AF Ocean Investment Management Company, formerly known as Dinello Restaurant Ventures, Inc., was incorporated under the laws of the State of Florida on April 2, 2003.  AF Ocean Investment Management Company, together with wholly owned subsidiary company, AF Ocean Investment Management Company (Shanghai) Ltd. hereinafter collectively referred to as the "Company", "AF Ocean", "us" or "we") promotes business relations and exchanges between Chinese and U.S. companies, facilitating international mergers and acquisitions, and increasing co-operation between Chinese companies and Wall Street financial institutions.  The mission is to help Wall Street investors identify and work with respectable and reputable Chinese counterparts and companies and assist Chinese corporations to understand that the only way to benefit from the world's biggest capital market is through strict and consistent adherence to the rules and regulations that govern companies listed on American stock exchanges. During the third quarter of this year the Company acquired intellectual property from Pilot New Energy Research Institute in the form of non-patented technology relating to a new energy electric vehicle based on electromagnetic induction for $75 million dollars satisfied to the issuance of 5,000,000 million shares of preferred stock. The Company believes that this will be the Company's main business enterprise going forward. After acquiring the non-patented technology the Company subsequently issued 95,909,826 common shares valued at $95,909,826 to 1,349 people that will enable us to effectively market our non-patented technology relating to a new energy electric vehicle, to many organizations in China that we otherwise would not have been able to reach with other marketing programs relating to the non-patented technology.

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company had $181,448 in revenue for the nine month period ended September 30, 2014 from management fees.  During that same period, the Company had a net loss of ($96,246,300). These factors indicate the Company is generating revenues; however the Company's continuation as a going concern is dependent upon its ability to generate revenues through its new business direction.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Basis of Consolidation

The financial statements include the accounts and activity of AF Ocean Investment Management Company and its wholly owned subsidiary, AF Ocean Investment Management Company (Shanghai Ltd.) as of July 6, 2012, the date of acquisition.  All intercompany balances and activity have been eliminated.

Basis of Presentation

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the nine month periods ended September 30, 2014 and 2013; (b) the financial position at September 30, 2013; and (c) cash flows for the nine month periods ended September 30, 2014 and 2013, have been made. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates

The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by "GAAP" for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information regarding the Company's significant accounting policies, refer to the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 4, 2014.

Our financial statements may not be comparable to companies that comply with public company effective dates.  Due to our election  not to opt out of the extended transition period that 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. All Amounts referenced in these Financial Statements and this Report are in US Dollars unless otherwise stated.

 

Cash and Cash Equivalents

The majority of cash is maintained with a major financial institution in Shanghai, China. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk.  The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

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Accounts receivable

Accounts receivable represent amounts due from customers in the ordinary course of business.  The Company considers accounts more than 90 days old to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not require collateral for its accounts receivable. The Company considers all accounts receivable to be collectable and consequently has provided no allowance for doubtful accounts.

Property and Equipment

Property and equipment is stated at cost.  Depreciation is computed by the straight-line method over estimated useful lives.   The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment exists at September 30, 2014.

Foreign Currency Translation

The Company addressed the effect of the exchange rate differences resulting from the translation of the financial statements of its wholly foreign owned entity ("WFOE"), AF Ocean Investment Management Company (Shanghai Ltd.), into the consolidated corporate statements on the Balance Sheet with an accumulated exchange rate adjustment of ($4,663) for the three month period ended September, 2014 and ($1,214) for the nine month period ended September 30, 2014.  The effect of the foreign currency translation is recorded in income in the general and administrative expense line item.    

Because of fluctuations (including possible devaluations) in currency exchange rates between ¥CNY and $USD or the imposition of limitations on conversion of foreign currencies into $USD, we are subject to currency translation exposure on the profits of our operations. Although the rates have remained relatively stable over the last year, this is not indicative of future changes or the related translation risk. Currently the Company does not hedge against foreign currency or interest rate risk, and as such significant changes in either can have adverse affects on our operations.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Company accounts for taxes in accordance with ASC 740-10, "Accounting for Uncertain Income Tax Positions." When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.  In accordance with ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.  Tax positions taken are not offset or aggregated with other positions.  Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.  The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. 

