10-Q 1 form10q093009.htm form10q093009.htm


 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
(Mark One)
 
[ X ]                 QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
 
 
[   ]                 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 0-52269
 
A.G. VOLNEY CENTER, INC.
 (Exact name of small business issuer as specified in its charter)
 

DELAWARE
 
13-4260316
(State of other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

124 LINCOLN AVENUE SOUTH
LIVERPOOL, NY 13088
 (Address of principal executive offices)
 
315-457-4729
(Issuer's telephone number)
 
Check 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 is a shell company (as defined by   Rule 12b-2 of the Exchange Act).
 
Yes ( )  No (X)

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:  17,330,000 shares of Common Stock, par value $0.001 per share, as of  September 30, 2009.
 
Transitional Small Business Disclosure Format (check one): Yes ( ) No ( X)

 
1

 

 
 


A.G. VOLNEY CENTER, INC.
SEPTEMBER 30, 2009
   
 
PART I – FINANCIAL INFORMATION
Page
Item 1.
Financial Statements
 
 
Balance Sheets as September 30, 2009 (Unaudited) and December 31, 2008
3
 
Statements of Operations
For the three months ended September 30, 2009 (Unaudited) and September 30, 2008 (Unaudited)
For the nine months ended September 30, 2009 (Unaudited) and September 30, 2008 (Unaudited)
For the cumulative period from March 6, 1997 (Inception) to September 30, 2009 (Unaudited)
4
 
Statements of Cash Flows
For the nine months ended September 30, 2009 (Unaudited) and September 30, 2008 (Unaudited)
For the cumulative period from March 6, 1997 (Inception) to September 30, 2009 (Unaudited)
5
 
Notes to Financial Statements
6
Item 2.
Management’s Discussion and Analysis or Plan of Operation
18
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
22
Item 4.
Controls and Procedures
22
     
 
PART II – OTHER INFORMATION
 
Item 1.
Legal Proceedings
23
Item 1A.
Risk Factors
23
Item 2.
Unregistered Sale of Equity Securities and Use of Proceeds
27
Item 3.
Defaults Upon Senior Securities
27
Item 4.
Submission of Matters to a Vote of Security Holders
27
Item 5.
Other Information
27
Item 6.
Exhibits
28
     
 
SIGNATURES
 


 
 
2

 

 
PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS

A.G. VOLNEY CENTER, INC.
 
(A Development Stage Company)
 
BALANCE SHEETS
 
             
   
(Unaudited)
       
   
September 30,
   
December 31,
 
   
2009
   
2008
 
ASSETS
           
  Current Assets:
           
    Cash
  $ 47     $ 829  
    Accounts Receivable
    2,602       6,433  
    Related Party Accounts Receivable
    461       -  
    Inventory (at lower of FIFO cost or market)
    -       1,000  
                 
  Total Current Assets
    3,110       8,262  
                 
TOTAL ASSETS
  $ 3,110     $ 8,262  
                 
LIABILITIES & EQUITY
               
  Current Liabilities:
               
    Accounts Payable
  $ 43,705     $ 42,217  
    Related Party Accounts Payable
    5,887       4,431  
    Sales Tax Payable
    92       55  
    Shareholder Loan
    26,322       19,493  
    Interest Payable
    5,111       1,757  
                 
  Total Current Liabilities
    81,117       67,953  
                 
  Total Liabilities
    81,117       67,953  
                 
  Stockholders' Equity
               
    Preferred Stock- $.001 par value; 10,000,000 shares
               
    authorized; 0 shares outstanding
               
    as of September 30, 2009 and December 31, 2008
    -       -  
    Common Stock- $.001 par value; 100,000,000 shares
               
    authorized; 17,330,000 and 17,300,000 shares outstanding
               
    as of September 30, 2009 and December 31, 2008
    17,330       17,330  
    Additional Paid-In Capital
    36,270       36,270  
    Deficit Accumulated During the Development Stage
    (131,607 )     (113,291 )
                 
  Total Stockholders' Equity
    (78,007 )     (59,691 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 3,110     $ 8,262  
                 
The accompanying notes are an integral part of these financial statements
 
 

 
3

 
A.G. VOLNEY CENTER, INC.
 
(A Development Stage Company)
 
STATEMENTS OF OPERATIONS
 
(Unaudited)
 
                           
Cumulative Since
 
                           
March 6, 1997
 
   
For the Three Months Ended
   
For the Nine Months Ended
   
(Date of Inception)
 
   
September 30,
   
September 30,
   
to September 30,
 
   
2009
   
2008
   
2009
   
2008
   
2009
 
Revenues:
                             
Sales Revenue
  $ 2,602     $ 5,811     $ 2,602     $ 18,295     $ 64,598  
Related Party Sales Revenue
    -       -       465       -       816  
Less:  Cost of Goods Sold
    (613 )     (4,976 )     (1,000 )     (15,660 )     (54,353 )
Gross Profit
    1,989       835       2,067       2,635       11,061  
                                         
Expenses:
                                       
General and Administrative
    360       (251 )     584       1,987       3,949  
Accounting Fees
    3,152       (1,910 )     13,397       11,000       49,797  
Related Party Accounting Fees
    700       1,100       2,650       3,794       12,950  
Legal Fees
    -       -       -       18,000       53,000  
Organizational Costs
    -       -       -       700       14,280  
Outside Services
    -       -       338       159       1,531  
Total Expenses
    4,212       (1,061 )     16,969       35,640       135,507  
                                         
Operating Income (Loss)
    (2,223 )     1,896       (14,902 )     (33,005 )     (124,446 )
                                         
Other Income (Expense)
                                       
Interest, Net
    (1,192 )     (649 )     (3,354 )     (1,545 )     (5,933 )
                                         
Net Income (Loss) Before Taxes
    (3,415 )     1,247       (18,256 )     (34,550 )     (130,379 )
                                         
Franchise Tax
    -       -       (60 )     (100 )     (1,228 )
                                         
Net Income (Loss)
  $ (3,415 )     1,247     $ (18,316 )   $ (34,650 )   $ (131,607 )
                                         
Basic & Diluted Loss per Share
  $ (0.00 )   $ 0.00     $ (0.00 )   $ (0.00 )        
                                         
Weighted Average Shares
                                       
Outstanding
    17,330,000       17,330,000       17,330,000       16,125,401          
                                         
The accompanying notes are an integral part of these financial statements
 
 
 
4

 
A.G. VOLNEY CENTER, INC.
 
