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EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - WORLDVEST, INC.f10q0310ex31i_worldvest.htm
EX-31.2 - CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - WORLDVEST, INC.f10q0310ex31ii_worldvest.htm
EX-32.2 - CERTIFICATION PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - WORLDVEST, INC.f10q0310ex32ii_worldvest.htm
EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - WORLDVEST, INC.f10q0310ex32i_worldvest.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
_______________
 
FORM 10-Q
_______________
 
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended: March 31, 2010
 
or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______to______.
 
WORLDVEST, INC.
 (Exact name of registrant as specified in its charter)

Florida
333-147529
27-0586475
(State or other jurisdiction of
incorporation or organization)
(Commission File No.)
(I.R.S. Employer Identification No.)

295 Madison Avenue, 12th Floor
New York, NY 10017
 (Address of principal executive offices)
 _______________
 
(310) 277-1513
 (Registrant’s telephone number, including area code)
_______________
  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes o No þ

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 o     Accelerated Filer o     Non-Accelerated Filer o     Smaller Reporting Company þ

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.  Yes o No þ

As of May 27, 2010, there were 59,065,317 shares outstanding of the registrant’s common stock.



 
 
 

 
 
WORLDVEST, INC.

FORM 10-Q

March 31, 2010

INDEX
 
 
PART I - FINANCIAL INFORMATION
 
       
 
ITEM 1.
FINANCIAL STATEMENTS
 
       
   
Combined Balance Sheets
  1
       
   
Combined Statements of Operations
  2
       
    Combined Statement of Stockholders' (Deficit)   3
       
   
Combined Statements of Cash Flows
  4
       
   
Notes to Combined Financial Statements
  5
       
 
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  21
       
 
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  27
       
 
ITEM 4.
CONTROLS AND PROCEDURES
  27
       
 
PART II - OTHER INFORMATION
 
       
 
ITEM 1.
LEGAL PROCEEDINGS
  28
       
 
ITEM 1A.
RISK FACTORS
  28
       
 
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  28
       
 
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
  28
       
 
ITEM 4.
(REMOVED AND RESERVED)
  28
       
 
ITEM 5.
OTHER INFORMATION
  28
       
 
ITEM 6.
EXHIBITS
  28


 
i

 

PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements


WorldVest, Inc.
 
Combined Balance Sheets
 
             
             
   
March 31,
   
December 31,
 
   
2010
   
2009
 
   
(Unaudited)
       
Assets
           
             
Current assets:
           
Cash
  $ 7,038     $ 2,480  
Trade receivables
    220,000       -  
Trade receivables - related party
    50,000          
Prepaid expenses
    9,359       9,359  
Salary advances
    -       2,250  
Notes receivable
    11,179       27,931  
Total current assets
    297,576       42,020  
                 
Property and equipment, net of accumulated depreciation
    20,767       22,216  
Deferred acquisition costs
    650,000       650,000  
                 
Total assets
  $ 968,343     $ 714,236  
                 
                 
Liabilities and Stockholders' (Deficit)
               
                 
Current liabilities:
               
Accounts payable
  $ 55,464     $ 51,337  
Accrued payroll
    93,557       92,357  
Notes payable - related parties
    1,791,855       1,668,041  
Accrued interest payable - related parties
    171,094       119,680  
Total current liabilities
    2,111,970       1,931,415  
                 
Total liabilities
    2,111,970       1,931,415  
                 
Commitments and contingencies
               
                 
Stockholders' (deficit):
               
Preferred stock, $0.001 par value, 10,000,000 shares
               
authorized, 5,000,000 and no shares issued and outstanding
               
as of March 31, 2010 and December 31, 2009
    4,000       4,000  
Common stock, $0.001 par value, 100,000,000 shares
               
authorized, 59,065,317 and 58,979,592 shares issued and outstanding
               
as of March 31, 2010 and December 31, 2009, respectively
    59,065       58,980  
Additional paid-in capital
    10,571,839       10,443,334  
Common stock payable
    329,655       284,544  
 Accumulated (deficit)
    (12,108,186 )     (12,008,037 )
Total stockholders' (deficit)
    (1,143,627 )     (1,217,179 )
                 
Total liabilities and stockholders' (deficit)
  $ 968,343     $ 714,236  
                 
See Accompanying Notes to Combined Financial Statements
 
 
1

 

WorldVest, Inc.
 
Combined Statements of Operations
 
Unaudited
 
             
   
For the three months ended
 
   
March 31,
 
   
2010
   
2009
 
         
(Restated)
 
Revenue
           
Consulting revenue
  $ 247,067     $ 25,000  
Consulting revenue - related party
    50,000          
Total Revenue
    297,067     $ 25,000  
                 
Expenses:
               
Rent expense
    18,796       44,416  
Executive management compensation
    79,573       -  
General and administrative expenses
    72,471       156,364  
Depreciation expense
    1,449       383  
                 
Total expenses
    172,289       201,163  
                 
Net operating income (loss)
    124,778       (176,163 )
                 
Other income/(expense)
               
Other income
    -       7,235  
Interest expense - related parties
    (51,227 )     (25,369 )
Total other income/(expense)
    (51,227 )     (18,134 )
                 
Net income (loss) before provision for income taxes
    73,551       (194,297 )
                 
Provision for income taxes
    -       -  
                 
Net income (loss)
  $ 73,551     $ (194,297 )
                 
                 
Weighted average number of common shares
    59,013,275       55,153,750  
outstanding - basic and fully diluted
               
                 
Net Income (loss) per common share - basic and fully diluted
  $ 0.00     $ (0.00 )
                 

See Accompanying Notes to Combined Financial Statements
 
2

 

WorldVest, Inc.
 
Combined Statement of Stockholders' (Deficit)
 
                                                       
                                 
Common
         
Deficit
       
                                 
Stock
         
Accumulated
       
                           
Additional
   
Issued for
   
Common
   
During
   
Total
 
   
Common Shares
   
Preferred Shares
   
Paid-In
   
Prepaid
   
Stock
   
Development
   
Stockholders'
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Services
   
Payable
   
Stage
   
(Deficit)
 
                                                       
Balance, December 31, 2009
    58,979,592     $ 58,980       5,000,000       4,000     $ 10,443,335       -     $ 284,544       (12,008,037 )     (1,217,178 )
                                                                         
Issuance of stock for payment of common stock payable on March 24, 2010.
    85,725       85                       128,504               (128,589 )             -  
                                                                         
Issuance of stock for preferred stock dividend on March 31, 2010
                                                    173,700       (173,700 )     -  
                                                                         
Net Income for the three months ended March 31, 2010.
                                                            73,551       73,551  
                                                                         
Balance, March 31, 2010 (Unaudited)
    59,065,317     $ 59,065       5,000,000     $ 4,000     $ 10,571,839     $ -     $ 329,655     $ (12,108,186 )   $ (1,143,627 )
                                                                         




See Accompanying Notes to Combined Financial Statements


 
3

 


WorldVest, Inc.
 
Combined Statements of Cash Flows
 
Unaudited
 
             
   
For the three months ended
 
   
March 31,
 
   
2010
   
2009
 
         
(Restated)
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net Profit (loss)
  $ 73,551     $ (194,297 )
Adjustments to reconcile net (loss)
               
to net cash used in operating activities:
               
Depreciation expense
    1,449       383  
                 
Changes in operating assets and liabilities:
               
(Increase) in accounts receivable
    -       (1,000 )
(Increase) in deferred acquistion costs
    -       (750,000 )
(Increase) in securities
    -       (12,000 )
(Increase) in employee advances
    2,250       -  
(Increase) in trade receivables
    (220,000 )     -  
(Increase) in trade receivables - related party
    (50,000 )        
Increase in cash overdraft
    -       15,547  
Increase in accounts payable
    4,127       17,973  
Increase in accrued payroll and payroll taxes
    1,200       15,234  
Increase in accrued interest payable - related party
    51,414       24,637  
                 
Net cash (used) in operating activities
    (136,009 )     (883,523 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Purchase of Fixed Assets
    -       (24,766 )
Proceeds for notes receivable - related party
    16,752       (45,189 )
                 
Net cash (used) by investing  activities
    16,752       (45,189 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Proceeds from notes payable - related party
    137,434       922,555  
Payments on notes payable - related party
    (13,619 )     -  
                 
Net cash provided by financing activities
    123,815       922,555  
                 
NET CHANGE IN CASH
    4,558       (30,923 )
                 
CASH AT BEGINNING OF YEAR
    2,480       37,636  
                 
CASH AT END OF YEAR
  $ 7,038     $ 6,713  
                 
SUPPLEMENTAL INFORMATION:
               
Interest Paid
    -       -  
Income Taxes Paid
    -       -  
                 
See Accompanying Notes to Combined Financial Statements
 
4

 

WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies

Description of Business

WorldVest, Inc. (hereafter “WorldVest” or the “Company”) was organized September 17, 2007, under the laws of the State of Florida, under the name Catalyst Ventures Incorporated.  The Company filed for a name change on July 2, 2009, and is now known as WorldVest, Inc.  The Company is authorized to issue 100,000,000 shares of common stock, par value $0.001, and 10,000,000 share of preferred stock, par value $0.001.

