Attached files
| file | filename |
|---|---|
| EX-31.1 - CERTIFICATION - Chaolei Marketing & Finance Co. | f10q0909ex31_chaolei.htm |
| EX-32.1 - CERTIFICATION - Chaolei Marketing & Finance Co. | f10q0909ex32_chaolei.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_____________________
FORM 10-Q
_____________________
|
x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the quarterly period ended September 30, 2009
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the transition period from
______to______.
Chaolei
Marketing and Finance Company
(Exact
name of registrant as specified in the Charter)
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Florida
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000-50214
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65-0968839
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||
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File No.)
|
(IRS
Employee Identification No.)
|
511
NE 94th Street, Building
2, Miami Shores, Florida 33138
(Address
of Principal Executive Offices)
(305)
759-2444
(Issuer
Telephone number)
Indicate
by check mark whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.
Yes x No
o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes o No
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
See definition of “accelerated filer” and “large accelerated filer” in
Rule 12b-2 of the Exchange Act (Check one):
|
Large
accelerated filer
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o
|
Accelerated
filer
|
o
|
|
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Non-accelerated
filer
(Do
not check if a smaller reporting company)
|
o
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Smaller
reporting company
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x
|
Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act.
Yes o No
x
State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of November 23, 2009: 59,999,756 shares of common stock.
CHAOLEI
MARKETING AND FINANCE COMPANY
FORM
10-Q
September
30, 2009
TABLE
OF CONTENTS
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PART
I— FINANCIAL INFORMATION
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||
|
Item
1.
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Financial
Statements
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1
|
|
Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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8
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|
Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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12
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|
Item
4T.
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Controls
and Procedures
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|
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PART
II— OTHER INFORMATION
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||
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Item
1.
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Legal
Proceedings
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13
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Item
1A.
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Risk
Factors
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13
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|
Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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13
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Item
3.
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Defaults
Upon Senior Securities
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13
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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13
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Item
5.
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Other
Information
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13
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|
Item
6.
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Exhibits
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13
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SIGNATURES
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||
i
CHAOLEI
MARKETING AND FINANCE
COMPANY
BALANCE
SHEETS
|
ASSETS
|
||||||||
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September
30,
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December
31,
|
|||||||
|
2009
|
2008
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|||||||
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(Unaudited)
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(Audited)
|
|||||||
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CURRENT
ASSETS
|
||||||||
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Cash
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$ | 310 | $ | 14,567 | ||||
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Accounts
receivable
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- | 14,308 | ||||||
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Total
current assets
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310 | 28,875 | ||||||
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Intangible
asset
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53,794 | 53,794 | ||||||
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TOTAL
ASSETS
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$ | 54,104 | $ | 82,669 | ||||
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LIABILITIES AND STOCKHOLDERS’
EQUITY
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||||||||
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CURRENT
LIABILITIES
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||||||||
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Accounts
payable and accrued expenses
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$ | 49,566 | $ | 12,000 | ||||
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Total
current liabilities
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49,566 | 12,000 | ||||||
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Advances-Related
Party
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29,985 | - | ||||||
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TOTAL
LIABILITIES
|
$ | 79,551 | $ | 12,000 | ||||
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COMMITMENTS
AND CONTINGENCIES
|
||||||||
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STOCKHOLDERS’
EQUITY
|
||||||||
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Preferred stock,
$0.001 par value, 10,000,000 shares authorized, none issued and
outstanding
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$ | - | $ | - | ||||
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Common
stock, $0.001 par value, 100,000,000 shares
authorized, 59,999,756 shares issued and outstanding, as of
September 30, 2009 and December 31, 2008
|
60,000 | 60,000 | ||||||
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Additional
paid in capital
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114,416 | 114,416 | ||||||
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Accumulated
deficit