(A Development Stage Company)
 
STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
               
Cumulative Since
 
               
March 6, 1997
 
   
For the Nine Months Ended
   
(Date of Inception)
 
   
September 30,
   
to September 30,
 
   
2009
   
2008
   
2009
 
CASH FLOWS FROM OPERATING
                 
ACTIVITIES:
                 
Net Loss
  $ (18,316 )   $ (34,650 )   $ (131,607 )
Stock Issued for Organizational Costs
            -       13,300  
(Increase) Decrease in Accounts Receivable
    3,831       9,345       (2,602 )
(Increase) Decrease in Related Party Accounts Receivable
    (461 )     -       (461 )
(Increase) Decrease in Inventory
    1,000       84       -  
Increase (Decrease)  in Accounts Payable
    1,488       (14,061 )     43,705  
Increase (Decrease) in Related Party Payable
    1,456       2,681       5,887  
Increase (Decrease) in Sales Tax Payable
    37       9       92  
Increase (Decrease) in Accrued Interest
    3,354       424       5,111  
Net Cash Used in Operating Activities
    (7,611 )     (36,168 )     (66,575 )
                         
CASH FLOWS FROM INVESTING
                       
ACTIVITIES
                       
Net Cash Provided by Investing Activities
    -       -       -  
                         
CASH FLOWS FROM FINANCING
                       
ACTIVITIES:
                       
Common Stock Issued for Cash
    -       30,300       40,300  
Payment on shareholder Loan
    -       (22,950 )     (22,950 )
Proceeds from Shareholder Loan
    6,829       27,993       49,272  
Net Cash Provided by Financing Activities
    6,829       35,343       66,622  
                         
Net (Decrease) Increase in
                       
  Cash and Cash Equivalents
    (782 )     (825 )     47  
Cash and Cash Equivalents
                       
  at Beginning of Period
    829       939       -  
Cash and Cash Equivalents
                       
  at End of Period
  $ 47     $ 114     $ 47  
                         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                       
Cash paid during the year for:
                       
Interest
  $ -     $ 1,121     $ 1,121  
Franchise and Income Taxes
  $ 60     $ 100     $ 1,228  
                         
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
                       
Stock Issued for Services
  $ -     $ -     $ 13,300  
                         
The accompanying notes are an integral part of these financial statements
 
 
 
5

 
 
A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of accounting policies for A.G. Volney Center, Inc. (a development stage company) is presented to assist in understanding the Company's financial statements.  The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Interim Financial Statements

The unaudited financial statements as of September 30, 2009 and the nine months then ended, reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of the operations for all nine months.  Operating results for interim periods are not necessarily indicative of the results which can be expected for full years.

Nature of Operations and Going Concern

The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that  A. G. Volney Center, Inc. (hereto referred to as the “Company”) will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations.

Several conditions and events cast doubt about the Company’s ability to continue as a “going concern.”  The Company has incurred net losses of approximately $(132,000) for the period from March 6, 1997 (inception) to September 30, 2009, has an accumulated deficit, has recurring losses, has minimal revenues and requires additional financing in order to finance its business activities on an ongoing basis.  The Company’s future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained.  In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.  Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide them with the opportunity to continue as a “going concern”.

 
6

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Nature of Operations and Going Concern (Continued)

These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a “going concern”.  While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful.  If the Company were unable to continue as a “going concern,” then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported revenues and expenses, and the balance sheet classifications used.

Organization and Basis of Presentation

The Company was incorporated under the laws of the State of Delaware on March 6, 1997 under the name Lottlink Technologies, Inc.  On July 29, 2003 the Articles of Incorporation were amended to change the Company’s name to A.G. Volney Center, Inc.
The Company is to serve as a vehicle to effect a merger, exchange of capital stock, asset acquisition, or other business combination with a domestic or foreign private business.  Since March 6, 1997, the Company is in the development stage, and has not commenced planned principal operations.  The Company has a December 31 year end.

Nature of Business

The Company was formed for the purpose of acquiring products from manufacturers (factory overruns) and retailers (overstocks) and marketing the lower priced merchandise to the retail public and wholesalers. It is anticipated that we can sell the products at a substantial discount below wholesale prices for similar products.

The Company’s principal executive offices are located at 124 Lincoln Ave. South Liverpool, NY  13088. Our telephone number is (315) 703-9012.

Cash and Cash Equivalents
 
 
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

 
7

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

The Company generates revenues by selling products purchased at a discount. The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition."  SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions.  The Company recognizes revenue when the earnings process is complete.  That is, when the arrangements of the goods are documented, the pricing becomes final and collectibility is reasonably assured. An allowance for bad debt is provided based on estimated losses. For revenue received in advance for goods, the Company records a current liability classified as either deferred revenue or customer deposits. As of the period ended September 30, 2009 and the year ended December 31, 2008, there was no deferred revenue.

Allowance for Doubtful Accounts

The Company recognizes an allowance for doubtful accounts to ensure accounts receivable are not overstated due to uncollectibility. Bad debt reserves are maintained for all customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position.  If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. As of September 30, 2009 and December 31, 2008, the Company has determined an allowance for doubtful accounts is not necessary.

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.  The Company had cash and cash equivalents of $47 and $829 as of September 30, 2009 and December 31, 2008, all of which was fully covered by federal depository insurance.

 
8

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Pervasiveness of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles required 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.  Actual results could differ from those estimates.

Inventories

Inventories are valued at the lower of cost or market, with cost determined on a first-in, first-out basis and market based upon the replacement cost or realizable value.  Inventories consisted of the following amounts.



   
September 30,
   
December 31,
 
   
2009
   
2008
 
             
Candles
  $ 0     $ 1,000  
                 
Total
  $ 0     $ 1,000  

Loss per Share

Basic loss per share has been computed by dividing the loss for the year applicable to the common stockholders’ by the weighted average number of common shares outstanding during the years.  There were no common equivalent shares outstanding at September 30, 2009 and December 31, 2008.

