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EX-31 - HAVAYA CORP | v205469_ex31.htm |
EX-32 - HAVAYA CORP | v205469_ex32.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
Amendment
No. 1
(Mark
One)
x QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended
September 30, 2010
¨ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from __________ to ____________
Commission
file number: 333-165083
HAVAYA CORP.
|
(Exact
name of Registrant as specified in its
charter)
|
Delaware
|
74-3245242
|
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification
No.)
|
51 Sheshet Hayamim St., Kfar Saba, 44269
Israel
|
(Address
of principal executive offices) (zip
code)
|
1-800-878-5756
|
(Registrant’s
telephone number, including area code)
|
N/A
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
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 ¨ No x
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 ¨ No ¨
Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
Non-accelerated
filer
|
¨
|
Smaller
reporting company
|
x
|
(Do
not check if a smaller reporting company)
|
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes x No ¨
State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date:
As of
November 30, 2010, there were 6,500,000 shares of the Registrant's common stock
issued and outstanding.
HAVAYA
CORP.
TABLE
OF CONTENTS
Part I—Financial
Information
|
|
Item
1. Financial Statements - Unaudited
|
|
Balance
Sheets as of September 30, 2010
|
3
|
Statements
of Operations and Comprehensive (Loss) for the Three Months and Nine
Months Ended September 30, 2010, and Cumulative from
Inception
|
4
|
Statement
of Stockholders’ Equity for the Period from Inception Through September
30, 2010
|
5
|
Statements
of Cash Flows for the Nine Months Ended September 30, 2010 and Cumulative
from Inception
|
6
|
Notes
to Financial Statements September 30, 2010
|
7
|
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
11
|
Item
3. Quantitative and
Qualitative Disclosures About Market Risk
|
12
|
Item
4. Controls and Procedures
|
12
|
Part
II – Other Information
|
|
Item
1. Legal Proceedings
|
13
|
Item
1A. Risk Factors
|
13
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
13
|
Item
3. Defaults upon Senior Securities
|
13
|
Item
4. (Removed and Reserved)
|
13
|
Item
5. Other Information
|
13
|
Item
6. Exhibits
|
13
|
Signatures
|
14
|
PART I - FINANCIAL
INFORMATION
Item 1. Financial
Statements – (Unaudited)
HAVAYA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
AS
OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009
September 30, 2010
|
December 31, 2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 19,079 | $ | 18,543 | ||||
Total
current assets
|
19,079 | 18,543 | ||||||
Total
Assets
|
$ | 19,079 | $ | 18,543 | ||||
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 19,219 | $ | 7,271 | ||||
Due
to shareholders
|
754 | 754 | ||||||
Total
current liabilities
|
19,973 | 8,025 | ||||||
Total
liabilities
|
19,973 | 8,025 | ||||||
Commitments
and Contingencies
|
- | - | ||||||
Stockholders'
Equity (Deficit):
|
||||||||
Common
stock, par value $0.0001 per share, 200,000,000 shares authorized;
6,500,000, and 5,500,000 shares issued and outstanding,
respectively
|
650 | 550 | ||||||
Stock
subscriptions receivable
|
- | (350 | ) | |||||
Additional
paid-in capital
|
59,700 | 39,800 | ||||||
(Deficit)
accumulated during development stage
|
(61,244 | ) | (29,482 | ) | ||||
Total
stockholders' equity (deficit)
|
(894 | ) | 10,518 | |||||
Total
Liabilities and Stockholders' Equity
|
$ | 19,079 | $ | 18,543 |
The
accompanying notes to financial statements are
an
integral part of these statements.
