UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
X.
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2009
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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 333- 149177
LAUFER BRIDGE ENTERPRISES, INC. |
(Exact Name of Registrant as Specified in its Charter) |
Nevada |
| 04-3626788 |
(State or Other Jurisdiction of Incorporation or Organization) |
| (I.R.S. Employer Identification No.) |
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3276 Buford Drive, Bldg. 104, Suite 320 Buford, GA |
| 30519 |
(Address of Principal Executive Offices) |
| (Zip Code) |
Registrant’s Telephone Number: 678-596-6872 |
Securities registered under Section 12(b) of the Act: Common Stock par value $.001 per share
Securities registered under Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act Yes .No X.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes .No X.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X.
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 definition 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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes .No X.
The number of shares outstanding of each of the Registrant’s classes of common stock, as of December 31, 2009 is 275,450,000 shares, all of one class, $.001 par value per share.
The Registrant’s common stock has not traded on the OTCBB or elsewhere and, accordingly, there is no aggregate “market value” to be indicated for such shares. The “value” of the outstanding shares held by non-affiliates, based upon the book value as of December 31, 2009, is $-0-.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are herewith incorporated by reference: NONE, except Forms 8-K as filed: (i) July 28, 2009 regarding entry into material definitive agreement; and (ii) November 3, 2009 as relates to Sale of Unregistered Securities.
2
LAUFER BRIDGE ENTERPRISES, INC.
TABLE OF CONTENTS
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ITEM 1 | BUSINESS | 4 |
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ITEM 1A | RISK FACTORS | 8 |
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ITEM 1B | UNRESOLVED STAFF COMMENTS | 13 |
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ITEM 2 | PROPERTIES | 13 |
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ITEM 3 | LEGAL PROCEEDINGS | 14 |
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ITEM 4 | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 14 |
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| PART II |
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ITEM 5 | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 14 |
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ITEM 6 | SELECTED FINANCIAL DATA | 14 |
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ITEM 7 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 15 |
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ITEM 7A | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 18 |
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ITEM 8 | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 18 |
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ITEM 9 | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 19 |
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ITEM 9A | CONTROLS AND PROCEDURES | 19 |
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ITEM 9B | OTHER INFORMATION | 19 |
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| PART III |
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ITEM 10 | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 19 |
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ITEM 11 | EXECUTIVE COMPENSATION | 21 |
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ITEM 12 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 21 |
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ITEM 13 | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE | 22 |
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ITEM 14 | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 23 |
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| PART IV |
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ITEM 15 | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 23 |
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PART I
Explanatory Note
This Annual Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management's beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning possible or assumed future results of operations of the Company set forth under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.
Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. The Company's future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.
ITEM 1 - BUSINESS
Merger
Laufer Bridge Enterprises, Inc. ("Laufer") was founded as a New York corporation on March 13, 2002 and became a corporation under the laws of the State of Nevada in January 2008. At inception, we acquired the assets of an existing bridge club. On July 22, 2009, Laufer entered into a Share Exchange Agreement (the “Agreement”) among Laufer and certain of its shareholders, Creative Edge Nutrition, Inc. (“Creative”), a Nevada corporation, and the shareholders of Creative (the “Creative Shareholders”).
Pursuant to the terms of the Agreement, Laufer agreed to issue an aggregate of 142,950,000 restricted shares of Laufer's common stock to the Creative Shareholders in exchange for all of the issued and outstanding shares of Creative. The closing of the Agreement was subject to the fulfillment of certain conditions, including, but not limited to the receipt of all requisite consents, waivers and approvals by the Company and Creative, and the transaction closed July 22, 2009. The shares were issued to the following:
Name | Number of Shares |
1Joel Stohlman | 125,000,000 |
2Paul Thomas | 5,000,000 |
3Reid Stone | 5,000,000 |
4Michael Thomas | 200,000 |
5Jason Barta | 250,000 |
Gary B. Wolff | 7,500,000 |
Creative is a wholly-owned subsidiary of Laufer.
Other Issuances of Shares
A Convertible Promissory Note (the “Note”) in the amount of $50,000 had been entered into between Gary B. Wolff and Laufer on September 13, 2008 to settle unpaid legal fees due to Mr. Wolff with respect to Laufer's Registration Statement which had been declared effective on March 11, 2008. The note accrues interest at 2% per annum and matured on December 1, 2008, at which time it effectively became a demand note. The Note is convertible at the option of the holder at a conversion price of $0.001 per share. On July 22, 2009 Mr. Wolff exchanged $12,500 principal amount of the Note to JW Financial LLC ("JW") in exchange for 12,500,000 shares of Laufer's common stock issued to JW. JW, which acquired the shares from Laufer in payment for $12,500 of consulting services performed by JW for Laufer. JW then forgave the principal amount of $12,500. In accordance with the Unanimous Consent of Laufer’s Board of Directors and a Debt Purchase A greement dated July 29, 2009, a portion of the unpaid principal balance of $8,700 was used by Gary B. Wolff to purchase 8,700,000 restricted shares of common stock of Laufer. Following these transactions, the remaining principal amount of the Note is $28,800. These transactions were reported in Forms 8-K filed with the SEC on July 30, 2009 and August 14, 2009, respectively.
______________________________
1 Mr. Joel Stohlman is President, Chief Executive Officer and Director of Laufer.
2 Mr. Paul Thomas may sell up to 5% of his holdings every other month, commencing 9 months from the date of issuance of such shares, but may not otherwise assign, transfer, pledge or hypothecate such shares.
3 Mr. Reid Stone is Executive Vice President, Secretary, Treasurer and Director of Laufer.
4 Mr. Michael Thomas may sell up to 5% of his holdings every other month, commencing 12 months from the date of issuance of such shares, but may not otherwise assign, transfer, pledge or hypothecate such shares
5 Mr. Jason Barta may sell up to 5% of his holdings every other month, commencing 12 months from the date of issuance of such shares, but may not otherwise assign, transfer, pledge or hypothecate such shares.
4
In November 2009 Laufer issued an aggregate of 101,100,000 restricted shares of its common stock to those persons and/or firms set forth below. Each recipient has been active in providing advice in the planning process of Creative. We recorded consulting expenses of $101,100 in connection with the issuance of these shares, which were exempt from registration in accordance with Section 4(2) of the Securities Act of 1933 as a transaction by an Issuer not involved in a public offering.
The 101,100,000 restricted shares of common stock were issued as follows:
Name | Number of Shares |
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1Mitchell Clark | 300,000 |
2John Atamian | 300,000 |
Affordable Luxuries | 1,000,000 |
3Cliff Tew | 300,000 |
4Ricardo Richardson | 25,000,000 |
Seeds R US | 25,000,000 |
Jason Barta | 1,000,000 |
Singletary and Associates | 5,000,000 |
5Reid Stone | 20,000,000 |
Michael Kap | 1,000,000 |
Brenda Jackson | 200,000 |
6Joel Stohlman | 21,200,000 |
Brian Edwards | 400,000 |
Brian Barton | 400,000 |
Following the issuances of shares described above, there are 275,450,000 shares of common stock outstanding. See also Form 8K filed November 3, 2009.
Changes to the Board of Directors and Executive Officers
Upon closing of the Share Exchange Agreement (“SEA”), Laufer's two former officers and directors, Richard Laufer and Carol Laufer, resigned from all executive positions held effective as of the closing of the SEA on July 22, 2009. Neither resignation was a result of any disagreement with the Company on any matter relating to its operations, policies (including accounting or financial policies) or practices. Richard Laufer and Carol Laufer remain as employees managing our bridge game operations.
Immediately following the closing of the SEA, our board of directors was reconstituted to consist of Joel Stohlman and Reid Stone. Paul Thomas became a corporate officer. All directors hold office for one-year terms until the election and qualification of their successors. Officers are elected by the board of directors and serve at the discretion of the board.
