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EXCEL - IDEA: XBRL DOCUMENT - Fern Holdings Corp.Financial_Report.xls
EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER - Fern Holdings Corp.f10q0614ex31i_fernholdings.htm
EX-32.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER - Fern Holdings Corp.f10q0614ex32i_fernholdings.htm

 

 

FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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

 

For the quarterly period ended June 30, 2014

 

OR

 

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

 

For the transition period from ________ to ________

 

Commission file number 000-54897

 

Fern Holdings Corp.

(Exact name of registrant as specified in its charter)

 

Delaware   30-1749642
(State or other jurisdiction   (I.R.S. Employer
of incorporation or organization)   Identification Number)

 

c/o Samir Masri CPA Firm P.C.

175 Great Neck Road, Suite 403

Great Neck, NY 11021

(Address of principal executive offices)(Zip Code)

 

(516) 466-6193

(Registrant’s telephone number, including area code)

 

No change

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐.

 

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒   No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated file.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

 

  Large accelerated filer Accelerated filer
  Non-accelerated filer Smaller reporting company
  (Do not check if a smaller reporting company)    

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☒   No ☐.

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING

THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐   No ☐.

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 5,000,000 shares of common stock, par value $.0001 per share, outstanding as of August 14, 2014.

 

 

 

 
 

 

FERN HOLDINGS CORP.

 

- INDEX -

 

    Page
PART I – FINANCIAL INFORMATION:  
     
Item 1. Financial Statements: 3
     
  Condensed Balance Sheets as of June 30, 2014 (Unaudited) and March 31, 2014 3
     
  Condensed Statements of Operations (Unaudited) for the Three Months Ended June 30, 2014 and 2013 4
     
  Condensed Statements of Cash Flows (Unaudited) for the Three Months Ended June 30, 2014 and 2013 5
     
  Notes to Condensed Financial Statements 6
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
     
Item 4. Controls and Procedures 14
     
PART II – OTHER INFORMATION:  
     
Item 1. Legal Proceedings 14
     
Item 1A. Risk Factors 14
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
     
Item 3. Defaults Upon Senior Securities 14
     
Item 4. Mine Safety Disclosures 14
     
Item 5. Other Information 14
     
Item 6. Exhibits 15
     
Signatures 16

 

2
 

 

PART I – FINANCIAL INFORMATION

 

Item 1.  Financial Statements.

 

FERN HOLDINGS CORP.

CONDENSED BALANCE SHEETS

 

   (unaudited)     
   June 30,
2014
   March 31, 2014 
         
ASSETS 
         
CURRENT ASSETS:          
Cash  $1,494   $1,520 
           
Total Current Assets   1,494    1,520 
           
TOTAL ASSETS  $1,494   $1,520 
           
LIABILITIES AND STOCKHOLDER'S DEFICIENCY 
           
CURRENT LIABILITIES:          
Accounts payable and accrued expenses  $7,288   $2,886 
Loan payable - related party   3,400    3,400 
Note payable - related party   58,514    51,514 
           
Total Current Liabilities   69,202    57,800 
           
COMMITMENTS AND CONTINGENCIES   -    - 
           
STOCKHOLDER'S DEFICIENCY:          
Preferred stock, $.0001 par value; 10,000,000 shares authorized; none issued and outstanding   -    - 
Common stock, $.0001 par value; 100,000,000 shares authorized; 5,000,000 shares issued and outstanding   500    500 
Additional paid-in capital   9,500    9,500 
Accumulated deficit   (77,708)   (66,280)
           
Total Stockholder's Deficiency   (67,708)   (56,280)
           
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY  $1,494   $1,520 

 

See accompanying notes to condensed financial statements

 

3
 

 

FERN HOLDINGS CORP.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

 

   For The Three Months Ended   For The Three Months Ended 
   June 30, 2014   June 30, 2013 
         
REVENUES  $-   $- 
           
GENERAL AND ADMINISTRATIVE EXPENSES   10,676    9,300 
           
(LOSS) BEFORE INTEREST AND BENEFIT FROM INCOME TAXES   (10,676)   (9,300)
           
