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 August 31, 2014 | |
| OR | |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 333-172842
USA InvestCo Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 33-1219888 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 720 North 3rd St, Suite 301 | ||
| Wilmington, NC | 28401 | |
| (Address of principal executive offices) | (Zip Code) |
(910) 251-6160
Registrant’s telephone number, including area code
Not Applicable
(Former Name or Former Address if Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
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,” “non-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 x No ¨
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 5,540,000 as of December 18, 2014.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to USA InvestCo Holdings, Inc. “SEC” refers to the Securities and Exchange Commission.
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USA INVESTCO HOLDINGS, INC.
(f/k/a LAMBENT SOLUTIONS CORP.)
CONTENTS
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PART I - FINANCIAL INFORMATION
| Item 1. | Financial Statements |
USA InvestCo Holdings, Inc.
(f/k/a Lambent Solutions Corp.)
| August 31, 2014 | February 28, 2014 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Total Assets | $ | - | $ | - | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 880 | $ | 9,064 | ||||
| Notes Payable - Related Party | 133,681 | 93,756 | ||||||
| Total Liabilities | 134,561 | 102,820 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders' Deficiency | ||||||||
| Common stock, $0.001 par value; 75,000,000 shares authorized, 5,540,000 shares and 5,540,000 shares issued and outstanding, respectively | 5,540 | 5,540 | ||||||
| Additional paid-in capital | 132,813 | 110,598 | ||||||
| Accumulated Deficit | (272,914 | ) | (218,958 | ) | ||||
| Total Stockholders' Deficiency | (134,561 | ) | (102,820 | ) | ||||
| Total Liabilities and Stockholders' Deficiency | $ | - | $ | - | ||||
See accompanying notes to condensed unaudited financial statements
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USA InvestCo Holdings, Inc.
(f/k/a Lambent Solutions Corp.)
Condensed Statements of Operations
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| August 31, 2014 | August 31, 2013 | August 31, 2014 | August 31, 2013 | |||||||||||||
| Operating Expenses | ||||||||||||||||
| Professional fees | $ | - | $ | 9,513 | $ | 26,998 | $ | 29,135 | ||||||||
| General and administrative | 9,867 | 17,259 | 23,343 | 27,025 | ||||||||||||
| Total Operating Expenses | 9,867 | 26,772 | 50,341 | 56,160 | ||||||||||||
| Loss from Operations | (9,867 | ) | (26,772 | ) | (50,341 | ) | (56,160 | ) | ||||||||
| Other Expense | ||||||||||||||||
| Interest expense | (2,002 | ) | (385 | ) | (3,615 | ) | (598 | ) | ||||||||
| Total other expense | (2,002 | ) | (385 | ) | (3,615 | ) | (598 | ) | ||||||||
| LOSS FROM OPERATIONS BEFORE INCOME TAXES | (11,869 | ) | (27,157 | ) | (53,956 | ) | (56,758 | ) | ||||||||
| Provision for Income Taxes | - | - | - | - | ||||||||||||
| NET LOSS | $ | (11,869 | ) | $ | (27,157 | ) | $ | (53,956 | ) | $ | (56,758 | ) | ||||
| Net Loss Per Share - Basic and Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
| Weighted average number of shares outstanding during the period - Basic and Diluted | 5,540,000 | 5,540,000 | 5,540,000 | 5,540,000 | ||||||||||||
See accompanying notes to condensed unaudited financial statements
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USA InvestCo Holdings, Inc.
(f/k/a Lambent Solutions Corp.)
Condensed Statement of Changes in Stockholders' Deficiency
For the six months ended August 31, 2014
(Unaudited)
| Common stock | Additional | Total | ||||||||||||||||||
| paid-in | Accumulated | Stockholders' | ||||||||||||||||||
| Shares | Amount | capital | Deficit | Deficiency | ||||||||||||||||
| Balance, February 28, 2014 | 5,540,000 | $ | 5,540 | $ | 110,598 | $ | (218,958 | ) | $ | (102,820 | ) | |||||||||
| In kind contribution of services | - | - | 15,600 | - | 15,600 | |||||||||||||||
| In kind contribution of interest | - | - | 3,615 | - | 3,615 | |||||||||||||||
| In kind contribution of rent | - | - | 3,000 | - | 3,000 | |||||||||||||||
| Net loss for the six months ended August 31, 2014 | - | - | - | (53,956 | ) | (53,956 | ) | |||||||||||||
| Balance, August 31 2014 | 5,540,000 | $ | 5,540 | $ | 132,813 | $ | (272,914 | ) | $ | (134,561 | ) | |||||||||
See accompanying notes to condensed unaudited financial statements
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USA InvestCo Holdings, Inc.
(f/k/a Lambent Solutions Corp.)
