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EX-10 - CANCELLATION AGREEMENT - V Media Corpex10.txt
EX-31 - SECTION 302 CERTIFICATION - V Media Corpex31.txt
EX-32 - SECTION 906 CERTIFICATION - V Media Corpex32.txt

                     U.S. 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 AUGUST 31, 2009

                        Commission File Number 333-142037


                          Golden Key International Inc.
             (Exact name of registrant as specified in its charter)

                                    Delaware
         (State or other jurisdiction of incorporation or organization)

                                 119 11th Street
                      Fort Macleod, Alberta, Canada T0L 0Z0
          (Address of principal executive offices, including zip code)

                 Telephone (403)553-2840 Facsimile (215)565-8110
                     (Telephone number, including area code)

                                Karen A. Batcher
                               Synergen Law Group
                             744 Otay Lakes Rd. #143
                              Chula Vista, CA 91910
                           (619) 475-7882 phone (619)
                                  512-5184 fax
                            kbatcher@synergenlaw.com
            (Name, Address and Telephone Number of Agent for Service)

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 last 90 days. 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,"
"non-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 or the Exchange Act). YES [X] NO [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 4,451,667 shares of common stock
issued and outstanding as of October 19, 2009.

ITEM 1. FINANCIAL STATEMENTS The quarterly financial statements for the 3 months ended August 31, 2009, prepared by the company, immediately follow. 2
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Consolidated Balance Sheets -------------------------------------------------------------------------------- As of As of August 31, May 31, 2009 2009 -------- -------- (Unaudited) ASSETS CURRENT ASSETS Cash $ -- $ 284 -------- -------- TOTAL CURRENT ASSETS -- 284 -------- -------- TOTAL ASSETS $ -- $ 284 ======== ======== LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accounts Payable 4,825 -- Loan from director $ 33,000 $ 33,000 -------- -------- TOTAL CURRENT LIABILITIES 37,825 33,000 -------- -------- TOTAL LIABILITIES 37,825 33,000 STOCKHOLDERS' EQUITY (DEFICIT) Preferred Stock, ($0.0001 par value, 20,000,000 shares authorized: -0- shares issued and outstanding as of August 31, 2009 and May 31, 2009 , respectively) -- -- Common stock, ($0.0001 par value, 80,000,000 shares authorized; 4,451,667 shares issued and outstanding August 31, 2009 and May 31, 2009 , respectively) 445 445 Additional paid-in capital 49,205 49,205 Deficit accumulated during development stage (87,475) (82,366) -------- -------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (37,825) (32,716) -------- -------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ -- $ 284 ======== ======== See Notes to the Consolidated Financial Statements 3
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Consolidated Statements of Operations (unaudited) -------------------------------------------------------------------------------- February 18, 1999 Three months Three months (inception) Ended Ended through August 31, August 31, August 31, 2009 2008 2009 ---------- ---------- ---------- REVENUES $ -- $ -- $ -- GENERAL & ADMINISTRATIVE EXPENSES 5,109 9,229 87,475 ---------- ---------- ---------- TOTAL GENERAL & ADMINISTRATIVE EXPENSES 5,109 9,229 87,475 ---------- ---------- ---------- NET INCOME (LOSS) $ (5,109) $ (9,229) $ (87,475) ========== ========== ========== BASIC EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.00) ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 4,451,667 4,451,667 ========== ========== See Notes to the Consolidated Financial Statements 4
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Consolidated Statement of Changes in Stockholders' Equity From February 18, 1999 (inception) through August 31, 2009 (unaudited) -------------------------------------------------------------------------------- Deficit Accumulated Common Additional During Common Stock Paid-in Development Stock Amount Capital Stage Total ----- ------ ------- ----- ----- Beginning balance 2/18/1999 -- $ -- $ -- $ -- $ -- Net lncome, May 31, 1999 -- -- ---------- -------- ------- -------- -------- BALANCE, MAY 31, 1999 -- -- -- -- -- ---------- -------- ------- -------- -------- Net lncome, May 31, 2000 -- -- ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2000 -- -- -- -- -- ---------- -------- ------- -------- -------- Stock issued for cash on November 30, 2000 @ $0.0001 per share 4,000,000 400 -- 400 Stock issued for cash on January 30, 2001 @ $0.10 per share 240,000 24 23,976 24,000 Net loss, May 31, 2001 (7,165) (7,165) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2001 4,240,000 424 23,976 (7,165) 17,235 ---------- -------- ------- -------- -------- Net loss, May 31, 2002 (10,020) (10,020) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2002 4,240,000 424 23,976 (17,185) 7,215 ---------- -------- ------- -------- -------- Net loss, May 31, 2003 (2,070) (2,070) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2003 4,240,000 424 23,976 (19,255) 5,145 ---------- -------- ------- -------- -------- Net loss, May 31, 2004 (3,777) (3,777) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2004 4,240,000 424 23,976 (23,032) 1,368 ---------- -------- ------- -------- -------- Net loss, May 31, 2005 (6,420) (6,420) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2005 4,240,000 424 23,976 (29,452) (5,052) ---------- -------- ------- -------- -------- Stock issued for cash on July 22, 2005 @ $0.10 per share 80,000 8 7,992 8,000 Stock issued for cash on September 8, 2005 @ $0.10 per share 50,000 5 4,995 5,000 Net loss, May 31, 2006 (10,440) (10,440) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2006 4,370,000 437 36,963 (39,892) (2,492) ---------- -------- ------- -------- -------- Net loss, May 31, 2007 (8,780) (8,780) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2007 4,370,000 437 36,963 (48,672) (11,272) ---------- -------- ------- -------- -------- Stock issued for cash on October 23, 2007 @ $0.15 per share 81,667 8 12,242 12,250 Net loss, May 31, 2008 (15,358) (15,358) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2008 4,451,667 445 49,205 (64,030) (14,380) ---------- -------- ------- -------- -------- Net loss year ended, May 31, 2009 (18,336) (18,336) ---------- -------- ------- -------- -------- BALANCE, MAY 31, 2009 4,451,667 445 49,205 (82,366) (32,716) ---------- -------- ------- -------- -------- Net loss period ended, August 31, 2009 (5,109) (5,109) ---------- -------- ------- -------- -------- BALANCE, AUGUST 31, 2009 4,451,667 $ 445 $49,205 $(87,475) $(37,825) ========== ======== ======= ======== ======== See Notes to the Consolidated Financial Statements 5
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Consolidated Statements of Cash Flows (unaudited) -------------------------------------------------------------------------------- February 18, 1999 Three months Three months (inception) Ended Ended through August 31, August 31, August 31, 2009 2008 2009 -------- -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (5,109) $ (9,229) $(87,475) Increase (decrease) in accounts payable 4,825 -- 4,825 -------- -------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (284) (9,229) (82,650) CASH FLOWS FROM INVESTING ACTIVITIES NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- -- CASH FLOWS FROM FINANCING ACTIVITIES Increase in loan from director -- 6,200 33,000 Issuance of common stock -- -- 445 Additional paid in capital -- -- 49,205 -------- -------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES -- 6,200 82,650 -------- -------- -------- NET INCREASE (DECREASE) IN CASH (284) (3,029) -- CASH AT THE BEGINNING OF PERIOD 284 3,320 -- -------- -------- -------- CASH AT THE END OF PERIOD $ -- $ 291 $ -- ======== ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid $ -- $ -- $ -- ======== ======== ======== Income taxes paid $ -- $ -- $ -- ======== ======== ======== See Notes to the Consolidated Financial Statements 6
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Golden Key International, Inc. (the "Company") was incorporated under the laws of the State of Delaware on February 18, 1999. The Company has minimal operations and in accordance with SFAS #7, the Company is considered a development stage company. The Company has issued 4,451,667 shares of $0.0001 par value common stock. The Company operates through its wholly owned subsidiary: Deep Rooted, Inc. a Delaware corporation. The Company through its subsidiary Deep Rooted, Inc. plans to build an internet business that caters to travelers by allowing them to plan their own trips. This includes things like booking accommodation, activities and transportation as well as obtaining general information about the area of choice. The Companies activities to date have been limited to capital formation, organization, set-up of a website, and development of its business plan and a target customer market. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING METHOD The Company's consolidated financial statements are prepared using the accrual method of accounting. The Company has elected a May 31, year-end. BASIS OF CONSOLIDATION The consolidated financial statements include the accounts of Golden Key International, Inc., the parent Company, and it's wholly owned subsidiary Deep Rooted, Inc., a Delaware corporation. All subsidiaries are wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. CASH EQUIVALENTS The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. ACCOUNTS RECEIVABLE The Company considers accounts receivable to be fully collectible; accordingly, no allowances for doubtful accounts are required. If amounts become non-collectible, they will be charged to operations when that determination is made. 7
