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EXCEL - IDEA: XBRL DOCUMENT - FUTURELAND CORP. | Financial_Report.xls |
EX-31 - EXHIBIT 31.1 - FUTURELAND CORP. | ex311.htm |
EX-32 - EXHIBIT 32.1 - FUTURELAND CORP. | ex321.htm |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 2013
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 000-53377
FOREVER VALUABLE COLLECTIBLES, INC.
(Exact Name of Registrant as specified in its charter)
Colorado
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41-2230041
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(State or other jurisdiction
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(IRS Employer File Number)
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of incorporation)
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535 16th Street, Suite 820
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Denver, CO
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80202
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(Address of principal executive offices)
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(zip code)
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(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:
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 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 £
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Accelerated filer
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£
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||
Non-accelerated filer £ (Do not check if a smaller reporting company)
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Smaller reporting company
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R
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No þ
The number of shares outstanding of the Registrant's common stock, as of the latest practicable date, March 31, 2013 was 12,012,600.
FORM 10-Q
Forever Valuable Collectibles, Inc.
TABLE OF CONTENTS
Page
|
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PART I FINANCIAL INFORMATION
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Item 1. Financial Statements for the Period Ended March 31, 2013
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3
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Item 2. Management’s Discussion and Analysis and Plan of Operation
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10
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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14
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Item 4 Controls and Procedures
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14
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PART II OTHER INFORMATION
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Item 1. Legal Proceedings
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14
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Item 1A. Risk Factors
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15
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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15
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Item 3. Defaults Upon Senior Securities
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15
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Item 4. Mine Safety Disclosures
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15
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Item 5. Other Information
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15
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Item 6. Exhibits
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15
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Signatures
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15
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- 2 -
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Forever Valuable Collections, Inc.
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||||||||
(A Development Stage Company)
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||||||||
BALANCE SHEETS
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||||||||
March 31,
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December 31,
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|||||||
2013
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2012
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|||||||
ASSETS
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||||||||
Current assets
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||||||||
Cash
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$ | 297 | $ | 567 | ||||
Merchandise inventory
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7,912 | 7,912 | ||||||
Total current assets
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8,209 | 8,479 | ||||||
Total Assets
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$ | 8,209 | $ | 8,479 | ||||
LIABILITIES
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||||||||
Current Liabilities
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||||||||
Accounts payable related parties (Note 2)
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$ | 3,984 | $ | 6,572 | ||||
Trade accounts payable
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33,145 | 30,408 | ||||||
Total current liabilities
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37,129 | 36,980 | ||||||
Notes payable, related parties (Note 2)
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79,573 | 74,073 | ||||||
Accrued interest payable, related parties (Note 2)
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43,778 | 39,469 | ||||||
Total Liabilities
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160,480 | 150,522 | ||||||
STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
Common stock; 50,000,000 shares authorized at; 12,012,600 and 12,012,600
issued and outstanding at March 31, 2013 and December 31, 2012, respectively
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13,329 | 13,329 | ||||||
Additional paid-in capital
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305,323 | 291,011 | ||||||
Deficit accumulated during development stage
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(470,923 | ) | (446,383 | ) | ||||
Total stockholders' equity (deficit)
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(152,271 | ) | (142,043 | ) | ||||
Total liabilities and stockholders' equity (deficit)
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$ | 8,209 | $ | 8,479 |
The accompanying notes are an integral part of these financial statements.
- 3 -
Forever Valuable Collections, Inc.
