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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended: December 31, 2012
 
Commission File No. 000-53377
FOREVER VALUABLE COLLECTIBLES, INC.
 (Exact Name of Registrant as specified in its charter)

      Colorado
41-2230041
(State or other jurisdiction
(IRS Employer File Number)
of incorporation)
 

535 16th Street, Suite 820
 
Denver, CO
80202
(Address of principal executive offices)
(zip code)
 
(303) 573-1000
 (Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes: o No:þ
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.   Yes: o No: þ
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: o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer  £
 
  Accelerated filer
£
 
         
Non-accelerated filer     £   (Do not check if a smaller reporting company)
 
Smaller reporting company
R
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):  Yes o   No þ
 
Registrant had revenues of $0 for its most recent fiscal year. The aggregate market value of the voting stock held by non-affiliates is approximately $64.096 as of  Feb 19, 2013. Our shares of common stock currently trade on the OTCBB.  The number of shares outstanding of the registrant's common stock, as of the latest practicable date, March 22, 2013, was 12,012,600.
 
 



 
 
 
 

FORM 10-K
 
Forever Valuable Collectibles, Inc.
INDEX
 
 
    Page
PART I
   
     
    Item 1.           Business
 
3
     
    Item 1A.        Risk Factors
 
6
     
    Item 1B.        Unresolved Staff Comments
 
6
     
    Item 2.           Properties
 
6
     
    Item 3.           Legal Proceedings
 
 6
     
    Item 4.           Mine Safety Disclosures
 
6
     
PART II
   
     
    Item 5.           Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
                          of Equity Securities
 
 
7
     
    Item 6.          Selected Financial Data
 
8
     
    Item 7.          Management's Discussion and Analysis of Financial Condition and Results of Operations
 
9
     
    Item 7A.       Quantitative and Qualitative Disclosures About Market Risk
 
12
     
    Item 8.          Financial Statements and Supplementary Data
 
12
     
    Item 9.          Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
 
27
     
    Item 9A.       Controls and Procedures
 
27
     
    Item 9B.       Other Information
 
28
      
   
PART III
   
     
    Item 10.        Directors, Executive Officers and Corporate Governance
 
28
     
    Item 11.        Executive Compensation
 
29
     
    Item 12.        Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
30
     
    Item 13.        Certain Relationships and Related Transactions, and Director Independence
 
30
     
    Item 14.        Principal Accountant Fees and Services
 
31
     
PART IV
   
     
    Item 15.        Exhibits, Financial Statement Schedules
 
31
     
   Financial Statements pages
 
13 – 26
     
   Signatures
 
33
 
 
- 2 -

 
 
For purposes of this document, unless otherwise indicated or the context otherwise requires, all references herein to “Forever Valuable,” “we,” “us,” and “our,” refer to Forever Valuable Collectibles, Inc., a Colorado corporation.
 
Forward-Looking Statements

The following discussion contains forward-looking statements regarding us, our business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation: our ability to successfully develop new products and services for new markets; the impact of competition on our revenues, changes in law or regulatory requirements that adversely affect or preclude clients from using us for certain applications; delays our introduction of new products or services; and our failure to keep pace with our competitors.

When used in this discussion, words such as "believes", "anticipates", "expects", "intends" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this report and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business.

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

General
 
Forever Valuable is a corporation which was formed under the laws of the State of Colorado on November 29, 2007. We were a wholly-owned subsidiary of Fincor, Inc. (“Fincor”) until August 13, 2008.
 
On December 5, 2007, the directors of Fincor approved, subject to the effectiveness of a registration with the Securities and Exchange Commission, a spin-off to Fincor shareholders of record as of August 13, 2008 (the “Record Date”), on a pro rata basis, with one (1) Forever Valuable common share to be issued for each one (1) Fincor common share as of the Record Date. Since Fincor’s business is totally unrelated to the proposed activities of Forever Valuable, the Fincor directors decided it was in the best interest of Fincor and Forever Valuable and Fincor's shareholders to spin-off Forever Valuable to better define the role of Fincor. The spin-off was completed in August, 2008.

 
- 3 -

 

Business
 
We purchased our original inventory from Fincor. This was inventory which was originally acquired by Fincor from non-affiliated third parties at the same price as Fincor originally acquired the inventory. This inventory consisted exclusively of sports memorabilia. The inventory consists of commemorative professional and college sports teams and players and coaches on those teams. We acquired the inventory at the original purchase price of $3,211.  To date, we have sold $1,200 of the inventory.

We plan to identify undervalued items that can be purchased at below retail prices and resold for a profit.  We plan to use other sports memorabilia sellers and auction web sites and will also contact private collectors to develop our inventory. There is risk inherent in any transaction since the collectibles market can be volatile and collector tastes can change quickly.  Our collectibles merchandise will initially be focused on sports memorabilia. We define sports memorabilia as any product directly related to a member of a professional or college sport. Our goal is to become a significant retailer of sports memorabilia in the United States. Once we have established our presence as a significant retailer of sports memorabilia, we may look at expanding our product line to include other collectibles. We plan to become a significant retailer of sports memorabilia by emphasizing growth through implementing a national operating strategy emphasizing internal revenue growth and profitability.
 
Key elements of our strategy include:
     
   
Develop, strengthen, and expand vendor relationships. Vendors in the collectibles industry often recognize retailers based on certain volume levels and reputation. We will try to achieve preferred gallery status with key vendors which would entitle us to volume discounts, co-op advertising funds, shipping allowances and other benefits. We will also try to establish exclusive relationships with vendors for certain product lines and items.   We will simultaneously focus on finding inventory on auction web sites and developing relationships with established sports memorabilia vendors throughout the United States, both individually and through trade shows. We will initially focus in the Western half of the United States and online but may also look for opportunities where we can find them. We have done initial research on auction web sites but have had no discussions with vendors at  this time, nor have we attended any trade shows;

   
Develop database direct mail, telemarketing and Internet marketing programs. We plan to develop databases that detail the buying patterns and merchandise preferences of potential customers and enable us to conduct targeted database direct mail, telemarketing and Internet marketing programs.

   
Establish operating procedures.  Initially we intend to focus on developing a centralized system to monitor our operations by auditing sales receipts, accounts payables, payroll, purchases and inventory levels and by implementing centralized cash management operations.
 
 
- 4 -

 

Taxes
 
Various states are increasingly seeking to impose sales or use taxes on inter-state mail order sales and are aggressively auditing sales tax returns of mail order businesses.  Complex legal issues arise in these areas, relating, among other things, to the required nexus of a business with a particular state, which may permit the state to require a business to collect such taxes. At the present time, we are not aware of any states in which we may operate who would impose sales taxes on our transactions.  Although we believe that we can adequately provide for sales taxes on mail order sales, there can be no assurance as to the effect of actions taken by state tax authorities on our financial condition or results of operations. In the future, we may be required to collect sales tax on sales made to customers in all of the states in which we conducts our operations. The imposition of sales taxes on mail order sales generally has a negative effect on mail order sales levels. All of the factors cited above may negatively affect our financial condition and results of operations in the future.  Any such impact cannot currently be quantified.