Condensed Statements of Cash Flows
(Unaudited)
| For the Six Months Ended | ||||||||
| August 31, 2014 | August 31, 2013 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net Loss | $ | (53,956 | ) | $ | (56,758 | ) | ||
| Adjustments to reconcile net loss to net cash used in operations | ||||||||
| In-kind contribution of services | 15,600 | 15,600 | ||||||
| In-kind contribution of interest and rent | 6,615 | 3,598 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| (Decrease)/Increase in accounts payable and accrued expenses | (8,184 | ) | 18,238 | |||||
| Net Cash Used In Operating Activities | (39,925 | ) | (19,322 | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from notes payable - related party | 39,925 | 19,322 | ||||||
| Net Cash Provided by Financing Activities | 39,925 | 19,322 | ||||||
| Net Decrease in Cash | - | - | ||||||
| Cash at Beginning of Period | - | - | ||||||
| Cash at End of Period | $ | - | $ | - | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for taxes | $ | - | $ | - | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| For the six months ended August 31, 2014 the principal stockholder paid expenses on the Company's behalf in the amount of $39,925 in exchange for notes payable (See Notes 4 and 5). | ||||||||
See accompanying notes to condensed unaudited financial statements
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USA Investco Holdings, inc.
(F/K/A LAMBENT SOLUTIONS CORP.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2014
(UNAUDITED)
| NOTE 1 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION |
(A) Basis of Presentation
USA InvestCo Holdings, Inc . (the "Company") was incorporated under the laws of the State of Nevada on January 20, 2011 under the name of Lambent Solutions Corp.
On July 25, 2012, the Company entered into a Stock Purchase Agreement (the “SPA”) with the former sole director and officer of the Company (the “Seller”), and the current sole director and officer (the “Purchaser”), under which the Purchaser purchased 4,500,000 shares of common stock, par value $0.001 per share, of the Company (the “Shares”), for an aggregate purchase price of $126,000, payable in full to the Seller (a “Change of Control”). The Shares represent all of the Seller’s interest in and to any securities of the Company, and make up 81.227% of the issued and outstanding shares of common stock of the Company. The SPA closed and the Change of Control occurred on July 25, 2012.
In connection with the Change of Control, on September 5, 2012, the Company amended its Articles of Incorporation to change its name to USA InvestCo Holdings, Inc.
The Company previously offered an advertising system for real estate brokers and agents. The Company has ceased operations in this area in anticipation of a potential merger.
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.
It is management’s opinion, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements presentation.
(B) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Significant estimates include the valuation of deferred taxes assets and the valuation of in kind contribution of services, rent and interest. Actual results could differ from those estimates.
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USA Investco Holdings, inc.
(F/K/A LAMBENT SOLUTIONS CORP.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2014
(UNAUDITED)
(C) Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At August 31, 2014 and February 28, 2014, the Company had no cash or cash equivalents.
(D) Loss Per Share
| Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. As of August 31, 2014 and 2013, there were no common share equivalents outstanding. |
(E) Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes (“ASC Topic 740”). Under ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
(F) Business Segments
The Company operates in one segment and therefore segment information is not presented.
(G) Recent Accounting Pronouncements
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the six months ended August 31, 2014.
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USA Investco Holdings, inc.
(F/K/A LAMBENT SOLUTIONS CORP.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2014
(UNAUDITED)
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial conditions.
In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our result of operations, cash flows or financial conditions.
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USA Investco Holdings, inc.
(F/K/A LAMBENT SOLUTIONS CORP.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2014
(UNAUDITED)
All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.
| NOTE 2 | GOING CONCERN |
As reflected in the accompanying unaudited condensed financial statements, the Company has minimal operations, used cash in operations of $39,925 and has a net loss of $53,956 for the six months ended August 31, 2014. There is also a working capital and stockholders’ deficiency of $134,561. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital through stockholder loans and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
| NOTE 3 | STOCKHOLDERS’ EQUITY |
(A) In-Kind Contribution
For the six months ended August 31, 2014, the CEO who is also a majority stockholder of the Company contributed services having a fair value of $15,600 (See Note 5).
For the six months ended August 31, 2014, a total of $3,615 in imputed interest relating to the notes payable due to the CEO, was recorded as an in-kind contribution (See Notes 4 & 5).
For the six months ended August 31, 2014, the Company recorded an in-kind contribution of rent having a fair value of $3,000 for facilities and related overhead provided by a company controlled by the CEO (See Note 5).
| NOTE 4 | NOTES PAYABLE – RELATED PARTY |
During the six months ended August 31, 2014, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $39,925 in exchange for notes payable. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured and due on demand. The Company recorded a total of $3,615 in imputed interest as in-kind contributions for the six months ended August 31, 2014 (See Notes 3(A) & 5).
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USA Investco Holdings, inc.
