UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 10-Q
_____________________
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2009
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______to______.
OMNI VENTURES, INC.
(Exact name of registrant as specified in the Charter)
| KANSAS | 333-156263 | 26-3404322 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File No.) | (IRS Employee Identification No.) |
15875 S. Cherry Ct, Suite 1
Olathe, Kansas 66062
(Address of Principal Executive Offices)
(913) 681-8193
(Issuer Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):
| Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer (Do not check if a smaller reporting company) | o | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x
The number of shares outstanding of the Registrant’s common stock as of May20, 2009: 92,655,172 shares of common stock.
OMNI VENTURES, INC.
FORM 10-Q
March 31, 2009
TABLE OF CONTENTS
| PART I— FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |
| Item 4T. | Controls and Procedures | |
| PART II— OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | |
| Item 1A. | Risk Factors | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
| Item 3. | Defaults Upon Senior Securities | |
| Item 4. | Submission of Matters to a Vote of Security Holders | |
| Item 5. | Other Information | |
| Item 6. | Exhibits | |
| SIGNATURES | ||
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Omni Ventures, Inc.
(A Development Stage Company)
Financial Statements
March 31, 2009
CONTENTS
| Page(s) | |
| Balance Sheets – As of March 31, 2009 (Unaudited) and September 30, 2008 (Audited) | 1 |
| Statements of Operations – | |
| For the three and six months ended March 31, 2009 and for the period from | |
| August 14, 2008 (Inception) to March 31, 2009 | 2 |
| Statements of Cash Flows – | |
| For the six months ended March 31, 2009 and for the period from | |
| August 14, 2008 (Inception) to March 31, 2009 | 3 |
| Notes to Financial Statements (Unaudited) | 4 - 8 |
| (A Development Stage Company) | ||||||||
| Balance Sheets | ||||||||
| March 31, 2009 | September 30, 2008 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 3,153 | $ | - | ||||
| Prepaid expense | 176,335 | 92,500 | ||||||
| Total Current Assets | 179,488 | 92,500 | ||||||
| Total Assets | $ | 179,488 | $ | 92,500 | ||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Current Liabilities | ||||||||
| Accrued expenses | $ | 26,926 | $ | 3,000 | ||||
| Loan payable - related party | 8,900 | - | ||||||
| Note payable | 100,000 | 100,000 | ||||||
| Total Current Liabilities | 135,826 | 103,000 | ||||||
| Stockholders' Equity (Deficit) | ||||||||
| Preferred stock, $0.001 par value, 50,000,000 shares authorized; | ||||||||
| �� none issued and outstanding | - | - | ||||||
| Common stock, $0.0001 par value, 200,000,000 shares authorized; | ||||||||
| 92,655,172 and 80,000,000 shares issued and outstanding | 9,265 | 8,000 | ||||||
| Additional paid-in capital | 251,838 | - | ||||||
| Deficit accumulated during the development stage | (217,441 | ) | (18,500 | ) | ||||
| Total Stockholders' Equity (Deficit) | 43,662 | (10,500 | ) | |||||
| Total Liabilities & Stockholders' Equity (Deficit) | $ | 179,488 | $ | 92,500 | ||||
See accompanying notes to unaudited financial statements
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| (A Development Stage Company) | ||||||||||||
| Statements of Operations | ||||||||||||
| (Unaudited) | ||||||||||||
| For the period from | ||||||||||||
| For the three months ended | For the six months ended | August 14, 2008 (inception) to | ||||||||||
| March 31, 2009 | March 31, 2009 | March 31, 2009 | ||||||||||
| Revenues | $ | - | $ | - | $ | - | ||||||
| Operating Expenses | ||||||||||||
| General and administrative | 129,300 | 191,941 | 209,441 | |||||||||
| Total Operating Expenses | 129,300 | 191,941 | 209,441 | |||||||||
| Loss from Operations | (129,300 | ) | (191,941 | ) | (209,441 | ) | ||||||
| Other Expense | ||||||||||||
| Interest expense | 4,000 | 7,000 | 8,000 | |||||||||
| Total Other Expense | 4,000 | 7,000 | 8,000 | |||||||||
| Net Loss | $ | (133,300 | ) | $ | (198,941 | ) | $ | (217,441 | ) | |||
| Net Loss per Share - Basic and Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
| Weighted Average Number of Shares Outstanding | ||||||||||||
| During the Period - Basic and Diluted | 92,655,172 | 88,813,332 | 87,004,483 | |||||||||
See accompanying notes to unaudited financial statements
-2-
| (A Development Stage Company) | ||||||||
| Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| For the period from | ||||||||
| For the six months ended | August 14, 2008 (inception) to | |||||||
| March 31, 2009 | March 31, 2009 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (198,941 | ) | $ | (217,441 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of prepaid consulting services | 157,068 | 164,568 | ||||||
| Common stock issued for pre-incorporation services - founder | - | 8,000 | ||||||
| Change in operating assets and liabilities | ||||||||
| Increase (decrease) in: | ||||||||
| Accrued expenses | 23,926 | 26,926 | ||||||
| Net Cash Used In Operating Activities | (17,947 | ) | (17,947 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds loan payable - related party | 13,300 | 13,300 | ||||||
| Repayment of loan payable - related party | (4,400 | ) | (4,400 | ) | ||||
| Proceeds from sale of common stock | 12,200 | 12,200 | ||||||
| Net Cash Provided by Financing Activities | 21,100 | 21,100 | ||||||
| Net Increase in Cash | $ | 3,153 | $ | 3,153 | ||||
| Cash - Beginning of Period | - | - | ||||||
| Cash - End of Period | $ | 3,153 | $ | 3,153 | ||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 3,000 | $ | 4,000 | ||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Note payable issued for future services | $ | - | $ | 100,000 | ||||
| Common stock issued for future services | $ | 240,903 | $ | 240,903 | ||||
See accompanying notes to unaudited financial statements
-3-
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
(Unaudited)
Note 1 Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.