INTEREST EXPENSE   752    65 
           
(LOSS) BEFORE BENEFIT FROM INCOME TAXES   (11,428)   (9,365)
           
BENEFIT FROM INCOME TAXES   -    - 
           
NET (LOSS)  $(11,428)  $(9,365)
           
BASIC AND DILUTED LOSS PER SHARE   -    - 
           
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED   5,000,000    5,000,000 

 

See accompanying notes to condensed financial statements

4
 

 

FERN HOLDINGS CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

 

   For The Three Months Ended   For The Three Months Ended 
   June 30, 2014   June 30, 2013 
           
CASH FLOWS FROM OPERATING ACTIVITIES:          
           
NET (LOSS)  $(11,428)  $(9,365)
           
ADJUSTMENT TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:          
Increase (decrease)  in accounts payable and accrued expenses   4,402    (3,938)
           
NET CASH USED IN OPERATING ACTIVITIES   (7,026)   (13,303)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Increase in loans payable - related parties   -    3,400 
Increase in note payable - related party   7,000    5,900 
           
NET CASH PROVIDED BY FINANCING ACTIVITIES   7,000    9,300 
           
NET (DECREASE) IN CASH   (26)   (4,003)
           
CASH, BEGINNING OF PERIOD   1,520    4,052 
           
CASH, END OF PERIOD  $1,494   $49 

 

See accompanying notes to condensed financial statements

 

5
 

 

FERN HOLDINGS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

Note 1 - Organization and Business

 

Business Activity

 

Fern Holdings Corp., ("the Company") was incorporated in the state of Delaware on August 29, 2012 with the objective to acquire, or merge with, an operating business. 

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly traded corporation. The Company’s principal business objective over the next twelve months and beyond will be to achieve long-term growth potential through a combination with a business rather than immediate short-term earnings. The Company will not restrict its potential target companies to any specific business, industry or geographical location. The analysis of business opportunities will be undertaken by, or under the supervision of, the officers and directors of the Company.

 

Note 2 - Summary of Significant Accounting Policies

 

Basis of Presentation

  

The accompanying condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted for interim financial statements presentation and in accordance with the instructions to Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation. In the opinion of management, all adjustments for a fair statement of the results of operations and financial position for the interim periods presented have been included. All such adjustments are of a normal recurring nature. The accompanying condensed financial statements and the information included under the heading Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s audited financial statements and related notes included in the Company’s Form 10-K as of March 31, 2014. Interim results are not necessarily indicative of the results for a full year.

 

Use of Estimates

 

The preparation of condensed financial statements in conformity with accounting principles generally accepted 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

6
 

 

FERN HOLDINGS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

Note 2 - Summary of Significant Accounting Policies (cont’d.)

 

Cash Equivalents

 

The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. There are no cash equivalents at the condensed balance sheet dates.

 

Income Taxes

 

The Company utilizes the accrual method of accounting for income taxes. Under the accrual method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.

 

The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely than-not” threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. As of June 30, 2014 and 2013, the Company has no accrued interest or penalties related to uncertain tax positions.

 

Loss Per Common Share

 

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments for the period presented.

 

Emerging Growth Company

 

The Company is an “emerging growth company” and  has elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.

 

7
 

 

FERN HOLDINGS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

Note 2 - Summary of Significant Accounting Policies (cont’d.)

 

Recent Accounting Pronouncements

 

In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10 to eliminate certain financial reporting requirements. In accordance with that pronouncement we have elected to adopt the elimination of certain financial reporting requirements including the presentation of inception-to-date information in the statements of operations, cash flows, and stockholder’s deficiency and labeling the financial statements as those of a development stage entity. 

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

Note 3 - Going Concern

 

The accompanying condensed financial statements have been prepared assuming 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.

 

The Company has incurred losses from inception of approximately $78,000, and has negative working capital of approximately $68,000 at June 30, 2014, which among other factors, raises substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent upon management’s plan to find a suitable acquisition or merger candidate, raise additional capital from the sales of stock, and receive loans from related parties. The accompanying condensed financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

 

Note 4 - Income Taxes

 

As of June 30, 2014, the Company has net operating loss carryforwards of approximately $78,000 to reduce future federal and state taxable income through 2034.