Major Supplier

During the year ended December 31, 2008 and period ended September 30, 2009 one supplier, Seven Oceans Enterprises, Inc. accounted for 100% of the inventory purchased.  The loss of this supplier would adversely impact the business of the Company.


 
9

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Major Customers

During the year ended December 31, 2008, three customers accounted for 99% of the Company’s revenues.  The Company had revenues of $6,433 from Kim’s County Classics, $13,002 from Wisteria Antiques and $5,190 from Fountain Treats.  The total revenues for December 31, 2008 were $24,728.

As of September 30, 2009, the Company lost some of its major customers. Fountain Treats is the one remaining major customer in 2009 and they accounted for 85% of the Company’s revenues. Two related party customers, Inna Sheveleva, shareholder of the Company and David Stever, President and shareholder of the Company, accounted for 15% of the Company’s revenues.  The total revenues for September 30, 2009 were $3,067.

Financial Instruments

The Company’s financial assets and liabilities consist of cash, accounts receivable, and accounts payable. Except as otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values due to the short-term maturities of these instruments.

Income Taxes

The Company accounts for income taxes under the provisions of SFAS No.109, “Accounting for Income Taxes.”  SFAS No.109 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities.

Reclassification

Certain reclassifications have been made in the 2008 financial statements to conform to the September 30, 2009 presentation.

 
10

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-Based Compensation

Effective January 1, 2006, the company adopted the provisions of SFAS No. 123 (R) requiring employee equity awards to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award. Prior to September 1, 2006, the company accounted for awards granted to employees under its equity incentive plans under the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25), and related interpretations, and provided the required pro forma disclosures prescribed by SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123), as amended. No stock options were granted to employees during the years ended December 31, 2007, and 2006 and accordingly, no compensation expense was recognized under APB No. 25 for the years ended December 31, 2008, and 2007. In addition, no compensation expense is recognized under provisions of SFAS No. 123 (R) with respect to employees as no stock options where granted to employees.

Under the modified prospective method of adoption for SFAS No. 123 (R), the compensation cost recognized by the company beginning on September 1, 2006 includes (a) compensation cost for all equity incentive awards granted prior to, but not vested as of September 1, 2006, based on the grant-dated fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all equity incentive awards granted subsequent to September 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No, 123 (R). The company uses the straight-line attribution method to recognize share-based compensation costs over the service period of the award. Upon exercise, cancellation, forfeiture, or expiration of stock options, or upon vesting or forfeiture of restricted stock units, deferred tax assets for options and restricted stock units with multiple vesting dates are eliminated for each vesting period on a first-in, first-out basis as if each vesting period was a separate award. To calculate the excess tax benefits available for use in offsetting future tax shortfalls as of the dated of implementation, the company followed the alternative transition method discussed in FASB Staff Position No. 123 (R)-3.  During the periods ended December 31, 2007 and 2006, no stock options were granted to non-employees. Accordingly, no stock-based compensation expense was recognized for new stock option grants in the Statement of Operations and Comprehensive Loss at December 31, 2008 and 2007.

 
11

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Standards

In December 2007, the FASB issued No. 160, “Noncontrolling Interests in Financial Statements, an amendment of ARB No. 51" (“SFAS 160").  SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.  It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements.  This Statement is effective for fiscal years beginning on or after December 15, 2008.  Early adoption is not permitted. Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.

In December 2007, the FASB issued No. 141(R),  “Business Combinations” (“SFAS 141(R)”.  SFAS 141(R) provides companies with principles and requirements on how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree as well as the recognition and measurement of goodwill acquired in a business combination. SFAS 141(R) also requires certain disclosures to enable users of the financial statements to evaluate the nature and financial effects of the business combination. Acquisition costs associated with the business combination will generally be expensed as incurred. SFAS 141(R) is effective for business combinations occurring in fiscal years beginning after December 15, 2008, which will require the Company to adopt these provisions for business combinations occurring in fiscal 2009 and thereafter. Early adoption of SFAS 141(R) is not permitted.  Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.

In March 2008, the FASB issued No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133.  (“SFAS 161").  SFAS 161 requires enhanced disclosures about an entity's derivative and hedging activities and thereby improves the transparency of financial reporting.  This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption.  Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.



 
12

 

A. G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Standards (Continued)

In April 2008, the FASB released staff position (“FSP”) SFAS No. 142-3, Determination of the Useful Life of Intangible Assets.  The FSP requires entities to disclose information for recognized intangible assets that enable users of financial statements to understand the extent to which expected future cash flows associated with intangible assets are affected by the entity’s intent or ability to renew or extend the arrangement associated with the intangible asset.  The FSP also amends the factors an entity should consider in developing the renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142, Goodwill and Other Intangible Assets.  The FSP will be applied prospectively to intangible assets acquired after the FSP’s effective date, but the disclosure requirements will be applied prospectively to all intangible assets recognized as of, and after, the FSP’s effective date.  The FSP is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited.  The adoption of SFAS No. 142-3 is not expected to have a material effect on the Company’s financial statements.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 162, The Hierarchy of Generally Accepted Accounting Principles (“GAAP”) (“SFAS 162”). The purpose of the new standard is to provide a consistent framework for determining what accounting principles should be used when preparing U.S. GAAP financial statements. Previous guidance did not properly rank the accounting literature. The new standard is effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The adoption of SFAS 162 is not expected to have a material effect on the Company’s financial statements.


 
13

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 2 - INCOME TAXES

As of December 31, 2008, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $100,000 that may be offset against future taxable income through 2027.  Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs.  Therefore, the amount available to offset future taxable income may be limited.  No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carry-forwards will expire unused.  Accordingly, the potential tax benefits of the loss carry-forwards are offset by a valuation allowance of the same amount.

   
2008
   
2007
 
Net Operating Losses
  $ 15,000     $ 9,139  
Valuation Allowance
    (15,000 )     (9,139 )
    $ -     $ -  


The provision for income taxes differs from the amount computed using the federal US statutory income tax rate as follows:

   
2008
   
2007
 
Provision (Benefit) at US Statutory Rate
  $ 5,861     $ 6,572  
Increase (Decrease) in Valuation Allowance
    (5,861 )     (6,572 )
    $ -     $ -  

The Company evaluates its valuation allowance requirements based on projected future operations.  When circumstances change and causes a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income.