The unaudited interim financial statements should be read in conjunction with the Company’s Registration Statement on Form S-1, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the period ended September 30, 2008. The interim results for the period ended March 31, 2009 are not necessarily indicative of results for the full fiscal year.
Note 2 Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Omni Ventures, Inc. (the “Company”), was incorporated in the State of Kansas on August 14, 2008.
The Company intends to become a real estate development company. The Company is searching to develop properties on Indian reservations.
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan. The Company has not generated any revenues since inception.
Risks and Uncertainties
The Company's operations will be subject to significant risk and uncertainties including financial, operational, regulatory and other risks associated with a development stage company, including the potential risk of business failure.
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Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
(Unaudited)
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
A significant estimate in fiscal year-end 2009 included a 100% valuation allowance for deferred taxes due to the Company’s continuing and expected future losses.
Cash and Cash Equivalents
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At March 31, 2009 and September 30, 2008, respectively, there were no balances that exceeded the federally insured limit.
For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. At March 31, 2009 and September 30, 2008, respectively, the Company had no cash equivalents.
Earnings per Share
Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. For the period from August 14, 2008 (inception) to March 31, 2009, the Company had no common stock equivalents that could potentially dilute future earnings (loss) per share; hence, a separate computation of diluted earnings (loss) per share is not presented.
Stock-Based Compensation
All share-based payments to employees will be recorded and expensed in the statement of operations as applicable under SFAS No. 123R “Share-Based Payment”. For the period from August 14, 2008 (inception) to March 31, 2009, the Company has not issued any stock based compensation to employees.
Non-Employee Stock Based Compensation
Stock-based compensation awards issued to non-employees for services will be recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Emerging Issues Task Force Issue EITF No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” (“EITF 96-18”). For the period from August 14, 2008 (inception) to March 31, 2009, the Company has not issued any stock based compensation to third parties.
-5-
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
(Unaudited)
Fair Value of Financial Instruments
The carrying amounts of the Company’s short-term financial instruments, including prepaid expense, accrued expenses, loans payable-related party and a note payable, approximate fair value due to the relatively short period to maturity for these instruments.
Segment Information
The Company follows Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information." During fiscal year-end 2009, the Company only operated in one segment; therefore, segment information has not been presented.
Recent Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its controlling financial interest and fair value measurement of any retained noncontrolling equity investment. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The adoption of SFAS No. 160 did not have a material effect on the Company’s financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS 141R, “Business Combinations” (“SFAS 141R”), which replaces FASB SFAS 141, “Business Combinations”. This Statement retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R will require an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. SFAS 141R will require an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date. This compares to the cost allocation method previously required by SFAS No. 141. SFAS 141R will require an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non-contractual, if certain criteria are met. Finally, SFAS 141R will require an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This Statement will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption of this standard is not permitted and the standards are to be applied prospectively only. Upon adoption of this standard, there would be no impact to the Company’s results of operations and financial condition for acquisitions previously completed. The adoption of SFAS No. 141R did not have a material effect on the Company’s financial position, results of operations or cash flows.