 

The Company currently has no federal or state tax examinations in progress nor has it had any federal or state examinations since its inception. All of the Company’s tax years are subject to federal and state tax examination.

 

8
 

 

FERN HOLDINGS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

Note 4 - Income Taxes (cont’d.)

 

The benefit from income taxes consists of the following:

 

     For The Three Months Ended
June 30, 2014
   For The Three Months
Ended June 30, 2013
 
  Current Expense:          
  Federal and State  $-   $- 
  Deferred tax benefit:          
  Federal and State   4,000    3,000 
  Valuation allowance   (4,000)   (3,000)
  Total  $-   $- 

 

The income tax benefit differs from the amount computed by applying the federal statutory income tax rate to the loss before income taxes due to the following:

 

     For The Three Months Ended
June 30, 2014
   For The Three Months Ended
June 30,
2013
 
  Statutory federal income tax rate   (34)%   (34)%
  Valuation allowance   34%   34%
  Effective income tax rate   0%   0%

 

Note 5 - Common Stock

 

The Company is authorized to issue one hundred million (100,000,000) shares of $.0001 par value common stock, of which five million (5,000,000) shares have been issued.

 

Note 6 - Preferred Stock

 

The Company is authorized to issue ten million (10,000,000) shares of $.0001 par value preferred stock with designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors of the Company.

 

Note 7 - Related Party Transactions

 

The Company utilizes the office space and equipment of its management at no cost.

 

Loan payable – related part consists of amounts advanced to the Company by Sunrise Financial Group Inc. (“SFG”). The President of SFG has control of NLBDIT 2010 Services, LLC., the Company’s sole stockholder. As of June 30, 2014, the balance of $3,400 is unsecured, non-interest bearing and has no stipulated repayment terms.

  

9
 

 

FERN HOLDINGS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

Note 7 - Related Party Transactions (cont’d.)

 

On October 15, 2012, the Company issued a Promissory Note payable (the “Note”) to NLBDIT 2010 Enterprises, LLC, a company controlled by the President of SFG. The Note bears interest at 6% and is payable upon completion of a business combination with a private company in a reverse merger or other transaction after which the Company would cease to be a shell company. At June 30, 2014, the outstanding balance of $58,514 is reported as note payable - related party. At June 30, 2014, $2,227 of accrued interest related to this loan is reported as accounts payable and accrued expenses. Subsequent to June 30, 2014, the Company borrowed an additional $650.

 

For the three months ended June 30, 2014, and 2013, the Company incurred costs of $2,500, for the periods then ended, for accounting services provided by an entity owned by the President of the Company.

 

10
 

 

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

 

Forward Looking Statement Notice

 

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Fern Holdings Corp. (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

 

Description of Business

 

The Company was incorporated in the State of Delaware on August 29, 2012 (Inception) and maintains its principal executive office at c/o Samir Masri CPA Firm P.C., 175 Great Neck Road, Suite 403, Great Neck, NY 11021. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. The Company filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on February 8, 2013, and since its effectiveness, the Company has focused its efforts to identify a possible business combination.

 

The Company is currently considered to be a “blank check” company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. The Company is also a “shell company,” defined in Rule 12b-2 under the Exchange Act as a company with no or nominal assets (other than cash) and no or nominal operations. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.

 

In addition, the Company is an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act, and exemptions from the requirements of Sections 14A(a) and (b) of the Securities Exchange Act of 1934 to hold a nonbinding advisory vote of shareholders on executive compensation and any golden parachute payments not previously approved. 

 

The Company has also elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

 

We will remain an “emerging growth company” until the earliest of (1) the last day of the fiscal year during which our revenues exceed $1 billion, (2) the date on which we issue more than $1 billion in non-convertible debt in a three year period, (3) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement filed pursuant to the Securities Act of 1933, as amended, or (4) when the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. To the extent that we continue to qualify as a “smaller reporting company”, as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years.

