Attached files
| file | filename |
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| EX-31.2 - OMNI VENTURES 10QA 31.2 - Omni Ventures, Inc. | omve10qa32.htm |
| EX-31.1 - OMNI VENTURES 10QA 31.1 - Omni Ventures, Inc. | omve10qa31.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 10-Q/A
_____________________
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2010
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to______.
OMNI VENTURES, INC.
(Exact name of registrant as specified in the Charter)
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KANSAS
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333-156263
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26-3404322
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(State or other jurisdiction of
incorporation or organization)
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(Commission File No.)
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(IRS Employee Identification No.)
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7500 College Blvd., 5th Floor, Overland Park, KS 66210
(Address of Principal Executive Offices) (Zip Code)
(913) 693-8073
(Registrants 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 x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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x
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x
The number of shares outstanding of the Registrant’s common stock as of December 31, 2010: 92,684,520 shares of common stock.
OMNI VENTURES, INC.
FORM 10-Q
December 31, 2010
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PART I— FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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3-8
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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9
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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10
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Item 4T.
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Controls and Procedures
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10
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PART II— OTHER INFORMATION
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Item 1.
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Legal Proceedings
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11
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Item 1A.
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Risk Factors
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11
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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11
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Item 3.
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Defaults Upon Senior Securities
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11
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Item 4.
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Submission of Matters to a Vote of Security Holders
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11
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Item 5.
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Other Information
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11
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Item 6.
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Exhibits
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11
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Item 1. Financial Statements
1
Omni Ventures, Inc.
(A Development Stage Company)
Financial Statements
December 31, 2010
(Unaudited)
2
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2008
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CONTENTS
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Page(s)
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Balance Sheets – As of December 31, 2010 (Unaudited)
and September 30, 2010 (Audited)
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3
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Statements of Operations –
For the three months ended December 31, 2010 and 2009
and for the period from August 14, 2008 (inception)
to December 31, 2010 (Unaudited)
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4
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Statements of Cash Flows –
For the three months ended December 31, 2010 and 2009
and for the period from August 14, 2008 (inception)
to December 31, 2010 (Unaudited)
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5
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Notes to Financial Statements
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6-8
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Omni Ventures, Inc.
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(A Development Stage Company)
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Consolidated Balance Sheets
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December 31, 2010
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September 30, 2010
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(Unaudited)
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(Audited)
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Assets
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Current Assets
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||||||||
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Cash
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$ | 1,395 | $ | 27 | ||||
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Acounts receivable (less allowance for Doubtful accounts of $75)
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844 | |||||||
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Inventory
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897,986 | - | ||||||
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Total Current Assets
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900,225 | 27 | ||||||
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Fixed Assets
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Furniture and equipment, less Accumulated depreciation of $1,840)
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71,750 | |||||||
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Total Fixed Assets
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71,750 | |||||||
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Other Assets
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Deposits
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10,000 | |||||||
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Intangible Assets
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3,157,915 | |||||||
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Total Other Assets
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3,167,915 | |||||||
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Total Assets
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$ | 4,139,890 | $ | 27 | ||||
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Liabilities and Stockholders' Equity (Deficit)
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Current Liabilities
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Accounts payable and accrued expenses
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$ | 70,519 | $ | 67,653 | ||||
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Notes and loans payable - Related Parties
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257,039 | 152,062 | ||||||
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Notes and loans payable
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345,000 | 20,000 | ||||||
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Total Current Liabilities
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672,558 | 239,715 | ||||||
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Stockholders' Equity (Deficit)
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Preferred stock, $0.001 par value, 50,000,000 shares authorized;
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none issued and outstanding
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- | - | ||||||
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Common stock, $0.0001 par value, 200,000,000 shares authorized;
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109,195,172 and 92,695,172 shares issued and outstanding
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10,920 | 9,270 | ||||||
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Additional paid-in capital
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4,250,984 | 452,634 | ||||||
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Deficit accumulated during the development stage
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(794,572 | ) | (701,592 | ) | ||||
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Total Stockholders' Equity (Deficit)
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3,467,332 | (239,688 | ) | |||||
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Total Liabilities & Stockholders' Deficit
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$ | 4,139,890 | $ | 27 | ||||
See accompanying notes to Financial Statements
3
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Omni Ventures, Inc.