Operations, Management and Employees

Our plan is to concentrate our operations in the Western half of the United States and online through our website.

We have no full-time employees. We plan to use part-time independent contractors for sales. As we expand, we intend to hire employees. However, we have no present plans to do so.

Marketing and Promotion

We expect to generate revenues in the next twelve months from memorabilia and collectibles operations using referrals from Fincor and unrelated individuals and entities that operate in the memorabilia and collectibles business. We also plan to market through direct contact with prospective customers. We have no sales representatives who solicit potential clients.

Patents and Trademarks

We do not currently have any patent or trademark protection. If we determine it is feasible to file for such trademark protection, we still have no assurance that doing so will prevent competitors from using the same or similar names, marks, concepts or appearance.

Competition
 
We have no operating history and, therefore, will have inherent difficulty competing in the crowded collectibles market. Large, well known auction houses and collectibles companies that have been in existence for many years have an extensive, well established client base with whom they have earned credibility and cemented strong long term relationships.  We face the challenge of competing against well entrenched competition with limited capital.  This becomes even more critical in the collectibles market, where the percentage of profits tends to increase exponentially with the size of the purchase.  With the amount of collectibles of dubious origin being sold to unsuspecting buyers, we believe that it will take many years to establish the impeccable reputation necessary to garner the large list of satisfied clients that is essential for any successful collectibles business.  We cannot expect to be a significant factor in the collectibles field in the foreseeable future.

 
- 5 -

 

We do not expect to pay dividends on common stock.
 
We have not paid any cash dividends with respect to our common stock, and it is unlikely that we will pay any dividends on our common stock in the foreseeable future. Earnings, if any, that we may realize will be retained in the business for further development and expansion.

Effect of Governmental Regulations: Compliance with Environmental Laws
 
We do not believe that we are subject to any material government or industry regulation.
 
Backlog

At December 31, 2012, we had no backlogs.

Research and Development
 
We have never spent any amount in research and development activities.

How to Obtain Our SEC Filings

We file annual, quarterly, and special reports, proxy statements, and other information with the Securities Exchange Commission (SEC). Reports, proxy statements and other information filed with the SEC can be inspected and copied at the public reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549. Such material may also be accessed electronically by means of the SEC's website at www.sec.gov.

Our investor relations department can be contacted at our principal executive office located at 535 16th Street, Suite 820, Denver, Colorado 80202. Our telephone number is (303)573-1000.
 
ITEM 1A.  RISK FACTORS

The Company is not required to provide the information required by this Item because the Company is a smaller reporting company. 

ITEM 1B.  UNRESOLVED STAFF COMMENTS
 
The Company is not required to provide the information required by this Item because the Company is a smaller reporting company.

ITEM 2.  PROPERTIES.

We currently use the mailing address of 535 16th Street, Suite 820, Denver, Colorado 80202. We own no real estate nor have plans to acquire any real estate. All of our management activities are performed in Colorado. 

ITEM 3.  LEGAL PROCEEDINGS.

We are not a party to any material legal proceedings and our property is not the subject of any material legal proceeding.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

 
- 6 -

 
 
PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Holders

As of February 19, 2013, there were 41 record holders of our common stock and there were 12,012,600 shares of our common stock outstanding.
 
Market Information
 
We have recently been cleared for trading on the OTCBB but we have three market makers and no public market has yet been developed. There can be no assurance that a public trading market will develop or be sustained in the future. Without an active public trading market, you may not be able to liquidate your shares without considerable delay, if at all. If a market does develop, the price for our securities may be highly volatile and may bear no relationship to our actual financial condition or results of operations. Factors we discuss in this prospectus, including the many risks associated with an investment in our Company, may have a significant impact on the market price of our common stock. Also, because of the relatively low price of our common stock, many brokerage firms may not effect transactions in the common stock. 

We have applied for and been approved for trading on the OTC Bulletin Board operated by the National Association of Securities Dealers, Inc., trading under the symbol FVBC.

On October 11, 2011, we engaged the services of Alpine Securities to assist in applying to and interacting with the Depository Trust Company (DTC) as our agent in our request to the DTC to make an issue of our securities eligible for DTC book-entry delivery and depository services. We have been cleared for DTC Services.

Dividend Policy

We have not previously declared or paid any dividends on our common stock and do not anticipate declaring any dividends in the foreseeable future. The payment of dividends on our common stock is within the discretion of our board of directors. We intend to retain any earnings for use in our operations and the expansion of our business. Payment of dividends in the future will depend on our future earnings, future capital needs and our operating and financial condition, among other factors that our board of directors may deem relevant. We are not under any contractual restriction as to our present or future ability to pay dividends.

Equity Compensation Plan Information

We have no outstanding stock options or other equity compensation plans.

The Securities Enforcement and Penny Stock Reform Act of 1990

The Securities Enforcement and Penny Stock Reform Act of 1990 require additional disclosure and documentation related to the market for penny stock and for trades in any stock defined as a penny stock. Unless we can acquire substantial assets and trade at over $5.00 per share on the bid, it is more likely than not that our securities, for some period of time, would be defined under that Act as a "penny stock." As a result, those who trade in our securities may be required to provide additional information related to their fitness to trade our shares. These requirements present a substantial burden on any person or brokerage firm who plans to trade our securities and would thereby make it unlikely that any liquid trading market would ever result in our securities while the provisions of this Act might be applicable to those securities.

 
- 7 -

 

Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the Commission, which
 
 
-
contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
 
-
contains a description of the broker's or dealer's duties to the customer  and of the rights and remedies available to the customer with respect to a  violation to such duties or other requirements of the Securities Act of  1934, as amended;
 
-
contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;
 
-
contains a toll-free telephone number for inquiries on disciplinary actions;
 
-
defines significant terms in the disclosure document or in the conduct of trading penny stocks; and
 
-
contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;
 
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:
 
 
-
the bid and offer quotations for the penny stock;
 
-
the compensation of the broker-dealer and its salesperson in the transaction;
 
-
the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
 
-
monthly account statements showing the market value of each penny stock held in the customer’s account.
 
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.
 
Stock Transfer Agent

The stock transfer agent for our securities for the fiscal year ended December 31, 2012 is First American Stock Transfer, Inc, 4747 N 7th Street, Suite 170, Phoenix, AZ 85014, (602) 485-1346.
 
ITEM 6. SELECTED FINANCIAL DATA

The Company is not required to provide the information required by this Item because the Company is a smaller reporting company.

 
- 8 -

 

ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
Certain statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations that are not historical facts are forward-looking statements such as statements relating to future operating results, existing and expected competition, financing and refinancing sources and availability and plans for future development or expansion activities and capital expenditures. Such forward-looking statements involve a number of risks and uncertainties that may significantly affect our liquidity and results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to, those related to effects of competition, leverage and debt service financing and refinancing efforts, general economic conditions, and changes in applicable laws or regulations. The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report.
 