 
14

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 3 - DEVELOPMENT STAGE COMPANY

The Company has not begun principal operations and as is common with a development stage company, the Company will have recurring losses during its development stage.  The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.  In the interim, shareholders of the Company have committed to meeting its minimal operating expenses.

NOTE 4 – UNCERTAIN TAX POSITIONS

Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The adoption of the provisions of FIN 48 did not have a material impact on the company’s financial position and results of operations. At January 1, 2007, the company had no liability for unrecognized tax benefits and no accrual for the payment of related interest.

Interest costs related to unrecognized tax benefits are classified as “Interest expense, net” in the accompanying statements of operations. Penalties, if any, would be recognized as a component of “Selling, general and administrative expenses”. The Company recognized $0 of interest expense related to unrecognized tax benefits during 2008.  In many cases the company’s uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities.

With few exceptions, the company is generally no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2004. The following describes the open tax years, by major tax jurisdiction, as of January 1, 2008:

United States (a)
 
2004– Present

(a) Includes federal as well as state or similar local jurisdictions, as applicable.


 
15

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 5 - COMMITMENTS

As of September 30, 2009, all activities of the Company have been conducted by corporate officers from either their homes or business offices.  Currently, there are no outstanding debts owed by the company for the use of these facilities and there are no commitments for future use of the facilities.

NOTE 6 – RELATED PARTY TRANSACTIONS

As of September 30, 2009, Inna Sheveleva, shareholder of the Company and David Stever, President and shareholder of the Company, were customers of the Company accounting for 15% of the sales revenue for the period. As of September 30, 2009, the Company has a related party accounts receivable in the amount of $461 due from David Stever.

As of September 30, 2009 and December 31, 2008, Joseph C. Passalaqua, a shareholder, loaned the Company a total $26,322 and $19,493 respectively.  These loans are payable on demand and carry a simple interest rate of 18% per annum. As of September 30, 2009 and December 31, 2008 there was $5,111 and $1,757 respectively of interest due on the notes.  In 2008, a partial repayment of the shareholder loans of both principle and interest had been paid.

As of September 30, 2009 and December 31, 2008, the Company has a Related Party Accounts Payable in the amount of $5,887 and $4,431 respectively due to Lyboldt-Daly, Inc. for Bookkeeping expenses.  Joseph Passalaqua (a major shareholder) is President and Sole Director of Lyboldt-Daly, Inc.  Total bookkeeping services during the period ended September 30, 2009 and year ended December 31, 2008 were $2,650 and $4,431 respectively.

During 2003, the Company issued 400,000 shares to David F. Stever, President of the Company/ Director, for services rendered.

During 2003, the Company issued 400,000 shares to Samantha Ford, Secretary of the Company/ Director, for services rendered.

During 2003, the Company issued 400,000 shares to John J. Connolly, Director of the Company, for services rendered.



 
16

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 7- COMMON STOCK TRANSACTIONS
 
 
On March 6, 1997, the Company issued 1,210 shares of no par common stock for services.  Shares were valued at $10 per share.

On April 7, 1997, the Board of Directors amended the Certificate of Incorporation by changing the total authorized stock to 25 million shares with a par value of $.001 per share. This Amendment was not filed or effective until July 29, 2003.

On July 29, 2003, the Board of Directors authorized a 10,000 for 1 forward stock split.

On July 31, 2003, the Company issued 1,200,000 shares to the Directors of the Company for services rendered. Shares were issued for $.001 per share

On February 26, 2004, the Company issued 100,000 shares of common stock for cash.  Shares were issued for $.01 per share

On March 02, 2004, the Company issued 500,000 shares of common stock for cash.  Shares were issued for $.01 per share

On March 12, 2004, the Company issued 100,000 shares of common stock for cash.  Shares were issued for $.01 per share

On October 23, 2005, the Company issued 100,000 shares of common stock for cash.  Shares were issued for $.01 per share.

On October 31, 2005, the Company issued 100,000 shares of common stock for cash.  Shares were issued for $.01 per share.

On February 13, 2006, the Company issued 100,000 shares of common stock for cash.  Shares were issued for $.01 per share.

On April 11, 2008, the Company issued 1,030,000 shares of common stock for cash.  Shares were issued for $.01 per share.

On April 22, 2008, the Company issued 1,000,000 shares of common stock for cash.  Shares were issued for $.01 per share.

On April 23, 2008, the Company issued 500,000 shares of common stock for cash.  Shares were issued for $.01 per share.


 
17

 

A.G. VOLNEY CENTER, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)

NOTE 7- COMMON STOCK TRANSACTIONS (Continued)

On April 24, 2008, the Company issued 500,000 shares of common stock for cash.  Shares were issued for $.01 per share.

NOTE 8 – SUBSEQUENT EVENTS

A.G. Volney signed a Letter of Engagement with Sol V. Slotnik P.C., dated September 10, 2009, in connection for legal aid to be rendered.  The amount due from the Company is estimated between $5,000 and $10,000, to be determined upon completion of the legal services. As of September 30, 2009, no amounts have been paid and no services have been received.

 
18

 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
FORWARD LOOKING STATEMENTS
 
This Form 10-Q contains forward-looking statements that involve risks and uncertainties. You can identify these statements by the use of forward-looking words such as "may," "will," "expect," "anticipate," "estimate," "continue," or other similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or financial condition or state other "forward-looking" information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are unable to accurately predict or control. Those events as well as any cautionary language in this registration statement provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should be aware that the occurrence of the events described in this Form 10-Q could have a material adverse effect on our business, operating results and financial condition.
 
BASIS OF PRESENTATION
 
The unaudited financial statements of A.G. Volney Center, Inc., a Delaware corporation (“AG”, “A.G. Volney”, “the Company”, “our”, or “we”), should be read in conjunction with the notes thereto. In the opinion of management, the unaudited financial statements presented herein reflect all adjustments (consisting only of normal recurring adjustments) necessary for fair presentation.  Interim results are not necessarily indicative of results to be expected for the entire year.
 