Accounting Treatment
The merger was accounted for as a reverse acquisition and recapitalization. Creative is the acquirer for accounting purposes and Laufer is the issuer. Accordingly, Creative's historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares issued in the merger. Operations prior to the transaction are those of Creative. Earnings per share for the period prior to the transaction are restated to reflect the equivalent number of shares outstanding.
______________________________
1 Mr. Mitchell Clark may sell up to 5% of his holdings every other month, commencing nine months from the date of issuance of such shares, but may not otherwise assign, transfer, pledge or hypothecate such shares.
2 Mr. John Atamian may sell up to 5% of his holdings every other month, commencing nine months from the date of issuance of such shares, but may not otherwise assign, transfer, pledge or hypothecate such shares.
3 Mr. Cliff Tew may sell up to 5% of his holdings every other month, commencing nine months from the date of issuance of such shares, but may not otherwise assign, transfer, pledge or hypothecate such shares
4 Mr. Ricardo Richardson may sell up to 5% of his holdings every other month, commencing 9 months from the date of issuance of such shares, but may not otherwise assign, transfer, pledge or hypothecate such shares.
5 Mr. Reid Stone is Executive Vice President, Secretary, Treasurer and Director of Laufer and owned 5,000,000 shares of Laufer common stock prior to this issuance
6 Mr. Joel Stohlman is President, Chief Executive Officer and Director of the Laufer and owned 125,000,000 shares of Laufer common stock prior to this issuance.
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Operations
Creative
Creative is a development stage operation that was incorporated on May 11, 2009 as a Nevada corporation. Creative was formed to develop and market the product ideas of Joel Stohlman, our President, who has been working on these ideas and developing product formulas for the past several years.
Creative plans on becoming an innovative bio-science company engaged in the development of nutraceuticals and health supplements. It intends to offer a wide range of capsules, tablets, and powders, as well as science-based products in four principal categories:
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weight management,
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specific nutrition challenges,
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energy, and
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fitness.
Creative's initial product line, which Creative hopes will be introduced in the last half of 2010, will consist of 17 diverse nutritional products, which have been completely formulated, developed and package designed. Our initial product line will consist of the basics, to most cutting edge on the market today, introduction to weight loss, protein powders, sleeping aids to the extreme hardcore supplements called prohormones.
Creative also plans to market a line of nutrition bar products under the CENERGY™ brand. The CENERGY product line will include several nutrition bars that supply protein, vitamins and other essential nutrients with fewer calories than a traditional candy bar. The CENERGY-Bar product line will be comprised of snack bars that are free of hydrogenated oils and trans fat, made with wholesome ingredients such as grains, oats, nuts and fruit, and coated with white, semi-sweet or milk chocolate.
The CENERGY Bar brand will be intended to provide consumers with a healthy alternative to traditional snack foods and candy bars.
Manufacturing -All of our products will be manufactured at and shipped from the facilities of an unaffiliated vendor known to our President, Mr. Stohlman. All products will be made based on formulas developed by us. Wherever possible, we will pay for these services through the issuance of additional restricted shares of our common stock. At this time there are verbal understandings between us and a manufacturer but no formal written commitment exists.
Marketing -Our current plan is to use large distributors that can gain access to our products in the mass market retail channel with additional, yet limited, distribution in health food stores. and online sites to sell and distribute our products. We will also use a multi-level marketer for certain products. We have entered negotiations with some of these independent third parties but no formal agreements exist.
Our strategy is to price our products at the mid to high ends of the price range. We intend to use professional athletes known to our President to serve as spokesmen for our products. To the extent possible we will compensate these professional athletes through the issuance of additional restricted shares of our common stock. In some instances, we believe that we will have to pay cash compensation and enter into formal royalty agreements.
Competition -There are many companies in our planned marketplace. Most of these companies have more resources and name recognition than do we. We intend to compete by using professional athletes to emphasize the quality and effectiveness of our products in marketing programs. These programs will depend on us being able to raise sufficient capital to finance them. There can be no assurances given that we will be successful in raising the needed resources and, if raised, that our marketing program will be successful.
Bridge Deck
The merger between Laufer and Creative was accounted for as a reverse acquisition and recapitalization. Therefore, the results of Bridge Deck's operations are included in our consolidated financial statements starting with the merger date, July 22, 2009.
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We operate a bridge club offering tournament style duplicate bridge games and also offer instructions and lessons on how to play bridge. We are generally open seven days per week and are located in Westchester County, New York. We operate under the name of The Bridge Deck. Duplicate bridge is the most widely used variation of bridge used in club and tournament settings. It is calledduplicate because the same bridge hand (i.e. arrangement of cards) is duplicated at most of the tables playing in order to allow a fair comparison of playing skill and reduce "luck of the cards." In this way, every hand, whether good or bad, is played in competition with others playing the identical cards, and the element of competition is heightened while the element of chance is reduced. In duplicate bridge, a player normally plays with the same partner throughout an event. The two are known as a "pair."
We are members of the American Contract Bridge League (the “ACBL”). The ACBL supports approximately 2.5 million tables of bridge in play annually in clubs and tournaments and an additional 200,000 tables online. It also has a membership of 3,200 bridge clubs and sponsors 1,100 bridge tournaments annually. The ACBL certifies bridge directors and teachers and sets forth player achievement through a system known as masterpoints. Players receive masterpoints for winning and placing in club and tournament games as they strive to become a Life Master. Members advance through ranks as they earn the required number of masterpoints for each of 14 categories. We pay the ACBL average monthly fees of approximately $1,000 in order to sponsor sanctioned events that qualify our participants for masterpoints.
We generally operate seven days a week with games in the morning and afternoon and two evening games per week. Many of our players during the day are local retirees. In general, our games draw between 100 and 160 players. We draw fewer players in the winter than at other times of the year. We do not operate games on weekends when there are major bridge tournaments in the Westchester area and if the weather is very inclement. We also close for Thanksgiving.
We charge an entry fee of $12 to a player for each game. We are paid in cash and do not accept any credit cards. We will accept checks only from players who are known to us..
A game generally lasts approximately three hours. The games are supervised by our president and/or vice president and by independent contractors engaged by us. Supervisors sign players in, assign tables, score games and render rulings if necessary. The results of games are posted daily on our Website as are the numbers of Masterpoints attained by our players.
We also provide instruction for bridge players using independent contractors as instructors. Classes are for beginners as well as for intermediate and advanced players. Typical classes cost at least $160 and meet over eight week periods.
Competition - We compete with several other bridge clubs located in or near Westchester, NY as well as churches and temples that may sponsor bridge games. In addition, we face competition from other entertainment sources such as casinos.
We compete against these other entities in several ways:
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Our fees are slightly lower than other nearby bridge clubs;
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We provide a cheerful and friendly atmosphere for players;
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We provide light meals and coffee for players; and
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Our facility has excellent parking which is a major factor for players in the New York area.
A significant percentage of newer players come to us through word of mouth recommendations from existing and former players. We also advertise occasionally in local Westchester area newspapers and are listed on the ACBL Website.
We cannot offer any assurances that our competitive strategy will be successful in the future.
Intellectual Property
We have no patents or trademarks.
Employees
At December 31, 2009, we had three employees. Joel Stohlman, our President, devotes 25% of his time to our business but will devote significantly more time to us as soon as Creative commences formal revenue producing operations. Richard Laufer and Carol Laufer, who are married to each other, devote fulltime to Bridge Deck's operations. There are no written employment contracts or agreements. We are using outside subcontractors to assist us in developing Creative's business plan and products and also generally use eight or nine independent contractors to perform various tasks at our bridge game operations.
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ITEM 1A - RISK FACTORS
Risks Related to the Business
Lauferhas substantially no financial resources which makes it difficult for us to raise capital or other financing, and our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern. Absent financial resources, we will be unable to undertake programs designed to develop Creative's business plan or expand Bridge Deck's business.
