UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2011
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission File Number 000-54017
MEIGUO VENTURES I, INC
(Exact name of registrant as specified in its charter)
Delaware 26-3551294
(State of Incorporation) (I.R.S. Employer Identification No.)
5155 Spectrum Way, Unit #5, Mississauga,
ON, Canada L4W 5A1
(Address of principal executive offices)
(647) 426-1640
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
Common Stock, $.0001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant: (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that he 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 Website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit or post such files). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S- K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of "large accelerated filer," "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 Act). Yes [X] No [ ]
The aggregate marker 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 the Registrant's most recently completed second fiscal
quarter (June 30, 2011) was approximately $ -0- because the Registrant's common
equity was not quoted or traded on such date.
As of March 27, 2012, there were 4,132,559 shares of our common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
TABLE OF CONTENTS
ITEMS PAGE
----- ----
PART I
Item 1. Business 4
Item 1A. Risk Factors 9
Item 1B. Unresolved Staff Comments 9
Item 2. Properties 9
Item 3. Legal Proceedings 9
Item 4. Mine Safety Disclosures 9
PART II
Item 5. Market For Common Equity and Related Stockholder Matters and Issuer
Purchases of Equity Securities 9
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
Item 7A. Quantitative and Qualitative Disclosure About Market Risks 18
Item 8. Financial Statements and Supplementary Data 19
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 19
Item 9A. Controls and Procedures 19
Item 9B. Other Information 20
PART III
Item 10. Directors, Executive Officers and Corporate Governance 20
Item 11. Executive Compensation 23
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters 24
Item 13. Certain Relationships and Related Transactions, and Director
Independence 25
Item 14. Principal Accounting Fees and Services 26
PART IV
Item 15. Exhibits, Financial Statement Schedules 27
2
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This 2011 Annual Report on Form 10-K ("2011 Annual Report"), including the
accompanying financial statements of the Company and the notes thereto appearing
in Item 8 herein ("Financial Statements"), the Management's Discussion and
Analysis of Financial Condition and Results of Operations appearing in Item 7
herein ("MD&A") and the other Exhibits and Financial Statement Schedules filed
as a part hereof or incorporated by reference herein may contain or incorporate
by reference information that includes or is based on "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
give expectations or forecasts of future events. The reader can indentify these
forward-looking statements by the fact that they do not relate strictly to
historical or current facts. They use words such as "believe(s)," "goal(s),"
"target(s)," "estimate(s)," "anticipate(s)," "forecast(s)," "project(s),"
(plan(s)," "intend(s)," "expect(s)," "might," may" and other words and terms of
similar meaning in connection with a discussion of future operating, financial
performance or financial condition. Forward-looking statements, in particular,
include statements relating to future actions, prospective services or products,
future performance or results of current and anticipated services or products,
sales efforts, expenses, the outcome of contingencies such as legal proceedings,
trends of operations and financial results.
Any or all forward-looking statements may turn out to be wrong, and,
accordingly, readers are cautioned not to place undue reliance on such
statements, which speak only as of the date of this 2011 Annual Report. These
statements are based on current expectations and current the current economic
environment. They involve a number of risks and uncertainties that are difficult
to predict. These statements are not guarantees of future performance; actual
results could differ materially from those expressed or implied in the
forward-looking statements. Forward-looking statements can be affected by
inaccurate assumptions or by known or unknown risks and uncertainties. Many such
factors will be important in determining the Company's actual results and
financial condition. The reader should consider the following list of general
factors that could affect the Company's future results and financial condition.
Among the general factors that could cause actual results and financial
condition to differ materially from estimated results and financial condition
are:
* the success or failure of management's efforts to implement our
business strategy;
* the ability of the Company to raise sufficient capital to meet
operating requirements;
* the ability of the Company to compete with major established
companies;
* the level of success and costs expended in realizing economies of
scale and implementing significant business consolidations and
technology initiatives;
* the effect of changing economic conditions;
* the ability of the Company to attract and retain quality employees and
management;
* the current global recession and financial uncertainty; and
* other risks which may be described in future filings with the U.S.
Securities and Exchange Commission ("SEC").
No assurances can be given that the results contemplated in any
forward-looking statements will be achieved or will be achieved in any
particular timetable. We assume no obligation to publicly correct or update any
forward-looking statements as a result of events or developments subsequent to
the date of this 2011 Annual Report. The reader is advised, however, to consult
any further disclosures we make on related subjects in our filings with the SEC.
3
PART I
ITEM 1. BUSINESS.
BUSINESS DEVELOPMENT
CORPORATE BACKGROUND
Meiguo Ventures I, Inc. ("Company," "we," "us," "our") was incorporated in
the State of Delaware on October 31, 2008. The Company has been in the
developmental stage since inception and has conducted virtually no business
operations. The Company has no full-time employees and owns no real estate or
personal property. The Company was formed as a vehicle to pursue a business
combination and has made limited effort to identify a possible business
combination. As a result, the Company has not conducted negotiations or entered
into a letter of intent concerning any target business. The business purpose of
the Company is to seek the acquisition of, or merger with, an existing company.
We have a minimal amount of cash. The Independent Auditor's Report to our
financial statements for the period ended December 31, 2011, included in this
Annual Report, indicates that there are a number of factors that raise
substantial doubt about our ability to continue as a going concern. Such doubts
identified in the report include the fact (i) that we have not established any
source of revenue to cover our operating costs; (ii) that we will engage in very
limited activities without incurring any liabilities that must be satisfied in
cash until a source of funding is secured; (iii) that we will offer noncash
consideration and seek equity lines as a means of financing our operations; (iv)
that if we are unable to obtain revenue producing contracts or financing or if
the revenue or financing we do obtain is insufficient to cover any operating
losses we may incur, we may substantially curtail or terminate our operations or
seek other business opportunities through strategic alliances, acquisitions or
other arrangements that may dilute the interests of existing shareholders.
BUSINESS OF ISSUER
Based on our proposed business activities, we are a "blank check" company.
The U.S. Securities and Exchange Commission ("SEC") defines those companies as
"any development stage company that is issuing a penny stock, within the meaning
of Section 3 (a) (51) of the Exchange Act of 1934, as amended ("Exchange Act")
and that has no specific business plan or purpose, or has indicated that its
business plan is to merge with an unidentified company or companies. Under Rule
12b-2 promulgated under the Exchange Act, the Company will be deemed to be a
"shell company," because it has no or nominal assets (other than cash) and no or
nominal operations. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in our securities, either debt or equity, until we have
successfully concluded a business combination. The Company intends to comply
with the periodic reporting requirements of the Exchange Act for so long as we
are subject to those requirements.
We were organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. Our principal business objective for the
next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. We will not restrict our potential candidate target
companies to any specific business, industry or geographical location and, thus,
may acquire or merge with any type of business, domestic or foreign.
4
PERCEIVED ADVANTAGES
There are certain perceived advantages to being a reporting company with a
class of publicly-traded securities. These are commonly thought to include the
following:
* the ability to use registered securities to make acquisitions of
assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in raising capital;
* compensation of key employees through stock options for which there
may be a market valuation;
* enhanced corporate image; and
* a presence in the United States' capital markets.
POTENTIAL TARGET COMPANIES
A business entity that may be interested in a business combination with the
Company may include the following:
* a company for which a primary purpose of becoming a public company is
the use of is securities for the acquisition of assets or business;
* a company that is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to
it;
* a company that believes it will be able to obtain investment capital
on more favorable terms after it has become public;
* a foreign company that may wish an initial entry into the United
States' securities markets;
* a special situation company, such as a company seeking a public market
to satisfy redemption requirements under a qualified Employees Stock
Option Plan; and
* a company seeking one or more of the other perceived benefits of
becoming a public company.
The analysis of new business opportunities will be undertaken by or under
the supervision of our officers, directors, accountants and legal counsel. We
will have unrestricted flexibility in seeking, analyzing and participating in
potential business opportunities. In our efforts to analyze potential
acquisition targets, we will consider the following kinds of factors:
* potential for growth, indicated by new technology, anticipated market
expansion or new products or services;
* competitive position as compared to other firms of similar size and
experience within the industry segment, as well as within the industry
as a whole;
* strength and diversity of management, either in place or scheduled for
recruitment;
* capital requirements and anticipated availability of required funds,
to be provided by the Company or from operations, through the sale of
additional securities, through joint ventures or similar arrangements
or from other sources;
* the cost of participation by the Company as compared to the perceived
tangible and intangible values and potentials;
* the extent to which the business opportunity can be advanced;
5
* the accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required items;
and
* other factors deemed to be relevant by our management team, which
currently consists solely of Mr. Keith Roberts
In applying the foregoing criteria, no one of which will be controlling,
management will attempt to analyze all factors and circumstances and make a
determination based upon reasonable investigative measures and available data.