We prepare our financial statements in accordance with U.S. generally accepted accounting principals, which require that management make estimates and assumptions that affect reported amounts.  Actual results could differ from these estimates.
 
Certain statements contained below are forward-looking statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
 
DESCRIPTION OF BUSINESS
 
A.G. Volney Center is a development stage company which was incorporated under the laws of the state of Delaware on March 6, 1997 under the name Lottlink Technologies, Inc. The intent was to operate vending machines that would sell lottery tickets. On April 7, 1997, the board of directors decided to change the name of the company to A.G. Volney Center, Inc. and restate the par value of the Company’s shares of common stock at per share to $0.001 per share. On the same date, in a stockholders’ meeting (the “Stockholders Meeting”), the proposed changes of the Company’s name and common stock’s par value were approved, but the amendment the Company’s Certificate of Incorporation effecting such changes was never filed with the Secretary of State of the State of Delaware. On December 31, 1997, the Company’s Certificate of Incorporation was suspended in Delaware for non-payment of franchise taxes. The Company was dormant until July 18, 2003. On that date, Lottlink Technologies, Inc. filed a renewal of the Company’s Articles of Incorporation in Delaware. On July 29, 2003, the Company filed an amendment of the Company’s Articles of Incorporation with the Secretary of State of the State of Delaware effecting a change of Company’s name Lottlink Technologies, Inc. to A.G. Volney Center, Inc. as approved in the stockholders’ Meeting.

 
 
19

 
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(CONTINUED)

DESCRIPTION OF BUSINESS (Continued)
 
A. G. Volney Center was reinstated in the State of Delaware to develop relationships with companies which purchase factory overruns from manufacturers and distressed merchandise from retailers at discounts. As a result, it is hoped that these companies can offer us new high quality products in quantity whereby the costs to us is substantially discounted (generally around 30% of the standard wholesale cost for the same product). It is anticipated that we will primarily sell to retailers; however, we also intend to engage in retail sales on a limited basis.
 
We have purchased factory overrun and bulk merchandise and continued to make sales. Our primary business objective is to satisfy and fulfill the demand of retailers for high quality merchandise at below wholesale costs. We intend to purchase new, high quality items in quantity whereby we can sell these items immediately to retailers for an amount which includes a profit to us. We believe we can maximize net profits by minimizing fixed overhead such as salary and employee benefits.
 
We anticipate selling nationwide, but our initial focus will be in New York, Pennsylvania, Connecticut and Vermont.
 
We are currently looking to find a suitable merger candidate and alternative financing.  Although we have had discussions with various third parties, no firm commitments have been obtained to date.  See “Liquidity and Capital Resources.”
 
On October 19, 2006, we filed a Registration Statement on Form 10SB (File No.: 0-52269), or the Registration Statement, with the Securities and Exchange Commission, or the SEC,  to register our common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The Registration Statement went effective by operation of law on December 18, 2006, or the Effective Date, and we are in the process of amending the Registration Statement to answer the SEC’s comments regarding the Registration Statement.  Since the Effective Date of the Registration Statement, we have become a reporting company under the Securities Exchange Act and are responsible for preparing and filing periodic and current reports under the Exchange Act with the SEC.
 
Any person or entity may read and copy our reports with the Securities and Exchange Commission at the SEC's Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Room by calling the SEC toll free at 1-800-SEC-0330. The SEC also maintains an Internet site at http://www.sec.gov where reports, proxies and informational statements on public companies may be viewed by the public.
 
GOING CONCERN QUALIFICATION
 
In their Independent Auditor's Report for the fiscal years ending December 31, 2008, Robison, Hill & Co. stated that several conditions and events cast substantial doubt about our ability to continue as a “going concern.”  We have incurred net loses of approximately $(113,000) from our inception on March 6, 1997 to December 31, 2008.  At December 31, 2008, we had $829 cash on hand, $6,433 in accounts receivable and an accumulated deficit of $(113,291). We have incurred net losses of approximately $(132,000) from our inception on March 6, 1997 to September 30, 2009.  At September 30, 2009, we had $47 cash on hand, $3,063 in accounts receivable and an accumulated deficit of $(131,607).  See “Liquidity and Capital Resources.”




20


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2009, we had $47 cash on hand and an accumulated deficit of $(131,607).  Our primary source of liquidity for the current quarter has been from borrowing from a Joseph C. Passalaqua, a principal stockholder. As of September 30, 2009 we have notes payable to Joseph C. Passalaqua in the amount $26,322.  These notes bear a simple interest rate of 18% per annum and are payable upon demand. As of September 30, 2009 the accrued interest on these notes was $5,111.

Net cash used in operating activities was $7,611 during the nine-month period ended September 30, 2009.
 
Net cash provided by investing activities was $0 during the nine-month period ended September 30, 2009.

Net cash provided by financial activities was $6,829 during the nine-month period ended September 30, 2009.

Our expenses to date are largely due to professional fees that include accounting and legal fees.

To date, we have had minimal revenues; and we require additional financing in order to finance our business activities on an ongoing basis.  Our future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities. We are actively pursuing alternative financing and have had discussions with various third parties, although no firm commitments have been obtained to date.  In the interim, shareholders of the Company have committed to meet our minimal operating expenses.  We believe that actions presently being taken to revise our operating and financial requirements provide them with the opportunity to continue as a “going concern,” although no assurances can be given.

REVENUE RECOGNITION POLICIES

The Company generates revenues by selling products purchased at a discount. The Company recognizes revenues in accordance with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) number 104, "Revenue Recognition."  SAB 104 clarifies application of U. S. generally accepted accounting principles to revenue transactions.  The Company recognizes revenue when the earnings process is complete.  That is, when the arrangements of the goods are documented, the pricing becomes final and collectability is reasonably assured. An allowance for bad debt is provided based on estimated losses. For revenue received in advance for goods, the Company records a current liability classified as either deferred revenue or customer deposits. As of the year ended December 31, 2008 and the nine months ended September 30, 2009, there was no deferred revenue.

