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EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATION - HOLLYWALL ENTERTAINMENT INCf10q113011_ex32z1.htm
EX-31.1 - EXHIBIT 31.1 SECTION 302 CERTIFICATION - HOLLYWALL ENTERTAINMENT INCf10q113011_ex31z1.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


  X . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended November 30, 2011


      . TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from ______ to _______


Commission File Number 333-163628


HOLLYWALL ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

27-0310225

(State of incorporation)

 

(I.R.S. Employer Identification No.)

 

Formerly Known as

Acceleritas Corp

Formerly Known as

National Intelligence Association, Inc.


625 Bakers Bridge Avenue, Ste 105 Franklin, TN 37067

(Address of principal executive offices)


(615) 257-0780

(Registrant’s telephone number)


with a copy to:

Securus Law Group, P.A.

13046 Racetrack Road, #243 Tampa, Florida 33626

Telephone (813) 504-7831

 

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  X . No      .

 

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 (§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      . (Not required)


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


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


As of November 31, 2011, there were 99,590,000 shares of the registrant’s $0.001 par value common stock issued and outstanding.




1




NATIONAL INTELLIGENCE ASSOCIATION, INC. *


 

 

 

TABLE OF CONTENTS

Page

 

 

PART I. FINANCIAL INFORMATION

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

3

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

12

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

13

ITEM 4.

CONTROLS AND PROCEDURES

13

 

 

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.

[REMOVED AND RESERVED]

14

ITEM 5.

OTHER INFORMATION

14

ITEM 6.

EXHIBITS

14


Special Note Regarding Forward-Looking Statements

 

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of National Intelligence Association, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.


*Please note that throughout this Quarterly Report, except as otherwise indicated by the context, references in this report to “Company”, “NIAS”, “we”, “us” and “our” are references to National Intelligence Association, Inc.



2




PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS















NATIONAL INTELLIGENCE ASSOCIATION INC.

(A Development Stage Company)


Financial Statements


For the Periods Ended November 30, 2011 (unaudited) and August 31, 2011




 

 

Balance Sheets (unaudited)

4

Statements of Operations (unaudited)

5

Statements of Cash Flows (unaudited)

6

Notes to the Financial Statements (unaudited)

7









3




NATIONAL INTELLIGENCE ASSOCIATION INC.

(A Development Stage Company)

Balance Sheet

(unaudited)


 

 

For the three

 

For the fiscal

 

 

Months Ending

 

Year Ending

 

 

November 30, 2011

 

August 31, 2011

Assets

 

 

 

 

Cash

$

30

$

4

Accounts Receivable

 

49,950

 

-

Stock Receivable

 

-

 

-

Total Assets

$

49,980

$

4

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Deficiency

 

 

 

 

Accounts Payable

$

13,251

$

3,585

Accrued marketing fees

 

6,848

 

-

Accrued director fees

 

-

 

-

Accrued legal fees

 

-

 

-

Other current liabilities Note to Millington

 

52,681

 

61,338

Current liabilities of discontinued operations

 

-

 

-

Unsecured convertible promissory note(s)

 

49,754

 

10,000

Unsecured convertible promissory note payable to Officer

 

90,000

 

70,000

Total Liabilities

 

212,534

 

144,923

 

 

 

 

 

Preferred Stock, $.001 par value, 10,000,000 shares authorized; nil shares issued and outstanding

 

-

 

-

Common Stock, $.001 par value, 200,000,000 shares authorized and; 96,090,000 shares issued and outstanding at August 31, 2011 and 73,290,000 on November 30, 2011, respectively.

 

73,290

 

96,090

Additional paid in capital

 

498,090

 

465,910

Accumulated Deficit

 

(733,934)

 

(706,919)

Total Shareholders’ Deficiency

 

(162,554)

 

(144,919)

 

 

 

 

 

Total Liabilities and Shareholders’ Deficiency

$

49,980

$

4






(The accompanying notes are an integral part of these financial statements)




4




NATIONAL INTELLIGENCE ASSOCIATION INC.

