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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

þ

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

 

 ACT OF 1934

For the quarterly period ended: September 30, 2011

or

 

 

¨

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

 

 ACT OF 1934

For the transition period from: _____________ to _____________

———————

Andover Holdings, Inc.

(Exact name of registrant as specified in its charter)

———————

Florida

000-17746

64-1045849

(State or Other Jurisdiction

(Commission

(I.R.S. Employer

of Incorporation)

File Number)

Identification No.)

7300 N. Federal Highway Suite 207 Boca Raton, Florida 33487

(Address of Principal Executive Office) (Zip Code)

561 989 3600

(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

þ

 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

¨

 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.

 

 

Large accelerated filer

¨

 

 

Accelerated filer

¨

 

Non-accelerated filer

¨

 

 

Smaller reporting company

þ

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

¨

 Yes

þ

 No

 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of September 30, 2011 was approximately 31,110,580.  

 

 




PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS


 

 

September 30,

 

 

December 31,

 

 

 

2011

 

 

2010

 

 

 

(Unaudited)

 

 

 

 

ASSETS

     

 

                    

  

     

 

                    

  

 

 

 

 

 

 

 

 

 

Cash

 

$

11,946

 

 

$

57,094

 

Total current assets

 

 

11,946

 

 

 

57,094

 

  

 

 

 

 

 

 

 

 

Total assets

 

$

11,946

 

 

$

57,094

 

  

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

108,083

 

 

$

189,386

 

Accounts payable and accrued expenses, related parties

 

 

312,054

 

 

 

294,329

 

Loans payable

 

 

330,500

 

 

 

277,500

 

Loans payable- related parties

 

 

185,869

 

 

 

185,869

 

Total current liabilities

 

 

936,506

 

 

 

947,084

 

  

 

 

 

 

 

 

 

 

Total liabilities

 

 

936,506

 

 

 

947,084

 

  

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Stockholders' (deficit):

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 20,000,000 shares authorized; none issued and outstanding

 

 

 

 

 

 

Common stock, $0.001 par value, 50,000,000 shares authorized; 31,110,580 shares issued and outstanding, respectively

 

 

31,111

 

 

 

31,111

 

Additional paid-in capital

 

 

2,857,089

 

 

 

2,857,089

 

Deficit accumulated during the development stage

 

 

(3,812,760

)

 

 

(3,778,190

)

  

 

 

 

 

 

 

 

 

Total stockholders' (deficit)

 

 

(924,560

)

 

 

(889,990

)

  

 

 

 

 

 

 

 

 

Total liabilities and stockholders' (deficit)

 

$

11,946

 

 

$

57,094

 


The accompanying notes are an integral part of the consolidated financial statements



1




ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


 

 

Cumulative From

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inception

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(June 28, 1999)

 

 

 

 

 

 

 

 

 

To

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2011

 

 

2011

 

 

2010

 

 

2011

 

 

2010

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenue

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

3,888,816

 

 

 

42,156

 

 

 

38,337

 

 

 

106,148

 

 

 

44,739

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (Loss)

 

 

(3,888,816

)

 

 

(42,156

)

 

 

(38,337

)

 

 

(106,148

)

 

 

(44,739

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of debt pursuant to agreement rescission  

 

 

130,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of Accounts Payable

 

 

96,029

 

 

 

 

 

 

 

 

 

96,029

 

 

 

 

Interest (expense)

 

 

(149,973

)

 

 

(9,201

)

 

 

(10,132

)

 

 

(24,451

)

 

 

(26,167

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Before Provision for Income Taxes

 

 

(3,812,760

)

 

 

(51,357

)

 

 

(48,469

)

 

 

(34,570

)

 

 

(70,906

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss)

 

$

(3,812,760

)

 

$

(51,357

)

 

$

(48,469

)

 

$

(34,570

)

 

$

(70,906

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss) Per Common Share -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

$

 

 

$

 

 

$

 

 

$

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares of Common Stock Outstanding

 

 

 

 

 

 

31,110,580

 

 

 

31,110,580

 

 

 

31,110,580

 

 

 

31,110,580

 


The accompanying notes are an integral part of the consolidated financial statements



2




ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


 

 

Cumulative From

 

 

 

 

 

 

 

 

 

Inception

 

 

 

 

 

 

 

 

 

(June 28, 1999)

 

 

 

 

 

 

To

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2011

 

 

2011

 

 

2010

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Net (loss)

 

$

(3,812,760

)

 

$

(34,570

)

 

$

(70,906

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

2,885

 

 

 

 

 

 

 

Stock based compensation

 