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(A Development Stage Company)
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Consolidated Statements of Operations
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(Unaudited)
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For the period from
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For the 3 Months Ended
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August 14, 2008 (inception) to
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December 31,
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December 31, 2010
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2010
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2009
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Revenue
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$ | 2,307 | $ | - | $ | 2,307 | ||||||
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Cost of Goods Sold
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1,099 | 1,099 | ||||||||||
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Gross profit
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1,208 | 1,208 | ||||||||||
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General and administrative expenses
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80,025 | 6,392 | 742,934 | |||||||||
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Interest expense
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14,161 | 4,900 | 52,844 | |||||||||
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Net loss
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$ | (92,978 | ) | $ | (11,292 | ) | $ | (794,570 | ) | |||
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Net loss per common share - basic and diluted
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||
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Weighted average number of common shares outstanding
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during the year/period - basic and diluted
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100,945,172 | 102,684,520 | 94,088,995 | |||||||||
See accompanying notes to Financial Statements
4
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Omni Ventures, Inc.
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(A Development Stage Company)
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Consolidated Statements of Cash Flows
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( Unadited)
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For the period from
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For the 3 Months Ended
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Aug. 14, 2008 (inception)
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December 31,
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to Dec. 31, 2010
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2010
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2009
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (92,978 | ) | $ | (11,292 | ) | $ | (794,570 | ) | |||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Amortization of prepaid consulting services
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- | - | 340,903 | |||||||||
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Common stock issued for compensation - related party
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- | - | 200,000 | |||||||||
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Common stock issued for interest
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400 | 800 | ||||||||||
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Common stock issued for pre-incorporation services - founder
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- | - | 8,000 | |||||||||
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Provision for Bad Debts
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75 | - | 75 | |||||||||
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Depreciation
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1,840 | - | 1,840 | |||||||||
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Change in operating assets and liabilities
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Increase (decrease) in:
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Accounts payable and accrued expenses
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(12,546 | ) | 10,805 | 55,108 | ||||||||
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Net Cash Used In Operating Activities
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(103,609 | ) | (87 | ) | (187,844 | ) | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Proceeds from loan payable - related party
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104,977 | - | 118,277 | |||||||||
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Repayment of loan payable - related party
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- | - | (13,300 | ) | ||||||||
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Proceeds from notes payable
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- | - | 72,062 | |||||||||
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Proceeds from sale of common stock
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- | - | 12,200 | |||||||||
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Net Cash Provided by Financing Activities
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104,977 | - | 189,239 | |||||||||
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Net Increase in Cash
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1,368 | (87 | ) | 1,395 | ||||||||
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Cash - Beginning of Period/Year
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27 | 186 | - | |||||||||
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Cash - End of Period/Year
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$ | 1,395 | $ | 99 | $ | 1,395 | ||||||
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SUPPLEMENTARY CASH FLOW INFORMATION:
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Cash paid during the period/year for:
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Income taxes
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$ | - | $ | - | $ | - | ||||||
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Interest
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$ | - | $ | - | 3,000 | |||||||
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SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
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Note payable issued for future services
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$ | - | $ | - | $ | 100,000 | ||||||
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Common stock issued for future services
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$ | - | $ | - | $ | 240,903 | ||||||
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Assets acquired for stock and notes
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$ | 4,125,000 | $ | - | $ | 4,125,000 | ||||||
See accompanying notes to Financial Statements
5
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2010
(Unaudited)
Note 1 Basis of Presentation
The consolidated financial statements include the accounts of Omni Ventures, Inc. and its wholly-owned subsidiary, PRVCY Couture, Inc.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.
The unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended September 30, 2010. The interim results for the period ended December 31, 2010 are not necessarily indicative of results for the full fiscal year.
Note 2 Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Omni Ventures, Inc. (the “Company”), was incorporated in the State of Kansas on August 14, 2008.
The Company intended to develop properties on Indian reservations. However, during February 2010 there was a change in control as well as the business plans of the Company. See Note G for material subsequent events.
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan.