Potentially available business opportunities may occur in many different
industries, and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Due to our limited financial resources
available for investigation, we may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.
No assurances can be given that the Company will be able to enter into a
business combination of any nature.
FORM OF ACQUISITION
The manner in which the Company participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Company and the promoters of the opportunity and the relative negotiating
strength of the Company and such promoters.
It is likely that the Company will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax-free" reorganization under
Section 368(a) (1) of the Internal Revenue Code of 1986, as amended ("Code"),
depends upon whether the owners of the acquired business own 80% or more of the
voting stock of the surviving entity. If a transaction were structured to take
advantage of these provisions rather than other "tax-free" provisions provided
under the Code, our shareholders would, in such circumstances, retain 20% or
less of the total issued and outstanding shares of the Company. Under other
circumstances, depending upon the relative negotiating strength of the parties,
our shareholders may retain substantially less than 20% of the total issued and
outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who were shareholders of the Company
prior to such reorganization.
Our present shareholders will likely not have control of a majority of our
voting shares following a reorganization transaction. As part of such a
transaction, all or a majority of the officers and directors may resign and new
officers and directors may be appointed without any vote by our shareholders.
In the event of an acquisition, the transaction shall be approved by vote
or consent of our shareholders. In the case of a statutory merger or
consolidation directly involving us, it will be necessary to call a
shareholders' meeting and obtain the approval of the holders of a majority of
the outstanding shares. The necessity to obtain such stockholder approval may
result in delay and additional expense in the consummation of any proposed
transaction and will also give rise to certain appraisal right to dissenting
shareholders.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosures
documents and other instruments will require substantial management time and
attention and substantial cost for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs incurred in the related investigation would not be recoverable.
6
Furthermore, even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction may result in
the loss to us of the related costs incurred.
We presently have no employees other than Keith Roberts, our sole officer
and sole director, who is engaged in outside business activities and anticipates
he will devote to our business very limited time until the acquisition of a
successful business opportunity has been identified. We expect no significant
changes in the number of our employees other than such changes, if any, incident
to a business combination.
SEASONALITY
Our business is not affected by seasonality.
COMPETITIVE CONDITIONS
We are in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination. In reality, it might be more
feasible for a privately held company to file its own Form 10 registration
statement to become a fully reporting company than to give up ownership to the
Company by entering into a business combination with us.
In the event we are successful in identifying a private company that is
interested in combining with us, the private company will have to provide us
with a lot of information related to its business history, prospects, financial
condition, management and have books and records that are auditable without
undue time and expense. Upon entry into a definitive agreement with a target, we
will have to file a Form 8-K describing the proposed transaction, that the
proposed transaction will result in a change in control of our Company and
include audited financial statements of the combined entity as an exhibit to the
Form 8-K or in an amendment to the Form 8-K.
REPORTS TO SECURITY HOLDERS
1. We are subject to the informational requirements of the Exchange Act.
Accordingly, we will file annual, quarterly and periodic reports,
proxy statements, information statements and other information with
the SEC.
2. The public may read and copy any materials the Company files with the
SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549. The public may call the SEC at 1-800-SEC-0330
for further information on the Public Reference Room. Our SEC filings
will also be available to the public at the SEC's web site at
http://www.sec.gov.
BUSINESS AND LEGAL DEVELOPMENTS REGARDING CLIMATE CHANGE
We do not believe our business will be affected by business and legal
developments regarding climate change. However, in the event we acquire or merge
with a business that could be affected by business and legal developments
7
regarding climate change, we will certainly analyze such factors and their
potential or actual impact on our future business.
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS
The Company's common stock is registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934 ("1934 Act"). As a result of such registration,
the Company is subject to Regulation 14A of the "1934 Act," which regulates
proxy solicitations. Section 14(a) requires all companies with securities
registered pursuant to Section 12(g) thereof to comply with the rules and
regulations of the Commission regarding proxy solicitations, as outlined in
Regulation 14A. Matters submitted to stockholders of the Company at a special or
annual meeting thereof or pursuant to a written consent will require the Company
to provide its stockholders with the information outlined in Schedules 14A or
14C of Regulation 14; preliminary copies of this information must be submitted
to the Commission at least 10 days prior to the date that definitive copies of
this information are forwarded to stockholders.
The Company is also required to file annual reports on Form 10-K and
quarterly reports on Form 10-Q with the Commission on a regular basis, and will
be required to disclose certain events in a timely manner, (e.g. changes in
corporate control; acquisitions or dispositions of a significant amount of
assets other than in the ordinary course of business; and bankruptcy) in a
Current Report on Form 8-K.
WE ARE SUBJECT TO THE REQUIREMENTS OF SECTION 404 OF THE SARBANES-OXLEY ACT
OF 2002. IF WE ARE UNABLE TO TIMELY COMPLY WITH SECTION 404 OR IF THE COSTS
RELATED TO COMPLIANCE ARE SIGNIFICANT, OUR PROFITABILITY, STOCK PRICE AND
RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD BE MATERIALLY ADVERSELY
AFFECTED.
The Company is required to comply with the provisions of Section 404 of the
Sarbanes-Oxley Act of 2002, which requires that we document and test our
internal controls and certify that we are responsible for maintaining an
adequate system of internal control procedures for the 2011 fiscal year. We are
currently evaluating our existing controls against the standards adopted by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). During
the course of our ongoing evaluation and integration of the internal controls of
our business, we may identify areas requiring improvement, and we may have to
design enhanced processes and controls to address issues identified through this
review (see Item 9A, below for a discussion of our internal controls and
procedures).
We believe that the out-of-pocket costs, the diversion of management's
attention from running the day-to-day operations and operational changes caused
by the need to comply with the requirement of Section 404 of the Sarbanes-Oxley
Act could be significant. If the time and costs associated with such compliance
exceed our current expectations, our results of operations and the future
fillings of our Company could be materially adversely affected.
DEPENDENCE ON KEY EMPLOYEES AND NEED FOR ADDITIONAL MANAGEMENT AND PERSONNEL
The Company is heavily dependent on the ability of our President, Keith
Roberts. The Company will be dependent upon Mr. Roberts to recruit good
management for the Company.
In the event of future growth in administration, marketing, manufacturing
and customer support functions, the Company may have to increase the depth and
experience of its management team by adding new members. The Company's success
will depend to a large degree upon the active participation of its key officers
and employees, as well as the continued service of its key management personnel
and its ability to identify, hire, and retain additional qualified personnel.
8
There can be no assurance that the Company will be able to recruit such
qualified personnel to enable it to conduct its proposed business successfully.
EMPLOYEES
As of March 27, 2012, we had no full time employees, and one part time
employee, Keith Roberts, our sole officer. We believe that our relations with
our employee are good. Our employee is not represented by a union or covered by
a collective bargaining agreement.
ITEM 1A. RISK FACTORS.
We are a smaller reporting company and are not required to provide the
information required by this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2. PROPERTIES.
We neither rent nor own any properties at this time. We presently have no
agreements to acquire any properties and have no policy with respect to
investments or interests in real estate, real estate mortgages or securities of,
or interests in, persons primarily engaged in real estate activities.
We currently maintain an address at 5155 Spectrum Way, Unit #5,
Mississauga, ON, Canada L4W 5A1. We pay no rent or other fees for the use of our
office space. We do not presently believe that we will need to maintain any
additional office space in order to carry out our plan of operations as
described herein.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any legal proceedings and are not aware of any
threatened litigation. There have been no events under any bankruptcy act, no
criminal proceedings and no judgments, injunctions, orders or decrees material
to the evaluation of the ability and integrity of any director, executive
officer, promoter or control person of ours during the past 10 years.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Our common stock is not currently traded or quoted on any national
exchange. We are not aware of any market activity in our common stock since
inception through the date of this filing. While we intend to arrange to have
our common stock traded on the public market after complying with Rule 419 and
with the availability of our shares to be sold on the public market, we have not
yet applied to have our stock listed on an exchange or quoted on a quotation
9
service. We do intend to apply for quotation of our common stock on the OTC
Bulletin Board subsequent to (A) our consummation of a Business Combination
Transaction, (B) filing a Form 8-K with the SEC with current information with
respect to the combined companies and (C) the SEC declaring such Form 8-K
effective. There can be no assurance that a trading market will ever develop or,
if developed, that it will be sustained.