-6-
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
(Unaudited)
In October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS 157-3”), with an immediate effective date, including prior periods for which financial statements have not been issued. FSP FAS 157-3 amends FAS 157 to clarify the application of fair value in inactive markets and allows for the use of management’s internal assumptions about future cash flows with appropriately risk-adjusted discount rates when relevant observable market data does not exist. The objective of FAS 157 has not changed and continues to be the determination of the price that would be received in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date. The adoption of FSP FAS 157-3 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.
In April 2009, the FASB issued FSP SFAS 157-4, “Determining Whether a Market Is Not Active and a Transaction Is Not Distressed,” which further clarifies the principles established by SFAS No. 157. The guidance is effective for the periods ending after June 15, 2009 with early adoption permitted for the periods ending after March 15, 2009. The adoption of FSP FAS 157-4 is not expected to have a material effect on the Company’s financial position, results of operations, or cash flows.
Other accounting standards have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date and are not expected to have a material impact on the financial statements upon adoption.
Note 3 Going Concern
As reflected in the accompanying financial statements, the Company has a net loss of $198,941 and net cash used in operations of $17,947, for the six months ended March 31, 2009; and a deficit accumulated during the development stage of $217,441 at March 31, 2009.
The Company is in the development stage and has not yet generated any revenues. The ability of the Company to continue as a going concern is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities, further implementation of its business plan and continuing to raise funds through debt or equity raises. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
-7-
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2009
(Unaudited)
Note 4 Loan Payable - Related Party
On October 6, 2008, the Company’s Chairman provided a $20,000 revolving line of credit. The debt bears interest at 12%, with interest due monthly. All advances are due on demand and are unsecured. As of March 31, 2009, the balance on the line was $8,900.
Note 5 Note Payable
On September 3, 2008, the Company entered into an agreement for future consulting services. In exchange for these future services, the Company issued a $100,000, one-year note payable. The note bears interest at 12% and is due monthly. The note is secured by the Company’s assets and 80,000,000 shares issued to the Company’s founder (See Note 6). The note is due on September 3, 2009. As of March 31, 2009 and September 30, 2008, respectively, the Company had accrued interest of $4,000 relating to this note.
The Company did not pay the interest due in January 2009 under the terms of the note agreement; therefore, beginning in February 2009, the note holder began charging the default interest rate of 18% on the amount in default. The note holder granted a six-month extension until July 1, 2009 to repay all unpaid accrued interest
The Company is amortizing the related services over a one-year period. The Company has expensed $25,000 and $50,000 for the three and six months ended March 31, 2009, respectively, and $57,500 for the period from August 14, 2008 (inception) to March 31, 2009. The remaining balance of $42,500 is reflected as a component of prepaid expense.
Note 6 Stockholders’ Equity (Deficit)
On August 14, 2008, the Company issued 80,000,000 shares of common stock, having a fair value of $8,000 ($0.0001/share), to its founder for pre-incorporation services. Under SFAS No. 123R and APB No. 29, “Accounting for Nonmonetary Transactions”, fair value of the services provided reflect a more readily determinable fair value of the shares issued. The exchange of these non-monetary assets did not result in a gain or loss. The Company has expensed this stock issuance as a component of general and administrative expense. These shares are being held by a third party escrow agent as security on a note payable in the event of default on the $100,000 note (See Note 5).
In October 2008, the Company issued 610,000 shares of common stock, for $12,200 ($0.02/share), under a private placement to third party investors.
On November 26, 2008, the Company issued 12,045,172 shares of common stock to consultants for future services having a fair value of $240,903 ($0.02/share), based upon the recent cash offering price. The services will be rendered during the period December 1, 2008 through August 31, 2009. The Company expensed $80,301 and $107,068 during the three and six months ended March 31, 2009. The remaining $133,835 is reflected as a prepaid expense.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
GENERAL
We were incorporated in August 2008 in the State of Kansas. We plan to provide equity funding for commercial and recreational projects in the Mid-west and Western areas of the United States, with specialization in two different categories. One is apartment projects to house employees that work for gaming and supporting businesses. The other is recreational activities geared at family oriented activities. Our founder and Chief Executive Officer, Hollis Cunningham, has been active in the development of commercial projects for over forty years and has extensive knowledge and experience in this field.
Our primary goal is to provide housing and recreational activities that complement the Native American gaming activities in the area. We believe that tourism in these areas is becoming more oriented toward family activities. Our management believes investment in these types of projects appropriately meets the market need in these areas.
Market research shows a continued and steady increase in tourism in the targeted areas, especially in family oriented activities.
Our management believes the increasing popularity of tourism in these areas is due in part to demographic and social trends. Annual reports from Chamber of Commerce and marketing news agencies in these areas indicate a steady trend toward combining adult gaming with family activities such as winter sports, water parks, and indoor fun centers.