Laufer has extremely limited financial resources and has not established a source of equity or debt financing. Our independent registered auditors’ report on our consolidated financial statements at September 30, 2009 includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.
If we are unable to generate additional revenue or obtain financing or if the financing we do obtain is insufficient, we will be unable to commence Creative's revenue producing operations or expand Bridge Deck's operations. To date, no Laufer officer, director, affiliate or associate has had any formal contact or discussions with, nor are there any present plans, proposals, arrangements or understandings with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger transaction referred to herein or otherwise except for that concluded with Creative.
Bridge Deck operates in a highly competitive industry with low barriers to entry and may be unable to compete successfully against existing or new competitors.
Bridge Deck, our only current source of revenue, operates a bridge club offering tournament style duplicate bridge games and instruction in playing bridge. We compete with other bridge clubs as well as a variety of other recreation alternatives, including casinos. The barriers to entry are not great because our business does not require substantial amounts of capital assets. Many of our competitors and potential competitors have significantly greater resources and name recognition than do we. We expect that the level of competition will remain high, which could limit our ability to maintain or increase our market share or profitability.
We may not be able to continue to compete effectively with existing or potential competitors. Our inability to meet these competitive challenges could have an adverse impact on our business, financial condition and results of operations.
Laufer is completely dependent on Joel Stohlman, our President, to implement the business plans of Creative. The loss of Mr. Stohlman's services may cause our overall business operations to fail, and we will need to engage and retain qualified employees and consultants to further implement our strategy.
Laufer’s operations and business strategy are largely dependent upon developing the business plan of Creative. The knowledge, contacts and reputation of Mr. Stohlman are needed to accomplish this task. He is under no contractual obligation to remain employed by us. If he should choose to leave us for any reason before we have hired additional personnel, our operations will likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described above. We will fail without Mr. Stohlman or an appropriate replacement(s).
We intend to acquire key-man life insurance on the life of Mr. Stohlman naming us as the beneficiary when and if we obtain the resources to do so and he is insurable. We have not yet procured such insurance, and there is no guarantee that we will be able to obtain such insurance in the future. Accordingly, it is important that we are able to attract, motivate and retain highly qualified and talented personnel and independent contractors.
Joel Stohlman, our chief executive officer, has no meaningful accounting or financial reporting education or experience and, accordingly, our ability to meet Exchange Act reporting requirements on a timely basis is dependent to a significant degree upon others.
Joel Stohlman has no meaningful financial reporting education or experience. They are heavily dependent on advisors and consultants. As such, there is risk about our ability to comply with all financial reporting requirements accurately and on a timely basis.
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We are subject to the periodic reporting requirements of the Securities Exchange Act of 1934 which requires us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.
We are required to file periodic reports with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm has to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel has to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major affect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhe ad requirements and earn a profit. We may be exposed to potential risks resulting from new requirements under Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required, beginning with our fiscal year ending September 30, 2010, to include in our annual report our assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year ended September 30, 2010. Furthermore, in the following fiscal year, our independent registered public accounting firm will be required to report separately on whether it believes that we have maintained, in all material respects, effective internal control over financial reporting. We have not yet completed our assessment of the effectiveness of our internal control over financial reporting. We expect to incur additional expenses and diversion of management’s time as a result of performing the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.
We currently have only three employees which is not a sufficient number of employees to segregate responsibilities. We may be unable to afford the cost of increasing our staff or engaging outside consultants or professionals to overcome our lack of employees. During the course of our testing, we may identify other deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, if we fail to achieve and maintain adequate internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financi al reports and are important to help prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Having only two directors limits our ability to establish effective independent corporate governance procedures and increases the control of our president.
We have only two directors, who are also two of our three principal officers. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues. In addition, a tie vote of board members is decided in favor of the chairman, which gives him significant control over all corporate issues.
Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our president’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.
Risks Related to Our Common Stock
Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares of our common stock.
We have no committed source of financing. Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized (500,000,000) but unissued (224,550,000) common shares. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material.
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The interests of shareholders may be hurt because we can issue shares of our common stock to individuals or entities that support existing management with such issuances serving to enhance existing management’s ability to maintain control of our Company.
Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized (500,000,000) but unissued (224,550,000) common shares. Such issuances may be issued to parties or entities committed to supporting existing management and the interests of existing management may not be the same as the interests of other shareholders. Our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control of our Company.
Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.
Our articles of incorporation as amended to date allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.
Our Articles of Incorporation provide for indemnification of officers and directors at our expense and limit their liability. These provisions may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.
Our Articles of Incorporation and applicable Nevada law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's written promise to repay us therefore, if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us that we may be unable to recoup.
We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with the securities being registered, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, eitherof which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.
Currently, there is no established public market for our securities, and there can be no assurances that any established public market will ever develop or that our common stock will be quoted for trading, and even if quoted, it is likely to be subject to significant price fluctuations.
Prior to the date of this Form 10K, there has not been any established trading market for our common stock, and there is currently no established public market whatsoever for our securities. FINRA has assigned us a trading symbol (LBGE on July 1, 2008) which enables a market maker to quote the shares of our common stock on the OTCBB maintained by FINRA. There can be no assurances as to whether:
(i)
any market for our shares will develop;
(ii)
the prices at which our common stock will trade; or
(iii)
the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.
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In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for our common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of Lauferand general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.
Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.
The trading of our securities, if any, will be in the over-the-counter market which is commonly referred to as the OTCBB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.
Rule 3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $4.00 per share or with an exercise price of less than $4.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.
For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive 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 and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that 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 prepared by the SEC 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.
Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and 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.
Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of our shareholders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become actively publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, if they trade at all, will be subject to such penny stock rules for the foreseeable future, and our shareholders will, in all likelihood, find it difficult to sell their securities.
The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.
Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:
·
Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
·
Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
·
"Boiler room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;
·
Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
·
Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
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Investors may have difficulty in reselling their shares because of state Blue Sky laws.
Our common stock is currently not quoted on any market. No market may ever develop for our common stock, or if developed, may not be sustained in the future.
The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, investors should consider any secondary market for our securities to be a limited one. We intend to seek coverage and publication of information regarding the Company in an accepted publication which permits a "manual exemption." This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain
·
the names of issuers, officers, and directors,
·
an issuer's balance sheet, and
·
a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations.
We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it generally unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor's, Moody's Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin. Accordingly, our shares should be considered totally illiquid, which inhibits investors’ ability to resell their shares.
We do not expect to pay cash dividends in the foreseeable future
We have never paid cash dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.
Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protections against interested director transactions, conflicts of interest and similar matters.
The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the NASDAQ Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the NASDAQ Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.
Because our directors are not independent directors, we do not currently have independent audit or compensation committees. As a result, our directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and any potential investors may be reluctant to provide us with funds necessary to expand our operations.
We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.
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Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
·
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
·
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of our limited resources and personnel, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.
Legislation, including the Sarbanes-Oxley Act of 2002, may make it more difficult for us to retain or attract officers and directors.
The Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding corporate accountability in connection with recent accounting scandals. The stated goals of the Sarbanes-Oxley Act are to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the SEC, under the Securities Exchange Act of 1934. We are required to comply with the Sarbanes-Oxley Act. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may dete r qualified individuals from accepting these roles. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We continue to evaluate and monitor developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.
Because it has been more than one year since our initial Registration Statement was declared effective, our reporting obligations under the Securities Laws may (in our discretion) be automatically suspended by operation of statute under Section 15(d) of the Securities Exchange Act of 1934 if we have less than 300 shareholders. We currently have less than 300 shareholders, which means that we may file periodic reports voluntarily with the SEC but are no longer obligated to file those periodic reports with the SEC. Therefore, your access to our business information could be even more restricted. We are not be required to furnish proxy statements to security holders, and our directors, officers and principal beneficial owners are not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Securities Exchange Act of 1934 until we have both 500 or more security holders and greater than $10 million in assets and a re required to register our shares under Section 12 of the Exchange Act. This means that your access to information regarding our business is and will likely continue to be limited.