(A Development Stage Company)

Statements of Operations

(unaudited)


 

 

For the three

Months Ended

November 30,

2011

 

For the three

Months Ended

November 30,

2010

 





Revenues

$

$

 

 

 

 

 

Expenses

 

 

 

 

Consulting Expense

 

-

 

-

Accounting

 

-

 

-

General and Administrative

 

80,315

 

17,286

Accrued Officer’s Salaries

 

-

 

-

Management Fees

 

700

 

7,500

Payroll and Benefits

 

-

 

-

Professional Fees

 

-

 

22,708

Total Expenses

 

81,015

 

47,494

 

 

 

 

 

Loss from continuing operations

 

(81,015)

 

(47,494)

 

 

 

 

 

Other Income (Expenses)

 

 

 

 

Interest expense

 

-

 

-

Loss on Debt Settlement

 

-

 

-

Total Other income (Expenses)

 

-

 

-

 

 

 

 

 

Net Loss

$

(81,015)

 

(47,494)

 

 

 

 

 





(The accompanying notes are an integral part of these financial statements)





5




NATIONAL INTELLIGENCE ASSOCIATION INC.

(A Development Stage Company)

Statements of Cashflow

(unaudited)


 

 

For the three

Months Ended

November 30,

2011

 

For the three

Months Ended

November 30,

2010

 

 

 

 

 

Cash flows from operating and activities of discontinued operation

 

 

 

 

Net loss

$

(81,015)

$

(47,494)

 

 

 

 

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

9,666

 

16,047

Accrued Liabilities

 

6,848

 

-

Loss on settlement of debt

 

-

 

-

Due to related parties

 

20,000

 

2,500

Shares issued for services

 

-

 

-

Net Cash Used In Operating Activities

 

(44,501)

 

(28,947)

 

 

 

 

 

Cash flows from investing activities of discontinued operation

 

 

 

 

Purchase of property and equipment

 

-

 

-

Net cash used in investing activities

 

-

 

-

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Donated Capital

 

13,430

 

-

Proceeds from issuance of common shares

 

-

 

-

Proceeds from notes payable

 

31,097

 

-

Repayment of notes payable

 

-

 

-

Repayments of longterm debt

 

-

 

-

Net Cash Provided By Financing Activities

 

44,527

 

-

 

 

 

 

 

Increase (Decrease) in Cash

 

26

 

(28,947)

 

 

 

 

 

Cash Beginning of Period

 

4

 

30,437

 

 

 

 

 

Cash End of Period

$

30

$

1,490

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

Interest paid

$

-

$

-

Income tax paid

$

-

$

-

 

 

 

 

 

Non-cash investing and financing activities

 

 

 

 

Shares issued for management fees

$

-

$

-

Shares issued for settlement of debt

$

-

$

-



(The accompanying notes are an integral part of these financial statements)






6



NATIONAL INTELLIGENCE ASSOCIATION INC.

(A Development Stage Company)

(UNAUDITED)

Notes to the Financial Statements


1.

Nature of Operations and Continuance of Business


National Intelligence Association Inc. (the “Company”) was incorporated in the State of Nevada on May 12, 2009. The Company is a Development Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company a security and investigative company, and will provide professional security, recovery, investigative, training, and protection services.


Going Concern


These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at August 31, 2011, the Company has not recognized any revenue, has a working capital deficit of $30,433 and an accumulated deficit of $706,919. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.


2.

Summary of Significant Accounting Policies


a)

Basis of Presentation


The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is August 31.


b)

Use of Estimates


The preparation of financial statements in conformity with US GAAP 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 period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


c)

Cash and cash equivalents


The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.


d)

Basic and Diluted Net Loss per Share


The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.



7




e)

Financial Instruments


Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:


Level 1


Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.


Level 2


Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model- derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3


Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, and amounts due to related parties. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.


f)

Comprehensive Loss


ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at August 31, 2011 and 2010, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.


g)

Recent Accounting Pronouncements


In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.


