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EXCEL - IDEA: XBRL DOCUMENT - Lion Lam Diamond Inc | Financial_Report.xls |
EX-31.1 - Lion Lam Diamond Inc | ex3111.htm |
EX-32.1 - Lion Lam Diamond Inc | ex3211.htm |
.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended 09/30/2013
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No.333-172112
Lion Lam Diamond Inc.,
(Exact name of registrant as specified in its charter)
Texas | 27-3309602 |
(State or other jurisdiction | (I.R.S. Employer Identification No.) |
of incorporation or organization) |
14520 Memorial Drive, Suite 206
Houston, Texas 77079
(Address of principal executive offices)
1-281-776-9101
(Issuer's telephone number)
Indicate by checkmark whether the issuer: (1) has 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 x No o
Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer o Accelerated filer o
Non-accelerated filer o Small Reporting company x
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the most practicable date: 7,000,000 as of November 5, 2013.
Lion Lam Diamond Inc.,
Form 10-Q Report Index
Page No: | |
PART 1. FINANCIAL INFORMATION | |
Item 1. Financial Statements | |
Balance Sheet | 3 |
Statements of Operations | 4 |
Statements of Cash Flows | 5 |
Notes to financial Statements | 6-9 |
Item 2. Management Discussion and Analysis of Financial Condition | 10-11 |
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 11 |
Item 4. Control and Procedures | 11 |
PART 11. OTHER INFORMATION | |
Item 1. Legal Proceedings | 12 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 12 |
Item 3. Defaults Upon Senior Securities | 12 |
Item 4. Mine Safety Disclosures | 12 |
Item 5. Other Information | 12 |
Item 6. Exhibit | 12 |
Item 7. Signature | 12 |
Lion Lam Diamond Corporation
(A Development Stage Company)
Condensed Balance Sheets
As of September 30, 2013 (unaudited) |
As of December 31, 2012 ( audited) |
|||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 1,169 | $ | 1,259 | ||||
Inventory | 15,005 | 18,005 | ||||||
TOTAL ASSETS | 16,174 | 19,264 | ||||||
- | - | |||||||
LIABILITIES AND STOCKHOLDER'S EQITY | ||||||||
Note Payable-Related Party | $ | 2,000 | $ | - | ||||
Accrued payable | 3,565 | |||||||
TOTAL CURRENT LIABILITIES | 2,000 | 3,565 | ||||||
SHAREHOLDER'S EQUITY | ||||||||
Preferred Share 9,998,889,998 authorized, -0- shares issued and outstanding, par value of $0.0001 | - | - | ||||||
Common shares 8,889,998,889 authorized, 7,000,000 shares issued and outstanding, par value of $0.0001 | $ | 700 | $ | 700 | ||||
Paid-In Capital | 145,100 | 145,100 | ||||||
( Deficit) accumulated During Development Stage | (131,626) | (122,971 | ) | |||||
STOCKHOLDERS' EQUITY | 14,174 | (22,829 | ) | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 16,174 | $ | 19,264 |
The accompanying notes are an integral part of these financial statements
Lion Lam Diamond Corporation
(A Development Stage Company)
Condensed Statements of Operations
( unaudited)
Three Months Ended Sept.30 2013 |
Three Months Ended Sept. 30, 2012 |
Nine Months Ended Sept. 30, 2013 |
Nine Months Ended Sept.30, 2012 |
From July 14 2010 (Inception) Through Sept. 30, 2013 |
|||||||||||
Revenue: | $ | - | 4,000 | $ | 7,925 | $ | 151,750 | $ | 216,096 | ||||||
Less: Cost of Goods Sold | - | (2,987) | (3,000) | (126,186) | (168,041 | ) | |||||||||
Gross Profit | $ | 1,013 | $ | 4,925 | $ | 25,564 | 48,055 | ||||||||
Operating Expenses: | |||||||||||||||
General and Administrative | 1,752 | (87,091) | 10,730 | (113,506) | (177,380 | ) | |||||||||
Total Operating Expenses | 1,752 | (86,078) | (5,805) | (87,942) | (129,325 | ) | |||||||||
Income ( Loss) from Operating Expense | |||||||||||||||
Interest Expense | (2,300 | ) | |||||||||||||
Provision for Income Taxes | - | - | |||||||||||||
Net Income ( Loss) | $ | 1,752 | (86,078) | $ | (5,805) | $ | (87,942) | $ | (131,626) | ||||||
Net Loss per Share Basic and Diluted | $ | 0.00 | 0.00 | $ | -0- | $ | 0.00 | $ | 0.00 | ||||||
Weighted Average Number of Common Share Outstanding | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 |
The accompanying notes are an integral part of these financial statements
Lion Lam Diamond Corporation
(A Development Stage Company
Condensed Statement of Cash flow
(unaudited)
Nine Months Ended Sept 30, 2013 |
Nine Months Ended Sept 30, 2012 |
From July 14 2010 (Inception) Through Sept 30, 2013 |
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net Profit//Loss | $ | (5,805) | $ | (87,942 | ) | $ | (131,626 | ) | ||||
ADJUSTMENTS TO NET PROFIT/LOSS: | ||||||||||||
Interest forgiven by stockholder | - | |||||||||||
CHANGE IN OPERATING ASSETS AND LIABILITIES : | ||||||||||||
Stock-based Compensation | - | 87,500 | 87,500 | |||||||||
Increase (decrease) in accrued payable | - | 19,857 | - | |||||||||
Increase( decrease) in inventory | 4,053 | 6,940 | 15,005 | |||||||||
Increase ( decrease) in receivable | - | (58,904) | - | |||||||||
Net cash used in operating activities | (1,752) | (32,550) | (29,121) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Issuance of common stock for cash | - | 50,000 | 56,000 | |||||||||