For all of the foregoing reasons and others set forth herein, an investment in the Company’ssecurities in any market which may develop in the future involves a high degree of risk. Any person considering an investment in such securities should be aware of these and other risk factors set forth in this Form 10-K.
ITEM 1B - UNRESOLVED STAFF COMMENTS
None
ITEM 2 - PROPERTIES
Our President provides us office space at 3276 Buford Drive, Bldg. 104, Suite 320, Buford, GA 30519 that serves as our principal address.
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The address of our Bridge Deck operations is 313 South Central Avenue, Scarsdale, NY 10583. Our current lease with an unrelated party expires on March 31, 2012 and calls for the following minimum annual rental payments:
October 1, 2009 through March 31, 2010 | 49,450 |
April 1, 2010 through March 31, 2011 | 101,200 |
April 1, 2011 through March 31, 2012 | 103,500 |
ITEM 3 - LEGAL PROCEEDINGS
We are not involved in any litigation.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None, except as may be set forth in Form 8-K with Date of Report of July 22, 2009.
Part II
ITEM 5 - MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES
We became subject to Securities Exchange Act Reporting Requirements as of March 11, 2008.
The trading symbol for our common stock is LBGE. However, there is no and has never been any trading market for the shares of our common stock.
We have never paid any cash dividends on shares of our common stock and do not anticipate that we will pay dividends in the foreseeable future. We intend to apply any earnings to fund the development of our business. The purchase of shares of common stock is inappropriate for investors seeking current or near term income.
As of the close of business on December 31, 2009, there were 55 stockholders of record of our common stock, and 275,450,000 shares were issued and outstanding.
The Company has never repurchased any of its equity securities.
ITEM 6 - SELECTED FINANCIAL DATA
Balance Sheet Data: |
| September 30, 2009 |
|
|
|
Current assets | $ | 56,045 |
|
|
|
Current liabilities | $ | 162,691 |
|
|
|
Stockholders’ deficit | $ | (25,183) |
Current liabilities include accruals for services to the Creative business plan of $101,100 (including $41,200 due to Company officers). This amount was satisfied in full by the issuance of 101,100,000 restricted shares of common stock in November 2009.
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Income Data |
| Period from May 11, 2009 (inception) until September 30, 2009 |
|
|
|
Revenues | $ | 115,210 |
Expenses | $ | 210,435 |
Net loss | $ | (95,225) |
Net loss per common share - basic and diluted | $ | (0.00) |
Weighted average number of shares outstanding – basic and diluted |
| 163,321,127 |
The merger between Creative and Laufer was accounted for as a reverse acquisition and recapitalization. Creative is the acquirer for accounting purposes, and Laufer is the issuer. Accordingly, Creative's historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares issued in the merger. From inception on May 11, 2009 until the merger date, July 22, 2009, Creative had no operations. All revenue during the reporting period relates to the operations of the Bridge Deck from July 22, 2009 until September 30, 2009. Earnings per share for the period prior to the merger are restated to reflect the equivalent number of shares outstanding.
ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Certain matters discussed in this annual report on Form 10-K are forward-looking statements. Such forward-looking statements contained in this annual report involve risks and uncertainties, including statements as to:
·
our future operating results,
·
our business prospects,
·
our contractual arrangements and relationships with third parties,
·
the dependence of our future success on the general economy and its impact on the industries in which we may be involved,
·
the adequacy of our cash resources and working capital, and
·
other factors identified in our filings with the SEC, press releases and other public communications.
These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe," “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated as of the date of this Form 10-K. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this report and we und ertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
The following discussion and analysis provides information which the Company’s management believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this report.
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Operations
A summary of our operations for the Period from May 11, 2009 (inception) until September 30, 2009:
|
| Period from May 11, 2009 (inception) until September 30, 2009 |
|
|
|
Revenues | $ | 15,210 |
Expenses | $ | 210,435 |
Net loss | $ | (95,225) |
Net loss per common share - basic and diluted | $ | (0.00) |
Weighted average number of shares outstanding – basic and diluted |
| 163,321,127 |
The merger between Creative and Laufer was accounted for as a reverse acquisition and recapitalization. Creative is the acquirer for accounting purposes, and Laufer is the issuer. Accordingly, Creative's historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares issued in the merger. From inception on May 11, 2009 until the merger date, July 22, 2009, Creative had no operations. All revenue during the reporting period relates to the operations of the Bridge Deck from July 22, 2009 until September 30, 2009. Earnings per share for the period prior to the merger are restated to reflect the equivalent number of shares outstanding
Expenses include $100,100 relating to amounts due for planning and design work for Creative. Of this amount, $21,200 was due to our President, Joel Stohlman, and $20,000 was due to Reid Stone, our Executive Vice President, Secretary, Treasurer and Director. The entire amount, $100,100 was satisfied by the issuance of 100,100,000 restricted shares of common stock in November 2009.
Other
As a corporate policy,we will not incur any cash obligations that we cannot satisfy with known resources, of which there are currently none except as described in “Liquidity” below and/or elsewhere in this Form 10-K. We believe that the perception that many people have of a public company make it more likely that they will accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter. Our conclusion is based on our own observations. However, there can be no assurances that we will be successful in any of those efforts although we were successful in issuing 100,100,000 restricted shares to satisfy obligations of $100,100.. Additionally, issuance of restricted shares would necessarily dilute the percentage of ownership interest of our stockholders.
Liquidity
We need to raise debt or equity capital to develop the business plan of Creative. The estimated amount needed to achieve some revenue producing operations is at least $45,000. To date we have not undertaken any formal procedures or efforts to raise any debt or equity financing. Private capital, if sought, will be sought from former business associates of our President or private investors referred to us by those business associates. If a market for our shares ever develops, of which there can be no assurances, we may use restricted shares of our common stock to compensate employees/consultants and independent contractors wherever possible. We believe that operations of the Bridge Deck are generating sufficient cash to continue its operations for the next 12 months from the date of this annual report.
In November 2009 we issued an aggregate of 101,100,000 restricted shares of our common stock to settle $101,100 in obligations to individuals and entities which been active in providing advice in the planning process of Creative. Of this amount, $21,200 was due to our President, Joel Stohlman, and $20,000 was due to Reid Stone, our Executive Vice President, Secretary, Treasurer and Director. We recorded expenses of $101,100 in connection with the issuance of these shares, which were exempt from registration in accordance with Section 4(2) of the Securities Act of 1933 as a transaction by an Issuer not involved in a public offering.
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We have become a public company and, by doing so, have incurred and will continue to incur additional significant expenses for legal, accounting and related services. We estimate that these costs will range up to $50,000 per year for the next few years and will be higher if our business volume and activity increases. These obligations will reduce our ability and resources to fund other aspects of our business. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling obligations and compensate independent contractors who provide professional services to us, although there can be no assurances that we will continue to be successful in any of those efforts. We will reduce the compensation levels paid to our president if there is insufficient cash generated from operations to satisfy these costs.
Recent Accounting Pronouncements
In June 2003, the United States Securities and Exchange Commission adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002. Commencing with our annual report for the year ended September 30, 2010, we will be required to include a report of management on our internal control over financial reporting. The internal control report must include a statement.
·
of management’s responsibility for establishing and maintaining adequate internal control over our financial reporting;
·
of management’s assessment of the effectiveness of our internal control over financial reporting as of year end; and
·
of the framework used by management to evaluate the effectiveness of our internal control over financial reporting.