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(199,863 | ) | (103,747 | ) | ||||
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Total
Stockholders’ Equity
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(25,447 | ) | 70,669 | |||||
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TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 54,104 | $ | 82,669 | ||||
The
accompanying notes are an integral part of these financial
statements
1
CHAOLEI
MARKETING AND FINANCE COMPANY
STATEMENTS
OF OPERATIONS
|
For
The Three Months Ended September 30,
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For
The Nine Months Ended September 30,
|
|||||||||||||||
|
2009
|
2008
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2009
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2008
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|||||||||||||
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REVENUE
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$ | - | $ | - | $ | 15,677 | $ | 137,175 | ||||||||
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OPERATING
EXPENSES
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||||||||||||||||
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General
and administrative
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9,588 | 31,460 | 39,555 | 62,481 | ||||||||||||
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Professional
fees
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16,731 | 19,813 | 72,238 | 79,992 | ||||||||||||
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Total
operating expenses
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26,319 | 51,273 | 111,793 | 142,473 | ||||||||||||
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Other
income (expense):
|
||||||||||||||||
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Interest
income
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- | 179 | - | 209 | ||||||||||||
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NET
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
|
(26,319 | ) | (51,094 | ) | (96,116 | ) | (5,089 | ) | ||||||||
|
Provision
for income taxes
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- | - | - | - | ||||||||||||
|
NET
INCOME (LOSS)
|
$ | (26,319 | ) | $ | (51,094 | ) | $ | (96,116 | ) | $ | (5,089 | ) | ||||
|
Net
loss per share - basic and diluted
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
|
Weighted
average number of shares outstanding during the period - basic and
diluted
|
59,999,756 | 59,966,756 | 59,999,756 | 59,966,756 | ||||||||||||
The
accompanying notes are an integral part of these financial
statements
2
CHAOLEI
MARKETING AND FINANCE COMPANY
STATEMENTS
OF CASH FLOWS
|
For
The Nine Months Ended September 30,
|
||||||||
|
2009
|
2008
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|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net
loss
|
$ | (96,116 | ) | $ | (5,089 | ) | ||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Change
in assets and liabilities
|
||||||||
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Increase
accounts receivable
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14,308 | 181 | ||||||
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Increase
accounts payable and accrued expenses
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37,566 | 2,100 | ||||||
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Net
cash used in operating activities
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(44,242 | ) | (2,808 | ) | ||||
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CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
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Capital
contribution related parties
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29,985 | - | ||||||
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Net
cash used in financing activities
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29,985 | - | ||||||
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NET
(DECREASE) IN CASH
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(14,257 | ) | (2,808 | ) | ||||
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CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
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14,567 | 64,952 | ||||||
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CASH
AND CASH EQUIVALENTS AT END OF PERIOD
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$ | 310 | $ | 62,144 | ||||
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Supplemental
disclosure of non cash investing & financing
activities:
|
||||||||
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Cash
paid for income taxes
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$ | - | $ | - | ||||
|
Cash
paid for interest expense
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$ | - | $ | - | ||||
|
Common
stock issued for services
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$ | - | $ | - | ||||
|
Non-cash
capital contributions from related parties
|
$ | - | $ | - | ||||
The
accompanying notes are an integral part of these financial statements
3
CHAOLEI
MARKETING AND FINANCE COMPANY
NOTES TO
FINANCIAL STATEMENTS
September
30, 2009
NOTE 1 –
ORGANIZATION
Organization
Chaolei
Marketing and Finance Company (the Company) was established to act as a sales,
marketing and finance agent of Sichuan Chaolei Industry Stock Co, Ltd. (CICO), a
company organized in the People’s Republic of China that mines silicon, produces
poly- and mono- crystalline silicon ingots and wafers for use in photovoltaic
cells and computer chips. Additionally, CICO owns a subsidiary
company that produces pipes for hydroelectric projects.
Biotex
Holdings, Inc. (previously Capital Ventures Group I, Inc.) was incorporated on
December 17, 1999 under the laws of the State of Florida to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and
acquisitions.
The
financial statements are presented on the basis that the Company is a going
concern, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business over a reasonable length of time.
The Company has incurred operating losses since its inception. This condition
raises substantial doubt as to the Company’s ability to continue as a going
concern.
As
reflected in the accompanying financial statements, the Company has a net loss
of $96,116 for the nine months ended September 30, 2009, and accumulated net
losses of $199,863. These factors raise substantial doubt about the Company’s
ability to continue as a going concern.
While the
Company believes in the viability of its strategy to improve sales volume and in
its ability to raise additional funds, there can be no assurances to that
effect. The ability of the Company to continue as a going concern is dependent
on the Company’s ability to further implement its business plan, generate
revenue, and secure additional financing. The Company believes it is taking
actions to further implement its business plan and generate revenue, including
additional financing which the Company is currently pursuing, but the Company
will not be able to continue as a going concern in the absence of obtaining
sufficient funding. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going
concern.