 

1,405,600

 

 

 

 

 

 

 

Stock issued for liabilities

 

 

122,845

 

 

 

 

 

 

 

Cancellation of debt pursuant to agreement rescission

 

 

(130,000

)

 

 

 

 

 

 

Stock and note issued for purchased R & D

 

 

161,250

 

 

 

 

 

 

 

Accumulated loss of acquisition

 

 

8,711

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

116,082

 

 

 

(81,303

)

 

 

6,403

 

Accounts payable and accrued expenses-related parties

 

 

736,559

 

 

 

17,725

 

 

 

14,764

 

Net cash used in operating activities

 

 

(1,388,828

)

 

 

(98,148

)

 

 

(49,739

)

  

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,885

)

 

 

 

 

 

 

Net cash used in investing activities

 

 

(2,885

)

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

Loans payable proceeds, related parties

 

 

321,594

 

 

 

 

 

 

 

Loans payable repayments, related parties

 

 

(183,483

)

 

 

 

 

 

 

Proceeds from loans payable

 

 

330,500

 

 

 

53,000

 

 

 

150,000

 

Proceeds from sale of common stock

 

 

935,048

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

1,403,659

 

 

 

53,000

 

 

 

150,000

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

11,946

 

 

 

(45,148

)

 

 

100,261

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents, beginning of period

 

 

 

 

 

57,094

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents, end of period

 

$

11,946

 

 

$

11,946

 

 

$

100,261

 




3




ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(UNAUDITED)


 

 

Cumulative From

 

 

 

 

 

 

 

 

 

Inception

 

 

 

 

 

 

 

 

 

(June 28, 1999)

 

 

 

 

 

 

To

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2010

 

 

2010

 

 

2009

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

Payment of taxes

 

$

 

 

$

 

 

$

 

Payment of interest

 

$

10,120

 

 

$

 

 

$

 

  

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

Stock Issued for Services

 

$

1,405,600

 

 

$

 

 

$

 

Contribution of debt by shareholder

 

$

370,222

 

 

$

 

 

$

 

Stock Issued for Acquisition of Timber Property, Inc.

 

$

8,711

 

 

$

 

 

$

 

Stock Issued for Purchased R & D

 

$

31,250

 

 

$

 

 

$

 


The accompanying notes are an integral part of the consolidated financial statements






4




ANDOVER HOLDINGS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011


NOTE 1. - DESCRIPTION OF BUSINESS

The Company was incorporated under the laws of the State of Florida on June 28, 1999. We filed a Form 10SB with the Securities and Exchange Commission, thereby becoming a publicly reporting company. On October 29, 2001, the Company changed its name from Xelos, Inc. to Real Logic, Inc. On July 31, 2008, it changed the name from Real Logic, Inc. to Andover Energy Holdings, Inc. Management's intentions were to focus on Wind Energy Turbines manufacturing. Due to a change in Management, the Company changed the name to Andover Holdings, Inc. on August 24. 2010 and changed intentions to focus on making an Acquisition for the Company.

NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development Stage Company

The Company is in its development stage since its formation in 1999 and has an accumulated deficit of $3,812,760.

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 disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Estimates are used when accounting for allowance for bad debts, collect ability of accounts receivable, amounts due to service providers, depreciation, and litigation contingencies, among others.

Principles of consolidation

The consolidated financial statements will include the accounts of the Company and its future subsidiaries, in accordance with U.S. generally accepted accounting principles, under the rules and regulations of the U.S. Securities and Exchange Commission (SEC). All inter-company transactions and balances will be eliminated in consolidation.

Revenue recognition

Revenue will be recognized when the related service has been provided, and there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. Revenue from other professional services, will be recognized in the period the services are to be provided.  Deferred revenue will consist of amounts that have been prepaid and services which have not yet been rendered.

Net loss per common share

In accordance with FASB ASC 260 basic net loss per common share is computed using the weighted average number of common shares outstanding during each period presented, excluding unvested restricted stock awards subject to cancellation. Diluted net loss per common share is computed by using the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares represent the incremental common shares issuable for stock options.

Cash and cash equivalents

The Company classifies cash on hand and deposits in the bank as cash and considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Concentrations of Risk

The Company’s revenues will primarily be derived from Independent Acquisitions Entities which will be structured as Subsidiaries to the Parent Holding Company.





5




Property and Equipment

Depreciation is computed on the straight-line method, based on the estimated useful lives of the asset of five to seven years. Expenditures for maintenance and repairs will be charged to operations as incurred. Upon retirement or sale, the cost of assets disposed of and related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. The Company had a minimal amount $2,885 of office equipment that it disposed of in 2008.