Borrowing from related Party | 2,000 | (15,151) | (26,879) | |||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES: | (34,849) | |||||||||||
Net Increase ( decrease) in cash | (248) | 2,299 | (26,879) | |||||||||
Cash at beginning of period | 921 | 569 | ||||||||||
Cash at end of period | $ | 1,169 | 2,868 | $ | 1,169 | |||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||
Interest paid in cash | $ | - | $ | - | $ | - | ||||||
Income taxes paid | $ | - | $ | - | $ | - | ||||||
SUPPLEMENTAL NON-CASH FINANCING ACTIVITIES: | ||||||||||||
Interest forgiven | $ | - | $ | $ | 2,300 |
The accompanying notes are an integral part of these financial statements
Lion Lam Diamond Corporation
(A DEVELOPMENT STAGE Company)
Notes to the Condensed Financial Statements
For the nine months ended Sept. 30, 2013 and 2012 ( unaudited)
NOTE 1 - UNAUDITED INFORMATION
The balance sheet of Lion Lam Diamond Corporation (the “Company”) as of June 30, 2013, and the statements of operations and cash flows for the 3 months ended June 30, 2013 have not been audited. However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the financial position of the Company as of June 30, 2013, and the results of operations for the six-months ended June 30, 2013.
Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Interim period results are not necessarily indicative of the results to be achieved for an entire year. These financial statements should be read in conjunction with the financial statements and notes to financial statements included in the Company’s audited financial statements as of December 31, 2012 and calendar year then ended.
NOTE 2 – ORGANIZATION AND BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Lion Lam Diamond Corporation was incorporated in Texas on July 14th, 2010. For the nine months ended September 30, 2013, we have generated $216,096 in revenues. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring startup costs and expenses. As a result, the Company incurred accumulated net losses from July 14, 2010 (Inception) through the period ended September 30, 2013 of $(131,626).
.
YEAR END
The Company has elected December 31 as its year end.
NATURE OF OPERATION
The Company has developed a jewelry wholesale and retail operations which offers polished diamonds and fine jewelry to the public.
BASIC OF PRESENTATION
The accompanying audited financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”).
REVENUE RECOGNITION
We recognize revenue from product sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As of Sep.30, 2013, there were no cash equivalents.
INVENTORY
Inventory consisting of polished diamonds is stated at the lower of cost or market.
EQUIPMENT AND DEPRECIATION
Equipment is stated at cost. Depreciation is calculated using the straight- line method over the estimated useful lives of the related assets, currently set at five years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the deferred tax assets, Management evaluates whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on Management’s evaluation, the net deferred tax asset was offset by a full valuation allowance in all periods presented. The Company’s deferred tax asset valuation allowance will be reversed if and when the Company generates sufficient taxable income in the future to utilize the tax benefits of the related deferred tax assets.
As of September 30, 2013, the Company had a net operating loss carry-forward of approximately $(131,626) which may be used to offset future taxable income and begins to expire in 2030.
FAIR VALUE MEASUREMENTS
The Company adopted the provisions of ASC Topic 820, "Fair Value Measurements and Disclosures", which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents, deposits, prepaid expenses, notes payable, and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
MC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. MC 820 describes three levels of inputs that may be used to measure fair value:
* | level l - quoted prices in active markets for Identical assets or liabilities |
* | level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable |
* | level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions) |
STOCK-BASED COMPENSATION
The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
EARNINGS (LOSS) PER COMMON SHARE
Basic net income per share is computed by dividing the net income available to common shareholders (the numerator) for the period by the weighted average number of common shares outstanding (the denominator) during the period. The computation of diluted earnings is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. As of June 30, 2013, there was no variance between basic and diluted loss per share as there were no potentially dilutive common shares outstanding.
RECENT ACCOUNTING STANDARDS
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.
NOTE 3-GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has generated $216,096 revenues from July 14, 2010 ( Inception) through September 30,2013. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring startup costs and expenses. As a result, the Company incurred net losses from July 14, 2010 (Inception) through the period ended September 30, 2013 of $(131,626).