(F/K/A LAMBENT SOLUTIONS CORP.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
AS OF AUGUST 31, 2014
(UNAUDITED)
During the year ended February 28, 2014, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $80,666 in exchange for notes payable. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured and due on demand.
| NOTE 5 | RELATED PARTY TRANSACTIONS |
During the six months ended August 31, 2014, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $39,925 in exchange for notes payable. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured and due on demand. The Company recorded a total of $3,615 in imputed interest as in-kind contributions for the six months ended of August 31, 2014 (See Notes 3(A) & 4).
During the year ended February 28, 2014, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $80,666 in exchange for notes payable. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured and due on demand.
For the six months ended August 31, 2014, the CEO who is also a majority stockholder of the Company contributed services having a fair value of $15,600 (See Note 3(A)).
For the six months ended August 31, 2014, the Company recorded an in-kind contribution of rent having a fair value of $3,000 for facilities and related overhead provided by a company controlled by the CEO (See Note 3(A)).
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| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
We were incorporated in the State of Nevada on January 20, 2011 as Lambent Solutions Corporation. On July 25, 2012, the Company entered into a Stock Purchase Agreement (the “SPA”) with Irina Dondikova, the former sole director and officer of the Company (the “Seller”), and Charles Schoninger (the “Purchaser”), under which the Purchaser purchased 4,500,000 shares of common stock, par value $0.001 per share, of the Company (the “Shares”), for an aggregate purchase price of $126,000, payable in full to the Seller (a “Change of Control”). The Shares represent all of the Seller’s interest in and to any securities of the Company, and make up 81.227% of the issued and outstanding shares of common stock of the Company. The SPA closed and the Change of Control occurred on July 25, 2012.
On September 5, 2012, the Company filed a Certificate of Amendment to its Articles of Incorporation (the “Name Change”) with the Secretary of State of the State of Nevada to change its name from “Lambent Solutions Corp.” to “USA InvestCo Holdings, Inc.”
The Name Change was effected in connection with the Company’s potential business combination with USA Holdings, Inc., a land development company that is primarily focused on projects in the coastal regions of North Carolina. The first project of USA Holdings, Inc. is a waterfront project in Wilmington, NC that includes a 200 ship marina, a hotel and restaurant. The second project being contemplated is a cold storage food facility at the Port of Wilmington. USA Holdings, Inc. is considering other similar projects in the area.
The Company has not entered into any definitive agreement with USA Holdings, Inc. as of the date hereof. Up until the sale of the Company in the Change of Control, the Company offered an advertising system for real estate brokers and agents. The Company has ceased operations in this area in anticipation of the potential merger with USA InvestCo Holdings, Inc.
Results of Operations
We have not generated any revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
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Three and Six Month Periods Ended August 31, 2014 Compared to the Three and Six Month Periods Ended August 31, 2013
Our net loss for the six month period ended August 31, 2014 was $53,956 compared to a net loss of $56,758 for the six month period ended August 31, 2013. During the six month period ended August 31, 2014 and 2013, we did not generate any revenue.
Our net loss for the three month period ended August 31, 2014 was $11,869 compared to a net loss of $27,157 for the three month period ended August 31, 2013. During the three month period ended August 31, 2014 and 2013, we did not generate any revenue.
During the six month period ended August 31, 2014, we incurred general and administrative expenses of $23,343 compared to $27,025 incurred during the six month period ended August 31, 2013. General and administrative expenses incurred during the six month period ended August 31, 2014 were generally related to corporate overhead.
During the three month period ended August 31, 2014, we incurred general and administrative expenses of $9,867 compared to $17,259 incurred during the three month period ended August 31, 2013. General and administrative expenses incurred during the three month period ended August 31, 2014 were generally related to corporate overhead.
During the six month period ended August 31, 2014, we incurred professional fees of $26,998, as opposed to $29,135 during the six month period ended August 31, 2013. The decrease in the professional fees in the six month period ended August 31, 2014 as opposed to the six month period ended August 31, 2013 was attributable to the decrease in legal fees attributable to the SEC compliance.
During the three month period ended August 31, 2014, we incurred professional fees of $0, as opposed to $9,513 during the three month period ended August 31, 2013. The decrease in the professional fees in the three month period ended August 31, 2014 as opposed to the three month period ended August 31, 2013 was attributable to the decrease in legal fees attributable to the SEC compliance.
The weighted average number of shares outstanding was 5,540,000 for the three and six month periods ended August 31, 2014.
Liquidity and Capital Resources
As of August 31, 2014, our current assets were $0. As of August 31, 2014, our current liabilities were $134,561. Current liabilities were comprised of $880 in accounts payable and $133,681 in notes payable from related party at August 31, 2014.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the six month period ended August 31, 2014, net cash flows used in operating activities were $39,924. Net cash flows used in operating activities were $19,322 for the six month period ended August 31, 2013.
