UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2012
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION FROM _________ TO _________
Commission File Number: 000-54017
MEIGUO VENTURES I, INC.
(Exact name of registrant as specified in its charter)
Delaware 26-3551294
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
155 Spectrum Way, Unit #5, Mississauga, ON, Canada L4W 5A1
(Address of principal executive offices) (Zip code)
(647) 426-1640
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its 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 and post such files). Yes [X] No [ ]
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
the 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 Exchange Act). Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of September 30 2012, there were
4,132,559 outstanding shares of the Registrant's Common Stock, $0.0001 par
value.
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements..................................................3
Balance Sheets dated September 30, 2012 (Unaudited) and December
31, 2011 (Audited)....................................................3
Statements of Operations for the Three Months Ended September 30,
2012 and 2011, Nine Months Ended September 30, 2012 and 2011,and
for the Period from October 31, 2008 (Inception) to September 30,
2012 (Unaudited)......................................................4
Statement of Changes in Stockholders' Deficit for the period from
October 31, 2008 (Inception) to September 30, 2012 (Unaudited)........5
Statements of Cash Flows for the Nine Months Ended September 30,
2012 and 2011, and the Period from October 31, 2008 (Inception) to
September 30, 2012 (Unaudited)........................................6
Notes to Financial Statements (Unaudited).............................7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................11
Item 3. Quantitative and Qualitative Disclosures about Market Risk...........19
Item 4. Controls and Procedures..............................................19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................20
Item 1A. Risk Factors.........................................................20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..........20
Item 3. Defaults Upon Senior Securities......................................20
Item 4. Mine Safety Disclosures..............................................20
Item 5. Other Information....................................................21
Item 6. Exhibits.............................................................21
SIGNATURES....................................................................22
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Meiguo Ventures I, Inc.
(A Development Stage Company)
Balance Sheets
(Unaudited)
As of As of
September 30, December 31,
2012 2011
-------- --------
(Unaudited) (Audited)
ASSETS:
CURRENT ASSETS
Cash and Cash Equivalents $ 0 $ 0
-------- --------
TOTAL CURRENT ASSETS 0 0
-------- --------
TOTAL ASSETS $ 0 $ 0
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES
Accounts payable $ 4,000 $ 750
Accrued expenses 830 2,500
-------- --------
TOAL CURRENT LIABILITIES 4,830 3,250
Payable to a related parties 22,896 19,106
-------- --------
TOTAL LIABILITIES 27,726 22,356
-------- --------
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 09/30/2012 and
4,132,559, 12/31/2011 413 413
Additional paid-in capital 31,012 31,012
(Deficit) accumulated during the development stage (59,151) (53,781)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (27,726) (22,356)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 0 $ 0
======== ========
See Notes to Financial Statements
3
Meiguo Ventures I, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
Cumulative from
For three months For Three Months For Nine months For Nine Months October 31, 2008
Ended Ended Ended Ended (Inception) to
September 30, September 30, September 30, September 30, September 30,
2012 2011 2012 2011 2012
---------- ---------- ---------- ---------- ----------
REVENUE $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
GENERAL AND ADMINISTRATION EXPENSES
Filing Fees 80 80 620 445 4,798
Bank charges 0 0 1,335 1,360
Professional Fees 750 750 4,750 7,905 52,993
---------- ---------- ---------- ---------- ----------
OPERATING LOSS (830) (830) (5,370) (9,685) (59,151)
---------- ---------- ---------- ---------- ----------
Provision for income taxes -- -- --
---------- ---------- ---------- ---------- ----------
NET LOSS $ (830) $ (830) $ (5,370) $ (9,685) $ (59,151)
========== ========== ========== ========== ==========
NET (LOSS) PER SHARE
Basic and diluted $ (0.0002) $ (0.0002) $ (0.0013) $ (0.0027) $ (0.0143)
========== ========== ========== ========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted 4,132,559 4,132,559 4,132,559 4,132,559 4,132,559
========== ========== ========== ========== ==========
See Notes to Financial Statements
4
Meiguo Ventures I, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
(Unaudited)
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, 2011 -- -- -- -- (12,185) (12,185)
---------- ------ ------- -------- -------- --------
BALANCE, DECEMBER 31, 2011 4,132,559 413 -- 31,012 (53,781) (22,356)
