UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-Q
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010
[] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
----------- -----------
Commission file number: 000-53909
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RACE WORLD INTERNATIONAL, INC.
(Exact name of small business issuer as specified
in its charter)
Nevada 20-8720608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
252 Dongen East Street
Kuiwen District, Weifang,
Shandong, China 261041
(Address of principal (Zip Code)
executive offices)
------------------
Issuer's telephone number, including area code: 15906367765
------------------
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, par value $0.001 per share
Preferred stock, par value $0.001 per share
- -----------------------------------------------------------------------
(Former name or former address, if changed since last report)Not Applicable
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
- ----------------------------------------------------------------------
Indicate by check mark whether the registrant 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 [ ] (Do not Smaller reporting company [X]
check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
Defined in Rule 12b-2 of the Exchange Act). [x] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS
As of November 15, 2010 the Issuer had 46,200,000 shares of common stock
issued and outstanding.
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RACE WORLD INTERNATIONAL, INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010
TABLE OF CONTENTS
PART I
Item 1. Financial Statements
Balance Sheets as of Sept 30, 2010 and December 31, 2009 . . . . . . . . F-1
Statements of Operations for the Three Months and Nine Months Ended Sept
30, 2010 and Sept 30, 2009 and from Inception (Dec 29,2006) to
Sept 30, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .F-2
Statement of Stockholders' Equity . . . . . . . . . . . . . . . . . . . .F-3
Statements of Cash Flows for the Three Months and Nine Months Ended Sept
30, 2010 and Sept 30, 2009 and from Inception(Dec 29, 2006) to
Sept 30, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . .F-5
Item 2. Management's Discussion and Analysis or Plan of Operation . .6
Item 3. Quantitative and Qualitative Disclosures about Market Risk. .8
Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . . .8
PART II
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .10
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds. .10
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . .10
Item 4. Submission of Matters to a Vote of Security Holders . . . . .10
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . .10
Item 6. Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . .11
RACE WORLD INTERNATIONAL, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
Race World International, Inc.
(a development stage company)
Balance Sheet
As At As At
September 30 December 31
2010 2009
(RECLASSIFIED)
- ---------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------
CURRENT
Cash $ - $ 1,874
Other current assets
Refundable Taxes 368 5,088
------------ -------------
Total Current Assets 368 6,962
PROPERTY AND EQUIPMENT (Note 3)
Race Vehicle - 90,125
------------ -------------
Total Assets $ 368 $ 97,087
============ =============
- ---------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------
CURRENT
Accounts payable and $ 13,430 $ 18,847
accrued liabilities
Due to Shareholders (Note5(g)) 105,130 19,718
------------ -------------
Total liabilities $ 118,560 $ 38,565
============ =============
- ---------------------------------------------------------------------
STOCKHOLDERS' EQUITY
- ---------------------------------------------------------------------
Preferred stock,$.001 par value
Authorized: 20,000,000 shares
Issued: Nil
Common stock, $.001 par value
Authorized: 200,000,000 shares
Issued: 46,200,000 shares 46,200 46,200
Additional paid-in capital 215,631 215,631
Deficit accumulated during the
development stage (380,023) (203,309)
------------ -------------
Total stockholders' equity (118,192) 58,522
------------ -------------
Total liabilities and stockholders'
Equity $ 368 $ 97,087
============ =============
GOING CONCERN (Note 1)
The accompanying notes are an integral part of these financial statements.
APPROVED BY THE DIRECTOR:
/s/Wang Shi Bin
- ----------------
Wang Shi Bin
Director
.F-1.
Race World International, Inc.