On November 15, 2010, the Company entered into a Purchase Agreement, Security Agreement and Promissory Note with Agile Opportunity Fund LLC to purchase certain assets defined as the “Diamond Decision Assets” which Agile had previously purchased from the Trustee in the Diamond Decisions Inc. Chapter 11 Bankruptcy Case.
PRVCY Couture Inc. (a wholly-owned subsidiary) was incorporated in the State of Nevada on December 7, 2010 to receive the assets defined as the “Diamond Decision Assets” and to engage in the manufacture and sale of men’s and women’s clothing. The assets purchased are: inventory, equipment, customer lists, domain names, websites, copyrighted materials, patents and trade marks. The purchase price for the assets were 16,500,000 shares of Omni Ventures Inc. common stock and a $325,000 note to Agile due November 14, 2011, bearing interest at 9% that is secured by assets. See Note 7 for Agile’s put right for Omni shares. Management has determined the fair value of the Tangible Assets acquired as follows:
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Inventory:
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$899,000
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Design and sample-making Equipment
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27,000
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Office and Other Equip.
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47,000
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Total
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$973,000
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Management has hired an expert appraisal firm to value the intangible assets. However, at the writing of this report the expert firm has not completed its valuations.. When the appraisal is completed, the Company will either amend this Form 10-Q, or report the completed appraisal in the next Form 10-Q.
Management’s best estimate of the fair value of the intangible assets, which includes:
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Fair Value
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Trademarks
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$1,600,000
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Patents
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750,000
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Copyrights
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400,000
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Domain Names and Websites
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250,000
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Customer Lists
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152,000
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$3,152,000
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Trademarks have been classified as indefinite-lived assets and are not being amortized.
Patents and copyrights will be amortized effective January 1, 2011 over a ten year period using the straight line method.
Domain names, websites and customer lists will be amortized over a three year period effective January 1, 2011 using the straight line method.
There were no research and development assets acquired and written off in 2010 or 2009.
The Company has placed no significant residual value in total and by major intangible class.
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan. The Company has not generated any substantial revenues since inception.
Risks and Uncertainties
The Company's operations will be subject to significant risk and uncertainties including financial, operational, regulatory and other risks associated with a development stage company, including the potential risk of business failure.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The most significant estimate included in the preparation of the financial statements are related to income taxes, accruals, valuation allowances, amortization and depreciation.
Cash and Cash Equivalents
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At December 31, 2010 and September 30, 2010, respectively, there were no balances that exceeded the federally insured limit.
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. At December 31, 2010 and September 30, 2010, respectively, the Company had no cash equivalents.
6
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2010
(Unaudited)
Share Based Payments
Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards’ grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense.
Earnings per share
Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.
The computation of basic and diluted loss per share since inception are equivalent since the Company has had continuing losses. The Company also has no common stock equivalents.
Inventories
Inventories are valued at the lower cost or market, with cost generally determined on a first-in, first-out basis and market based upon the lower of replacement cost or realizable value. Inventories consisted of the following:
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Finished Goods
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$719,380
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Work in Process
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14,166
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Raw Materials
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164,440
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Totals
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$897,896
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Inventory includes finished men's and women's denim jeans. The WIP includes the unfinished product while raw material includes denim, buttons, rivets and thread.
Property, Plant and Equipment
Property, plant and equipment is carried at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method.
Leases
On November 15, 2010, the Company entered into a lease of approximately 9,000 square feet for a term of 5 years in Norco, California at a base rent of $6,468 per month.
Note 3 Going Concern
As reflected in the accompanying financial statements, the Company has a net loss of $92,978 and net cash used in operations of $103,609 for the three months ended December 31, 2010; and a working capital of $227,667 and a deficit accumulated during the development stage of $794,572 at December 31, 2010. The Company is in the development stage and has not yet generated any substantial revenues.
The ability of the Company to continue as a going concern is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities, further implementation of its business plan and continuing to raise funds through debt or equity raises. 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. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 4 - Fair Value
The Company has categorized our assets and liabilities recorded at fair value based upon the fair value hierarchy specified by GAAP.
The levels of fair value hierarchy are as follows:
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·
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Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;
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·
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Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals; and
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·
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Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.
