HAVAYA CORP - FORM 10-Q - November 14, 2011

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EX-32 - EXHIBIT 32 - HAVAYA CORP	v239367_ex32.htm
EX-31 - EXHIBIT 31 - HAVAYA CORP	v239367_ex31.htm
EXCEL - IDEA: XBRL DOCUMENT - HAVAYA CORP	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(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, 2011

¨ 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 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 (§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 x 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 ¨ No x

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 1, 2011, 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

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5

Item 4.	Controls and Procedures	5

Part II – Other Information

Item 1.	Legal Proceedings	5

Item 1A.	Risk Factors	5

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5

Item 3.	Defaults upon Senior Securities	5

Item 4.	(Removed and Reserved)	5

Item 5.	Other Information	5

Item 6.	Exhibits	6

Signatures		7

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements – (Unaudited)

HAVAYA CORP.

(A DEVELOPMENT STAGE COMPANY)

INDEX TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

Financial Statements-

Balance Sheets as of September 30, 2011 and December 31, 2010		F-2

Statements of Operations for the Three Months and Nine Months Ended
September 30, 2011 and 2010, and Cumulative from Inception		F-3

Statement of Stockholders’ Equity for the Period from Inception
Through of September 30, 2011		F-4

Statements of Cash Flows for Nine Months Ended September 30, 2011 and 2010
and Cumulative from Inception		F-5

Notes to Financial Statements		F-6

F-1

HAVAYA CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

AS OF SEPTEMBER 30, 2011 AND DECEMBER 31, 2010

	September 30, 2011			December 31, 2010
	(Unaudited)			(Audited)

ASSETS

Current Assets:
Cash and cash equivalents	$	1,121		$	10,297
Prepaid expenses		-			62

Total current assets		1,121			10,359

Total Assets	$	1,121		$	10,359

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued liabilities	$	31,654		$	16,036
Due to shareholders		6,124			5,724
Advance customer payments		87,470			-

Total current liabilities		125,248			21,760

Total liabilities		125,248			21,760

Commitments and Contingencies		-			-

Stockholders' Equity (Deficit):
Common stock, par value $0.0001 per share, 200,000,000 shares authorized; 6,500,000 shares issued and outstanding		650			650
Additional paid-in capital		59,700			59,700
(Deficit) accumulated during development stage		(184,477	)		(71,751	)

Total stockholders' equity (deficit)		(124,127	)		(11,401	)

Total Liabilities and Stockholders' Equity	$	1,121		$	10,359

The accompanying notes to financial statements are

an integral part of these statements.

F-2

HAVAYA CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010, AND

CUMULATIVE FROM INCEPTION (NOVEMBER 21, 2007)

THROUGH SEPTEMBER 30, 2011

	Three Months			Three Months			Nine Months			Nine Months			Cumulative
	Ended			Ended			Ended			Ended			From
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010			Inception

Revenues	$	14,184		$	-		$	26,005		$	-		$	26,005

Expenses:
General and administrative-

Marketing expenses		-			-			-			1,152			1,152
Professional fees		3,100			14,648			34,849			24,546			72,669
Consulting fees		20,000			-			69,426			-			74,426
Travel expenses		1,689			-			28,936			-			45,641
Organization costs		-			-			-			-			1,500
Filing Fees		3,883			3,023			6,901			5,969			16,605
Franchise tax expense		-						400						686
Other		176			29			647			327			1,972

Total general and administrative expenses		28,849			17,700			141,159			31,994			214,651
														-
Net Income (Loss) from Operations		(14,664	)		(17,700	)		(115,154	)		(31,994	)		(188,646	)

Other Income (Expense)
Gains (loss) on foreign currency exchange		(398	)		910			2,427			233			4,169

Provision for income taxes		-			-			-			-			-

Net Income (Loss)	$	(15,062	)	$	(16,790	)	$	(112,727	)	$	(31,762	)	$	(184,477	)

Net Income (Loss) Per Common Share:
(Loss) per common share - Basic and Diluted	$	(0.00	)	$	(0.00	)	$	(0.02	)	$	(0.01	)

Weighted Average Number of Common Shares Outstanding - Basic and Diluted		6,500,000			6,500,000			6,500,000			6,093,407

The accompanying notes to financial statements are

an integral part of these statements.