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months will be to complete the transactions contemplated by the Share Exchange.  In the event the Company does not consummate the transactions contemplated by the Share Exchange the Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with an operating business. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

11
 

 

The Company currently does not engage in any business activities that provide cash flow.  During the next twelve months we anticipate incurring costs related to:

 

(i)         filing Exchange Act reports, and

(ii)        investigating, analyzing and consummating an acquisition.

 

We believe we will be able to meet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors. As of the date of the period covered by this report, the Company had $1,494 in cash. There are no assurances that the Company will be able to secure any additional funding as needed.  Currently, however our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.  Our ability to continue as a going concern is also dependent on our ability to find a suitable target company and enter into a possible reverse merger with such company.  Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances, however there is no assurance of additional funding being available.

 

The Company may consider acquiring a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering. 

 

Since our Registration Statement on Form 10 went effective, our management has not had any contact or discussions with representatives of other entities regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks. Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

 

The Company anticipates that the selection of a business combination will be complex and extremely risky. Our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

 

Liquidity and Capital Resources

 

As of June 30, 2014, the Company had assets equal to $1,494, comprised exclusively of cash.  This compares with assets of $1,520, comprised exclusively of cash, as of March 31, 2014.  The Company’s current liabilities as of June 30, 2014 totaled $69,202, comprised of accounts payable, accrued expenses and amounts due to related parties.  This compares to the Company’s total current liabilities of $57,800, comprised of accounts payable and accrued expenses, as of March 31, 2014. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.

 

12
 

 

The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities:

 

   Three Months Ended
June 30, 2014
   Three Months Ended
June 30, 2013
 
Net Cash Used in Operating Activities  $(7,026)  $(13,303)
Net Cash (Used in) Investing Activities   -    - 
Net Cash Provided by Financing Activities  $7,000   $9,300 
Net Increase (Decrease) in Cash and Cash Equivalents  $(26)  $(4,003)

 

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

 

Results of Operations

 

The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from August 29, 2012 (Inception), through June 30, 2014.  It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance.  It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern.  The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates. 

 

For the three months ended June 30, 2014, the Company had a net loss of $11,428, comprised of legal, accounting, audit and other professional service fees incurred in relation to the preparation and filing of the Company’s periodic reports and general and administrative expenses.

 

For the three months ended June 30, 2013, the Company had a net loss of $9,365, comprised of legal, accounting, audit and other professional service fees incurred in relation to the preparation and filing of the Company’s periodic reports and general and administrative expenses.

 

Off-Balance Sheet Arrangements

 

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

 

Contractual Obligations

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Emerging Growth Company

 

As an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”), the Company has elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

 

13
 

 

Item 4.  Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

As of June 30, 2014, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective  as of the end of the period covered by this report. 

 

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting during the quarter ended June 30, 2014 that have materially affected or are reasonably likely to materially affect our internal controls.

 

PART II — OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

There are presently no material pending legal proceedings to which the Company, any of its subsidiaries, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

Item 1A.  Risk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

 

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.

 

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Item 6.  Exhibits.

 

(a)  Exhibits required by Item 601 of Regulation S-K.

 

Exhibit No.  Description
    
*3.1   Certificate of Incorporation, as filed with the Delaware Secretary of State on August 29, 2012.
    
*3.2   By-laws.
    
31.1   Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
    
31.2   Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
    
32.1   Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
    
32.2   Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
    
101.INS   XBRL Instance Document
    
101.SCH   XBRL Taxonomy Extension Schema
    
101.CAL   XBRL Taxonomy Extension Calculation Linkbase
    
101.DEF   XBRL Taxonomy Extension Definition Linkbase
    
101.LAB   XBRL Taxonomy Extension Label Linkbase
    
101.PRE   XBRL Taxonomy Extension Presentation Linkbase

 

* Filed as an exhibit to the Company's Registration Statement on Form 10, as filed with the SEC on February 8, 2013, and incorporated herein by this reference.

  

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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.

 

 

  Fern Holdings Corp.
     
Dated: August 14, 2014 By: /s/ Samir N. Masri
    Samir N. Masri
    President, Chief Financial Officer,
    Secretary and Director
    Principal Executive Officer
    Principal Financial Officer

 

 

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