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In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such financial asset or liability based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
Both observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 category. As a result, the unrealized gains and losses for assets within the Level 3 category can include changes in fair value that were attributable to both observable and unobservable inputs. The Company has no instruments that require additional disclosure.
7
Omni Ventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2010
(Unaudited)
Note 5 – Notes and Loans Payable – Related Parties and Other
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12/31/10
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9/30/10
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1. 12% note payable dated September 3, 2008, in the amount of
$100,000, due September 3, 2009, collateralized by the
Company’s assets and 80,000,000 shares of stock issued
to the Company’s founder. The note bears interest at
12% and is due monthly. The company did not pay the
interest in January 2009 and the Lender began charging
the default interest rate of 18%. The Lender granted
extensions to August 14, 2009 to repay all unpaid accrued
interest. The Company did not repay the note by
September 3, 2009 or the related accrued interest by
August 14, 2009 and is in default,. During December 2009,
the current majority shareholder agreed to acquire the note
payable from the original lender, and agreed to acquire the
80,000,000 shares of stock formerly issued to the
Company’s founder. The Company is currently in
negotiations with its major shareholders to restructure
this debt that is in default.
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$100,000
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$100,000
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2. On May 18, 2009, the Company issued two $10,000, one-year
notes payable, to third parties. The notes required payment of
interest in the form of shares of common stock. 20,000 shares
were issued on May 18, 2009 and an additional 20,000 shares
were issued on November 18, 2009. The stock issued as interest
was valued by the debt holders at $400 ($0.02/share) at both
dates. Fair value was based upon recent cash offerings to third
parties at $0.02/share in October 2008. The Company believes
that the valuation of these shares based upon a quoted closing
trade price is not the best available evidence among willing
buyers or sellers due to the stock being restricted and thinly
traded at the date of issuance. Furthermore, the Company was
inactive, so no valuation could be ascribed that would indicate
the shares had any additional value. These notes are unsecured,
due on May 18, 2010 and are in default. Unpaid interest has been
accrued through September 30, 2010.The Company expects to be
able to negotiate settlement of these notes during fiscal 2011.
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20,000
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20,000
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3. 6% unsecured loan payable to majority shareholder for
payments he made on behalf of the company from Jan. 1, 2010
through December 31, 2010.
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157,039
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52,062
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4. 9% Note Payable to Agile, collateralized by assets, due
November 14, 2011.
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325,000
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----
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Total notes and loans payable
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$602,039
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$172,062
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Note 6 – Common Stock
On August 14, 2008, the Company issued 80,000,000 shares of common stock, having a fair value of $8,000 ($0.0001/share), to its founder for pre-incorporation services. Fair value of the services provided reflected a more readily determinable fair value of the shares issued. At September 30, 2008, the Company expensed this stock issuance as a component of general and administrative expenses. These shares were acquired during December 2009 by the current majority shareholder.
In October 2008, the Company issued 610,000 shares of common stock, for $12,200 ($0.02/share) under a private placement to third party investors.
On November 26, 2008, the Company issued 12,045,172 shares of common stock to consultants for future services having a fair value of $240,903 ($0.02/share), based upon the recent cash offering price. The services were rendered during the period December 1, 2008 through August 31, 2009. The Company expensed $240,903 during the year ended September 30, 2009.
On May 5, 2009, the Company issued 10,000,000 shares of common stock, having a fair value of $200,000 ($0.02/share), to its Chairman and CEO as compensation for past services rendered. Fair value was based upon recent cash offerings to third parties at $0.02/share in October 2008. The Company believes the valuation of these shares based upon quoted closing trade price is not the best available evidence among willing buyers or sellers due to the stock being restricted and thinly traded at the date of issuance. Furthermore, the Company was inactive, so no valuation could be ascribed that would indicate the shares had any additional value. These shares were cancelled and retired in January 2010.
On May 18, 2009, the Company issued 20,000 shares of common stock, having a fair value of $400 ($0.02/share) to two lenders for interest.
On November 18, 2009, the Company issued 20,000 shares of common stock, having a fair value of $400 ($0.02/share) to two lenders for interest.
On October 25, 2010 the Company issued 16,500,000 shares of common stock in connection with the acquisition of the “Diamond Decision Assets” described in Note 2, having a fair value of $3,800,000.