Furthermore, in the following fiscal year, it is required to file the registered accounting firm’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.
In June 2009, the FASB approved theFASB Accounting Standards Codification (the “Codification”) as the single source of authoritative nongovernmental U.S. GAAP to be launched on July 1, 2009. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative. The Codification is effective for interim and annual periods ending after September 15, 2009. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.
In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-04,Accounting for Redeemable Equity Instruments - Amendment to Section 480-10-S99 which represents an update to section 480-10-S99, distinguishing liabilities from equity, per EITF Topic D-98,Classification and Measurement of Redeemable Securities. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-05,Fair Value Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair Value, which provides amendments to subtopic 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of liabilities. This Update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: 1. A valuation technique that uses: a. The quoted price of the identical liability when traded as an asset b. Quoted prices for similar liabilities or similar liabilities when traded as assets. 2. Another valuation technique that is consistent with the principles of topic 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this Update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this Update also clarify that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-08,Earnings Per Share – Amendments to Section 260-10-S99,which represents technical corrections to topic 260-10-S99, Earnings per share, based on EITF Topic D-53,Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42,The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
17
In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-09,Accounting for Investments-Equity Method and Joint Ventures and Accounting for Equity-Based Payments to Non-Employees. This Update represents a correction to Section 323-10-S99-4,Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee. Additionally, it adds observer comment Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees to the Codification. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-12,Fair Value Measurements and Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent), which provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this Update permit, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of the amendments in this Update on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date, including measurement of all or sub stantially all of the underlying investments of the investee in accordance with Topic 820. The amendments in this Update also require disclosures by major category of investment about the attributes of investments within the scope of the amendments in this Update, such as the nature of any restrictions on the investor’s ability to redeem its investments a the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be make by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in U.S. GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments in this Update regardless of wheth er the fair value of the investment is measured using the practical expedient. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
Critical Accounting Policies
The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.
Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2to the financial statements include a summary of the significant accounting policies and methods used in the preparation of our financial statements.
Seasonality
We have not noted a significant seasonal impact in our business, although we generally draw fewer bridge players during the winter.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Laufer’s consolidated financial statements as of September 30, 2009 and the year then ended start on page 37.
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ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A -CONTROLS AND PROCEDURES
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. 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 SEC.
Evaluation of Disclosure Controls and Procedures
Our principal executive officer and principal financial officer (one person) has reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of the end of the period covered by this report and has 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 principal executive officer and principal financial officer.
Changes in Internal Control 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.
ITEM 9B -OTHER INFORMATION
No event occurred during the fourth quarter of the fiscal year ended September 30, 2008 that would have required disclosure in a report on Form 8-K, except for those Forms 8K filed with the SEC during that period..
PART III
ITEM 10 -DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Board of Directors
Our management consists of:
Name | Age | Title |
Joel Stohlman | 45 | President, CEO and Chairman |
Reid Stone | 42 | Executive Vice President, Secretary, Treasurer and Director |
Paul Thomas | 55 | Senior Vice President |
Joel Stohlman - serves as President, CEO and Director of both Laufer and Creative. Mr. Stohlman spent over four years in the research and development of the business model and plan for Creative while securing talent with ProConcept Marketing Group, Inc. (PRMK) from 2005 to 2009. Mr. Stohlman was formerly the Senior Vice President of Sales and Marketing and Athlete Acquisition for Sun Rayz Beverages, Inc. from 2004 to 2005; and Chief Operating Officer of BEV Systems International, Inc., from 2003 to 2004. From 1994 to 2004, Mr. Stohlman was the President of US operations for Elfo USA Inc. where he was responsible for: (i) development and startup of the infrastructure of US operations that included staffing and setting up manufacturing facility, (ii) formulating marketing strategies for effective business plans; competitive analysis, market positioning, brand management, contract negotiation and supply chain integration, (iii) overseeing the developm ent, deployment, support and continuous improvement of overall business; and (iv) major accounts, including Wal-Mart, Target, Starbucks, Braun, Sunbeam, Cuisinart, and Waring. Mr. Stohlman currently devotes 25% of his time to us but will devote a significantly greater amount of his time to us as soon as the Creative product line becomes available for sale. Mr. Stohlman has a degree in marketing from Western Connecticut College.
19
Reid Stone- serves as Executive Vice President, Secretary, Treasurer and a Director for both Laufer and Creative. Mr. Stone has been involved in the strategic marketing concepts of Creative since its inception, focusing on product development, as well as planning for athlete/talent negotiations. Prior thereto from 1998 to 2004, Mr. Stone was the co-owner of Atlantic Promotions, Inc. a privately-held specialty advertising business. Mr. Stone directed and managed a sales team of 7 to 10 employees, and re-evaluated direction of company to a full service marketing agency rather than just a promotional products distributor. He negotiated pricing with over 200 vendors, including capabilities to source products with overseas suppliers in Taiwan, China, and Sri Lanka. Mr. Stone is available to work with Mr. Stohlman on an as needed basis. Mr. Stone has a degree in marketing from the University of South Carolina.
Paul Thomas - serves as Senior Vice President for both Laufer and Creative. He has over 30 years of business management and nutrition marketing experience. Some of Mr. Thomas’ corporate functions will consist of overseeing manufacturing, distribution, sales, marketing and strategic partnerships when Creative's product sales begin. From 2002 to 2006, Mr. Thomas specialized as an independent procurement consultant arranging for the manufacture of nutraceuticals from international suppliers. From 2006 to 2009 Mr. Thomas served as Chief Operations Officer for Engineered Sports Technology, Inc. overseeing inventory systems, sales procedures and distribution. Mr. Thomas, who received a Bachelor’s Degree in Marketing from SUNY in Albany, New York, is available to work with Mr. Stohlman on an as needed basis until Creative commences generating revenue producing activities.
The term of office of each director expires at our annual meeting of stockholders or until their successors are duly elected and qualified. No officer or director has any prior history with a blank check company.
Possible Potential Conflicts
The OTCBB on which we plan and hope to have our shares of common stock quoted at some point in the future does not have any director independence requirements.
No member of management is currently required by us to work on a full time basis, although our President currently plans to devote a significant portion of his time to us as soon as Creative's product line are ready to be sold. Accordingly, certain conflicts of interest may arise between us and our officers in that they may have other business interests in the future to which they devote their attentions, and they may be expected to continue to do so although management time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such judgment as is consistent with their understanding of their fiduciary duties to us.
Currently we have only three officers, two of whom are also directors and will seek to add additional officer(s) and/or director(s) as and when the proper personnel are located and terms of employment are mutually negotiated and agreed, and we have sufficient capital resources and cash flow to make such offers.
Board of Directors
All directors hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. Our director’s term of office expires on September 30, 2010. All officers are appointed annually by the board of directors and, subject to existing employment agreements (of which there are currently none) and serve at the discretion of the board. Currently, our directors receive no compensation for their role as directors but may receive compensation for their role as officers.
If we have an even number of directors, tie votes on issues will be resolved in favor of the chairman’s vote.
Involvement in Certain Legal Proceedings.
There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Laufer during the past five years.
Committees of the Board of Directors
Concurrent with having sufficient members and resources, the Laufer board of directors will establish an audit committee and a compensation committee. We believe that we will need a minimum of five directors to have effective committee systems. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will manage any stock option plan we may continue or establish and review and recommend compensation arrangements for the officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees.
20
All directors will be reimbursed by Laufer for any expenses incurred in attending directors' meetings provided that Laufer has the resources to pay these fees. Laufer will consider applying for officers and directors liability insurance at such time when it has the resources to do so.