Share-Based Compensation

The Company will record compensation expense for share-based compensation in accordance with ASC Topic 718. Currently, there are no Share Options issued. For share options to certain officers and others, in the future, the Company will use the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.

Income taxes

The Company’s U.S. Federal and state income tax returns prior to fiscal year December 31, 2008 are filed and management will continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the consolidated balance sheets. Deferred income taxes (benefits) are provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes.

The Company had cumulative net operating loss carry-forwards for income tax purposes at September  30, 2011 of approximately $3,812,760 expiring through December 31, 2023. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The fair value of notes and loan payables is determined using current applicable rates which approximate market rates of such debt.

Recently Issued Accounting Standards

Subsequent Events Disclosures

In February 2010, the FASB issued FASB ASU 2010-09, “Subsequent Events, Amendments to Certain Recognition and Disclosure Requirements,” which clarifies certain existing evaluation and disclosure requirements in ASC 855 “Subsequent Events” related to subsequent events. FASB ASU 2010-09 requires SEC filers to evaluate subsequent events through the date in which the financial statements are issued and is effective immediately. The new guidance does not have an effect on the Company’s consolidated results of operations and financial condition.

Fair Value Measurements

On January 1, 2009, the Company adopted accounting guidance issued by the Financial Accounting Standards Board ( "FASB") which had previously deferred the effective date of fair value measurements for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed in financial statements at fair value on a recurring basis ( at least annually). The adoption of this guidance did not have a material impact on the consolidated financial statements.

NOTE 3 - INCOME TAX

In February 1992, the Financial Standards Board issued Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under SFAS No. 109, deferred assets and liabilities are recognized for the estimated future tax consequences between the financial statement carrying amounts of the existing assets and their respective basis.



6




Deferred assets and liabilities are measured using enacted tax rates in effect for the year in which temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. For the nine months ending September 30, 2011 and for the year ending December 31, 2010 the effective income tax rate is:

 

 

 

 

 

 

 

Period ending

 

 

September 30,
2011

 

December 31,
2010

Statutory federal income tax rate

     

34%

 

34%

Valuation allowance 

 

(34%)

 

(34%)

Effective tax rate

 

––%

 

––%

The Company has a net operating loss carry forward as of September 30, 2010 of approximately $3,812,760 which is offset by a 100% valuation allowance due to the uncertainty surrounding the ultimate realization of these assets. The loss carry-forwards expires at various dates through 2027.

NOTE 4 - RELATED PARTY TRANSACTIONS

Loan Payable

The Company’s officers and directors have advanced funds to the company for working capital. These advances are unsecured, bear interest at 7% per annum and have no scheduled repayment. For the nine months ending September 30, 2011 interest expense of $24,451 has been accrued and the total accrued interest balance at September 30, 2011 is $149,973.

Management Fees

The Board of Directors approved an Executive Employment Agreement of $10,000 per month for Barbara Lang Tolley, as Acting Chief Executive Officer and Chairman of the Board, .effective the Second Quarter of Y2010.

NOTE 5 - CAPITAL TRANSACTIONS

There were no capital transactions in the first quarter of Y2010.

NOTE 6 - NOTES AND LOANS PAYABLE

At September 30, 2011 and 2010, total notes and loans payable consisted of the following: Notes and loans payable to principal stockholders are unsecured and due upon demand, with interest at between 5% and 7%.

 

 

September 30,

2011

 

September 30,

2010

 

 

 

 

 

 

 

 

 

Loans Payable

     

$

330,500

 

$

277,500

 

Loans Payable Related Parties

 

$

185,869

 

$

185,869

 


Interest expense was $9,201and $10,132 for the quarters ended September 2011 and September 2010, respectively.

NOTE 7. - EQUITY TRANSACTIONS

The fair values of the Stock Options issued during March 31, 2008 have been valued at the fair market value of the Common Stock at Date of Issue.

The Company issued a total of 740,000 and 2,670,000, respectively of shares of common stock for a total value of $89,000 and $1,182,400, which has been recorded as compensation expense during the years ended December 31, 2008 and 2007.

The Company issued a total of 320,000 and 25,000, respectively of shares of common stock for a total value of $122,845 and $8,000, which satisfied liabilities during the years ended December 31, 2008 and 2007.

The Company sold 3,305,000 and 3,480,000, respectively of shares of common stock to investors for $348,000 and $142,500 during the years ended December 31, 2008 and 2007.



