand five hundred dollars ($240,500) in addition to the issuance by the Company of two hundred fifty thousand (250,000) warrants to Belmont to purchase an equal number of shares of the Company’s common stock with an exercise price of twenty five cents ($0.25), and the issuance by the Company of a total of one million five hundred thousand (1,500,000) shares of the Company’s common stock with seven hundred fifty thousand (750,000) shares delivered on September 2, 2009 and the balance of seven hundred fifty thousand (750,000) shares to be delivered on September 2, 2010.
NOTE B – SIGNIFICANT ACCOUNTING POLICIES
Basis for Presentation
In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three and nine month periods ended September 30, 2009 and September 30, 2008; (b) the financial position at September 30, 2009 and (c) cash flows for the nine month periods ended September 30, 2009 and 2008, have been made.
The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require 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. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.
The financial statement and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying financial statements should be read in conjunction with the financial statements for the years ended December 31, 2008 and December 31, 2007 (presented in last audited filing) and notes thereto in the Company’s annual report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission.
Going Concern and Management's Plans
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company incurred a net loss of $192,940 and $4,539 for the nine months ended September 30, 2009 and 2008, respectively, and as of September 30, 2009 the Company had total stockholders’ equity of $365 and no working capital or cash. Furthermore, the Company has no significant assets and no liabilities.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all short-term securities with a maturity of three months or less to be cash equivalents.
Fixed Assets
Property and equipment are stated at cost. Depreciation is computed using straight-line methods over the estimated useful lives of the assets. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires the corporation to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Revenue Recognition
During the quarter ended September 30, 2009, the Company generated revenue through commercial real estate management services. The Company provided these services and billed for them on a monthly or quarterly basis. The Company recognized its revenue when its monthly or quarterly services were completed. The Company received all of its income from one client.
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Income Taxes
No provision for income taxes has been made because the company has loss carryforwards from 2008.
Fair Values of Financial Instruments
Statement of Financial Accounting Standards No. 107, “Disclosures About Fair Value of Financial Instruments”, requires the Corporation to disclose estimated fair value for its financial instruments. Fair Value estimates, methods, and assumptions are set forth as follows for the Corporation’s financial instruments. The carrying amounts of cash, receivables, other current assets, payables, accrued expenses and notes payable approximate fair value because of the short maturity of those instruments.
Recently Adopted or Issued Accounting Pronouncements
There are no recently issued accounting standards that will have an impact on the financial statements that have not been adopted.
NOTE C – RELATED PARTY TRANSACTIONS
During the quarter ended September 30, 2009, the Company derived all of its property management fee revenue from commercial properties owned by the mother of a key shareholder. The Company also leased its principal location from this same individual.
NOTE D – EARNINGS(LOSS) PER COMMON SHARE
For the nine months ended September 30, 2009 earnings (loss) per common share of ($.16) were calculated based on a net loss numerator of ($192,940) divided by a denominator of 1,179,557 weighted-average shares of outstanding common stock outstanding at September 30, 2009. For the nine months ended September 30, 2008 earnings (loss) per common share of $.00 were calculated based on a net income numerator of ($4,539) divided by a denominator of 1,200,000 weighted-average shares of outstanding common stock outstanding at September 30, 2008. There are no share equivalents.
On October 19, 2009, the Company entered into a Merger and Recapitalization Agreement with Liberator, Inc. Pursuant to the agreement, Liberator merged with and into the Company, with the Company surviving as the sole remaining entity. Each issued and outstanding share of the common stock of Liberator (the “Liberator Common Shares”) were converted, into one share of the Company’s common stock, $0.01 par value, which, after giving effect to the merger, equaled, in the aggregate, 98.4% of the total issued and outstanding common stock of the Company (the “WES Common Stock”). Pursuant to the agreement, each preferred share of Liberator (the “Liberator Preferred Shares”) were to be converted into one share of the Company’s preferred stock with the provisions, rights, and designations set forth in the agreement (the “WES Preferred Stock”). On the execution date of the agreement, the Company was not authorized to issue any preferred stock and therefore pursuant to the agreement, it was agreed that the Company will file an amendment to its Articles of Incorporation authorizing the issuance of the WES Preferred Stock, and at such time the WES Preferred Stock will be exchanged pursuant to the terms of the agreement. As of the execution date of the agreement, Liberator owned eighty-one point seven (80.7%) percent of the issued and outstanding shares of the Company’s common stock. Upon the consummation of the transactions contemplated by the agreement, the WES Common Stock owned by Liberator prior to the agreement was cancelled.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
Certain statements in this Management’s Discussion and Analysis section, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the “Risk Factors” section of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
As used in this report, unless the context requires otherwise, “we” or “us” or the “Company” or “WES” means WES Consulting, Inc., a Florida corporation, and its subsidiaries.