- 3 -
HAVAYA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
FOR
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009, AND
CUMULATIVE
FROM INCEPTION (NOVEMBER 21, 2007)
THROUGH
SEPTEMBER 30, 2010
(Unaudited)
Cumulative
|
||||||||||||||||||||
Three Months Ended
|
Three Months Ended
|
Nine Months Ended
|
Nine Months Ended
|
From
|
||||||||||||||||
September 30, 2010
|
September 30, 2009
|
September 30, 2010
|
September 30, 2009
|
Inception
|
||||||||||||||||
Revenues
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Expenses:
|
||||||||||||||||||||
General
and administrative-
|
||||||||||||||||||||
Marketing
expenses
|
- | - | 1,152 | - | 1,152 | |||||||||||||||
Professional
fees
|
14,648 | - | 24,546 | - | 31,071 | |||||||||||||||
Consulting
fees
|
- | 5,000 | - | 5,000 | 5,000 | |||||||||||||||
Travel
expenses
|
- | - | - | 16,705 | 16,705 | |||||||||||||||
Organization
costs
|
- | - | - | - | 1,500 | |||||||||||||||
Filing
Fees
|
3,023 | - | 5,969 | - | 5,969 | |||||||||||||||
Other
|
29 | 40 | 327 | 792 | 1,235 | |||||||||||||||
Total
general and administrative expenses
|
17,700 | 5,040 | 31,994 | 22,497 | 62,632 | |||||||||||||||
- | ||||||||||||||||||||
(Loss)
from Operations
|
(17,700 | ) | (5,040 | ) | (31,994 | ) | (22,497 | ) | (62,632 | ) | ||||||||||
Other
Income (Expense)
|
||||||||||||||||||||
Gains
(loss) on foreign currency exchange
|
- | - | 199 | 1,156 | 1,355 | |||||||||||||||
Unrealized
gain (loss) on foreign currency
|
910 | - | 33 | - | 33 | |||||||||||||||
Provision
for income taxes
|
- | - | - | - | - | |||||||||||||||
Net
(Loss)
|
$ | (16,790 | ) | $ | (5,040 | ) | $ | (31,762 | ) | $ | (21,342 | ) | $ | (61,244 | ) | |||||
(Loss)
Per Common Share:
|
||||||||||||||||||||
(Loss)
per common share - Basic and Diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Weighted
Average Number of Common Shares Outstanding - Basic and
Diluted
|
6,500,000 | 5,500,000 | 6,093,407 | 4,247,253 |
The
accompanying notes to financial statements are
an
integral part of these statements.
- 4 -
HAVAYA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
FOR
THE PERIOD FROM INCEPTION (NOVEMBER 21, 2007)
THROUGH
SEPTEMBER 30, 2010
(Unaudited)
(Deficit)
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Stock
|
Additional
|
During the
|
||||||||||||||||||||||
Common stock
|
Subscriptions
|
Paid-in
|
Development
|
|||||||||||||||||||||
Description
|
Shares
|
Amount
|
Receivable
|
Capital
|
Stage
|
Totals
|
||||||||||||||||||
Balance
- at inception
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Common
stock issued for cash ($0.0001/share)
|
500,000 | 50 | (50 | ) | - | - | - | |||||||||||||||||
Common
stock issued for cash ($0.0001/share)
|
3,000,000 | 300 | (300 | ) | - | - | - | |||||||||||||||||
Net
(loss) for the period
|
- | - | - | - | (2,640 | ) | (2,640 | ) | ||||||||||||||||
Balance
- December 31, 2008
|
3,500,000 | 350 | (350 | ) | - | (2,640 | ) | (2,640 | ) | |||||||||||||||
Common
stock issued for cash ($0.02/share)
|
2,000,000 | 200 | - | 39,800 | - | 40,000 | ||||||||||||||||||
Net
(loss) for the period
|
- | - | - | - | (26,842 | ) | (26,842 | ) | ||||||||||||||||
Balance
-December 31, 2009
|
5,500,000 | 550 | (350 | ) | 39,800 | (29,482 | ) | 10,518 | ||||||||||||||||
Stock
subscriptions payment received
|
- | 350 | - | - | 350 | |||||||||||||||||||
Common
stock issued for cash ($0.02/share)
|
1,000,000 | 100 | - | 19,900 | - | 20,000 | ||||||||||||||||||
Net
(loss) for the period
|
- | - | - | - | (31,762 | ) | (31,762 | ) | ||||||||||||||||
Balance
-September 30, 2010
|
6,500,000 | $ | 650 | $ | - | $ | 59,700 | $ | (61,244 | ) | $ | (894 | ) |
The
accompanying notes to financial statements are
an
integral part of these statements.
