UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
| (x) | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF 1934 |
| | For the fiscal year ended January 31, 2013 |
| ( ) | TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | For the transaction period from to __________ to ______________ |
Commission File Number: 333-119566
AVALON HOLDING GROUP INC.
(Exact name of registrant as specified in its charter)
| Nevada | | 26-3608086 |
| State or other jurisdiction of | | (I.R.S. Employer |
| incorporation or organization | | Identification No.) |
6536 102nd Place NE, Kirland, WA 98033 USA
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 206-947-5639
Securities registered under Section 12(b) of the Exchange Act:
| Title of each class | | | Name of each exchange on which registered |
| None | | | None |
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 Par Value
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [X] Yes [ ] No
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. [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [X] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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. [ ] Yes [X] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| 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 aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of July, 2012 is $0.00
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Number of common voting shares issued and outstanding as of May15, 2013, 121,320,000 shares of common stock
| | | Page No. |
| | PART I | |
| Item 1. | | 3 |
| Item 1A. | | 3 |
| Item 1B. | | 3 |
| Item 2. | | 3 |
| Item 3. | | 3 |
| Item 4. | | 3 |
| | | |
| | PART II | |
| Item 5. | | 4 |
| Item 6. | Selected Financial Data. | 5 |
| Item 7. | | 5 |
| Item 7A. | | 5 |
| Item 8. | | 7 |
| Item 9. | | 8 |
| Item 9A. | | 8 |
| Item 9B. | | 9 |
| | | |
| | PART III | |
| Item 10. | | 10 |
| Item 11. | | 10 |
| Item 12. | | 11 |
| Item 13. | | 12 |
| Item 14. | | 12 |
| | | |
| | PART IV | |
| Item 15. | | 13 |
| | | 13 |
Item 1. Business.
AVALON HOLDING GROUP, INC (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on July 28, 2008.
On September 28, 2012, the Company incorporated a new fully owned company (“subsidiary”) under the laws of the State of Nevada, U.S. The new subsidiary is called Painmaster Product, Inc. Avalon Holding Group, Inc. ceased operations in the entertainment and amusement gaming machines business within Russia. The Company is active in the acquisition and promotion of consumer medical product brands and businesses, and is an investment platform for pursuing synergistic opportunities in the rapidly growing pain management market, an industry estimated to grow from $40 billion to $60 billion in the U.S. by 2015.
The Company now intends through its wholly owned subsidiary Painmaster Products, Inc. to license, manufacture, market and distribute, within the United States and Canada, a Micro Current Therapy patch that is drug free, non-invasive and proven to control pain and promote healing.
Employees
We have no employees at the present time. Our officers and directors are responsible for all planning, developing and operational duties, and will continue to do so throughout the early stages of our growth.
We have no intention of hiring employees until our business has been successfully launched and we have sufficient, reliable revenue flow from our operations. Our sole executive officer and director will undertake the work and tasks necessary to bring our business to the point of having positive cash flow by earning revenues.
Item 1A. Risk Factors.
The Company is a smaller reporting Company as defined by Rule 12b-2 of the Securities Act of 1934 and are not required to provide the information under this item.
Item 1B. Unresolved Staff Comments.
None
Item 2. Properties.
We do not own or rent facilities of any kind. At present we are operating from our principal office that is located within the offices of our President, who provides this space free of charge. We will continue to use this space for our executive offices for the foreseeable future.
We do not have any manufacturing plants and have minimal equipment for the operation of our business.
We do not have any investments or interests in any real estate.
Item 3. Legal Proceedings.
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suite, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Item 4. (Removed and Reserved).
PART II
Our shares of common stock, par value $0.001 per share, were quoted on the OTCQB under the symbol “AVLH”.
Fiscal Year Ended January 31, 2013
| Quarter Ended | April 30, 2012 | July 31, 2012 | October 31, 2012 | January 31, 2013 |
| High | $0.00 | $0.00 | $0.00 | $0.00 |
| Low | $0.00 | $0.00 | $0.00 | $0.00 |
Fiscal year ended January 31, 2012
| Quarter Ended | April 30, 2011 | July 31, 2011 | October 31, 2011 | January 31, 2012 |
| High | $0.00 | $0.00 | $0.00 | $0.00 |
| Low | $0.00 | $0.00 | $0.00 | $0.00 |
(b) Holders
As of May 15, 2013, there were 33 holders of record of our common stock.
(c) Dividend Policy
We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.
(d) Securities authorized for issuance under equity compensation plans
None.
RECENT SALES OF UNREGISTERED SECURITIES
We have not sold any unregistered securities during the period covered by this annual report.
USE OF PROCEEDS FROM SALE OF REGISTERED SECURITIES
Not applicable.
DESCRIPTION OF SECURITIES
Common Stock
Each record holder of common stock is entitled to one vote for each share held in all matters properly submitted to the stockholders for their vote. Cumulative voting for the election of directors is not permitted by the By-Laws of Avalon.