---------- ------ ------- -------- -------- --------
Net Loss for the nine months
ended September 30, 2012 (5,370) (5,370)
---------- ------ ------- -------- -------- --------
BALANCE, SEPTEMBER 30, 2012 4,132,559 $ 412 $ -- $ 31,013 $(59,151) $(27,726)
========== ====== ======= ======== ======== ========
See Notes to Financial Statements
5
Meiguo Ventures I, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Cumulative from
Nine Months Nine Months October 31, 2008
Ended Ended (Inception) to
September 30, September 30, September 30,
2012 2011 2012
-------- -------- --------
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) $ (5,370) $ (9,685) $(59,151)
Adjustments to Reconcile Net Loss to Net Cash
Used by Operating Activities:
Common stock issued for services -- -- --
Changes in Assets and Liabilities
Accounts payable 4,000 (3,250) 4,000
Accrued expenses 830 (2,850) 830
-------- -------- --------
NET CASH FLOW USED IN OPERATING ACTIVITIES (540) (15,785) (54,321)
-------- -------- --------
INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from related party advances 540 13,216 22,896
Proceeds from sale of common stock or subscribed -- -- 31,425
-------- -------- --------
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES 540 13,216 54,321
-------- -------- --------
NET CHANGE IN CASH -- (2,569) --
CASH, BEGINNING OF PERIOD -- 2,569 --
-------- -------- --------
CASH, END OF END OF PERIOD $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
6
Meiguo Ventures 1, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2012
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.
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 September 30, 2012.
7
Meiguo Ventures 1, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2012
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 September 30, 2012
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 September 30, 2012 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.
8
Meiguo Ventures 1, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2012
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 September 30, 2012 deferred tax assets consist of the following:
September 30, 2012
------------------
Federal loss carry forwards $ 20,703
Less: valuation allowance (20,703)
---------
$ --
=========
The increase in the valuation allowance for deferred tax assets at September 30,
2012 was $291. 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 September 30, 2012, and recorded a full
valuation allowance.
As of June 30, 2012, the effective tax rate is lower than the statutory rate due
to net operating losses.
The estimated net operating loss carry forwards of $59,151 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
9
Meiguo Ventures 1, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2012
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 September 30, 2012, the Company was not involved in any litigation.
NOTE 5. GOING CONCERN
At September 30, 2012 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 $59,151. 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, 2012 the amount due to the related party is $ 22,896.
These advances are considered short-term in nature and are non-interest bearing.
From October 31, 2008, the date of inception, through September 30, 2012, 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.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the results of operations and financial
condition of Meiguo Ventures, Inc. should be read in conjunction with the
unaudited Financial Statements, and the related notes.. 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 prospectus. 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 no cash. The Independent Auditor's
Report to our financial statements for the period from October 31, 2008
(Inception) to December 31, 2011, indicated 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
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,
11
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 no 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 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 it's 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 September 30, 2012. We also
have very little operating history upon which an evaluation of our future
success or failure can be made. As of September 30, 2012, we had incurred a net
loss of approximately $59,151 since inception.
We have generated no revenue since inception and our loss from operations was
$5,370 for nine month period ended September 30, 2012 and a loss of $9,685 for
the same period in 2011. Net cash used by operating activities was $540 and net
cash provided by financing activities was $540 for the nine month period ended
September 30, 2012. The Company's cash balance at September 30, 2012 was $ 0.
12
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.
CRITICAL ACCOUNTING POLICIES
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 The Company has not earned any revenue from operations
since inception. Accordingly, the Company's 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 March 31, 2012.
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
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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.