COSTS RELATED TO OUR OPERATION
 
The principle costs related to the ongoing operation of the Company’s business consists of payments made by the Company to wholesale distributors for merchandise.

NET LOSS FROM OPERATIONS
 
The Company has a cumulative net loss after taxes of $(131,607) as of September 30, 2009.  The company had net loss after taxes of $(18,316) for the current nine months ending September 30, 2009 as compared to a net loss after taxes of $(34,650) for the nine months ended September 30, 2008.

WORKING CAPTIAL
 
We had total assets of $3,110 and total liabilities of $81,117, which results in working capital deficit of $(78,007) for the nine months ended September 30, 2009.  We had total assets of $8,262 and total liabilities of $67,953 resulting in a working capital deficit of $(59,691) for the year ended December 31, 2008.
 
 
21

 
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION (CONTINUED)

THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2008
 
REVENUES
 
Our total revenue decreased by $3,209, or approximately 55%, from $5,811 in the three months ended September 30, 2008 to $2,602 in the three months ended September 30, 2009. This decrease was attributable to the decline in demand from our major customers for our products and a decline in sales during the three months in 2009 over the same period in 2008.  The sold merchandise consisted of various types of overstock merchandise, including candles purchased on the internet.

COST OF SALES

Our overall cost of sales decreased by $4,363, or approximately 88%, from $4,976 in the three months ended September 30, 2008 to $613 in the three months ended September 30, 2009. This decrease in cost of sales was a direct effect of a decline in total sales during the three months in 2009. Due to the decline in demand, the Company purchased a lower amount of inventory in 2009 over the previous period in 2008.
  
OPERATION AND ADMINISTATIVE EXPENSES
 
Operating expenses increased by $5,273, from a negative expense and credit due to the Company of $(1,061) in the three months ended September 30, 2008 to $4,212 in the three months ended September 30, 2009. This negative expense was due to a credit issued by Robison Hill, the company’s accounting firm during the quarter for previously billed accounting invoices. The increase was due to professional fees for accounting during the current quarter.  Operating expenses primarily consist of general and administrative expenses (G&A) and professional fees. G&A expenses, made up primarily of office expense and postage and delivery expenses, increased by $611, from a credit of $(251) in the three months ended September 30, 2008 to $360 in the three months ended September 30, 2009. Professional fees, made up of accounting and legal fees increased by $4,662, from a credit of $(810) in the three months ended September 30, 2008 to $3,852 in the three months ended September 30, 2009. These are fees we pay to accountants and attorneys throughout the year for performing various tasks.  The bulk of the increase in expense was due to accounting fees in 2009 and a credit on previous accounting expenses taken in 2008, when comparing the same three month period in 2008 and 2009.

NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2008
 
REVENUES
 
Our total revenue decreased by $15,228, or approximately 83%, from $18,295 in the nine months ended September 30, 2008 to $3,067 in the nine months ended September 30, 2009. This decrease was attributable to the decline in demand from our major customers for our products and a decline in sales during the nine months in 2009 over the same period in 2008.  The sold merchandise consisted of various types of overstock merchandise, including candles purchased on the internet.

COST OF SALES

Our overall cost of sales decreased by $14,660, or approximately 94%, from $15,660 in the nine months ended September 30, 2008 to $1,000 in the nine months ended September 30, 2009. This decrease in cost of sales was a direct effect of a decline in total sales during the nine months in 2009.  Due to the decline in demand, the Company purchased a lower amount of inventory in 2009 over the previous period in 2008.
  
OPERATION AND ADMINISTATIVE EXPENSES
 
Operating expenses decreased by $18,671, from $35,640 in the nine months ended September 30, 2008 to $16,969 in the nine months ended September 30, 2009. The decline was due to a decrease in professional fees, primarily legal fees during the nine months in 2009 when comparing the same period in 2008.  Operating expenses primarily consist of general and administrative expenses (G&A) and professional fees. G&A expenses, made up primarily of office expense and postage and delivery expenses, decreased by $1,403, from $1,987 in the nine months ended September 30, 2008 to $584 in the nine months ended September 30, 2009. Professional fees, made up of accounting and legal fees decreased by $16,747, from $32,794 in the nine months ended September 30, 2008 to $16,047 in the nine months ended September 30, 2009. These are fees we pay to accountants and attorneys throughout the year for performing various tasks.  The bulk of the decrease in expense was due to the decline in legal fees in 2009, when comparing the same nine month period in 2008.
 
COMMON STOCK
 
Our board of directors is authorized to issue 100,000,000 shares of common stock, with a par value of $0.001. There are an aggregate of 17,330,000 shares of Common Stock issued and outstanding, which are held by 61 stockholders as of the date of this Quarterly Report.  All shares of our common stock have one vote per share on all matters, including election of directors, without provision for cumulative voting. The common stock is not redeemable and has no conversion or preemptive rights. The common stock currently outstanding is validly issued, fully paid and non-assessable. In the event of liquidation of the Company, the holders of common stock will share equally in any balance of the Company's assets available for distribution to them after satisfaction of creditors and preferred stockholders, if any. The holders of our common stock are entitled to equal dividends and distributions per share with respect to the Common Stock when, as and if, declared by the board of directors from funds legally available.
 
PREFERRED STOCK
 
Our Original Certificate of Incorporation did not provide for the issuance of Preferred Stock.  On May 19, 2008, a Certificate of Amendment was filed with the State of Delaware that stated that the Corporation shall have the authority to issue 110,000,000 shares of capital stock, of which 10,000,000 shares are authorized as Preferred Stock with the par value of .$0.001 per share.  There are an aggregate of 0 shares of Preferred Stock issued and outstanding as of the date of this Quarterly Filing.


 
22


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from the fact that the area in which we do business is highly competitive and constantly evolving. We face competition from the larger and more established companies -- from companies that develop new technology, as well as the many smaller companies throughout the country.

We face competition from the larger and more established companies, from companies that develop new technology, as well as the many smaller companies throughout the country. For example, the last several years have shown an increase in the use of larger online sources such as Overstock.com and Ebay.com. These increases cut into our potential customer base. Companies who have a larger sales force, more money, larger manufacturing capabilities and greater ability to expand their markets also cut into our potential customers. Many of our competitors have longer operating histories, significantly greater financial strength, nationwide advertising coverage, brand identification and other resources that we do not have. Our competitors might introduce less expensive or more improved merchandise. These, as well as other factors, can negatively impact our business strategy.  The competition from larger overstock companies is a very serious threat that can result in substantially less revenue.

