UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2011
OR
oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
COMMISSIONFILE NUMBER 333-171148
LYONS LIQUORS, INC.
(Exact Name of small business issuer as specified in its charter)
| Nevada | | 27-1656207 |
| (State or other jurisdiction of | | (I.R.S. Employer |
| incorporation or organization) | | Identification No.) |
PO Box 344, Ellenton, Florida 34222
(Address of principal executive offices) (Zip Code)
Issuer’s telephone Number: (941) 932-8234
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ | | Accelerated filer ¨ |
| | | |
Non-accelerated filer ¨ | | Smaller reporting company x |
(Do not check if a smaller reporting company) | | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of February 7, 2012, the issuer had 10,193,000 outstanding shares of Common Stock.
Form 10-Q
December 31, 2011
TABLE OF CONTENTS
| | | Page |
| | PART I | |
| Item 1. | Financial Statements |
| | | |
| | Balance Sheets | 3 |
| | Statements of Operations | 4 |
| | Statements of Cash Flows | 5 |
| | Notes to the Financials Statements | 6 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 7 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 9 |
| Item 4T | Controls and Procedures | 9 |
| | | |
| | PART II | |
| Item 1. | Legal Proceedings | 9 |
| Item 1A. | Risk Factors | 9 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| Item 3. | Defaults Upon Senior Securities | 9 |
| Item 4. | Removed and Reserved | 9 |
| Item 5. | Other Information | 9 |
| Item 6. | Exhibits | 9 |
| | |
| SIGNATURES | 10 |
PART I.
ITEM 1. FINANCIAL INFORMATION
Lyons Liquors, Inc.
(A Development Stage Company)
Balance Sheets
| | | December 31,
2011 | | | Sept. 30, 2011 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | |
| Current Assets: | | | | | | |
| Cash | | $ | 166 | | | $ | 266 | |
| Total Current Assets | | | 166 | | | | 266 | |
| Other Assets: | | | | | | | | |
| Deferred Offering Costs | | | - | | | | - | |
| Deposits | | | 797 | | | | 797 | |
| TOTAL ASSETS | | $ | 963 | | | $ | 1,063 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| Current Liabilities: | | | | | | | | |
| Accounts payable | | $ | 5,000 | | | $ | - | |
| Accrued expenses | | | 59,612 | | | | 47,712 | |
| | | | | | | | | |
| Total Current Liabilities | | | 64,612 | | | | 47,712 | |
| | | | | | | | | |
| STOCKHOLDERS' DEFICIT | | | | | | | | |
| Common stock - $.001 par value; 75,000,000 shares authorized; 10,193,000 shares issued and outstanding | | | 10,193 | | | | 10,193 | |
| Additional paid-in capital | | | 19,107 | | | | 19,107 | |
| Deficit accumulated during the development stage | | | (92,949) | | | | (75,949) | |
| TOTAL STOCKHOLDERS' DEFICIT | | | (63,649) | | | | (46,649) | |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | | $ | 963 | | | $ | 1,063 | |
The accompanying notes are an integral part of these financial statements.
Lyons Liquors, Inc.
(A Development Stage Company)
Statements of Operations
Three Months Ended December 31, 2011 and 2010, and
Inception (December 17, 2009) through December 31, 2011
(Unaudited)
| | | Three Months Ended December 31, 2011 | | | Three Month Ended December 31, 2010 | | | Inception to December 31, 2011 | |
| | | | | | | | | | |
| REVENUE | | $ | - | | | $ | - | | | $ | - | |
| OPERATING EXPENSES: | | | | | | | | | | | | |
| General & Administrative Expenses | | | 17,000 | | | | 7,500 | | | | 92,949 | |
| TOTAL OPERATING EXPENSES | | | 17,000 | | | | 7,500 | | | | 92,949 | |
| LOSS BEFORE INCOME TAXES | | | (17,000) | | | | (7,500) | | | | (92,949) | |
| | | | | | | | | | | | | |
| INCOME TAXES | | | - | | | | - | | | | - | |
| NET LOSS | | $ | (17,000) | | | $ | (7,500) | | | $ | (92,949) | |
| Net Loss Per Common Share, basic & diluted | | $ | (0.00) | | | $ | (0.00) | | | $ | - | |
| Weighted Common Shares Outstanding, basic & diluted | | $ | 10,193,000 | | | $ | 10,160,000 | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
Lyons Liquors, Inc.