Our activities have been primarily focused on organization as a development stage enterprise since planned principal operations have not yet commenced. Accordingly, management does not consider the historical results of operations to be representative of our future results of operation. Our development stage began with our incorporation. Our plan is to own and operate a sports and non-sports memorabilia and collectibles business. See “Business” below.
 
Critical Accounting Policies
 
We have identified the following policies below as critical to our business and results of operations. For further discussion on the application of these and other accounting policies, see Note 1 to the accompanying audited financial statements for the period ended December 31, 2012.  Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.

Use of Estimates in the Preparation of Financial Statements
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
Revenue Recognition
 
The Company had revenues of $0 during the period ended December 31, 2012. Anticipated future operating revenue will represent product sales in connection owning and operating a memorabilia and collectibles business. Such revenues will be recorded as the memorabilia and collectibles are sold.
 
 
- 9 -

 

Plan of Operation for December 31, 2012 to December 31, 2013.
 
Forever Valuable intends to own and operate a memorabilia and collectibles business. Our operating costs are expected to range between $70,000 and $90,000 for the fiscal year ending December 31, 2013. These operating costs include insurance, taxes, utilities, maintenance, contract services and all other costs of operations. However, the operating costs and expected revenue generation are difficult to predict. We expect to generate revenues in the next twelve months from memorabilia and collectibles operations using referrals from Fincor and unrelated individuals and entities that operate in the memorabilia and collectibles business. Since there can be no assurances that revenues will be sufficient to cover operating costs for the foreseeable future, it may be necessary to raise additional funds. Due to our lack of operating history, raising additional funds may be difficult. In November, 2007, an affiliated organization named A-Squared Holdings, Inc. (“A-Squared”) agreed to provide operating capital in the form of a loan of $200,000 to cover operating expenses. This loan is evidenced by an unsecured promissory note which was originally due November 29, 2008, extended by one year on November 29, 2009 and was again extended until November 29, 2015, and renews automatically each year on November 29 with a renewal fee calculated as 1.5% of the unpaid balance due on that date.  A second affiliate, X-Clearing Corporation (“X-Clearing”) has also advanced working capital to us on an as-needed basis in exchange for promissory notes.  There is no assurance that these loans will continue in the future.  If we are unable to raise funds to cover any operating deficit after fiscal year ending December 31, 2015, our business may fail.   We have generated minimal revenues during the period ended December 31, 2012, and management does not anticipate any significant revenues until the last quarter of 2013 as contemplated by our business plan.
 
We have minimal inventory valued at $7,912. We anticipate implementing the following business plan for our next twelve months:

As we have attempted to implement our business plan over the last 38 months, we will continue to concentrate on the purchase of inventory.  The new inventory will consist primarily of sports collectibles and will be obtained in the following ways:
 
1.  
Continued development of business contacts.

2.  
Setting up a table at major sports collectibles trade show in the Midwest and West.  We plan to purchase inventory brought into the show by collectors who want to sell.

3.  
Making buying trips.  Prior to any trips, a small ad will be placed in the local newspaper to notify collectors of the location and times when they can bring their collectibles to be purchased.
 
In the months ahead, we will continue to purchase sports memorabilia to build an appropriate inventory level.  Initially, we will sell our inventory on a cash-only basis. At some point within the next twelve months of our operations, we will begin selling inventory on EBAY and begin accepting credit cards in order to reach a potential broader market.

The new inventory will be acquired by attending at least one large trade show, by contacting private collectors, and through other sports collectibles business contacts. Throughout this process, we will continue to sell by advertising in hobby publications and by selling at all trade shows attended. We will begin plans to hold a live public auction which will be held in Denver and be run by a licensed, third party auctioneer, who we will hire.  

 
- 10 -

 
 
We anticipate taking additional buying trips and attending at least one major trade show. Once we hold the public auction, we will keep the list of all attendees and add them to our mailing list.  We will begin to plan a direct mail sale targeted to our mailing list.  We will continue to attend at least one trade show per month; buying and selling inventory.

As business progresses, we plan to attend another trade show and to make another buying trip. Furthermore, we plan to begin to put together a direct sales email campaign to send out to our mailing list.  New customers will always be solicited at each trade show attended.

We plan to send out the email sales offering.  If sales and profits justify, we will begin interviewing possible additions to staff.  We will continue to attend at least one trade show per month and buying and selling inventory.
We will develop a Company website.  The site would be a virtual store, where prospective buyers can see a list of available merchandise and view pictures of the more expensive items.  We will continue to buy and sell inventory.

Following activation of the Company website, we will promote the website in all hobby publication ads and when selling auction lots on EBAY.  We will send emails to our mailing list promoting the website.  Continue attending trade shows and plan an additional buying trip.

We anticipate developing our plan for the next twelve months using a combination of our loan guarantee from A-Squared, cash advances from X-Clearing and the cash flow generated from sales.

Seasonality
 
We expect that our business will be seasonal with most revenue generated in the latter half of the calendar year. However, with our startup phase, we do not anticipate any material revenue until the last quarter of 2013.
 
Results of Operations
 
We had no sales revenue for the fiscal year ended December 31, 2012.  Operating expenses during the period ended December 31, 2012 totaled $77,664 consisting of filing fees, professional fees and rent.

Liquidity and Capital Resources
 
At December 31, 2012, we had a nominal cash balance of $567. Our total assets were $8479. At December 31, 2012 our current liabilities were $150,522, which consists of accounts payable, interest accrued payable, and loans payable. While contributed services and fees throughout the development stage total $291,011 in additional paid-in capital, total operating losses for the same period equal $446,383, resulting in a net shareholders’ deficit of $142,043 at the fiscal year ended December 31, 2012.
 
Financial Position
 
At December 31, 2012, we had no commitments for capital expenditures. In November, 2007, A-Squared agreed to provide operating capital in the form of a loan of $200,000 to cover operating expenses. This loan is evidenced by an unsecured promissory note which was originally due November 29, 2008, with a possible extension ending November 29, 2009. On November 26, 2008, a motion was presented and passed to extend the Maturity Date of the above notes to November 29, 2009. On November 29, 2009 a motion was passed to extend the Maturity date of the above notes to November 29, 2015. A second affiliate, X-Clearing has also advanced working capital to us on an as-needed basis in exchange for non-secured promissory notes. There is no assurance that these loans will continue in the future.

 
- 11 -

 
 
Management estimates it will take approximately an additional $70,000 - $90,000 per year to fund proposed operations.  Since we have limited operating history, it is uncertain whether revenue from operations will be sufficient to cover our operating expenses. In addition, the current economic crisis has led to an overall consumer confidence decline. The demand for sports memorabilia has declined due to the overall conservative nature displayed in consumer behaviors over the last eleven quarters. Holiday spending was largely over projected in all sectors of consumer spending.  Furthermore, we have no commitment for funding after fiscal year 2015.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
 
A smaller reporting company is not required to provide the information in this Item.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLIMENTARY DATA

 
- 12 -

 

FOREVER VALUABLE COLLECTIBLES, INC.
 