Holders of outstanding shares of common stock are entitled to such dividends as may be declared from time to time by the Board of Directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of the affairs of Avalon, holders are entitled to receive, ratably, the net assets of Avalon available to stockholders. Holders of outstanding shares of common stock have no preemptive, conversion or redemptive rights. To the extent that additional shares of Avalon’s common stock are issued, the relative interest of the existing stockholders may be diluted.
Stock Purchase Warrants
None.
Stock Purchase Options
None.
Item 6. Selected Financial Data.
The company is a smaller reporting company and is not required to provide this information.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.
We were incorporated on July 28, 2008 under the laws of the state of Nevada. Our principal offices are located at 6536 102nd Place NE, Kirland, WA 98033 USA. Our telephone number is 206-947-5639. Our fiscal year end is January 31.
Avalon Holding Group, Inc. ceased operations in the entertainment and amusement gaming machines business within Russia. The Company is active in the acquisition and promotion of consumer medical product brands and businesses, and is an investment platform for pursuing synergistic opportunities in the rapidly growing pain management market, an industry estimated to grow from $40 billion to $60 billion in the U.S. by 2015.
The Company now intends through its wholly owned subsidiary Painmaster Products, Inc. to license, manufacture, market and distribute, within the United States and Canada, a Micro Current Therapy patch that is drug free, non-invasive and proven to control pain and promote healing.
RESULTS OF OPERATION
Years ended January 31, 2013 and 2012
Because the Company is planning to launch its Painmaster product, we have incurred a significant increase in expenses. Our net loss for the year ended January 31, 2013 was $244,300, compared to a loss of $17,143 during the same period from the prior fiscal year. During the year ended January 31, 2013, we did not generate any revenue and incurred general and administrative expenses of $81,741, advertising and Marketing expenses of $150,689, Management fees of $23,000, interest expense of $10,384 and a gain on forgiveness of debt of $21,514 resulting in a net loss of $244,300. As compared to the year ended January 31, 2012, we did not generate any revenue and incurred general and administrative expenses of $17,143, advertising and Marketing expenses of $nil, Management fees of $nil, interest expense of $nil and a gain on forgiveness of debt of $nil resulting in a net loss of $17,143.
The weighted average number of shares outstanding was 121,320,000 for the year ended January 31, 2013.
LIQUIDITY AND CAPITAL RESOURCES
As at January 31, 2013, we had $355,103 assets consisting of $147,153 in cash, $50,000 in prepaid royalty fees for the Painmaster product, $29,600 in prepaid marketing expense, $10,000 deposit for a video production and Painmaster product inventory of $118,350. As at January 31, 2012, the Company had no assets.
As at January 31, 2013, our total liabilities were $600,376 comprised of $23,351 in accounts payable and accrued expenses, a promissory note of $551,925 advances of $nil and advances from a director of $25,100 which resulted in a working capital deficit of $245,723, compared to total liabilities of $57,081, and a working capital deficit of $57,081 as of January 31, 2012. The increase in our working capital deficit was due to an increase in accounts payable of $20,168, a decrease in advances of $9,000, an increase in promissory note of $551,925 and a decrease in advances from director of $19,798 incurred during the year ended January 31, 2013.
Stockholders deficit increased from $57,081 for the year ended January 31, 2012 to $245,273 for the year ended January 31, 2013.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the year ended January 31, 2013, net cash flows used in operating activities was $377,652 consisting of a net loss of $244,300, gain on debt forgiveness of $21,514, expenses paid by third party on behalf of the Company of $51,925, expenses paid by related party on behalf of the Company of $11,505, inventory of $118,350, prepaid royalty fees of $50,000, prepaid expenses of $29,600, a deposit of $10,000 and accounts payable and accrued expenses $32,682 as compared to net cash flows for the year ended January 31, 2012 of $31,963 consisting of a net loss of $17,143 and changes in accounts payable of $14,820.
Cash Flows from Investing Activities
For the years ended January 31, 2013 and 2012, we did not generate net cash flows from investing activities.
Cash Flows from Financing Activities
We have financed our operations primarily from either advances from director or the issuance of equity and debt instruments. On October 1, 2012 Painmaster signed a Promissory Note for five hundred and fifty-two thousand dollars $552,000 with an annual interest rate of 10%, and a default annual interest rate of the lower of 18%, or the maximum rate permitted by law. The Promissory Note is fully secured with a general assignment of all the assets of Painmaster. The maturity date of the Promissory Note is September 30, 2013. All interest and principal payments are due on the maturity date of the Promissory Note. Painmaster may draw on the Promissory Note as funds are required. As of January 31, 2013, the amount owing on the Promissory Note was $551,925, with accrued interest of $10,384.
For the year ended January 31, 2012, cash flows provided by financing activities was $31,963 which were advances from a director.