The Company believes its tax positions are all highly certain of being upheld upon examination.  As such, the Company has not recorded a liability for unrecognized tax benefits.  As of September 30, 2014, tax years 2013, 2012, 2011 and 2010 remain open for IRS audit.  The Company has received no notice of audit from the IRS for any of the open tax years.

Intangible Assets

Intangible assets consist of business licenses in the Peoples' Republic of China and goodwill acquired in an acquisition during 2012.  Management believes that these are indefinite lived intangible assets; and as such will not be amortized. They are however subject to our impairment test quarterly as noted below.

Impairment of Long-lived Assets

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

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Revenue Recognition

The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Share-based Compensation

The Company may issue stock options whereby all share-based payments to employees, including grants of employee stock options are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented.

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718.  ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees.  The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.  The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50.  The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

The Company may issue restricted stock for various business and administrative services.  Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.  

There were 42,000 common shares issued to Mr. Shumin Liao for share based compensation paid in the three month period ended September 30, 2014.

During the three month period ended September 30, 2014, there were 95,909,826 common shares issued to 1,349 people, all of whom are residents of China, in connection with various promotions in China regarding the Technology. The 95,909,826 shares are referred to as the "Promotional Shares."  The aggregate value of the Promotional Shares is $95,909,826 based on a $1.00 closing price of our common stock on the OTCQB tier of the OTC marketplace on July 28, 2014.  We did not receive any cash consideration in connection with the issuance of the Promotional Shares.  However, we believe that the issuance of these shares to these 1,349 people will enable us to effectively market our non-patented technology relating to a new energy electric vehicle based on electromagnetic induction (the "Technology") to many organizations in China that we otherwise would not have been able to reach with other marketing programs relating to the Technology. The issuance of the Promotional Shares gives us the opportunity to be looked at as a key player in the electric vehicle industry. Common Chinese business practices still rely heavily on promotion through person-to-person communication and long standing personal relationships. We believe that tapping into the extensive personal relationships of the recipients of the Promotional Shares is the best approach for promoting the Technology to the masses in China. The offering and issuance of the Promotional Shares were not registered under the Securities Act, but were made in reliance upon the exemptions from the registration requirements of the Securities Act set forth in Section 4(2) and Rule 903 of Regulation S promulgated thereunder, insofar as the Promotional Shares were offered and sold in an "offshore transaction" and there were no "directed selling efforts" in or into the United States of the Promotional Shares, all within the meaning of Rule 902 of Regulation S.  Furthermore, no recipient of the Promotional Shares is a United States citizen; nor did any recipient acquire the Promotional Shares for the account or benefit of a United States citizen; and the Promotional Shares are restricted pursuant to Rule 144 under the Securities Act.

 

There were no shares issued during the year ended December 31, 2013.

Loss per Share

In accordance with ASC 260-10, "Earnings Per Share", basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period.  Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. During the three month period ended September 30, 2014, the Company issued 5,000,000 shares of our Series A Preferred Stock (the "Preferred Shares").  The Preferred shares were issued in connection with a transfer of the Technology from Pilot New Energy Research Institute of Beijing to our WFOE.  In exchange for transferring the Technology to our WFOE, we agreed to issue the Preferred Shares to the institute's sole legal representative, Mr. Andy Fan.  Mr. Fan is also our sole officer and director.  The Preferred Shares have an aggregate preferred liquidation value of $75 million, have super voting rights equivalent to 500,000,000 common shares and are convertible into 75,000,000 common shares.  The amount of Preferred Shares issued in exchange for the Technology was based on several factors, including an assessment of the value of the Technology by a government licensed independent third-party, application of a 20% discount to such value and the current closing price of the common stock.  The offering and issuance of the Preferred Shares was not registered under the Securities Act, but was made in reliance upon the exemptions from the registration requirements of the Securities Act set forth in Section 4(2) thereof.  The recipient of the Preferred Shares took them for investment purposes without a view to distribution.  Furthermore, he had access to information concerning us and our business prospects; there was no general solicitation or advertising in connection with the offering and issuance of the Preferred Shares; and the Preferred Shares are restricted pursuant to Rule 144 under the Securities Act.