Stock Option Plan
Pursuant to a January 10, 2008 Board of Directors approval and subsequent stockholder approval, the Company adopted its 2008 Non-Statutory Stock Option Plan (the “Plan”) whereby it reserved for issuance up to 1,500,000 shares of its common stock to directors, officers, employees, consultants and professionals. The purpose of the Plan is to provide recipients with additional incentives by increasing their ownership interest in the Company. The Plan provides for the issuance of Non-Statutory Stock Options only, which are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code, as amended. The Plan expires in 2018.
No options have been issued or are outstanding under the Plan.
ITEM 11 - EXECUTIVE COMPENSATION
None of our employees are subject to a written employment agreement nor has any officer received a cash salary since our founding.
The Summary Compensation Table shows certain compensation information for services rendered in all capacities for the fiscal periods ended September 30, 2009 and 2008?. Other than as set forth herein, no executive officer's salary and bonus exceeded $100,000 in any of the applicable years. The following information includes the dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.
|
| Annual Compensation |
| Long Term Compensation | ||||||
|
|
|
|
|
| Awards |
| Payouts | ||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Other Annual Compensation ($) |
| Restricted Stock Awards ($) | Securities Underlying Options SARs (#) |
| LTIP Payouts ($) | All Other Compensation ($) |
|
|
|
|
|
|
|
|
|
|
|
Joel Stohlman | 2009 | $-0- | -0- | -0- |
| -0- | -0- |
| -0- | -0- |
Reid Stone | 2009 | -0- | -0- | -0- |
| -0- | -0- |
| -0- | -0- |
Paul Thomas | 2009 | -0- | -0- | -0- |
| -0- | -0- |
| -0- | -0- |
At September 30, 2009, we owed $21,200 to Joel Stohlman and $20,000 to Reid Stone for services. In November 2009, they agreed to accept 21,200,000 and 20,000,000, respectively of our restricted shares of common stock in full satisfaction of amounts due. The shares that were issued have no market value.
Outstanding Equity Awards at Fiscal Year End
There are no outstanding equity awards at September 30, 2008.
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of December 31, 2009, we had 275,450,000 shares of common stock outstanding which are held by 55 shareholders. The following table sets forth information known to us regarding beneficial ownership of our common stock as of December 31, 2009 by:
·
each person known or believed by us to own, directly or beneficially, more than 5% of our common stock,
·
each of our directors, and
·
all of our officers and directors as a group.
21
Except as otherwise indicated, we believe that the beneficial owners of the common stock listed below, based on information furnished by the owners, have sole investment and voting power over the shares.
Name and Address of Beneficial Owner(a) |
| Number of Shares Beneficially Owned (b) |
| Percent of Class |
Joel Stohlman |
| 146,200,000 |
| 53.08% |
Reid Stone |
| 25,000,000 |
| 9.08% |
Paul Thomas |
| 5,000,000 |
| 1.82% |
Ricardo Richardson |
| 25,000,000 |
| 9.08% |
Seeds R US |
| 25,000,000 |
| 9.08% |
Officers and Directors as a group ( 3 members) |
| 176,200,000 (c) |
| 63.97% |
(a) The address for each person is 3276 Buford Drive, Building 104, Suite 320, Buford, GA 30519
(b) Unless otherwise indicated, Laufer believes that all persons named in the table have sole voting and investment power with respect to all shares of the common stock beneficially owned by them. A person is deemed to be the beneficial owner of securities which may be acquired by such person within 60 days from the date indicated above upon the exercise of options, warrants or convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within 60 days of the date indicated above, have been exercised.
Shareholder Matters
As a Nevada corporation, we are subject to the Nevada Revised Statutes ("NRS" or "Nevada law"). Certain provisions of Nevada law create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.
Directors' Duties - Section 78.138 of the Nevada law allows our directors and officers, in exercising their powers to further our interests, to consider the interests of our employees, suppliers, creditors and customers. They can also consider the economy of the state and the nation, the interests of the community and of society and our long-term and short-term interests and shareholders, including the possibility that these interests may be best served by our continued independence. Our directors may resist a change or potential change in control if they, by a majority vote of a quorum, determine that the change or potential change is opposed to or not in our best interest. Our board of directors may consider these interests or have reasonable grounds to believe that, within a reasonable time, any debt which might be created as a result of the change in control would cause our assets to be less than our liabilities, render us insolvent, or cause u s to file for bankruptcy protection
Amendments to Bylaws - Our articles of incorporation provide that the power to adopt, alter, amend, or repeal our bylaws is vested exclusively with the board of directors. In exercising this discretion, our board of directors could conceivably alter our bylaws in ways that would affect the rights of our shareholders and the ability of any shareholder or group to effect a change in our control; however, the board would not have the right to do so in a way that would violate law or the applicable terms of our articles of incorporation.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
In January 2008, we sold 700,000 shares of our common stock in a private placement at $.001 per share to 38 individuals. Of the 700,000 shares, 330,000 shares were sold to our outside counsel.
In July 2009 we issued an aggregate of 142,950,000 shares of our common stock pursuant to terms of the SEA. See Item 1 “Business” - Merger.
In November 2009 we issued an aggregate of 101,100,000 restricted shares of our common stock to settle $101,100 in obligations to individuals and entities which have been active in providing advice in the planning process of Creative. Of this amount, $21,200 was due to our President, Joel Stohlman, and $20,000 was due to Reid Stone, our Executive Vice President, Secretary, Treasurer and Director. We recorded expenses of $101,100 at September 30, 2009 in connection with the services that were satisfied by the issuance of these shares. The share issuance was exempt from registration in accordance with Section 4(2) of the Securities Act of 1933 as a transaction by an Issuer not involved in a public offering.
22
A Convertible Promissory Note (the “Note”) in the amount of $50,000 had been entered into between Gary B. Wolff, our outside counsel, and Laufer on September 13, 2008 to settle unpaid legal fees due to Mr. Wolff with respect to Laufer's Registration Statement which had been declared effective on March 11, 2008. The note accrues interest at 2% per annum and matured on December 1, 2008. The Note is convertible at the option of the holder at a conversion price of $0.001 per share. On July 22, 2009 Mr. Wolff exchanged $12,500 principal amount of the Note to JW Financial LLC ("JW") in exchange for 12,500,000 shares of Laufer's common stock held by JW. JW then forgave the principal balance of $12,500 due by Laufer.. In accordance with the Unanimous Consent of Laufer’s Board of Directors and a Debt Purchase Agreement dated July 29, 2009, a portion of the unpaid principal balance of $8,700 was used by Gary B. Wol ff to purchase 8,700,000 restricted shares of common stock of Laufer. Following these transactions, the remaining principal amount of the Note is $28,800. These transactions were reported in Forms 8-K filed July 30, 2009 and August 14, 2009, respectively.
Director Independence
For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Accordingly, we do not have an independent director as of December 31, 2009.
ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees: Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Li & Company, PC in connection with statutory and regulatory filings. Fees incurred are $1,500 for each quarterly review associated with our Form 10-Q filings and $10,000 for the annual audit of the Company’s financial statements included as part of our Form 10-K filing.
Audit-Related Fees: Audit-related services consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards and were not incurrd.
Tax Services Fees: Tax fees consist of fees billed for professional services for tax compliance. These services include assistance regarding federal, state, and local tax compliance. Tax fees were not incurred during the fiscal year ended September 30, 2009.
All Other Fees: Other fees, which were not incurred, would include fees for products and services other than the services reported above.
PART IV
ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a.
Exhibits
31.1
Certification of Chief Executive Officer
31.2
Certification of Chief Financial Officer
b.
Financial Statement Schedules
None
23
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
/s/ Joel Stohlman
Joel Stohlman
Title: President and Chief Executive Officer
Date: January 13, 2010
24
LAUFER BRIDGE ENTERPRISES, INC.
