Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - AFH Holding IV, Inc.Financial_Report.xls
EX-32.1 - AFH Holding IV, Inc.ex32-1.htm
EX-31.1 - AFH Holding IV, Inc.ex31-1.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 September 30, 2012

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from

 

Commission File No. 000-52850

 

AFH HOLDING IV, INC.

 (Name of Small Business Issuer in its charter)

  

Delaware   26-1365023
(State or other jurisdiction of
incorporation or formation)
  (I.R.S. employer identification number)

  

9595 Wilshire Blvd.

 Suite 700

 Beverly Hills, CA 90212

 (Address of principal executive offices)

  

Issuer’s telephone number: (310) 492-9898

  

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 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 [  ] 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 the definitions of “large accelerated filer,” “accelerated filer,” “non-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]

 

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

[x] Yes [  ] No

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: State the number of shares outstanding of each of the issuer’s classes of common equity, as of the last practicable date: As of November 14, 2012, there were 5,087,500 shares of common stock, par value $0.001 per share, of the Registrant issued and outstanding.

 

 

 

 
 

  

TABLE OF CONTENTS

  

    Page
     
PART I - FINANCIAL INFORMATION  
Item 1. Financial Statements 3
  Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011 F-2
  Statement of Changes in Stockholders’ Deficit for the Period from Date of Inception (April 16, 2007) through September 30, 2012 (Unaudited) F-3
  Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011 and for the Cumulative Period from Date of Inception (April 16, 2007) through September 30, 2012 (Unaudited) F-4
  Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 and for the Cumulative Period from Date of Inception (April 16, 2007) through September 30, 2012 (Unaudited) F-5
  Notes to Financial Statements F-6 - F-9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
Item 3. Quantitative and Qualitative Disclosures About Market Risk 8
Item 4. Controls and Procedures 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 1A Risk Factors 9
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Mine Safety Disclosures 9
Item 5. Other Information 9
Item 6. Exhibits 9
SIGNATURES 10

2
 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

AFH HOLDING IV, INC.

(A DEVELOPMENT STAGE COMPANY)

(A DELAWARE CORPORATION)

Beverly Hills, CA

 

FINANCIAL REPORTS
AT
September 30, 2012

 

3
 

AFH HOLDING IV, INC.

(A Development Stage Company)

(A DELAWARE Corporation)

Beverly Hills, CA

  

TABLE OF CONTENTS
 
Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011 F-2
   
Statement of Changes in Stockholders’ Equity for the Period from Date of Inception (April 16, 2007) through September 30, 2012 (Unaudited) F-3
   
Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011 and for the Period from Date of Inception (April 16, 2007) through September 30, 2012 (Unaudited) F-4
   
Statements of Cash Flows for the Nine Months Ended September 30, 2012  and 2011 and for the Period from Date of Inception (April 16, 2007) through September 30, 2012 (Unaudited) F-5
   
Notes to Financial Statements F-6 - F-9

F-1
 

  

AFH HOLDING IV, INC.

(A DEVELOPMENT STAGE COMPANY)

(A DELAWARE CORPORATION)

Beverly Hills, CA

 

BALANCE SHEETS

 

 

   (Unaudited)     
   September 30, 2012   December 31, 2011 
         
ASSETS          
Due from Parent  $175,000   $175,000 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Liabilities          
Accrued Expenses  $7,037   $7,768 
Due to Parent   23,190    15,422 
           
Total Liabilities   30,227    23,190 
           
Stockholders’ Equity          
Preferred Stock: $.001 Par; 20,000,000 Shares Authorized, -0- Issued and Outstanding        
Common Stock: $.001 Par; 100,000,000 Shares Authorized; 5,087,500 Issued and Outstanding   5,088    5,088 
Additional Paid-In-Capital   176,933    176,933 
Deficit Accumulated During Development Stage   (37,248)   (30,211)
           
Total Stockholders’ Equity   144,773    151,810 
           
Total Liabilities and Stockholders’ Equity  $175,000   $175,000 

 

The accompanying notes are an integral part of these financial statements.

 

F-2
 

 

AFH HOLDING IV, INC.