(A Development Stage Company)
Index to Financial Statements

   
    Page   
     
Report of Independent Registered Public Accounting Firm
 
14-15
     
Balance Sheets at December 31, 2012 and 2011
 
16
     
Statements of Operations for the years ended December 31, 2012 and 2011,
   
and from November 29, 2007 (Inception) through December 31, 2012
 
17
     
Statement of Changes in Shareholders' Deficit from
   
November 29, 2007 (Inception) through December 31, 2012
 
18
     
Statements of Cash Flows for the years ended December 31, 2012 and 2011,
   
and from November 29, 2007 (Inception) through December 31, 2012
 
19
     
Notes to Financial Statements
 
20-26
     
 
 
- 13 -

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
To the Board of Directors and Stockholders of Forever Valuable Collectibles, Inc.:
 
We have audited the accompanying balance sheets of Forever Valuable Collectibles, Inc. (“the Company”) as of December 31, 2011 and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit. 
 
We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion. 
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Forever Valuable Collectibles, Inc., as of December 31, 2011, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles in the United States of America.
 
The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting.  Accordingly, we express no such opinion.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Borgers & Cutler CPA’s PLLC
Borgers & Cutler CPA’s PLLC
 
Denver, CO
 
March 22, 2013
 
 
- 14 -

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Stockholders of Forever Valuable Collectibles, Inc.:
 
We have audited the accompanying balance sheets of Forever Valuable Collectibles, Inc. (“the Company”) as of December 31, 2012 and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit. 
 
We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion. 
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Forever Valuable Collectibles, Inc., as of December 31, 2012, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles in the United States of America.
 
The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting.  Accordingly, we express no such opinion.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ B F Borgers CPA PC
B F Borgers CPA PC
 
Denver, CO
 
March 22, 2013
 
 
 
 
- 15 -

 
 
FOREVER VALUABLE COLLECTIBLES, INC.
 
(A Development Stage Company)
 
BALANCE SHEETS
 
   
             
   
December 31,
   
December 31,
 
   
2012
   
2011
 
ASSETS
           
             
Current assets
           
Cash
  $ 567     $ 191  
Merchandise inventory
    7,912       7,384  
  Total current assets
    8,479       7,575  
                 
Total Assets
  $ 8,479     $ 7,575  
                 
LIABILITIES
               
                 
Current Liabilities
               
Accounts payable related parties (Note 2)
  $ 6,572     $ 4,938  
Trade accounts payable
    30,408       23,349  
  Total current liabilities
    36,980       28,287  
                 
Notes payable, related parties (Note 2)
    74,073       60,948  
Accrued interest payable, related parties (Note 2)
    39,469       24,351  
                 
    Total Liabilities
    150,522       113,586  
                 
STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
Common stock; 50,000,000 shares authorized at; 12,012,600 and 12,012,600 issued and outstanding at December 31, 2012 and 2011, respectively
    13,329       13,329  
Additional paid-in capital
    291,011       233,765  
Deficit accumulated during development stage
    (446,383 )     (353,105 )
Total stockholders' equity (deficit)
    (142,043 )     (106,011 )
                 
Total liabilities and stockholders' equity (deficit)
  $ 8,479     $ 7,575  
 
The accompanying notes are an integral part of these financial statements.
 
 
- 16 -

 
 
FOREVER VALUABLE COLLECTIBLES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
 
                 
From inception
 
   
For the Year Ended
     (November 29,  
   
December 31,
2012
   
December 31,
2011
   
 2007) through
December 31, 2012
 
                   
                   
REVENUE
  $ -     $ 470     $ 1,555  
                         
COST OF GOODS SOLD
    -       400       1,200  
                         
GROSS MARGIN
    -       70       355  
                         
OPERATING EXPENSES
                       
Contributed rent and services (Note 2)
    57,246       57,246       291,001  
Selling, general and administrative expenses, related party (Note 2)
    -       -       3,954  
Selling, general and administrative expenses, other
    20,418       32,111       105,777  
     Total Operating Expenses
    77,664       89,357       400,732  
                         
NET LOSS FROM OPERATIONS
    (77,664 )     (89,287 )     (400,377 )
                         
OTHER (INCOME) EXPENSE
                       
Interest expense
    15,614       15,294       46,006  
     TOTAL OTHER EXPENSE
    15,614       15,294       46,006  
                         
NET LOSS BEFORE INCOME TAXES
    (93,278 )     (104,581 )     (446,383 )
                         
PROVISION FOR INCOME TAX
    -       -       -  
                         
NET LOSS FOR THE PERIOD
  $ (93,278 )   $ (104,581 )   $ (446,383 )
                         
BASIC AND DILUTED (LOSS)
                       
PER COMMON SHARE
  $ (0.01 )   $ (0.01 )        
                         
WEIGHTED AVERAGE NUMBER
                       
OF COMMON SHARES (Basic and Diluted)
    12,012,600       12,005,367          
 
The accompanying notes are an integral part of these financial statements.
 
 
- 17 -

 
 
FOREVER VALUABLE COLLECTIBLES, INC.
(A Development Stage Company)
Statement of Changes in Shareholders' Deficit
From inception November 29, 2007 through December 31, 2012
 
                     
Deficit
       
                     
Accumulated
       
               
Additional
   
During
   
Total
 
   
Common Stock
   
Paid-in
   
Development
   
Stockholders'
 
   
Issued
   
Amount
   
Capital
   
Stage
   
Equity (Deficit)
 
                               
Balance at inception - November 29, 2007
    -     $ -     $ -     $ -     $ -  
                                         
Shares issued for cash and property - November, 2007
    11,920,600       4,211       -       -       4,211  
                                         
Issuance of warrant to A-Squared Holdings Inc. - November, 2007
    -       -       10       -       10  
                                         
Contributed rent and services
    -       -       4,771       -       4,771  
                                         
Net (loss) for period from inception on November 29, 2007 to December 31, 2007
    -       -       -       (12,282 )     (12,282 )
Balance, December 31, 2007
    11,920,600       4,211       4,781       (12,282 )     (3,290 )
                                         
Shares issued for services - October, 2007
    5,000       500       -       -       500  
                                         
Contributed rent and services
    -       -       57,246       -       57,246  
                                         
Net (loss) for the year ended December 31, 2008
    -       -       -       (78,483 )     (78,483 )
Balance, December 31, 2008
    11,925,600       4,711       62,027       (90,765 )     (24,027 )
                                         
Shares issued for services - March, 2009
    25,000       2,500       -       -       2,500  
                                         
Shares issued for services - September, 2009
    10,000       1,000       -       -       1,000  
                                         
Contributed rent and services
    -       -       57,246       -       57,246  
                                         
Net (loss) for the year ended December 31, 2009
    -       -       -       (77,866 )     (77,866 )
Balance, December 31, 2009
    11,960,600       8,211       119,273       (168,631 )     (41,147 )
                                         
Shares issued for services - February, 2010
    12,000       1,118       -       -       1,118  
                                         
Contributed rent and services
    -       -       57,246       -       57,246  
                                         
Net (loss) for the year ended December 31, 2010
    -       -       -       (79,893 )     (79,893 )
Balance, December 31, 2010
    11,972,600       9,329       176,519       (248,524 )     (62,676 )
                                         
Shares issued for services - March, 2011
    40,000       4,000       -       -       4,000  
                                         
Contributed rent and services
    -       -       57,246       -       57,246  
                                         
Net (loss) for the year ended December 31, 2011
    -       -       -       (104,581 )     (104,581 )
Balance, December 31, 2011
    12,012,600       13,329       233,765       (353,105 )     (106,011 )
                                         
Contributed rent and services
    -       -       57,246       -       57,246  
                                         
Net loss for the year ended December 31, 2012
    -       -       -       (93,278 )     (93,278 )
Balance, December 31, 2012
    12,012,600     $ 13,329     $ 291,011     $ (446,383 )   $ (142,043 )
                                         
 
The accompanying notes are an integral part of these financial statements.

