Bone Biologics Corp - Annual Report: 2008 (Form 10-K)
U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-K
(Mark
One)
x ANNUAL REPORT
UNDER SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended October 31, 2008
o TRANSITION REPORT
UNDER SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from ______________ to ______________
Commission
File Number 000-53078
AFH
ACQUISITION X, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
42-1743430
|
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
|
incorporation
or organization)
|
Identification
No.)
|
9595
Wilshire Blvd., Suite 900, Beverly Hills, CA 90212
(Address
of principal executive offices)
(310)
300-3431
(Registrant’s
telephone number, including area code)
Securities
registered under Section 12(b) of the Exchange Act:
None.
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, $0.001 par value per share
(Title of
Class)
Check
whether the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act. Yes¨ No x
Check
whether the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. ¨
Check
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 ¨
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ¨
Check
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
|
Large
Accelerated Filer ¨
|
Accelerated
Filer
¨
|
|
Non-accelerated
Filer ¨
|
Smaller
Reporting Company x
|
(Do
not check if a smaller reporting company.)
Check
whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes x No o
As of
October 31, 2008, there were no non-affiliate holders of common stock of the
Company.
APPLICABLE
ONLY TO CORPORATE REGISTRANTS
As of
January 29, 2009, there were 5,000,000 shares of common stock, par value $.001,
outstanding.
FORWARD-LOOKING
STATEMENTS
Certain
statements made in this Annual Report on Form 10-K are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) regarding the plans and objectives of management for future operations.
Such statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of AFH ACQUISITION X,
Inc. (the “Company”) to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties. The Company's plans
and objectives are based, in part, on assumptions involving the continued
expansion of business. Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this Report will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
PART
I
Item
1. Description of Business.
AFH
Acquisition X, Inc. (“we”, “us”, “our”, the "Company") was incorporated in the
State of Delaware on October 18, 2007. Since inception, the Company has been
engaged in organizational efforts and obtaining initial
financing. The Company was formed as a vehicle to pursue a business
combination and has made no efforts to identify a possible business
combination. As a result, the Company has not conducted negotiations
or entered into a letter of intent concerning any target business. The business
purpose of the Company is to seek the acquisition of, or merger with, an
existing company. The Company selected October 31 as its fiscal year
end.
The
Company, based on proposed business activities, is a "blank check" company. The
U.S. Securities and Exchange Commission (the “SEC”) defines those companies as
"any development stage company that is issuing a penny stock, within the meaning
of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies." Under SEC Rule 12b-2 under the Exchange Act, the Company also
qualifies as a “shell company,” because it has no or nominal assets (other than
cash) and no or nominal operations. Many states have enacted
statutes, rules and regulations limiting the sale of securities of "blank check"
companies in their respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in our securities, either
debt or equity, until we have successfully concluded a business combination. The
Company intends to comply with the periodic reporting requirements of the
Exchange Act for so long as it is subject to those requirements.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. The Company’s principal business objective
for the next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict its potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
The analysis of new business
opportunities will be undertaken by or under the supervision of Amir Farrokh
Heshmatpour, the sole officer and director of the Company. As of this
date the Company has not entered into any definitive agreement with any party,
nor have there been any specific discussions with any potential business
combination candidate regarding business opportunities for the
Company. The Company has unrestricted flexibility in seeking,
analyzing and participating in potential business opportunities. In its efforts
to analyze potential acquisition targets, the Company will consider the
following kinds of factors:
(a) Potential
for growth, indicated by new technology, anticipated market expansion or new
products;
(b) Competitive
position as compared to other firms of similar size and experience within the
industry segment as well as within the industry as a whole;
(c) Strength
and diversity of management, either in place or scheduled for
recruitment;
(d) Capital
requirements and anticipated availability of required funds, to be provided by
the Company or from operations, through the sale of additional securities,
through joint ventures or similar arrangements or from other
sources;
(e) The
cost of participation by the Company as compared to the perceived tangible and
intangible values and potentials;
(f) The
extent to which the business opportunity can be advanced;
1
(g) The
accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items; and
(h) Other
relevant factors.
In
applying the foregoing criteria, no one of which will be controlling, management
will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data. Potentially
available business opportunities may occur in many different industries, and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Due to the Company's limited capital available for investigation,
the Company may not discover or adequately evaluate adverse facts about the
opportunity to be acquired.