Segment Information

In accordance with the provisions of ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", the Company is required to report financial and descriptive information about its reportable operating segments which meet the quantitative thresholds delineated. The Company has one reporting segment that does not meet any of the quantitative thresholds to require separate reporting, see Note 8 for additional information.

Comprehensive Income (Loss)

Comprehensive income is defined as all changes in stockholders' equity (deficit), exclusive of transactions with owners, such as Capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. There is no difference between net income and comprehensive income for wither period presented.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company financial statements.

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On December 23, 2013 AF Ocean Investment Management Company (Shanghai Ltd.) entered into an agreement with ChinAmerica Andy Movie Entertainment Media Co. for the collection and maintenance of all funds received in the People's Republic of China on behalf of ChinAmerica Andy Movie Entertainment Co.  All deposits received in the People's Republic of China will incur a management fee of ten percent (10%) due to the Company. As of September 30, 2014, payments totaling ($130,648) (USD) have been received for this management service.

Commencing on June 1, 2014 the Company entered into a one year agreement with two separate related parties to provide management services. Both related parties pay the Company $6,350 per month for management and accounting related services including, without limitation, preparing periodic and other reports required to be filed under the Securities Exchange Act of 1934, preparing financial reports, bookkeeping, managing their websites, handling previous employee matters, and related governmental filings, handling advertising matters, and processing payables. As of September 30, 2014, payments totaling ($50,800) has been received from both companies for these management services.

As of September 30, 2014, the Company showed a Related Party Payable in the amount of $8,056, as a result of cash loaned from a related party which will be paid in full by year end.

During the nine month period ended September 30, 2014, the Company shows a balance of $14,178, as a result of a loan from the majority shareholder. During the three month ended September 30, 2014 $2,400 was paid back. On October 1, 2014 the balance of this loan was paid in full.

There are no other related party loans receivable or payable outstanding at September 30, 2014.

On February 3, 2014, the Company paid $107,788 to Island Capital Management as payment in full on the $100,000 ICM Note. There are no other related party loans receivable or payable outstanding at September 30, 2014 other than the above mentioned $8,056.

 

Dates shares issued	Shares Issued To/For		Amount/Stock Value (USD)				Shares Issued				Price Per Share
6/26/14	Mr. Xueji / Consulting Compensation		$	42,000				42,000				1.00
7/16/14	Mr. Liao / Consulting Compensation		$	42,000				42,000				1.00
7/28/14	Multiple shareholders / Marketing shares		$	95,909,826				95,909,826				1.00
Total			$	95,993,826				95,993,826

 

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On December 23, 2013, the Company, through its WFOE, AF Ocean Investment Management Company (Shanghai Ltd.) ("AF Ocean-Shanghai"), entered into a Management Agreement with ChinAmerica Andy Movie Entertainment Media Company ("ChinAmerica"), a Florida corporation.  ChinAmerica has operations' in China and will be receiving payment for such operations in China.  Because China employs strict currency regulations that are designed to prevent large amounts of currency moving out of the country, ChinAmerica retained AF Ocean-Shanghai to manage the money it receives from its Chinese operations.

As of the nine month period ended September 30, 2014, the current balance in the account held on behalf of ChinAmerica is $1,304,460. Pursuant to the Management Agreement, AF Ocean-Shanghai will receive a fee equal to 10% of each deposit or wire received on ChinAmerica's behalf.