Note 7 – Commitments, Contingencies and Subsequent events
Related to the purchase of “Diamond Decision Assets”, the Seller, Agile shall have the right, at its sole option, to sell up to 10,000,000 of the Company’s shares, or any portion thereof back to the Company for a total consideration equal to all or a pro-rata portion of $2,800,000 if on or before the end of that fiscal quarter which ends June 30, 2011, (i) Omni has not achieved an annual quarterly sales of $10,000,000, (ii) Omni has not obtained total market capitalization of at least $50,000,000 and (iii) Omni has not achieved positive cash flow.
The Company has evaluated for subsequent events between the balance sheet date of December 31, 2010 and February 2011.
The Company has engaged firms for outsourced sales, public relations, and distribution of denim products in Korea.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
8
The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
On November 11, 2010 Omni Ventures, Inc. entered into an Asset Purchase Agreement as well as a Security Agreement with Agile Opportunity Fund, LLC in respect to the assets acquired by Agile Opportunity Fund, LLC (“Agile”) based on the Asset Purchase Agreement of September 17, 2010 as affirmed and approved by the Federal Bankruptcy Court in the bankruptcy case of Diamond Decisions, Inc. No.: 2:10-bk-15109-RN in the US Bankruptcy Court, Central District of California, Los Angeles Division, as of November 05, 2010 and any other merchant card ISO business owned by CALL KC (the “Assets”). In consideration for the acquisition of these assets, Omni issued a promissory note and tendered 16,500,000 shares of restricted common stock, of which 14,000,000) shares were delivered to Agile and 2,500,000 (two million five hundred thousand) shares were delivered to Howard Grobstein, CPA, who acted as the court-appointed Trustee in the above referenced bankruptcy case. The amount of the promissory note to Agile was set at $325. We have placed a value of this acquisition in our financial statements of $4,125,000. However, we have retained an appraiser to further value the acquisition and upon receiving a report from that appraiser, we may amend that valuation. We expect to have the report sometime later this quarter.
On December 8, 2010 Omni incorporated a wholly owned subsidiary named PRVCY Couture, Inc., a Nevada corporation, for the purpose of operating casual couture apparel design, fabrication and distribution business. According to the agreements with Agile, Omni and its wholly owned subsidiary PRVCY Couture, Inc. acquired the 100% of Agile’s rights, titles and interests in following assets pertinent to PRVCY Premium and PrivacyWear apparel labels formerly operated by Diamond Decisions, Inc. free and clear of any liens or encumbrances of any kind:
a. Patents. All patents, including any registrations or applications for registration, and all goodwill associated therewith (collectively, the “Patents”). All income, royalties, damages and payments due or payable and causes of action for infringement or violation of all rights in and to the Patents after the Closing Date as they pertain to the rights hereby assigned;
b. Trademarks. All trademarks, trade names or service marks including any registrations or applications for registration, and all goodwill associated therewith (collectively, the “Marks”). All income, royalties, damages and payments due or payable and causes of action for infringement or violation of all rights in and to the Marks after the Closing Date as they pertain to the rights assigned according to the above referenced agreements;
c. Customer Information. All customer lists, databases, files and documents relating to customers engaged in the Assets;
d. Contracts. All current contracts, executed or otherwise relating to the customers of Diamond Decisions, Inc. engaged in the apparel and casual couture business underlying the Assets;
e. Accounts Receivable. All current Accounts Receivable related to the sale of or any other disposition of the Assets;
f. Software. Any and all computer programs and other software and Internet sites created or acquired by Agile for the purposes of the apparel and casual couture business underlying the Assets and any other merchant card ISO business owned by CALL KC including the right to reproduce, the right to distribute to the public by sale or rental and the right to prepare derivative works of the said programs for future reproduction or distribution;
g. Hardware. Any and all servers, auxiliary devices, racks, cables, connections, any other computer and peripheral equipment, desks and communication lines;
h. Permits and Licenses. All governmental franchises, licenses, approvals, authorizations and permits that are held or used primarily in connection with the Assets, if any; and
i. Any and all other items located inside the warehouse located at the former places of business of Diamond Decisions, Inc. at 2211 East Olympic Boulevard, Los Angeles, CA 90021 and 2068 Second Street, Norco, CA 92860 as well as fabric, which used to belong to Diamond Decisions, Inc. and located at warehouse of Denovas, Inc. at 1000 60th Str., Los Angeles, CA 90001.