Because it is not contemplated that any of our stockholders intend to sell
their shares until we enter into a Business Combination Transaction, and any
sales will have to be through a broker-dealer, we will not know in which states
prospective purchasers will be located, It will be the broker's responsibility
to confirm that sales can legally be made in the applicable states.
When our common stock begins trading on the Over the Counter Bulletin
Board, our common stock will likely be considered a "penny stock." The
application of the "penny stock" rules to our common stock could limit the
trading and liquidity of the common stock, adversely affect the market price of
our common stock and increase your transaction costs to sell those shares. The
Commission has adopted regulations which generally define a "penny stock" to be
any equity security that has a market price (as defined) of less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions.
HOLDERS
As of March 27, 2012, there were 56 shareholders of record of the Company's
Common Stock.
DIVIDENDS
The Company has not declared any cash dividends with respect to its common
stock or preferred stock during the last two fiscal years and does not intend to
declare dividends in the foreseeable future. There are no material restrictions
limiting or that are likely to limit the Company's ability to pay dividends on
its outstanding securities.
RECENT ISSUANCE OF UNREGISTERED SECURITIES
Since its incorporation on October 31, 2008, we have issued the following
securities without registration under the Securities Act of 1933:
In October 2008, we issued the following shares of our common stock at par
value to our founder for services rendered in the formation of the Company and
for developmental work on our business plan:
Name of Shareholder Number of Shares Issued Aggregate Consideration
------------------- ----------------------- -----------------------
David W. Keaveney 1,000,000 $100.00
SUB-TOTAL: 1,000,000 shares of common stock outstanding after this issuance.
From December 2009, until March 23, 2010, we issued an aggregate of
2,932,559 shares to a total of 54 investors who were not citizens or residents
of the United States at a purchase price of $.01 per share.
SUB-TOTAL: 3,932,559 shares of common stock outstanding after this issuance.
In March 2010, we issued 200,000 shares of our common stock for an
aggregate consideration of $2,000 to David E. Wise, our securities counsel, as
payment for legal services previously rendered.
10
TOTAL: 4,132,559 shares of common stock outstanding after this issuance.
The above shares issued to David W. Keaveney and David E. Wise were issued
in reliance of the exemption from registration requirements of the 33 Act
provided by Section 4(2) promulgated thereunder, as the issuance of the stock
did not involve a public offering of securities based on the following:
* the investors represented to us that they were acquiring the
securities for their own account for investment and not for the
account of any other person and not with a view to or for
distribution, assignment or resale in connection with any distribution
within the meaning of the 33 Act;
* we provided each investor with written disclosure prior to sale that
the securities have not been registered under the 33 Act and,
therefore, cannot be resold unless they are registered under the 33
Act or unless an exemption from registration is available;
* the investors agreed not to sell or otherwise transfer the purchased
securities unless they are registered under the 33 Act and any
applicable state laws, or an exemption or exemptions from such
registration are available;
* each investor had knowledge and experience in financial and other
business matters such that he, she or it was capable of evaluating the
merits and risks of an investment in us;
* each investor was given information and access to all of our
documents, records, books, officers and directors, our executive
offices pertaining to the investment and was provided the opportunity
to ask questions and receive answers regarding the terms and
conditions of the offering and to obtain any additional information
that we possesses or were able to acquire without unreasonable effort
and expense;
* each investor had no need for liquidity in their investment in us and
could afford the complete loss of their investment in us;
* we did not employ any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio;
* we did not conduct, hold or participate in any seminar or meeting
whose attendees had been invited by any general solicitation or
general advertising;
* we placed a legend on each certificate or other document that
evidences the securities stating that the securities have not been
registered under the 33 Act and setting forth or referring to the
restrictions on transferability and sale of the securities;
* we placed stop transfer instructions in our stock transfer records;
* no underwriter was involved in the offering; and
* we made independent determinations that such persons were
sophisticated or accredited investors and that they were capable of
analyzing the merits and risks of their investment in us, that they
understood the speculative nature of their investment in us and that
they could lose their entire investment in us.
The 2,932,559 shares sold and issued to 54 investors who were not citizens
or residents of the United States were issued in reliance on the exemption under
Regulation S promulgated under the 33 Act.
We believe that Regulation S was available to us because:
* None of these issuances involved underwriters, underwriting discounts
or commissions;
* We placed Regulation S required restrictive legends on all
certificates issued;
* No offers or sales of stock under the Regulation S offering were made
to persons in the United States; and
* No direct selling efforts of the Regulation S offering were made in
the United States.
ISSUER PURCHASES OF EQUITY SECURITIES
None.
11
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
CAUTIONARY FORWARD - LOOKING STATEMENT
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of the results of operations and
financial condition of Meiguo Ventures, Inc. for the fiscal years ended December
31, 2011 and 2010. References to "we," "our," or "us" in this section refers to
the Company and its subsidiaries. Our discussion includes forward-looking
statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations and intentions. Actual results and
the timing of events could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors, including those
set forth under the Risk Factors, Forward-Looking Statements and Business
sections in this Annual Report. We use words such as "anticipate," "estimate,"
"plan," "project," "continuing," "ongoing," "expect," "believe," "intend,"
"may," "will," "should," "could," and similar expressions to identify
forward-looking statements.
OVERVIEW
BUSINESS DEVELOPMENT
Meiguo Ventures I, Inc. ("Company") was incorporated in the State of
Delaware on October 31, 2008. The Company has been in the developmental stage
since inception and has conducted virtually no business operations. The Company
has no full-time employees and owns no real estate or personal property. The
Company was formed as a vehicle to pursue a business combination and has made no
efforts to identify a possible business combination. As a result, the Company
has not conducted negotiations or entered into a letter of intent concerning any
target business. The business purpose of the Company is to seek the acquisition
of, or merger with, an existing company. We have a minimal amount of cash. The
Independent Auditor's Report to our financial statements for the period from
October 31, 2008 (Inception) to December 31, 2010, included in this annual
report, indicates that there are a number of factors that raise substantial
doubt about our ability to continue as a going concern. Such doubts identified
in the report include the fact (i) that we have not established any source of
revenue to cover our operating costs; (ii) that we will engage in very limited
activities without incurring any liabilities that must be satisfied in cash
until a source of funding is secured; (iii) that we will offer noncash
consideration and seek equity lines as a means of financing our operations; (iv)
that if we are unable to obtain revenue producing contracts or financing or if
the revenue or financing we do obtain is insufficient to cover any operating
losses we may incur, we may substantially curtail or terminate our operations or
seek other business opportunities through strategic alliances, acquisitions or
other arrangements that may dilute the interests of existing stockholders.
BUSINESS OF ISSUER
The Company, based on our proposed business activities, is a "blank check"
company. The U.S. Securities and Exchange Commission ("SEC") defines those
companies as "any development stage company that is issuing a penny stock,
within the meaning of Section 3 (a) (51) of the Exchange Act of 1934, as amended
("Exchange Act") and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies. Under Rule 12b-2 promulgated under the Exchange Act, the Company will
12
be deemed to be a "shell company," because it has no or nominal assets (other
than cash) and no or nominal operations. Many states have enacted statutes,
rules and regulations limiting the sale of securities of "blank check" companies
in their respective jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in our securities, either debt or equity,
until we have successfully concluded a business combination. The Company intends
to comply with the periodic reporting requirements of the Exchange Act for so
long as we are subject to those requirements.
The Company was organized to provide a method for a foreign or domestic
privately held company to become a reporting company whose securities are
qualified for trading in the United States securities markets, such as the New
York Stock Exchange ("NYSE"), NASDAQ, American Stock Exchange ("AMEX") or the
OTC Bulletin Board, and, as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held reporting company. The Company's principal business
objective for the next 12 months and beyond will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict its potential candidate
target companies to any specific industry or geographical location and, thus,
may acquire or merge with any type of business, domestic or foreign.
Since we have only one officer and director, Keith Roberts, the analysis of
new business opportunities will be undertaken by and under the supervision of
our Mr. Roberts. As of the date of this filing, we have not entered into any
definitive agreement with any party, nor have there been any specific
discussions with any potential business combination candidate regarding business
opportunities for the Company. We have unrestricted flexibility in seeking,
analyzing and participating in potential business opportunities. However, we
have a nominal amount of cash at this time and no plan to raise additional money
through the sale of equity or borrow money from a traditional lending source.