(a development stage company)
Statements of Operations
(Unaudited)
For the Three For the Three For the Nine For the Nine Period From
Months Ended Months Ended Months Ended Months Ended Dec 29, 2006
Sept 30, 2010 Sept 30, 2009 Sept 30,2010 Sept 30,2009 (inception) to
Sept 30, 2010
- --------------------------------------------------------------------------------------------------
REVENUE
Interest Revenue $ - $ - $ - $ 21 $ 11,492
Operating Revenue - - - 2,581 2,581
------------- ------------- --------------- ------------- -------------
Total Revenue - - - 2,602 14,073
============================================================================
EXPENSES
Advertising
& Promotion - - 180 238 20,941
Bank Charges 127 66 305 225 1,048
Courier 98 - 257 - 257
Depreciation 124 2,375 1,749 7,125 6,624
Foreign Currency
Loss/Gain 1,943 (1,111) (782) (2,012) 3,589
Listing and Share
Transfer fees 1,626 4,267 11,065 19,170 46,973
Management fees 1,178 - 39,574 7,342 92,276
Professional fees 49,444 1,133 78,036 7,284 155,835
Rent - - 2,894 2,564 15,834
Travel 35,060 - 35,060 397 42,343
------------- ------------- -------------- ------------- -------------
Total Expenses 89,600 6,730 168,338 42,333 385,720
============================================================================
Loss on Sale
of Race Vehicle 8,376 - 8,376 - 8,376
NET LOSS $ (97,976) $ (6,730) $(176,714) $(39,731) $ (380,023)
============= ============= ============== ============= =============
Loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.00) $ (0.01)
(Note 2(f)) ============= ============= ============== ============= =============
Weighted average
number of shares
outstanding 46,200,000 46,200,000 46,200,000 46,200,000 41,807,367
============= ============= ============== ============= =============
- ---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
.F-2.
Race World International, Inc.
(a development stage company)
Statement of Stockholders' Equity
(Unaudited)
For the Period from Dec 29, 2006 (inception) to September 30, 2010
- -----------------------------------------------------------------------------
Common stock
-------------- Deficit Acc. Total
Number Amount Additional During Devel- Stockholders
Of Shares Paid-in opment Stage Equity
Capital
--------- -------- ----------- --------------- -------------
Issue of Common 19,700,000 $19,700 $ 78,800 $ - $ 98,500
Stock for cash
on organization
of the Company
Issue of Common 26,200,000 $26,200 $107,131 $ - $ 133,331
Stock for cash
Net loss for
Period - - - $ (21,508) $ (21,508)
--------- -------- ----------- --------------- -------------
Balance 45,900,000 $45,900 $185,931 $ (21,508) $ 210,323
December 31,
2007
Issue of Common 300,000 300 29,700 - 30,000
Stock for cash
Net loss for
Period - - - (135,649) (135,649)
--------- --------- ---------- --------------- -------------
Balance
December 31,
2008 46,200,000 $46,200 $215,631 $(157,157) $ 104,674
Net loss for
Period - - - (46,152) (46,152)
---------- -------- ----------- --------------- -------------
Balance
December 31,
2009 46,200,000 $46,200 $215,631 $(203,309) $ 58,522
Net loss for
Period - - - (176,714) (176,714)
---------- -------- ----------- --------------- ------------
Balance
September 30,
2010 46,200,000 $46,200 $215,631 $(380,023) $(118,192)
========== ======== =========== =============== ============
The accompanying notes are an integral part of these financial statements.
.F-3.
Race World International, Inc.
(a development stage company)
Statement of Cash Flows
(Unaudited)
For the Three For the Three For the Nine For the Nine Period from
Months Ended Months Ended Months Ended Months Ended Dec 29,2006
Sept 30,2010 Sept 30, 2009 Sept 30,2010 Sept 30,2009 (inception) to
Sept 30, 2010
- ----------------------------------------------------------------------------------------------
CASH FLOWS (USED IN)
PROVIDED BY:
OPERATING ACTIVITIES
Net loss $ (97,976) $ (6,730) $(176,714) $ (39,731) $ (380,023)
Adjustments for items
not affecting cash:
Depreciation 124 2,375 1,749 7,125 6,624
Changes in Operating
Assets and Liabilities:
Decrease (Increase)
in prepaid expenses
and accrued assets - 833 - 5,833 -
Increase (Decrease) in
accounts payable
and accrued
liabilities 42,296 (5,336) 74,583 6,973 93,430
Increase in accrued
interest receivable - - - - -
Decrease (Increase)
in Refundable
Taxes 3,634 (203) 4,720 243 (368)
Loss on sale of
Race vehicle 8,376 - 8,376 - 8,376
----------- ---------- ----------- ---------- -----------
(43,546) (9,061) (87,286) (19,557) (271,961)
=========== ========== =========== ========== ===========
INVESTING ACTIVITIES
Promissory note
Receivable - - - - (95,000)
----------- ---------- ----------- ----------- -----------
FINANCING ACTIVITIES
Common stock
issued for cash: - - - - 261,831
Due to
Shareholders (280,659) - 85,412 - 105,130
----------- ---------- ----------- ----------- -----------
(280,659) - 85,412 - 366,961
=========== ========== =========== =========== ===========
INCREASE
(DECREASE) IN CASH (324,205) (9,061) (1,874) (19,557) -
CASH, beginning 324,205 13,698 1,874 24,194 -
----------- ---------- ----------- ----------- -----------
CASH, ending $ - $ 4,637 $ - $ 4,637 $ -
=========== ========== =========== =========== ===========
SUPPLEMENTAL
INFORMATION
Cash paid during
the year to:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
Non-cash events:
Promissory note
receivable $ - $ - $ - $ - $ 95,000
Purchase of property
and equipment $ - $ - $ - $ - $ (95,000)
Sale of property
and equipment $ 80,000 $ - $ 80,000 $ - $ 80,000
Offset against
accounts payable $ (80,000) $ - $(80,000) $ - $ (80,000)
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
.F-4.