Milestones

We have set the following milestones to implement our business plan.

    · Locate suitable retailers to whom we can resell overstock merchandise purchased by us over the internet.  We’ve commenced locating suitable retailers in May 2006.  During 2008, the Company established three major customers; Wisteria Antiques, Fountain Treats and Kim’s Country Classics, which accounted for $24,624 of the total accumulated sales of $24,728 or 99% of the total accumulated sales of the Company as of December 31, 2008.  As of September 30, 2009 one major customer accounted for $2,602of the total accumulated sales for the current quarter or 85% of the total revenue for the nine months.

   · Increase volume of inventory purchases and resale utilizing retained earnings from the past 12 to 24 months. The estimated date is December 2010.

To date, we have not been able to conduct these business affairs without further capital.
We do not anticipate hiring any additional personnel or consultants unless and until further capital is raised.
 
ITEM 4. CONTROLS AND PROCEDURES
 
The Company's Chief Executive Officer is responsible for establishing and maintaining disclosure controls and procedures for the Company.
 
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission.  Our Chief Executive Officer and Chief Financial Officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(f) and 15d-15(f) as of the end of the period covered by this report and have concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.  There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our Chief Executive Officer and Chief Financial Officer.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
 
23

 
 
 
ITEM 1. LEGAL PROCEEDINGS
 
None.
 
ITEM 1A.  RISK FACTORS

In addition to the other information in this report, the following risks should be considered carefully in evaluating our business and prospects:

WE HAVE A LIMITED OPERATING HISTORY WHICH MAY NOT BE AN INDICATOR OF OUR FUTURE RESULTS.

As a result of our limited operating history, our plan for rapid growth, and the increasingly competitive nature of the markets in which we operate, the historical financial data is of limited value in evaluating our future revenue and operating expenses. Our planned expense levels will be based in part on expectations concerning future revenue, which is difficult to forecast accurately based on current plans of expansion and growth. We may be unable to adjust spending in a timely manner to compensate for any unexpected shortfall in revenue. Further, general and administrative expenses may increase significantly as we expand operations. To the extent that these expenses precede, or are not rapidly followed by, a corresponding increase in revenue, our business, operating results, and financial condition will suffer.

WE MAY HAVE TO DISCONTINUE OPERATIONS.

If we are unable to achieve or sustain profitability, or if operating losses increase in the future, we may have to discontinue operations. Our expenses have historically exceeded our revenues and we have had losses in all fiscal years of operation, including those in fiscal years 2005 through 2008, and the losses are projected to continue in 2009. Our net losses were $39,067 and $43,812 for fiscal years ended 2008 and 2007, respectively. We have been concentrating on the development of our products, services and business plan. There is no assurance that we will be successful in implementing our business plan or that we will be profitable now or in the future.

WE MAY NOT SUCCEED OR BECOME PROFITABLE.

We will need to generate significant revenues to achieve profitability and we may be unable to do so. Even if we do achieve profitability, we may not be able to sustain or increase profitability in the future. We expect that our expenses will continue to increase and there is no guarantee that we will not experience operating losses and negative cash flow from operations for this fiscal year or for the foreseeable future. If we do not achieve or sustain profitability, then we may be unable to continue our operations.

OUR SOLE OFFICER AND DIRECTOR HAS LIMITED TIME TO DEVOTE AND LACK SALES EXPERIENCE

Our current sole officer and director has some experience in retail but not wholesale sales and has limited time to devote.

The amount of time the sole officer and director devotes to our business may be limited:
 
Officer/Director
Percent (%) of time to be dedicated to Company
David F. Stever (Pres., CEO, CFO, Secretary and Sole Director)
30%
 
Until we sustain operations and achieve profitability, we will be unable to retain the full time services of these individuals or pay either one of them monetary compensation for their services. The loss of either of them would have a material adverse effect on our business operations.
 
 
24

 
 
ITEM 1A.  RISK FACTORS (Continued)

WE WILL NEED ADDITIONAL CAPITAL FINANCING IN THE FUTURE.

We will be required to seek additional financing in the future to respond to increased expenses or shortfalls in anticipated revenues, accelerate product development and deployment, respond to competitive pressures, and develop new or enhanced products. We cannot be certain we will be able to find such additional financing on reasonable terms, or at all. If we are unable to obtain additional financing when needed, we could be required to modify our business plan in accordance with the extent of available financing.

IF WE ENGAGE IN ACQUISITIONS, WE MAY EXPERIENCE SIGNIFICANT COSTS AND DIFFICULTY ASSIMILATING THE OPERATIONS OR PERSONNEL OF THE ACQUIRED COMPANIES, WHICH COULD THREATEN OUR FUTURE GROWTH.

If we make any acquisitions, we could have difficulty assimilating the operations, technologies and products acquired or integrating or retaining personnel of acquired companies. In addition, acquisitions may involve entering markets in which we have no or limited direct prior experience. The occurrence of any one or more of these factors could disrupt our ongoing business, distract our management and employees and increase our expenses. .In addition, pursuing acquisition opportunities could divert our management's attention from our ongoing business operations and result in decreased operating performance.

Moreover, our profitability may suffer because of acquisition-related costs or amortization of acquired goodwill and other intangible assets. Furthermore, we may have to incur debt or issue equity securities in future acquisitions. The issuance of equity securities would dilute our existing stockholders.

IF WE CANNOT ATTRACT, RETAIN, MOTIVATE AND INTEGRATE ADDITIONAL SKILLED PERSONNEL, OUR ABILITY TO COMPETE WILL BE IMPAIRED.

Many of our current and potential competitors have more employees than we do. Our success depends in large part on our ability to attract, retain and motivate highly qualified management and technical personnel. We face intense competition for qualified personnel. The industry in which we compete has a high level of employee mobility and aggressive recruiting of skilled personnel. If we are unable to continue to employ our key personnel or to attract and retain qualified personnel in the future, our ability to successfully execute our business plan will be jeopardized and our growth will be inhibited.