Mr. Roberts has verbally committed to the Company that he will fund the costs of
preparing the Company's Exchange Act reports (Form 10-Ks, Form 10-Qs, Form 8-Ks)
for the current fiscal year ending December 31, 2012 if the Company's current
amount of cash is insufficient. However, Mr. Roberts has not committed to pay
such costs beyond the preparation of the Form 10-K for the fiscal year ending
December 31, 2012. In the event that Mr. Roberts fails to pay such costs and the
Company's current amount of cash is insufficient, the Company's common stock
would likely be limited to quotation on the OTC Markets Pink Sheets and no
market for the common stock would develop or, if a market did develop, the
market for our common stock would not exist for very long. Investors in our
common stock could lose part or all of their investment in our shares.
FINANCIAL RESULTS AND OUTLOOK
From its inception on October 31, 2008, the Company has been funded by its
sole officer and director and from proceeds from the issuance of equity
securities. We have generated no revenues or profits through December 31, 2011.
We also have very little operating history upon which an evaluation of our
future success or failure can be made. As of December 31, 2011, we had incurred
a net loss of approximately $53,781 since inception.
We have generated no revenue since inception and our loss from operations
was $12,185 for year ended December 31, 2011, and a loss of $38,339 for the same
period in 2010. Net cash used by operating activities was $15,785 and net cash
provided by financing activities was $13,216 for the year ended December 31,
2010. The Company's cash balance at December 31, 2011 was $ 0.
Since the Company's principal business objective for the next 12 months and
beyond will be to achieve long-term growth potential through a combination with
a business rather than immediate, short-term earnings, the Company may have a
sufficient amount of cash on hand in order to achieve our objective. Additional
funding may be required from our sole officer and director and, if necessary,
proceeds from the issuance of equity securities.
13
CRITICAL ACCOUNTING POLICIES
The Company has not earned any revenue from operations since inception.
Accordingly, the Company's activities have been accounted for as those of a
"DEVELOPMENT STAGE ENTERPRISE" as set forth in ASC 915, "DEVELOPMENT STAGE
ENTITIES." Among the disclosures required by ASC 915, are that the Company's
financial statements be identified as those of a development stage company, and
that the statements of operations, stockholders' equity and cash flows disclose
activity since the date of the Company's inception. The Company has elected a
fiscal year ending on December 31.
In April 2009, the FASB issued FASB ASC 825-10-50 and FASB ASC 270 ("FSP
107-1 AND APB 28-1 Interim Disclosures About Fair Value Of Financial
Instruments"), which increases the frequency of fair value disclosures to a
quarterly basis instead of on an annual basis. The guidance relates to fair
value disclosures for any financial instruments that are not currently reflected
on an entity's balance sheet at fair value. FASB ASC 825-10-50 and FASB ASC 270
are effective for interim and annual periods ending after June 15, 2009. The
adoption of FASB ASC 825-10-50 and FASB ASC 270 did not have a material impact
on results of operations, cash flows, or financial position.
We account for non-employee stock-based compensation in accordance with ASC
718 and ASC Topic 505 ("ASC 505"). ASC 718 and ASC 505 require that we recognize
compensation expense based on the estimated fair value of stock-based
compensation granted to non-employees over the vesting period, which is
generally the period during which services are rendered by the non-employees.
Income Taxes - The Company accounts for its income taxes under the
provisions of FASB-ASC-10 "Accounting for Income Taxes." This statement requires
the use of the asset and liability method of accounting for deferred income
taxes. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax reporting purposes, at
the applicable enacted tax rates. The Company provides a valuation allowance
against its deferred tax assets when the future realizability of the assets is
no longer considered to be more likely than not. There were no current or
deferred income tax expenses or benefits due to the Company not having any
material operations for the period from October 31, 2008 (Inception) through
December 31, 2010.
Earnings per share is computed in accordance with the provisions of
Financial Accounting Standards (FASB) Accounting Standards Codification (ASC)
Topic 260 (SFAS No. 128, "Earnings Per Share"). Basic net income (loss) per
share is computed using the weighted-average number of common shares outstanding
during the period. Diluted earnings per share is computed using the
weighted-average number of common shares outstanding during the period, as
adjusted for the dilutive effect of the Company's outstanding convertible
preferred shares using the "if converted" method and dilutive potential common
shares. Potentially dilutive securities include warrants, convertible preferred
stock, restricted shares, and contingently issuable shares.
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2009, the FASB issued FASB ASC 855-10 (prior authoritative
literature, FSB No. FAS 165, "Subsequent Events"). FASB ASC 855-10 established
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued. FASB ASC
855-10 is effective for interim or annual financial periods ending after June
15, 2009. FASB ASC 855-10 did not have a material effect on the financial
position, cash flows, or results of operations.
14
In June 2009, the FASB issued FASB ASC 105-10 (prior authoritative
literature, FSB No. FAS 168, "The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB
Statement No. 162). FASB ASC 105-10 replaces SFAS 162 and establishes the FASB
Accounting Standards Codification as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with GAAP. FASB ASC 105-10
is effective for financial statements issued for interim and annual periods
ending after September 15, 2009. As such, the Company is required to adopt this
standard in the current period. Adoption of FASB ASC 105-10 did not have a
significant effect on the Company's consolidated financial statements.
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position, or cash flow.
COMPARISON OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010
GENERAL AND ADMINISTRATION EXPENSES
General and administration expenses consist primarily of professional fees
and other general and administrative expenses.
OTHER GENERAL AND ADMINISTRATIVE EXPENSES
Other general and administrative expenses consist of filing fees and bank
service charges. Filing fees totaled $1,945 for the twelve month period ended
December 31, 2011, and $2,001 for the twelve months ended December 31, 2010.
NET LOSS
Our net loss was $12,185 for the year ended December 31, 2011, compared to
a net loss of $38,339 for the same period of 2010. These were due to the general
and administration expenses listed above.
LIQUIDITY AND CAPITAL RESOURCES
Since our inception, we have funded our operations primarily through the
private sales of equity securities during the period from December 2009 until
March 23, 2010, when we issued an aggregate of 2,932,559 shares for an aggregate
amount of $31,013. In addition, our sole officer has advanced a total of $19,106
to the Company for working capital requirements during the period from October
31, 2008 (Inception) to December 31, 2011.
As of December 31, 2011 and December 31, 2010, we had cash and cash
equivalents of $ 0 and $2,569, respectively.
Net cash used by operating activities was $12,185 for the year ended
December 31, 2011 and was comprised of our net loss of $12,185 and a decrease in
both accrued expenses of $1,100 and accounts payable of $2,500.
Net cash provided by financing activities was $13,216 for the year ended
December 31, 2011, which was advanced to the Company by related parties for
working capital requirements. Net cash provided by financing activities was
$32,545 for the year ended December 31, 2010.
15
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting company with a
class of publicly-traded securities. These are commonly thought to include the
following:
* the ability to use registered securities to make acquisitions of
assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in raising capital;
* compensation of key employees through stock options for which there
may be a market valuation;
* enhanced corporate image; and
* a presence in the United States' capital markets.
POTENTIAL TARGET COMPANIES
A business entity that may be interested in a business combination with the
Company may include the following:
* a company for which a primary purpose of becoming a public company is
the use of is securities for the acquisition of assets or business;
* a company that is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to
it;
* a company that believes it will be able to obtain investment capital
on more favorable terms after it has become public;
* a foreign company that may wish an initial entry into the United
States' securities markets;
* a special situation company, such as a company seeking a public market
to satisfy redemption requirements under a qualified Employees Stock
Option Plan; and
* a company seeking one or more of the other perceived benefits of
becoming a public company.
The analysis of new business opportunities will be undertaken by or under
the supervision of our officers, directors, accountants and legal counsel. We
will have unrestricted flexibility in seeking, analyzing and participating in
potential business opportunities. In our efforts to analyze potential
acquisition targets, we will consider the following kinds of factors:
* potential for growth, indicated by new technology, anticipated market
expansion or new products or services;
* competitive position as compared to other firms of similar size and
experience within the industry segment, as well as within the industry
as a whole;
* strength and diversity of management, either in place or scheduled for
recruitment;
* capital requirements and anticipated availability of required funds,
to be provided by the Company or from operations, through the sale of
additional securities, through joint ventures or similar arrangements
or from other sources;
* the cost of participation by the Company as compared to the perceived
tangible and intangible values and potentials;
* the extent to which the business opportunity can be advanced;
* the accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required items;
and
16
* other factors deemed to be relevant by our management team, which
currently consists solely of Keith Roberts, our Chief Executive
Officer and sole Director.