Interim
reporting
The
accompanying interim unaudited financial information has been prepared pursuant
to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted pursuant to such rules and regulations. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of the Company as of
September 30, 2009 and the related operating results and cash flows for the
interim period presented have been made. The results of operations of such
interim period are not necessarily indicative of the results of the full
year. This financial information should be read in conjunction with the
Consolidated Financial Statements and Notes thereto included in the Company’s
Annual Report on Form 10-K for the year ended December 31,
2008.
4
CHAOLEI
MARKETING AND FINANCE COMPANY
NOTES TO
FINANCIAL STATEMENTS
September
30, 2009
NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statement and the reported amounts of revenues and
expenses during the reporting period. Estimates that are critical to the
accompanying financial statements arise from the determination of the fair value
of the Company’s investment. Because such determination involves subjective
judgment, it is at least reasonably possible that the Company’s estimates could
change in the near term with respect to this matter.
Revenue
Recognition
The
Company derives its revenue from the sale of mined silicon, and poly- and
mono-crystaline silicon ingots and wafers. The Company presents revenue in
accordance with FASB new codification of “Revenue Recognition in Financial
Statements”. Under the “Revenue Recognition in Financial Statements”,
revenue is realized when persuasive evidence of an arrangement exists, delivery
has occurred, the price is fixed or determinable and collectability is
reasonably assured.
Accounts
Receivable
The
Company is required to estimate the collectability of its accounts receivable.
The Company's reserve for doubtful accounts is estimated by management based on
a review of historic losses and the age of existing receivables from specific
customers. The Company considers all accounts receivable collectible and,
therefore, no reserve has been recorded. The Company has not recognized any
accounts receivable as of September 30, 2009.
Concentration of Credit
Risk
During
the nine months ended September 30, 2009 and 2008 one customer accounted for
100% of the Company's sales.
Income
Taxes
The
Company accounts for income taxes under FASB new codification of Accounting for
Income Taxes. Deferred income tax assets and liabilities are determined based
upon differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. Due to the net loss
incurred in all periods, there is no provision for income taxes provided as a
full valuation allowance has been established.
Net Loss Per
Share
Basic and
diluted net losses per common share are presented in accordance with FASB new
codification of Earnings Per Share for all periods presented.
5
CHAOLEI
MARKETING AND FINANCE COMPANY
NOTES TO
FINANCIAL STATEMENTS
September
30, 2009
Goodwill and
Indefinite-Lived Intangible Assets
In
accordance with FASB new codification of "Goodwill and Other Intangible Assets,"
goodwill represents
the excess of the purchase price and related costs over the value assigned to
net tangible and identifiable intangible assets of businesses acquired and
accounted for under the purchase method, acquired in business combinations is
assigned to reporting units that are expected to benefit from the synergies of
the combination as of the acquisition date. Under this standard, goodwill and
intangibles with indefinite useful lives are no longer amortized. The Company
assesses goodwill and indefinite-lived intangible assets for impairment annually
during the fourth quarter, or more frequently if events and circumstances
indicate impairment may have occurred in accordance with FASB new
codification.
If the
carrying value of a reporting unit's goodwill exceeds its implied fair value,
the Company records an impairment loss equal to the difference. Goodwill and
Other Intangible Assets also requires that the fair value of indefinite-lived
purchased intangible assets be estimated and compared to the carrying value. The
Company recognizes an impairment loss when the estimated fair value of the
indefinite-lived purchased intangible assets is less than the carrying value.
The Company currently carries $53,794 as an intangible asset associated with the
acquisition of the sales and marketing agreement with CICO. The
Company does not believe any impairment of this asset has occurred as of
September 30, 2009 and, therefore, has recorded no loss from impairment in its
Statement of Operations.
Long-Lived Assets
The
Company's accounting policy regarding the assessment of the recoverability of
the carrying value of long-lived assets, including property and equipment and
purchased intangible assets with finite lives, is to review the carrying value
of the assets, annually, during the fourth quarter, or whenever events or
changes in circumstances indicate that they may be impaired. If this review
indicates that the carrying value will not be recoverable, as determined based
on the projected undiscounted future cash flows, the carrying value is reduced
to its estimated fair value.
NOTE 4 –
AGREEMENTS
On
December 1, 2007, the Company entered into a 6 month employment agreement with
its Assistant Secretary. The Company is obligated to pay to our
Assistant Secretary $5,000 on the 15th of
every month beginning December 15, 2007 and ending May 15, 2008. On April 12,
2008, the Company entered in to a 6 month employment agreement with its
Assistant Secretary. The Company is obligated to pay to our Assistant Secretary
$5,000 on the 15th of
every month beginning June 1, 2008 and ending December 31, 2008. On December 9,
2008, the agreement was extended until March 31, 2009. This agreements was not
renewed.