RACE WORLD INTERNATIONAL, INC.
(a development stage company)
September 30, 2010
1. 0RGANIZATION AND DEVELOPMENT STAGE ACTIVITIES
The Company was incorporated under the laws of the State of Nevada on Dec 29,
2006. The company purpose in the Articles of Incorporation is to engage in
any lawful activity or activities in the State of Nevada and throughout the
world. As of September 30, 2010, the Company is considered to be in the
development stage as the Company is devoting substantially all of its effort to
establishing its new business and the Company has not generated revenues from
its business activities. The Company has no cash flows from operations. The
Company is currently seeking additional funds through future debt or equity
financing to offset future cash flow deficiencies. Such financing may not be
available or may not be available on reasonable terms. The resolution of this
going concern issue is dependent on the realization of management's plans. If
management is unsuccessful in raising future debt or equity financing, the
Company will be required to liquidate assets and curtail or possibly cease
operations.
2 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States. Because a
precise determination of many assets and liabilities is dependent on future
events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgment.
The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality and within the framework of
the accounting policies summarized below:
a .Cash and cash equivalents
The Company considers all short-term investments, including investments in
certificates of deposit, with a maturity date at purchase of three months
or less to be cash equivalents.
b .Revenue recognition
Revenue is recognized on the sale and transfer of goods and
services.
c .Foreign currencies
The functional currency of the Company is the United States dollar.
Transactions in foreign currencies are translated into United States dollars
at the rates in effect on the transaction date. Exchange gains or losses
arising on translation or settlement of foreign currency denomination
monetary items are included in the statement of operations.
d .Property and equipment
Property and equipment are recorded at cost and are depreciated using the
straight-line method over their estimated useful lives as follows:
Asset Rate
------- ------
Race Vehicle 10 years
The cost of maintenance and repairs are expensed as incurred.
During 2009 the company revised the estimated residual value of its
heritage race vehicle and current year depreciation has been revised
accordingly.
e .Financial instruments
The Company's financial instruments consist of cash, refundable taxes, and
accounts payable and accrued liabilities.
Management is of the opinion that the Company is not subject to significant
interest, currency or credit risks on the financial instruments included in
these financial statements. The fair market values of these financial
instruments approximate their carrying values.
f .Income taxes
The Company follows the asset and liability method of accounting for income
taxes. Under this method, current taxes are recognized for the estimated
income taxes payable for the current period.
Deferred income taxes are provided based on the estimated future tax effects
of temporary differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases as well as the benefit
of losses available to be carried forward to future years for tax purposes.
Deferred tax assets and liabilities are measured using enacted tax rates that
are expected to apply to taxable income in the years in which those temporary
differences are expected to be covered or settled. The effect of deferred tax
assets and liabilities of a change in tax rates is recognized in operations
in the period that includes the enactment date. A valuation allowance is
recorded for deferred tax assets when it is more likely than not that such
deferred tax assets will not be realized.
g .Loss per share
Basic loss per share is computed by dividing loss for the period available to
common stockholders by the weighted average number of common stock
outstanding during the period.
h .Recent accounting pronouncements
New authoritative accounting guidance (Accounting Standards Update No. 2009-5)
under ASC Topic 820 provides guidance for measuring the fair value of a
liability in circumstances in which a quoted price in an active market for the
identical liability is not available. In such instances, a reporting entity is
required to measure fair value utilizing a valuation technique that uses (i)
the quoted price of the identical liability when traded as an asset, (ii)
quoted prices for similar liabilities or similar liabilities when traded as
assets, or (iii) another valuation technique that is consistent with the
existing principles of ASC Topic 820, such as an income approach or market
approach. The new authoritative accounting guidance also clarifies that when
estimating the fair value of a liability, a reporting entity is not required to
include a separate input or adjustment to other inputs relating to the
existence of a restriction that prevents the transfer of the liability. The new
authoritative accounting guidance under ASC Topic 820 is effective for our
financial statements beginning January 1, 2010 and is not expected to have a
significant impact on the company's financial statements.