In applying the foregoing criteria, no one of which will be controlling,
management will attempt to analyze all factors and circumstances and make a
determination based upon reasonable investigative measures and available data.
Potentially available business opportunities may occur in many different
industries, and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Due to our limited financial resources
available for investigation, we may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.
No assurances can be given that the Company will be able to enter into a
business combination of any nature.
FORM OF ACQUISITION
The manner in which the Company participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Company and the promoters of the opportunity and the relative negotiating
strength of the Company and such promoters.
It is likely that the Company will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax-free" reorganization under
Section 368(a) (1) of the Internal Revenue Code of 1986, as amended ("Code"),
depends upon whether the owners of the acquired business own 80% or more of the
voting stock of the surviving entity. If a transaction were structured to take
advantage of these provisions rather than other "tax-free" provisions provided
under the Code, our stockholders would, in such circumstances, retain 20% or
less of the total issued and outstanding shares of the Company. Under other
circumstances, depending upon the relative negotiating strength of the parties,
our stockholders may retain substantially less than 20% of the total issued and
outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who were stockholders of the Company
prior to such reorganization.
Our present stockholders will likely not have control of a majority of our
voting shares following a reorganization transaction. As part of such a
transaction, all or a majority of the officers and directors may resign and new
officers and directors may be appointed without any vote by our stockholders.
In the case of an acquisition, the transaction may be accomplished upon the
sole determination of management without any vote or approval by stockholders.
In the case of a statutory merger or consolidation directly involving the
Company, it will likely be necessary to call a stockholders' meeting and obtain
the approval of the holders of a majority of the outstanding shares. The
necessity to obtain such stockholder approval may result in delay and additional
expense in the consummation of any proposed transaction and will also give rise
to certain appraisal right to dissenting stockholders. Most likely, management
will seek to structure any such transaction so as not to require stockholder
approval.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosures
documents and other instruments will require substantial management time and
attention and substantial cost for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction may result in
the loss to the Company of the related costs incurred.
17
We presently have no employees other than Keith Roberts, our sole officer
and director. Our officer and sole director is engaged in outside business
activities and anticipates he will devote to our business very limited time
until the acquisition of a successful business opportunity has been identified.
We expect no significant changes in the number of our employees other than such
changes, if any, incident to a business combination.
Although our management has not taken any preliminary steps to consummate a
business combination, we anticipate beginning our search for viable business
combination targets once we become a fully reporting company with the U.S.
Securities and Exchange Commission. We believe there are many valuable resources
we can reach out to in order to identify potential targets including, but not
limited to, business brokers, networking web sites, conferences, business
professionals and direct contacts by our management with business owners with
whom management is familiar.
Competitive Conditions
We are in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination. In reality, it might be more
feasible for a privately held company to file its own Form 10 registration
statement to become a fully reporting company than to give up ownership to the
Company by entering into a business combination with us.
In the event we are successful in identifying a private company that is
interested in combining with us, the private company will have to provide us
with a lot of information related to its business history, prospects, financial
condition, management and have books and records that are auditable without
undue time and expense. Upon entry into a definitive agreement with a target, we
will have to file a Form 8-K describing the proposed transaction, that the
proposed transaction will result in a change in control of our Company and
include audited financial statements of the combined entity as an exhibit to the
Form 8-K or in an amendment to the Form 8-K.
REPORTS TO SECURITY HOLDERS
1. We will be subject to the informational requirements of the Exchange
Act. Accordingly, we will file annual, quarterly and periodic reports,
proxy statements, information statements and other information with
the SEC.
2. The public may read and copy any materials the Company files with the
SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549. The public may call the SEC at 1-800-SEC-0330
for further information on the Public Reference Room. Our SEC filings
will also be available to the public at the SEC's web site at
http://www.sec.gov.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Not applicable.
18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our financial statements and supplementary data may be found beginning at
page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Commencing with our Annual Report for the 2011 fiscal year, we are required
to maintain "disclosure controls and procedures." The term "disclosure controls
and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities and Exchange Act of 1934, as amended ("Exchange Act"), means controls
and other procedures of a company that are designed to ensure that information
required to be disclosed by the company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Securities and Exchange Commission's rules and
forms. Disclosure controls and procedures also include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by a company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the company's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate, to allow timely decisions
regarding required disclosure.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Commencing with our Annual Report for the 2011 fiscal year, our management
will be responsible for establishing and maintaining adequate internal control
over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act. Our internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. Our internal control over
financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of our
assets;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with U.S. GAAP, and that our receipts and expenditures are being made
only in accordance with the authorization of our management and
directors; and
(3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
19
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
This Annual Report does not include a report of management's assessment
regarding internal control over financial reporting or an attestation report of
the Company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
We did not change our internal control over financial reporting during our
last fiscal quarter that materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our executive officers are elected by the board of directors and serve at
the discretion of the board. All of the current directors serve until the next
annual shareholders' meeting or until their successors have been duly elected
and qualified. The following table sets forth certain information regarding our
current directors and executive officers:
Name Age Position Director Since
---- --- -------- --------------
Keith Roberts 59 President, Chief Executive Officer, September 23, 2011
Chief Financial Officer and Director
Certain biographical information of our current director and officer is set
forth below.
KEITH ROBERTS, CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, CHIEF OPERATING
OFFICER AND A DIRECTOR
Keith Roberts was appointed to the offices President, Chief Executive
Officer, Chief Financial Officer and Director on September 20, 2011. As
President of Comprehensive Business Services, Keith brings over 30 years of
experience in the areas of finance, administration and manufacturing at the
senior management level. After graduating from University of Waterloo with a
Bachelor of Mathematics, Keith pursued a professional accounting designation
obtaining his CMA in 1983. After serving several years at key level positions in
a variety of industries including -
Branch Controller - NCR Canada, -1980 - 1983
Manager of Operations - Polar Plastics Ltd. -1983 - 1987
20
VP & General Manager - Kirby Manufacturing -1987 - 1991
VP- Finance & Administration - Eco-Med Pharmaceuticals Ltd -1991 - 1995
Keith established his own accounting firm in 1995. For the next 10 years,
Keith successfully marketed and grew his practice providing accounting,
financial and overall business expertise to small business owners to over a 100
clients in all areas of industrial and retail operations until its down sizing
in 2005.
From 2005 to present, Keith has been a financial strategist and his
background bodes well as he continues as President of Comprehensive Business
Services consulting and utilizing his diversified skills for a select group of
corporate clients.
COMMITTEES OF THE BOARD OF DIRECTORS
We do not currently have an audit committee or a compensation committee.
COMPENSATION OF DIRECTORS
Our directors do not receive any direct cash compensation for their service
on our board of directors.
DIRECTORSHIPS
During the past five years, none of our directors or persons nominated or
chosen to become directors held any other directorship in any company with a
class of securities registered pursuant to Section 12 of the 1934 Act or subject
to the requirements of Section 15(d) of such Act or any other company registered
as an investment company under the Investment Company Act of 1940.
OTHER SIGNIFICANT EMPLOYEES
No other significant employees exist.
FAMILY RELATIONSHIPS
No family relationship exists between or among any of our officers and
directors.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Except as described below, during the past ten years, no present director,
executive officer or person nominated to become a director or an executive
officer of the Company:
(1) had a petition under the federal bankruptcy laws or any state
insolvency law filed by or against, or a receiver, fiscal agent or
similar officer appointed by a court for the business or property of
such person, or any partnership in which he was a general partner at
or within two years before the time of such filing, or any corporation
or business association of which he was an executive officer at or
within two years before the time of such filing;
(2) was convicted in a criminal proceeding or subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
21
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting his involvement in any of the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the
Commodity Futures Trading Commission, or an associated person of
any of the foregoing, or as an investment adviser, underwriter,
broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and
loan association or insurance company, or engaging in or
continuing any conduct or practice in connection with such
activity;
(ii) engaging in any type of business practice; or
(iii)engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation
of federal or state securities laws or federal commodities laws;
or
(4) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of an federal or state authority
barring, suspending or otherwise limiting for more than 60 days the
right of such person to engage in any activity described in paragraph
(3) (i), above, or to be associated with persons engaged in any such
activity;
(5) was found by a court of competent jurisdiction in a civil action, the
Securities and Exchange Commission to have violated a federal or state
securities law, and the judgment in such civil action or finding by
the Securities and Exchange Commission has not been subsequently
reversed, suspended or vacated;
(6) was found by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any Federal
commodities law, and the judgment in such civil action or finding by
the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated;
(7) was the subject of, or a party to, any Federal or State judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to any alleged violation of:
(i) Any Federal or State securities or commodities law or regulation;
or
(ii) Any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease-and-desist order,
or removal or prohibition order; or
(iii)Any law or regulation prohibiting mail or wire fraud or fraud in
connection with any business entity; or
(8) was the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15
U.S.C. 78c(a)(26)), and registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C.1(a)(29)), or any
equivalent exchange, association, entity or organization that has
22
disciplinary authority over its members or persons associated with a
member.