On
December 1, 2007 the Company entered into a 12 month Consulting Agreement with a
consulting company to provide regulatory compliance, business development and
other ancillary business services. The Company is obligated to pay
the Consultant $5,000 per month, beginning December 1, 2007 and ending November
30, 2008. On December 9, 2008, the agreement was extended until March 31, 2009.
This agreement was not renewed.
On July
15, 2009 the Company entered into a 12 month Consulting Agreement with a
consulting company to provide regulatory compliance, business development and
other ancillary business services.
The Company is obligated to pay the Consultant $3,000 per month, payable in
advance on the first day of the month.
6
Item
2. Management’s Discussion and Analysis
of Financial Condition and Results of Operation
The
following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes thereto appearing elsewhere in this Form 10-K.
The following discussion contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 relating to future events or our future performance. Actual
results may materially differ from those projected in the forward-looking
statements as a result of certain risks and uncertainties set forth in this
prospectus. Although management believes that the assumptions made and
expectations reflected in the forward-looking statements are reasonable, there
is no assurance that the underlying assumptions will, in fact, prove to be
correct or that actual results will not be different from expectations expressed
in this report.
BUSINESS
OVERVIEW
We were
incorporated on December 17, 1999 under the laws of the State of Florida to
engage in any lawful corporate undertaking. In June, 2005 pursuant to a
Stock Purchase Agreement and Share Exchange between the Company and BioTex Corp.
(“Corp”), a Florida corporation, whereby the Company purchased all of the
outstanding shares of Corp. and Corp. became a wholly owned subsidiary of the
Company. BioTex Corp was established in 2003 to develop and employ
technologies from around the world to process biomass (plant derived) waste,
extract the usable fractions, and then utilize or sell those extractions in
further downstream processes.
On
December 30, 2005, pursuant to a Stock Purchase Agreement and Share Exchange by
and among the Company, Corp and BTX Holdings, Inc., a Florida corporation
(“BTX”), BTX purchased all of the outstanding shares of Corp. Pursuant to the
Agreement, the Company transferred all of the outstanding shares of Corp. to BTX
and Corp. became a wholly owned subsidiary of BTX. Since the Company had no
other assets than Corp. and all of the shares of Corp. were transferred to BTX,
the Company became a shell company as defined in Rule 12b-2 of the Exchange
Act.
On
October 22, 2007, we entered into an Agreement with Sichuan Chaolei Stock
Industry Co., Ltd, (“CICO”) a company located in Chengdu, Sichuan Province,
People’s Republic of China. Pursuant to the agreement, we acquired a
Sales and Marketing Agreement from CICO for 53,793,990 shares of our common
stock which provided for us to become the exclusive sales and marketing agent
for CICO. The acquisition was approved by the unanimous consent of
our Board of Directors on October 22, 2007. Pursuant to the
Agreement, we filed an amendment in the State of Florida changing the name of
the company to Chaolei Marketing and Finance Company. Pursuant to the Sales and
Marketing Agreement, we will receive a commission of 10% of CICO’s worldwide
revenues from all sources. While we have signed supply contracts with two
potential major customers during the fourth Quarter of 2007, sales of silicon
products were substantial impacted by events described below.
During
the second quarter of 2008, a major earthquake struck Sichuan Province, China.
The effects of this earthquake are still being felt. Our main supplier,
Sichauan Chaolei Industry Stock Co., Ltd. is located in Sichuan
province. As a result of the earthquake, CICO was forced to halt its mining
operations temporarily, which has temporarily interrupted our
revenues. While the mines of CICO were not to our knowledge directly
impacted our supplier has faced substantial infrastructure and labor issues as a
result of this event and its aftermath. We earned limited revenues during the
first quarter of 2009 and have had no revenues for the three month period ending
September 30, 2009 and expect that conditions to remain the same for the current
quarter but thereafter slowly improve. Full operations for CICO are anticipated
to resume during 2010.