(A DEVELOPMENT STAGE COMPANY)

(A DELAWARE CORPORATION)

Beverly Hills, CA

 

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM

DATE OF INCEPTION (APRIL 16, 2007) THROUGH SEPTEMBER 30, 2012 - UNAUDITED

 

 

               Deficit     
               Accumulated     
   Common Stock   Additional   During   Total 
   Number       Paid-In   Development   Stockholders’ 
   of Shares   Value   Capital   Stage   Equity 
                     
Balance - April 16, 2007      $   $   $   $ 
                          
Common Stock Issued in Lieu of Services   5,000,000    5,000            5,000 
                          
Contributed Capital for Services           2,021        2,021 
                          
Net Loss               (7,021)   (7,021)
                          
Balance - December 31, 2007   5,000,000    5,000    2,021    (7,021)    
                          
Common Stock Issued for Cash   87,500    88    174,912        175,000 
                          
Net Loss               (3,550)   (3,550)
                          
Balance - December 31, 2008   5,087,500    5,088    176,933    (10,571)   171,450 
                          
Net Loss               (6,416)   (6,416)
                          
Balance - December 31, 2009   5,087,500    5,088    176,933    (16,987)   165,034 
                          
Net Loss for the Period               (5,456)   (5,456)
                          
Balance - December 31, 2010   5,087,500    5,088    176,933    (22,443)   159,578 
                          
Net Loss for the Period               (7,768)   (7,768)
                          
Balance - December 31, 2011   5,087,500    5,088    176,933    (30,211)   151,810 
                          
Net Loss for the Period               (7,037)   (7,037)
                          
Balance - September 30, 2012   5,087,500   $5,088   $176,933   $(37,248)  $144,773 

 

The accompanying notes are an integral part of these financial statements.

 

F-3
 

  

AFH HOLDING IV, INC.

(A DEVELOPMENT STAGE COMPANY)

(A DELAWARE CORPORATION)

Beverly Hills, CA

 

STATEMENTS OF OPERATIONS - UNAUDITED

 

 

                   Period From 
                   Date of Inception 
   For the Nine Months Ended   For the Three Months Ended   (April 16, 2007) 
   September 30,   September 30,   Through 
   2012   2011   2012   2011   September 30, 2012 
                     
Revenues  $   $   $   $   $ 
                          
Expenses                         
General and Administrative   5,287    4,353    1,060    2,149    30,733 
Interest                   15 
                          
Total Expenses  $5,287   $4,353   $1,060   $2,149   $30,748 
                          
Net Loss for the Period Before Taxes  $(5,287)  $(4,353)  $(1,060)  $(2,149)  $(30,748)
                          
Franchise Tax  $1,750   $1,750   $   $   $6,500 
                          
Net Loss for the Period After Taxes  $(7,037)  $(6,103)  $(1,060)  $(2,149)  $(37,248)
                          
Loss per Share - Basic and Diluted  $(0.00)  $(0.00)  $(0.00)  $(0.00)  $(0.01)
                          
Weighted Average Common Shares Outstanding   5,087,500    5,087,500    5,087,500    5,087,500    5,067,014 

 

The accompanying notes are an integral part of these financial statements.

 

F-4
 

 

AFH HOLDING IV, INC.

(A DEVELOPMENT STAGE COMPANY)

(A DELAWARE CORPORATION)

Beverly Hills, CA

 

STATEMENTS OF CASH FLOWS - UNAUDITED

 

 

           Period From 
           Date of Inception 
   For the Nine Months Ended   (April 16, 2007) 
   September 30,   Through 
   2012   2011   September 30, 2012 
             
Cash Flows from Operating Activities               
                
Net Loss  $(7,037)  $(6,103)  $(37,248)
                
Non Cash Adjustments:               
Common Stock Issued in Lieu of Services           5,000 
Contributed Capital for Services           2,021 
                
Changes in Assets and Liabilities:               
Accrued Expenses   (731)   4,559    7,037 
                
Net Cash Flows from Operating Activities   (7,768)   (1,544)   (23,190)
                
Net Cash Flows from Investing Activities            
                
Cash Flows from Financing Activities               
Cash Advance by Parent   7,768    1,544    23,190 
                
Net Change in Cash and Cash Equivalents            
                
Cash and Cash Equivalents - Beginning of Period            
                
Cash and Cash Equivalents - End of Period  $   $   $ 
                
SUPPLEMENTAL NON-CASH DISCLOSURES               
Common Stock Proceeds Held by Parent  $   $   $175,000 
                
Cash Paid During the Period for:               
Interest  $   $   $ 
Franchise Tax  $   $   $ 

 

The accompanying notes are an integral part of these financial statements.