CODE OF BUSINESS CONDUCT AND ETHICS
On March 24, 2010, we adopted a Code of Business Conduct and Ethics
applicable to our officers, including our principal executive officer, principal
financial officer, principal accounting officer or controller and any other
persons performing similar functions. Our Code of Business Conduct and Ethics
was designed to deter wrongdoing and promote honest and ethical conduct, full,
fair and accurate disclosure, compliance with laws, prompt internal reporting
and accountability to adherence to our Code of Business Conduct and Ethics. Our
Code of Business Conduct and Ethics will be posted on our website whenever we
set it up. We also intend to disclose any future amendments to, and any waivers
from (though none are anticipated), the Code of Business Conduct and Ethics in
the "Governance" section of our website whenever we set it up. Our Code of
Business Conduct and Ethics will be provided free of charge by us to interested
parties upon request. Requests should be made in writing and directed to the
Company at the following address: 5155 Spectrum Way, Unit #5, Mississauga, ON,
Canada L4W 5A1.
ITEM 11. EXECUTIVE COMPENSATION.
Since inception, we have not paid any compensation to any of our officers
or directors.
It is possible that, after the Company successfully consummates a business
combination with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of our management for the purposes of
providing services to the surviving entity. However, the Company has adopted a
policy whereby the offer of any post-transaction employment to members of
management will not be a consideration in our decision whether to undertake any
proposed transaction.
DIRECTOR COMPENSATION
We do not have a formal compensation plan for our directors.
EMPLOYMENT CONTRACTS
We do not have any employment agreements with our employees or officers.
STOCK OPTIONS AND WARRANTS
We have no outstanding stock options or warrants.
OPTION/SAR GRANTS TABLE
There were been no stock options/SARS granted to executive officers and
directors, since we have no such plans in effect.
AGGREGATE OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
There have been no exercises of stock options/SAR by executive officers.
LONG-TERM INCENTIVE PLAN AWARDS
There were been no long-term incentive plan awards made by the company.
23
REPRICING OPTIONS
We have never repriced any stock options.
COMPENSATION DISCUSSION AND ANALYSIS
We have prepared the following Compensation Discussion and Analysis to
provide you with information that we believe is necessary to understand our
executive compensation policies and decisions as they relate to the compensation
of our named executive officers.
We have only one member on our board of directors and do not currently have
a compensation committee.
The primary objectives of the compensation committee with respect to
executive compensation will be to (i) attract and retain the best possible
executive talent available to us; (ii) motivate our executive officers to
enhance our growth and profitability and increase shareholder value; and (iii)
reward superior performance and contributions to the achievement of corporate
objectives.
The focus of our executive pay strategy will be to tie short-term and
long-term cash and equity incentives to the achievement of measurable corporate
and individual performance objectives or benchmarks and to align executive
compensation with the creation and enhancement of shareholder value. In order to
achieve these objectives, our compensation committee will be tasked with
developing and maintaining a transparent compensation plan that will tie a
substantial portion of our executives' overall compensation to our sales,
operational efficiencies and profitability.
Our board of directors has not set any performance objectives or benchmarks
for 2012, as it intends for those objectives and benchmarks to be determined by
the compensation committee once it is constituted and then approved by the
board. However, we anticipate that compensation benefits will include
competitive salaries, bonuses (cash and equity based), health insurance and
stock option plans.
Our compensation committee will meet at least quarterly to assess the cost
and effectiveness of each executive benefit and the performance of our executive
officers in light of our revenues, expenses and profits.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
To our knowledge, the following table sets forth, as of March 27, 2012,
information regarding the ownership of our common stock by:
* Persons who own more than 5% of our common stock
* each of our directors and each of our executive officers; and
* all directors and executive officers as a group.
Each person has sole voting and investment power with respect to the shares
shown, except as otherwise noted.
24
Amount and Nature
of Beneficial Ownership
Name and Address --------------------------------
of Beneficial Owner Number Percent (1)
------------------- ------ -----------
Teresita Rubio 1,065,000 25.77%
5155 Spectrum Way, Unit #5
Mississauga, ON, Canada L4W 5A1
All officers and directors as a 1,065,000 25.77%
group (1 person)
----------
(1) The numbers and percentages set forth in these columns are based on
4,132,559 shares of common stock outstanding as of March 27, 2012. The
number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rule, beneficial ownership includes any shares as
to which the selling security holder has sole or shared voting power or
investment power and also any shares, which the selling security holder has
the right to acquire within 60 days.
There are no arrangements or understandings among the entities and
individuals referenced above or their respective associates concerning election
of directors or other any other matters which may require shareholder approval.
CHANGES IN CONTROL
On March 25, 2011, Teresita Rubio acquired 1,000,000 shares of Common Stock
from David W. Keaveney, our former President, effective March 23, 2011. Ms.
Rubio then served as our Chief Executive Officer, Chief Financial Officer and
sole Director until she resigned from such positions on September 20, 2011, when
Keith Roberts was appointed to those positions. We are not aware of any other
arrangements that may result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
Although we have not adopted formal procedures for the review, approval or
ratification of transactions with related persons, we adhere to a general policy
that such transactions should only be entered into if they are on terms that, on
the whole, are no more favorable, or no less favorable, than those available
from unaffiliated third parties and their approval is in accordance with
applicable law. Such transactions require the approval of our board of
directors.
During the year ended December 31, 2010, our then President and Chief
Executive Officer, David W. Keaveney, made advances to the Company for operating
expenses in the amount of $5,660. These advances are considered short term and
non-interest bearing.
On March 23, 2010, Teresita Rubio, our then President, acquired 1,000,000
shares of our Common Stock from our former President, David W. Keaveney in a
private transaction.
25
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has renewed the engagement of Stan J.H. Lee, CPA to serve as
the independent accounting firm responsible for auditing our financial
statements for the fiscal year ended December 31, 2011.
AUDIT FEES
The aggregate fees billed for professional services rendered was $4,750 and
$2,500 for the audit of our annual financial statements for the fiscal years
ended December 31, 2011, and 2010, respectively.
AUDIT-RELATED FEES
The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are reasonably
related to the performance of the audit or review of our financial statements
and not reported under the caption "Audit Fee." There were no such fees billed
for the fiscal year ended December 31, 2011, and 2010.
TAX FEES
No fees were billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice and
tax planning services.
ALL OTHER FEES
Other than the services described above, there were no other services
provided by our principal accountants for the fiscal years ended December 31,
2011, and 2010.
We do not have an audit committee. Therefore, our entire Board of Directors
("Board") serves in the capacity of the audit committee. In discharging its
oversight responsibility as to the audit process, our Board obtained from the
independent auditors a formal written statement describing all relationships
between the auditors and us that might bear on the auditors' independence as
required by Independence Standards Board Standard No. 1, "Independence
Discussions with Audit Committees."
Effective May 6, 2003, the Securities and Exchange Commission adopted
rules that require that before Principal Accountants are engaged by us to render
any auditing or permitted non-audit related service, the engagement be:
* approved by our audit committee (which consists of our entire board of
directors); or
* entered into pursuant to pre-approval policies and procedures
established by the board of directors, provided the policies and
procedures are detailed as to the particular service, the board of
directors is informed of each service, and such policies and
procedures do not include delegation of the board of directors'
responsibilities to management.
Our Board pre-approves all services provided by our independent auditors.
All of the above services and fees were reviewed and approved by the Board
either before or after the respective services were rendered.
Our Board has considered the nature and amount of fees billed by our
principal accountants and believes that the provision of services for activities
unrelated to the audit is compatible with maintaining our principal accountants'
independence.