 
- 18 -

 

 FOREVER VALUABLE COLLECTIBLES, INC.
(A Development Stage Company)
Statements of Cash Flows
 
   
For the Year Ended
    From inception 
(November 29,
 
   
December 31,
 2012
   
December 31,
 2011
   
2007) through
December 31, 2012
 
                   
OPERATING ACTIVITIES
                 
Net loss
  $ (93,278 )   $ (104,581 )   $ (446,383 )
Adjustments to reconcile net loss from operations:
                       
  Share-based payment
    -       4,000       12,329  
  Contributed services (Note 2)
    48,000       48,000       244,000  
  Contributed rent (Note 2)
    9,246       9,246       47,011  
Change in operating assets and liabilities:
                       
  Inventory
    (528 )     (3,425 )     (7,912 )
  Accounts payable
    8,693       14,012       36,980  
  Accrued interest related party
    15,118       10,392       39,469  
Net cash used in operating activities
    (12,749 )     (22,356 )     (74,506 )
                         
FINANCING ACTIVITIES
                       
Proceeds from issuance of common stock
    -       -       1,000  
Proceeds from issuance of related party notes
    13,125       22,028       74,073  
Net cash provided by financing activities
    13,125       22,028       75,073  
                         
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
    376       (328 )     567  
                         
CASH AND CASH EQUIVALENTS
                       
-BEGINNING OF PERIOD
    191       519       -  
                         
CASH AND CASH EQUIVALENTS
                       
-END OF PERIOD
  $ 567     $ 191     $ 567  
                         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                       
Cash paid for interest
  $ -     $ -     $ -  
Cash paid for taxes
  $ -     $ -     $ -  
                         
 NON-CASH INVESTING AND FINANCING ACTIVITIES:
                       
Related party advances paid with stock
  $ -     $ -     $ -  
Liabilities assumed for asset purchase agreement
  $ -     $ -     $ -  
                         
The accompanying notes are an integral part of these financial statements.
 

 
- 19 -

 
 
FOREVER VALUABLE COLLECTIBLES, INC.
(A Development Stage Company)
Notes to Financial Statements



NOTE 1 – NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

Upon effectiveness of a Registration Statement filed with the Securities and Exchange Commission (“SEC”) by Forever Valuable Collectibles, Inc. (the “Company” or “we”), Fincor, Inc (“Fincor”) completed the spin-off of the Company to its shareholders of record as of August 13, 2008. The transaction was effected by the issuance of 11,920,600 shares of the Company’s common stock to Fincor in exchange for cash and property.

Fincor shareholders retained their Fincor common shares and, after the spin-off, received (1) share of the common stock of the Company for each share of Fincor common stock held. Immediately following the spinoff, Fincor’s shareholders owned approximately 100 percent of the Company’s common stock.

The Company accounted for the spin-off based on recorded amounts.

The Company is incorporated in the State of Colorado and plans to enter the memorabilia and collectible industry. The Company is a development stage enterprise in accordance with accounting principles generally accepted in the United States of America.

Basis of Presentation and Going Concern

We have a limited history of operations, limited assets, and an operating loss since Inception. Our current burn rate is between $70,000 and $90,000 annually and we may incur additional operating losses in future periods. In addition, there is no assurance that we will be able to access capital markets to raise funds sufficient to cover any future operating losses.

Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to locate customers who will use our memorabilia and collectibles services and our ability to generate sales revenues. However, we have generated nominal revenues from our Inception, and at December 31, 2012 and 2011, we had cash positions of $567 and $191, respectively.

In November, 2007, A-Squared Holdings, Inc., an affiliated company, agreed to provide us with a credit facility of $200,000 for working capital (see Note 2). There is no assurance that this credit facility will be sufficient to meet our future cash needs. A second affiliate, X-Clearing and its subsidiary X-Pedited Transfer Corporation (“X-Transfer”) have also advanced working capital to us on an as needed basis in exchange for promissory notes (see Note 2). There is no assurance that these loans will continue in the future.

As a result, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 
- 20 -

 

Risks and Uncertainties

The collectibles industry can be subject to seasonal variations in demand. We expect that most of our collectibles operations will see the greatest demand during the winter holiday shopping period. Consequently, we expect to be most profitable during the fourth quarter of our fiscal year. Quarterly results may also be materially affected by the timing of new product introductions, the gain or loss of significant customers or product lines and variations in merchandise mix. We will make decisions about purchases of inventory well in advance of the time at which such products are intended to be sold. Accordingly, our performance in any particular quarter may not be indicative of the results that can be expected for any other quarter or for the entire year. Significant deviations from projected demand for collectibles merchandise could have a material adverse effect on our financial condition and quarterly or annual results of operations.

Demand for collectibles merchandise is affected by the general economic conditions in the United States. When economic conditions are favorable and discretionary income increases, purchases of non-essential items like collectibles merchandise and animation art generally increase. When economic conditions are less favorable, sales of collectibles merchandise and animation art are generally lower. In addition, we may experience more competitive pricing pressure during economic downturns. Therefore, any significant economic downturn or any future changes in consumer spending habits could have a material adverse effect on our financial condition and results of operations.

The markets for our products are subject to changing customer tastes and the need to create and market new products. Demand for collectibles is influenced by the popularity of certain themes, cultural and demographic trends, marketing and advertising expenditures and general economic conditions. Because these factors can change rapidly, customer demand also can shift quickly.

Use of Estimates

The preparation of financial statements in accordance 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 the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Inventory

Inventory, consisting of collectibles held for sale, are stated at the lower of cost (specific identification method) or market.

Revenue Recognition

The Company earned revenues of $-0- and $470 for the years ended December 31, 2012 and 2011, respectively. There was little revenue earned prior to 2010. Anticipated future operating revenue will represent product sales in connection with owning and operating a memorabilia and collectibles business. We recognize revenue on the sale of our inventory when persuasive evidence of an arrangement exists, delivery has occurred, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured.

Shipping and Handlings cost

Shipping and handling fees billed to customers are recorded as revenues while the related shipping and handling costs are included in other cost of revenues. The Company has not incurred any shipping costs in its development stage.

 
- 21 -

 

Advertising Costs

The Company plans to expense all advertising costs as incurred. The Company had no advertising costs during the years ended December 31, 2012 and 2011.