- 5 -
HAVAYA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CASH FLOWS (UNAUDITED)
FOR
NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009, AND CUMULATIVE FROM INCEPTION
(NOVEMBER 21, 2007)
THROUGH
SEPTEMBER 30, 2010
(Unaudited)
Cumulative
|
||||||||||||
Nine Months Ended
|
Nine Months Ended
|
From
|
||||||||||
September 30, 2010
|
September 30, 2009
|
Inception
|
||||||||||
Operating
Activities:
|
||||||||||||
Net
(loss)
|
$ | (31,762 | ) | $ | (21,342 | ) | $ | (61,244 | ) | |||
Adjustments
to reconcile net (loss) to net cash provided by operating
activities:
|
||||||||||||
Changes
in net assets and liabilities- Accounts payable and accrued
liabilities
|
11,948 | (115 | ) | 19,219 | ||||||||
Net
Cash Used in Operating Activities
|
(19,814 | ) | (21,457 | ) | (42,025 | ) | ||||||
Investing
Activities:
|
||||||||||||
Cash
used by investing activities
|
- | - | - | |||||||||
Net
Cash Used by Investing Activities
|
- | - | - | |||||||||
Financing
Activities:
|
||||||||||||
Proceeds
from shareholder loans
|
- | - | 754 | |||||||||
Proceeds
from common stock
|
20,350 | 40,000 | 60,350 | |||||||||
Net
Cash Provided by Financing Activities
|
20,350 | 40,000 | 61,104 | |||||||||
Net
Increase (Decrease) in Cash
|
536 | 18,543 | 19,079 | |||||||||
Cash
- Beginning of Period
|
18,543 | - | - | |||||||||
Cash
- End of Period
|
$ | 19,079 | $ | 18,543 | $ | 19,079 | ||||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||||||
Cash
paid during the period for:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | - | ||||||
Income
taxes
|
$ | - | $ | - | $ | - |
The
accompanying notes to financial statements are an integral part of these
statements.
- 6 -
HAVAYA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
Basis
of Presentation and Organization
Havaya
Corp. (the “Company”) is in the development stage, and has limited operations.
The Company was incorporated under the laws of the State of Delaware on November
21, 2007 and began activity in 2008. The business plan of the Company is to
import and market home teeth whitening kits. The accompanying financial
statements of the Company were prepared from the accounts of the Company under
the accrual basis of accounting.
Unaudited
Interim Financial Statements
The
interim financial statements of the Company as of September 30, 2010, and for
the periods then ended, and cumulative from inception, are unaudited. However,
in the opinion of management, the interim financial statements include all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the Company’s financial position as of September 30, 2010, and
the results of its operations and its cash flows for the periods ended September
30, 2010, and cumulative from inception. These results are not necessarily
indicative of the results expected for the calendar year ending December 31,
2010. The accompanying financial statements and notes thereto do not reflect all
disclosures required under accounting principles generally accepted in the
United States. Refer to the Company’s audited financial statements as of
December 31, 2009, filed with the SEC, for additional information, including
significant accounting policies.
Cash and Cash
Equivalents
For
purposes of reporting within the statement of cash flows, the Company considers
all cash on hand, cash accounts not subject to withdrawal restrictions or
penalties, and all highly liquid debt instruments purchased with a maturity of
three months or less to be cash and cash equivalents.
Revenue
Recognition
The Company is in the development stage
and has yet to realize revenues from operations. Once the Company has commenced
operations, it will recognize revenues when delivery of goods or completion of
services has occurred provided there is persuasive evidence of an agreement,
acceptance has been approved by its customers, the fee is fixed or determinable
based on the completion of stated terms and conditions, and collection of any
related receivable is probable.
Loss
per Common Share
Basic
loss per share is computed by dividing the net loss attributable to the common
stockholders by the weighted average number of shares of common stock
outstanding during the period. Fully diluted loss per share is computed similar
to basic loss per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. There were no dilutive financial instruments issued or outstanding for
the period ended September 30, 2010.