Use of GAAP Financial Measures
We use GAAP financial measures in the section of this quarterly report captioned "Management’s Discussion and Analysis or Plan of Operation." All of the GAAP financial measures used by us in this report relate to the inclusion of financial information.
Overview
This subsection of MD&A is an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance, our overall business strategy and our earnings for the periods covered.
General
WES Consulting, Inc. was incorporated on February 25, 1999 under the laws of the State of Florida. Since inception and through the period covered by this report, we engaged in providing consulting services to companies requiring expert guidance and assistance in successfully upgrading and improving their high-volume commercial printing businesses. The primary emphasis had been on global companies involved in printing telephone directories.
Results of Operations
General
The following table shows our revenues, expenditures and net income for the nine month periods ended September 30, 2009 and 2008.
Revenues, Expenditures and Net Income
YEAR | REVENUE | EXPENSES | NET INCOME (LOSS) | |||||||||
September 30, 2009 | $ | 32,200 | $ | 225,140 | $ | (192,940 | ) | |||||
September 30, 2008 | $ | 60,750 | $ | 65,289 | $ | (4,539 | ) |
Operating Results for the three months ended September 30, 2009 Compared To September 30, 2008
Revenues. For the three months ended September 30, 2009, revenues were $4,300, compared to $20,250 for the three months ended September 30, 2008. The decrease in revenues was due to the loss of our consulting income due to the cancellation of our contract with NTT Quaris effective March 31, 2009.
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Total Expenses. Total Expenses decreased by $15,994 to $8,420 for the three months ended September 30, 2009 from $24,414 for the three months ended September 30, 2008. The decrease in expenses of $15,994 is largely due to the reduction of officer’s salary and professional fees.
Other Income (Expense). Other expense during the three months ended September 30, 2009 includes income from the forgiveness of debt by the Company’s majority shareholder (prior to August 11, 2009) who agreed to cancel a debt in the amount of $31,382 and release the Company from further liability pursuant to the loan. On September 2, 2009, we issued two hundred fifty thousand (250,000) warrants to Belmont to purchase an equal number of shares of our common stock with an exercise price of twenty five cents ($0.25), and issued a total of one million five hundred thousand (1,500,000) shares of our common stock with seven hundred fifty thousand (750,000) shares delivered on September 2, 2009 and the balance of seven hundred fifty thousand (750,000) shares to be delivered on September 2, 2010. The expense related to the sale of majority control to Liberator, Inc. includes $14,458 for the fair market value of the warrant issued to Belmont and $187,500 being the fair market value of the 750,000 shares of common stock issued to Belmont.
Net Income (Loss). For the three months ended September 30, 2009, we had a loss of ($174,899) and for the three months ended September 30, 2008, we had a loss of $(4,164). The decrease in profitability is due primarily to the loss of our consulting income and the expense associated with the sale of majority control to Liberator, Inc.
Provision for Income Taxes. No provision for income taxes was made in the three or nine months ended September 30, 2009.
Liquidity and Capital Resources
As of September 30, 2009, we had no cash or cash equivalents.
Operating Activities. For the nine months ended September 30, 2009 and 2008, our operating activities used ($7,185) and ($5,990) respectively. During 2008, this decrease in cash used by operating activities was primarily due to a decrease in Accrued Expenses.
Investing Activities. We had no investing activity for the nine month periods ended September 30, 2009 and 2008.
Financing Activities. Net cash provided by financing activities in the nine month periods ended September 30, 2009 and 2008 totaled $4,572 and $6,746, respectively. The cash provided by financing activities was due to cash provided by stockholder loans.
Seasonality of our Sales
Our operating results and operating cash flows historically have not been subject to seasonal variations. We do not anticipate a change in the patterns due to seasonality at this time.