In February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position and results of operations.



8




In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.


In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard is not expected to have a significant impact on the Company’s financial statements.


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations


3.

Related Party Transactions


a)

As of August 31, 2012, the Company owed $90,000 (2010 - $27,760 and 2011- $58,560) to the President and Director of the Company for financing of day-to-day expenditures and management fees incurred on behalf of the Company. The amount owing is in an unsecured convertible promissory note bearing interest at ten percent per annum.


4.

Notes Payable


a)

As at August 31, 2011, the Company owes $70,000 (2010 - $nil) in notes payable to non-related parties. The amounts owing are unsecured, bears interest at 10% per annum, and is due on demand. As at August 31, 2011, accrued interest of $2,148 (2010 - $nil) was recorded in accrued liabilities. Refer to Note 7(b).


b)

On December 10, 2010, the Company received $5,000 from a non-related party and a further $2,000 on July 7, 2011. The amounts owing are unsecured, bears interest at 10% per annum, and is due on demand. On July 7, 2011, the Company settled the $7,000 note payable and accrued interest of $279 with the issuance of 700,000 common shares with a fair value of $28,000 resulting in a loss on settlement of debt of $20,721.


c)

During the year ended August 31, 2011, the Company $2,600 of outstanding accrued interest payable for $0.00, and recorded a gain on settlement of debt of $2,600.


5.

Common Shares


The company has not issued any securities from August 31, 2011 through June 30, 2012.


Year ended August 31, 2011


a)

On July 7, 2011, the Company issued 700,000 common shares with a fair value of $28,000 to settle outstanding debt of $7,279, resulting in a loss on settlement of debt of $20,721. The fair value was determined based on the Company’s trading price on the date of issuance. Refer to Note 4(b).


b)

In May 2011, the Company issued 50,000 common shares at $0.05 per share to a consultant for business development services valued at $2,500. The fair value was determined based on the Company’s trading price on the date of issuance.


c)

In April 2011, the Company issued 4,000,000 common shares at $0.025 per share to a consultant for investor relations services valued at $100,000. The fair value of the common shares was based on the fair value of the last issuance of common shares, as the Company’s common stock was not actively trading. On August 17, 2011, the consultant returned 3,500,000 common shares for cancellation.



9




d)

In April 2011, the Company issued 1,600,000 common shares at $0.025 per share to settle outstanding professional fees valued at $40,000. The fair value of the common shares was based on the fair value of the last issuance of common shares, as the Company’s common stock was not actively trading.


e)

In January 2011, the Company issued 1,800,000 common shares at $0.025 per share to settled outstanding professional fees valued at $45,000. The fair value of the common shares was based on the fair value of the last issuance of common shares, as the Company’s common stock was not actively trading.


f)

On November 1, 2010, the Company and its Board of Directors authorized a forward split of its common stock on a 4-to-1 basis. The effect of the forward split increased the number of issued and outstanding common shares from 22,860,000 common shares to 91,440,000 common shares. The effect of the forward split has been applied on a retroactive basis to the Company’s inception.


Year ended August 31, 2010


a)

In August 2010, the Company issued 400,000 common shares at $0.025 per share for consulting services with a fair value of $10,000. The fair value of the common shares was based on the fair value of the last issuance of common shares, as the Company’s common stock was not actively trading.


Year ended August 31, 2010


a)

In July 2010, the Company issued 3,200,000 common shares to settle loans payable of $80,000. The fair value of the common shares was based on the fair value of the last issuance of common shares, as the Company’s common stock was not actively trading.


b)

In July 2010, the Company issued 3,240,000 common shares at $0.025 per share for consulting services with a fair value of $81,000. The fair value of the common shares was based on the fair value of the last issuance of common shares, as the Company’s common stock was not actively trading.


c)

In July 2010, the Company issued 1,000,000 common shares at $0.025 per share for proceeds of $25,000.


d)

In June 2010, the Company issued 1,460,000 common shares at $0.025 per share for proceeds of $36,500.


e)

In September 2009, the Company issued 2,140,000 common shares at $0.025 per share for proceeds of $53,500, of which $43,500 was received and recorded as common stock issuable at August 31, 2009.


f)

In September 2009, the Company issued 60,000,000 common shares for proceeds of $5,000 and management services with a fair value of $10,000.


g)

On May 12, 2009, the Company issued 20,000,000 founders shares of the Company to the President of the Company for proceeds of $500.