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|||||
(A Development Stage Company)
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|||||
STATEMENTS OF OPERATIONS
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For the Three Months Ended
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From inception
(November 29,
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|||||||||||
March 31,
2013
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March 31,
2012
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2007) through
March 31,
2013
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||||||||||
REVENUE
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$ | - | $ | - | $ | 1,555 | ||||||
COST OF GOODS SOLD
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- | - | 1,200 | |||||||||
GROSS MARGIN
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- | - | 355 | |||||||||
OPERATING EXPENSES
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||||||||||||
Contributed rent and services (Note 2)
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15,312 | 14,311 | 306,313 | |||||||||
Selling, general and administrative expenses, related party (Note 2)
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- | - | 3,954 | |||||||||
Selling, general and administrative expenses, other
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4,770 | 8,067 | 110,547 | |||||||||
Total Operating Expenses
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20,082 | 22,378 | 420,814 | |||||||||
NET LOSS FROM OPERATIONS
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(20,082 | ) | (22,378 | ) | (420,459 | ) | ||||||
OTHER (INCOME) EXPENSE
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||||||||||||
Interest expense
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4,458 | 4,334 | 50,464 | |||||||||
TOTAL OTHER EXPENSE
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4,458 | 4,334 | 50,464 | |||||||||
NET LOSS BEFORE INCOME TAXES
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(24,540 | ) | (26,712 | ) | (470,923 | ) | ||||||
PROVISION FOR INCOME TAX
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- | - | - | |||||||||
NET LOSS FOR THE PERIOD
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$ | (24,540 | ) | $ | (26,712 | ) | $ | (470,923 | ) | |||
BASIC AND DILUTED (LOSS)
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||||||||||||
PER COMMON SHARE
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
WEIGHTED AVERAGE NUMBER
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||||||||||||
OF COMMON SHARES (Basic and Diluted)
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12,012,600 | 12,012,600 | ||||||||||
The accompanying notes are an integral part of these financial statements.
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- 4 -
(A Development Stage Company)
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||||||||||||||||||||
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||||||||||||||
From Inception November 29, 2007 through March 31, 2013
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||||||||||||||||||||
Deficit
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||||||||||||||||||||
Accumulated
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||||||||||||||||||||
Additional
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During
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Total
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||||||||||||||||||
Common Stock
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Paid-in
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Development
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Stockholders'
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|||||||||||||||||
Issued
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Amount
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Capital
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Stage
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Equity (Deficit)
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||||||||||||||||
Balance at inception - November 29, 2007
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- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Shares issued for cash and property - November, 2007
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11,920,600 | 4,211 | - | - | 4,211 | |||||||||||||||
Issuance of warrant to A-Squared Holdings Inc. - November, 2007
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- | - | 10 | - | 10 | |||||||||||||||
Contributed rent and services
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- | - | 4,771 | - | 4,771 | |||||||||||||||
Net (loss) for period from inception on November 29, 2007 to December 31, 2007
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- | - | - | (12,282 | ) | (12,282 | ) | |||||||||||||
Balance, December 31, 2007
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11,920,600 | 4,211 | 4,781 | (12,282 | ) | (3,290 | ) | |||||||||||||
Shares issued for services - October, 2007
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5,000 | 500 | - | - | 500 | |||||||||||||||
Contributed rent and services
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- | - | 57,246 | - | 57,246 | |||||||||||||||
Net (loss) for the year ended December 31, 2008
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- | - | - | (78,483 | ) | (78,483 | ) | |||||||||||||
Balance, December 31, 2008
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11,925,600 | 4,711 | 62,027 | (90,765 | ) | (24,027 | ) | |||||||||||||
Shares issued for services - March, 2009
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25,000 | 2,500 | - | - | 2,500 | |||||||||||||||
Shares issued for services - September, 2009
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10,000 | 1,000 | - | - | 1,000 | |||||||||||||||
Contributed rent and services
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- | - | 57,246 | - | 57,246 | |||||||||||||||
Net (loss) for the year ended December 31, 2009
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- | - | - | (77,866 | ) | (77,866 | ) | |||||||||||||
Balance, December 31, 2009
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11,960,600 | 8,211 | 119,273 | (168,631 | ) | (41,147 | ) | |||||||||||||
Shares issued for services - February, 2010
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12,000 | 1,118 | - | - | 1,118 | |||||||||||||||
Contributed rent and services
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- | - | 57,246 | - | 57,246 | |||||||||||||||
Net (loss) for the year ended December 31, 2010
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- | - | - | (79,893 | ) | (79,893 | ) | |||||||||||||
Balance, December 31, 2010
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11,972,600 | 9,329 | 176,519 | (248,524 | ) | (62,676 | ) | |||||||||||||
Shares issued for services - March, 2011
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40,000 | 4,000 | - | - | 4,000 | |||||||||||||||
Contributed rent and services
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- | - | 57,246 | - | 57,246 | |||||||||||||||
Net (loss) for the year ended December 31, 2011
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- | - | - | (104,581 | ) | (104,581 | ) | |||||||||||||
Balance, December 31, 2011
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12,012,600 | 13,329 | 233,765 | (353,105 | ) | (106,011 | ) | |||||||||||||
Contributed rent and services
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- | - | 57,246 | - | 57,246 | |||||||||||||||
Net loss for the year ended December 31, 2012
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- | - | - | (93,278 | ) | (93,278 | ) | |||||||||||||
Balance, December 31, 2012
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12,012,600 | $ | 13,329 | $ | 291,011 | $ | (446,383 | ) | $ | (142,043 | ) | |||||||||
Contributed rent and services
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- | - | 14,312 | - | 14,312 | |||||||||||||||
Net loss for the year ended March 31, 2013
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- | - | - | (24,540 | ) | (24,540 | ) | |||||||||||||
Balance, March 31, 2013
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12,012,600 | $ | 13,329 | $ | 305,323 | $ | (470,923 | ) | $ | (152,271 | ) | |||||||||
The accompanying notes are an integral part of these financial statements.