Cash Flows from Financing Activities
We have financed our operations primarily from either advances or the issuance of equity and debt instruments. For the six month period ended August 31, 2014 net cash provided by financing activities was $39,924. For the six month period ended August 31, 2013 net cash provided by financing activities was $19,322.
Plan of Operation and Funding
The Company does not maintain a cash account, and therefore does not have any cash to meet our obligations for the next twelve month period. As a result, we will need to seek additional funding in the near future. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of shares of our common stock. We may also seek to obtain short-term loans from our directors or unrelated parties, although no such arrangements have been made. We do not have any arrangements in place for any future equity financing.
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Off-Balance Sheet Arrangements
As of the date of this Quarterly Report, we do not have any 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 investors.
Going Concern
The Company has not earned any revenues and has had a net loss for the six month period ended August 31, 2014 of $53,956. The Company has a stockholders’ deficiency of $134,561 at August 31, 2014. The Company had no assets at August 31, 2014.
The Company’s independent auditors, Liggett, Vogt and Webb, P.A., provided an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern in their audit report for the year ended February 28, 2014. The financial statements were prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital through loans as well as the sale of equity or debt securities. We do not currently have any arrangements in place for any future equity financing or loans from our directors or unrelated parties.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are a smaller reporting company and therefore not required to provide this information.
| Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ‟Exchange Act”)) as of the end of the period covered by this report. Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Based on the evaluation as of August 31, 2014, for the reasons set forth below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’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.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of August 31, 2014, the Company determined that there were control deficiencies that constituted the following material weaknesses:
| · | The Company does not currently have an active Chief Financial Officer to oversee the day to day transactions and operations, which ensures the timely and accurate identification and reporting of all necessary transactions. |
| · | The Company does not have an independent audit committee that can review and approve significant transactions and the reporting process and provide independent oversight of the Company. |
| · | The Company does not have a cash account and is reliant on related parties to pay operating costs and properly identify and record transactions in a timely and accurate manner. |
| 16 |
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 17 |
| Item 1. | Legal Proceedings. |
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
| Item 1A. | Risk Factors. |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
None.
| Item 3. | Defaults Upon Senior Securities. |
None.
| Item 4. | Mine Safety Disclosures |
Not Applicable.
| Item 5. | Other Information. |
None.
| Item 6. | Exhibits |
(a) Exhibits
| Exhibit Number |
Description | |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1* | Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* In accordance with SEC Release 33-8238, Exhibit 32.1 is furnished and not filed.
| 18 |
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.
| USA INVESTCO HOLDINGS, INC. | ||
| Date: December 29, 2014 | By: | /s/ Charles Schoninger |
| Charles Schoninger, President | ||
|
Chief Executive Officer (Duly Authorized, Principal Executive Officer and Principal Financial Officer) and Director | ||
| 19 |
Exhibit 31.1
Certification of Principal Executive Officer and
Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant To Section 302 of
The Sarbanes-Oxley Act of 2002
I, Charles Schoninger, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of USA InvestCo Holdings Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.
|
| Dated: December 29, 2014 | /s/ Charles Schoninger |
| Charles Schoninger | |
| Chief Executive Officer | |
| (Principal Executive Officer and Principal Financial Officer) |
Exhibit 32.1
Certification of Principal Executive Officer
And Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant To Section 906 of
The Sarbanes-Oxley Act of 2002
In connection with the accompanying quarterly report on Form 10-Q of USA InvestCo Holdings Inc. for the quarter ended August 31, 2014, I, Charles Schoninger, Principal Executive Officer and Principal Financial Officer of USA InvestCo Holdings Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:
| 1. | Such quarterly report on Form 10-Q for the quarter ended August 31, 2014, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in such quarterly report of Form 10-Q for the quarter ended August 31, 2014, fairly represents in all material respects, the financial condition and results of operations of USA InvestCo Holdings Inc. |
| Dated: December 29, 2014 | /s/ Charles Schoninger |
| Chief Executive Officer | |
| (Principal Executive Officer and Principal Financial Officer) |
|
STOCKHOLDERS' EQUITY
|
6 Months Ended | ||||
|---|---|---|---|---|---|
|
Aug. 31, 2014
|
|||||
| Stockholders' Equity Note [Abstract] | |||||
| Stockholders' Equity Note Disclosure [Text Block] |
(A) In-Kind Contribution For the six months ended August 31, 2014, the CEO who is also a majority stockholder of the Company contributed services having a fair value of $15,600 (See Note 5). For the six months ended August 31, 2014, a total of $3,615 in imputed interest relating to the notes payable due to the CEO, was recorded as an in-kind contribution (See Notes 4 & 5). For the six months ended August 31, 2014, the Company recorded an in-kind contribution of rent having a fair value of $3,000 for facilities and related overhead provided by a company controlled by the CEO (See Note 5). |