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues through sales of polished diamonds and sales of our crown products.
NOTE 4- INVENTORY
During the nine ended September 30, 2013, our inventory consists of polished diamonds acquired from four different national suppliers. Our inventory is stated at the lower of cost or market. We believe historical cost method is more conservative than the market method because polished diamonds tend to have high valuation in the jewelry industry.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
This section of the prospectus includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place an undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
PLAN OF OPERATION
Our plan of operation for the next 12 months is divided into the following four Phases:
Phase I: Develop our website
Our website is currently being developed with on-line shopping capabilities. Due to our limited budget of $2,500 for website development, we have outsourced our website development project to the website designer in China. Initially, our website only contains English and Chinese's versions, and we intend to add additional languages to our website in the future to attract potential clients from different Countries. Our website is being developed, and two domain names have been reserved for our websites. The estimate amount of time to complete our first website is 120 days.
Phase II: Outsource jewelry design projects
We will outsource our jewelry design project to several jewelry designers with 3-D jewelry design capabilities. One 3-D jewelry designer is: AJC Designing Inc. This firm has more than 10 years of experience designing complex design concepts at a reasonable price. We have a verbal agreement with AJC Designing Inc., pursuant to which AJC Designing Inc. have agreed to provide 3-D design services; however, we have the options to select from a number of 3-D design vendors that could provide similar design services. In addition to AJC Designing Inc., We have three vendors that could provide us with 3-D jewelry designs in additional to AJC Designing Inc., and with which we have verbal agreements. Pursuant to the verbal agreements with these vendors, we are not obligated to place an order with these vendors, and these vendors are not obligated to accept any orders we place. Our average cost per design project is $1,500 or less. This phase involves the creation of one or more prototype crown designs. The purpose of the prototype's crown designs is to have a variety of crown designs that may be suitable for different potential customers.
We have skilled artisans and goldsmiths use the relevant prototype design that is selected or ordered by a customer to create the physical crown. These skilled artisans and goldsmiths typically take 90 days to complete the creation of each crown. These skilled artisans and goldsmiths are third-party vendors that do not set minimum orders nor required us to enter into any material agreements. We have three skilled artisans and goldsmiths that could provide services to us and with which we have verbal agreements with these skilled artisans and goldsmith, we are not obligated to place orders with these artisans and goldsmiths, and these artisans are not obligated to accept any orders we place. We typically outsourced our manufacturing jobs to these third-party vendors.
Phase III: Purchase of ideal cut diamonds
Our budget to accumulate the diamonds for the 24K crown is estimated at $30,000. We have signed a supply contract with A.D. Diamonds Inc., A.D. Diamonds Inc., do not set any minimum order or restrictions for our orders. We could order a single diamond or a parcel of diamonds at any given time, but we must wire the funds to A.D. Diamonds Inc., prior to her release of shipments to us. We have acquired all the necessary polished diamonds from A.D. Diamonds Inc. and other diamond vendors to complete our first 24K gold crown. Our existing diamond inventories are sufficient to complete one 24K gold crown. Our basic design of the 24K gold crown has nine round brilliant cut diamonds weighted well over one carat each.
Phase IV: Accepting orders or consignments to auction companies
Once our website is completely developed, we will accept orders through our website. Our annual production of the 24K crown is projected to be 25 crowns and adjustments will be made based on supply and demand and our financial resources. We intend to distribute our 24K crown to nationals from different Continents. Consignments of our finished products to auction companies are still our main marketing and sales strategies. Potential bidders from different continents could submit their bids through these auction companies to win these exclusively designed 24K crown.
RESULTS OF OPERATIONS
From July 14, 2010 (Inception) to September 30, 2013
During the period, our incorporation in the State of Texas, we hired attorney for the preparation of this registration statement and our auditors to audit our financial statements. We have generated $218,096 in revenues since July 14, 2010 ( Inception). Our loss since inception was $(131,626) for general and administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2013, we have generated $216,096 in revenues and our total assets were $16,174. We had $1,169 in cash; $15,005 in inventory; our total liabilities were $2,000.
OFF-BALANCE SHEET ARRANGEMENT
The Company has no material transactions, arrangements, obligations or other relationships with entities or other persons that have or are reasonably likely to have a material current or future impact, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a small reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information.
ITEM 4. CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.
Item 1A. RISK FACTORS
We are a small reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities during the quarterly period ended September 30, 2013.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
Exhibit 31.1 Certificate of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101 XBRL data files of Financial Statements and notes contained in this Quarterly Report on Form 10Q.
* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”
ITEM 7. 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.
Lion Lam Diamond Inc.
/s/ Cai Yu
Cai Yu
Chief Executive Officer/Chief Financial Officer
Principle Accounting Officer, Director
Dated: November 5, 2013