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EX-31.2 - KAIBO FOODS Co Ltdv205894_ex31-2.htm
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EX-31.1 - KAIBO FOODS Co Ltdv205894_ex31-1.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
(Amendment No. 1)
 
¨  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2009
 
or
 
¨      TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _____________ to ________________

Commission file number: 333-149294

CFO CONSULTANTS, INC. 

(Exact name of registrant as specified in its charter)

Nevada
 
42-1749358
(State or other jurisdiction of
   
incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
Rm. 2102 F & G, Nan Fung Centre, 264-298 Castle Peak Rd.
   
Tsuen Wan, N.T., Hong Kong
   
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code:   +852 2412 2208
 
Securities registered pursuant to Section 12(b) of the Act: None
 
Name of each exchange on which registered:
 
Securities registered pursuant to Section 12(g) of the Act:  Common Stock, par value $0.001 per share
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No  x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨  No  x
 
Indicate by check mark whether the registrant (1) has filed all reports required 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  x  No ¨

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 (§229.405 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x
 
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.

Large accelerated filer ¨
Accelerated filer ¨
   
Non-accelerated filer ¨
Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
  
For the year ended December 31, 2009, the issuer had no revenues.
 
As of March 31, 2009, there was no active trading market for the issuer’s common stock, $.001 par value.  The issuer has been cleared to trade on the OTC:BB.
 
The number of shares outstanding of the issuer’s common stock, $.001 par value, as of March 31, 2009 was 5,655,000 shares.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
None. 

 
 

 
 
Explanatory Note
 
This Amendment No. 1 to the Annual Report on Form 10-K filed by CFO Consultants, Inc., a Nevada corporation (“we,” “our,” “us,” or the “Company”), on April 6, 2010 is being filed to (i) include audited balance sheets of CFO Consultants, Inc. as of December 31, 2009 and 2008, and the related statements of operations, stockholders' equity (deficit), and cash flows for the period from the date of inception on December 10, 2007 to December 31, 2009, (ii) include a new audit report of Sam Kan & Company, our independent registered public accounting firm, for the period covered by the financial statements, (iii) include an updated Exhibit List in Item 15, (iv) include updated Exhibit 31 and 32 certifications for our principal executive and financial officers, and (iv) update the disclosure in Item 9A.

Except as specifically referenced herein, this Amendment No. 1 to Annual Report on Form 10-K/A does not reflect any event occurring subsequent to April 6, 2009, the filing date of the original report, and no other changes have been made to the report.
 

 
Item 9A(T)

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our president and chief financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, the president and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our president and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2009. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Our management has concluded that, as of December 31, 2009, our internal control over financial reporting are not effective based on these criteria. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
 
We have noted the following deficiencies in our control environment: a) the lack of an internal audit function or other effective mechanism for ongoing monitoring of the effectiveness of internal controls and b) insufficient documentation and communication of our accounting policies and procedures as of December 31, 2009.
 
We have noted the following deficiencies in the staffing of our financial accounting department: The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources.
 
Prior to October 21, 2010, we were a shell company.  On October 21, 2010, we acquired Hong Kong Wai Bo International Limited, which wholly owns our newly acquired operating companies.  Following this acquisition, and in order to rectify these deficiencies, we have implemented a new control environment and hired a new Principal Accounting Officer who has audit experience and who is familiar with US GAAP.
 
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities Exchange Commission that permit the company to provide only management’s report in this annual report.
 
(c) Changes in Internal Control over Financial Reporting
  
There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
Item 15.  Exhibits and Financial Statement Schedules.
 
Financial Statements
Financial statements filed as part of this report:
 
 
·
Consolidated Balance Sheets of CFO Consultants, Inc. as of December 31, 2009 and 2008
·
Statements of Operations for the period from the date of inception on December 10, 2007 to December 31, 2009
 
·
Statement of Changes in Stockholders' Equity (Deficiency) for the period from the date of inception on December 10, 2007 to December 31, 2009
 
·
Statement of Cash Flows for the years ended December 31, 2009 and 2008 and for the period from the date of inception on December 10, 2007 to December 31, 2009
 
·
Notes to financial statements
 
Exhibits
 
Exhibit No.
 