FORM OF
ACQUISITION
The
manner in which the Company participates in an opportunity will depend upon the
nature of the opportunity, the respective needs and desires of the Company and
the promoters of the opportunity, and the relative negotiating strength of the
Company and such promoters.
It is
likely that the Company will acquire its participation in a business opportunity
through the issuance of common stock or other securities of the Company.
Although the terms of any such transaction cannot be predicted, it should be
noted that in certain circumstances the criteria for determining whether or not
an acquisition is a so-called "tax free" reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") depends upon
whether the owners of the acquired business own 80% or more of the voting stock
of the surviving entity. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under the
Code, all prior stockholders would in such circumstances retain 20% or less of
the total issued and outstanding shares of the surviving entity. Under other
circumstances, depending upon the relative negotiating strength of the parties,
prior stockholders may retain substantially less than 20% of the total issued
and outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who were stockholders of the Company
prior to such reorganization.
The sole
stockholder of the Company will likely not have control of a majority of the
voting securities of the Company following a reorganization transaction. As part
of such a transaction, the Company's sole director may resign and one or more
new directors may be appointed without any vote by stockholders.
In the
case of an acquisition, the transaction may be accomplished upon the sole
determination of management without any vote or approval by stockholders. In the
case of a statutory merger or consolidation directly involving the Company, it
will likely be necessary to call a stockholders' meeting and obtain the approval
of the holders of a majority of the outstanding securities. The necessity to
obtain such stockholder approval may result in delay and additional expense in
the consummation of any proposed transaction and will also give rise to certain
appraisal rights to dissenting stockholders. Most likely, management will seek
to structure any such transaction so as not to require stockholder
approval.
It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial cost for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation might not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the loss
to the Registrant of the related costs incurred.
2
We
presently have no employees apart from our management. Our sole officer and
director is engaged in outside business activities and anticipate that they will
devote to our business very limited time until the acquisition of a successful
business opportunity has been identified. We expect no significant changes in
the number of our employees other than such changes, if any, incident to a
business combination.
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 this information.
Item
1B. Unresolved Staff Comments
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
Item
2. Description of Property.
The
Company neither rents nor owns any properties. The Company utilizes the office
space and equipment of its management at no cost. Management estimates such
amounts to be immaterial. The Company currently has no policy with
respect to investments or interests in real estate, real estate mortgages or
securities of, or interests in, persons primarily engaged in real estate
activities.
Item
3. Legal Proceedings.
To the best knowledge of our officers
and directors, the Company is not a party to any legal proceeding or
litigation.
Item
4. Submission of Matters to a Vote of Security Holders.
None.
PART
II
Item
5. Market for Common Equity, Related Stockholder Matters and Small Business
Issuer Purchases of Equity Securities.
Common
Stock
Our
Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares
of common stock, par value $.001 per share (the “Common Stock”). The
Common Stock is not listed on a publicly-traded market. As of January
29, 2009, there was one holder of record of the Common Stock.
Preferred
Stock
Our
Certificate of Incorporation authorizes the issuance of up to 20,000,000 shares
of preferred stock, par value $.001 per share (the “Preferred
Stock”). The Company has not yet issued any of its preferred
stock.
3
Dividend
Policy
The
Company has not declared or paid any cash dividends on its common stock and does
not intend to declare or pay any cash dividend in the foreseeable future. The
payment of dividends, if any, is within the discretion of the Board of Directors
and will depend on the Company’s earnings, if any, its capital requirements and
financial condition and such other factors as the Board of Directors may
consider.
Securities
Authorized for Issuance under Equity Compensation Plans
The
Company does not have any equity compensation plans or any individual
compensation arrangements with respect to its common stock or preferred stock.
The issuance of any of our common or preferred stock is within the discretion of
our Board of Directors, which has the power to issue any or all of our
authorized but unissued shares without stockholder approval.
Recent
Sales of Unregistered Securities
On
October 18, 2007, the Company offered and sold 5,000,000 shares of Common Stock
for aggregate proceeds equal to $25,000 to Amir Farrokh Heshmatpour, our sole
officer and director. The Company sold these shares of Common Stock under the
exemption from registration provided by Section 4(2) of the Securities
Act. On August 7, 2008, Mr. Heshmatpour contributed his 5,000,000
shares of Common Stock to AFH Holding & Advisory, LLC, where such
contribution was deemed an additional capital contribution to AFH Holding &
Advisory, LLC.
