Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - Austin Acquisitions, Inc | Financial_Report.xls |
| EX-31.1 - Austin Acquisitions, Inc | e31-1.htm |
| EX-32.1 - Austin Acquisitions, Inc | ex32-1.htm |
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2012
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-54228
AUSTIN ACQUISITIONS, INC.
(Exact name of registrant as specified in its charter)
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Nevada
(State or other jurisdiction of incorporation or organization)
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27-3768248
(I.R.S. Employer Identification No.)
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2328 B Hartford Road, Austin Texas 78703
(Address of principal executive offices)
(512) 750-5844
(Registrant's telephone number)
(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. x Yes o 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). x Yes o 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o (Do not check if a smaller reporting company)
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Smaller reporting company x
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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). x Yes o No
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: At May 21, 2012, there were 1,000,000 shares of common stock outstanding.
TABLE OF CONTENTS
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PART I. Financial Information
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Page
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Item 1.
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1
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Item 2.
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10
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Item 3.
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12
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Item 4T.
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12
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PART II. Other Information
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Item 1.
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13
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Item 1A.
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13
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Item 2.
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13
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Item 3.
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13
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Item 4.
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13
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Item 5.
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Item 6.
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14
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
Austin Acquisitions, Inc.
(A Development Stage Company)
Balance Sheets
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As of
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||||||||
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March 31,
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September 30,
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|||||||
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2012
(Unaudited)
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2011
(Audited)
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|||||||
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ASSETS
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||||||||
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CURRENT ASSETS
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||||||||
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Cash
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$ | 632 | $ | - | ||||
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TOTAL CURRENT ASSETS
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632 | - | ||||||
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TOTAL ASSETS
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632 | - | ||||||
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LIABILITIES AND STOCKHOLDERS' (DEFICIT)
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||||||||
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LIABILITIES
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||||||||
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CURRENT LIABILITIES
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||||||||
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Note Payable to a Related Party
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$ | 24,950 | $ | 18,500 | ||||
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Accounts Payable
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305 | 795 | ||||||
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Bank Overdraft
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- | 208 | ||||||
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Accrued Interest
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2,062 | 1,155 | ||||||
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TOTAL CURRENT LIABILITIES
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27,317 | 20,658 | ||||||
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TOTAL LIABILITIES
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27,317 | 20,658 | ||||||
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STOCKHOLDERS' (DEFICIT)
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||||||||
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Preferred stock ($0.0001 par value; 10,000,000 shares authorized; none issued and outstanding)
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- | - | ||||||
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Common stock ($0.0001 par value; 100,000,000 shares authorized; 1,000,000 shares issued and outstanding)
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100 | 100 | ||||||
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Deficit Accumulated During Development Stage
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(26,785 | ) | (20,758 | ) | ||||
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TOTAL STOCKHOLDERS' (DEFICIT)
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(26,685 | ) | (20,658 | ) | ||||
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TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)
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$ | 632 | $ | - | ||||
The accompanying notes are an integral part of these financial statements.
Austin Acquisitions, Inc.
(A Development Stage Company)
Statements of Operations
For the Three and Six Months Ended March 31, 2012, Three Months and Six Months Ended March 31, 2011 and Period of Inception (October 21, 2010) to March 31, 2012
(Unaudited)
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3 months ended
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3 months ended
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6 months ended
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6 months ended
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Oct. 21, 2010 (Inception)
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||||||||||||||||
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March 31, 2012
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March 31, 2011
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March 31, 2012
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March 31, 2011
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March 31, 2012
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REVENUES:
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||||||||||||||||||||
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Income
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$ | $ | $ | $ | - | $ | - | |||||||||||||
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Total Revenue
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- | - | - | - | - | |||||||||||||||
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EXPENSES:
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||||||||||||||||||||
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Selling, General and Administrative
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958 | 528 | 970 | 1,351 | 3,847 | |||||||||||||||
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Professional Fees
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1,457 | - | 4,150 | 12,650 | 20,876 | |||||||||||||||
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Other Expenses
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494 | 276 | 907 | 475 | 2,062 | |||||||||||||||
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Total Expenses
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2,909 | 804 | 6,027 | 14,476 | 26,785 | |||||||||||||||
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NET INCOME (LOSS)
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$ | (2,909 | ) | $ | (804 | ) | $ | (6,027 | ) | $ | (14,476 | ) | $ | (26,785 | ) | |||||
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Basic and fully diluted net loss per common share:
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||
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Weighted average common shares outstanding
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1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||||
The accompanying notes are an integral part of these financial statements.