The business of the Company is to grow as a global merchant bank that offers traditional investment banking, asset management and advisory services, as well as direct investments as a principal in select high-growth transactions on a global basis.  Recognizing the disconnect that exists between the needs of companies and the limitations of traditional investment banking, private equity, and venture capital institutions, WorldVest seeks to set a new standard, emerging as a partner and solution provider where one did not previously exist.

Basis of Presentation
 
The financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”).  Management has included all nominal recurring adjustments considered necessary to give a fair presentation of operating results for the periods presented.  Interim results are not necessarily indicative results for a full year.  The information included in this Form 10-Q should be read in conjunction with information included in the 2009 annual report filed on Form 10-K.
 
Principles of Combination
 
Financial Accounting Standards Board (“FASB”) ASC 805, “Business Combinations” ASC 805 a “business combination” excludes transfers of net assets or exchanges of equity interests between entities under common control. ASC 805 also states that transfers of net assets or exchanges of equity interests between entities under common control should be accounted for similar to the pooling-of-interests method (“as-if pooling-of-interests”) in that the entity that receives the net assets or the equity interests initially recognizes the assets and liabilities transferred at their carrying amounts in the accounts of the transferring entity at the date of transfer. Because the Company and WorldVest, LLC and FutureVest were under common control at the time of the acquisitions, the transfer of assets and liabilities of WorldVest, LLC and FutureVest were accounted for at historical cost in a manner similar to a pooling of interests. For financial accounting purposes, the acquisition was viewed as a change in reporting entity and, as a result, required restatement of the Company’s financial statements for all periods subsequent to June 18, 2009, the date of the Transaction and the date at which common control of the Company and WorldVest, LLC and FutureVest by WorldVest, Inc. commenced. Accordingly, the Company’s combined balance sheet as of March 31, 2010 and March 31, 2009, and the combined statement of operations, combined statement of stockholders’ deficit and combined statement of cash flows for the quarter ended March 31, 2010 and for the period from September 17, 2007 through March 31, 2010 include WorldVest, Inc., WorldVest, LLC and FutureVest.

Business Combinations
 
On June 18, 2009, the Company acquired the Global Banking & Advisory assets of WorldVest Equity, Inc., a related-party entity, for $6 million, subject to certain post-closing adjustments. The purchase price consisted of a convertible debenture of $6 million. As described above, since WorldVest, Inc. was under control of WorldVest Equity, Inc. at the time of the asset acquisitions, the transfer of assets and liabilities of WorldVest, LLC and FutureVest were accounted for at historical cost in a manner similar to a pooling of interests. The $6 million of convertible debentures paid to WorldVest Equity, Inc., a related party, for 100% of the Banking & Advisory assets was treated as dividend and recorded to retained earnings.  In “as-if pooling-of-interests” accounting, financial statements of the previously separate companies for periods under common control prior to the combination are restated on a combined basis to furnish comparative information. At June 30, 2009, the WorldVest, LLC assets added $924,447 of total assets and FutureVest added $114,740 of total assets.  For the period from January 1, 2009 through December 31, 2009, WorldVest, LLC assets added revenue and net loss of $28,439 and $641,557, respectively.

 
5

 




WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

Summary of Restatement Adjustments for Business Combinations

The restatement in this Form 10Q principally reflects the addition and combination of the acquisition of WorldVest, LLC assets and FutureVest Management (Shengyang) Co., Ltd.

   
Statement of Operations
For the three months ended March 31, 2009
 
   
As Reported
   
Adjustments
   
As Restated
 
                   
Revenue
                 
Consulting revenue
  $ -     $ 25,000     $ 25,000  
Consulting revenue - related party
    -       -       -  
Total Revenue
    -       25,000       25,000  
                         
Expenses:
                       
Professional services - related party
    5,000       (5,000 )     -  
Rent expense
    -       44,416       44,416  
Executive management expense
    -       -       -  
General and administrative expenses
    40,010       116,354       156,364  
Depreciation expense
    -       383       383  
                         
Total expenses
    45,010       156,153       201,163  
                         
Net operating (loss)
    (45,010 )     (131,153 )     (176,163 )
                         
Other income/(expense)
                       
Other income
    -       7,235       7,235  
Interest expense - related parties
    (10,907 )     (14,462 )     (25,369 )
Total other income/(expense)
    (10,907 )     (7,227 )     (18,134 )
                         
Net (loss) before provision for income taxes
    (55,917 )     (138,380 )     (194,297 )
                         
Provision for income taxes
    -       -       -  
                         
Net (loss)
  $ (55,917 )   $ (138,380 )   $ (194,297 )
                         
                         
Weighted average number of common shares
    55,153,750       55,153,750       55,153,750  
outstanding - basic and fully diluted
                       
                         
Net (loss) per common share - basic and fully diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )
 
 
 
6

 

 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

   
Statement of Cash Flows
For the three months ended March 31, 2009
 
   
As Reported
   
Adjustments
   
As Restated
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net Profit (loss)
  $ (55,917 )   $ (138,380 )   $ (194,297 )
Adjustments to reconcile net (loss)
                       
to net cash used in operating activities:
                       
Depreciation expense
    -       383       383  
                         
Changes in operating assets and liabilities:
                       
(Increase) in accounts receivable
    -       (1,000 )     (1,000 )
(Increase) in Deferred Acquisition Costs
    -       (750,000 )     (750,000 )
(Increase) in Securities
    -       (12,000 )     (12,000 )
Increase in cash overdraft
    -       15,547       15,547  
Increase in accounts payable
    1,973       16,000       17,973  
Increase in accrued payroll and payroll
taxes
    -       15,234       15,234  
Increase in accrued interest payable –
related party
    10,907       13,730       24,637  
Net cash (used) in operating activities
    (43,037 )     (840,486 )     (883,523 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
Purchase of Fixed Assets
    -       (24,766 )     (24,766 )
Proceeds for notes receivable - related party
    -       (45,189 )     (45,189 )
Net cash (used) by investing  activities
            (69,955 )     (69,955 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Proceeds from notes payable - related party
    40,000       882,555       922,555  
Payments on notes payable - related party
    -       -       -  
Net cash provided by financing activities
    40,000       882,555       922,555  
                         
NET CHANGE IN CASH
    (3,037 )     (27,886 )     (30,923 )
CASH AT BEGINNING OF YEAR
    9,750       27,886       37,636  
CASH AT END OF YEAR
  $ 6,713     $ -     $ (8,834 )
 
Cash and Equivalents

For the purpose of the statement of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.  There were no cash equivalents as of March 31, 2010.
 
 
7

 
 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

Investments in Companies Accounting for Using the Equity or Cost Method

Investments in other entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. Investments of this nature are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. In accordance with ASC 323, “Investments-Equity Method and Joint Ventures”, when net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. When an investment accounted for using the equity method issues its own shares, the subsequent reduction in the Company's proportionate interest in the investee is reflected in income as a deemed dilution gain proportionate interest in or loss on disposition. The Company evaluates its investments in companies accounted for by the equity or cost method for impairment when there is evidence or indicators that a decrease in value may be other than temporary.

Revenue Recognition

The Company recognizes revenues from investment banking, consulting, financial advisory services, and direct investments consolidating revenues of our wholly owned subsidiary operations and majority owned investments, and through cash flow generated from our subsidiaries and investments.  Revenue is recognized at the time when services are actually completed.

Stock-based compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.

Dividends

During the three months ended March 31, 2009, the Company declared a dividend for 90,000 common shares with a market value of $173,700 as payment on the 4,000,000 Preferred Class B shares issued as of December 31, 2009.  This dividend has not been issued and is reflected as a balance in the common stock payable equity account.

Loss per Common Share

The Company presents basic loss per share (“EPS”) and diluted EPS on the face of the statement of operations.  Basic EPS is computed by dividing reported losses by the weighted average shares outstanding.  Diluted EPS is computed by adding to the weighted average shares the dilutive effect if stock options and warrants were exercised into common stock.  For the years ended December 31, 2009 and 2008 the denominator in the diluted EPS computation is the same as the denominator for basic EPS because the Company has no stock options and 4,000,000 warrants outstanding.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

 
8

 

WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company has financial instruments whereby the fair value of the financial instruments could be different than that recorded on a historical basis in the accompanying balance sheet.  The Company’s financial instruments consist of cash and payables.  The carrying amounts of the Company’s financial instruments approximate their fair values as of March 31, 2010 due to their short-term nature.