No
securities have been issued for services. Neither the Registrant nor any person
acting on its behalf offered or sold the securities by means of any form of
general solicitation or general advertising. No services were performed by any
purchaser as consideration for the shares issued.
Issuer
Purchases of Equity Securities
None.
Item
6. Selected Financial Data
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
Item
7. Management’s Discussion and Analysis of Financial Condition and
Results of Operation
The Company currently does not engage
in any business activities that provide cash flow. During the next
twelve months we anticipate incurring costs related to:
(i) filing
Exchange Act reports, and
(ii) investigating,
analyzing and consummating an acquisition.
We believe we will be able to meet
these costs through use of funds in our treasury, through deferral of fees by
certain service providers and additional amounts, as necessary, to be loaned to
or invested in us by our stockholders, management or other
investors.
4
The Company may consider acquiring a
business which has recently commenced operations, is a developing company in
need of additional funds for expansion into new products or markets, is seeking
to develop a new product or service, or is an established business which may be
experiencing financial or operating difficulties and is in need of additional
capital. In the alternative, a business combination may involve the acquisition
of, or merger with, a company which does not need substantial additional capital
but which desires to establish a public trading market for its shares while
avoiding, among other things, the time delays, significant expense, and loss of
voting control which may occur in a public offering.
Any target business that is selected
may be a financially unstable company or an entity in its early stages of
development or growth, including entities without established records of sales
or earnings. In that event, we will be subject to numerous risks inherent in the
business and operations of financially unstable and early stage or potential
emerging growth companies. In addition, we may effect a business combination
with an entity in an industry characterized by a high level of risk, and,
although our management will endeavor to evaluate the risks inherent in a
particular target business, there can be no assurance that we will properly
ascertain or assess all significant risks.
The Company anticipates that the
selection of a business combination will be complex and extremely risky. Because
of general economic conditions, rapid technological advances being made in some
industries and shortages of available capital, our management believes that
there are numerous firms seeking even the limited additional capital which we
will have and/or the perceived benefits of becoming a publicly traded
corporation. Such perceived benefits of becoming a publicly traded corporation
include, among other things, facilitating or improving the terms on which
additional equity financing may be obtained, providing liquidity for the
principals of and investors in a business, creating a means for providing
incentive stock options or similar benefits to key employees, and offering
greater flexibility in structuring acquisitions, joint ventures and the like
through the issuance of stock. Potentially available business combinations may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Liquidity
and Capital Resources
As of October 31, 2008, the Company had
assets equal to $5,159, comprised of cash and prepaid expenses. This
compares with assets of $12,098, comprised exclusively of
cash and cash equivalents, as of October 31, 2007. The Company’s
current liabilities as of October 31, 2008 totaled $15,325, comprised of accrued
expenses and monies due to parent. This compares with liabilities of
$21,821 comprised
of accrued expenses and monies due to parent, as of October 31, 2007. The Company can provide
no assurance that it can continue to satisfy its cash requirements for at least
the next twelve months.
The following is a summary of the
Company's cash flows provided by (used in) operating, investing, and financing
activities for the year ended October 31, 2008, October 31, 2007 and for the
cumulative period from October 18, 2007 (Inception) to October 31,
2008.
|
Fiscal Year
Ended
October 31,
2008
|
Fiscal Year
Ended
October 31,
2007
|
For the Cumulative
Period from
October 18, 2007
(Inception) to
October 31, 2008
|
||||||||||
|
Net
Cash (Used in) Operating Activities
|
$ | (24,326 | ) | $ | (10,573 | ) | $ | (34,899 | ) | |||
|
Net
Cash (Used in) Investing Activities
|
- | - | - | |||||||||
|
Net
Cash Provided by Financing Activities
|
$ | 15,304 | $ | 22,671 | $ | 37,975 | ||||||
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
$ | (9,022 | ) | $ | 12,098 | $ | 3,076 | |||||
The
Company has nominal assets and has generated no revenues since inception. The
Company is also dependent upon the receipt of capital investment or other
financing to fund its ongoing operations and to execute its business plan of
seeking a combination with a private operating company. In addition, the Company
is dependent upon certain related parties to provide continued funding and
capital resources. If continued funding and capital resources are unavailable at
reasonable terms, the Company may not be able to implement its plan of
operations.