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ESTIMATES AND ADJUSTMENTS The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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. In accordance with FASB 16 all adjustments are normal and recurring. BASIC EARNINGS PER SHARE In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective February 18, 1999 (inception). Basic net loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company. INCOME TAXES Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. 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. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 8
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 2009, the FASB issued SFAS No. 168, "THE FASB ACCOUNTING STANDARDS CODIFICATION AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - A REPLACEMENT OF FASB STATEMENT NO. 162". The FASB Accounting Standards Codification ("Codification") will become the source of authoritative U.S. generally accepted accounting principles ("GAAP") recognized by FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission "SEC" under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 30, 2009. The adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. In June 2009, the FASB issued SFAS No. 167, "AMENDMENTS TO FASB INTERPRETATION NO. 46(R)". The objective of this statement is to improve financial reporting by enterprises involved with variable interest entities. This statement addresses (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), "Consolidation of Variable Interest Entities", as a result of the elimination of the qualifying special-purpose entity concept in SFAS No. 166, "Accounting for Transfers of Financial Assets", and (2) concern about the application of certain key provisions of FASB Interpretation No. 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise's involvement in a variable interest entity. This statement is effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. The adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. In June 2009, the FASB issued SFAS No. 166, "ACCOUNTING FOR TRANSFERS OF FINANCIAL ASSETS - AN AMENDMENT OF FASB NO. 140". The object of this statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor's continuing involvement, if any, in transferred financial assets. This statement addresses (1) practices that have developed since the issuance of SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", that are not consistent with the original intent and key 9
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) requirements of that statement and (2) concerns of financial statement users that many of the financial assets (and related obligations) that have been derecognized should continue to be reported in the financial statements of transferors. SFAS No. 166 must be applied as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. This statement must be applied to transfers occurring on or after the effective date. Additionally, on and after the effective date, the concept of a qualifying special-purpose entity is no longer relevant for accounting purposes. The disclosure provisions of this statement should be applied to transfers that occurred both before and after the effective date of this statement. The adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. In May 2009, the FASB issued SFAS No. 165, "Subsequent Events".("SFAS No. 165") This Statement establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date and is effective for interim and annual periods ending after June 15, 2009. We are currently assessing the impact of the adoption of SFAS 165, if any, on our consolidated financial position, results of operations or cash flows. In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 163, "ACCOUNTING FOR FINANCIAL GUARANTEE INSURANCE CONTRACTS - AN INTERPRETATION OF FASB STATEMENT NO. 60". SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise's risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. In May 2008, the FASB issued SFAS No. 162, "The HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES". SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "THE MEANING OF PRESENT FAIRLY IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES". The adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. 10