 

F-5
 

 

AFH HOLDING IV, INC.

(A Development Stage Company)

(A DELAWARE Corporation)

Beverly Hills, CA

 

NOTES TO FINANCIAL STATEMENTS

 

Note A- The Company

 

AFH Holding IV, Inc., a development stage company (the “Company”), was incorporated under the laws of the State of Delaware on April 16, 2007. The Company is 98.3% owned by AFH Holding & Advisory, LLC (the “Parent”). The financial statements presented represent only those transactions of AFH Holding IV, Inc. The Company is looking to acquire an existing company or acquire the technology to begin operations.

 

As a blank check company, the Company’s business is to pursue a business combination through acquisition, or merger with, an existing company. As of the date of the financial statements, the Company is not conducting negotiations with any target business. No assurances can be given that the Company will be successful in locating or negotiating with any target company.

 

Since inception, the Company has been engaged in organizational efforts.

 

The accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. Certain information that is not required for interim financial reporting purposes has been omitted.

 

Note B- Summary of Significant Accounting Policies

 

Method of Accounting

 

The Company maintains its books and prepares its financial statements on the accrual basis of accounting.

 

Development Stage

 

The Company has operated as a development stage enterprise since its inception by devoting substantially all of its efforts to financial planning, raising capital, research and development, and developing markets for its services. The Company prepares its financial statements in accordance with the requirements of FASB ASC 915.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company maintains cash and cash equivalents at financial institutions, which periodically may exceed federally insured amounts.

 

F-6
 

 

Note B- Summary of Significant Accounting Policies – continued

 

Loss Per Common Share

 

Loss per common share is computed in accordance with FASB ASC 260-10 by dividing income (loss) available to common stockholders by weighted average number of common shares outstanding for each period. The calculations of diluted net loss per share gives effect to common stock equivalents, however, potential common shares are excluded if their effect is anti-dilutive.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results can differ from those estimates.

 

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740 using the asset and liability approach, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of such assets and liabilities. This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences are expected to reverse and gives immediate effect to changes in income tax rates upon enactment. Deferred tax assets are recognized, net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards. Deferred income tax expense represents the change in net deferred assets and liability balances.

 

Financial Instruments

 

The Company’s financial instruments consist of cash and due to parent. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying value, unless otherwise noted.

 

Recent Pronouncements

 

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.

 

F-7
 

AFH HOLDING IV, INC.

(A Development Stage Company)

(A DELAWARE Corporation)

Beverly Hills, CA

  

NOTES TO FINANCIAL STATEMENTS

 

Note C- Equity Securities

 

Holders of shares of common stock shall be entitled to cast one vote for each common share held at all stockholder’s meetings for all purposes, including the election of directors. The common stock does not have cumulative voting rights.

 

The preferred stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time.

 

No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

  

Note D- Going Concern

 

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations. As a result, there is an accumulated deficit of $37,248 at September 30, 2012.

 

The Company’s continued existence is dependent upon its ability to raise capital or acquire a marketable company. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 

Note E- Due to Parent

 

Due to parent represents cash advances from AFH Holding & Advisory LLC. AFH Holding & Advisory LLC is related to the Company through common ownership. There are no repayment terms.

 

Note F- Stock Transactions and Due from Parent

 

AFH Holding IV, Inc. (the “Company”) previously reported that it commenced a private placement (the “Offering”) of shares (the “Shares”) of its common stock, par value $.001 per share (the “Common Stock”) on a best efforts basis with expected gross proceeds of up to $700,000 on February 26, 2008. While the Company intended to commence the Offering on such date, the Offering was delayed and commenced on April 14, 2008.

 

- continued -

  

F-8
 

 

AFH HOLDING IV, INC.