Description
31.1
 
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
 
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
 
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 

 

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
CFO CONSULTANTS, INC.
   
Date: December 21, 2010
 
   
 
By:
/s/ Joanny Kwok
 
   
Joanny Kwok, President
 
 
 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: December 21, 2010
   
     
   
By:
/s/ Joanny Kwok
 
     
Joanny Kwok, President and Director
 
     
(Principal Executive Officer)
 
   
 
Date: December 21, 2010
   
     
   
By:
/s/ Ken Tsang
 
     
Ken Tsang, Chief Financial Officer
 
     
(Principal Financial and Accounting Officer)
 
   
 
   
 
 
 
 

 

CFO CONSULTANTS, INC.

(A DEVELOPMENT STAGE COMPANY)

AUDITED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED

DECEMBER 31, 2009

SAM KAN AND COMPANY
1151 HARBOR BAY PKWY, STE 101
ALAMEDA, CA 94502

 
 

 
 
TABLE OF CONTENTS
 
Page
   
INDEPENDENT AUDITOR’S REPORT
F-3
   
FINANCIAL STATEMENTS
 
   
Balance Sheet
F-4
   
Statement of Operations
F-5
   
Statement of Cash Flows
F-6
   
Statement of Stockholders’ Equity
F-7
   
Notes to Financial Statements
F-8
 
 
F-2

 
 
 


Report of Independent Registered Public Accounting Firm
 

To the Board of Directors of
CFO Consultants, Inc.
(A Development Stage Company)
Palm Springs, California 
 
We have audited the accompanying balance sheets of CFO Consultants, Inc. as of December 31, 2009 and 2008, and the related statements of operations, stockholders' equity (deficit), and cash flows for the period from the date of inception on December 10, 2007 to December 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CFO Consultants, Inc. (A Development Stage Company) as of December 31, 2009 and 2008, and the results of their operations and their cash flows for the period from the date of inception on December 10, 2007 to December 31, 2009 then ended in conformity with U.S. generally accepted accounting principles.
 
We were not engaged to examine management's assessment of the effectiveness of CFO Consultants, Inc.’s internal control over financial reporting as of December 31, 2009 and 2008, and accordingly, we do not express an opinion thereon.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note B to the consolidated financial statements, the Company has suffered recurring losses and has experienced negative cash flows from operations, which raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to those matters are also described in Note B to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 

Sam Kan & Company,
March 31, 2010
Alameda, California 
 
 
F-3

 
CFO CONSULTANTS, INC.
(A Development Stage Enterprise)
Balance Sheets

   
December 31,
 
   
2009
   
2008
 
ASSETS
           
    
 
   
 
 
Current assets
       
    
 
Cash
    113         960  
Prepaid Expenses
  $ -     $ -  
Accounts receivable
               
Total current assets
    113         960  
                 
Total assets
  $ 113     $ 960  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
Current liabilities
               
Accounts payable
  $ 4,230     $ -  
Total current liabilities
    4,230         -  
                 
Stockholders' Deficit
               
Common stock, $.0001 par value; 75,000,000 shares authorized, 5,655,000 and 5,580,000 shares issued and outstanding at December 30, 2009 and 2008
    5,655         5,580  
Additional paid in capital
    24,145         23,470  
Deficit accumulated during the development stage
    (33,917 )        (28,090 )
Total stockholders' deficit
    (4,117 )       (960 )
                 
Total liabilities and stockholders' deficit
  $ 113     $ 960  
 
See accompanying notes to financial statements

 
F-4

 

CFO CONSULTANTS, INC.
(A Development Stage Enterprise)
Statement of Operations

   
 
Year Ended 
December 31,
2009
   
For Year Ended
December, 31 2008
   
For the period from 
December 10, 2007 
(inception) to 
December 31, 2009
 
   
           
Revenue
  $ -     $ -     $ -  
   
                       
Expenses
                       
  General and administrative
    5,827       28,090       33,917  
Total expenses
    5,827       28,090       33,917  
   
                       
Net loss
  $ (5,827 )   $ (28,090 )   $ (33,917 )
   
                       
Basic and diluted loss per common share
  $ (0.0012 )   $ (0.0063 )        
   