Income
Taxes
The
Company accounts for income taxes pursuant to FASB ASC 740. Deferred tax assets
and liabilities are determined based on temporary differences between the bases
of certain assets and liabilities for income tax and financial reporting
purposes. The deferred tax assets and liabilities are classified according to
the financial statement classification of the assets and liabilities generating
the differences.
The
Company maintains a valuation allowance with respect to deferred tax assets. The
Company establishes a valuation allowance based upon the potential likelihood of
realizing the deferred tax asset and taking into consideration the Company’s
financial position and results of operations for the current period. Future
realization of the deferred tax benefit depends on the existence of sufficient
taxable income within the carryforward period under the Federal tax
laws.
- 7 -
Changes
in circumstances, such as the Company generating taxable income, could cause a
change in judgment about the realizability of the related deferred tax asset.
Any change in the valuation allowance will be included in income in the year of
the change in estimate.
Fair
Value of Financial Instruments
The
Company estimates the fair value of financial instruments using the available
market information and valuation methods. Considerable judgment is required in
estimating fair value. Accordingly, the estimates of fair value may not be
indicative of the amounts the Company could realize in a current market
exchange. As of September 30 and 2010, December 31, 2009, the carrying value of
accounts payable-trade and accrued liabilities approximated fair value due to
the short-term nature and maturity of these instruments.
Deferred
Offering Costs
The
Company defers as other assets the direct incremental costs of raising capital
until such time as the offering is completed. At the time of the completion of
the offering, the costs are charged against the capital raised. Should the
offering be terminated, deferred offering costs are charged to operations during
the period in which the offering is terminated.
Common
Stock Registration Expenses
The
Company considers incremental costs and expenses related to the registration of
equity securities with the SEC, whether by contractual arrangement as of a
certain date or by demand, to be unrelated to original issuance transactions. As
such, subsequent registration costs and expenses are reflected in the
accompanying financial statements as general and administrative expenses, and
are expensed as incurred.
Lease
Obligations
All
non-cancellable leases with an initial term greater than one year are
categorized as either capital leases or operating leases. Assets recorded under
capital leases are amortized according to the methods employed for property and
equipment or over the term of the related lease, if shorter.
Estimates
The
financial statements are prepared on the basis of accounting principles
generally accepted in the United States. The preparation of financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities as of September 30, 2010 and December 31, 2009, and expenses for the
three months and nine months ended September 30, 2010 and 2009, and cumulative
from inception. Actual results could differ from those estimates made by
management.
Fiscal
Year End
The
Company has adopted a fiscal year end of December 31.
2.
Development Stage
Activities and Going Concern
The
Company is currently in the development stage, and has not commenced operations.
The business plan of the Company is to import and market home teeth whitening
kits.
During
the period ended December 31, 2009, the Company offered a capital formation
activity through a PPO, exempt from registration under the Securities Act of
1933, to raise up to $40,000 through the issuance of 2,000,000 shares of its
common stock, par value $0.0001 per share, at an offering price of $0.02 per
share. As of December 31, 2009, the Company raised $40,000 in proceeds with the
issuance of 2,000,000 shares of its common stock.
- 8 -
The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which contemplate
continuation of the Company as a going concern. The Company has not established
any source of revenues to cover its operating costs, and as such, has incurred
an operating loss since inception. Further, as of September 30, 2010 the cash
resources of the Company were insufficient to meet its current business plan.
These and other factors raise substantial doubt about the Company’s ability to
continue as a going concern. The accompanying financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Company to
continue as a going concern.
3.
Common
Stock
On July
15, 2008, the Company issued 3,000,000 shares of common stock to an officer and
director of the Company, for cash payment of $300.
On
November 24, 2008, the Company issued 500,000 shares of common stock to an
officer and director of the Company, for cash payment of $50.
On
January 31, 2009, the Company began a capital formation activity through a PPO,
exempt from registration under the Securities Act of 1933, to raise up to
$40,000 through the issuance of 2,000,000 shares of its common stock, par value
$0.0001 per share, at an offering price of $0.02 per share. As of December 31,
2009, the Company had received $40,000 in proceeds from the PPO.