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In March 2008, FASB issued SFAS No. 161, "DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - AN AMENDMENT TO FASB STATEMENT NO. 133". SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The Company is currently evaluating the impact of SFAS No. 161 on its financial statements, and the adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. In December 2007, the FASB issued SFAS No. 141R, "BUSINESS COMBINATIONS". This statement replaces SFAS 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. In December 2007, the FASB issued SFAS No. 160, "NONCONTROLLING INTERESTS IN CONSOLIDATED FINANCIAL STATEMENTS LIABILITIES -AN AMENDMENT OF ARB NO. 51". This statement amends ARB 51 to establish accounting and reporting standards for the Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's consolidated financial statements. In June 2008, the FASB issued FASB Staff Position ("FSP") No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP EITF 03-6-1"). FSP No. EITF 03-6-1 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP No. EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Upon adoption, a company is required to 11
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) retrospectively adjust its earnings per share data (including any amounts related to interim periods, summaries of earnings and selected financial data) to conform with the provisions of FSP EITF 03-6-1. The Company is currently evaluating the impact adoption of this statement could have on its consolidated financial statements. In May 2008, the FASB issued FSP No. APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" ("FSP No. APB 14-1"). FSP No. APB 14-1 requires that the liability and equity components of convertible debt instruments that may be settled in cash (or other assets) upon conversion (including partial cash settlement) be separately accounted for in a manner that reflects an issuer's nonconvertible debt borrowing rate. The resulting debt discount is amortized over the period the convertible debt is expected to be outstanding as additional non-cash interest expense. FSP No. APB 14-1 is effective for fiscal years beginning after December 15, 2008 and early adoption is not permitted. Retrospective application to all periods presented is required except for instruments that were not outstanding during any of the periods that will be presented in the annual financial statements for the period of adoption but were outstanding during an earlier period. The Company is currently evaluating the impact adoption of this statement could have on its consolidated financial statements. In April 2008, the FASB issued FSP No. FAS 142-3, "Determination of the Useful Life of Intangible Assets" ("FSP No. FAS 142-3"). FSP No. FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and Other Intangible Assets." FSP No. FAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company is currently evaluating the impact adoption of this statement could have on its consolidated financial statements. NOTE 3. GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated net losses of $87,475 during the period from February 18, 1999 (inception) to August 31, 2009. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 12
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 4. RELATED PARTY TRANSACTIONS Robert Blair, the sole officer and director of the Company may, in the future become involved in other business opportunities as they become available; thus, he may face a conflict in selecting between the Company and his other business opportunities. The Company has not formulated a policy for the resolution of such conflicts. While the Company is seeking additional capital, Mr. Blair has advanced funds to the Company to pay for any costs incurred by it. These funds are interest free and there is no maturity date. The balance due to Mr. Blair was $33,000 on August 31, 2009. NOTE 5. INCOME TAXES As of August 31, 2009 --------------------- Deferred tax assets: Net operating tax carryforwards $ 29,742 Other 0 -------- Gross deferred tax assets 29,742 Valuation allowance 29,742 -------- Net deferred tax assets $ 0 ======== Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance. NOTE 6. SCHEDULE OF NET OPERATING LOSSES 1999 Net Operating Income $ 0 2000 Net Operating Loss (7,165) 2001 Net Operating Loss (10,020) 2002 Net Operating Loss (2,070) 2003 Net Operating Loss (3,777) 2004 Net Operating Loss (6,420) 2005 Net Operating Loss (10,440) 2006 Net Operating Loss (8,780) 2007 Net Operating Loss (15,358) 2008 Net Operating Loss (18,336) 2009 Net Operating Loss (5,109) -------- $(87,475) ======== As of August 31, 2009 the Company has net operating loss carryforwards of approximately $87,475. Net operating loss carryforward expires twenty years from the date the loss was incurred. 13