Income Taxes

We maintained a full valuation allowance on our net deferred tax assets as of December 31, 2012 and 2011. The valuation allowance was determined in accordance with the provisions of Accounting Standards Codification (ASC) No. 740, Accounting for Income Taxes (ASC 740), which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable; such assessment is required on a jurisdiction by jurisdiction basis. Expected future losses represented sufficient negative evidence under ASC 740 and accordingly, a full valuation allowance was recorded against deferred tax assets. We intend to maintain a full valuation allowance on the deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance.

Our tax provision was $-0- on a pre-tax losses of $93,278 and $104,581 for the years ended December 31, 2012 and 2011, respectively.

The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal tax return and its state tax return in Colorado as “major” tax jurisdictions, as defined. The Company believes that its income tax filings positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial conditions, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded.

Fair Value of Financial Instruments

The Company considers all highly liquid investments with original maturities of three months or less when acquired to be cash equivalents.

The carrying amounts of cash and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.

The FASB ASC clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

 
Level 1: Quoted prices in active markets for identical assets or liabilities.
 
 
Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.
 
 
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 
- 22 -

 

Stock-based Compensation

Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the awards and is recognized as expense over the vesting period.

Loss per Common Share

Accounting Standards Codification No. 260, Earnings per Share , requires presentation of “basic” and “diluted” earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. At December 31, 2012 and 2011, a warrant to purchase 200,000 shares of our common stock was excluded from diluted earnings per share because it was anti-dilutive.

Recently Issued Accounting Pronouncements

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations.

NOTE 2 – RELATED PARTY TRANSACTIONS

Rent expense of $9,246 was recognized during the years ended December 31, 2012 and 2011 for contribution of office space by an affiliate. The Board of Directors valued the contribution based on rent for similar space in the local area.

Our President and Director contributed her time and attendance during 2012 and 2011. We recognized $48,000 for the years ended December 31, 2012 and 2011, in contributed service expense. The Board of Directors valued the contribution based on prevailing rates for similar services in the local area.

During the years ended December 31, 2012 and 2011, we incurred stock transfer agent fees to X- Pedited Transfer Corp., an affiliate, totaling $496 and $534, respectively. At December 31, 2012, the unpaid balance to the affiliate was $3,985, and is included in the accompanying balance sheet as accounts payable, related party. During February 2010, we issued 12,000 shares of our common stock to X-Pedited Transfer Corp. as payment for the December 31, 2009 obligation.

Our affiliates, X-Clearing Corp. and A-Squared Holdings, Inc., have provided us cash since our inception to cover operating expenses pursuant to the terms of unsecured promissory notes.

 
- 23 -

 

As of December 31, 2012 and 2011, notes payable to related parties, consist of the following:

     
December 31,
 
     
2012
   
2011
 
Demand notes payable to affilliate A-Squared Holdings, Inc. issued between February 2008 and November 2011, due on demand not to exceed a maturity date of November 29, 2015, unsecured and bearing interest at 15%, interest payable every 90 days
    $ 31,361     $ 31,361  
                   
Demand notes payable to affilliate X-Clearing issued between January 2008 and December 2012, due on demand not to exceed a maturity date of November 29, 2015, unsecured and bearing interest at 15%, interest payable every 90 days
    $ 41,237     $ 29,587  
                   
Demand notes payable to affilliate X-Pedited Transfer issued between August 2012, due on demand not to exceed a maturity date of November 29, 2015, unsecured and bearing interest at 15%, interest payable every 90 days
    $ 1,475     $ -  
                   
Total notes payable, related parties
    $ 74,073     $ 60,948  

Interest is payable every 90 days, but no interest has been paid to date. Accrued interest payable as of December 31, 2012 and 2011 were $35,311 and $24,351, respectively.

NOTE 3 – SHAREHOLDERS’ DEFICIT

Preferred stock

We are authorized to issue 1,000,000 shares of no par value preferred stock; the classes and features of which will be determined by the Board of Directors.

Common stock

We are authorized to issue 50,000,000 shares of no par value common stock. The shares do not have preemptive rights and cumulative voting is not permitted.

During October 2008, we issued 5,000 shares of common stock to a vendor in exchange for payment of professional fees. The transaction was recorded based on the fair value of the services rendered, which totaled $500, or $0.10 per share.

During March 2009 and September 2009, we issued 25,000 and 10,000 shares of common stock, respectively, to our stock transfer agent, X-Pedited Transfer Corp., an affiliate, for payment of professional services. 25,000 shares were issued as payment for a December 31, 2008 liability related to services rendered during 2008. 10,000 shares were issued for services performed during 2009. The transactions were recorded based on the fair value of the services rendered, which totaled $3,500, or $0.10 per share.

During March 2011 we issued 40,000 shares of common stock to our stock transfer agent, Island Capital Management, for payment of professional services.

Warrant to purchase our common stock

On November 29, 2007 the Board of Directors unanimously approved the granting of a warrant to A-Squared Holdings, Inc. in exchange for providing a one-year, $200,000 credit facility to the Company (See Note 5).

The warrant vested as of the date of the grant and expires in five years. On November 28, 2012 the Board of Directors approved an extension of the warrant expiration date for another three years to November 29, 2015. All 200,000 shares underlying the warrant are exercisable at $0.001 per share. The Board of Directors valued the shares of common stock at the fair value of $0.00005 per share on the date of grant using the Black-Scholes option pricing model. Compensation expense totaling $10 was recognized during the period ended December 31, 2007. No warrants had been exercised through December 31, 2012.

 
- 24 -

 
 
The status of the Company’s outstanding warrant is as follows:

   
Number of
Shares
   
Weighted Avg.
Exercise Price
 
 Weighted Avg.
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
Outstanding at November 29, 2007 (inception)
  $ -     $ -          
Granted
    200,000       0.001  
4.9 years
     
Exercised
    -       -          
Cancelled
    -       -          
Outstanding at December 31, 2007
  $ 200,000     $ -  
4.9 years
  $ -  
Granted
    -       -            
Exercised
    -       -            
Cancelled
    -       -            
Outstanding at December 31, 2008
  $ 200,000     $ -  
3.9 years
  $ -  
Granted
    -       -            
Exercised
    -       -            
Cancelled
    -       -            
Outstanding at December 31, 2009
  $ 200,000     $ -  
2.9 years
  $ -  
Granted
    -       -            
Exercised
    -       -            
Cancelled
    -       -            
Outstanding at December 31, 2010
  $ 200,000     $ -  
1.9 years
  $ -  
Granted
    -       -            
Exercised
    -       -            
Cancelled
    -       -            
Outstanding at December 31, 2011
  $ 200,000     $ -  
.9 years
  $ -  
Granted     -        -            
Exercised
     -        -            
Cancelled
     -        -            
Outstanding at December 31, 2012
     200,000        -   2.9 years      -  
Exercisable at December 31, 2007
  $ 200,000     $ -       $ -  
Exercisable at December 31, 2008
  $ 200,000     $ -       $ -  
Exercisable at December 31, 2009
  $ 200,000     $ -       $ -  
Exercisable at December 31, 2010
  $ 200,000     $ -       $ -  
Exercisable at December 31, 2011
  $ 200,000     $ -       $ -  
Exercisable at December 31, 2012
  $ 200,000     $ -       $ -  
 
 
- 25 -

 

The weighted average fair value of the warrant granted on November 29, 2007 was estimated on the date of grant using the Black-Sholes option-pricing model at $0.00035 per share or $10. The fair value of the warrants granted is estimated on the date of grant using the following assumptions: dividend yield of zero, expected volatility of 100%, risk free interest rate of 3.42%, and an expected life of five years.