Austin Acquisitions, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the Six Months Ended March 31, 2012 and March 31, 2011 and Period of Inception (Oct 21, 2010) to March 31, 2012
(Unaudited)
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Six months
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Six months
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Inception
(October 20, 2010) to
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||||||||||
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Ended March 31, 2012
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Ended March 31, 2011
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Mar 31, 2012
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CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||||||||
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Net loss
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$ | (6,027 | ) | $ | (14,476 | ) | $ | (26,785 | ) | |||
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Adjustments to reconcile net loss to net cash used in operations:
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||||||||||||
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Changes in Assets and Liabilities:
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||||||||||||
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Increase/(decrease) in Payables
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(698 | ) | - | 305 | ||||||||
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Increase/(decrease) in Accrued Expenses
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907 | 475 | 2,062 | |||||||||
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
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(5,818 | ) | (14,001 | ) | (24,418 | ) | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Sale of Capital Stock
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- | 100 | 100 | |||||||||
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Proceeds from a Note Payable to Related Party
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6,450 | 14,000 | 24,950 | |||||||||
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
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6,450 | 14,100 | 25,050 | |||||||||
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
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632 | 99 | 632 | |||||||||
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CASH AND CASH EQUIVALENTS,
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||||||||||||
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BEGINNING BALANCE
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- | - | - | |||||||||
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ENDING BALANCE
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$ | 632 | $ | 99 | $ | 632 | ||||||
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
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||||||||||||
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CASH PAID DURING THE PERIOD FOR:
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||||||||||||
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Interest
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$ | - | $ | - | $ | - | ||||||
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Taxes
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$ | - | $ | - | $ | - | ||||||
The accompanying notes are an integral part of these financial statements.
Austin Acquisitions, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE 1 - ORGANIZATION, BUSINESS, AND OPERATIONS
Austin Acquisitions, Inc. (“The Company”) was organized under the laws of the State of Nevada on October 21, 2010 as a corporation with a year end of September 30. The Company’s objective is to acquire or merge with a target business or company in a business combination.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated during the development stage of $26,785, used cash from operations of $24,418 since its inception, and has a working capital deficiency of $26,685 at March 31, 2012.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company’s ability to continue as a going concern is also dependent on its ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances; however there is no assurance of additional funding being available. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation- The financial information at March 31, 2012 is unaudited, but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial information set forth herein, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information, and with the instructions to Form 10-Q. Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual Report on Form 10-K for the year ended September 30, 2011.
Cash and Cash Equivalents- For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.
Management’s Use of Estimates- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.
Revenue Recognition- The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met:
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(i)
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persuasive evidence of an arrangement exists,
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(ii)
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the services have been rendered and all required milestones achieved,
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(iii)
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the sales price is fixed or determinable, and
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(iv)
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collectability is reasonably assured.
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NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Comprehensive Income (Loss) - The Company reports Comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
Net Income per Common Share- Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of March 31, 2012.
Deferred Taxes- The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
Fair Value of Financial Instruments- The carrying amounts reported in the balance sheet for cash, accounts receivable and payable approximate fair value based on the short-term maturity of these instruments.
Impairment of Long-Lived Assets- The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the period ended March 31, 2012.
Stock-Based Compensation- The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Fair Value for Financial Assets and Financial Liabilities- The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification
(“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
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Level 1
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Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
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Level 2
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Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
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Level 3
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Pricing inputs that are generally observable inputs and not corroborated by market data.
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NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at Mar 31, 2012, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the period ended March 31, 2012.