7




Effective December 31, 2008, the acting CEO and surviving relative of the deceased CEO Bradford Tolley, of the Company has authorized the contribution $370,222 which represents the balance of his cumulative unpaid accrued compensation to paid in capital of the Company.

The Company has not issued any additional shares resulting from subscription agreements for common stock since July 2008 to present.

NOTE 8. - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing date of this 10-Q and determined that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes thereto other than as discussed in the accompanying notes.





8




Item 2.

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

The following discussion should be read in conjunction with our consolidated financial statements. Certain statements contained in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include those discussed in “Forward Looking Statements,” above.

Results of Operations

We are a development stage company as defined in the Statement of Financial Accounting Standards ASC 915 with limited operations. We have had no revenues since inception. The Companies' acquisition for the Duncan Motor Company did not materialize.

There was no Stock based compensation in the Third Quarter of September 30, 2011.  The Company's accumulated deficit in the Third Quarter was $3,812,760 and a working capital deficit of $936,506 compared to an accumulated deficit of $3,778,190 and a working capital deficit of $947,085 in 2010.  Until we initiate and conclude an acquisition, the Company will continue to operate with a deficit.

Interest expense was $9,201 for the quarter ended September 30, 2011, resulting in a cumulative balance since inception of $149,973.

Accounting fees were $12,225 for the Y 2011, compared to $13,500 in Y2010.


Legal fees were $0.00 for the Y2011, compared to $4,030 in Y2010.

)

Liquidity and Capital Resources

The following table summarizes the cash flows for the quarters ended September 30, 2011 and 2010:


 

For the Quarter Ended

September 30,

 

Net cashed (used in) provided by:

2011

 

2010

 

 

 

 

     

 

 

 

Operating Activities

$

(42,156

)

$

(38,337

)

Investing Activities

$

 

$

 

Financing Activities

$

 

$

 


Critical Accounting Policies

Revenue recognition

Revenue is recognized when the related service has been provided, there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collection is reasonably assured. The Company has had no revenue, to date.. The Company intends to recognize revenue for services as they are provided, beginning on the date that the customer commences our services and continuing over the term of the customer contract. Revenue from other professional services, including setup and direct installation activities are recognized in the period the services are provided. Amounts that have been invoiced are recorded in accounts receivable and either deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Therefore, deferred revenue consists of amounts that have been prepaid and services have not yet been rendered. Revenue from the sale of bundled infrastructure hardware is recognized at the time installation is complete.

The Company records compensation expense for share-based compensation in accordance with ASC Topic 718. For share options to certain officers and others, the Company used the Black-Scholes pricing model to determine the fair value of stock options on the grant dates for stock option awards issued. The Black-Scholes valuation model requires the Company to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the fair value of our common stock, expected term, the expected volatility, and certain present values.





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Net Operating Loss Carry Forwards

The Company had cumulative net operating loss carry forwards for income tax purposes at September 30, 2011 of approximately $3,812,760 expiring through December 31, 2024. The Company has established a 100% valuation allowance against this deferred tax asset, as the Company has no history of profitable operations.

Going Concern

There is no assurance that we will be able to successfully raise the funds necessary to fund operations through any means available. Further, there is no assurance that we will be able to successfully grow operations even if we are successful in acquiring the funds necessary, which may have a material impact on our consolidated financial position and results of operations. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Item 3.

Quantitative and Qualitative disclosure about Market Risk

Not required by smaller reporting companies.

Item 4.

Controls and Procedures.

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2010 (the “Evaluation Date”).  This evaluation included reviews of the documentation of controls, evaluation of the design effectiveness of controls, and a conclusion on this evaluation. This evaluation was carried out under the supervision and with the participation of our President, as Principal Executive Officer, and our Chief Financial Officer. Based upon that evaluation, management concluded that, as of the end of such period, our disclosure controls and procedures were effective.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our President and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

 




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PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

There have been no Legal claims or Procedures

Item 1A.

Risk Factors.

Not required by smaller reporting companies.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

There has been no sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities.

There has been no default upon Senior Securities

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None

Item 6.

Exhibits.


Exhibit No.

  

Description

 

  

  

31.1

  

Certificate of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

 

  

  

31.2

  

Certificate of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

 

 

 

32.1

  

Certificate of Principal Executive and Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 

 

101

 

XBRL Interactive Data*

———————

*

Attached as Exhibit 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) related notes to these financial statements tagged as blocks of text. The XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.





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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: May 29, 2012

         

Andover Holdings, Inc.

 

 

  

 

 

 

 

By:  

/s/ Barbara Lang Tolley

 

 

Barbara Lang Tolley

 

 

CEO








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