The
Company also commenced an activity to submit a Registration Statement on Form
S-1 to the Securities and Exchange Commission (“SEC”) to register 2,000,000 of
its outstanding shares of common stock on behalf of selling stockholders. The
Company will not receive any of the proceeds of this registration activity once
the shares of common stock are sold.
On April
22, 2010, the Company issued 1,000,000 shares of common stock to officers and
directors of the Company, for cash payment of $20,000.
4.
Income
Taxes
The
provision (benefit) for income taxes for the periods ended September 30, 2010
and 2009 was as follows (assuming a 23% effective tax rate):
2010
|
2009
|
|||||||
Current
Tax Provision:
|
||||||||
Federal-
|
||||||||
Taxable
income
|
$ | - | $ | - | ||||
Total
current tax provision
|
$ | - | $ | - | ||||
Deferred
Tax Provision:
|
||||||||
Federal-
|
||||||||
Loss
carryforwards
|
$ | 7,305 | $ | 4,909 | ||||
Change
in valuation allowance
|
(7,305 | ) | (4,909 | ) | ||||
Total
deferred tax provision
|
$ | - | $ | - |
The
Company had deferred income tax assets as of September 30, 2010 and December 31,
2009, as follows:
2010
|
2009
|
|||||||
Loss
carryforwards
|
$ | 14,086 | $ | 6,781 | ||||
Less
- Valuation allowance
|
(14,086 | ) | (6,781 | ) | ||||
Total
net deferred tax assets
|
$ | - | $ | - |
- 9 -
The
Company provided a valuation allowance equal to the deferred income tax assets
for the periods ended September 30, 2010 and December 31, 2009 because it is not
presently known whether future taxable income will be sufficient to utilize the
loss carryforwards.
As of
September 30, 2010, the Company had approximately $61,244 in tax loss
carry-forwards that can be utilized in future periods to reduce taxable income,
and expire by the year 2030.
The
federal income tax returns of the Company are subject to examination by the IRS,
generally for three years after they are filed.
5. Related
Party Loans and Transactions
On July
15, 2008, the Company issued 3,000,000 shares of common stock to an officer and
director of the Company, for cash payment of $300.
On
November 24, 2008, the Company issued 500,000 shares of common stock to an
officer and director of the Company, for cash payment of $50.
On April
22, 2010, the Company issued 1,000,000 shares of common stock to officers and
directors of the Company, for cash payment of $20,000.
As of
September 30, 2010, loans from related parties amounted to $754, and represented
working capital advances from officers who are also stockholders of the Company.
The loans are unsecured, non-interest bearing, and due on demand.
6. Recent Accounting
Pronouncements
In April
2009, the FASB issued FSP No. FAS 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”), codified
in FASB ASC 820-10-65, which provides additional guidance for estimating fair
value in accordance with ASC 820-10 when the volume and level of activity for an
asset or liability have significantly decreased. ASC 820-10-65 also includes
guidance on identifying circumstances that indicate a transaction is not
orderly. The adoption of ASC 820-10-65 did not have an impact on the Company's
results of operations or financial condition.
In May
2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165") codified in
FASB ASC 855-10-05, which provides guidance to establish general standards of
accounting for and disclosures of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. FASB
ASC 855-10-05 also requires entities to disclose the date through which
subsequent events were evaluated as well as the rationale for why that date was
selected. FASB ASC 855-10-05 is effective for interim and annual periods ending
after June 15, 2009. FASB ASC 855-10-05 requires that public entities evaluate
subsequent events through the date that the financial statements are
issued.
In June
2009, the FASB issued SFAS No. 166, "Accounting for Transfers of Financial
Assets - an amendment of FASB Statement No. 140" ("SFAS 166"), codified as FASB
ASC 860, which requires entities to provide more information regarding sales of
securitized financial assets and similar transactions, particularly if the
entity has continuing exposure to the risks related to transferred financial
assets. FASB ASC 860 eliminates the concept of a "qualifying special-purpose
entity," changes the requirements for derecognizing financial assets and
requires additional disclosures. FASB ASC 860 is effective for fiscal years
beginning after November 15, 2009. The adoption of FASB ASC 860 did not have an
impact on the Company's financial condition, results of operations or cash
flows.