26
During the 2011 and 2010 fiscal years, the Company used the following
pre-approval procedures related to the selection of our independent auditors and
the services they provide: unanimous consent of all directors via a board
resolution.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) (1) Financial Statements
Financial statements for Meiguo Ventures I, Inc. listed in the Index to
Financial Statements and Supplementary Data on page F-1 are filed as part
of this Annual Report.
(a) (2) Financial Statement Schedule
Financial Statement Schedule for Meiguo Ventures I, Inc. listed in the
Index to Financial Statements and Supplementary Data on page F-1 are filed
as part of this Annual Report.
(a) (3) See the "Index to Exhibits" set forth below.
(b) See Exhibit Index below for exhibits required by Item 601 of Regulation S-K
27
EXHIBIT INDEX
List of Exhibits attached or incorporated by reference pursuant to Item 601 of
Regulation S-K
3(i).1* Certificate of Incorporation of Meiguo Ventures I, Inc. filed
October 31, 2008, with the Secretary of State of Delaware
3(i).2* Certificate of Amendment to the Certificate of Incorporation of
Meiguo Ventures I, Inc. filed on March 10, 2010, with the
Secretary of State of Delaware
3(ii)* By-Laws of Meiguo Ventures I, Inc.
4.1* Meiguo Ventures I, Inc. Certificate of Common Stock (Specimen)
5.1* Escrow Agreement by, between and among Meiguo Ventures I, Inc.,
Wilmington Trust Company and the Selling Shareholders
14* Code of Business Conduct and Ethics
21** Subsidiaries.
31.1** Certification of Principal Executive Officer Pursuant to 18
U.S.C. Section 1350
31.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350
32.1** 906 Certification of Principal Executive Officer
32.2** 906 Certification of Principal Financial Officer
101** Interactive data files pursuant to Rule 405 of Regulation S-T.
----------
* Incorporated by reference from the Company's Form S-1 registration
statement filed with the Securities and Exchange Commission (File No.
333-165726) that went effective on November 12, 2010.
** Filed herewith.
28
SIGNATURES
In accordance with Section 13 or 15(d) 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.
Meiguo Ventures I, Inc.
Dated: March 28, 2012 /s/ Keith Roberts
-------------------------------------
By: Keith Roberts
Its: President and Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
Dated: March 28, 2012 /s/ Keith Roberts
------------------------------------
By: Keith Roberts
Its: President, Chief Executive Officer
and Director (Principal Executive
Officer) Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
29
STAN J.H. LEE, CPA
2160 North Central Rd Suite 203 * Fort Lee * NJ 07024
P.O. Box 436402 * San Diego * CA 92143-9402
619-623-7799 * Fax 619-564-3408 * stan2u@gmail.com
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
MEIGUO VENTURES I, INC.
We have audited the accompanying balance sheet of MEIGUO VENTURES I, INC. ( a
Development Stage Enterprise) as of December 31, 2011 and 2010 and the related
statements of operation, changes in shareholders' equity and cash flows for the
fiscal years then ended and period from October 31, 2008 (inception) to December
31, 2011. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
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 audits 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 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 MEIGUO VENTURES I, INC. as of
December 31, 2011 and 2010, and the results of its operation and its cash flows
for the fiscal years then ende and for the period from October 31, 2008
(inception) to December 31, 2011 in conformity with U.S. generally accepted
accounting principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in the notes to the financial
statements, the Company's losses from operations and lack of liquidity raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Stan J.H. Lee, CPA
--------------------------------
Stan J.H. Lee, CPA
Fort Lee, NJ 07024
March 27, 2012
F-1
Meiguo Ventures I, Inc.
(A Development Stage Company)
Balance Sheets
As of December 31
2011 2010
-------- --------
ASSETS:
CURRENT ASSETS
Cash and Cash Equivalents $ -- $ 2,569
-------- --------
TOTAL CURRENT ASSETS -- 2,513
-------- --------
TOTAL ASSETS $ -- $ 2,513
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES
Accounts payable $ 750 $ 3,250
Accrued expenses 2,500 3,600
-------- --------
TOAL CURRENT LIABILITIES 3,250 6,850
-------- --------
Payable to a related party 19,106 5,890
-------- --------
TOTAL LIABILITIES 22,356 12,740
-------- --------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
STOCKHOLDERS' EQUITY
Common stock ($.0001 par value), 250,000,000 shares
authorized 4,132,559 issued and outstanding as of
12/31/2011 and 4,132,559, 12/31/2010 413 413
Additional paid-in capital 31,012 31,012
(Deficit) accumulated during the development stage (53,781) (41,596)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (22,356) (10,171)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -- $ 2,569
======== ========
See Notes to Financial Statements
F-2
Meiguo Ventures I, Inc.
(A Development Stage Company)
Statements of Operations
Cumulative from
Fiscal Year Fiscal Year October 31, 2008
Ended Ended (Inception) to
December 31, December 31, December 31,
2011 2010 2011
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
GENERAL AND ADMINISTRATION EXPENSES
Filing Fees 1,945 2,001 4,176
Bank charges 0 1,335 1,362
Professional Fees 10,240 35,003 48,243
---------- ---------- ----------
OPERATING LOSS (12,185) (38,339) (53,781)
---------- ---------- ----------
Provision for income taxes -- -- --
---------- ---------- ----------
NET LOSS $ (12,185) $ (38,339) $ (53,781)
========== ========== ==========
NET (LOSS) PER SHARE
Basic and diluted $ (0.01) $ (0.01) $ (0.02)
========== ========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted 4,132,559 3,751,422 4,132,559
========== ========== ==========
See Notes to Financial Statements
F-3
Meiguo Ventures I, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated Total
Common Stock Common Additional During the Stockholder's
------------------- Stock Paid-in Development Equity
Shares Amount Subscribed Capital Stage (Deficit)
------ ------ ---------- ------- ----- ---------
October 31, 2008, inception, common stock
subscribed @ $.0001 par value 1,000,000 $ -- $ 100 $ -- $ -- $ 100
Net loss for the period ended
December 31, 2008 -- -- -- -- (230) --
---------- ------ ------- -------- -------- --------
BALANCE, DECEMBER 31, 2008 1,000,000 -- 100 -- (230) (130)
---------- ------ ------- -------- -------- --------
Shares issued for common stock previoulsy
subscribed -- 100 (100) -- -- --
Common stock issued for cash:
@ $0.01 per share, Dec 15, 2009 59,000 6 -- 584 -- 590
@ $0.01 per share, Dec 15, 2009 60,000 6 -- 594 -- 600
@ $0.01 per share, Dec 15, 2009 65,000 7 -- 643 -- 650
@ $0.01 per share, Dec 15, 2009 60,000 6 -- 594 -- 600
Net loss for the period ended
December 31, 2009 -- -- -- -- (3,027) (3,027)
---------- ------ ------- -------- -------- --------
BALANCE, DECEMBER 31, 2009 1,244,000 124 -- 2,416 (3,257) (717)
---------- ------ ------- -------- -------- --------
@ $.01 per share, Janaury 8, 2010 231,900 23 -- 2,296 -- 2,319
@ $.01 per share, January 15, 2010 119,169 12 -- 1,180 -- 1,192
@ $.01 per share, January 19, 2010 413,485 41 -- 4093 -- 4,134
@ $.01 per share, January 19, 2010 64,000 6 -- 634 -- 640
@ $.01 per share, January 28, 2010 57,800 6 -- 572 -- 578
@ $.01 per share, February 5, 2010 58,500 6 -- 579 -- 585
@ $.01 per share, February 22, 2010 122,555 12 -- 1,214 -- 1,226
@ $.01 per share, February 22, 2010 1,152,800 115 -- 11,413 -- 11,528
@ $.01 per share, March 3, 2010 468,350 47 -- 4,636 -- 4,683
@ $.01 per share, March 5, 2010 200,000 20 -- 1,980 -- 2,000
Net loss for the year ended
December 31, 2010 -- -- -- -- (38,339) (38,339)
---------- ------ ------- -------- -------- --------
BALANCE, DECEMBER 31, 2010 4,132,559 413 -- 31,012 (41,596) (10,171)
---------- ------ ------- -------- -------- --------
Net loss for the year ended
December 31, 2010 -- -- -- -- (12,185) (12,185)
---------- ------ ------- -------- -------- --------
BALANCE, DECEMBER 31, 2011 4,132,559 $ 413 $ -- $ 31,012 $(53,781) $(22,356)
========== ====== ======= ======== ======== ========
See Notes to Financial Statements
F-4
Meiguo Ventures I, Inc.