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 7. STOCK TRANSACTIONS Transactions, other than employees' stock issuance, are in accordance with paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair value of the consideration given up or received; whichever is more readily determinable. Transactions with employees' stock issuance are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever measure is deemed more reliable. On November 30, 2000, the Company issued 4,000,000 shares of common stock at $.0001 per share for cash valued at $400. In January 30, 2001, the Company issued 240,000 shares of common stock at $.10 per share for cash valued at $24,000. On July 22, 2005, the Company issued 80,000 shares of common stock at $.10 per share for cash valued at $8,000. On September 8, 2005, the Company issued 50,000 shares of common stock at $.10 per share for cash valued at $5,000. On October 23, 2007 the Company issued 81,667 shares of common stock at $.15 per share for cash valued at $12,250. As of August 31, 2009, the Company had 4,451,667 shares of common stock issued and outstanding. NOTE 8. STOCKHOLDERS EQUITY The stockholders' equity section of the Company contains the following class of capital stock as of August 31, 2009: * Preferred Stock, $0.0001 per share: 20,000,000 shares authorized: -0- shares issued and outstanding. * Common stock, $0.0001 par value: 80,000,000 shares authorized: 4,451,667 shares issued and outstanding. 14
GOLDEN KEY INTERNATIONAL, INC. (A Development Stage Company) Notes to the Consolidated Financial Statements As of August 31, 2009 (unaudited) -------------------------------------------------------------------------------- NOTE 9. SUBSEQUENT EVENTS On July 10, 2009, we entered into a Share Exchange Agreement with the shareholders of Home Savers Holding Corporation ("Home Savers") each of which are accredited investors ("Home Savers Shareholders") pursuant to which we agreed to acquire 100% of the outstanding securities of Home Savers in exchange for 14,296,788 shares (the "Acquisition Shares") of our common stock (the "Home Savers Acquisition"). Paul Peterson, Robert Agostini and Lysander Marrero were appointed as executive officers and directors in connection with the Company's proposed acquisition of Home Savers. As the Acquisition Shares and the shares of Home Savers were not delivered to each of the respective parties, the Home Savers Acquisition was never considered closed due to the absence of consideration. As a result, the Home Savers Acquisition did not close. On October the Company signed the Cancellation Agreement with Home Savers Holding Corporation. On September 1, 2009, Paul R. Peterson resigned from the Company as Chief Executive Officer and Director of the Company. Additionally, effective October 2, 2009, Lysander M. Marrero and Robert Agostini resigned as executive officers and directors of the Company and Robert Blair was appointed as the sole executive officer and director of the Company. On October 2, 2009, the Acquisition Shares, which were never delivered to the Home Savers Shareholders, were cancelled. On October 2, 2009, the 4,000,000 shares were reissued to Norm Blair representing his initial ownership in the Company. The Company will continue to focus its operations on the development of a cross-platform community portal provider. 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Certain statements in this annual report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to consummate a merger or business combination, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this annual report in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. GENERAL INFORMATION Golden Key International, Inc. was incorporated on February 18, 1999 in the State of Delaware. Through its wholly-owned subsidiary, Deep Rooted, Inc., a Delaware corporation, the company intends to become a leading cross-platform community portal provider. The company will target communities with 5,000 residents and larger in population and is developing a platform for uniting organizations, government, chambers of commerce, corporate enterprises and non-profit groups through "community-based" sites. Deep Rooted community portal applications can be deployed as business to employee, business to business or city to city. We are a development stage company with no revenues or profits. Our principal executive office address is 119 11th Street, Fort Macleod, Alberta, Canada T0L 0Z0. The principal executive office and telephone number are provided by the officer of the corporation. Our fiscal year end is May 31st. We have a total of 20,000,000 authorized preferred shares with a par value of $0.0001 per share with none of those shares issued and outstanding as of August 31, 2009. We have a total of 80,000,000 authorized common shares with a par value of $0.0001 per share with 4,451,667 common shares issued and outstanding as of August 31, 2009. We completed a form SB-2 Registration Statement under the Securities Act of 1933 with the U.S. Securities and Exchange Commission registering 870,000 shares of our common stock in connection with an offering of the 870,000 shares at a price of $0.15 per share. Of the shares registered, 370,000 were registered for sale by existing shareholders, and 500,000 were registered for sale by the Company to raise funds to pursue our business plan. The offering expired on October 23, 2007 and we had sold 81,667 of the shares offered by the Company for funds of $12,250. RESULTS OF OPERATIONS We have generated no revenues since inception and have incurred $87,475 in expenses through August 31, 2009. The following table provides selected financial data about our company for the period ended August 31, 2009. 16