We have not begun operations, and we require outside capital to begin operations. We believe we will be able to competitively market ourselves. All functions will be coordinated and managed by our founder, including marketing, finance, and operations.
We are currently negotiating with several Tribes on various projects and have had positive input from them. We are working on our web site which will provide quick response for new customers.
We also intend to engage Three Fires Development Group, Inc. to assist us in the introduction of our Company to potential customers and to assist in negotiating Joint Venture Agreements with them. Three Fires has vast experience in the development arena and enjoys an excellent reputation with the Native American Tribes.
Over the next year our plan is to negotiate joint venture agreements with the Nambe Pueblo, Santa Fe, New Mexico, Moapa, Las Vegas, Nevada, and the Ysleta Del Sur, El Paso, Texas. At this time negotiations on these projects are underway and response has been positive.
We have budgeted $250,000.00 over the next year for general expenses. This budget covers marketing expenses ($60,000.00), legal and consulting fees ($140,000.00), infrastructure fees ($20,000.00) and due diligence fees ($30,000.00).
We expect the first year total cost of marketing and advertising to be $60,000.00. As projects come on line we anticipate interest from other Tribes for assistance in additional projects. We anticipate that new projects will offset any additional general and marketing costs.
At the end of the first year we plan to make an assessment on the first year of operations. By that time we anticipate having additional projects contracted for funding for the following year.
If we are unable to effectively market and fund these projects we may have to suspend or cease our efforts. If we cease our previously stated efforts we do not have plans to pursue other business opportunities. If we cease operations investors will not receive any return on their investments.
-9-
Results of Operations
For the period from August 14, 2008 (inception) through March 31, 2009, we had no revenue. Total expenses for the period were $217,441 which included interest expense of $8,000.
Capital Resources and Liquidity
As of March 31, 2009 we had $3,153 in cash.
We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that additional financing will be available. In the absence of additional financing, we may be unable to proceed with our plan of operations.
We anticipate that our operational, and general and administrative expenses for the next 12 months will total approximately $250,000. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
Recent Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement did not have a material effect on the Company's financial statements.
In December 2007, the FASB issued SFAS 141R, “Business Combinations” (“SFAS 141R”), which replaces FASB SFAS 141, “Business Combinations”. This Statement retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R will require an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. SFAS 141R will require an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date. This compares to the cost allocation method previously required by SFAS No. 141. SFAS 141R will require an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non-contractual, if certain criteria are met. Finally, SFAS 141R will require an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This Statement will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption of this standard is not permitted and the standards are to be applied prospectively only. Upon adoption of this standard, there would be no impact to the Company’s results of operations and financial condition for acquisitions previously completed. The adoption of SFAS No. 141R did not have a material effect on the Company’s financial position, results of operations or cash flows.
In October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS 157-3”), with an immediate effective date, including prior periods for which financial statements have not been issued. FSP FAS 157-3 amends FAS 157 to clarify the application of fair value in inactive markets and allows for the use of management’s internal assumptions about future cash flows with appropriately risk-adjusted discount rates when relevant observable market data does not exist. The objective of FAS 157 has not changed and continues to be the determination of the price that would be received in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date. The adoption of FSP FAS 157-3 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.
-10-
In April 2009, the FASB issued FSP SFAS 157-4, “Determining Whether a Market Is Not Active and a Transaction Is Not Distressed,” which further clarifies the principles established by SFAS No. 157. The guidance is effective for the periods ending after June 15, 2009 with early adoption permitted for the periods ending after March 15, 2009. The adoption of FSP FAS 157-4 is not expected to have a material effect on the Company’s financial position, results of operations, or cash flows.
Critical Accounting Policy
In December 2001, the SEC requested that all registrants discuss their most “critical accounting policies” in management’s discussion and analysis of financial condition and results of operations. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of the company’s financial condition and results and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain 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 expenses during the reporting period. Actual results could differ from those estimates.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
We are subject to certain market risks, including changes in interest rates and currency exchange rates. We do not undertake any specific actions to limit those exposures.
Item 4T. Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Controls over Financial Reporting
Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. There has been no change in the Company’s internal control over financial reporting during the quarter ended March 31, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company’s management, including the Company’s CEO and CFO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of March 31, 2009.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Currently we are not aware of any litigation pending or threatened by or against the Company.
Item 1A. Risk Factors
Not applicable because we are a smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
31.1 Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer
32.1 Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
OMNI VENTURES, INC. | |||
| Date: May 20, 2009 | By: | /s/ Hollis Cunningham | |
| Hollis Cunningham | |||
President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors | |||
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