September 30, 2009
INDEX TO THE FINANCIAL STATEMENTS
TABLE OF CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-2 |
|
|
CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2009 | F-3 |
|
|
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM MAY 11, 2009 (INCEPTIONS) THROUGH SEPTEMBER 30, 2009 | F-4 |
|
|
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT FOR THE PERIOD FROM MAY 11, 2009 (INCEPTIONS) THROUGH SEPTEMBER 30, 2009 | F-5 |
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM MAY 11, 2009 (INCEPTIONS) THROUGH SEPTEMBER 30, 2009 | F-6 |
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | F-7 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Laufer Bridge Enterprises, Inc.
Buford, Georgia
We have audited the accompanying consolidated balance sheet of Laufer Bridge Enterprises, Inc. (the “Company”) as of September 30, 2009 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the period from May 11, 2009 (inception) through September 30, 2009. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as wel l as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Laufer Bridge Enterprises, Inc. as of September 30, 2009 and the results of its operations and its cash flows for the period from May 11, 2009 (inception) through September 30, 2009 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company had an accumulated deficit of $95,225 at September 30, 2009, and had a net loss for the period from May 11, 2009 (inception) through September 30, 2009. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Li & Company, PC
Li & Company, PC
Skillman, New Jersey
January 13, 2010
F-2
LAUFERBRIDGE ENTERPRISES, INC.
Consolidated Balance Sheet
September 30, 2009
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash | $ | 29,821 |
Time deposits |
| 26,224 |
Total current assets |
| 56,045 |
OTHER ASSETS: |
|
|
Security deposits |
| 12,650 |
Goodwill |
| 55,000 |
Furniture and fixtures (net of accumulated depreciation of $890) |
| 13,813 |
Total other assets |
| 81,463 |
TOTAL ASSETS | $ | 137,508 |
|
|
|
LIABILITIES: |
|
|
Note payable | $ | 28,800 |
Accrued expenses |
| 133,891 |
Total current liabilities |
| 162,691 |
|
|
|
Stockholders' Deficit: |
|
|
Preferred stock: $0.001 par value; 1,000,000 shares authorized; no shares issued or outstanding |
| - |
Common stock: $0.001 par value; 500,000,000 shares authorized; 174,350,000 shares issued and outstanding |
| 174,350 |
Additional paid-in-capital |
| (104,308) |
Accumulated deficit |
| (95,225) |
Total stockholders’ deficit |
| (25,183) |
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 137,508 |
See notes to the consolidated financial statements.
F-3
LAUFERBRIDGE ENTERPRISES, INC.
Consolidated Statement of Operations
For the Period from May 11, 2009 (inception) to September 30, 2009
Revenues: |
|
|
Admission revenues | $ | 114,510 |
Instruction and other |
| 700 |
Total revenues |
| 115,210 |
|
|
|
Operating expenses |
|
|
Director expense |
| 22,685 |
Rent |
| 24,725 |
Consulting |
| 113,600 |
General and administrative |
| 61,925 |
Total operating expenses |
| 222,935 |
Loss from operations |
| (107,725) |
|
|
|
Other income (expense) |
|
|
Forgiveness of debt |
| 12,500 |
Total other income (expense) |
| 12,500 |
|
|
|
Loss before income taxes |
| (95,225) |
|
|
|
Provision for income taxes |
| - |
|
|
|
Net loss | $ | (95,225) |
|
|
|
Net loss per common share - basic and diluted | $ | (0.00) |
|
|
|
Weighted average number of common shares outstanding - basic and diluted |
| 163,321,127 |
See notes to the consolidated financial statements.
F-4
LAUFERBRIDGE ENTERPRISES, INC.
Statement of Stockholders’ Deficit
For the Period from May 11, 2009 (inception) to September 30, 2009
| Common Shares |
| Amount |
| Additional Paid-in Capital |
| Accumulated Deficit |
| Total |
Balance May 11, 2009 (inception) | 153,150,000 | $ | 153,150 | $ | (104,308) | $ | - | $ | 48,842 |
Shares issued for services | 12,500,000 |
| 12,500 |
|
|
|
|
| 12,500 |
Shares issued for note | 8,700,000 |
| 8,700 |
|
|
|
|
| 8,700 |
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
| (95,225) |
| (95,225) |
Balance, September 30, 2009 | 174,350,000 | $ | 174,350 | $ | (104,308) | $ | (95,225) | $ | (25,183) |
See notes to the consolidated financial statements.
F-5
LAUFERBRIDGE ENTERPRISES, INC.
Consolidated Statement of Cash Flows
For the Period from May 11, 2009 (inception) to September 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
Net loss | $ | (95,225) |
Depreciation and amortization |
| 890 |
Common stock issued for services |
| 12,500 |
Forgiveness of debt |
| (12,500) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
Increase in accrued expenses |
| 102,873 |
Net Cash Provided by Operating Activities |
| 8,538 |
|
|
|
CASH FROM INVESTING ACTIVITIES: |
|
|
Cash acquired in acquisition |
| 48,922 |
Purchase of furniture and fixtures |
| (1,415) |
Net Cash Provided by Investing Activities |
| 47,507 |
INCREASE IN CASH |
| 56,045 |
CASH AT BEGINNING OF PERIOD |
| - |
CASH AT END OF PERIOD | $ | 56,045 |
|
|
|
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES |
|
|
Cash Paid For: |
|
|
Interest paid | $ | - |
Income taxes | $ | - |
NON-CASH FINANCING AND INVESTING |
|
|
Common stock issued for note | $ | 3,517 |
See notes to the consolidated financial statements.
F-6
LAUFERBRIDGE ENTERPRISES, INC.
September 30, 2009
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
Laufer Bridge Enterprises, Inc. ("Laufer" or the “Company”) was founded as a New York corporation on March 13, 2002 and became a corporation under the laws of the State of Nevada in January 2008. At inception, Laufer acquired the assets of an existing bridge club. Laufer operates a bridge club offering tournament style duplicate bridge games and instruction in playing bridge under the name of The Bridge Deck. It is generally open seven days per week and is located in Westchester County, New York.
Creative Edge Nutrition, Inc. (“Creative”) was incorporated under the laws of the State of Nevada on May 11, 2009. Creative plans on becoming an innovative bio-science company engaged in the development of nutraceuticals and health supplements.
Merger of Creative Edge Nutrition, Inc.
On July 22, 2009, Laufer entered into a Share Exchange Agreement (the “Agreement”) among Laufer and certain of its shareholders, Creative Edge Nutrition, Inc. (“Creative”), and the shareholders of Creative (the “Creative Shareholders”).
Pursuant to the terms of the Agreement, Laufer agreed to issue an aggregate of 142,950,000 restricted shares of Laufer's common stock to the Creative Shareholders in exchange for all of the issued and outstanding shares of Creative. The closing of the Agreement was subject to the fulfillment of certain conditions, including, but not limited to the receipt of all requisite consents, waivers and approvals by the Company and Creative, and the transaction closed July 22, 2009.
The merger was accounted for as a reverse acquisition and recapitalization. Creative is the acquirer for accounting purposes and Laufer is the issuer. Accordingly, Creative's historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares issued in the merger. Operations prior to the merger are those of Creative. From inception on May 11, 2009 until the merger date, July 22, 2009, Creative had no operations. All revenues during the reporting period relates to the operations of the Laufer from July 22, 2009 (date of acquisition) until September 30, 2009. Earnings per share for the period prior to the merger are restated to reflect the equivalent number of shares outstanding.
Creative is a wholly-owned subsidiary of Laufer. The consolidated financial statements consist of Laufer Bridge Enterprises, Inc. and its wholly-owned subsidiary, Creative Edge Nutrition, Inc., collectively referred to herein as the “Company” or “Laufer.” All significant intercompany transactions and balances have been eliminated in consolidation.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of presentation
The Company’s consolidated financial statements have been prepared in accordance withaccounting principles generally accepted in the United States of America (“U.S. GAAP”).