3.Property and Equipment
2009 2008
------- --------
Race Vehicle $ - $ 95,000
Accumulated Depreciation - (11,875)
------- --------
$ - $ 83,125
======= ========
The company does not carry storage or operating insurance on the Race
Vehicle.
4.Stockholders' Equity:
Common Stock Offerings:
On Dec 29, 2006, the Company completed a private placement
offering of 19,700,000 common shares to its officers and
directors for $98,500.
On August 9, 2007, the Company completed a private placement
offering of 26,200,000 to its remaining founders for $133,331.
On August 19, 2008, the Company completed a private placement
Offering of 300,000 common shares to new subscribers for net
proceeds of $30,000.
6. RELATED PARTY TRANSACTIONS
a.On January 1, 2008 a management agreement was entered into with JPI, a
company controlled by the wife of the past company president, and management
fees (2010 - $38,396; 2009 - $7,342) relate to this agreement. Management
fees for July 2009 to December 2009 have been waived.
b.JPI owned and operated a Formula Atlantic Racecar on behalf of RWI for
advertising purposes. The RWI team car was entered into five races between
April and September 2008. Advertising fees (2010 - Nil; 2009 - $238) relate
to the team car.
c.On July 1, 2008, JPI sold its Formula Atlantic Racing Car to RWI, as well
as all spare parts, tools and the paddock support vehicle for a total of
$95,000. The purchase price was subjected to an appraisal by I.W.E. Rear
Ends Only Ltd., an approved auto specialist.
d.On July 14, 2010, Evan Willams and his company, Buzan Electrical
Consultants (2003) Ltd., purchased the Formula Atlantic Racing Car with
all spare parts, tools, and paddock support vehicle for a total of $80,000
plus 12% HST.
e.Professional fees include amounts attributed to S N Ventures Inc.
(2010 - $56,502; 2009 - $2,171), a company controlled by the past Treasurer.
f.Rental charges were paid on a month-to-month basis to JPI (2010 - $2,894;
2009 - $2,564). Rental charges for July 2009 to December 2009 have been
waived.
g.Listing and Stock Transfer Fees include amounts attributed to U N
Holdings Inc. (2010 - $5,680; 2009 - $7,678), a company controlled by the
past Treasurer's brother.
h.The amounts due to shareholders are unsecured, non-interest bearing, with
no fixed terms of repayment.
6.INCOME TAXES
- ----------------------------------------------------------------------------
Deferred tax assets and liabilities:
- ----------------------------------------------------------------------------
Deferred tax assets: September 30,2010
Operating loss carry-forwards $ 140,904
Valuation allowance (140,904)
- ----------------------------------------------------------------------------
Net Deferred tax asset $ -
============================================================================
Management believes that it is not more likely than not that it will create
sufficient taxable income sufficient to realize its deferred tax assets. It
is reasonably possible these estimates could change due to future income and
the timing and manner of the reversal of deferred tax liabilities. Due to its
losses, the Company has no income tax expense.
The Company has computed its operating loss carry-forwards to 2009 for income
tax purposes to be $247,834.
.F-5.
ITEM 2. Management Discussion and Analysis of Financial Condition and Results
of Operations.
Safe Harbor Statement
This report on Form 10-Q contains certain forward-looking statements. All
statements other than statements of historical fact are "forward-looking
statements" for purposes of these provisions, including any projections of
earnings, revenues, or other financial items; any statements of the plans,
strategies, and objectives of management for future operation; any statements
concerning proposed new products, services, or developments; any statements
regarding future economic conditions or performance; statements of belief; and
any statement of assumptions underlying any of the foregoing. Such forward-
looking statements are subject to inherent risks and uncertainties, and actual
results could differ materially from those anticipated by the forward-looking
statements.
These forward-looking statements involve significant risks and uncertainties,
including, but not limited to, the following: competition, promotional costs,
and risk of declining revenues. Our actual results could differ materially
from those anticipated in such forward-looking statements as a result of a
number of factors. These forward-looking statements are made as of the date of
this filing, and we assume no obligation to update such forward-looking
statements. The following discusses our financial condition and results of
operations based upon our consolidated financial statements which have been
prepared in conformity with accounting principles generally accepted in the
United States. It should be read in conjunction with our financial statements
and the notes thereto included elsewhere herein.