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- 5 -
(A Development Stage Company)
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||||||||||||
STATEMENTS OF CASH FLOWS
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||||||||||||
From inception
(November 29,
2007) through
March 31, 2013
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||||||||||||
For the Year Ended
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||||||||||||
March 31, 2013
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March 31, 2012
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|||||||||||
OPERATING ACTIVITIES
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||||||||||||
Net loss
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$ | (24,540 | ) | $ | (26,712 | ) | $ | (470,923 | ) | |||
Adjustments to reconcile net loss from operations:
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||||||||||||
Share-based payment
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- | - | 12,329 | |||||||||
Contributed services (Note 2)
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12,000 | 12,000 | 256,000 | |||||||||
Contributed rent (Note 2)
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2,312 | 2,311 | 49,323 | |||||||||
Change in operating assets and liabilities:
|
||||||||||||
Inventory
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- | - | (7,912 | ) | ||||||||
Accounts payable
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149 | 6,182 | 37,129 | |||||||||
Accrued interest related party
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4,309 | 3,419 | 43,778 | |||||||||
Net cash used in operating activities
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(5,770 | ) | (2,800 | ) | (80,276 | ) | ||||||
FINANCING ACTIVITIES
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||||||||||||
Proceeds from issuance of common stock
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- | - | 1,000 | |||||||||
Proceeds from issuance of related party notes
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5,500 | 6,000 | 79,573 | |||||||||
Net cash provided by financing activities
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5,500 | 6,000 | 80,573 | |||||||||
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
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(270 | ) | 3,200 | 297 | ||||||||
CASH AND CASH EQUIVALENTS
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||||||||||||
-BEGINNING OF PERIOD
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567 | 191 | - | |||||||||
CASH AND CASH EQUIVALENTS
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||||||||||||
-END OF PERIOD
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$ | 297 | $ | 3,391 | $ | 297 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
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||||||||||||
Cash paid for interest
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$ | - | $ | - | $ | - | ||||||
Cash paid for taxes
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$ | - | $ | - | $ | - | ||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES:
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||||||||||||
Related party advances paid with stock
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$ | - | $ | - | $ | - | ||||||
Liabilities assumed for asset purchase agreement
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$ | - | $ | - | $ | - | ||||||
The accompanying notes are an integral part of these financial statements.
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- 6 -
FOREVER VALUABLE COLLECTIBLES, INC.
(An Development Stage Company)
NOTES TO THE FINANCIAL STATEMENT
March 31, 2013 and December 31, 2012
NOTE 1: BASIS OF PRESENTATION AND GOING CONCERN
The accompanying unaudited financial statements have been prepared from the records of the Company, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 2013, the results of operations for the three months ended March 31, 2013 and 2012, and cash flows for the three months ended March 31, 2013 and 2012 and the period from November 29, 2007 (Inception) through March 31, 2013. These financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company's annual report on Form 10-K for the year ended December 31, 2012.
There is no provision for dividends for the quarter to which this quarterly report relates.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The results of operations for the three month period ended March 31, 2013 are not necessarily indicative of the results to be expected for the full year ending December 31, 2013.
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 only limited revenues of $1,555 from our Inception and at March 31, 2013 we had a cash position of $297.
As a result, our auditors are uncertain 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.