                       
Weighted average shares outstanding
    5,051,414       4,456,226          

See accompanying notes to financial statements

 
F-5

 
 
CFO CONSULTANTS, INC.
(A Development Stage Enterprise)
Statements of Cash Flows

   
Year Ended 
December 31,
2009
   
Year Ended
December
31, 2008
   
For the period
from
December 10,
2007
(inception) to
December 31,
2009
 
Cash flows from operating activities
                 
Net loss
  $ (5,827 )   $ (28,090 )   $ (33,917 )
Changes in operating assets and liabilities
                       
                         
Stock Issuance for services
    750       -       750  
Prepaid expenses
    -       -       -  
Accounts payable
    4,230       -       4,230  
Net cash used in operating activities
    (847 )     (28,090 )     (28,937 )
                         
Cash flows from investing activities
    -       -       -  
                         
Cash flows from financing activities
                       
Common stock issued for services
    -       -       -  
Proceeds from sale of stock
    -       21,300       7,750  
Net cash provided by financing activities
    -       21,300       7,750  
                         
Net change in cash
    (847 )     (6,790 )     (21,187 )
                         
Cash at beginning of period
    960       7,750       -  
                         
Cash at end of period
  $ 113     $ 960     $ 113  
                         
Supplemental disclosure of non-cash investing and financing activities
                       
Issuance of 75,000 and 2,130,000 shares of common stock for professional and consulting services for years ended December 31, 2009 and 2008 respectively
  $ 750     $ -     $ 750  
                         
Supplemental cash flow Information:
                       
Cash paid for interest
  $ -     $ -     $ -  
Cash paid for income taxes
  $ -     $ -     $ -  
 
See accompanying notes to financial statements

 
F-6

 

CFO CONSULTANTS, INC.
(A Development Stage Enterprise)
Statement of Changes in Stockholders' Deficit
 
    
Common Stock
   
Additional Paid
   
Accumulated
       
   
Shares
   
Amount
   
In Capital
   
Deficit
   
Total
 
Balance, December 31, 2007 (Inception)
    3,450,000     $ 3,450     $ 4,300     $ -     $ 7,750  
Common stock issued for cash
    2,130,000       2,130       19,170       -       21,300  
Net loss, period ended December 31, 2008
    -       -       -       (28,090 )     (28,090 )
Balance, December 31,, 2008
    5,580,000       5,580       23,470       (28,090 )     (960 )
                                         
Common stock issued for cash
    75,000       75       675       -       750  
Net loss, year ended December 31, 2009
    -       -       -       (5,827 )     (5,827 )
Balance,December 31, 2009
    5,655,000     $ 5,655     $ 24,145     $ (33,917 )   $ 4,117 )
 
See accompanying notes to financial statements

 
F-7

 

CFO Consultants, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 2009 and 2008

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting policies of CFO Consultants, Inc. (A Development Stage Company) (the Company) is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. The Company has not realized revenues from its planned principal business purpose and is considered to be in its development state in accordance with ASC 915, “Development Stage Entities”, formerly known as SFAS 7, “Accounting and Reporting by Development State Enterprises.”

Organization, Nature of Business and Trade Name

CFO Consultants, Inc. (the Company) was incorporated in the State of Nevada on December 10, 2007. CFO Consultants, Inc. was established to assist companies in their need for CFO’s and CFO related service. The Company has elected a fiscal year end of December 31st.

Basis of Presentation

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 at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

Use of Estimates

The preparation of financial statements in 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  A change in managements’ estimates or assumptions could have a material impact on CFO Consultants, Inc.’s financial condition and results of operations during the years in which such changes occurred. Actual results could differ from those estimates. CFO Consultants, Inc.’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the years presented.

Property and Equipment

Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets.
 
 
F-8

 

CFO Consultants, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 2009 and 2008

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property and Equipment (continued)

The estimated useful lives of depreciable assets are:

 
Estimated
Useful Lives
Office Equipment
5-10 years
Copier
5-7   years
Vehicles
5-10 years

For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For audit purposes, depreciation is computed under the straight-line method.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents.