Balance Sheet Data: 8/31/09 ------------------- ------- Cash $ 0 Total assets $ 0 Total liabilities $ 37,825 Shareholders' equity $(37,825) Cash provided by financing since inception was $400 from the sale of shares to our officer and director, $37,000 resulting from the sale of our common stock to 46 independent investors pursuant to Regulation S, category 3 of Rule 903 of the Securities Act of 1933, as amended (the "Act") and $12,250 from the sale of our common stock to 4 independent investors pursuant to the shares registered by the Form SB-2 Registration Statement. We incurred operating expenses of $5,109 and $9,229 for the three months ended Augut 31, 2009 and 2008, respectively. These expenses consisted of general operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our registration statement and required reports. LIQUIDITY AND CAPITAL RESOURCES Our cash in the bank at February 28, 2009 was $0, total assets were $0 and outstanding liabilities were $37,825. Our director has agreed to provide additional funding that will enable us to maintain a positive cash flow needed to pay for our current level of operating expenses over the next twelve months, which would include miscellaneous office expenses, bookkeeping and audit fees and website costs. There are no formal commitments or arrangements with our director to advance or loan funds. There are no terms regarding repayment of any loan or capital contribution. We are a development stage company and have generated no revenue to date. We estimate our current cash balance, along with loans from our director, will be sufficient for office expenses and fees. We anticipate that we will need approximately $5,000 through the fourth quarter 2009 or until we are able to receive additional funding or generate revenues. These fees are estimated to be $3,000 for accounting and legal fees and $2,000 for website development costs. BUSINESS OPERATIONS OVERVIEW On July 10, 2009, we entered into a Share Exchange Agreement with the shareholders of Home Savers each of which are accredited investors ("Home Savers Shareholders") pursuant to which we acquired 100% of the outstanding securities of Home Savers in exchange for 14,296,788 shares of our common stock (the "Home Savers Acquisition"). Considering that, following the merger, the Home Savers Shareholders would control the majority of our outstanding voting common stock and we effectively succeeded our otherwise minimal operations to those that are theirs, Home Savers is considered the accounting acquirer in the reverse-merger transaction. Home Savers was to be the surviving and continuing entities and the historical financials following the reverse merger transaction will be those of Home Savers. In addition, on July 13, 2009, the Company entered into an Agreement and Release with Norman Blair pursuant to which Norman Blair agreed to return 4,000,000 shares of common stock of the Company for cancellation and has provided a full release of the Company in consideration of a cash payment of $25,000, a promissory note in the amount of $150,000 payable on September 13, 2009 (the "Blair Note") and the transfer of all securities of Deep Rooted, Inc., the Company's former wholly owned subsidiary. Messrs Agostini, Peterson, Marrero and Rubin (the "Shareholders") pledged their shares of the Company to Norman Blair as security for payment of the Blair Note. Further on October 2, a cancellation agreement was signed whereas the acquisition shares and the shares of Home Savers were not delivered to each of the respective parties and the Home Savers Acquisition was cancelled due to the absence of consideration. The Company failed to pay the Blair Note at maturity and, as a result, Norman Blair was reissued 4,000,000 shares of common stock to replace his shares cancelled on July 13, 2009. As a result of the above, the Company will again focus its operations on the development of a cross-platform 17
community portal provider. Further, all securities of Home Savers Holding Corp. were returned to the Shareholders and the Company will no longer continue the operation of such business. We were able to raise minimal funding of $12,250 in our recent offering, far less than our projected budget of $75,000. Our director has verbally agreed to loan the company funds to continue operations in this limited scenario until sales will support operations or until we receive additional funding. Our director will implement the website as well as conduct sales and marketing on a limited scale. If we have not yet generated revenues sufficient to sustain modified business operations, we may have to raise additional monies through sales of our equity securities or through loans from banks or third parties to continue our business plans, however, no such plans are