Recent accounting pronouncements

In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”).  Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration.  Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors.  The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010.  The amendments are to be applied prospectively.  Early adoption is permitted.  We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In February 2010, the FASB issued ASU No. 2010-09 regarding subsequent events and amendments to certain recognition and disclosure requirements.  Under this ASU, a public company that is a SEC filer, as defined, is not required to disclose the date through which subsequent events have been evaluated. This ASU is effective upon the issuance of this ASU.  The adoption of this ASU did not have a material impact on our consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements.  This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers.  Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements.  This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  We are currently evaluating the impact of this ASU, however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

 
9

 
 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

In January 2010, the FASB issued ASU No. 2010-02 regarding accounting and reporting for decreases in ownership of a subsidiary.  Under this guidance, an entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary.  Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value.  In contrast, an entity is required to account for a decrease in its ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction.  This ASU clarifies the scope of the decrease in ownership provisions, and expands the disclosures about the deconsolidation of a subsidiary or de-recognition of a group of assets.  This ASU is effective for beginning in the first interim or annual reporting period ending on or after December 31, 2009.  We are currently evaluating the impact of this ASU, however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-01 regarding equity and accounting for distributions to shareholders with components of stock and cash.  This ASU addresses the diversity in practice related to the accounting for a distribution to shareholders that offers them the ability to elect to receive their entire distribution in cash or shares of equivalent value with potential limitation on the total amount of cash that shareholders can elect to receive in the aggregate.  Historically, some entities have accounted for the stock portion of the distribution as a new share issuance that is reflected in earning per share (EPS) prospectively. Other entities have accounted for the stock portion of the distribution as a stock dividend by retroactively restating shares outstanding and EPS for all periods presented.  The amendments in this ASU clarify that the stock portion of a distribution to shareholders that allows them to elect to receive cash or shares with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance thus eliminating the diversity in practice.

The amendments in this ASU affect entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate.  This ASU is effective for interim and annual periods ending on or after December 15, 2009, and it is to be applied retrospectively. The adoption of this ASU did not have an impact on our consolidated financial statements.

In December 2009, the FASB issued ASU No. 2009-17 regarding consolidations and improvements to financial reporting by enterprises involved with VIEs. This ASU changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting should be consolidated.  The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance.  This statement is effective for us beginning in the first quarter of fiscal 2011 (October 1, 2010). We are currently assessing the potential impact that the adoption of ASU No. 2009-17 will have on our consolidated financial statements.

In September 2009, the FASB issued ASU No. 2009-12 – Fair Value Measurements and Disclosures (Topic 820) – Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent).  This ASU permits use of a practical expedient, with appropriate disclosures, when measuring the fair value of an alternative investment that does not have a readily determinable fair value.  ASU No. 2009-12 is effective for interim and annual periods ending after December 15, 2009, with early application permitted.  Since the Company does not currently have any such investments, it does not anticipate any impact on its financial statements upon adoption.

In August 2009, the FASB issued ASU No. 2009-05 – Fair Value Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair Value.  This ASU clarifies the fair market value measurement of liabilities.  In circumstances where a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: a technique that uses quoted price of the identical or a similar liability or liabilities when traded as an asset or assets, or another valuation technique that is consistent with the principles of Topic 820 such as an income or market approach.  ASU No. 2009-05 was effective upon issuance and it did not result in any significant financial impact on the Company upon adoption.

 
10

 
 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

On July 1, 2009, the Financial Accounting Standards Board (FASB) officially launched the FASB Accounting Standards Codification (ASC) 105 -- Generally Accepted Accounting Principles, which established the FASB Accounting Standards Codification (“the Codification”), as the single official source of authoritative, nongovernmental, U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission.  The Codification is designed to simplify U.S. GAAP into a single, topically ordered structure.  All guidance contained in the Codification carries an equal level of authority.  The Codification is effective for interim and annual periods ending after September 15, 2009.  Accordingly, the Company refers to the Codification in respect of the appropriate accounting standards throughout this document as “FASB ASC”.  Implementation of the Codification did not have any impact on the Company’s consolidated financial statements.

On June 30, 2009, the FASB issued Accounting Standard Update (ASU) No. 2009-01 (Topic 105) – Generally Accepted Accounting Principles – amendments based on – Statement of Financial Accounting Standards No. 168 – The FASB Accounting and Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. Beginning with this Statement the FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts.  Instead, it will issue Accounting Standard Updates.  This ASU includes FASB Statement No. 168 in its entirety.  While ASU’s will not be considered authoritative in their own right, they will serve to update the Codification, provide the bases for conclusions and changes in the Codification, and provide background information about the guidance.  The Codification modifies the GAAP hierarchy to include only two levels of GAAP:  authoritative and non-authoritative.  ASU No. 2009-01 is effective for financial statements issued for the interim and annual periods ending after September 15, 2009, and the Company does not expect any significant financial impact upon adoption.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”.  SFAS No. 167 addresses the effect on FASB Interpretation 46(R), “Consolidation of Variable Interest Entities” of the elimination of the qualifying special-purpose entity concept of SFAS No. 166, “Accounting for Transfers of Financial Assets”.  SFAS No. 167 also amends the accounting and disclosure requirements of FASB Interpretation 46(R) to enhance the timeliness and usefulness of information about an enterprise’s involvement in a variable interest entity. This Statement shall be effective as of the Company’s first interim reporting period that begins after November 15, 2009. Earlier application is prohibited.  The Company does not anticipate any significant financial impact from adoption of SFAS No. 167. As of September 30, 2009, SFAS No. 167 has not been added to the Codification.

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140”.  SFAS No. 166 amends SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” by eliminating the concept of special-purpose entity, requiring the reporting entity to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets, changes the requirements for the de-recognition of financial assets, and provides for the sellers of the assets to make additional disclosures.  This Statement shall be effective as of the Company’s first interim reporting period that begins after November 15, 2009. Earlier application is prohibited.  The Company does not anticipate any significant financial impact from adoption of SFAS No. 166. As of September 30, 2009, SFAS No. 166 has not been added to the Codification.

In May 2009, the FASB issued FASB ASC 855, “Subsequent Events”.  This Statement addresses accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued.  FASB ASC 855 requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, the date issued or date available to be issued.  The Company adopted this Statement in the second quarter of 2009.  As a result the date through which the Company has evaluated subsequent events and the basis for that date have been disclosed in Note 12, Subsequent Events.

In April 2009, the FASB issued an update to FASB ASC 820, “Fair Value Measurements and Disclosures”, related to providing guidance on when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly.  The update clarifies the methodology to be used to determine fair value when there is no active market or where the price inputs being used represent distressed sales.  The update also reaffirms the objective of fair value measurement, as stated in FASB ASC 820, which is to reflect how much an asset would be sold in and orderly transaction, and the need to use judgment to determine if a formerly active market has become inactive, as well as to determine fair values when markets have become inactive.  The Company adopted this Statement in the second quarter of 2009 without significant financial impact.

 
11

 
 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

In April 2009, the FASB ASC 320, “Investments – Debt and Equity”, amends current other-than-temporary guidance for debt securities through increased consistency in the timing of impairment recognition and enhanced disclosures related to credit and noncredit components impaired debt securities that are not expected to be sold.  Also, the Statement increases disclosures for both debt and equity securities regarding expected cash flows, securities with unrealized losses, and credit losses.  The Company adopted this Statement in the second quarter of 2009 without significant impact to our financial statements.

In April 2009, the FASB issued an update to FASB ASC 825, “Financial Instruments”, to require interim disclosures about the fair value of financial instruments”.  This update enhances consistency in financial reporting by increasing the frequency of fair value disclosures of those assets and liabilities falling within the scope of FASB ASC 825. The Company adopted this update in the second quarter of 2009 without significant impact to the financial statements.

In April 2009, the FASB issued an update to FASB ASC 805, “Business Combinations”, that clarifies and amends FASB ASC 805, as it applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies.  This update addresses initial recognition and measurement issues, subsequent measurement and accounting, and disclosures regarding these assets and liabilities arising from contingencies in a business combination.  The Company adopted this Statement in the second quarter of 2009 without significant impact to the financial statements.

In January 2009, the FASB issued an update to FASB ASC 325, “Investments – Other”, which amends the impairments guidance on recognition of interest income and impairment on purchased beneficial interests and beneficial interests that continue to be held by a transferor in securitized financial assets to achieve more consistent determination of whether an other-than-temporary impairment has occurred. The update also retains and emphasizes the objective of another than-temporary impairment assessment and the related disclosure requirements in FASB ASC 320, “Investments – Debt and Equity Securities”, and other related guidance.  The adoption of this update in the second quarter of 2009 did not have a significant impact on the Company’s financial statements.