NOTE 2: RELATED PARTY TRANSACTIONS
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”), 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. 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 generated no revenue during the period ended March 31, 2012, and management does not anticipate any significant revenues until the last quarter of 2015 as contemplated by our business plan.
FOREVER VALUABLE COLLECTIBLES, INC.
(An Development Stage Company)
NOTES TO THE FINANCIAL STATEMENT
March 31, 2013 and December 31, 2012
NOTE 2: RELATED PARTY TRANSACTIONS (CONTINUED)
Rent expense of $ 2,311 was recognized respectively during the three month periods ended March 31, 2013 and 2012 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 2013 and 2012. We recognized $ 12,000 respectively for the three months ended March 31, 2013 and 2012, in contributed service expense. The Board of Directors valued the contribution based on prevailing rates for similar services in the local area.
During the year ended December 31, 2011 we elected to hire a new transfer agent for our securities, Island Stock Transfer Corp., whose address is 15500 Roosevelt Blvd., Suite 100, Clearwater, FL 33760. Prior to that, we incurred stock transfer agent fees to X-Pedited Transfer Corp. (“X-Pedited”), an affiliate, totaling $2,750 for the period ended December 31, 2010. At December 31, 2012, the unpaid balance to X-Pedited was $3,984, including unpaid finance charges. During the three months ended March 31, 2013, we incurred a finance charge of $149 to X-Pedited that increased the outstanding balance to $3,984, which amount remained outstanding at March 31, 2013 and is included in the accompanying balance sheet as accounts payable, related parties.
During the year ended December 31, 2011, X-Clearing Corp., an affiliate, paid expenses on our behalf totaling $1,450. This amount remained outstanding at March 31, 2013 and is included in the accompanying balance sheet as accounts payable, related parties.
Since 2008, our affiliates, X-Clearing Corp. and A-Squared Holdings, Inc. have provided us cash to cover operating expenses pursuant to the terms of unsecured promissory notes. During the three months ended March 31, 2013, X-Clearing Corp., provided loan proceeds totaling $5,500.
As of March 31, 2013 and December 31, 2012, notes payable to related parties, consist of the following:
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
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
|
$ | 46,737 | $ | 41,237 | ||||
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 | $ | 1,475 | ||||
Total notes payable, related parties
|
$ | 79,573 | $ | 74,073 |
Interest is payable every 90 days, but no interest has been paid to date. Accrued interest payable was $43,778 and $39,469 as of March 31, 2013 and December 31, 2012, respectively.
- 7 -
FOREVER VALUABLE COLLECTIBLES, INC.
(An Development Stage Company)
NOTES TO THE FINANCIAL STATEMENT
March 31, 2013 and December 31, 2012
NOTE 3: SHAREHOLDERS’ DEFICIT
The status of our outstanding warrant is as follows:
Number
of Shares
|
Weighted Avg.
Exercise
Price
|
Weighted Avg.
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding at December 31, 2012
|
$ | 200,000 | $ | - |
2.9 years
|
$ | - | ||||||
Granted
|
- | - | |||||||||||
Exercised
|
- | - | |||||||||||
Cancelled
|
- | - | |||||||||||
Outstanding at March 31, 2013
|
$ | 200,000 | $ | - |
2.6 years
|
$ | - | ||||||
Exercisable at December 31, 2012
|
$ | 200,000 | $ | - | $ | - | |||||||
Exercisable at March 31, 2013
|
$ | 200,000 | $ | - | $ | - |
NOTE 4: INCOME TAXES
We have incurred net operating losses during all periods presented resulting in a deferred tax asset, which has been fully allowed for; therefore, the net benefit and expense resulted in no income tax provision.
NOTE 5: SUBSEQUENT EVENTS
The Company has evaluated events subsequent to the balance sheet date through the issuance date of these financial statements in accordance with FASB ASC 855 and has determined there are no such events that would require adjustment to, or disclosure in, the financial statements.
- 8 -
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in, Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements.
Forward-Looking Statements
This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management. Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, variations of such words, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth herein and in other reports and documents that we file from time to time with the Securities and Exchange Commission, particularly the Annual Reports on Form 10-K, Quarterly reports on Form 10-Q and any Current Reports on Form 8-K.
Overview and History
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 both 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.
Our office is located at 535 16th Street, Suite 820, Denver, Colorado 80202. Our telephone number is (303) 573-1000.