Revenue and Cost Recognition

The Company provides custom solutions for business management needs. The Company reports income and expenses on the accrual basis of accounting, whereby income is recorded when it is earned and expenses recorded when they are incurred. In this specific industry revenue from jobs is recognized as stipulated in each contract for services. The Company currently has not met any contract terms for recognition of revenue.

Cost of Goods Sold

Job costs include all direct materials, and labor costs and those indirect costs related to contracted services. Selling, general and administrative costs are charged to expense as incurred.

Advertising

Advertising expenses related to specific jobs are allocated and classified as costs of goods sold. Advertising expenses not related to specific jobs are recorded as general and administrative expenses.

 
F-9

 

CFO Consultants, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 2009 and 2008

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stockholders’ Equity: Common stock

In December 2007, the Company undertook a private offering of Two Million (2,000,000) shares of common stock. The stock was offered with a price of .00315 per share. The private offering was made to Orion Investment Partners through a subscription agreement that the shares were purchased with the intention of holding the securities for investment purposes, with no intention of dividing or allowing others to participate in this investment or to sell the securities for at least one year in the event that the company becomes registered with the Securities and Exchange Commission.

In December 2007, the Company issued One Million Four Hundred Fifty Thousand (1,450,000) shares of common stock to its officer and director, Norbert LeBoeuf. This stock was issued to Mr. LeBoeuf at $0.001 per share which was estimated as the market value of share price.

In the subscription agreement the purchaser specifically agrees that if the Company has an initial public offering prior to March 15, 2008, and the underwriter in such offering requires the existing shareholders of the Company to agree to a lock-up period during which such shareholders will not dispose of or pledge their securities, the purchasers agree to the lock-up period prescribed by the underwriter.

On February 19, 2008, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission registering 5,000,000 shares of common stock in a direct public offering, without any involvement of underwriters or broker-dealers with a minimum offering of 2,000,000 shares.    On August 18, 2008 the Company closed its offering after having sold 2,130,000 newly issued common shares.

On January 26, 2009, the Company issued 75,000 shares of common stock at $0.01 per share to the professional who provided legal and consulting services to the Company. The fair market value of $0.01 was used based on the offering price in Form S-1. Net loss per share is calculated in accordance with ASC 260, “Earnings Per Share,” formerly known as SFAS No. 128, “Earnings Per Share.”  The weighted-average number of common shares outstanding during each period is used to compute basic loss per share.  Diluted loss per share is computed using the weighted averaged number of shares and dilutive potential common shares outstanding.  Dilutive potential common shares are additional common shares assumed to be exercised.

Basic net loss per common share is based on the weighted average number of shares of common stock outstanding during 2009 and since inception.  As of Dec. 31, 2009, the Company had 5,655,000 common shares outstanding.  As of Dec. 31, 2009 and since inception, the Company had no dilutive potential common shares.

Basic Loss Per Share

The computations of basic loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements. There are no common stock equivalents outstanding.

   
Loss
   
Shares
   
Per Share
 
   
(Numerator)
   
(Denominator)
   
Amount
 
From Inception on December 10, 2007 to Period Ended Dec. 31, 2009
  $ (33,917 )   $ 5,051,414     $ (0.0067 )
 
 
F-10

 

CFO Consultants, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 2009 and 2008

Provision for Income Taxes

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely that not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 
Net deferred tax assets consist of the following components from Inception on December 10, 2007 to December 31, 2009:

   
2009
 
Deferred tax assets NOL Carryover
  $ 11,532  
Valuations Allowance
    (11,532 )
Net Deferred Tax Asset
  $ 0  

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations for the periods ended Dec. 31, 2009 due to the following:

On December 31, 2009, the Company had an operating loss carry forward of $11,532 that can be used as an offset against future taxable income. No tax benefit has been reported in the December 31, 2009 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards for Federal income tax reporting purposes are subject to annual limitations.  Should a change in ownership occur, net operating loss carry forwards may be limited as to use in the future.

Recently Issued Accounting Pronouncements

On July 1, 2009, Financial Accounting Standards Board (“FASB”) Accounting Standards Codification™ (“ASC”) became the sole source of authoritative Generally Accepted Accounting Principles (“GAAP”) literature recognized by the Financial Accounting Standards Board for financial statements issued for interim and annual periods ending after September 15, 2009. Rules and interpretive releases of the Security Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Except for applicable SEC rules and regulations and a limited number of grandfathered standards, all other sources of GAAP for nongovernmental entities were superseded by the issuance of ASC. ASC did not change GAAP, but rather combined the sources of GAAP and the framework for selecting among those sources into a single source. Accordingly, the adoption of ASC had no impact on the financial results of the Company.