In November 2008, EITF issued new guidance under FASB ASC 350, “Intangibles – Goodwill and Other” on accounting for defensive intangible assets”.  The new guidance applies to all acquired intangible assets in which the acquirer does not intend to actively use the asset but intends to hold (lock up) the asset to prevent its competitors from obtaining or using the asset (a defensive asset).  This guidance was adopted by the Company in January 2009 without impact to the financial statements.

In May 2008, the FASB issued an update to FASB ASC 470, “Debt”, with respect to accounting for convertible debt instruments that may be settled in cash upon conversion including partial cash settlement.  This update applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under FASB ASC 815, “Derivatives and Hedging”.  Additionally, this update specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost recognized in subsequent periods. The update is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years.  The Company does not currently have any debt instruments for which this update would apply.  This update was adopted in January 2009 without significant financial impact.

In March 2008, the FASB issued an update to FASB ASC 815, “Derivatives and Hedging” This update is intended to enhance the current disclosure framework in FASB ASC 815.  Under this update, entities will have to provide disclosures about (a) how and why and entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under FASB ASC 815 and its related interpretations, and (c), how derivative instruments and related hedged items effect an entity’s financial position, financial performance and cash flows.  This update is effective for all financial statements issued for fiscal and interim periods beginning after November 15, 2008.  The Company does not currently have any derivative instruments, nor does it engage in hedging activities, therefore, the Company’s adoption of this update in the first quarter of 2009 was without significant financial impact.

 
12

 
 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 1: Description of Business and Summary of Significant Accounting Policies (Continued)

In December 2007, the FASB issued an update to FASB ASC 805, “Business Combinations” which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree, and the goodwill acquired. This update also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This update is effective for the Company with respect to business combinations for which the acquisition date is on or after January 1, 2009. The Company adopted this update in the first quarter of 2009 without significant financial impact.
 
In December 2007, the FASB issued an update to FASB ASC 810, “Consolidation”, which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of noncontrolling owners. This update is effective for the Company as of January 1, 2009. The Company adopted this update in January 2009 without significant impact on the consolidated financial position, results of operations, and disclosures.

Fiscal Year End
 
The Company’s fiscal year end is December 31

Note 2: Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has accumulated consolidated net losses through March 31, 2010. The Company’s current liabilities exceed its current assets by $1,814,384 as of March 31, 2010.

These conditions give rise to substantial doubt about the Company’s ability to continue as a going concern.  These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as going concern.  The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock as may be required and ultimately to attain profitability.

Management’s plan, in this regard, is to raise financing of USD $5 Million through it a preferred share private placement offering, which will be launched in June, 2010, which will pay a 9% paid in kind coupon and the preferred shares will convert into common shares.  The offering may also include warrants in WorldVest. Management believes it will be able to successfully sell out the USD $5 Million financing which should finance the growth through profitability.  However, there is no assurance that the Company will be successful in raising such financing.  As of the date of these financial statements the Company has not secured a firm commitment under its financing plan, but has opened the private placement to accredited investors and institutions.

Note 3: Business Combinations
 
On June 22, 2009 and amended on August 19, 2009 we completed an agreement with our parent company, whereby WorldVest Equity, Inc. to acquire its global banking and advisory operations.  As part of this agreement, we acquired Banking and Advisory assets from WorldVest, LLC (“WVUSA”), a Nevada Company and 100% of FutureVest Management (Shenyang) Co., Ltd. from WorldVest Equity, Inc. in accordance with the terms and conditions of a contemporaneously executed and delivered WorldVest, Inc. – WorldVest Equity, Inc. Purchase Agreement.

As a global merchant bank, WorldVest will focus on providing premier investment banking, advisory and asset management services, as well as making direct investments as a principal in select global transactions.  WorldVest will focus on two areas of business: Global Banking & Advisory and Asset Management.  WorldVest maximizes shareholder value by creating synergies between its operating divisions, allowing us to provide a full complement of services to a wide variety of clients while choosing the highest caliber transactions to pursue as direct investments.

 
13

 

WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)
 
Note 3: Business Combinations (Continued)

As part of the WorldVest asset and liability acquisition the Company acquired 20% of Ascher Decision Services (“Ascher”) with an option to purchase the remaining 80% of Ascher upon the final approval from FINRA.  Additionally, the Company acquired the rights to purchase 100% all current acquisition projects of WorldVest, LLC, which included the LOI to purchase a Brazilian multiple license bank, and a Brazilian retail company.  In February 2008, WorldVest, LLC paid $750,000 to an unrelated third party for the rights to acquire the three entities above.  As of December 31, 2009, WorldVest has not formally closed on these transactions and the Company has recorded as deferred acquisition costs, which is classified as other assets.  Additionally, the Company spent $124,500 in direct acquisition costs related to these entities and have recorded that amount to deferred acquisition costs.  On December 31, 2009 due to the inability of WorldVest and Management of Ascher to finalize their original agreement the 20% of Ascher was sold back to CCG for $24,499 and the company took a $100,000 write off effective on December 31, 2009.

Note 4: Trade Receivables

During the three months ended March 31, 2010 the company incurred revenue from its core Merchant Banking / Finance business through various consulting contracts.

During the three months ended March 31, 2010 the company recorded $270,000 of revenue from three clients and as of March 31, 2010 is due a total of $270,000 of equity in the clients as full payment for this revenue.

   
March 31,
   
December 31,
 
   
2010
   
2009
 
Accounts receivable for Consulting revenues, related party, Payable in Common Stock in Stockpicks.com Corporation.
  $ 50,000     $ -  
Accounts receivable for Consulting revenues, Payable in Common Stock in Alexis Capital Partners, Inc.
    180,000       -  
Accounts receivable for Consulting revenues, Payable in Common Stock in iWatchNow Inc. dba SoftMD.
    40,000       -  
    $ 270,000     $ -  

Note 5: Notes Receivable

Notes receivable consisted of the following as of March 31, 2010 and December 31, 2009:

   
March 31,
   
December 31,
 
   
2010
   
2009
 
Notes receivable, unrelated third party, unsecured, 12% interest, matures on April 30, 2010, monthly payment of $7,500
  $ 11,179     $ 27,931  
    $ 11,179     $ 27,931  
 
During the quarter ended March 31, 2010 and 2009, the Company had interest income of $749 and $0, respectively.

 
14

 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)
 
Note 6: Property and Equipment

Fixed assets consisted of the following as of March 31, 2010 and December 31, 2009:

   
March 31,
   
March 31,
 
   
2010
   
2009
 
Computer equipment
  $ 18,085     $ 18,085  
Furniture and equipment
    7,029       7,029  
Accumulated depreciation
    (4,347 )     (2,898 )
    $ 20,767     $ 22,216  
 
During the quarter ended March 31, 2010 and 2009, the Company recorded depreciation expense of $1,449 and $0, respectively.
 
Note 7: Notes Payable – Related and Unrelated Parties.
 
Notes payable consisted of the following as of March 31, 2010 and December 31, 2009:
 
   
March 31,
   
December 31,
 
   
2010
   
2009
 
Notes payable, related party, unsecured, 12% interest, matures on December 2010, balloon payment of principal and interest.
  $ 851,880     $ 829,762  
Revolving line of credit for up to $1,500,000 until December 31, 2012, related party, unsecured, 12% interest, matures on December 31, 2012.  Interest Payments Accrued.
    996,710       957,959  
Bridge Loan for $100,000, unrelated party, secured over all assets of the company, 12%, matures 75 days with two 90-day extensions.
    102,104       -  
    $ 1,950,694     $ 1,787,721  
 
During the quarter ended March 31, 2010 and 2009, the Company had interest expense of $51,227 and $10,907, respectively, related to notes payable for related and unrelated parties.  As of March 31, 2010 and March 31, 2009, the Company had accrued interest for notes payable of $171,094 and $21,440 respectively.
 
Note 8: Preferred Shares (conversion of debenture)
 
On December 31, 2009 WorldVest came to agreement with WorldVest Equity, Inc. to convert its $6,000,000 9% Convertible Debenture into 4,000,000 new Preferred Series B shares convertible into common stock, which continue to pay a 9% PIK “Paid in Kind” Coupon through December 31, 2013 and 1,000,000 new Preferred Series C non-equity shares that carry 100 common stock votes for each share issued.  These shares are issued to WV55 Partners as per agreement.
 
Note 9: Other Related Party Transactions

On September 17, 2007, the Company hired Kenneth Green to serve as the President of the Company.  Mr. Green was to be paid an annual salary of $400,000.  Mr. Green was also to be paid an annual director’s fees of $200,000.  This agreement was cancelled upon the resignation of Mr. Green on November 13, 2008.