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 NINE MONTH PERIODS ENDED SEPTEMBER 30, 2012 AND 2011
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 $
620 for the nine month period ended September 30, 2012 and $ 445 for the nine
months ended September 30, 2011. Bank charges were $ 0 for nine months ended
September 30, 2012 and $1,335 for the same period in 2011.
PROFESSIONAL FEES. Professional fees consist of fees paid to our independent
accountants, lawyers and other professionals and consultants. Professional fees
totaled $4,750 for the nine month period ended September 30, 2012 and $7,905 for
the comparable period in 2011 - consisting primarily of legal fees.
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NET LOSS
Our net loss was $ 5,370 for the six months ended September 30, 2012 comparable
to a net loss of $9,685 for the same period of 2011. 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 3,132,559 shares for an aggregate amount of
$31,013. In addition, our sole officer through a related party has advanced a
total of $22,896 to the Company for working capital requirements during the
period from October 31, 2008 (Inception) to September 30, 2012.
As of September 30, 2012 and June 30, 2011 we had cash and cash equivalents of $
0 and $ 0 respectively.
Net cash used by operating activities was $540 for the nine months ended
September 30, 2012 and was comprised of our net loss of $5,370 less the accrued
expenses of $4,830.
Net cash provided by financing activities was $540 for the nine months ended
September 30, 2012, which was advanced to the Company by related parties for
working capital requirements. Net cash provided by financing activities was
$13,216 for the nine months ended September 30, 2011.
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.
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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;
16
* 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. 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 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.
17
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.
We presently have no employees other than Keith Roberts. 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 Mr Roberts 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.
18
We are voluntarily filing this Registration Statement with the U.S. Securities
and Exchange Commission and we are under no obligation to do so under the
Securities Exchange Act of 1934.
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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
We conducted an evaluation under the supervision and with the participation of
our management, including Keith Roberts, our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
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. Based on this evaluation, our Chief Executive Officer and Chief
Financial Officer concluded as of December 31, 2011, and again as of September
30, 2012, that our disclosure controls and procedures have been improved and
were effective at the reasonable assurance level in our internal controls over
financial reporting discussed immediately below.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
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:
19
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 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.
Management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2011, and again as of September 30, 2012. In making
this assessment, management used the framework set forth in the report entitled
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or COSO. The COSO framework summarizes
each of the components of a company's internal control system, including (i) the
control environment, (ii) risk assessment, (iii) control activities, (iv)
information and communication, and (v) monitoring. This quarterly report does
not include an attestation report of our registered public accounting firm
regarding internal control over financial reporting. Management's report was not
subject to attestation by our registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permits us to
provide only management's report in this annual report.
Identified Material Weaknesses and Significant Deficiencies
A material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the financial statements will not be prevented or detected.
Management identified no such material weakness or deficiency during its
assessment of our internal control over financial reporting as of December 31,
2011, and again as of September 30, 2012.
(b) Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2012, we did not make any changes in our
internal controls over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not aware of any threatened or pending litigation against the
Company.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Since March 31, 2011, the Company has not issued any equity securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
20
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
See Exhibit Index below for exhibits required by Item 601 of regulation S-K.
EXHIBIT INDEX
List of Exhibits attached or incorporated by reference pursuant to Item 601 of
Regulation S-K:
Exhibit Description
------- -----------
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. 14 * Code of Business Conduct and
Ethics
14* Code of Business Conduct and Ethics
31.1** Certification under Section 302 of Sarbanes-Oxley Act of 2002.
32.1** Certification under Section 906 of Sarbanes-Oxley Act of 2002.
101*** Interactive Data Files pursuant to Rule 405 of Regulation S-T.
----------
* Exhibits incorporated herein by reference. File No. 333-165726.
** Filed herewith.
*** To be provided by amendment.
21
SIGNATURES
Pursuant to the requirements of 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.
Date: November 12, 2012 /s/ Keith Roberts
----------------------------------------
Keith Roberts
President, Chief Executive Officer and
Chief Financial Officer
(Principal Accounting, Executive and
Financial Officer)
22