Recent Accounting Pronouncements
In March 2010, the FASB issued Accounting Standard Update No. 2010-11 “Derivatives and Hedging” (Topic 815). ASU No. 2010-11 update provides amendments to subtopic 815-15, Derivatives and hedging. The amendments clarify about the scope exception in paragraph 815-10-15-11 and section 815-15-25 as applicable to the embedded credit derivatives. The ASU is effective on the first day of the first fiscal quarter beginning after June 15, 2010. Therefore, for a calendar-year-end entity, the ASU becomes effective on July 1, 2010. Early application is permitted at the beginning of the first fiscal quarter beginning after March 5, 2010
In April 2010, the FASB issued Accounting Standard Update No. 2010-12. “Income Taxes” (Topic 740). ASU No.2010-12 amends FASB Accounting Standard Codification subtopic 740-10 Income Taxes to include paragraph 740-10-S99-4. On March 30, 2010 The President signed the Health Care & Education Affordable Care Act reconciliation bill that amends its previous Act signed on March 23, 2010. FASB Codification topic 740, Income Taxes, requires the measurement of current and deferred tax liabilities and assets to be based on provisions of enacted tax law. The effects of future changes in tax laws are not anticipated.” Therefore, the different enactment dates of the Act and reconciliation measure may affect registrants with a period-end that falls between March 23, 2010 (enactment date of the Act), and March 30, 2010 (enactment date of the reconciliation measure). However, the announcement states that the SEC would not object if such registrants were to account for the enactment of both the Act and the reconciliation measure in a period ending on or after March 23, 2010, but notes that the SEC staff “does not believe that it would be appropriate for registrants to analogize to this view in any other fact patterns.”
In April 2010, the FASB issued Accounting Standard Update No. 2010-13 “Stock Compensation” (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The amendments in this Update should be applied by recording a cumulative-effect adjustment to the opening balance of retained earnings. The cumulative-effect adjustment should be calculated for all awards outstanding as of the beginning of the fiscal year in which the amendments are initially applied, as if the amendments had been applied consistently since the inception of the award. The cumulative-effect adjustment should be presented separately. Earlier application is permitted.
In April 2010, the FASB issued Accounting Standards Update No.2010-14, “Accounting for Extractive Activities – Oil & Gas” (Topic 932). ASU No. 2010-14 amends FASB accounting Standard paragraph 932-10-S99-1 due to SEC release no. 33-8995 [FR 78], Modernization of Oil and Gas Reporting and provides update as to amendments to SEC Regulation S-X, Rule 4-10.
In April 2010, the FASB issued Accounting Standard Update No. 2010-15. “Financial Services-Insurance” (Topic 944) ASU No.2010-15 gives direction on how investments through separate accounts affect an insurer’s consolidation analysis of those investments. Under the ASU: an insurance entity should not consider any separate account interests held for the benefit of policy holders in an investment to be the insurer's interests and should not combine those interests with its general account interest in the same investment when assessing the investment for consolidation, unless the separate account interests are held for the benefit of a related party policy holder as defined in the Variable Interest Entities Subsections of Subtopic 810-10 and those Subsections require the consideration of related parties. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. Early adoption is permitted. The amendments in this Update should be applied retrospectively to all prior periods upon the date of adoption.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements (continued)
In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.
In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on December 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.
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 IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on December 1, 2012. We are currently evaluating ASU 2011-04 and have not yet determined the impact that adoption will have on our financial statements.
In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. ASU 2011-02 has become effective for the Company on September 1, 2012. The Company does not believe that the guidance will have a material impact on its financial statements.
In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure of supplementary pro forma information for business combinations.” This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
In December 2010, the FASB issued ASU 2010-28, “Intangible –Goodwill and Other (Topic 350): When to perform Step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts.” This update requires an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors, resulting in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
NOTE 4 - SEGMENT REPORTING
In June, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 131,”Disclosures About Segments of an Enterprises and Related Information”. This Statement requires companies to report information about operating segments in interim and annual financial statements. It also requires segment disclosures about products and services,
geographic areas, and major customers. The Company determined that it did not have any separately reportable operating segments as of March 31, 2012.