We have not been subject to any bankruptcy, receivership or similar proceeding.
Results of Operations
Our activities have been primarily focused on organization as a development stage enterprise. From Inception through March 31, 2013, revenues were $ 1,555.
Operating expenses, which are composed of selling, general and administrative expenses for the three months ended March 31, 2013, were $20,082 compared to $22,378, for the three months ended March 31, 2012. Operating expenses for the three months ended March 31, 2013 were $60,292 compared to $60,730 and $420,814 from November 29, 2007 (Inception) through March 31, 2013. The major components of operating expenses include rent, transfer agent fees, marketing costs, and professional fees, which consist of legal and accounting costs.
- 9 -
As a result of the foregoing, we had a net loss before income taxes of $ 24,540 (less than $0.01 per share) for the three months ended March 31, 2012 compared to a net loss before income taxes of $ 26,712 (less than $0.01 per share) for the three months ended March 31, 2013. We had a net loss of $470,923 from Inception through March 31, 2013.
Our auditors have expressed doubt about our ability to continue as a going concern as a result of our continued net losses. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to locate clients who will purchase our products and our ability to generate revenues.
We expect that we will need to raise additional funds if we decide to pursue more rapid expansion, the development of new or enhanced products, appropriate responses to competitive pressures, or the acquisition of complementary businesses or technologies, or if we must respond to unanticipated events that require us to make additional investments. We cannot assure that additional financing will be available when needed on favorable terms, or at all.
We may continue to incur operating losses in future periods because we will be incurring expenses and not generating sufficient revenues. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. Failure to generate sufficient revenues or additional financing when needed could cause us to go out of business.
Liquidity and Capital Resources
As of March 31, 2013, we had cash of $297.
Net cash used in operating activities was $5770 for the three months ended March 31, 2013 compared to net cash used in operating activities of $2800 for the three months ended March 31, 2012 and $80,276 from Inception through March 31, 2013.
Cash flows provided by financing activities were $5500 for the three months ended March 31, 2013 compared to $6000 for the three months ended March 31, 2012 and $80,573 from Inception through March 31, 2013. These cash flows were all related to borrowings from a related party and the sale of common stock.
We believe that we have sufficient capital in the short term for our current level of operations. This is because we believe that we can attract sufficient product sales within our present organizational structure and resources to become profitable in our operations. We do not anticipate needing to raise additional capital resources in the next twelve months as we expect to be able to fully fund our activities from our unused credit facility.
Our principal source of liquidity will be our operations and our unused credit facility as discussed in Note 2 to the accompanying unaudited financial statements for the period ended March 31, 2013, We expect variation in revenues to account for the difference between a profit and a loss. Also business activity is closely tied to the economy of Denver and the U.S. economy. In any case, we try to operate with minimal overhead. Our primary activity will be to seek to develop sales. If we succeed in generating sufficient sales, we will become profitable. We cannot guarantee that this will ever occur. Our plan is to build our company in any manner which will be successful.
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Critical Accounting Policies
We have identified the following policies below as critical to our business and results of operations. 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
We had no revenue during the three months ended March 31, 2013. Anticipated future operating revenue will represent product sales in connection with the accumulated level of acquired memorabilia and collectibles inventory. Such revenues will be recorded as the memorabilia and collectibles are sold.
Plan of Operation for April 1, 2013 to December 31, 2013
Forever Valuable intends to continue its operations of the sales of 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 and all other costs of operations. However, the operating costs and expected revenue generation are difficult to predict. 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. A third affiliate, X-Pedited Transfer Corporation (“X-Pedited”)-a subsidiary of X-Clearing, has also advanced working capital to us on an as-need 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 2015 as contemplated by our business plan.
We expect to generate revenues in the next twelve to eighteen months from memorabilia and collectibles operations using referrals from business contacts and unrelated individuals and other entities that operate in the memorabilia and collectibles business.