NOTE 4 – INCOME TAXES

A reconciliation of the U.S. statutory federal income tax rate to the effective tax rates at December 31, 2012 and 2011 is as follows:

   
December 31,
 
   
2012
   
2011
 
U.S. federal statutory graduated rate
    15.00 %     15.00 %
State income tax rate, net of federal benefit
    4.00 %     4.00 %
Permanent differences
    -14.00 %     -14.00 %
Net operating loss for which no tax benefit is currently available
    -5.00 %     -5.00 %
      0.00 %     0.00 %

At December 31, 2012, deferred tax assets consisted of a net tax asset of $29,521, due to an operating loss carryforward of $155,372, which was fully allowed for, in the valuation allowance of $29,521. The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery. The changes in the valuation allowance for the year ended December 31, 2012 and 2011 was $6,672 and $8,963, respectively. Net operating loss carryforwards will expire through 2031. The value of these carryforwards depends on the ability of the Company to generate taxable income.

The valuation allowance will be evaluated at the end of each year, considering positive and negative evidence about whether the asset will be realized. At that time, the allowance will either be increased or reduced; reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax asset is no longer impaired and the allowance is no longer required.

NOTE 5 – SUBSEQUENT EVENTS

In conjunction with the preparation of these financial statements, an evaluation of subsequent events was performed though March 20, 2013, which is the date financial statements were issued. No reportable subsequent events were noted other than those described below.
 
As of March 21, 2013 we are in the advanced stages of negotiation to enter into a definitive agreement for the acquisition of an entity and real property.

 
- 26 -

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.
 
We did not have any disagreements on accounting and financial disclosures with our present accounting firm during the reporting period. We filed a Form 8-K on March 12, 2013 and amended that filing on March 15, 2013 noticing a change in our Certifying Accountant.

ITEM 9A. CONTROLS AND PROCEDURES.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
 
Under the supervision and with the participation of our principal executive officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).   Accordingly, we concluded that our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act were not effective as of December 31, 2012.
 
Management’s Annual Report on Internal Control Over Financial Reporting.

We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of 1934,  as  amended  (the  "Exchange  Act")  that are  designed  to ensure  that information  required to be disclosed in our reports  under the Exchange Act, is recorded,  processed,  summarized and reported within the time periods  required under  the  SEC's  rules and forms  and that the  information  is  gathered  and communicated to our management, including our Chief

Executive Officer (Principal Executive Officer), as appropriate, to allow for timely decisions regarding required disclosure.
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-(f) under the Exchange Act. Our internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U. S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
 
 
i.
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

 
ii.
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in  accordance with U. S. generally accepted accounting principles, and  that our receipts and expenditures are being made only in accordance with  authorizations of our management and directors; and

 
iii.
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report.  Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012 and has concluded that our internal control over financial reporting was effective as of December 31, 2012.

 
- 27 -

 

Changes in Internal Control Over Financial Reporting.

We have made no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report on Form 10-K.
 
 
ITEM 9B. OTHER INFORMATION.
 
Nothing to report.
 
PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS & CORPORATE GOVERNANCE

         Set forth below is the name of our director and officer, all positions and offices held with us, the period during which she has served as such, and the business experience during at least the last five years:

Name
Age
   Position
     
Jodi Stevens
47
  President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director

Jodi Stevens has been the President, Chief Executive Officer, Treasurer, Chief Financial Officer, Secretary-Treasurer and a Director of our Company since Inception on November 29, 2007.  She has been Secretary of Fincor, Inc. since 2005 and serves as President of X-Pedited Transfer Corporation.  She has been with X-Pedited Transfer Corporation since its Inception in January 2007.  She has worked for two Fortune 500 companies, Ball Aerospace Systems Group, 1986-1992, and Coram Healthcare, 1994 to 1996.  With Ball Aerospace, she handled Public and Investor Relations as well as social events while supporting the Vice President of Human Relations and the Vice President of Public Affairs and Public Relations.  She also managed the department’s budget and non-profit projects.  With Coram Healthcare she worked with the Executive Vice President of the Corporation, the President of the Lithotripsy Division, and the Vice President of Human Resources for the Corporation. She worked from 1996-2001 with LRG Group, LLC as office manager.  From 2001–2010 she worked first as VP Operations of X-Clearing Corp., a U.S Securities and Exchange Commission-regulated stock transfer agency, and in January 2004 became the President of the Corporation until its closing in December 2010. She was educated at Metropolitan State College, Denver, Colorado. She will devote a minimum of forty hours per month to our operations.
 
Committees of the Board of Directors
 
Currently, we do not have any committees of the Board of Directors.

 
- 28 -

 

Director and Executive Compensation
 
Our President and Director contributed her time and attendance during the period from November 29, 2007 through December 31, 2012.  Although no compensation has been paid and no stock options have been granted to any officer or director in the last three fiscal years, we recognize that she has accrued salary compensation of $48,000 year ended December 31, 2011, and $48,000 for the year end December 31, 2012, and a total of $244,000 for her contributed services expense from Inception through December 31, 2012.  The Board of Directors valued the contribution based on prevailing rates for similar services in the local area. 
 
Employment Agreements
 
 We have no written employment agreements with our executive officer.
 
Equity Incentive Plan
 
 We have not adopted an equity incentive plan, and no stock options or similar instruments have been granted to any of our officers or directors.

 Indemnification and Limitation on Liability of Directors
 
 Our Articles of Incorporation limit the liability of our directors to the fullest extent permitted by Colorado law. Specifically, our directors will not be personally liable to our Company or any of its shareholders for monetary damages for breach of fiduciary duty as directors, except liability for (i) any breach of the director's duty of loyalty to the corporation or its shareholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) voting for or assenting to a distribution in violation of Colorado Revised Statutes Section 7-106-401 or the articles of incorporation if it is established that the director did not perform his duties in compliance with Colorado Revised Statutes Section 7-108-401, provided that the personal liability of a director in this circumstance shall be limited to the amount of distribution which exceeds what could have been distributed without violation of Colorado Revised Statutes Section 7-106-401 or the articles of incorporation; or (iv) any transaction from which the director directly or indirectly derives an improper personal benefit. Nothing contained in the provisions will be construed to deprive any director of his right to all defenses ordinarily available to the director nor will anything herein be construed to deprive any director of any right he may have for contribution from any other director or other person. 
 