(A Development Stage Company)
Statements of Cash Flows
Cumulative from
Fiscal Year Fiscal Year October 31, 2008
Ended Ended (Inception) to
December 31, December 31, December 31,
2011 2010 2011
-------- -------- --------
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) $(12,185) $(38,339) $(53,781)
Adjustments to Reconcile Net Loss to Net Cash Used
by Operating Activities:
Common stock issued for services -- 2,000 --
Changes in Assets and Liabilities
Accounts payable (2,500) 3,250 750
Accrued expenses (1,100) 600 2,500
-------- -------- --------
NET CASH FLOW USED IN OPERATING ACTIVITIES (15,785) (32,489) (50,531)
-------- -------- --------
INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from related party advances 13,216 5,660 19,106
Proceeds from sale of common stock or subscribed -- 26,885 31,425
-------- -------- --------
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES 13,216 32,545 50,531
-------- -------- --------
NET CHANGE IN CASH (2,569) 56 --
CASH, BEGINNING OF YEAR 2,569 2,513 --
-------- -------- --------
CASH, END OF END OF YEAR $ -- $ 2,569 $ --
======== ======== ========
See Notes to Financial Statements
F-5
Meiguo Ventures 1, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2011
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Meiguo Ventures I, Inc. (the "COMPANY") was incorporated under the laws of the
State of Delaware on October 31, 2008. The Company intends to serve as a vehicle
to effect an asset acquisition, merger, exchange of capital stock or other
business combination with a domestic or foreign business.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Company is currently a shell company and has limited operations. The Company
intends to locate and combine with an existing company that is profitable or
which, in management's view, has growth potential, irrespective of the industry
in which it is engaged. A combination may be structured as a merger,
consolidation, exchange of the Company's common stock for stock or assets or any
other form.
Pending negotiation and consummation of a combination the Company anticipates
that it will have, aside from carrying on its search for a combination partner,
no business activities, and, thus, will have no source of revenue. The Company
does not currently have cash on hand sufficient to fund its operations until the
earlier of a combination or a period of one year, and will be required to seek
additional funding to consummate a transaction. The Company intends to either
seek additional equity or debt financing. No assurances can be given that such
equity or debt financing will be available, nor can there be any assurance that
a combination transaction will be consummated. Should the Company be required to
incur any significant liabilities prior to a combination transaction, including
those associated with the current minimal level of general and administrative
expenses, it may not be able to satisfy those liabilities in the event it was
unable to obtain additional equity or debt financing.
The Company has not earned any revenue from operations since inception.
Accordingly, the Company's activities have been accounted for as those of a
"DEVELOPMENT STAGE COMPANY" as set forth in Financial Accounting Standards
("FAS") Accounting Standards Codification (`ASC") Topic 915. Among the
disclosures required by are that the Company's financial statements be
identified as those of a development stage company, and that the statements of
operations, stockholders' equity and cash flows disclose activity since the date
of the Company's inception. The Company has elected a fiscal year ending on
December 31.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
F-6
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments, as defined by FASB ASC 825-10-50, include
cash, accounts payable and accrued expenses. All instruments are accounted for
on a historical cost basis, which, due to the short maturity of these financial
instruments, approximates fair value at December 31, 2011.
FASB ASC 820 defines fair value, establishes a framework for measuring fair
value in accordance with generally accepted accounting principles, and expands
disclosures about fair value measurements. FASB ASC 820 establishes a three-tier
fair value hierarchy which prioritizes the inputs used in measuring fair value.
The Company does not have any assets or liabilities measured at fair value on a
recurring basis at December 31, 2011
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred income tax expense represents the change during the
period in the deferred tax assets and deferred tax liabilities. The components
of the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized.
BASIC EARNINGS (LOSS) PER SHARE
Basic net earnings (loss) per common share is computed by dividing net earnings
(loss) applicable to common shareholders by the weighted-average number of
common shares outstanding during the period. Diluted net earnings (loss) per
common share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon exercise of common
stock options. In periods where losses are reported, the weighted-average number
of common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive. At December 31, 2011 diluted net loss per
share is equivalent to basic net loss per share as there are no potentially
dilutive securities outstanding and the inclusion of any shares committed to be
issued would be anti-dilutive.
IMPACT OF NEW ACCOUNTING STANDARDS
The Company has implemented all new relevant accounting pronouncements that are
in effect through the date of these financial statements. These pronouncements
did not have any material impact on the financial statements unless otherwise
disclosed, and the Company does not believe that there are any other new
accounting pronouncements that have been issued that might have a material
impact on its financial position or results of operations.
F-7
REVENUE RECOGNITION
The Company has not yet commenced its principal operations, and therefore, the
financial statements are presented in accordance with ASC Topic 915. When the
Company commences operations, revenue will be recognized when all of the
following have been met:
* Persuasive evidence of an arrangement exists;
* Delivery or service has been performed;
* The customer's fee is deemed to be fixed or determinable and free of
contingencies or significant uncertainties
* Collectability is probable.
NOTE 3. INCOME TAXES
At December 31, 2011 deferred tax assets consist of the following:
December 31, 2011
-----------------
Federal loss carry forwards $ 18,823
Less: valuation allowance (18,823)
--------
$ --
========
The increase in the valuation allowance for deferred tax assets at December 31,
2011 was $875. In assessing the recovery of the deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income in the
periods in which those temporary differences become deductible. Management
considers the scheduled reversals of future deferred tax liabilities, projected
future taxable income, and tax planning strategies in making this assessment. As
a result, management determined it was more likely than not the deferred tax
assets would not be realized as of December 31, 2011, and recorded a full
valuation allowance.
As of December 31, 2011, the effective tax rate is lower than the statutory rate
due to net operating losses.
The estimated net operating loss carry forwards of $53,781 begin to expire in
2029.
NOTE 4. COMMITMENTS AND CONTINGENCIES
Certain conditions may exist which may result in a loss to the Company, but
which will only be resolved when one or more future events occur or fail to
occur. The Company's management and its legal counsel assess such contingent
liabilities, and such assessment inherently involves an exercise of judgment. In
assessing loss contingencies related to legal proceedings that are pending
against the Company, or unasserted claims that may result in such proceedings,
the Company's legal counsel evaluates the perceived merits of any legal
proceedings or unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, the
estimated liability would be accrued in the Company's financial statements. If
the assessment indicates that a potentially material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated, the
nature of the contingent liability, together with an estimate of the range of
possible loss if determinable and material, would be disclosed. Loss
contingencies considered remote are generally not disclosed unless they arise
from guarantees, in which case the guarantees would be disclosed.
At December31, 2011, the Company was not involved in any litigation.
F-8
NOTE 5. GOING CONCERN
At December 31, 2011 the Company does not engage in any business activities that
provide cash flow. The Company has a working capital deficit and has incurred
losses from inception of approximately $53,781. As such, the accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. The Company does not have sufficient working capital for its
planned activities, which raises substantial doubt about its ability to continue
as a going concern.
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern.
The Company's ability to raise additional capital through the future issuances
of common stock is unknown. The obtainment of additional financing, the
successful development of the Company's contemplated plan of operations, and its
transition, ultimately, to the attainment of profitable operations are necessary
for the Company to continue operations. The ability to successfully resolve
these factors raise substantial doubt about the Company's ability to continue as
a going concern. These financial statements do not include any adjustments that
may result from these uncertainties.
NOTE 6. RELATED PARTY TRANSACTIONS
The Company has received advances from a shareholder to funds its operating
costs. At September 30, 2011 the amount due to the related party is $ 19,106.
These advances are considered short-term in nature and are non-interest bearing.
From October 31, 2008, the date of inception, through December 31, 2011, a
shareholder has provided office space to the Company at no charge.
NOTE 7. STOCKHOLDERS' EQUITY
The Company's articles of incorporation have authorized the Company to issue
270,000,000 shares of its stock., consisting of 250,000,000 shares of $.0001 par
value common stock, of which 4,132,559 shares are issued and outstanding, and
20,000,000 shares of $.0001 par value preferred stock, of which none are issued
or outstanding. The preferred stock shall have those rights, preferences, and
designations as determined by the Board of Directors for each series.
NOTE 8. SUBSEQUENT EVENTS
Management has evaluated subsequent events, and the impact on the reported
results and disclosures and determined that there have not been any events that
would be required to be reflected in the financial statements or the notes.
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