Subsequent to closing of the acquisition of the assets with Agile, Omni and PRVCY Couture, Inc. proceeded to commence operations in the garment business under PRVCY Premium and PrivacyWear labels. We closed down the location at 2211 East Olympic Boulevard, Los Angeles, CA 90021, relocated the assets from there to the approximately 9,000 square feet office and warehousing facility at 2068 Second Street, Norco, CA 92860 where Omni entered into a five-year commercial lease and from which location we intend to continue the operations of our casual apparel business. We entered into long-term contracts with West Bank Clothing, Inc. as well as Berri Goldfarb, PR and restarted the sales and marketing of the apparel under PRVCY brands in multiple specialty stores across the United States. We hired a design team with the purposes of updating the existing product line and designing the new product lines for the fall of 2011 and spring of 2012. We are planning to restart the fabrication of apparel under our brands in Los Angeles, CA as well as overseas. We started our international expansion and entered into a long-term Distributor Agreement with Fashion Forward, LLC to distribute our product on the territory of Korea. We also updated our website at www.prvcypremium.com adding electronic commerce feature there and started sales of PRVCY Premium brand jeans at our online store.
Effective February 22, 2010, James Smith was removed as a director and president of the Company and Myles O’Dwyer was removed as a director and Chief Financial Officer of the Company. As a result of these removals, Daniel Reardon was appointed the Company’s president and Chief Financial Officer.
Three Months Ended December 31, 2010 Compared to Three Months Ended December 31, 2009
Revenues
Revenues for the three months ended December 31, 2010, were $2,307as compared to no earnings for the three months ended December 31, 2009. The reason for the commencement of revenues is a result of the Company’s acquisition of the PRVCY Couture and the sales of clothing there from..
Gross Profit
Gross profit for the three months ended December 31, 2010 was $1,099 as compared to none for the three months ended December 31, 2009.
Operating Expenses
Operating Expenses incurred for the three months ended December 31, 2010 were $80,025 as compared to $6,392 for the three months ended December 31, 2009, an increase of $73,633. The increase is mainly due to the Company’s acquisition of the PRVCY Brand and expenses related to the marketing and launching of that brand for the quarter.
Income and Earnings Per Share
The Company’s net loss for the three months ended December 31, 2010 was ($92,978) compared to a net loss of ($11.292) for the three months ended December 31, 2009, an increase in the loss of $81,686. Net income (loss) per weighted average share was ($0.00) for the three months ended December 31, 2010, as compared to $0.00 for the three months ended December 31, 2009.
Liquidity and Capital Resources
At December 31, 2010, working capital was $227,667 as compared with a working capital deficit of ($177,791) at December 31, 2009. .
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Research and Development
In the three months ended December 31, 2010, the Company did not incur any expenses on research and development and nor did it incur any expenses for the period ending December 31, 2009
Inflation
We believe that the impact of inflation on our operations since our inception has not been material.
Going Concern
As reflected in the accompanying financial statements, we have a net loss from inception of ($794,570).
We are in the development stage and have not yet generated any revenues. Our ability to continue as a going concern is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities, further implementation of its business plan and continuing to raise funds through debt or equity raises. 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. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
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 Risks
Not required for Smaller Reporting Companies.
Item 4T. 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”) (the Company’s principal financial and accounting officer), 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.
Management’s Report on Internal Controls over Financial Reporting
Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. There has been no change in the Company’s internal control over financial reporting during the quarter ended December 31, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company’s management, including the Company’s CEO and CFO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of December 31, 2010.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are currently not involved in any litigation and 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.
Item 1A. Risk Factors
Not applicable because we are a smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports of Form 8-K.
(a) Exhibits
31.1 Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer
32.1 Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
(b) Reports of Form 8-K
None.
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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.
Omni Ventures, Inc.
March 14, 2011 By: /s/Daniel Reardon
Daniel Reardon, President