 
15

 
 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 9: Other Related Party Transactions (Continued)

On September 17, 2007, the Company hired Patricia Hendricks to serve as the Secretary and Treasurer of the Company.  Ms. Hendricks was to be paid an annual salary of $100,000.  Ms. Hendricks was also to be paid an annual director’s fees of $100,000.   This agreement was cancelled upon the resignation of Ms. Hendricks on November 13, 2008.

The Board of Directors of the Company authorized payments to Mr. Green and Ms. Hendricks of both the annual salary and director fees for years 2005, 2006 and 2007.  Accordingly the Company accrued executive compensation totaling $2,600,000 and the associated payroll taxes of approximately $82,055 through the period ending March 31, 2008.

The company paid Mr. Ken Green the sum of $29,210 for consulting services in the period ended September 30, 2008 and the sum of $55,000 in the period ended September 30, 2007.  These sums were made prior to June 30, 2008 and any ongoing fees relating to the agreements with Mr. Green and Ms. Hendricks have been suspended as of June 30, 2008.

In 2008, Mr. Green and Ms. Hendricks agreed to waive payment of the accrued compensation of $2,600,000 and the Company classified this accrual and the related payroll taxes of $82,055 as additional paid-in capital.  On November 13, 2008, Kenneth S. Green resigned as our President, Chief Executive Officer and Chairman of the Board of Directors, and Patricia Hendricks resigned from her position as our Secretary, Treasurer and member of the Board of Directors. Their resignations were not the result of any disagreement with us on any matter relating to our operations, policies and practices.

On March 8, 2008 the Company entered into a professional services contract with Catalyst Financial Group, Inc. (“CFGI”) wherein for a term of five years CFGI will provide the company with business development and executive corporate strategic planning.  The Company issued 5,000,000 of restricted common stock as compensation for the services to be performed (see Note 9).  Kenneth Green is the Chief Executive Officer, director and shareholder of CFGI.   This contract was cancelled and the stock was returned to the company as part of the return of 30,000,000 (See Note 9).
 
On October 1, 2008, the Company entered into a one-year professional services contract with majority shareholder WorldVest Equity, Inc. (WVE), WorldVest, LLC, a wholly owned operating subsidiary of WorldVest Equity at that time.  WorldVest was to provide the Company with business development and corporate strategic planning.  The Company agreed to pay $10,000 per month to WorldVest, LLC pursuant to this contract.  Garrett K. Krause is the Executive Chairman of WorldVest Equity, Inc. and Managing Director of WorldVest, LLC.  As of September 30, 2009 this contract has been cancelled.

On November 30, 2008, the Company entered into a line of credit promissory note with Zuma Investment Partners (Zuma), whereby Zuma paid a total of $3,500 on behalf of the Company to various professionals for services rendered.  Interest of $379 has accrued on this note.
 
On November 30, 2008, the Company entered into a line of credit promissory note with WorldVest Equity, Inc., whereby WVE paid a total of $9,000 on behalf of the Company to various professionals for services rendered.  At the same time, WVE extended an additional $10,000 to the Company within this line of credit to cover short term operating expenses.  As of September 30, 2009 WorldVest Equity is advanced a total of $591,446 to WorldVest and interest of $18,079 has accrued on the advances.
 
On April 10, 2009 Mr. Garrett K. Krause agreed to a consulting contract whereby he was paid a minimum of $25,000 for the 3 month period in order to execute the WorldVest, Inc. merchant banking plan on behalf of the new majority shareholder WorldVest Equity, Inc.  This agreement was amended and Mr. Krause agreed to receive a base salary of $114,906 for 2009 and $120,000 for 2010.

Pursuant to the June 22, 2009 transaction to acquire the Global Banking & Advisory assets, WorldVest Equity, Inc. was issued a 9% $6,000,000 convertible debenture that converts into 4,000,000 shares of stock and includes warrants to purchase 4,000,000 shares of stock at $3.00 per share.

On December 31, 2009 WorldVest Equity, Inc. agreed to convert its $6,000,000 Convertible Debenture into 4,000,000 9% Preferred Series B Shares and 1,000,000 Preferred Series C shares that carry no equity but have 100 common share votes for each share issued.

 
16

 
 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)
 
Note 9: Other Related Party Transactions (Continued)

On December 31, 2009 WorldVest Equity agreed to acquire $107,106 in Notes Receivable from FaceKoo Limited in payment of accrued interest owed and Notes Payable owed by FutureVest Management (Shenyang) Co. Ltd.   This transaction provides for no future recourse to FutureVest Management (Shenyang) Co. Ltd or its parent company, WorldVest, Inc.

On December 31, 2009 Corporate Capital Group, LLC agreed to acquire the 20% equity shares in Ascher Decision Services, Inc plus the $9,499 in current notes receivable owed by Ascher Decision Services, Inc. for a total amount of $21,499 which was applied against the Notes Payable owed to Corporate Capital Group by WorldVest, Inc.

On December 31, 2009 Corporate Capital Group, LLC agreed to acquire a Note Receivable of $7,040 owed by Mr. Peter Dunev from WorldVest, Inc. and agreed to acquire the debts owed to Stockpicks.com Corporation and DealFlow Media of $475 and $7,500 respectively. These transactions will have no recourse to WorldVest, Inc.

Note 10: Equity

On September 17, 2007, the Company issued 55,000,000 shares of restricted stock in exchange for consulting services rendered valued at $55,000.  The common stock was issued to entities that are controlled and owned by the company’s former Chief Executive Officer.  The shares were valued at the fair value of the services.

On September 30, 2007, the Company issued 47,000 shares of its common stock in exchange for a subscription receivable of $47,000.  On October 3, 2007, the Company received $47,000 and reduced its subscription receivable balance.

In December 2007, the Company received $34,250 in payment of subscriptions for 34,250 shares of common stock.  As the shares of common stock were issued January 18, 2008, the Company recorded a common stock payable for the $34,250 on December 31, 2007.

On January 18, 2008 the Company issued 22,500 shares of its Common stock for 22,500 in cash.

On June 9, 2008 the company cancelled 20,000,000 shares pursuant to the cancellation of the consulting contracts (see Note 8).

On June 19, 2008, the Company received $50,000 in payment for 50,000 shares of unrestricted common stock. As the shares were issued in July 2008, the Company recorded the $50,000 as a common stock payable.

On July 25, 2008 the Company Issued 50,000 shares in satisfaction of common stock payable totaling $50,000.

On August 13, 2008 the company cancelled 10,000,000 shares pursuant to the cancellation of the consulting contracts (Note 8).
 
Pursuant to a stock purchase agreement as of September 18, 2008, Catalyst Holding Group, LLLP, an entity owned by the Company’s former Chief Executive Officer, transferred 51,000,000 shares of the Company’s common stock to Wilmington Rexford International, Inc. for a price of twenty thousand dollars ($20,000).  On November 13, 2008, Wilmington Rexford International, Inc, assigned 20,000,000 shares of the common stock to Wilmington WorldVest Partners, 20,000,000 shares to CaboWest Group, Inc. and 11,000,000 shares to Javalon Investment Partners. The total of 51,000,000 shares represents 92.47% of our issued and outstanding common stock. Garrett K Krause is the beneficial owner of Wilmington WorldVest Partners, Inc., CaboWest, and Javalon Investment Partners.

On April 9, 2009 51,000,000 shares of our common stock held by Wilmington WorldVest Partners (20,000,000 shares), CaboWest Group, Inc. (20,000,000 shares) and Javalon Investment Partners (11,000,000 shares) have been transferred to WorldVest Equity, Inc., a global Merchant Bank for a price of three hundred thousand dollars ($300,000).  WorldVest Equity will own a total of 51,000,000 shares representing 91.9% of our issued and outstanding common stock.  Garrett K. Krause is the Executive Chairman of WorldVest Equity, Inc. and will be deemed a beneficial owner of 70% of the fully diluted WorldVest Equity, Inc. stock through investment companies and trusts for which Garrett K. Krause is either Executive Chairman and/or Managing Director.

 
17

 
WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)
 
Note 10: Equity (Continued)

On June 22, 2009, the Company issued 4,000,000 warrants in conjunction with a convertible debenture for $6,000,000.  The fair value of the warrants and the beneficial conversion feature totaled $2,941,773 and was recorded to additional paid in capital.  Based on the early conversion of this convertible debenture the company recorded a reversal to the beneficial conversion in the amount of $2,503,636.

On December 31, 2009 the company issued 155,852 shares of its Commons stock for $233,760 in cash.

On December 31, 2009 the company issued 3,670,000 shares to ZumaHedgeFund, LLC for conversion of $367,000 outstanding Notes Payable of $367,000 to ZumaHedgeFund, LLC.

On December 31, 2009 the company agreed to issue 189,696 common shares to WorldVest Equity, Inc. in order to pay the accrued interest of $284,544 due for the convertible debenture through December 31, 2009.