BECAUSE OUR SOLE OFFICER AND DIRECTOR IS INDEMNIFIED AGAINST CERTAIN LOSSES, WE MAY BE EXPOSED TO COSTS ASSOCIATED WITH LITIGATION.

If our sole officer or director becomes exposed to liabilities invoking the indemnification provisions, we could be exposed to additional un-reimbursable costs, including legal fees. Our bylaws provide that our directors and officers will not be liable to us or to any shareholder and will be indemnified and held harmless for any consequences of any act or omission by the directors and officers unless the act or omission constitutes gross negligence or willful misconduct. Extended or protracted litigation could have a material adverse effect on our cash flow.

 
25

 
 
ITEM 1A.  RISK FACTORS (Continued)

OUR STOCK PRICE MAY BE VOLATILE.

There is currently no trading market for our securities, and there is a chance that a trading market may never develop. However, in the event that we do develop a trading market for our common stock, the market price of our common stock will likely fluctuate significantly in response to the following factors, some of which are beyond our control:

 
·
Variations in our quarterly operating results;

 
·
Changes in financial estimates of our revenues and operating results by securities analysts;

 
·
Announcements by us of significant contracts, acquisitions,  strategic partnerships, joint ventures or
capital commitments;

 
·
Additions or departures of key personnel;

 
·
Future sales of our common stock;

 
·
Stock market price and volume fluctuations attributable to inconsistent trading volume levels of our stock;

   
·
Commencement of or involvement in litigation.

In addition, the equity markets have experienced volatility that has particularly affected the market prices of equity securities issued by wholesale companies and that often has been unrelated or disproportionate to the operating results of those companies. These broad market fluctuations may adversely affect the market price of our common stock.

WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS ON OUR COMMON STOCK.

We have not paid any dividends on our Common Stock since inception and do not anticipate paying any dividends on our Common Stock in the foreseeable future. Instead, we intend to retain any future earnings for use in the operation and expansion of our business.

WE LACK OPERATING HISTORY

We have no operating history so it will be difficult for you to evaluate an investment in our common stock.

We were formed in 1997 as a vending machine business under the name of Lottlink Technologies, Inc. but did not commence business at that time. Our business activities have been limited to amending the Articles of the Corporation on July 29, 2003 to amend the corporate name to A.G. Volney Center, Inc., and contacting companies that acquire and warehouse inventory from factory overruns and retailers with overstocks in New York, Pennsylvania, Vermont and Ohio. There is no assurance that we will be successful in acquiring factory overruns or overstock merchandise for sale at discount prices.

We do not have an established source of revenue sufficient to cover our operating costs to allow us to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to successfully compete, operate profitably and/or raise additional capital through other means.

 
26

 
 
ITEM 1A.  RISK FACTORS (Continued)

CURRENTLY THERE IS NO MARKET FOR OUR COMMON STOCK.

Currently, there is no market for our common stock. We intend to request that a broker-dealer / market maker submit an application to make a market for the Company's shares on the OTC Bulletin Board. However, there can be no assurance that the application will be accepted or that any trading market will ever develop or be maintained on the OTC Bulletin Board, pink sheets or any other recognized trading market or exchange. Any trading market for the common stock that may develop in the future will most likely be very volatile, and numerous factors beyond the control of the Company may have a significant effect on the market. Only companies that report their current financial information to the SEC may have their securities included on the OTC Bulletin Board. In the event that the Company loses this status as a "reporting issuer," any future quotation of its common stock on the OTC Bulletin Board maybe jeopardized.

OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

*
that a broker or dealer approve of a person’s account for transactions in penny stocks; and

*
that the broker or dealer received from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny        stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

*
obtain financial information and investment experience objectives of the person; and
 
*
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
 
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

*
sets forth the basis on which the broker or dealer made the suitability determination; and

*
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

WE WILL ENCOUNTER SUBSTANTIAL COMPETITION

The discount market for wholesale and retail merchandise is highly competitive and involves a high degree of risk and there is no assurance that we will be able to operate profitably. In the retail segment of our business, which will be minimal, we will experience substantial competition with other entities such as Dollar Discounts, All-A-Dollar, Dollar General and Discount Houses in the sale and marketing of merchandise all of which have greater name recognition and experience.
  
 
27

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

During the year ended December 31, 2008 the following shares of common stock were purchased at $0.01 per share:

Amanda Godin residing in Liverpool, New York purchased 500,000 shares; Mary K. Evans residing in Liverpool, New York purchased 500,000 shares; Justin Lamacchia residing in Orlando Florida purchased 10,000 shares; John R. Pichotto III residing in Orlando Florida purchased 10,000 shares; Lindsay Leploski residing in Buffalo, New York purchased 10,000 shares; Rebecca McGuiness residing in Fulton, New York, purchased 500,000 shares; Gloris Goff residing in Mesa, Arizona purchased 500,000 shares; John Passalaqua residing in Liverpool, New York purchased 500,000 shares; and Stephanie Passalaqua residing in Brewerton, New York purchased 500,000 shares.

During the nine months ended September 30, 2009 there were no sales of securities.
 
 
None.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
None.

ITEM 5. OTHER INFORMATION

None.  

 
28

 
 
PART III EXHIBITS.
 
The following exhibits required by Item 601 of Regulation S-B are attached.
 
Exhibit No.
Description
Certificate of Incorporation*
3.1
Certificate of Renewal and Revival of Certificate of Incorporation*
3.2
Certificate of Amendment of Certificate of Incorporation*
3.3
By-laws*
4.1
Form of Common Stock Certificate*
31.1
Certification of the Principal Executive Officer and Principal Financial Officer  of Registrant pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1
Certification of the Principal Executive Officer and Principal Financial Officer  of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
*
Previously Submitted and incorporated by reference herein.

 
 
29

 
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

 
A.G. VOLNEY, INC.
 
 
 
 
     
Date: October 28, 2009
 
 
 
/s/ David F. Stever
   
Name: David F. Stever
Title: President, Secretary
(Principal Executive Officer
and Principal Financial Officer)