The following discussion should be read in conjunction with our consolidated
financial statements, including the notes thereto, appearing elsewhere in this
Form 10-Q. The discussions of results, causes and trends should not be
construed to imply any conclusion that these results or trends will necessarily
continue into the future.
Overview
We were incorporated pursuant to the laws of the State of Nevada on December
29, 2006 under the name Race World International, Inc. Race World was
originally formed to develop and operate a motorsports theme park. Race World
International Inc. is no longer pursuing that project and is considering other
business ventures.
Liquidity and Capital Resources
As of September 30, 2010, we had no cash or cash equivalents and a
working capital deficiency of $118,192. As of September 30, 2010 our
accumulated deficit was $380,023. For the nine months ended September 30,
2010 our net loss was $176,714 compared to $39,731 during the same period in
2009. This increase was due mostly to higher management, professional fees
and travel.
Our losses have been funded by proceeds from shareholder loans and from the
sale of our common stock. During the nine months ended September 30, 2010,
our cash position decreased by $1,874.
We used net cash of $87,286 in operating activities for the nine months ended
September 30, 2010 compared to net cash of $19,557 in operating activities
for the same period in 2009. We did not use any money in investing
activities for the nine months ended September 30, 2010, nor did we use
any money for investing activities during the same period in 2009.
6
During the nine months ended September 30, 2010 our monthly cash requirement
was approximately $9,698 compared to approximately $2,173 for the same
period in 2009.
These financial statements have been prepared on the assumption that we are a
going concern, meaning we will continue in operation for the foreseeable
future and will be able to realize assets and discharge liabilities in the
ordinary course of operations. Different bases of measurement may be
appropriate when a company is not expected to continue operations for the
foreseeable future. Our continuation as a going concern is dependent upon
our ability to attain profitable operations and generate funds there-from,
and/or raise equity capital or borrowings sufficient to meet current and
future obligations.
Management plans to raise equity financings over the next twelve months to
finance operations. There is no guarantee that we will be able to complete
any of these objectives. We have incurred losses from operations since
inception and at September 30, 2010, have a working capital deficiency and
an accumulated deficit that creates substantial doubt about our ability to
continue as a going concern.
Results of Operations for the three months ended September 30, 2010
compared to the three months ended September 30, 2009 and from inception
to September 30, 2010.
Limited Revenues
Since our inception on December 29, 2006 to September 30, 2010, we have
earned limited revenue of $14,073. As of September 30, 2010, we have an
accumulated deficit of $380,023 and we did not earn any revenues during the
three months ending on September 30, 2010. At this time, our ability to
generate any significant revenues continues to be uncertain. Our financial
statements contain an additional explanatory paragraph in Note 2, which
identifies issues that raise substantial doubt about our ability to continue
as a going concern. Our financial statements do not include any adjustment
that might result from the outcome of this uncertainty.
Net Loss
We incurred a net loss of $97,976 for the three months ended September 30,
2010, compared to a net loss of $6,730 for the same period in 2009. This
increase in net loss is mostly due to higher professional fees
and travel expenses. From inception on December 29, 2006 to September 30,
2010, we have incurred a net loss of $380,023. Our basic and diluted loss
per share was $0.002120 for the three months ended September 30, 2010, and
$0.000145 for the same period in 2009.
Expenses
Our total operating expenses increased from $6,730 to $89,600 for the three
months ended September 30, 2010 compared to the same period in 2009. This
increase in expenses is mostly due to higher professional fees and travel.
Since our inception on December 29, 2006 to September 30, 2010, we have
incurred total operating expenses of $385,720.
Our management fees increased from $0 to $1,178 for the three months ended
September 30, 2010 compared to the same period in 2009. Since our inception
on December 29, 2006 until September 30, 2010 we have spent $92,276 on
management fees.
Our professional fees, consisting primarily of legal, accounting, consulting
and auditing fees, increased by $48,311 to $49,444 for the three months
ended September 30, 2010 from $1,133 for the same period in 2009, mainly due
to increased legal and auditing services provided in the three month periods
ended September 30, 2010. Since our inception on December 29, 2006 until
September 30, 2010 we have spent $155,835 on professional fees.
Our travel expenses increased from $0 to $35,060 for the three months ended
September 30, 2010 compared to the same period in 2009. Since our inception
on December 29, 2006 until September 30, 2010 we have spent $42,343 on
travel fees.