NOTE 5 - INCOME TAXES
Due to the operating loss and the inability to recognize an income tax benefit there is no provision for current or deferred federal or state income taxes for the period ended March 31, 2012.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.
The Company’s total deferred tax asset, calculated using federal and state effective tax rates, as of Mar 31, 2012 is as follows:
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Total Deferred Tax Asset
|
$ | 9,138 | ||
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Valuation Allowance
|
(9,138 | ) | ||
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Net Deferred Tax Asset
|
- |
The reconciliation of income taxes computed at the federal statutory income tax rate to total income taxes for the period from inception through Mar 31, 2012 is as follows:
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2012
|
||||
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Income tax computed at the federal statutory rate
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34 | % | ||
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State income tax, net of federal tax benefit
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0 | % | ||
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Total
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34 | % | ||
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Valuation allowance
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-34 | % | ||
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Total deferred tax asset
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0 | % | ||
NOTE 5 - INCOME TAXES (CONTINUED)
Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by approximately $2,029 for the period ending March 31, 2012.
As of March 31, 2012, the Company had a federal and state net operating loss carry forward in the amount of $26,785 which expires in the year ending 2030.
NOTE 6 - CAPITAL STOCK
The Company is authorized to issue 100,000,000 common shares at $0.0001 par value per share.
During the period from inception (October 21, 2010) to March 31, 2012, the Company has issued the following stock subscriptions for Common Shares:
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Name
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Number of shares
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Cash or Services
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Price per share
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Total value
|
|||||||||
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AEP Holdings, LLC
|
500,000 |
founder shares
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$ | 0.0001 | $ | 50.00 | |||||||
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Anthony Allison
|
500,000 |
founder shares
|
$ | 0.0001 | $ | 50.00 | |||||||
| 1,000,000 | $ | 100.00 | |||||||||||
The Company is authorized to issue 10,000,000 preferred shares at $0.0001 per share.
During the period from inception (October 21, 2010) to March 31, 2012, the company issued no preferred stock.
NOTE 7 - DEVELOPMENT STAGE COMPANY
The Company is in the development stage as of March 31, 2012 and to date has had no significant operations. Recovery of the Company assets is dependent on future events, the outcome of which is indeterminable. In addition, successful completion of the Company’s development program and its transition, ultimately, to attaining profitable operations is dependent upon obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure.
NOTE 8 - NOTE PAYABLE TO A RELATED PARTY AND ACCRUED INTEREST
The Company has signed a promissory note with a related party. The total amount outstanding of the note is $24,950 and is payable upon demand and bears interest at 8% per year. The interest accrued, but not paid as of March 31, 2012 i $2,062.
NOTE 9 – SUBSEQUENT EVENTS
There are no subsequent events to disclose through the date of this filing.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
Austin Acquisitions, Inc. (“we,” “us” or the “Company”) was incorporated in the State of Nevada on October 21, 2010. We are a developmental stage company and have not generated any revenues to date. We were organized to serve as a vehicle for a business combination through a capital stock exchange, merger, reverse acquisition, asset acquisition or other similar business combination (a “Business Combination”) with an operating or development stage business (a “Target”) which desires to utilize our status as a reporting company under the Exchange Act.
The Company voluntarily filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on December 17, 2010, and since its effectiveness, the Company has focused its efforts on identifying a possible Target for a Business Combination. We are not presently engaged in, and will not engage in, any substantive commercial business operations unless and until we consummate a Business Combination. Our fiscal year ends on September 30.
Based on our business activities, the Company is a “shell company” as defined under the Exchange Act because we have no operations and nominal assets consisting solely of cash and/or cash equivalents. Because we are a “shell” company, the Business Combination we enter into with a Target will be deemed to be a “reverse acquisition” or “reverse merger.” We are also a “blank check” company as defined under the Exchange Act because we are a development stage company that is issuing a “penny stock” (as defined under the Exchange Act) and have no specific business plan or purpose other than to merge with an unidentified company or companies. Many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies in their respective jurisdictions.