PLAN OF OPERATION
Over the next twelve months, through its wholly owned subsidiary Painmaster Products, Inc. the Company intends to license, manufacture, market and distribute, within the United States and Canada, a Micro Current Therapy patch that is drug free, non-invasive and proven to control pain and promote healing. The Painmaster Patch has been successfully prescribed and used by doctors, chiropractors and sports medicine professionals for nearly a decade, but now the company has received FDA clearance to sell direct to consumers for self-administration. Utilizing micro current therapy (MCT), the patch provides both a drug-free solution to pain therapy and an efficient delivery system through localized electrical stimulation treatment delivering continuous relief for up to 250 hours.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The Company is a smaller reporting Company as defined by Rule 12b-2 of the Securities Act of 1934 and are not required to provide the information under this item.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2013
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Avalon Holding Group, Inc. and Subsidiary
(A Development Stage Company)
We have audited the accompanying consolidated balance sheet of Avalon Holding Group, Inc. and Subsidiary (a Development Stage Company) (the Company) as of January 31, 2013 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the year ended January 31, 2013, and for the period July 28, 2008 (date of inception) to January 31, 2013. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Avalon Holding Group, Inc. and Subsidiary (a Development Stage Company) as of January 31, 2013, and the consolidated results of its operations and its cash flows for the year ended January 31, 2013, and for the period July 28, 2008 (date of inception) to January 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred operating losses since inception and will need additional working capital to service its debt and for its planned activity, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 2 to the financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Sadler, Gibb & Associates, LLC
Sadler, Gibb & Associates, LLC
Salt Lake City, UT
May 15, 2013
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Avalon Holding Group Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Avalon Holding Group, Inc. (A Development Stage Company) (The Company) as of January 31, 2012 and 2011, and the related statements of operations, stockholders' equity (deficiency), and cash flows for each of the years in the two-year period ended January 31, 2012, and the period from July 28, 2008 (date of inception) to January 31, 2012. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits 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 purposes of expressing an opinion on the effectiveness for the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Avalon Holding Group, Inc. (A Development Stage Company) as of January 31, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the two-year period ended January 31, 2012, and the period from July 28, 2008 (date of inception) to January 31, 2012, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company will need additional working capital for its planned activities and to service its debt, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in the notes to the financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Madsen & Associates CPA’s, Inc.
Madsen & Associates CPA’s, Inc.
Murray, Utah
April 26, 2012
AVALON HOLDING GROUP, INC. AND SUBSIDIARY (A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
| | | January 31, 2013 | | | January 31, 2012 |
| | | | | | |
| ASSETS |
| | | | | | |
| CURRENT | | | | | |
| Cash | | $ | 147,153 | | | $ | - | |
| Prepaid royalty fees | | | 50,000 | | | | - | |
| Prepaid expenses | | | 29,600 | | | | - | |
| Deposit | | | 10,000 | | | | | |
| Inventory | | | 118,350 | | | | - | |
| | | | | | | | | |
| Total Current Assets | | | 355,103 | | | | - | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 355,103 | | | $ | - | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
Accounts payable and accrued expenses | | $ | 23,351 | | | $ | 3,183 | |
| Promissory note | | | 551,925 | | | | - | |
| Advances | | | - | | | | 9,000 | |
| Advances from a director | | | 25,100 | | | | 44,898 | |
| | | | | | | | | |
| TOTAL LIABILITIES | | | 600,376 | | | | 57,081 | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | | | | | | | | |
| STOCKHOLDERS’ DEFICIT | | | | | | | | |
Common stock | | | | | | | | |
| 500,000,000 shares authorized, at $0.001 par value, | | | | | | | | |
121,320,000 shares issued and outstanding (January 31, 2012 –121,320,000) | | | 121,320 | | | | 121,320 | |
| Additional paid-in capital | | | (36,712 | ) | | | (92,820 | ) |
Deficit accumulated during the development stage | | | (329,881 | ) | | | (85,581 | ) |
| | | | | | | | | |
| TOTAL STOCKHOLDERS’ DEFICIT | | | (245,273 | ) | | | (57,081 | ) |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | | $ | 355,103 | | | $ | - | |
| | | | | | | | | |
| | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
AVALON HOLDING GROUP INC. AND SUBSIDIARY (A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
| | | Year ended January 31, 2013 | | | Year ended January 31, 2012 | | | Inception (July 28, 2008) to January 31, 2013 | |
| | | | | | | | | | |
| REVENUE | | | | | | | | | |
| | | | | | | | | | |