RESULTS OF
OPERATIONS
Results
of Operations for the Three months Ended September 30, 2009 Compared to the
Three months Ended September 30, 2008
The
following table presents a summary of the statement of operations for the three
months ended September 30, 2009 as compared to the three months ended September
30, 2008. The discussion following the table is based on these
results.
|
For
The Three months Ended September 30,
|
||||||||
|
2009
|
2008
|
|||||||
|
REVENUE
|
$
|
-
|
$
|
-
|
||||
|
Total
operating expenses
|
26,319
|
51,237
|
||||||
|
NET
(LOSS) INCOME
|
$
|
(26,319)
|
$
|
(51,094)
|
||||
8
Total
Revenue
We had no
revenues for the three months ended September 30, 2009 and September 30,
2008.
Operating
Expenses
Operating
expenses for the three months ended September 30, 2009 decreased to $26,319 from
$51,273 for the three months ended September 30, 2008. The decrease is
attributable to suspension of our marketing efforts and reduction of officer
compensation. The operating expenses for the three month period ending September
30, 2009 included professional fees and costs associated with our recent
registration statement and other regulatory compliance issues.
Net income
(loss)
Net loss
was $26,319 for the three months ended September 30, 2009, compared to net loss
of $51,094 for the
same period ended September 30, 2008. Our net losses decreased for the
comparable period as a direct result of the interruption of the mining business
of our supplier as a result of the 2008 Sichuan earthquake.
Results
of Operations for the Nine months Ended September 30, 2009 Compared to the Nine
months Ended September 30, 2008
The
following table presents the statement of operations for the nine months ended
September 30, 2009 as compared to the nine months ended September 30, 2008. The
discussion following the table is based on these results.
|
For
The Nine Months Ended September 30,
|
||||||||
|
2009
|
2008
|
|||||||
|
REVENUE
|
$
|
15,677
|
$
|
137,175
|
||||
|
Total
operating expenses
|
111,793
|
142,473
|
||||||
|
NET
(LOSS) INCOME
|
$
|
(96,116
|
)
|
$
|
(5,089)
|
|||
Total
Revenue
We had
revenue of $15,677 for the nine months ended September 30, 2009 and $137,175 for
the nine months ended September 30, 2008. This decrease is
attributable to a suspension of mining operations of our supplier as a result of
a magnitude eight earthquake in May of 2008 which directly impacted the Sichuan
province of China.
Operating
Expenses
Operating
expenses for the nine months ended September 30, 2009 decreased to $111,793 from
$142,473 for the nine months ended September 30, 2008. The decrease is
attributable to a reduction in marketing related expenses. The most significant
element of our operating expenses for the nine months ended September 30, 2009
are professional fees and administrative costs associated with regulatory
compliance.
Net income
(loss)
Net loss
was $(96,116) for the nine months ended September 30, 2009, compared to a net
loss of $(5,089) for the same
period ended September 30, 2008. Our loss increased due
primarily to the reduction of revenue due to the inability of our supplier to
provide mined products as a result of the 2008 Sichuan earthquake and expenses
associated with our recent registration statement.
9
Liquidity and Capital
Resources
As of
September 30, 2009, we have assets of $54,104 consisting of $310 in cash and
intangible assets of $53,794 and total liabilities of $79,551consisting of
accounts payable of $49,566 and advanced to related party of $29,985 compared
with December 31, 2008 when we had assets of $82,669 consisting of cash of
$14,567 accounts receivable of $14,308 and intangible assets of $53,794 and
total liabilities of $12,000 consisting of accrued expenses of
$12,000.
We
believe that we will need additional funding to satisfy our cash requirements
for the next twelve months. Completion of our business plan is subject to
attaining adequate revenue base which is temporarily impacted by reconstruction
projects in the Sichuan province of China. We cannot assure investors that
additional financing will be available or that sufficient mining operations can
safely resume with our supplier or will not be further interrupted by new
significant seismic events. In the absence of additional financing, we may be
unable to proceed with our plan of operations.
We intend
to hire additional employees for sales, administrative and finance support staff
as necessary, though we have no time frame in which we expect to hire such
staff. Additional sales staff, when required, will be hired on a commission
basis, and administrative and finance support staff will only be hired when
revenues are such that the company can support such a
staff. Completion of our plan of operations is subject to
attaining adequate revenue. We cannot assure investors that adequate revenues
will be generated. In the absence of our projected revenues, we may be unable to
proceed with our plan of operations. Even without significant revenues within
the next twelve months, we still anticipate being able to continue with our
present activities, but we may require financing to potentially achieve our goal
of profit, revenue and growth. For the nine months ending September 30, 2009 we
relied on short-term borrowings and advances from our supplier (a related party)
and collection of accounts receivable. We currently have $0 in accounts
receivable and can not assure investors our supplier will continue to fund
operations beyond this fiscal year.