currently anticipated. There is no guarantee we will be successful in implementing our modified business plan. The business model for Golden Key demands extensive capabilities for community collaboration to cross all sectors. In today's information technology environment many companies are offering specific tools to meet the virtual demands of the Golden Key objectives. Focusing on these types of companies will be significantly less costly and provide the necessary products and services to generate revenues. The technology team of Golden Key will be required to write some specific coding to integrate the tools that provide a seamless experience for the viewer. A continual review of technology providers that can assist Golden Key in reaching its objectives indicates that there are strong possibilities to develop relationships that will be mutually beneficial. The present economic climate has many companies reevaluating their respective offerings and the present and future campaigns indicate that flexibility in pricing strategies will be the norm. This comes at a critical time for Golden Key. In order to meet all of our business plan goals, we need to receive funding or generate revenue. We will face considerable risk in each of our business plan steps, such as longer than anticipated lead time necessary for us to complete our website and marketing plan, and a shortfall of funding due to our inability to raise capital. If no funding is received during the next twelve months, we may utilize one or more options such as use existing cash in the bank, funds loaned by our director, or we might ask our shareholders for funds. Neither our director nor our shareholders have any formal commitments, arrangements or legal obligations to advance or loan funds to Golden Key International. To date, there has been $33,000 in loans from the director, with no specific terms of repayment OFF-BALANCE SHEET ARRANGEMENTS We have no off-balance sheet arrangements. GOING CONCERN As of Augsut 31, 2009 we had generated no revenues. We have been issued an opinion by our auditor that raises substantial doubt about our ability to continue as a going concern based on our current financial position. ITEM 4. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Management maintains "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed in Golden Key International's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. 18
In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of August 31, 2009. Based on that evaluation, management concluded, as of the end of the period covered by this report, that Golden Key International's disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission's rules and forms. CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING As of the end of the period covered by this report, there have been no changes in Golden Key International's internal controls over financial reporting during the quarter ended August 31, 2009, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date of management's last evaluation. PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION SUBSEQUENT EVENTS Effective October 2, 2009, Robert Agostini and Lysand Marrero resigned from Golden Key International, Inc. (the "Company") as executive officers and directors of the Company. Prior to their resignation, Mr. Robert Blair was appointed as the Chief Executive Officer, Present, Secretary, and Treasurer and as a director of the Company effective October 2, 2009. There are no understandings or arrangements between Mr. Blair and any other person pursuant to which he was appointed as an executive officer. Mr. Blair presently does not serve on any Company committee. Mr. Blair does not have any family relationship with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer. Mr. Blair has never entered into a transaction, nor are there any proposed transactions, between Mr. Blair and the Company. From 1998 to current date, Mr. Robert Blair is retired. From 1972 to 1998, Mr. Blair served as direct representative for 26 years with Hostess Foods Ltd., a division of Kraft Foods Ltd, where he built the sales and shipping divisions of Hostess Foods in the provinces of Newfoundland and British Columbia, Canada. ITEM 6. EXHIBITS The following exhibits are included with this filing: Exhibit Number Description ------ ----------- 3(i) Articles of Incorporation* 3(ii) Bylaws* 10 Cancellation Agreement 31 Sec. 302 Certification of CEO/CFO 32 Sec. 906 Certification of CEO/CFO ---------- * Included in our SB-2 filing under Commission File Number 333-142037. 19
SIGNATURES Pursuant to the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf in Fort Macleod, Alberta, by the undersigned, thereunto duly authorized. October 19, 2009 Golden Key International, Inc, Registrant By: /s/ Robert Blair --------------------------------------- Robert Blair, Sole Director, President, Chief Executive Officer, Principal Accounting Officer, Chief Financial Officer 2