We purchased no additional inventory in the three months ended March 31, 2013, though we will continue to purchase appropriate inventory. Initially, we have and will continue to sell our inventory on a cash-only basis. At some point within the next twelve months of our operations, we plan to begin accepting credit cards. We will continue to attend at least one trade show per month to increase the level of our inventory. We also plan to purchase a table and display system to set up at major trade shows. We anticipate this will allow us to make sales as follows:
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1. To business contacts made at trade shows attended,
2. Collectors contacted at the trade shows.
We also plan to increase our sales in the next twelve months by establishing a website and utilizing EBAY, the internet powerhouse for selling memorabilia and collectible items online. The site will be a virtual store, where prospective buyers can see a list of the available merchandise and view pictures of the more expensive items. Only items that have been purchased at an acceptable wholesale price will be offered.
Following activation of the company website, we will promote the website with ads in all hobby publications and when selling auction lots on EBAY. We will send e-mail notices to our extensive mailing list promoting the website.
Seasonality
We expect that our business will be seasonal with most revenue generated in the latter half of the calendar year.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is not required to provide the information required by this Item because the Company is a smaller reporting company.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), our Chief Executive Officer has concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the applicable time periods specified by the SEC’s rules and forms.
There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
This report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered accounting firm pursuant to temporary rules of the SEC that permits us to provide only management’s report in this quarterly report on Form 10-Q.
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PART II. OTHER INFORMATION
On March 30, 2013, Forever Valuable Collectibles, Inc., (the “Company”, “we”, “us”, “our”) entered into a share exchange agreement (the “Share Exchange Agreement”) pursuant to which we agreed to issue, 79,000,000 shares of our unregistered common stock, no par value (the “Common stock”) to the members of AEGEA, LLC, a Delaware limited liability company (“AEGEA”), 15,000,000 shares of our unregistered common stock together with 100 shares of our series A convertible preferred stock (the “Preferred Stock”) to the members of Energis Petroleum, LLC, a Florida limited liability company (“Energis”) and assume certain debt of AEGEA and Energis. Upon completion of the transaction, AEGEA and Energis will own approximately 88.7% of the then issued and outstanding common stock of our company.
AEGEA has been engaged in the initial phases of developing a mega-resort city in South Florida that will become an international community and leisure destination worldwide. The resort will offer residents and guests a unique living environment, integrating residential and hospitality with attractions and entertainment, and will include theme parks, a sports and education complex, and various venues for music and the arts. The character of the project will be marked by a network of canals and lagoons with authentic immersive architecture from around the world. AEGEA’s shopping, dining and hospitality will become a global marketplace for domestic and international brands.
The closing of the Share Exchange Agreement is conditioned upon certain, limited customary representations and warranties, as well as the following conditions to closing: (i) two of our shareholders owning collectively 9,000,000 shares of our common stock shall have entered into agreements restricting their sale of our common stock as provided for in the Bleed-Out Letter included as Exhibit B to the Share Exchange Agreement; (ii) the Company amending its articles of incorporation to change its name to AEGEA, Inc. and increase the authorized common stock to 1,000,000,000 shares, no par value, and increase the authorized preferred stock to 100,000,000 shares, and designation of the Series A Convertible Preferred Stock; (iii) the Company shall prepare and file its Form 10-K for the period ended December 31, 2012; (iv) the Company shall have zero liabilities at closing, and all current vendors shall be paid in full as of the closing date, including, but not limited to, the transfer agent and SEC Edgar filing agent; (v) the Company shall have assumed the loans made to Energis by its members; (vi) the holder of the mortgage encumbering the real estate owned by Energis in the approximate principal amount of $1.2 million shall have consented to the assumption of its mortgage by the Company; (vii) the Company shall have assumed any outstanding loans and obligations of AEGEA, including any loan transactions entered into after the execution of the Share Exchange Agreement and prior to closing; and (viii) each of the members of Energis, as of the date of this Share Exchange Agreement shall have consented to this transaction.
Following the closing of the Share Exchange Agreement, we intend to continue AEGEA’s historical businesses and proposed businesses. Our historical business and operations will continue independently through a newly formed wholly owned subsidiary.
There are no legal proceedings, to which we are a party, which could have a material adverse effect on our business, financial condition or operating results.
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.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibit No.
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Description
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31.1
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Certification of CEO/CFO pursuant to Sec 302
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32.1
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Certification of CEO/CFO pursuant to Sec 906
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101 | XBRL items |
Reports on Form 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on
May 13, 2013
FOREVER VALUABLE COLLECTIBLES, INC.
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By:
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/s/ Jodi Stevens
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Jodi Stevens
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