(A Development Stage Company)

(A DELAWARE Corporation)

Beverly Hills, CA

 

NOTES TO FINANCIAL STATEMENTS

 

Note F- Stock Transactions and Due from Parent– continued

 

The Company is offering a minimum of 70 investment units (the “Units”), each Unit consisting of 2,500 Shares at a per Unit price of $5,000 (the “Minimum Offering”) and a maximum of 140 Units (the “Maximum Offering”). The offering period during which the Company will accept subscriptions to purchase Shares (the “Offering Period”) commenced on April 14, 2008 and will continue until the earliest of: (i) the sale of the Minimum Offering; (ii) 60 days from April 14, 2008 (subject to extension by the Company for an additional 60 days with no notice to stockholders); and (iii) the termination of the Offering Period by the Company. The total amount of shares sold in the offering was 87,500 with gross proceeds of $175,000. These funds are held by the Company’s parent.

 

The Shares are expected to be issued to accredited investors under an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and any investors would be prohibited from offering or selling the Shares purchased in the Offering in the absence of an effective registration statement or an applicable exemption from registration requirements.

 

F-9
 

 

 

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

  

Overview

 

AFH Holding IV, Inc. (“we”, “us”, “our” or the “Registrant”) was incorporated in the State of Delaware on April 16, 2007, and maintains its principal executive offices at 9595 Wilshire Blvd., Suite 700, Beverly Hills, CA 90212. Since the Registrant’s inception, it has been engaged in organizational efforts and obtaining initial financing. The Registrant was formed as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. The Registrant filed a registration statement on Form 10-SB with the U.S. Securities and Exchange Commission (the “SEC”) on October 5, 2007, and since its effectiveness, the Registrant has focused its efforts to identify a possible business combination. Since the effective date of the Registrant’s Form 10-SB, the Registrant has been a reporting company and required to file periodic and current reports with the SEC under the Exchange Act.

 

Plan of Operation

 

The Registrant will attempt to locate and negotiate with a business entity for the combination of that target company with the Registrant. The combination will normally take the form of a merger, stock-for-stock exchange or stock-for- assets exchange (the “business combination”). In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that the Registrant will be successful in locating or negotiating with any target company.

 

The Registrant has not restricted its search for any specific kind of businesses, and it may acquire a business which is in its preliminary or development stage, which is already in operation, or in essentially

 

any stage of its business life. It is impossible to predict the status of any business in which the Registrant may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Registrant may offer.

 

In implementing a structure for a particular business acquisition, the Registrant may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity.

 

The Registrant has not realized any revenues from operations since inception, and its plan of operation for the next twelve months is to locate a suitable acquisition or merger candidate and consummate a business combination. The Registrant may need additional cash advances from its stockholder or loans from other parties to pay for operating expenses until the Registrant consummates a merger or business combination with a privately-held operating company. Although it is currently anticipated that the Registrant can satisfy its cash requirements with additional cash advances or loans from other parties, if needed, for at least the next twelve months, the Registrant can provide no assurance that it can continue to satisfy its cash requirements for such period.

 

Since our formation on April 16, 2007, our purpose has been to effect a business combination with an operating business which we believe has significant growth potential. We are currently considered to be a “blank check” company in as much as we have no specific business plans, no operations, revenues or employees. We currently have no definitive agreements or understanding with any prospective business combination candidates and have not targeted any business for investigation and evaluation nor are there any assurances that we will find a suitable business with which to combine. The implementation of our business objectives is wholly contingent upon a business combination and/or the successful sale of securities in the Registrant.

 

As a result of our limited resources, we expect to effect only a single business combination. Accordingly, the prospects for our success will be entirely dependent upon the future performance of a single business. Unlike certain entities that have the resources to consummate several business combinations or entities operating in multiple industries or multiple segments of a single industry, we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. A target business may be dependent upon the development or market acceptance of a single or limited number of products, processes or services, in which case there will be an even higher risk that the target business will not prove to be commercially viable.

 

4
 

 

Our officers and directors are only required to devote a very limited portion of their time to our affairs on a part-time or as-needed basis. We expect to use outside consultants, advisors, attorneys and accountants as necessary, none of which will be hired on a retainer basis. We do not anticipate hiring any full-time employees so long as we are seeking and evaluating business opportunities.

 

We expect our present management to play no managerial role in the Registrant following a merger or business combination. Although we intend to scrutinize closely the management of a prospective target business in connection with our evaluation of a business combination with a target business, our assessment of management may be incorrect. We cannot assure you that we will find a suitable business with which to combine.