(A Development Stage Company)
Statements of Cash Flows
Three Months Ended December 31, 2011 and 2010, and
Inception (December 17, 2009) through December 31, 2011
(Unaudited)
| | | Three Months Ended
December 31, 2011 | | | Three Months Ended
December 31, 2010 | | | Inception to
December
31, 2011 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | |
| Net Loss | | $ | (17,000) | | | $ | (7,500) | | | $ | (92,949) | |
| (Increase) in Deposits | | | - | | | | - | | | | (797) | |
| Common Shares Issued for Services | | | - | | | | - | | | | 1000 | |
| (Increase) in Deferred Offering Costs | | | - | | | | (5,000) | | | | - | |
| Increase in Accounts Payable & Accrued Expenses | | | 11,000 | | | | 7,500 | | | | 52,212 | |
| Total Adjustments to Net Income | | | 11,000 | | | | 2,500 | | | | 52,415 | |
| Net Cash (used in) Operating Activities | | | (6,000) | | | | (5,000) | | | | (40,534) | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | |
| Net Cash Flows provided by (used in) Investing Activities | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
| Officer Loans | | | 5,900 | | | | - | | | | 12,400 | |
| Common Shares Issued for Cash | | | - | | | | - | | | | 28,300 | |
| Net Cash provided by Financing Activities | | | 5,900 | | | | - | | | | 40,700 | |
| Net increase (decrease) in cash | | | (100) | | | | (5,000) | | | | 166 | |
| Cash – Beginning Balance | | | 266 | | | | 7,736 | | | | - | |
| | | | - | | | | - | | | | - | |
| CASH ENDING BALANCE | | $ | 166 | | | $ | 2,736 | | | $ | 166 | |
| | | | | | | | | | | | | |
Cash paid for: Interest | | $ | - | | | $ | - | | | $ | - | |
| Income taxes | | $ | - | | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
LYONS LIQUORS, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2011
(UNAUDITED)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and Rule 8.03 of Regulation SX. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements of the Company as of September 30, 2011, and for the year ended and period from inception through September 30, 2011, including notes thereto.
(2) Earnings per Share
The Company calculates net income (loss) per share as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, "Earnings per Share." Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods when anti-dilutive common stock equivalents are not considered in the computation.
(3) Basis of Reporting
The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company is in the development stage and has experienced a loss from operations as a result of its investment necessary to achieve its operatingplan, which is long-range in nature. The Company has no revenues and has incurred net losses through December 31, 2011, aggregating $92,949. In addition, the Company has negative working capital of $64,446 and negative stockholders’ equity of $63,649 at December 31, 2011.
The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase ownership equity and develop profitable operations. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.
The Company is pursuing financing for its operations and seeking additional private investments. In addition, the Company is seeking to expand its revenue base. Failure to secure such financing or to raise additional equity capital and to expand its revenue base may result in the Company depleting its available funds and not being able pay its obligations.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
(4) Accrued Expenses
Accrued expenses consist of amounts incurred from normal operations of the business. As of December 31, 2011, the Company has accrued $47,212 in compensation payable to its president and CEO. In addition, this officer has advanced the Company $12,400 for working capital purposes. These balances are due on demand.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements
The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.
The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.
Overview
We are a Nevada Corporation founded in December 17, 2009. We are currently a development stage company looking to enter the B2C retail and liquor industry, specifically we intend to own and operate a premier chain of retail stores. We have not yet commenced operations and currently are in the process of developing a business and marketing plan for capital formation. Once we have raised sufficient capital we will begin our operations. However, there is no guarantee that we will be successful in raising the required capital. If we are not successful at raising any capital we may have to change our business plan to a more suitable business and industry sector to be able to raise capital or commence operations. Some possible options include such sectors as Semiconductor, Component Technology, Oil & Gas, Clean Energy and Food Distribution. However, there can be no assurance that the raising of future equity or change in business sectors will be successful and that the Company’s anticipated financing will be available in the future, at terms satisfactory to the Company. Failure to achieve the equity and financing at satisfactory terms and amounts could have a material adverse effect on the Company’s ability to continue as a going concern.