Inflation
Inflation does not materially affect our business or the results of our operations.
Recent Accounting Pronouncements
We adopted the provisions of Financial Standards Accounting Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109 (" FIN 48"), on January 1, 2007. There were no unrecognized tax benefits and there was no effect on the Company's financial condition or results of operations as a result of implementing FIN 48.
Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption of FIN 48, there was no accrued interest or penalty associated with any unrecognized tax benefits nor was any interest expense recognized during the period.
In December 2007, the Financial Accounting Standards Board issued Statement of SFAS No. 141(revised 2007), Business Combinations, which replaces SFAS No. 141. The statement retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS No. 141(R) is effective for the Company beginning January 1, 2009 and will apply prospectively to business combinations completed on or after that date.
In December 2007, the Financial Accounting Standards Board issued SFAS No. 160; Noncontrolling Interest in Consolidated Financial Statements, and amendment of ARB 51, which changes the accounting and reporting for minority interest. Minority interest will be recharacterized as non-controlling interest and will be reported as component of equity separate from the parent's equity, and purchases or sales of equity interests that do not result in change in control will be accounted for as equity transactions. In addition, net income attributable to the non-controlling interest will be included in consolidated net income on the face of the income statement and, upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. SFAS No. 160 is effective for the Company beginning January 1, 2009 and will apply prospectively, except for the presentation and disclosure requirements, which will apply retrospectively.
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In March 2008, the Financial Accounting Standards Board issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 requires additional disclosures related to the use of derivative instruments, the accounting for derivatives and the financial statement impact of derivatives. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The adoption of SFAS No. 161 will not impact our financial statements.
In May 2008, the Financial Accounting Standards Board issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. This statement shall be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” We do not expect its adoption will have a material impact on our financial statements.
Off-Balance Sheet Arrangements
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We do not enter into any transactions using derivative financial instruments or derivative commodity instruments and believe that our exposure to market risk associated with other financial instruments is not material.
As of November 16, 2009 we have one loan which adjusts based on the prime rate. As such, we are exposed to the interest rate risk whereby a 1% increase in the prime rate would lead to an increase of approximately $2,500 in interest expense for the year ending June 30, 2010 (based on full utilization of the credit facility.)
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosures. As of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, were effective at the reasonable assurance level to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in United States Securities and Exchange Commission rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the management, including CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SHARES OF EQUITY SECURITIES AND USE OF PROCEEDS
On September 2, 2009, in connection with a transaction whereby Liberator, Inc. acquired the majority of our issued and outstanding common stock from Belmont Partners, LLC (“Belmont”), we issued a warrant to Belmont exercisable for up to 250,000 shares of our common stock at an exercise price of $0.25. We also issued 750,000 shares of our common stock to Belmont and are required to issue another 750,000 shares of our common stock on September 2, 2010. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act of 1933, as amended, for the issuance of these securities as the transaction was by the issuer and did not involve any public offering.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORAMTION
None.
Exh. No. | Description | |
3.1 | Amended and Restated Articles of Incorporation (1) | |
3.2 | Bylaws (1) | |
4.1 | Common Stock Purchase Warrant issued by the Company to Belmont Partners, LLC on September 2, 2009 (2) | |
31.1 | Section 302 Certification by the Corporation’s Principal Executive Officer * | |
31.2 | Section 302 Certification by the Corporation’s Principal Financial and Accounting Officer * | |
32.1 | Section 906 Certification by the Corporation’s Principal Executive Officer * | |
32.2 | Section 906 Certification by the Corporation’s Principal Financial and Accounting Officer * |
* | Filed herewith. |
(1) | Filed on March 2, 2007 as an exhibit to our Registration Statement on Form SB-2, and incorporated herein by reference. |
(2) | Filed on November 18, 2009 as an exhibit to our Quarterly Report on Form 10-Q, and incorporated herein by reference. |
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WES CONSULTING, INC. | ||
(Registrant) | ||
Date: February 22, 2010 | By: | /s/ Louis S. Friedman |
Louis S. Friedman | ||
Chief Executive Officer and President (Principal Executive Officer) | ||
Date: February 22, 2010 | By: | /s/ Ronald P. Scott |
Ronald P. Scott | ||
Chief Financial Officer (Principal Financial & Accounting Officer) |
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