In June
2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No.
46(R)" ("SFAS 167"), codified as FASB ASC 810-10, which modifies how a company
determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be consolidated. FASB ASC
810-10 clarifies that 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. FASB ASC 810-10 requires
an ongoing reassessment of whether a company is the primary beneficiary of a
variable interest entity. FASB ASC 810-10 also requires additional disclosures
about a company's involvement in variable interest entities and any significant
changes in risk exposure due to that involvement. FASB ASC 810-10 is effective
for fiscal years beginning after November 15, 2009. The adoption of FASB ASC
810-10 did not have an impact on the Company's financial condition, results of
operations or cash flows.
In June
2009, the FASB issued FASB ASC 105, Generally Accepted Accounting Principles,
which establishes the FASB Accounting Standards Codification as the sole source
of authoritative generally accepted accounting principles. Pursuant to the
provisions of FASB ASC 105, we have updated references to GAAP in our financial
statements. The adoption of FASB ASC 105 did not impact the Company's financial
position or results of operations.
- 10 -
7. Concentration of Credit
Risk
The
Company’s cash and cash equivalents are invested in a major bank
in Israel and are not insured. Management believes that the financial
institution that holds the Company’s investments is financially sound.
Accordingly, minimal credit risk exists with respect to these
investments.
Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
FORWARD-LOOKING
STATEMENTS
Certain statements that the Company
may make from time to time, including all statements contained in this report
that are not statements of historical fact, constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 and the safe harbour provisions set forth in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements may be identified by words such as “plans,”
“expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should,”
and other words of similar meaning used in conjunction with, among other things,
discussions of future operations, financial performance, product development and
new product launches, market position and expenditures. The Company assumes no
obligation to update any forward-looking statements. Additional information concerning
factors which could cause differences between forward-looking statements and
future actual results is discussed under the heading “Risk Factors” in the
Company’s Registration Statement on Form S-1, as filed with the SEC and
effective from November 12, 2010 (“Registration Statement”).
Executive
Overview
We are a
development stage company with limited operations and no revenues from our
business operations. Our auditors have issued a going concern opinion. This
means that our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months. We do not anticipate that we
will generate significant revenues until we are able to market the private label
teeth whitening kits and generate customers. Accordingly, we must raise cash
from sources other than our operations in order to implement our marketing
plan.
In our
management’s opinion, there is a market for reasonably priced teeth whitening
kits intended for application at home.
We
believe that we will need to raise an additional $103,200 in order to allow us
to begin our market development and to remain in business for twelve months. We
expect to begin to generate revenues in January 2011. If we raise the necessary
funds, but are unable to generate revenues for any reason, or if we are unable
to make a reasonable profit, we may have to suspend or cease operations. At the
present time, we have not made any arrangements to raise additional cash to
finance our operations. We may seek to obtain additional funds through a second
public offering, a private placement of securities, or loans. Other than as
described in this paragraph, we have no financing plans at this time, except for
a commitment by our directors to loan us up to $10,000 in the aggregate, if
necessary to help cover our costs to comply with the federal securities laws
over the next 12 months.
Our goal
is to become a leading seller of teeth whitening kits for the home market.
Assuming we raise the additional funds necessary for us to operate our business,
our plan of operation is as follows:
|
·
|
Commence a test marketing
campaign
|
|
·
|
Market our teeth whitening kits
with a campaign which will entail advertising on cable TV and through
internet marketing.
|
|
·
|
Purchase
privately labeled teeth whitening kits for resale to
customers.
|
Results
of Operations
During
the period from November 21, 2007 (date of inception) through September 30,
2010, we incurred a net loss of $19,760. This loss consisted primarily of
general and administrative expenses, comprising professional fees paid for legal
and accounting services provided to us, travel expenses related to two business
trips to the Far East by a consultant to evaluate potential suppliers of teeth
whitening systems, and consulting fees for assistance with the writing of our
business plan. Since inception, we have sold 4,500,000 shares of common stock to
our Directors.