| Revenue | | $ | - | | | $ | - | | | $ | 446 | |
| Cost of Goods Sold | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| GROSS PROFIT | | $ | - | | | $ | - | | | $ | 446 | |
| | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | |
| General and administrative expenses | | $ | 81,741 | | | $ | 17,143 | | | $ | 157,868 | |
| Advertising and marketing expenses | | | 150,689 | | | | - | | | | 150,689 | |
| Management fees | | | 23,000 | | | | - | | | | 23,000 | |
| Depreciation | | | - | | | | - | | | | 965 | |
| | | | | | | | | | | | | |
| TOTAL EXPENSES | | | 255,430 | | | | 17,143 | | | | 332,522 | |
| | | | | | | | | | | | | |
| Loss from operations | | | (255,430 | ) | | | (17,143 | ) | | | (332,076 | ) |
| | | | | | | | | | | | | |
| OTHER INCOME (EXPENSE) | | | | | | | | | | | | |
Gain on forgiveness of debt | | | 21,514 | | | | - | | | | 21,514 | |
| Interest expense | | | (10,384 | ) | | | - | | | | (10,384 | ) |
| Loss on disposal of equipment | | | - | | | | - | | | | (8,935 | ) |
| TOTAL OTHER INCOME (EXPENSE) | | | 11,130 | | | | - | | | | 2,195 | |
| | | | | | | | | | | | | |
| NET INCOME (LOSS) | | $ | (244,300 | ) | | $ | (17,143 | ) | | $ | (329,881 | ) |
| | | | | | | | | | | | | |
| BASIC AND DILUTED LOSS PER COMMON SHARE | | $ | (0.00 | ) | | | (0.00 | ) | | | | |
| | | | | | | | | | | | | |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | | | 121,320,000 | | | | 121,320,000 | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY (A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE PERIOD FROM INCEPTION (JULY 28, 2008) TO JANUARY 31, 2013
| | | Number of Shares | | | Amount | | | Additional Paid in Capital | | | Deficit accumulated during development stage | | | Total | |
| | | | | | | | | | | | | | | | |
| Balance as of July 28, 2008 | | | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
November 3, 2008, common shares issued For cash at $0.00004 | | | 72,000,000 | | | | 72,000 | | | | (69,000 | ) | | | - | | | | 3,000 | |
November 20, 2008, common shares issued For cash at $0.0002 | | | 28,800,000 | | | | 28,800 | | | | (22,800 | ) | | | - | | | | 6,000 | |
January 12, 2009, common shares issued For cash at $0.00083 | | | 18,600,000 | | | | 18,600 | | | | (3,100 | ) | | | - | | | | 15,500 | |
January 27,2009, common shares issued For cash at $0.002 | | | 1,920,000 | | | | 1,920 | | | | 2,080 | | | | - | | | | 4,000 | |
| Net loss for the year | | | - | | | | - | | | | - | | | | (1,017 | ) | | | (1,017 | ) |
| Balance, January 31, 2009 | | | 121,320,000 | | | | 121,320 | | | | (92,820 | ) | | | (1,017 | ) | | | 27,483 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss for the year | | | - | | | | - | | | | - | | | | (38,324 | ) | | | (38,324 | ) |
| Balance, January 31, 2010 | | | 121,320,000 | | | | 121,320 | | | | (92,820 | ) | | | (39,341 | ) | | | (10,841 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss for the year | | | - | | | | - | | | | - | | | | (29,097 | ) | | | (29,097 | ) |
| Balance, January 31, 2011 | | | 121,320,000 | | | | 121,320 | | | | (92,820 | ) | | | (68,438 | ) | | | (39,938 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss for the year | | | - | | | | - | | | | - | | | | (17,143 | ) | | | (17,143 | ) |
| Balance, January 31, 2012 | | | 121,320,000 | | | | 121,320 | | | | (92,820 | ) | | | (85,581 | ) | | | (57,081 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| July 1, 2012 – capital contribution by director | | | - | | | | - | | | | 56,108 | | | | - | | | | 56,108 | |
| Net loss for the year | | | - | | | | - | | | | - | | | | (244,300 | ) | | | (244,300 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, January 31, 2013 | | | 121,320,000 | | | $ | 121,320 | | | $ | (36,712 | ) | | $ | (329,881 | ) | | $ | (245,273 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY (A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
| | | Year ended January 31, 2013 | | | Year ended January 31, 2012 | | | July 28, 2008 (inception) to January 31, 2013 | |
| | | | | | | | | | |
| OPERATING ACTIVITIES | | | | | | | | | |
Net loss for the period | | $ | (244,300 | ) | | $ | (17,143 | ) | | $ | (329,881 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | |
| Depreciation | | | - | | | | - | | | | 965 | |
| Loss on disposal of equipment | | | - | | | | - | | | | 8,935 | |
| Gain on debt forgiveness | | | (21,514 | ) | | | - | | | | (21,514 | ) |
| Expenses paid by third party on behalf of the Company | | | 51,925 | | | | - | | | | 51,925 | |
| Expenses paid by related party on behalf of the Company | | | 11,505 | | | | - | | | | 11,505 | |
| Changes in operating assets and liabilities: | | | | | | | | | | | | |
| Inventory | | | (118,350 | ) | | | - | | | | (118,350 | ) |
| Prepaid royalty fees | | | (50,000 | ) | | | - | | | | (50,000 | ) |
| Prepaid expenses | | | (29,600 | ) | | | | | | | (29,600 | ) |
| Deposit | | | (10,000 | ) | | | | | | | (10,000 | ) |
| Accounts payable and accrued expenses | | | 32,682 | | | | (14,820 | ) | | | 35,865 | |
| | | | | | | | | | | | | |
| NET CASH USED IN OPERATING ACTIVITIES | | | (377,652 | ) | | | (31,963 | ) | | | (450,150 | ) |
| | | | | | | | | | | | | |
| INVESTING ACTIVITIES: | | | | | | | | | | | | |
| Purchase of vending equipment | | | - | | | | - | | | | (9,900 | ) |
| | | | | | | | | | | | | |
| NET CASH USED IN INVESTING ACTIVITIES | | | - | | | | - | | | | (9,900 | ) |
| | | | | | | | | | | | | |
| FINANCING ACTIVITIES | | | | | | | | | | | | |