F-3

HAVAYA CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)

FOR THE PERIOD FROM INCEPTION (NOVEMBER 21, 2007)

THROUGH SEPTEMBER 30, 2011

										(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		3,000,000		300		-			-		-			300

Common stock issued for cash		500,000		50		-			-		-			50

Stock Subscriptions Receivable		-		-		(350	)		-		-			(350	)

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		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 received				-		350			-		-			350

Common stock issued for cash		1,000,000		100		-			19,900		-			20,000

Net (loss) for the period		-		-		-			-		(42,269	)		(42,269	)

Balance -December 31, 2010		6,500,000	$	650	$	-		$	59,700	$	(71,751	)	$	(11,401	)

Net (loss) for the period		-		-		-			-		(112,727	)		(112,727	)

Balance - September 30, 2011		6,500,000	$	650	$	-		$	59,700	$	(184,478	)	$	(124,128	)

The accompanying notes to financial statements are

an integral part of these statements.

F-4

HAVAYA CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010, AND CUMULATIVE FROM INCEPTION (NOVEMBER 21, 2007)

THROUGH SEPTEMBER 30, 2011

							Cumulative
	Nine Months Ended			Nine Months Ended			From
	September 30, 2011			September 30, 2010			Inception

Operating Activities:
Net (loss)	$	(112,727	)	$	(31,762	)	$	(184,477	)
Adjustments to reconcile net (loss) to net cash provided by operating activities:
Changes in net assets and liabilities-
Prepaid expenses		62			-			-
Accounts payable and accrued liabilities		15,619			11,948			31,654
Advance customer payments		87,470			-			87,470

Net Cash Used in Operating Activities		(9,576	)		(19,814	)		(65,353	)

Investing Activities:
Cash used by investing activities		-			-			-

Net Cash Used by Investing Activities		-			-			-

Financing Activities:
Proceeds from shareholder loans		400			-			6,124
Proceeds from common stock		-			20,350			60,350

Net Cash Provided by Financing Activities		400			20,350			66,474

Net (Decrease) Increase in Cash		(9,176	)		536			1,121

Cash - Beginning of Period		10,297			18,543			-

Cash - End of Period	$	1,121		$	19,079		$	1,121

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.

F-5

HAVAYA CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND DECEMBER 31, 2010

1. Summary of Significant Accounting Policies

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, 2011, 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, 2011, and the results of its operations and its cash flows for the periods ended September 30, 2011, and cumulative from inception. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2011. 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, 2010, 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 recognizes 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, 2011.

F-6

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.

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, 2011, and December 31, 2010, 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, 2011 and December 31, 2010, and expenses for the three months and nine months ended September 30, 2011 and 2010, and cumulative from inception. Actual results could differ from those estimates made by management.

F-7

Fiscal Year End

The Company has adopted a fiscal year end of December 31.

2. Development Stage Activities

The Company is currently in the development stage, and has limited operations. The business plan of the Company is to import and market home teeth whitening kits.

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 2011 and 2010 was as follows (assuming a 23% effective tax rate):

	2011			2010

Current Tax Provision:
Federal-
Taxable income	$	-		$	-
Total current tax provision	$	-		$	-

Deferred Tax Provision:
Federal-
Loss carryforwards	$	25,927		$	7,305
Change in valuation allowance		(25,927	)		(7,305	)
Total deferred tax provision	$	-		$	-

The Company had deferred income tax assets as of September 30, 2011 and December 31, 2010, as follows:

F-8

	2011			2010

Loss carryforwards	$	42,430		$	16,503
Less - Valuation allowance		(42,430	)		(16,503	)
Total net deferred tax assets	$	-		$	-

The Company provided a valuation allowance equal to the deferred income tax assets for the periods ended December 31, 2010 because it was not known whether future taxable income will be sufficient to utilize the loss carryforwards.

As of September 30, 2011, the Company had approximately $184,477 in tax loss carry-forwards that can be utilized in future periods to reduce taxable income, and expire by the year 2031.

The Company did not identify any material uncertain tax positions on tax returns that were filed. The Company did not recognize any interest or penalties for unrecognized tax benefits.