Critical Accounting Policies
Basis of presentation - Going concern
The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company is in the development stage and has experienced a loss from operations as a result of its investment necessary to achieve its operatingplan, which is long-range in nature. The Company has no revenues and has incurred net losses through December 31, 2011, aggregating $92,949. In addition, the Company has negative working capital of $64,446 and negative stockholders’ equity of $63,649 at December 31, 2011.
The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase ownership equity and develop profitable operations. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.
The Company is pursuing financing for its operations and seeking additional private investments. In addition, the Company is seeking to expand its revenue base. Failure to secure such financing or to raise additional equity capital and to expand its revenue base may result in the Company depleting its available funds and not being able pay its obligations.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
However, there can be no assurance that the raising of future equity will be successful and that the Company’s anticipated financing will be available in the future, at terms satisfactory to the Company. Failure to achieve the equity and financing at satisfactory terms and amounts could have a material adverse effect on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Recent Accounting Pronouncements
The company does not believe that any recently issued accounting pronouncements will have a material impact on its financial statements.
Results of operations
Results of Operations for the Three Months Ended December 31, 2011 Compared to the Three Months Ended December 31, 2010.
Due to the fact that we are a development stage company in both periods, we had revenues of $0 for the three months ended December 31, 2011, which wasunchanged from our revenue of $0 for the three months ended December 31, 2010. Ourcost of goods sold and gross profits were $0 in both periods.
Our net loss for the three months ended December 31, 2011 was $17,000, which was an increase of $9,500 from our net loss of $7,500 in the threemonth period ended December 31, 2010.
Results of Operations from Inception December 17, 2009 through December 31, 2011.
Due to the fact that we are a development stage company since inception to our current period, we had revenues of $0 since inception or December 17th 2009 through December 31, 2011. Ourcost of goods sold and gross profits were $0 also.
Our net loss since inceptionor December 17th 2009 through December 31, 2011 was $ 92,949.
Liquidity and Capital Resources
As of December 31, 2011, we had cash of $166 as compared to cash of $266 as of September 30, 2011. Net cash used in operating activities totaled $6,000 for the three months ended December 31, 2011. Net cash provided by financing activities totaled $5,900 for the three months ended December 31, 2011 which included $5,900 advanced by the company officer for working capital purposes.
Net cash used in operating activities totaled $40,534 for the period December 17, 2009 (Inception) to December 31, 2011. Net cash provided by financing activities totaled $40,700 for the period December 17, (Inception) to December 31, 2011.
In order for us to execute our business plan we will need to raise at least $150,000 to $ 175,000 in debt or equity. The funds are needed for building out the first retail store, deposits, sales and marketing and working capital. There can be no assurance that we will be able to raise the funds needed to execute our business plan.
If we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations. We do not anticipate the purchase or sale of any significant equipment. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations.
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4T. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures . Under the supervision and with the participation of our management, including our President, Chief Executive Officer, Chief Financial Officer and Secretary, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our President, Chief Executive Officer, Chief Financial Officer and Secretary concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Changes in Internal Control Over Financial Reporting. During the most recent quarter ended December 31, 2011, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 1A. RISK FACTORS.
Not Applicable
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. REMOVED AND RESERVED.
None
ITEM 5. OTHER INFORMATION.
Not Applicable
ITEM 6. EXHIBITS.
Exhibit Number | | Description of Exhibit |
| | | |
| 31.1 | | |
| 32.1 | | |
Exhibit 101 | | Interactive data files formatted in XBRL (extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) theConsolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the ConsolidatedFinancial Statements.* |
| 101.ins* | | XBRL Instance Document |
| 101.xds* | | XBRL Taxonomy Extension Schema Document |
| 101.cal* | | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.def* | | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.lab* | | XBRL Taxonomy Extension Labels Linkbase Document |
| 101.pre* | | XBRL Taxonomy Extension Presentation Linkbase Document |
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to theliabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the SecuritiesExchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | LYONS LIQUORS, INC. |
| |
| | /s/ Shefali Vibhakar |
| February 7, 2012 | Shefali Vibhakar |
| | Chief Executive Officer, Chief Financial Officer and Director |
| | | |