- 11 -
Revenues
We had no
revenues for the period from November 21, 2007 (date of inception) through
September 30, 2010.
Liquidity
and Capital Resources
Our
balance sheet as of September 30, 2010 reflects assets of $19,079. Cash and cash
equivalents from inception to date have been insufficient to provide the working
capital necessary to operate to date. We anticipate generating losses
and, therefore, may be unable to continue operations in the future. If we
require additional capital, we would have to issue debt or equity or enter into
a strategic arrangement with a third party. There can be no assurance that
additional capital will be available to us. We currently have no agreements,
arrangements or understandings with any person to obtain funds through bank
loans, lines of credit or any other sources.
Going
Concern Consideration
Our
independent auditors included an explanatory paragraph in their report on the
financial statements attached to our Registration Statement regarding concerns
about our ability to continue as a going concern. Our financial statements for
the fiscal period ended September 30, 2010 contain additional note disclosures
describing the circumstances that lead to this disclosure by our independent
auditors.
Off-Balance
Sheet Arrangements
We have
no off-balance sheet arrangements.
CRITICAL
ACCOUNTING POLICIES
Financial
Reporting Release No. 60, published by the SEC, recommends that all companies
include a discussion of critical accounting policies used in the preparation of
their 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.
The
accounting policies identified as critical are as follows:
Development
Stage Company
We are
considered a development stage company as defined by ASC 915 “Development Stage
Entities,” as we have no principal operations or revenue from any source.
Operations from the inception of the development stage have been devoted
primarily to strategic planning, raising capital and research and development
activities.
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 and disclosures in
the financial statements. Actual results could differ from those
estimates.
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
Not
Applicable.
Item
4. Controls and Procedures.
We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms, and that such information is accumulated and
communicated to our management, including our president (who is acting as our
principal executive officer) and our chief financial officer (who is acting as
our principal financial officer and principal accounting officer) to allow for
timely decisions regarding required disclosure. In designing and
evaluating our disclosure controls and procedures, our management recognizes
that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and our management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
- 12 -
As of
September 30, 2010, the end of the nine-month period covered by this Quarterly
Report, we carried out an evaluation, under the supervision and with the
participation of our management, including our president and our chief financial
officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on the foregoing, our president and
our chief financial officer concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this quarterly
report.
There
have been no significant changes in our internal controls over financial
reporting that occurred during the quarter ended September 30, 2010, that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings.
We are
not currently subject to any material legal proceedings, nor, to our knowledge,
is any material legal proceeding threatened against us. However, from
time to time, we may become a party to certain legal proceedings in the ordinary
course of business.
Item
1A. Risk Factors.
Not
Applicable.
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior
Securities.
None.
Item 4. (Removed and
Reserved).
Not
applicable.
Item 5. Other
Information.
None.
Item
6. Exhibits
Exhibit No.
|
Description
|
|
3.1
|
Articles
of Incorporation (Incorporated by reference from our Registration
Statement on Form S-1).
|
|
3.2
|
Bylaws
(Incorporated by reference from our Registration Statement on Form
S-1).
|
|
4.1
|
Specimen
ordinary share certificate (Incorporated by reference from our
Registration Statement on Form S-1).
|
|
31*
|
Section
302 Certification of the Sarbanes-Oxley Act of 2002 of Avraham
Grundman.
|
|
32*
|
|
Section
906 Certification of the Sarbanes-Oxley Act of 2002 of Avraham
Grundman.
|
* Filed
herewith.
- 13 -
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: December
14 2010
HAVAYA
CORP.
|
|
/s/ Avraham Grundman |
|
Avraham
Grundman
|
|
President,
Chief Executive Officer, Chief Financial Officer and a member of the Board
of Directors
|
|
(who
also performs as the Principal Executive and Principal Financial and
Accounting Officer)
|
|
November
30,
2010
|
- 14 -