Advances payable | | | - | | | | - | | | | 9,000 | |
| Proceeds from promissory note | | | 500,000 | | | | | | | | 500,000 | |
| Advances from director | | | 25,100 | | | | 31,963 | | | | 69,998 | |
| Payments to director | | | (295 | ) | | | - | | | | (295 | ) |
| Proceeds from issuance of common stock | | | - | | | | - | | | | 28,500 | |
| | | | | | | | | | | | | |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | | | 524,805 | | | | 31,963 | | | | 607,203 | |
| | | | | | | | | | | | | |
| NET INCREASE IN CASH | | | 147,153 | | | | - | | | | 147,153 | |
| | | | | | | | | | | | | |
| CASH, BEGINNING | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| CASH, ENDING | | $ | 147,153 | | | $ | - | | | $ | 147,153 | |
| | | | | | | | | | | | | |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | | | | | | | | | | | | |
| Advances contributed to capital by director | | $ | 56,108 | | | $ | - | | | $ | 56,108 | |
The accompanying notes are an integral part of these consolidated financial statements.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY (A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS OPERATIONS
AVALON HOLDING GROUP, INC (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on July 28, 2008.
On September 28, 2012, the Company incorporated a new fully owned company (“subsidiary”) under the laws of the State of Nevada, U.S. The new subsidiary is called PAINMASTER PRODUCT, INC.
| b) | Development Stage Activities |
The Company is in the development stage as defined under ASC 915. Avalon Holding Group, Inc., under its new fully owned subsidiary, Painmaster Products, Inc., ceased operations in the entertainment and amusement gaming machines business within Russia. The Company now intends through its wholly owned subsidiary Painmaster Products, Inc. to license, manufacture, market and distribute, within the United States and Canada, a Micro Current Therapy patch that is drug free, non-invasive and proven to control pain and promote healing.
Based upon our business plan, we are a development stage enterprise, and we present our financial statements in conformity with the accounting principles generally accepted in the United States of America. As a development stage enterprise, we disclose the deficit accumulated during the development stage and the cumulative consolidated statements of operations and consolidated cash flows from our inception to the current consolidated balance sheet date.
2. BASIS OF PRESENTATION – GOING CONCERN
Our accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates our continuation as a going concern. However, we have minimal business operations to date. In addition, from inception on July 28, 2008 through January 31, 2013, we have incurred losses of $329,881, and have a working capital deficit of $245,273. These matters raise substantial doubt about our ability to continue as a going concern. There is no assurance that future capital raising plans will be successful in obtaining sufficient funds to assure our eventual profitability. While management believes that actions planned and presently being taken to revise our operating and financial requirements provide the opportunity for us to continue as a going concern, there is no assurance the actions will be successful. In addition, recent events in worldwide capital markets may make it more difficult for us to raise additional equity or debt capital.
Our consolidated financial statements do not include any adjustments that might result from these uncertainties.
3. SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in understanding our financial statements. Our financial statements and notes are representations of our management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements. The financial statements are stated in United States of America dollars.
We have adopted the ASC subtopic 740-10. ASC 740-10 requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method of ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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.
We provide deferred taxes for the estimated future tax effects attributable to temporary differences and carry forwards when realization is more likely than not.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Property and equipment is stated at cost, and is depreciated over estimated useful lives using primarily the straight line method for financial reporting purposes. Useful lives range from 3 to 5 years. We evaluate property and equipment at least annually for impairment. Since inception, all of the equipment has been sold for a net loss of $8,935. The Company has no property and equipment of value as of January 31, 2013.
| c) | Principles of consolidation |
The Company consolidates its 100% owned subsidiary pursuant to Accounting Standards Codification (“ASC”) No. 810, “Consolidation". All intercompany transactions and balances have been eliminated.
| d) | Basic and Diluted Loss Per Share |
In accordance with ASC 260-10, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At January 31, 2013 and January 31, 2012, we had no common stock equivalents that were dilutive.
| e) | Fair Value of Financial Instruments |
The carrying value of our financial instruments, consisting of accounts payable, approximates their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management’s opinion that we are not exposed to significant interest, currency or credit risks arising from these financial statements.