 

It is anticipated that any securities issued in any such business combination would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, the Registrant may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, it will be undertaken by the surviving entity after the Registrant has entered into an agreement for a business combination or has consummated a business combination. The issuance of additional securities and their potential sale into any trading market which may develop in the Registrant’s securities may depress the market value of the Registrant’s securities in the future if such a market develops, of which there is no assurance. However, if the Registrant cannot effect a non-cash acquisition, the Registrant may have to raise funds from a private offering of its securities under Rule 506 of Regulation D. There is no assurance the Registrant would obtain any such equity funding.

 

The Registrant will participate in a business combination only after the negotiation and execution of appropriate agreements. Negotiations with a target company will likely focus on the percentage of the Registrant which the target company shareholders would acquire in exchange for their shareholdings.

 

Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing and will include miscellaneous other terms. Any merger or acquisition effected by the Registrant can be expected to have a significant dilutive effect on the percentage of shares held by the Registrant’s shareholders at such time.

 

5
 

  

GOING CONCERN

 

In our accountant’s report for the fiscal year ended December 31, 2011, they expressed their doubt as to the Registrant’s ability to continue as a going concern. The financial statements included in this Quarterly Report have been prepared assuming that the Registrant will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business.

 

At September 30, 2012, the Registrant had $0 cash on hand. The Registrant has had no revenue and has incurred an accumulated deficit from April 16, 2007 (inception) through the period ended September 30, 2012 of $37,248. The Registrant’s development activities since inception have been financially sustained through equity financings and a loan from AFH Holding & Advisory, LLC, the Registrant’s parent company and of which the Registrant’s officer and director, Amir F. Heshmatpour, is the Management Member.

 

The ability of the Registrant to continue as a going concern is dependent upon its ability to find a suitable acquisition/merger candidate, raise additional capital from the sale of common stock, and receive additional paid-in capital from its shareholder and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Registrant be unable to recover the value of its assets or satisfy its liabilities.

 

6
 

  

Results of Operations

 

The Company has not conducted any active operations since inception, except for its efforts to locate a suitable acquisition or merger transaction. No revenue has been generated by the Company during such period, and it is unlikely the Company will have any revenues unless it is able to effect an acquisition of or merger with another operating company, of which there can be no assurance.

 

Assets

 

At September 30, 2012 and December 31, 2011, the Company had no cash and due from parent $175,000.

 

Liabilities

 

The Company’s total current liabilities at September 30, 2012 and December 31, 2011 were $30,227 and $23,190, respectively, comprised of Due to Parent and accrued expenses. The increase in liabilities was due to accounting fees.

 

Stockholders’ Deficit

 

At September 30, 2012, the Company had a stockholders’ deficit of $37,248 compared to $30,211 at December 31, 2011. The increase was due to increased liabilities.

 

Revenues

 

To date, the Company has not generated any revenues.

 

Net Loss

 

For the three month periods ended September 30, 2012 and 2011, the Company had a net loss of $1,060 and $2,149, respectively. For the nine month periods ended September 30, 2012 and 2011, the Company had a net loss of $7,037 and $6,103, respectively. From April 16, 2007 (Inception) to September 30, 2012, the Company had a net loss of $37,248.

 

Expenses

 

For the three months ended September 30, 2012, the Company had expenses of $1,060, compared to $2,149 for the three month period ended September 30, 2011. The decrease in expense was primarily due to additional XBRL costs of $1,000 in the prior year. For the nine months ended September 30, 2012, the Company had expenses of $7,037, compared to $6,103 for the nine month period ended September 30, 2011. This increase in expense period over period was primarily due to additional XBRL costs of $1,000. For the period from April 16, 2007 (Inception) to September 30, 2012, the Registrant had operating expenses of $37,248 (includes franchise tax of $6,500). These expenses were due to accounting, audit, franchise tax and SEC filing fees incurred in relation to the filing of the Registrant’s Registration Statement on Form 10-SB filed on October 5, 2007 and annual and quarterly reports filed since the effectiveness of such registration statement.