Legal

We were not subject to any litigation during the three and nine month period ended September 31, 2014 or 2013.  As of September 30, 2014, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

Other Commitments

The Company rents office space in New York, New York, Shanghai, China and recently moved its main operations from Sarasota, FL to Clearwater, FL.  The terms for the New York and the Shanghai, China locations are month to month and were started on March 1, 2012. The monthly rent is approximately $300, and $3,600, respectively. The terms for the Clearwater, Florida office are for 1 year, and commenced on July 1, 2014. The monthly rent is $2,020 plus electric used on a monthly basis.

In the third quarter of 2012, we acquired one operating segment, AF Ocean-Shanghai., in Shanghai, China, a provider of stock transfer agent and other business services to Chinese individuals who have investments in U.S. companies.   The following are the expenses attributed to AF Ocean-Shanghai for the nine month period ended September 30, 2014 as compared to the year ended December 31, 2013. At this time, the operating segment does not meet any of the quantitative thresholds which would require separate reporting of its operations, however, management believes that the following information about the segment would be useful to readers of the financial statements.

Schedule of Segment Reporting Information by Segment

Property consists of equipment purchased for the production of revenues:

Assets were depreciated over their useful lives when placed in service.  Depreciation expense was $4,974 and $2,825 for the nine month period ended September 30, 2014 and 2013, respectively.

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The following discussion should be read in conjunction with our financial statements and the notes thereto.

Forward-Looking Statements

This quarterly report contains forward-looking statements relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "plan" and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: our potential inability to raise additional capital, the possibility that third parties hold proprietary rights that preclude us from marketing our products, the emergence of additional competing technologies, changes in domestic and foreign laws, regulations and taxes, changes in economic conditions, a general economic downturn, a downturn in the securities markets, Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks," and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Report as anticipated, estimated or expected.

Use of Certain Defined Terms

Except as otherwise indicated by the context, references in this report to "AF Ocean" "we," "us," or "our" and the "Company" are references to the business of AF Ocean Investment Management Company.

Use of GAAP Financial Measures

 

We use GAAP financial measures in the section of this quarterly report captioned "Management's Discussion and Analysis and Results of Operation." All of the GAAP financial measures used by us in this report relate to the inclusion of financial information.

Overview

 

Employees

As of September 30, 2014, there were (5) full time employees (3) in Shanghai, China, and (2) in Florida.  This does not include the sole officer and director who oversees our operations.

Critical Accounting Policies

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Our actual results could differ from those estimates.  To be as accurate with our estimates as possible, we use our historical data to forecast our future results.  Deviations from our projections are addressed when our financials are reviewed on a monthly basis.  This allows us to be proactive in our approach to managing our business.  It also allows us to rely on proven data rather than having to make assumptions regarding our estimates.

Management does not believe that our actual results are related to any sensitivity in estimates made by management.  The year-end consistency of our results has shown that our prior year's historical data is the best projector of our future results.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.

Impairment of Long-Lived Assets

FASB ASC 360 requires that long-lived assets, and certain identifiable intangible assets held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  We assess the potential impairment of long-lived assets, principally property and equipment, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We determine if there is impairment by comparing undiscounted future cash flows from the related long-lived assets with their respective carrying values. In determining future cash flows, significant estimates are made by us with respect to future operating results of the restaurant over its remaining lease term. If assets are determined to be impaired, the impairment charge is measured by calculating the amount by which the asset carrying amount exceeds its fair value. This process of assessing fair values requires the use of estimates and assumptions, which are subject to a high degree of judgment. The adoption of FASB ASC 360 has not materially affected the Company's reported earnings, financial condition or cash flows.

Results of Operations for the Nine Month period ended September 30, 2014 and 2013

The following table provides a summary of the results of operations for the nine month period ended September 30, 2014 and 2013 and for the last two full fiscal years.

Summary of Results of Operations

Liquidity and Capital Resources

As of September 30, 2014, we had cash and cash equivalents of $225,913.