 At present, there is no pending litigation or proceeding involving any of our directors, officers, employees or agents where indemnification will be required or permitted. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
Section 16(a) of the Securities Exchange Act of 1934 (the “34 Act”) requires our officers and directors and persons owning more than ten percent of the Common Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in its Form 10-K and proxy statement those individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent year or prior years. We have nothing to report in this regard.

 
- 29 -

 

Code of Ethics
 
Our Board of Directors has not adopted a code of ethics but plans to do so in the future.
 
ITEM 11.  EXECUTIVE COMPENSATION

Our President and Director contributed her time and attendance during the period from November 29, 2007 through December 31, 2012.  Although no compensation has been paid and no stock options have been granted to any officer or director in the last three fiscal years, we recognize that she has accrued salary compensation of $48,000 year ended December 31, 2012, and $48,000 for the year end December 31, 2011, and a total of $244,000 for her contributed services expense from Inception through December 31, 2012.  The Board of Directors valued the contribution based on prevailing rates for similar services in the local area. 

Our officer and director did not receive nor was she entitled to receive any finder’s fee, either directly or indirectly, as a result of her efforts to implement our business plan outlined herein.  No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following sets forth the number of shares of our no par value common stock beneficially owned by (i) each person who, as of March 30, 2012, was known by us to own beneficially more than five percent (5%) of its common stock; (ii) our individual Directors and (iii) our Officers and Directors as a group. A total of 12,012,600 shares of common stock were issued and outstanding as of March 30, 2012.
 

       
Name
Number of Shares
Percentage Ownership
 
       
Jodi Stevens (1)
     
535 16th Street, Suite 820
11,495,000 96%  
Denver, Colorado  80202      
       
PEC Services, Inc (2)
535 16th Street, Suite 820
Denver, CO 80202
11,000
  0.1%
 
       
All Officers and Directors as a Group
11,515,000
96%
 
________________
 
(1) A total of 11,475,000 shares are owned of record jointly by Robert and Jodi Stevens through SHC, LLC. In addition, X-Clearing Corporation, owns 67,000 shares. Mrs. Stevens has beneficial ownership and control of all of the shares. In addition, Jodi Stevens and Robert Stevens own A-Squared Holdings, Inc., which has a total of 200,000 warrants issued to it, exercisable at a price of $0.001 per share subject to adjustment, for a period of five years from the date of issuance.
 
(2) PEC Services is controlled by Patricia Philbrook, who was our former Secretary and a Director and resigned as of January 3, 2013.

 
- 30 -

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On November 29, 2007, an affiliate named A-Squared Holdings, Inc., agreed to provide operating capital in the form of a loan of $200,000 to cover operating expenses. This loan is evidenced by an unsecured promissory note which was originally due November 29, 2008.  The maturity date of this note may be extended at the option of A-Squared  for a period of one year following the maturity date provided A-Squared  receives a renewal fee equal to 1.5% of the then outstanding principal balance due.  However, the loan is due on demand and the maturity date of this note will not be extended past November 29, 2015. The note is at an interest rate of 15% per annum, with interest payments to be made every ninety days, beginning ninety days from the date of the promissory note.  Interest payments have not been paid every 90 days as due, but continues to accrue and is compounded and is reflected in the total interest outstanding.  A-Squared is a Company owned by Robert and Jodi Stevens.

 We have issued a total of 200,000 warrants to A-Squared, exercisable at a price of $0.001 per share subject to adjustment, for a period of five years from the date of issuance. This period was extended on November 28, 2012 to a period not to exceed November 29, 2015. These warrants were issued as an additional inducement for A-Squared to loan us $200,000. The warrants are subject to registration rights. 

After the spin-off distribution, Robert and Jodi Stevens hold 11,495,000 shares of our issued and outstanding stock, representing approximately 96.4% of our issued and outstanding common stock. There were 11,925,600 shares of our common stock outstanding at August 13, 2008.
 
An affiliate contributed office space to us during the period from November 29, 2007 through December 31, 2012.  We recognized $771 for the period from November 29, 2007 to December 31, 2007, in rent expense.  For each of the years ended December 31, 2012 and December 31, 2011 we recognized $9,246 as rent. The Board of Directors valued the contribution based on rent for similar space in the local area.

Our President and Director contributed her time and attendance during the period from November 29, 2007 through December 31, 2012.  Although no compensation has been paid and no stock options have been granted to any officer or director in the last three fiscal years, we recognize that she has accrued salary compensation of $48,000 year ended December 31, 2012, and $48,000 for the year end December 31, 2011, and a total of $244,000 for her contributed services expense from Inception through December 31, 2012.  The Board of Directors valued the contribution based on prevailing rates for similar services in the local area. 
 
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our financial statements for the fiscal years ended December 31, 2012 and December 31, 2011, along with the related statements of operations, stockholders’ equity and cash flows have been audited by BF Borgers PC and Borgers & Cutler CPA’s PLLC both CPA of Denver, Colorado, independent registered public accounting firms, to the extent and for the period set forth in their report, and are set forth in reliance upon such report given upon the authority of them as experts in auditing and accounting.

Audit Fees
 
Our independent auditor, BF Borgers CPA PC, billed an aggregate of $4,320 for the year ended December 31, 2012 audit. Our previous auditors, Borgers and Cutler CPA PLLC billed $4,000 for the December 31, 2011 audit and an aggregate of $3,000 in connection with the reviews of the Company's unaudited quarterly financial statements for the period ended December 31, 2012. 

 
- 31 -

 
 
We do not have an audit committee and as a result our board of directors performs the duties of an audit committee. Our board of directors evaluates the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.


PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following financial information is filed as part of this report:

(a)       (1) FINANCIAL STATEMENTS

(2) SCHEDULES

(3) EXHIBITS. The following exhibits required by Item 601 to be filed herewith are incorporated  by reference to previously filed documents
 
     
Exhibit
Number
                              Description
 
     
3.1*
Articles of Incorporation
 
3.2*
Bylaws
 
4.1*
Warrant dated November 29, 2007 for A-Squared Holdings, Inc.
 
10.1*
Promissory note dated November 29, 2007 with A-Squared Holdings, Inc.
 
31.1
Certification of CEO/CFO pursuant to Sec. 302
 
32.1
Certification of CEO/CFO pursuant to Sec. 906
 
101** XBRL Exhibits   

 * Previously filed
** To be filed by amendment
 
 
(b)
Reports on Form 8-K. Item 4.01 on Form 8-K was filed by the Company on March 12, 2013 and Item 4.01 Form 8-K/A on March 15, 2013. Reports of Form 8-K Item 5.02 was filed on January 3, 2013.
 
 
- 32 -

 

SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) 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 on March 22, 2013.
 
 
FOREVER VALUABLE COLLECTIBLES, INC.
 
       
 
By:     
/s/ Jodi K. Stevens
 
 
Jodi K. Stevens
 
 
Chief Executive Officer and President (principal executive
 officer and principal financial and accounting officer)
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.
 
 
       
Date:   March 22, 2013
By:  
/s/  Jodi K. Stevens
 
   
Jodi K. Stevens
 
   
Director
 
 
 
 
 
 
 
 
 
- 33 -