10




6.

Income Taxes


The Company has ($405,769) of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2029. The income tax benefit differs from the amount computed by applying the US federal income tax rate of 34% to net loss before income taxes for the years ended August 31, 2011 and 2010 as a result of the following:


 

2011

$

2010

$

Net loss before taxes

(405,769)

(270,275)

Statutory rate

34%

34%


Computed expected tax recovery


137,961


91,894

Permanent differences and other

(6,161)

Change in valuation allowance

(131,800)

(91,894)


Income tax provision




The significant components of deferred income tax assets and liabilities as at August 31, 2011 and 2010 after applying enacted corporate income tax rates are as follows:


 

2011

$

2010

$

Net operating losses carried forward

234,192

102,392


Total gross deferred income tax assets


234,192


102,392

Valuation allowance

(234,192)

(102,392)


Net deferred tax asset




Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have been offset by a valuation allowance. As at August 31, 2011 and 2010, the Company has no uncertain tax positions.


7.

Subsequent Events


The Company had no material reportable events subsequent to August 31, 2011 with the exception of the following:


a)

On September 19, 2011, the President and Director of the Company returned and cancelled 29,800,000 common shares of the Company.


b)

On December 2, 2011, the Company entered into a settlement agreement to settle the outstanding note payable of $70,000 plus accrued interest in exchange for the issuance of 7,000,000 common shares of the Company.


c)

On December 5, 2011, the Company issued a promissory note for $30,000 to a non-related party. Under the terms of the note, the amounts owing are unsecured, bears interest at 10% per annum, and is due on December 5, 2013. The note is convertible into common shares at the election of the note holder at the lesser of 70% of the market value of the common shares or $0.02 per share on the date of conversion.








11




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


Off-Balance Sheet Arrangements


We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in note 1 of the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company adoption of provisions of ASU 2010-11 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position and results of operations.


In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.


In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.



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The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations


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 and are not required to provide the information under this item.


ITEM 4. CONTROLS AND PROCEDURES


Disclosure Controls and Procedures


We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2011. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective. Please refer to our Annual Report on Form 10-K as filed with the SEC on December 14, 2010, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.


Management’s Annual Report on Internal Control Over Financial Reporting


Our management is responsible for establishing and maintaining adequate control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of May 31, 2011. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of May 31, 2011, our internal control over financial reporting is not effective based on these criteria, due to material weaknesses resulting from not having an Audit Committee or financial expert on our Board of Directors and our failure to maintain appropriate cash controls.


Changes In Internal Control and Financial Reporting

 

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.


The Company is not required by current SEC rules to include, and does not include, an auditor’s attestation report. The Company’s registered public accounting firm has not attested to Management’s reports on the Company’s internal control over financial reporting.





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PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 1A. RISK FACTORS


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


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


Quarterly Issuances:


During the quarter, we did not issue any unregistered securities other than as previously disclosed.


2. Subsequent Issuances:


Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES


None.


ITEM 4. [REMOVED AND RESERVED]


ITEM 5. OTHER INFORMATION

 

None.


ITEM 6. EXHIBITS


The following exhibits are filed with this Quarterly Report on Form 10-Q:


Exhibit

 

 

Number

Description of Exhibit

Filing

31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14

Filed herewith.

32.01

CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith.




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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.


NATIONAL INTELLIGENCE ASSOCIATION, INC.



Dated: April 18, 2017


By:/s/ Roxanna Green

Roxanna Green

Secretary and COO






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