Our listing and share transfer fees decreased $2,641 from $4,276 to $1,626
for the three months ended September 30, 2010 compared to the same period in
2009. Since our inception on December 29, 2006 until September 30, 2010 we
have spent $46,973 on listing and share transfer fees.
Results of Operations for the nine months ended September 30, 2010 compared
to the nine months ended September 30, 2009
Limited Revenues
We did not earn any revenues during the nine months ending on September 30,
2010, compared to $2,602 in revenues earned during the same period in 2009.
At this time, our ability to generate any significant revenues continues to
be uncertain.
Net Loss
We incurred a net loss of $176,714 for the nine months ended September 30,
2010, compared to a net loss of $39,731 for the same period in 2009. This
increase in net loss is mostly due to higher management, professional fees
and travel expenses. Our basic and diluted loss per share was $0.003824
for the nine months ended September 30, 2010, and $0.000859 for the same
period in 2009.
Expenses
Our total operating expenses increased from $42,333 to $168,338 for the nine
months ended September 30, 2010 compared to the same period in 2009. This
increase in expenses is mostly due to higher management, professional fees
and travel expenses.
Our management fees increased $32,232 from $7,342 to $39,574 for the nine
months ended September 30, 2010 compared to the same period in 2009.
This increase was largely due to higher payments made to our management.
7
Our professional fees, consisting primarily of legal, accounting, consulting
and auditing fees, increased by $70,752 to 78,036 for the nine months ended
September 30, 2010 from $7,284 for the same period in 2009.
Our travel expenses increased from $397 to $35,060 for the nine months ended
September 30, 2010 compared to the same period in 2009.
Our listing and share transfer fees decreased from $19,170 to $11,065 for
the nine months ended September 30, 2010 compared to the same period in 2009.
Inflation
The amounts presented in the financial statements do not provide for the
effect of inflation on our operations or financial position. The net
operating losses shown would be greater than reported if the effects of
inflation were reflected either by charging operations with amounts that
represent replacement costs or by using other inflation adjustments.
Off-Balance Sheet Arrangements
As of September 30, 2010, we had no off-balance sheet transactions that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in our financial condition, revenues or expenses, results
of operations, liquidity, capital expenditures or capital resources.
ITEM 3. Quantitative and Qualitative Disclosure About Market Risks.
Not applicable.
ITEM 4. Control and Procedures.
Not applicable.
8
ITEM 4T. Control and Procedures.
Management's Report on Internal Control over Financial Reporting.
Our Internal control over financial reporting is a process that, under the
supervision of and with the participation of our management, including our
Chief Executive Officer and Chief Financial Officer, was designed to provide
reasonable assurances 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 (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly
reflect our transactions and dispositions of our assets; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of our management and our trustees; and
(iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of our assets that could have a
material effect on our 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 our controls
may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
As management, it is our responsibility to establish and maintain adequate
internal control over financial reporting. As of September 30, 2010, under
the supervision and with the participation of our management, including our
Chief Executive Officer, we evaluated the effectiveness of our internal
control over financial reporting using criteria established in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission("COSO"). Based on our evaluation,
we concluded that the Company maintained effective internal control over
financial reporting as of September 30, 2010, based on criteria established
in the Internal Control Integrated Framework issued by the COSO.
This quarterly report does not include an attestation report of the company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the
company's registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit the company to provide
only management's report in this quarterly report.
Evaluation of disclosure controls and procedures.
As of September 30, 2010, the Company's chief executive officer and chief
financial officer conducted an evaluation regarding the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e)
or 15d-15(e) under the Exchange Act. Based upon the evaluation of these
controls and procedures, our chief executive officer and chief financial
officer concluded that our disclosure controls and procedures were effective
as of the date of filing this annual report applicable for the period covered
by this report.
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Changes in internal controls.
During the period covered by this report, no changes occurred in our internal
control over financial reporting that materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
As of November 15, 2010 there are no material pending legal proceedings,
other than ordinary routine litigation incidental to our business, to which
we or any of our subsidiaries are a party or of which any of our properties
is the subject. Also, our management is not aware of any legal proceedings
contemplated by any governmental authority against us.
ITEM 2. Unregistered Sales of Equity Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
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ITEM 6. Exhibits.
Exhibit
31.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
31.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on our behalf by the
undersigned thereunto duly authorized.
RACE WORLD INTERNATIONAL, INC.
Date: November 15, 2010 /s/Wang Shi Bin
------------------
Wang Shi Bin
President, Chief Executive Officer,
Chief Financial Officer, Director
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