It is our policy that revenues will be recognized in accordance with ASC 605-10. Under ASC 605-10, product revenues (or service revenues) are recognized when persuasive evidence of an arrangement exists, delivery has occurred (or service has been performed), the sales price is fixed and determinable and collectability is reasonably assured.
The preparation of financial statements in conformity with 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
| h) | Cash and Cash Equivalents |
Cash is comprised of cash on hand and demand deposits. Cash equivalents include short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
We value our inventories at the lower of cost, determined on a first-in, first-out method, or market value. Our inventory consists solely of finished goods. We review inventories on hand at least quarterly and record provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and obsolete finished product.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company accounts for advertising costs in accordance with provisions in ASC 720-35-25 which states that advertising costs can be expensed as incurred or the first time the advertising takes place.
4. RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its consolidated financial statements.
5. MARKETING AGREEMENT
On September 26, 2012 Painmaster Products Inc. (“Painmaster’) entered into a Marketing Agreement (“Agreement”) with Newmark, Inc. (“Newmark”). This Agreement grants to Painmaster the exclusive license to all intellectual property owned by or licensed to Newmark or its affiliates associated with the product to use in the field of alleviating pain (the “Field”), including, without limitations, all patents, technology, inventions, know-how, processes and trademarks for the term of ten (10) years with an automatic renewal of another ten (10) years. Painmaster has the right to terminate the Agreement at the end of any one year period at its own discretion. The Territory this Agreement covers is the United States and Canada including each of their respective, territories and possessions.
Compensation
Within five (5) days of signing the Agreement Painmaster shall pay to Newmark fifty thousand dollars ($50,000 - the amount has been paid). Further Painmaster shall pay to Newmark the sum of seven hundred thousand dollars ($700,000), of which seventy thousand dollars ($70,000) shall be paid monthly commencing on July 15, 2013 and continuing on the 15th of each of the nine succeeding months. The total of seven hundred and fifty thousand dollars ($700,000) and the fifty thousand dollar ($50,000) payment shall be considered an advance on Royalties payments. These sums shall be non-refundable even if Royalties do not exceed total amount advanced.
Royalty Payments
Newmark shall receive from Painmaster an amount equal to three percent (3%) of all Net sale of the DRTV marketing campaign. Newmark also shall receive from Painmaster ten per cent (10%) of all retail and wholesale revenue of any kind (the “Retail Sales Royalties”), less the $750,000 previously advanced to Newmark. The Retail Sales Royalty rate shall be reduced to 7.5% once aggregate Royalties/Advances (irrespective of Retail, wholesale or DRTV marketing) has totalled two million dollars ($2,000,000). The Retail Sales Royalty rate shall be further reduced to 5% once aggregate Royalties/Advances (irrespective of Retail, wholesale or DRTV marketing) has totalled five million dollars ($5,000,000).
6. COMMON STOCK
The authorized capital of the Company is 500,000,000 common shares with a par value of $ 0.001 per share.
On November 3, 2008, the Company issued 72,000,000 shares of common stock at a price of $0.00004 per share for total cash proceeds of $3,000.
In November 20, 2008, the Company issued 28,800,000 shares of common stock at a price of $0.0002 per share for total cash proceeds of $6,000.
In January 2009, the Company issued 18,600,000 shares of common stock at a price of $0.00083 per share for total cash proceeds of $15,500.
In January 2009, the Company also issued 1,920,000 shares of common stock at a price of $0.002 per share for total cash proceeds of $4,000.
On September 29, 2010, a forward split 24:1 was approved and enacted. All equity transactions have been retroactively restated.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. INCOME TAXES
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.
| | Estimated NOL | | Estimated Tax | Valuation | |
| Year Ended | Carry-Forward | NOL Expires | Benefit from NOL | Allowance | Net Tax Benefit |
| 2009 | $ 1,017 | 2028 | $ 355 | $ (355) | - |
| 2010 | 38,324 | 2029 | 13,413 | (13,413) | - |
| 2011 | 29,097 | 2030 | 10,184 | (10,184) | - |
| 2012 | 17,143 | 2031 | 6,000 | (6,000) | - |
| 2013 | 244,300 | 2032 | 85,505 | (85,505) | - |
| | $329,881 | | $115,457 | $(115,457) | $ - |
The total valuation allowance as of January 31, 2013 was $115,457, which increased by $85,505 for the year ended January 31, 2013.
As of January 31, 2013 and 2012, the Company has no unrecognized income tax benefits. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest penalties have been recorded during the years ended January 31, 2013 and 2012 and no interest or penalties have been accrued as of January 31, 2013 and 2012. As of January 31, 2013 and 2012, the Company did not have any amounts pertaining to uncertain tax positions.
The tax years from 2009 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.