In May 2008, FASB issued Financial Accounting Standards No. 163, “Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.

 
F-11

 

CFO Consultants, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 2009 and 2008
 
Recently Issued Accounting Pronouncements (continued)

This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years.

In May 2008, FASB issued Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. This pronouncement has no effect on this Company’s financial reporting at this time.

In March of 2008 the Financial Accounting Standards Board (FASB) issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133, “Accounting for Derivatives and Hedging Activities.”  SFAS No. 161 has the same scope as Statement No. 133 but requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged.  The statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption.  SFAS No. 161 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In December, 2007, the FASB issued SFAS No. 160, “Non-controlling interests in Consolidated Financial Statements, an amendment of ARB No. 51.”   SFAS No. 160 applies to “for-profit” entities that prepare consolidated financial statements where there is an outstanding non-controlling interest in a subsidiary.  The Statement requires that the non-controlling interest be reported in the equity section of the consolidated balance sheet but identified separately from the parent.  The amount of consolidated net income attributed to the non-controlling interest is required to be presented, clearly labeled for the parent and the non-controlling entity, on the face of the consolidated statement of income.  When a subsidiary is de-consolidated, any retained non-controlling interest is to be measured at fair value.  Gain or loss on de-consolidation is recognized rather than carried as the value of the retained investment.  The Statement is effective for fiscal years and interim periods beginning on or after December 15, 2008.  It cannot be adopted earlier but, once adopted, is to be applied retroactively.  This pronouncement has no effect on this Company’s financial reporting at this time.

In December 2007, the FASB issued SFAS No.141 (revised 2007), “Business Combinations” (“SFAS 141(R)”) and SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements” (“SFAS 160”).

 
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CFO Consultants, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 2009 and 2008
 
Recently Issued Accounting Pronouncements (continued)

These standards aim to improve, simplify, and converge internationally the accounting for business combinations and the reporting of non-controlling interests in consolidated financial statements.

The provisions of SFAS 141 (R) and SFAS 160 are effective for the fiscal year beginning April 1, 2009.  The adoption of SFAS 141(R) and SFAS 160 has not impacted the Company’s financial statements.

None of the above new pronouncements has current application to the Company, but may be applicable to the Company’s future financial reporting.

NOTE B – GOING CONCERN

Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business. Management expects to face strong competition from well-established companies and small independent companies. Accordingly, the Company expects to compete on the basis of price (or the value to the customer of the services performed) and, on the basis of their established reputation among customers as a quality provider of management services and our locality of operation. Without a strong performance in the growth process Management expects to be less able than our larger competitors to handle generally increasing costs and expenses of doing business. Additionally, it is expected that there may be significant technological advances in the future and Management may not have adequate resources without the strong public response anticipated to enable the Company to take advantage of such advances.

NOTE C – RELATED PARTY TRANSACTIONS

The major shareholder of American Smooth Wave Inc and Western Lucrative Inc owns more than 5% of common stock of the Company at December 31, 2009 and 2008. For the year ended December 31, 2008, the Company paid consulting and professional fee of $12,900 through American Smooth Wave Inc and Western Lucrative Inc. The reimbursements of these consulting fees were made in August, 2008 and September, 2008.  There was no balance due to these affiliates at December 31, 2009 and December 31, 2008.

NOTE D - SUBSEQUENT EVENTS

In February, 2010, the Company issued a note payable of $3,000 to Dempsey Mork. The note will be matured by December 31, 2010. There is no payment term during the year. Principal and interest of 6% will be due when the loan is matured.

Since the filing of form 10-K for the fiscal year ended December 31, 2009, a number of significant events have occurred that have been reported separately by the filing of:  forms 8-K (2) on 10-19-10 and 10-22-10, form SC 14F1 on 10-22-10, form SC 13D on 11-08-10 and form 8-K/A on 12-06-10.

 
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