We
anticipate that our general and administrative expenses for the next 12 months
will total $125,000. The breakdown is as follows:
|
General
and Administrative
|
||||
|
Legal
and Accounting
|
$
|
65,000
|
||
|
Salaries
and Wages
|
22,000
|
|||
|
Consulting
Fees
|
15,000
|
|||
|
Travel
|
12,000
|
|||
|
Fees
and Registration costs
|
8,000
|
|||
|
Taxes
and Licenses
|
1,500
|
|||
|
Office
Expenses
|
1,500
|
|||
|
TOTAL
|
$
|
125,000
|
||
The
foregoing table represents our best estimate of our cash needs based on current
planning, anticipated expenses and costs and relevant business conditions. The
exact allocation, purposes and timing of any monies raised in subsequent private
financings may vary significantly depending upon the exact amount of funds
raised and our progress with the execution of our business plan. We anticipate
that depending on market conditions and our plan of operations, we may incur
operating losses in the foreseeable future. Therefore, our auditors have raised
substantial doubt about our ability to continue as a going concern.
Critical Accounting
Policies
Our
significant accounting policies are summarized in Note 2 of our financial
statements included in our annual report on Form 10-K for the year ended
December 31, 2008. Our financial statements and related public financial
information are based on the application of accounting principles generally
accepted in the United States (“GAAP”). GAAP requires the use of estimates;
assumptions, judgments and subjective interpretations of accounting principles
that have an impact on the assets, liabilities, revenues and expense amounts
reported. These estimates can also affect supplemental information contained in
our external disclosures including information regarding contingencies, risk and
financial condition. We believe our use of estimates and underlying accounting
assumptions adhere to GAAP and are consistently and conservatively applied. We
base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances. Actual results may
differ materially from these estimates under different assumptions or
conditions. We continue to monitor significant estimates made during the
preparation of our financial statements.
10
Recent Accounting
Pronouncements
In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51”. This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. SFAS No. 160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement.
In April
2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP 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 FASB Statement No. 142, “Goodwill and Other Intangible
Assets” (“SFAS 142”). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS 141R, and other GAAP. This FSP 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 of SFAS FSP 142-3,
but does not expect the adoption of this pronouncement will have a material
impact on its financial position, results of operations or cash
flows.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS 162”). SFAS 162 identifies the sources
of accounting principles and the framework for selecting 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. This statement shall be effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board’s amendments to
AU section 411, The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles. The Company is currently evaluating
the impact of SFAS 162, but does not expect the adoption of this pronouncement
will have a material impact on its financial position, results
of operations or cash flows.
In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. The adoption of FASB 163 is not expected to
have a material impact on the Company’s financial position.
Off-Balance Sheet
Arrangements
We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
11
Item
3. Quantitative and Qualitative Disclosures about Market
Risks
Not
applicable because we are a smaller reporting company.
Item
4T. Controls and Procedures
Evaluation of Disclosure
Controls and Procedures
Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”),of the effectiveness of the Company’s disclosure
controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act)
as of the end of the period covered by this report. Based upon that evaluation,
the Company’s CEO and CFO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the Exchange
Act, is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to the Company’s management, including the Company’s CEO and
CFO, as appropriate, to allow timely decisions regarding required
disclosure.
Changes in Internal
Controls
There
have been no changes in the Company’s internal control over financial reporting
during the last quarter that have materially affected, or are reasonably likely
to materially affect, the Company's internal control over financial
reporting.
12
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings.
We are
currently not involved in any litigation that we believe could have a material
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of our company or any of our
subsidiaries, threatened against or affecting our company, our common stock, any
of our subsidiaries or of our companies or our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision could have a
material adverse effect.
Item
1A. Risk Factors
Not
applicable because we are a smaller reporting company.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
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.
Item
6. Exhibits.
31.1 Rule
13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief
Financial Officer
32.1
Section 1350 Certification of Chief Executive Officer and Chief Financial
Officer
13
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
CHAOLEI
MARKETING AND FINANCE COMPANY
|
|||
|
Date:
November 23, 2009
|
By:
|
/s/ Luo
Fan
|
|
|
Luo
Fan
|
|||
|
Chairman
of the Board of Directors,
Chief
Executive Officer,
Chief
Financial Officer, Controller,
Principal
Accounting Officer
|
|||
14