8. PROMISSORY NOTE
On October 1, 2012 Painmaster signed a Promissory Note for five hundred and fifty-two thousand dollars ($552,000) with an annual interest rate of 10%, and a default annual interest rate of the lower of 18%, or the maximum rate permitted by law. The Promissory Note is fully secured with a general assignment of all the assets of Painmaster. The maturity date of the Promissory Note is September 30, 2013. All interest and principal payments are due on the maturity date of the Promissory Note. Painmaster may draw on the Promissory Note as funds are required. As of January 31, 2013, the amount owing on the Promissory Note was $551,925, with accrued interest of $10,384.
9. GAIN ON FORGIVENESS OF DEBT
On July 1, 2012, the Company entered into a written forgiveness of debth agreement to forgive a total of $9,000 that was previously advanced. In November 2012, the Company recorded a gain on forgiveness of debth of $10,000 related to an amount owed to the former CEO, per a signed agreement from the CEO. In addition, on January 31, 2013 a vendor forgave a total of $2,514 that was previously charged to the Company. As a result of these transactions, the Company recorded a gain on forgiveness of debth of $21,514 for the year eneded January 31, 2013.
AVALON HOLDING GROUP, INC. AND SUBSIDIARY(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. RELATED PARTY TRANSACTIONS
The Company entered into the following transactions with a related party:
On July 1, 2012, the Company’s former CEO contributed advances totalling $56,108 to capital.
During the year ended January 31, 2013, the previous CEO advanced $25,100 to the Company and paid expenses on behalf of the Company of $11,505. The CEO was also paid back $295. The advances are non-interest bearing and payable on demand.
During the year ended January 31, 2013, the Company accrued management fees of $15,000 (2011 - $nil). An additional $8,000 in management fees have been paid to an officer of Painmaster Product Inc.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None
Item 9A. Controls and Procedures.
Evaluation of disclosure controls and procedures.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management as appropriate, to allow timely decisions regarding required disclosure.
An evaluation was performed under the supervision and with the participation of our management, including the chief executive officer and the chief financial officer, of the effectiveness of the design and operation of our disclosure procedures. Based on management's evaluation as of the end of the period covered by this Annual Report, our principal executive officer and chief financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) were sufficiently effective to ensure that the information required to be disclosed by us in the reports that we file under the Exchange Act is gathered, analyzed and disclosed with adequate timeliness, accuracy and completeness.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company's Chief Financial Officer in connection with the audit of our financial statements as of March 31, 2012 and communicated the matters to our management.
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an affect on the Company's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can result in the Company's determination to its financial statements for the future years.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
Evaluation on Internal Control over Financial Reporting
Our management, with the participation of the President, evaluated the effectiveness of the Company’s internal control over financial reporting as of January 31, 2013. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on that evaluation, our management concluded that, as of January 31, 2013, our internal control over financial reporting was not effective due to material weaknesses in the system of internal control. Specifically, management identified the following control deficiency. The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.
Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.
This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.
Changes in internal controls
There have been no changes in our internal control over financial reporting identified in connection with the evaluation described above that occurred during our last fiscal quarter that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
The following table sets forth the names, ages and positions of our directors and executive officers:
| Name | Age | Offices Held |
| 69 | Director, President, Secretary and Treasurer |
Paksayakorn Tanawanjinnagul2 | 38 | Director |
| 69 | Director |
Paksayakorn Tanawanjinnagul – Director, President, Secretary and Treasurer
Miss Paksayakorn Tanawanjinnagul, 38 years old obtained a Bachelor of Arts Degree in Information Business Accounting at Rajabhat Institute Nakornratchasima in 1999 and Previous Certificates B.A. (Business Administration) Degree Conferred Graduate Diploma In Project Management And Evaluation at Institute of Social Technology in 2002.
From December 1, 2003 until December 31, 2010 Miss Paksayakorn Tanawanjinnagul worked for Magna Carta Co., Ltd as both a Human Resources Manager and Accountant. From January 1, 2011 to present Miss Paksayakorn Tanawanjinnagul manages and owns a variety retail outlet.
Dennis Shafer – Director, President, Secretary and Treasurer
Mr. Shafer was previously President and CEO of Benetton Sportsystem, the former sports subsidiary of the Italian-based Benetton Group. The Benetton Sportsystem included Rollerblade, the founder of in-line skating; Prince, the inventor of oversized and wide body tennis racquets; and Nordica, a world-wide leader in ski products for over 50 years. Prior to joining Rollerblade, Shafer held the position of President of Carlisle Plastics, a division of one of the world’s largest manufacturers of plastic products.
1 Resigned September 15, 2012 2 Resigned January 3, 2013 3 Appointed January 3, 2013
Since 2001, Dennis Shafer has been the President of Venture Resource Group, an advisory and management firm providing services to private equity and hedge fund firms engaged in business buyouts and turnarounds, as well as startups and early growth ventures in technology and consumer products and services. Through a consulting agreement with Venture Resource Group, he served as Chairman of the Board of Trustcash Holdings Inc., from July 2007 until May 2008.