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, 2011, loans from related parties amounted to $6,124, 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 May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRSs")." Under ASU 2011-04, the guidance amends certain accounting and disclosure requirements related to fair value measurements to ensure that fair value has the same meaning in U.S. GAAP and in IFRS and that their respective fair value measurement and disclosure requirements are the same. ASU 2011-04 is effective for public entities during interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not believe that the adoption of ASU 2011-04 will have a material impact on the Company's results of operation and financial condition.

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income," ("ASU 2011-05") which amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders' equity. Instead, comprehensive income must be reported in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after Dec. 15, 2011 with early adoption permitted. The Company does not believe that the adoption of ASU 2011-05 will have a material impact on the Company's results of operation and financial condition.

F-9

There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's financial position, results of operations or cash flows.

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.

8. Concentration of Revenues

On April 14, 2011, the Company entered into a license agreement with an Israeli corporation, (“ CTL ”), pursuant to which the Company granted CTL an exclusive license to sell teeth whitening kits/systems under the Havaya brand name in the State of Israel. Under the Agreement, the Company also agreed to provide CTL with support and assistance relating to the sale of the Products in Israel .

In consideration for the grant of the exclusive license, CTL paid the Company a one-time license fee of $110,000. In addition, CTL will pay the Company a fee on the sale of each Product sold in Israel in an amount equal to 5% of the Product purchase price. CTL will purchase Products either from the Company or from the Company’s supplier at the same price that the Company pays for the Products.

The Agreement has an initial term of 12 months, and the term shall automatically renew each year for an additional year unless one party provides the other party with prior written notice of non-renewal. The Company recognizes the one-time license fee over the estimated term of the license.

F-10

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 Annual Report on Form 10-K, as filed with the SEC on February 3, 2011.

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. Except for the revenues we have earned from our first licensee as advance payments, we do not anticipate that we will generate additional revenues until we receive license fees from our licensee or we are able to market the private label teeth whitening kits and generate customers.

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 not need to raise any additional funds to implement our marketing plan and to remain in business for twelve months. Except for the advance payments, we expect to begin to generate additional revenues during the fourth quarter of 2011. 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.

Our goal is to become a leading seller of teeth whitening kits for the home market. 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.

Recent Developments

On April 14, 2011, the Company entered into a license agreement with an Israeli corporation, (“CTL”), pursuant to which the Company granted CTL an exclusive license to sell teeth whitening kits/systems under the Havaya brand name in the State of Israel. Under the Agreement, the Company also agreed to provide CTL with support and assistance relating to the sale of the Products in Israel.

Results of Operations

During the period from November 21, 2007 (date of inception) through September 30, 2011, we generated net loss from operations in the amount of $188,646. For the three months ended September 30, 2011, we generated net loss from operations in the amount of $14,664, and for the nine months ended September 30, 2011, we generated net loss from operations in the amount of $115,154. During the three and nine months ended September 30, 2011, we incurred expenses in the amount of $28,849 and $141,159, respectively. These expenses 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.

Revenues

We had revenues of $26,005 for the period from November 21, 2007 (date of inception) through September 30, 2011. For the three and nine months ended September 30, 2011, we had revenues of $14,184 and $26,005, respectively. We have received advanced payments in the amount of $113,475.

Liquidity and Capital Resources

Our balance sheet as of September 30, 2011 reflects assets of $1,121 which consist of cash and cash equivalents. Prior to the signing of the license agreement on April 14, 2011, cash and cash equivalents from inception to date have been insufficient to provide the working capital necessary to operate to date.

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 Annual Report on Form 10-K regarding concerns about our ability to continue as a going concern. Our financial statements for the fiscal period ended September 30, 2011 does not contain a going concern consideration due to the fact that management expects royalties on future sales by CTL to be sufficient to fund operations for the next year.

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.

As of September 30, 2011, the end of the three-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 changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2011, 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.

Item3. Defaults Upon Senior Securities.

None.

Item4. (Removed and Reserved).

Not applicable.

Item5. 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.

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: November 10, 2011

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 10, 2011

HAVAYA CORP - FORM 10-Q - November 14, 2011

Attached files

HAVAYA CORP Reports