 

Liquidity and Capital Resources

 

As of September 30, 2012 and 2011, the Registrant had cash on hand of $0 and total assets equal to $175,000. Such assets consist of monies held by the Registrant’s parent company, AFH Holding & Advisory, LLC, and are the net proceeds of the sale of the Registrant’s shares of common stock in a Private Placement Offering which commenced in April 2008 and which is discussed below. The Registrant’s current liabilities as of September 30, 2012, totaled $30,227, comprised accrued expenses of $7,037 and $23,190 owed AFH Holding & Advisory, LLC, the majority owner of the Registrant. The loan does not have any repayment terms. In their report for the fiscal year ended December 31, 2011, the Registrant’s principal accountants expressed their doubt as to our ability to continue as a going concern.

 

In April 2008, the Company commenced a private placement (the “Offering”) of up to 350,000 shares (the “Shares”) of Common Stock at a purchase price of $2.00 per Share on a “best efforts” basis with expected gross proceeds of up to $700,000 to “accredited investors” (as defined in Rule 501 promulgated under Regulation D under the Securities Act of 1933, amended (the “Securities Act”)) pursuant to Rule 506 of Regulation D under the Securities Act. The total amount of Shares sold in the Offering was 87,500 with gross proceeds of $175,000. These funds are held by the Company’s parent.

 

7
 

  

The ability of the Registrant to continue as a going concern is dependent upon its ability to find a suitable acquisition/merger candidate, raise additional capital from the sale of common stock, and receive additional paid-in capital from its shareholder and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Registrant be unable to recover the value of its assets or satisfy its liabilities.

 

The following is a summary of the Company’s cash flows from operating, investing, and financing activities:

 

  

For the Nine

Months Ended

   For the
Period
April 16, 2007
(Inception)
to
 
   September 30, 2012   September 30, 2011   September 30, 2012 
             
Net Cash Used in Operating Activities  $(7,768)  $(1,544)  $(23,190)
Net Cash Provided by Investing Activities            
Net Cash Provided by Financing Activities  $7,768   $1,544   $23,190 
Net Effect on Cash  $   $   $ 

 

The Registrant has nominal assets and has generated no revenues since inception. The Registrant is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. If continued funding and capital resources are unavailable at reasonable terms, the Registrant may not be able to implement its plan of operations.

 

Off-Balance Sheet Arrangements

 

The Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

 

N/A

 

Item 4.     Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2012. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure.

 

Changes in Internal Controls.

 

There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the three months ended September 30, 2012, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.

 

8
 

  

PART II – OTHER INFORMATION

 

Item 1.    Legal Proceedings.

 

The Registrant is not party to any legal proceedings nor is it aware of any investigation, claim or demand made on the Registrant that may reasonably result in any legal proceedings.

  

Item 1A.   Risk Factors.

  

As a smaller reporting company we are not required to provide this information.

  

Item 2.     Unregistered Sale of Equity Securities and Use of Proceeds.

  

In April 2008, the Company commenced a private placement (the “Offering”) of up to 350,000 shares (the “Shares”) of Common Stock at a purchase price of $2.00 per share on a “best efforts” basis with expected gross proceeds of up to $700,000 to “accredited investors” (as defined in Rule 501 promulgated under Regulation D under the Securities Act of 1933, amended (the “Securities Act”)) pursuant to Rule 506 of Regulation D under the Securities Act. The total amount of Shares sold in the Offering was 87,500 with gross proceeds of $175,000.

 

Item 3.    Defaults Upon Senior Securities.

 

None.

 

Item 4.    Mine Safety Disclosures.

 

Not Applicable.

 

Item 5.    Other Information.

  

None.

 

Item 6.    Exhibits.

 

Exhibit
No.
  Description
31.1   Certification by Amir F. Heshmatpour, the Principal Executive Officer and Principal Financial and Accounting Officer of AFH Holding IV, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1   Certification by Amir F. Heshmatpour, the Principal Executive Officer and Principal Financial and Accounting Officer of AFH Holding IV, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

9
 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

 

Dated: November 14, 2012

  

  AFH HOLDING IV, INC.
  (Registrant)
   
  /s/ Amir F. Heshmatpour
  Amir F. Heshmatpour
  President, Secretary and Sole Director
 

(Principal Executive Officer)

(Principal Financial and Accounting Officer)

 

10