Item 11. Executive Compensation.
The table below summarizes all compensation awarded to, earned by, or paid to our named executive officers and director for all services rendered in all capacities to us for the period from inception through May 15, 2013.
| SUMMARY COMPENSATION TABLE |
Name and principal position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
Phil Jennings President, Director | 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| | 2009 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| | 2010 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| | 2011 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| | 2012 | 5,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Paksayakorn Tanawanjinnagul President, Director | 2012 | $10,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Dennis Shafer President, Director | 2012 | $8,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pension and Retirement Plans
Currently, we do not offer any annuity, pension or retirement benefits to be paid to any of our officers, directors or employees, in the event of retirement. There are also no compensatory plans or arrangements with respect to any individual named above which results or will result from the resignation, retirement or any other termination of employment with us, or from a change in our control.
Employment Agreements
We do not have written employment agreements.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information concerning the number of shares of our common stock beneficially owned as of May 15, 2013, by: (a) each person (including any “group”, as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) who is known us to be the beneficial owner of more than five percent (5%) of any class of our voting securities, (b) each of our directors, and (c) our executive officers and our directors as a group. Unless otherwise specified in the table below, such information, other than information with respect to our directors and officers, is based on a review of statements filed, with the Securities and Exchange commission (the “Commission”) pursuant to Sections 13 (d), 13 (f), and 13 (g) of the Exchange Act with respect to our Common Stock. As of May 15, 2013, there were 121,320,000 shares of Common Stock outstanding.
The number of shares of Common Stock beneficially owned by each person is determined under the rules of the Commission and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within sixty (60) days after the date hereof, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.
| Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class1 |
| Common | Nikolai Karamkov Saekoja St 1703 Tartu Estonia 50106 | 9,600,000 | 7.91% |
| Common | Tamara Gileva 3/2 Yahtennaya St., Suite 15 St. Petersburg Russia 197374 | 62,400,000 | 51.43% |
| Common | Director, Pres., Secretary and Treasurer 6536 102nd Place NE Kirland, WA 98033 | -0- | 0% |
| Paksayakorn Tanawanjinnagul | Director, Pres., Secretary and Treasurer 6536 102nd Place NE Kirland, WA 98033 | -0- | -0- |
| Dennis Shafer | Director, Pres., Secretary and Treasurer 6536 102nd Place NE Kirland, WA 98033 | -0- | -0- |
| Common | Directors and officers as a group (1) | -0- | 0% |
(1) Percent of Ownership is calculated in accordance with the Securities and Exchange Commission’s Rule 13(d) – 13(d)(1)
Item 13. Certain Relationships and Related Transactions, and Director Independence.
We have not entered into any transactions in which any of our directors, executive officers, or affiliates, including any member of an immediate family, had or are to have a direct or indirect material interest.
We have not sold any securities within the past three (4) years without registering the securities under the Securities Act of 1933.
Item 14. Principal Accounting Fees and Services.
The aggregate fees billed by our auditor during the fiscal years ended January 31, 2013 and 2012, for professional services rendered for the audit of our annual financial statements and for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q was $17,125 and $7,420, respectively.
Tax Fees.
We incurred nil fees to auditors for tax compliance, tax advice or tax compliance services during the fiscal year ended January 31, 2013.
All Other Fees.
We did not incur any other fees billed by auditors for services rendered to us other than the services covered in "Audit Fees" for the fiscal year ended January 31, 2013.
The Board of Directors has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence.
Since there is no audit committee, there are no audit committee pre-approval policies and procedures.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The following exhibits are incorporated into this Form 10-K Annual Report:
| Exhibit No. | Description | |
| 3.1 | Articles of Incorporation | Incorporated by reference from the Company’s S-1 filed with the Commission on March 2, 2009. |
| 3.2 | By-Laws of Avalon Holding Group, Inc. | |
| 31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a–14(a) or 15d-14(a) of the Securities Exchange Act of 1934 | Filed herewith |
| 31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 | Filed herewith* |
| 32.1 | Certification of Chief Executive Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith |
| 32.2 | Certification of Chief Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith** |
| 23.1 | Consent of Independent Accountants | Filed herewith |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | Filed herewith*** |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | Filed herewith*** |
| 101.INS | XBRL Instance Document | Filed herewith*** |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | Filed herewith*** |
| 101.PRE | XBRL Taxomony Extension Presentation Linkbase | Filed herewith*** |
| 101.SCH | XBRL Taxonomy Extension Schema | Filed herewith*** |
* Included in Exhibit 31.1
** Included in Exhibit 32.1
***
Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filedfor purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
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.
| | Avalon Holding Group, Inc. | |
| | | | |
Date: May 15, 2013 | By: | /s/ Dennis Shafer | |
| | Name: | Dennis Shafer | |
| | Title: | President and Director, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer | |
| | | | |