Our management has broad discretion with respect to identifying and selecting a prospective Target Business. We have not established any specific attributes or criteria (financial or otherwise) for a prospective Target and may enter into a Business Combination with a development stage company, distressed company or a foreign company engaged in any industry. Our sole officer and director previously has served as an officer or director of a development stage public company that has consummated a Business Combination but no assurances can be offered that he will successfully identify a Target Business or conclude a Business Combination for our Company. In addition, our management engages in other business activities and is not obligated to devote any specific number of hours to our matters. Management intends to devote only as much time as it deems necessary to our affairs.
We will not realize any revenues or generate any income unless and until we successfully merge with or acquire an operating business that is generating revenues and otherwise is operating profitably. Moreover, we can offer no guarantee that the Company will achieve long-term or immediate short-term earnings from any Business Combination.
Any entity with which we enter into a Business Combination will be subject to numerous risks in connection with its operations. To the extent we affect a Business Combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. If we consummate a Business Combination with a foreign entity, we will be subject to all of the risks attendant to foreign operations. Although our management will endeavor to evaluate the risks inherent in a particular Target Business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
We expect that in connection with any Business Combination, we will issue a significant number of shares of our common stock (equal to at least 80% of the total number of shares outstanding after giving effect to the transaction and likely, a significantly higher percentage) in order to ensure that the Business Combination qualifies as a “tax free” transaction under federal tax laws. The issuance of additional shares of our capital stock will significantly reduce the equity interest of our stockholders prior to the transaction and cause a change in control in our Company and likely result in the resignation or removal of our officer and director as of the date of the transaction.
Our management anticipates that our Company likely will affect only one Business Combination, due primarily to our limited financial resources and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a Target Business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us because it will not permit us to offset potential losses from one venture against potential gains from another.
The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to filing Exchange Act reports, investigating and analyzing Targets and consummating a Business Combination. We believe we will be able to meet these costs through use of funds in our treasury and from cash which may be loaned to or invested in us by our stockholders, management or other investors. There are no assurances that the Company will be able to secure additional funding as needed. Our ability to continue as a going concern is dependent upon our ability to generate cash from the sale of our common stock and/or obtain debt financing and attain future profitable operations by acquiring or merging with a profitable company.
Liquidity and Capital Resources
At March 31, 2012, we had total assets of $632, consisting exclusively of cash, and current liabilities of $23,317, comprised of amounts owed to stockholders, as compared to no assets and current liabilities of $20,658 at September 30, 2011, comprised exclusively of amounts owed to stockholders.
Our existing cash reserves will not be sufficient to cover our operating costs and expenses over the next twelve months.
To date, we have funded our operations through loans from our stockholders. Our stockholders have advised management that they presently expect to fund additional costs and expenses we may incur through loans or further investment in the Company, as and when necessary. However, our stockholders are under no obligation to provide such funding.
The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities:
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For the six months ended
March 31, 2012
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For the six months ended
March 31, 2011
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For the Cumulative
Period from
October 21, 2010
(Inception) to
March 31, 2012
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||||||||||
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Net Cash Used in Operating Activities
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$ | 5,818 | $ | 14,001 | $ | 24,418 | ||||||
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Net Cash Provided by Financing Activities
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$ | 6,450 | $ | 14,100 | $ | 25,050 | ||||||
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Net Increase (Decrease) in Cash and Cash Equivalents
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$ | 632 | $ | 99 | $ | 632 | ||||||
We do not expect to engage in any substantive activities unless and until such time as we enter into a Business Combination with a Target, if ever. We cannot provide investors with any assurance that we will have sufficient capital resources to fund our operations and realize our business objectives.
Results of Operations
Since our inception, we have not engaged in any substantive operations, other than seeking to identify a Target, nor have we generated any revenues. We reported a net loss for the three and six months ended March 31, 2012 of $2909 and $6027 respectively, compared to a net loss of $804 and $14,476 for the comparable 2011 periods, and have suffered a net loss since inception of $26,785. At March 31, 2012, we had a working capital deficit of $26,685 compared to a working capital deficit of $20,658 at September 30, 2011. Since our inception, our operating expenses have principally comprised professional fees and expenses incurred in connection with the filing of reports under the Exchange Act, as well as interest accrued on loans from our stockholders.