On December 31, 2009 the company issued 4,000,000 9% Preferred Class B shares convertible into 4,000,000 shares of common stock in exchange for cancellation of the $6,000,000 9% convertible debenture issued to WorldVest Equity, Inc.  This transaction also called for the issuance of 1,000,000 Preferred Class C non-equity shares that carry 100 common share votes for each 1 share issued.

On February 26, 2010 and on March 24, 2010 the company issued 15,323 shares and 70,507 shares respectively to interest holders of WV55, Inc. as payment against the common stock payable of $284,544 on December 31, 2009.

On March 31, 2010 the company agreed to pay 90,000 common shares as part of the preferred stock dividend paid on the 4,000,000 Preferred Class B shares for a total amount of $173,700 based on the average stock price for the quarter of $1.93 per share.  The $173,700 has increased the common stock payable account.

Note 11: Warrants

The following is a summary of the status of all of the Company’s stock warrants as of March 31, 2010 and changes during the quarter ended on that date:
 
   
Number Of Warrants
   
Weighted-Average Exercise Price
 
Outstanding at January 1, 2010
    4,000,000     $ 3.00  
Granted
    -       0.00  
Exercised
    -       0.00  
Cancelled
    -       0.00  
Outstanding at March 31, 2010
    4,000,000     $ 3.00  
                 
Warrants exercisable at March 31, 2010
    4,000,000     $ 3.00  
Warrants exercisable at March 31, 2009
    -     $ 0.00  


 
18

 

WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 11: Warrants (Continued)
 
The following tables summarize information about stock warrants outstanding and exercisable at March 31, 2010:
 
   
STOCK WARRANTS OUTSTANDING
Exercise Price
 
 
Number of Warrants Outstanding
 
Weighted-Average Remaining Contractual Life in Years
 
 
Weighted-Average Exercise Price
$ 3.00
 
4,000,000
 
1.72
 
$ 3.00
   
4,000,000
 
1.72
 
$ 3.00

   
STOCK WARRANTS EXERCISABLE
 
Exercise Prices
 
Number of Shares Exercisable
 
Weighted-Average Exercise Price
$ 3.00
 
4,000,000
 
$ 3.00
   
4,000,000
 
$ 3.00

Note 12: Commitments and Contingencies

On December 5, 2007 and March 8, 2008 the Company entered into six contracts to provide professional services in return for 20,000,000 and 10,000,000 shares of restricted common stock respectively, including 5,000,000 shares of restricted common stock issued to Catalyst Financial Group, Inc., (see Note 8).  All of the agreements have been assigned an effective date concurrent with the date of issuance of the stock, which is March 18, 2008.  The stock has been valued at $.75 (seventy five cents) per share, as the estimated fair market value of the common stock.  Accordingly on March 18, 2008, $22,500,000 in prepaid professional fee contracts was recorded on the books of the Company.  The prepaids were to be amortized over the lives of the contracts, which bear either one year or five years terms.  As of this time all six contracts have been cancelled and the 30,000,000 shares have been returned to treasury.

On June 9, 2008 the Company cancelled four of the six contracts to provide professional services and the stock certificates for 20,000,000 shares of the restricted common stock, which represented all of the stock issued for those contracts, were also cancelled and returned to the Company.  The related prepaid professional fees recorded on the books of the Company of $15,000,000 less $576,613 of the prepaid professional fees which were amortized and expensed as of the period ended March 31, 2008, have been reversed on the books of the Company as of June 30, 2008.  The agreements provide for the development and implementation of advertising and marketing programs and concurrent efforts at business development.

On August 13, 2008 the Company cancelled the remaining two of the six contracts to provide professional services and the stock certificates for 10,000,000 shares of the restricted common stock, which represented all of the stock issued for those contracts, were also cancelled and returned to the Company.   The agreements provide for the development and implementation of advertising and marketing programs and concurrent efforts at business development.

On February 19, 2010, The Company announced today the formation and launch of Hurricane Global Resource Corporation (“Hurricane”) as a platform development subsidiary.  Hurricane will engage in global trading of in-demand resources between high growth markets such as Latin America and Asia and will seek to secure continuous long-term supply through strategic acquisitions in a diversified slate of natural resource projects.

The Company will independently manage all Hurricane operations through a dedicated team of professionals experienced in acquisition, development and management of global resource properties.  With an extensive worldwide network of resources, The Company is confident in its ability to transform its current slate of resource M&A targets into long-term global supplies and strong revenue growth.

 
19

 

WorldVest, Inc.
Notes to Combined Financial Statements
(Unaudited)

Note 12: Commitments and Contingencies (Continued)

Hurricane’s launch coincides with the signing of a Letter of Intent with a large Chinese steel manufacturer with a government approved import license seeking a long-term iron ore supply with an initial monthly requirement of up to 1.2 million metric tons.  In order to fulfill this long-term demand, Hurricane has entered into negotiations for the acquisition of two properties, each estimated to contain significantly more than 500 million tons of iron ore reserves.  In the near term, Hurricane’s objective is to finalize a long-term purchase contract based on terms of LOI and to secure internal supply through the completion of at least one of its two acquisition targets.  In the near term, Hurricane anticipates securing multiple short-term Brazilian iron ore supplies and brokering initial shipments to China immediately creating positive cash flow.

In addition to these initial two iron ore investment targets, Hurricane has identified a Brazilian sustainable forestry management project and a significant U.S. based potash reserve each representing unique and attractive growth opportunities.  Collectively, management believes that Hurricane can consolidate these and other future resource opportunities creating a diversified and lucrative asset portfolio, ultimately positioning Hurricane for an independent public listing of its common shares on a major exchange.

On February 23, 2010, The Company consolidated of all finance subsidiary operations in the United States, Brazil and China under new wholly owned subsidiary, WorldVest Financial Corporation (“WV Financial”), which is strategically positioned to immediately capitalize on growth opportunities in these and other global financial markets.  The Company will continue implementing the focused growth of WV Financial, while simultaneously building its platform development companies, WorldVest Korea Group and Hurricane Global Resources Corporation, through its equity development & asset management subsidiary, WorldVest Partners.

WV Financial will seek to achieve significant growth within the Brazilian banking & finance sector with the pending launch of WorldVest Brasil Finance FIDC, a securitized credit receivables fund aimed at deploying capital into the Brazilian consumer finance and credit card markets.  WV Financial will also work toward finalizing the acquisition of a Brazilian multiple license commercial and investment bank, currently under Letter of Intent.

Additionally, WV Financial anticipates accelerated growth in its Chinese deal flow through its wholly owned Chinese financial advisory subsidiary, FutureVest Management (Shenyang) Co. Ltd., dba. China WorldVest Advisors, and the continued expansion of its U.S. corporate finance & advisory business.  Further, WV Financial looks to pursue additional banking & finance related M&A opportunities in the United States and Brazil.

On March 30, 2010, The Company’s to be formed subsidiary Hurricane Global Resource Corporation signed a Joint Venture to launch its Chinese Iron Ore Sales Office in Tianjin, China.  Simultaneously, Hurricane announced the addition of Qianli Ma, as its Managing Director in charge of negotiating and managing all Hurricane relationships with the Chinese steel industry.  Mr. Qianli Ma has extensive experience and far-reaching relationships within this industry as well as within the state and federal governments of China.

Through the addition of its Chinese Sales office, Hurricane has begun assembling a consortium of steel producers seeking to secure long-term supplies of iron ore.   In partnership with these buyers, Hurricane is currently evaluating opportunities to invest in and develop global reserve assets into producing iron ore mines for the benefit of the consortium. While pursuing its long-term mineral acquisition and development endeavors, Hurricane has begun sourcing interim supply and plans to broker iron ore transactions on behalf of its buyers.

Note 13: Subsequent Events

On April 5, 2010, The Company’s to be formed subsidiary Hurricane Global Resource Corporation (“Hurricane”), announced today that it has secured its first iron ore purchase contract from a prominent Chinese commodities import and trading company (the “Buyer”).  Through this contract, the Buyer has agreed to purchase up to 12 million tonnes of iron ore annually from Hurricane, with an annual current market value of $1.4 billion USD.  Through its broad relationships in Latin America, Hurricane has begun sourcing available iron ore supplies to fulfill this contract with long-term plans to acquire and develop into production a slate of Hurricane owned iron ore reserve properties.

 
20

 


Initially, Hurricane has contracted with its first iron ore producer to fulfill approximately 20% of the annual contract volume.  Subsequently, the Buyer has accepted and signed a “Supplier Addendum”, pursuant to the terms of the purchase contract, accepting the specifications of this initial iron ore supply.  Pending a mine site visit by the Buyer, the first monthly shipment of 70,000 tonnes is scheduled to occur within a period of 45 days, with monthly volumes increasing to 150,000 tonnes in the third month and 300,000 tonnes by the eighth month.  The contract calls for a total first year delivery volume of 2,390,000 tonnes at a value of $286,800,000.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and plan of operations together with our financial statements and related notes appearing elsewhere in this Quarterly Report.  Various statements have been made in this Quarterly Report on Form 10-Q that may constitute “forward-looking statements”. Forward-looking statements may also be made in Worldvest’s other reports filed with or furnished to the United States Securities and Exchange Commission (the “SEC”) and in other documents. In addition, from time to time, Worldvest, through its management, may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements. The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Worldvest undertakes no obligation to update or revise any forward-looking statements.