In the event we are unable to generate sufficient funds to continue our business efforts or if the company is pursued by a larger company for a business combination we will analyze all strategies to continue the company and maintain or increase shareholder value.  Under these circumstances we would consider a merger, acquisition, joint venture, strategic alliance, a roll-up, or other business combination for the purposes of continuing the business and maintaining or increasing shareholder value.  Management believes its responsibility to maintain shareholder value is of paramount importance, which means the Company should consider the aforementioned alternatives in the event funding is not available on favorable terms to the Company when needed.

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Table 1.0 Comparison of our Consolidated Statement of Operations for the Nine Months Ended September 30, 2014 and 2013

Revenue.

For the nine month period ended September 30, 2014, total revenue was $181,448, compared to $450,000 for the nine month period ended September 30, 2013, respectively. The reduction in revenue is due to the consulting agreements that were completed by the last fiscal quarter of 2013. Revenue generated in the nine month period ending September 30, 2014 was directly attributable to the management agreement that we entered into on December 23, 2013 with ChinAmerica.

Operating Expenses.

The increase in expenses for the nine month period ended September 30, 2014 compared to the nine month period ended September 30, 2013 is due primarily to the 95,909,826 shares of Common Stock recorded in General and Administrative as marketing expenses.

Net Income (Loss).

As a result of the factors described above, we had a net loss of ($96,246,300) and ($35,364) for the nine month period ended September 30, 2014, as compared to 2013.

Table 2.0 Comparison of our Consolidated Statement of Operations for the Three Months Ended September 30, 2014 and 2013

Revenue.

For the three months ended September 30, 2014, total revenue was $70,415, compared to $135,000 for the three month period ended September 30, 2013, respectively. The reduction in revenue is due to the consulting agreements that were completed by the last fiscal quarter of 2013.

Operating Expenses.

The increase in expenses for the three month period ended September 30, 2014 compared to the three month period ended September 30, 2013 is due primarily to the 95,909,826 shares of Common Stock recorded in General and Administrative as marketing expenses for the three month period ended September 30, 2014.

Net Income (Loss).

As a result of the factors described above, we had a net loss of ($96,019,202) and ($34,907) for the three month period ended September 30, 2014, as compared to 2013.

Liquidity and Capital Resources

General. As of September 30, 2014, we had cash and cash equivalents of $225,913. In the previous period we had generated enough revenue through our consulting services to cover our expenses, which are generally fees for professional services and general and administrative activities.

 

Our operating activities used cash of $(417,946) for the nine month period ended September 30, 2014 versus ($183,683) for the nine month period ended September 30, 2013. With a net loss of ($96,246,300) for the nine month period ended September 30, 2014, our operations are still supported by loans from the majority shareholder or equity purchases.

Net cash of (3,296) was used in investing activities for the nine month period ended September 30, 2014 compared to ($9,752) used in the nine month period ended September 30, 2013.  

Financing activities used $77,510 in the nine month period ended September 30, 2014, compared to $537,848 during the comparable period in 2013.

As of September 30, 2014, our assets exceed our liabilities exceed by $529,455.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company had revenue from management fees of $181,448 and a net loss of ($96,246,300) for the nine month period ended September 30, 2014 compared to revenue of $450,000 and net income of ($35,364) for the nine month period ended September 30, 2013. These factors indicate the Company is generating revenues; however, The Company's continuation as a going concern is dependent upon its ability to continue to generate revenues through its new business direction.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance arrangements.

ITEM 3.                  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item. 

 

Disclosure Controls and Procedures.

 

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company's Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company's management, as appropriate, to allow timely decisions regarding required disclosure.

The Company's management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective.

Changes in Internal Controls over Financial Reporting

There was no change in the Company's internal control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II – OTHER INFORMATION

We were not subject to any legal proceedings during the three month period ended September 30, 2014, nor to the best of our knowledge and belief are any threatened or pending.

ITEM 2.                        UNREGISTERED SALES OF EQUITY SECURITIES

  

No senior securities were issued and outstanding during the three month period ended September 30, 2014.

  

Not applicable to the Company.

 

None.

 

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