We do not expect to engage in any activities, other than seeking to identify a Target Business, unless and until such time as we enter into a Business Combination with a Target Business, if ever. We cannot provide investors with any assessment as to the nature of a Target Business’s operations or speculate as to the status of its products or operations, whether at the time of the Business Combination it will be generating revenues or its future prospects.
Going Concern
Our negative working capital, continuing operating losses, failure to generate revenues and lack of operating capital create substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on its ability to obtain capital from our affiliates to fund our operations, generate cash from the sale of its securities and attain future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.
The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
Forward Looking Statements
Statements, other than historical facts, contained in this Quarterly Report on Form 10-Q, including statements of potential acquisitions and our strategies, plans and objectives, are "forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Although we believe that our forward looking statements are based on reasonable assumptions, we caution that such statements are subject to a wide range of risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are important factors that could cause actual results to differ materially from the forward looking statements, including, but not limited to; the time management devotes to identifying a target business; management’s ability to consummate a business combination; the financial condition of the target company with which we may enter a business combination; the effect of existing and future laws; governmental regulations; the political and economic climate of the United States; and conditions in the capital markets. We undertake no duty to update or revise these forward-looking statements.
When used in this Form 10-Q, the words, "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Because these forward-looking statements involve risks and uncertainties, actual results could differ materially from those expressed or implied by these forward-looking statements for a number of important reasons.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4(T). Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of March 31, 2012, the Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer, who is the Company’s principal executive officer and principal financial officer, who we refer to herein as our PEO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), pursuant to Exchange Act Rule 13a-15. Our PEO concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2012.
The weaknesses in our disclosure and procedures encompassed weaknesses in certain elements of our internal control over financial reporting (ICFR) that our subsumed within our disclosure controls and procedures. A material weakness is defined in Section 210.1-02(4) of Regulation S-X as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The specific weaknesses relate to elements of our ICFR that provide reasonable assurances that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles and comprise the following:
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1.
|
We did not maintain effective controls over the control environment.
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2.
|
We did not maintain effective controls over financial statement disclosure.
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|
3.
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We did not maintain effective controls over financial reporting.
|
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4.
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There existed a lack of segregation of duties in regard to the Company’s financial reporting, procedures for depositing of funds, procedures for cash disbursements, procedures for checkbook entries, period close procedures, and procedures for financial statement preparation, because we have only one officer who is responsible for all such duties.
|
We believe that the weaknesses in our disclosure controls and procedures and ICFR are a direct consequence of our size, resource constraints and the nature of our business. We are a “shell company,” as defined under the Securities Act, in that we have no operations and nominal assets. Further, we have no full-time employees. As a result, we are constrained by our lack of resources to affect the types of corrective actions that we believe would be necessary and advisable to remediate the material weaknesses, including, for example, engaging additional accounting personnel and adopting an audit committee charter and seating an audit committee with at least one independent member who qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K
Changes in Internal Controls
There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three months ended March 31, 2012 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
There are presently no material pending legal proceedings to which the Company or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.
Item 1A. Risk Factors.
Smaller reporting companies are not required to provide the information required by this item. We refer readers to our registration statement on Form 10 as filed with the SEC on December 17, 2010 for a description of the risks associated with our business and an investment in our securities.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
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Exhibit
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Description
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31.1
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32.1*
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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* Pursuant to Commission Release No. 33-8238, this certification will be treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of such report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of Section 18 of the Securities Exchange Act of 1934, as amended, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused the Report to be signed on its behalf by the undersigned thereunto duly authorized.
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AUSTIN ACQUISITIONS, INC.
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||
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Dated: May 21, 2012
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By:
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/s/ Jonathan Patton
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Name:
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Jonathan Patton
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Title:
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President, Principal Executive Officer
and Principal Financial Officer
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