Plan of Operations

During the next twelve months, we seek to continue to develop our operating subsidiaries and platform development companies with the combined goal of maximizing both earnings per share and the net asset value of our investment portfolio.

Within WV Financial (“WV Financial”), we plan to complete the formation and capitalization of a Fundo de Investimento em Diretos Creditorios (“FIDC”), a Brazilian structured credit receivables fund investing in highly-rated short term receivables within the retail and consumer finance sectors in Brazil.  Additionally, WorldVest seeks to acquire a multiple license Brazilian commercial and Investment Bank, an established Brazilian financial management company and an emerging U.S. Mortgage Bank currently licensed in California.  Through the consolidation of these assets, WV Financial will become a diversified and far reaching global financial holding company positioned for an independent public listing.

WorldVest Partners aims to capitalize and further develop its existing two platform development companies.  Under Hurricane Global Resource Corporation, WorldVest Partners anticipates commending brokering the trade of iron ore between Latin America and its Chinese buyer, currently under LOI.  On the strength of this buyer, Hurricane aims to complete the acquisition of one or more iron ore reserves to be developed into a producing mine(s), while also pursuing additional investments in natural resource related assets.

We also plan to raise a minimum of USD $5 million in new capital into the Company through a Regulation D private placement offering, which we anticipate launching in June of 2010.
 
Limited Operating History

We have generated approximately two full years of financial information and have not previously demonstrated that we will be able to expand our business through an increased investment in our product line and/or marketing efforts.  Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our new products and/or sales methods.

If financing is not available on satisfactory terms, we may be unable to continue expanding our operations. Equity financing will result in a dilution to existing shareholders.
 
 
 
21

 

 
Results of Operations

For the first quarter ended March 31, 2010, we had revenue of $297,067. Total expenses for the first quarter ended March 31, 2010, totaled $172,289 resulting in a net operating income of $124,778. Total expenses of $172,289 for the period consisted of $72,471 for general and administrative expenses, $79,573 in executive management expenses, $18,796 for rent expense and $1,449 for depreciation expense. Additionally, we had other income of $- and interest expense of $51,414 for the first quarter ended March 31, 2010.

For the first quarter ended March 31, 2009, we had revenue of $25,000.  Total expenses for the first quarter ended March 31, 2009 totaled $201,613 resulting in a net operating loss of $194,297. Total expenses of $201,163 for the period consisted of $44,416 for rent expense, depreciation expense of $383 and $156,364 for general & administrative expenses. Additionally, we had other income of $7,235 and interest expense of $25,369 for the first quarter ended March 31, 2009.

Liquidity and Capital Resources

As of March 31, 2010, we had $7,038 in cash, $968,343 in total assets and $2,111,970 in total current liabilities.  Our current liabilities exceed our current assets by $2,084,394 as of March 31, 2010.

We believe we can satisfy our cash requirements for the next twelve months with our current cash, expected revenues and continued funding from WV55, Inc.  However, completion of our plan of operation is subject to attaining adequate revenue and additional financing. 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 adequate 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 profit, revenue, and growth goals.

Per our Form 8-K, dated June 26, 2009, WorldVest, Inc. acquired the global merchant banking operations from WorldVest Equity, Inc.  Pursuant to the agreement, we acquired Global Banking & Advisory assets from WorldVest Equity, which currently employs eleven (11) individuals, and is headquartered in New York and Los Angeles offices.  With this transaction we acquired the assets of FutureVest Management (Shenyang) Co., Ltd., a unique license to perform investment banking, advisory, and investment management services in the Peoples Republic of China, without the need for any Chinese partners.  Through this acquisition, we are able to provide capital financing and venture services, as well as use the extensive WorldVest global relationships to enhance and support the development of the WorldVest Global Merchant banking plan.  Additionally, through this acquisition, we believe we can attract equally beneficial relationships with the business communities and governments of Brazil and South Korea.

We anticipate that our operational, and general and administrative expenses for the next 12 months will be minimal.  We do not anticipate the purchase or sale of any significant equipment.  We also do not expect any significant additions to the number of employees.  The foregoing represents our best estimate of our cash needs based on current planning and 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.

In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core business. Should this occur, we would likely seek additional financing to support the continued operation of our business. 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 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, revenue 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 if 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.
 
 
 
22

 
 
Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

Investments in Companies Accounting for Using the Equity or Cost Method

Investments in other entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. Investments of this nature are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. In accordance with ASC 323, “Investments-Equity Method and Joint Ventures, when net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. When an investment accounted for using the equity method issues its own shares, the subsequent reduction in the Company's proportionate interest in the investee is reflected in income as a deemed dilution gain proportionate interest in or loss on disposition. The Company evaluates its investments in companies accounted for by the equity or cost method for impairment when there is evidence or indicators that a decrease in value may be other than temporary.

Revenue recognition

The Company recognized revenues through investment banking, consulting, financial advisory services, and direct investments consolidating revenues of our wholly owned platform development subsidiary operations and majority owned investments, and through cash flow generated from our subsidiaries and investments. Revenue is recognized at the time when services are actually completed.

Stock-based compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.

Recent Accounting Pronouncements

In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”).  Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration.  Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors.  The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010.  The amendments are to be applied prospectively.  Early adoption is permitted.  We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In February 2010, the FASB issued ASU No. 2010-09 regarding subsequent events and amendments to certain recognition and disclosure requirements.  Under this ASU, a public company that is a SEC filer, as defined, is not required to disclose the date through which subsequent events have been evaluated. This ASU is effective upon the issuance of this ASU.  The adoption of this ASU did not have a material impact on our consolidated financial statements.
 
 
23

 
 
In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements.  This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers.  Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements.  This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  We are currently evaluating the impact of this ASU, however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.
 
In January 2010, the FASB issued ASU No. 2010-02 regarding accounting and reporting for decreases in ownership of a subsidiary.  Under this guidance, an entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary.  Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value.  In contrast, an entity is required to account for a decrease in its ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction.  This ASU clarifies the scope of the decrease in ownership provisions, and expands the disclosures about the deconsolidation of a subsidiary or de-recognition of a group of assets.  This ASU is effective for beginning in the first interim or annual reporting period ending on or after December 31, 2009.  We are currently evaluating the impact of this ASU, however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In January 2010, the FASB issued ASU No. 2010-01 regarding equity and accounting for distributions to shareholders with components of stock and cash.  This ASU addresses the diversity in practice related to the accounting for a distribution to shareholders that offers them the ability to elect to receive their entire distribution in cash or shares of equivalent value with a potential limitation on the total amount of cash that shareholders can elect to receive in the aggregate.  Historically, some entities have accounted for the stock portion of the distribution as a new share issuance that is reflected in earning per share (EPS) prospectively. Other entities have accounted for the stock portion of the distribution as a stock dividend by retroactively restating shares outstanding and EPS for all periods presented.  The amendments in this ASU clarify that the stock portion of a distribution to shareholders that allows them to elect to receive cash or shares with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance thus eliminating the diversity in practice.  The amendments in this ASU affect entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate.  This ASU is effective for interim and annual periods ending on or after December 15, 2009, and it is to be applied retrospectively. The adoption of this ASU did not have an impact on our consolidated financial statements.

In December 2009, the FASB issued ASU No. 2009-17 regarding consolidations and improvements to financial reporting by enterprises involved with VIEs. This ASU changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting should be consolidated.  The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance.  This statement is effective for us beginning in the first quarter of fiscal 2011 (October 1, 2010). We are currently assessing the potential impact that the adoption of ASU No. 2009-17 will have on our consolidated financial statements.

In September 2009, the FASB issued ASU No. 2009-12 – Fair Value Measurements and Disclosures (Topic 820) – Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent).  This ASU permits use of a practical expedient, with appropriate disclosures, when measuring the fair value of an alternative investment that does not have a readily determinable fair value.  ASU No. 2009-12 is effective for interim and annual periods ending after December 15, 2009, with early application permitted.  Since the Company does not currently have any such investments, it does not anticipate any impact on its financial statements upon adoption.
 
In August 2009, the FASB issued ASU No. 2009-05 – Fair Value Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair Value.  This ASU clarifies the fair market value measurement of liabilities.  In circumstances where a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: a technique that uses quoted price of the identical or a similar liability or liabilities when traded as an asset or assets, or another valuation technique that is consistent with the principles of Topic 820 such as an income or market approach.  ASU No. 2009-05 was effective upon issuance and it did not result in any significant financial impact on the Company upon adoption.
 