The consolidated financial statements include all accounts of Creative as of September 30, 2009 and for the period from May 11, 2009 (inception) through September 30, 2009. Creative is included as of September 30, 2009 and for the period from May 11, 2009 (inception) through September 30, 2009. All inter-company balances and transactions have been eliminated.
b. Fiscal year-end
The Company has elected a fiscal year ending on September 30.
c. Development stage company
The Company is a development stage company as defined by ASC 915-10 “Development Stage Entities”.The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception has been considered as part of the Company's development stage activities.
F-7
d. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
e. Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
f. Furniture and fixtures
Furniture and fixtures are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over an estimated useful life of five years. Upon sale or retirement of furniture and fixtures, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of income.
g. Goodwill
Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. In accordance with paragraph 350-20-35-1 of the FASB Accounting Standards Codification for goodwill is not amortized. The Company periodically, at least on an annual basis, reviews goodwill, considering factors such as projected cash flows and revenue and earnings multiples, to determine whether the carrying value of the goodwill is impaired. If the goodwill is deemed to be impaired, the difference between the carrying amount reflected in the financial statements and the estimated fair value is recognized as an expense in the period in which the impairment occurs. There was no impairment of goodwill at September 30, 2009.
h. Impairment of long-lived assets
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include goodwill and furniture and fixtures, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company determined that there were no impairments of long-lived assets as of September 30, 2009.
i. Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservabl e inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3
Pricing inputs that are generally observable inputs and not corroborated by market data.
F-8
The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at September 30, 2009.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at September 30, 2009, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the interim period ended September 30, 2009.
j. Revenue recognition
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
k. Advertising
Advertising costs are expensed as incurred.
l. Stock-based compensation for obtaining employee services and equity instruments issued to parties other than employees for acquiring goods or services
The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification and accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of section 505-50-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the t hird-party performance is complete or the date on which it is probable that performance will occur.
m. Income taxes
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
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n. Basic and Diluted Loss Per Common Share
Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of September 30, 2009.
o. Recently Issued Accounting Standards
In June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-9072 on October 13, 2009. Commencing with the Company’s Annual Report for the fiscal year ended September 30, 2010, the Company is required to include a report of management on the Company’s internal control over financial reporting. The internal control report must include a statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting for the Company; of management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of year end; of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting; and that the Company’s independent accounting firm has issued an attestation report on management’s assessment of the Company’s internal control over financial reporting, which report is also required to be filed as part of the Annual Report on Form 10-K.
In June 2009, the FASB approved the “FASB Accounting Standards Codification” (the “Codification”) as the single source of authoritative nongovernmental U.S. GAAP to be launched on July 1, 2009. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative. The Codification is effective for interim and annual periods ending after September 15, 2009. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.
In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-04,Accounting for Redeemable Equity Instruments - Amendment to Section 480-10-S99, which represents an update to section 480-10-S99, distinguishing liabilities from equity, per EITF Topic D-98,Classification and Measurement of Redeemable Securities. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-05,Fair Value Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair Value, which provides amendments to subtopic 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of liabilities. This Update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: 1. A valuation technique that uses: a. The quoted price of the identical liability when traded as an asset b. Quoted prices for similar liabilities or similar liabilities when traded as assets. 2. Another valuation technique that is consistent with the principles of topic 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this Update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this Update also clarify that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-08,Earnings Per Share – Amendments to Section 260-10-S99,which represents technical corrections to topic 260-10-S99, Earnings per share, based on EITF Topic D-53,Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42,The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
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In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-09,Accounting for Investments-Equity Method and Joint Ventures and Accounting for Equity-Based Payments to Non-Employees. This Update represents a correction to Section 323-10-S99-4,Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee. Additionally, it adds observer comment Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees to the Codification. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-12,Fair Value Measurements and Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent), which provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this Update permit, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of the amendments in this Update on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date, including measurement of all or su bstantially all of the underlying investments of the investee in accordance with Topic 820. The amendments in this Update also require disclosures by major category of investment about the attributes of investments within the scope of the amendments in this Update, such as the nature of any restrictions on the investor’s ability to redeem its investments a the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be make by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in U.S. GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments in this Update regardless of whet her the fair value of the investment is measured using the practical expedient. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
NOTE 3 - GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has negative working capital of $106,641 and a deficit accumulated during the development stage of $95,225 at September 30, 2009, with a net loss of $92,225 for the nine months ended September 30, 2009. These conditions raise substantial doubt about its ability to continue as a going concern.
While the Company is attempting to produce sufficient sales, the Company’s cash position may not be sufficient to support the Company’s daily operations. While the Company believes in the viability of its strategy to produce sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern.
The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
NOTE 4 - NOTE PAYABLE
A Convertible Promissory Note (the “Note”) in the amount of $50,000 had been entered into between Gary B. Wolff, Laufer's outside counsel, and Laufer to settle unpaid legal fees due to Mr. Wolff with respect to Laufer's Registration Statement. The note accrues interest at 2% per annum and matured on December 1, 2008. The Note is convertible at the option of the holder at a conversion price of $0.001 per share. On July 22, 2009, Mr. Wolff exchanged $12,500 principal amount of the Note to JW Financial LLC ("JW") in exchange for 12,500,000 shares of Laufer's common stock held by JW. JW then forgave the principal balance of $12,500. In accordance with the Unanimous Consent of Laufer’s Board of Directors and a Debt Purchase Agreement dated July 29, 2009, a portion of the unpaid principal balance of $8,700 was used by Gary B. Wolff to purchase 8,700,000 restricted shares of common stock of Laufer. Following these transactions, the remai ning principal amount of the Note is $28,800.
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NOTE 5 - STOCKHOLDERS’ EQUITY
The Company is authorized to issue 500,000,000 shares of common stock and 1,000,000 shares of preferred stock.
Pursuant to the terms of the Agreement described in Note 1, Laufer agreed to issue an aggregate of 142,950,000 restricted shares of Laufer's common stock to the Creative Shareholders in exchange for all of the issued and outstanding shares of Creative.
On July 29, 2009, the Company issued 12,500,000 shares of its common stock for service rendered valued at $12,500 (the estimated fair value on the date of grant).
On July 29, 2009, the Company issued 8,700,000 shares of common stock valued at $0.001 per share in lieu of payment of $8,700 indebted to its attorney.
Stock Option Plan
Pursuant to a January 10, 2008 Board of Directors approval and subsequent stockholder approval, the Company adopted its 2008 Non-Statutory Stock Option Plan (the “Plan”) whereby it reserved for issuance up to 1,500,000 shares of its common stock to directors, officers, employees, consultants and professionals. The purpose of the Plan is to provide recipients with additional incentives by increasing their ownership interest in the Company. The Plan provides for the issuance of Non-Statutory Stock Options only, which are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code, as amended. The Plan expires in 2018.
No options have been issued or are outstanding under the Plan.
NOTE 6 - CONTINGENT LIABILITIES AND COMMITMENTS
The Company is obligated under a lease for the facility used by its Bridge Deck operations. The lease is with an unrelated party, expires on March 31, 2012 and calls for the following minimum annual rental payments:
October 1, 2009 through March 31, 2010 | 49,450 |
April 1, 2010 through March 31, 2011 | 101,200 |
April 1, 2011 through March 31, 2012 | 103,500 |
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date of September 30, 2009 through January 13, 2010, the date these financial statements were issued. The Management of the Company determined that there was a reportable subsequent event to be disclosed as follows:
In November 2009 the Company issued an aggregate of 101,100,000 restricted shares of its common stock to settle $101,100 in obligations to individuals and entities which had been active in providing advice in the planning process of Creative. Of this amount, $21,200 was due to the Company's President and $20,000 was due to the Company's Executive Vice President, Secretary, Treasurer and Director. The Company recorded expenses of $101,100 for the services in the accompanying consolidated financial statements.
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