 
24

 

 
On July 1, 2009, the Financial Accounting Standards Board (FASB) officially launched the FASB Accounting Standards Codification (ASC) 105 -- Generally Accepted Accounting Principles, which established the FASB Accounting Standards Codification (“the Codification”), as the single official source of authoritative, nongovernmental, U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission.  The Codification is designed to simplify U.S. GAAP into a single, topically ordered structure.  All guidance contained in the Codification carries an equal level of authority.  The Codification is effective for interim and annual periods ending after September 15, 2009.  Accordingly, the Company refers to the Codification in respect of the appropriate accounting standards throughout this document as “FASB ASC”.  Implementation of the Codification did not have any impact on the Company’s consolidated financial statements.

On June 30, 2009, the FASB issued Accounting Standard Update (ASU) No. 2009-01 (Topic 105) – Generally Accepted Accounting Principles – amendments based on – Statement of Financial Accounting Standards No. 168 – The FASB Accounting and Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. Beginning with this Statement the FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts.  Instead, it will issue Accounting Standard Updates.  This ASU includes FASB Statement No. 168 in its entirety.  While ASU’s will not be considered authoritative in their own right, they will serve to update the Codification, provide the bases for conclusions and changes in the Codification, and provide background information about the guidance.  The Codification modifies the GAAP hierarchy to include only two levels of GAAP:  authoritative and non-authoritative.  ASU No. 2009-01 is effective for financial statements issued for the interim and annual periods ending after September 15, 2009, and the Company does not expect any significant financial impact upon adoption.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”.  SFAS No. 167 addresses the effect on FASB Interpretation 46(R), “Consolidation of Variable Interest Entities” of the elimination of the qualifying special-purpose entity concept of SFAS No. 166, “Accounting for Transfers of Financial Assets”.  SFAS No. 167 also amends the accounting and disclosure requirements of FASB Interpretation 46(R) to enhance the timeliness and usefulness of information about an enterprise’s involvement in a variable interest entity. This Statement shall be effective as of the Company’s first interim reporting period that begins after November 15, 2009. Earlier application is prohibited.  The Company does not anticipate any significant financial impact from adoption of SFAS No. 167. As of September 30, 2009, SFAS No. 167 has not been added to the Codification.

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140”.  SFAS No. 166 amends SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” by eliminating the concept of special-purpose entity, requiring the reporting entity to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets, changes the requirements for the de-recognition of financial assets, and provides for the sellers of the assets to make additional disclosures.  This Statement shall be effective as of the Company’s first interim reporting period that begins after November 15, 2009. Earlier application is prohibited.  The Company does not anticipate any significant financial impact from adoption of SFAS No. 166. As of September 30, 2009, SFAS No. 166 has not been added to the Codification.

In May 2009, the FASB issued FASB ASC 855, “Subsequent Events”.  This Statement addresses accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued.  FASB ASC 855 requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, the date issued or date available to be issued.  The Company adopted this Statement in the second quarter of 2009.  As a result the date through which the Company has evaluated subsequent events and the basis for that date have been disclosed.

In April 2009, the FASB issued an update to FASB ASC 820, “Fair Value Measurements and Disclosures”, related to providing guidance on when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly.  The update clarifies the methodology to be used to determine fair value when there is no active market or where the price inputs being used represent distressed sales.  The update also reaffirms the objective of fair value measurement, as stated in FASB ASC 820, which is to reflect how much an asset would be sold in and orderly transaction, and the need to use judgment to determine if a formerly active market has become inactive, as well as to determine fair values when markets have become inactive.  The Company adopted this Statement in the second quarter of 2009 without significant financial impact.

In April 2009, the FASB ASC 320, “Investments – Debt and Equity”, amends current other-than-temporary guidance for debt securities through increased consistency in the timing of impairment recognition and enhanced disclosures related to credit and noncredit components impaired debt securities that are not expected to be sold.  Also, the Statement increases disclosures for both debt and equity securities regarding expected cash flows, securities with unrealized losses, and credit losses.  The Company adopted this Statement in the second quarter of 2009 without significant impact to our financial statements.
 
 
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In April 2009, the FASB issued an update to FASB ASC 825, “Financial Instruments”, to require interim disclosures about the fair value of financial instruments”.  This update enhances consistency in financial reporting by increasing the frequency of fair value disclosures of those assets and liabilities falling within the scope of FASB ASC 825. The Company adopted this update in the second quarter of 2009 without significant impact to the financial statements.

In April 2009, the FASB issued an update to FASB ASC 805, “Business Combinations”, that clarifies and amends FASB ASC 805, as it applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies.  This update addresses initial recognition and measurement issues, subsequent measurement and accounting, and disclosures regarding these assets and liabilities arising from contingencies in a business combination.  The Company adopted this Statement in the second quarter of 2009 without significant impact to the financial statements.

In January 2009, the FASB issued an update to FASB ASC 325, “Investments – Other”, which amends the impairments guidance on recognition of interest income and impairment on purchased beneficial interests and beneficial interests that continue to be held by a transferor in securitized financial assets to achieve more consistent determination of whether an other-than-temporary impairment has occurred. The update also retains and emphasizes the objective of an other than-temporary impairment assessment and the related disclosure requirements in FASB ASC 320, “Investments – Debt and Equity Securities”, and other related guidance.  The adoption of this update in the second quarter of 2009 did not have a significant impact on the Company’s financial statements.

In November 2008, EITF issued new guidance under FASB ASC 350, “Intangibles – Goodwill and Other” on accounting for defensive intangible assets”.  The new guidance applies to all acquired intangible assets in which the acquirer does not intend to actively use the asset but intends to hold (lock up) the asset to prevent its competitors from obtaining or using the asset (a defensive asset).  This guidance was adopted by WorldVest in January 2009 without impact to the financial statements.

In May 2008, the FASB issued an update to FASB ASC 470, “Debt”, with respect to accounting for convertible debt instruments that may be settled in cash upon conversion including partial cash settlement.  This update applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under FASB ASC 815, “Derivatives and Hedging.”  Additionally, this update specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost recognized in subsequent periods. The update is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years.  The Company does not currently have any debt instruments for which this update would apply.  This update was adopted in January 2009 without significant financial impact.

In March 2008, the FASB issued an update to FASB ASC 815, “Derivatives and Hedging” This update is intended to enhance the current disclosure framework in FASB ASC 815.  Under this update, entities will have to provide disclosures about (a) how and why and entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under FASB ASC 815 and its related interpretations, and (c), how derivative instruments and related hedged items effect an entity’s financial position, financial performance and cash flows.  This update is effective for all financial statements issued for fiscal and interim periods beginning after November 15, 2008.  The Company does not currently have any derivative instruments, nor does it engage in hedging activities, therefore, the Company’s adoption of this update in the first quarter of 2009 was without significant financial impact.

In December 2007, the FASB issued an update to FASB ASC 805, “Business Combinations” which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree, and the goodwill acquired. This update also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This update is effective for the Company with respect to business combinations for which the acquisition date is on or after January 1, 2009. The Company adopted this update in the first quarter of 2009 without significant financial impact.

In December 2007, the FASB issued an update to FASB ASC 810, “Consolidation”, which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent’s ownership interest, and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of non-controlling owners. This update is effective for the Company as of January 1, 2009. The Company adopted this update in January 2009 without significant impact on the consolidated financial position, results of operations, and disclosures.

 
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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).
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 
Not applicable because we are a smaller reporting company.
 
Item 4.  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 latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
 
 
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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.
 
On February 26, 2010, and on March 24, 2010, the Company issued 15,323 shares and 70,507 shares, respectively, to interest holders of WV55, Inc., as payment against the common stock payable of $284,544 on December 31, 2009.
 
On March 31, 2010, the Company agreed to pay 90,000 common shares as part of the preferred stock dividend paid on the 4,000,000 Preferred Class B shares for a total amount of $173,700, based on the average stock price for the quarter of $1.93 per share. The $173,700 has increased the common stock payable account.
 
All of these shares were issued in reliance upon an exemption from the securities registration afforded by the provisions of Section 4(2) and/or Regulation D as promulgated by the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.
 
Item 3. Defaults Upon Senior Securities.
 
None.
 
Item 4. (Removed and Reserved).
 
Item 5. Other Information.
 
None.
 
Item 6. Exhibits.
 
Exhibit No.                      Description

31.1
Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002
 
31.2
Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002
 
32.1
Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
32.2
Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
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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.

 
 
WORLDVEST, INC.
 
     
Date: May 27, 2010
By:  
/s/ Garrett K. Krause
 
   
Garrett K. Krause
 
   
Chairman, CEO, and Director
 
 

 
 
 
 
 
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