5
Results
of Operations
The
Company has not conducted any active operations since inception, except for its
efforts to locate suitable acquisition candidates. No revenue has been
generated by the Company from October 18, 2007 (Inception) to October 31,
2008. It is unlikely the Company will have any revenues unless it is
able to effect an acquisition or merger with an operating company, of which
there can be no assurance. It is management's assertion that these
circumstances may hinder the Company's ability to continue as a going
concern. The Company’s plan of operation for the next twelve months shall
be to continue its efforts to locate suitable acquisition
candidates.
For the
fiscal year ended October 31, 2008, the Company had a net loss of $13,343,
consisting of legal, accounting, audit, other professional service fees and
other organizational costs and expenses incurred in relation to the filing of
the Company’s Quarterly Report on Form 10-Q for the period ended July 31, 2008
in September of 2008, Quarterly Report on Form 10-Q for the period ended April
30, 2008 in May of 2008, Quarterly Report on Form 10-Q for the period ended
January 31, 2008 in March of 2008 and Registration Statement on Form 10-SB in
February of 2008.
For the
fiscal year ended October 31, 2007, the Company had a net loss of $21,823,
consisting of legal, accounting, audit, other professional service fees and
other organizational costs and expenses incurred in relation to the formation of
the Company and the preparation of the Company’s Registration Statement on Form
10-SB in February of 2008.
For the
period from October 18, 2007 (Inception) to October 31, 2008, the Company had a
net loss of $35,166 comprised exclusively of legal, accounting, audit, other
professional service fees and other organizational costs and expenses incurred
in relation to the formation of the Company, the filing of the Company’s
Quarterly Report on Form 10-Q for the period ended July 31, 2008 in September of
2008, Quarterly Report on Form 10-Q for the period ended April 30, 2008 in May
of 2008, Quarterly Report on Form 10-Q for the period ended January 31, 2008 in
March of 2008 and Registration Statement on Form 10-SB in February of
2008.
Off-Balance
Sheet Arrangements
The Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company’s financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to
investors.
Contractual
Obligations
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.
Item
7A. Quantitative and Qualitative Disclosures about Market
Risk.
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.
6
Item
8. Financial Statements and Supplementary Data.
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
|
FINANCIAL
REPORTS
|
|
AT
|
|
OCTOBER
31, 2008
|
TABLE
OF CONTENTS
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Balance
Sheets at October 31, 2008 and 2007
|
F-2
|
|
Statements
of Operations for the Year Ended October 31, 2008, the Period from
Date
|
|
|
of
Inception (October 18, 2007) Through October 31, 2007 and for the Period
from
|
|
|
Date
of Inception (October 18, 2007) through October 31, 2008
|
F-3
|
|
Statement
of Changes in Stockholder’s Deficit for the Period
|
|
|
from
Date of Inception (October 18, 2007) through October 31,
2008
|
F-4
|
|
Statements
of Cash Flows for the Year Ended October 31, 2008, the Period from
Date
|
|
|
of
Inception (October 18, 2007) Through October 31, 2007 and for the Period
from
|
|
|
Date
of Inception (October 18, 2007) through October 31, 2008
|
F-5
|
|
Notes
to Financial Statements
|
F-6
|
7
Report
of Independent Registered Public Accounting Firm
To the
Board of Directors and Stockholders of
AFH
Acquisition X, Inc.
We have
audited the accompanying balance sheets of AFH Acquisition X, Inc. as of October
31, 2008 and 2007, and the related statements of operations, changes in
stockholder’s deficit, and cash flows for the year ended October 31, 2008, for
the period from date of inception (October 18, 2007) through October 31, 2007
and for the period from date of inception (October 18, 2007) through October 31,
2008. AFH Acquisition
X, Inc.’s management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of AFH Acquisition X, Inc. as of
October 31, 2008 and 2007, and the results of its operations and its cash flows
for the year ended October 31, 2008, for the period from date of inception
(October 18, 2007) through October 31, 2007 and for the period from date of
inception (October 18, 2007) through October 31, 2008 in conformity with
accounting principles generally accepted in the United States of
America.
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern.
As discussed in Note D to the financial statements, the Company’s significant
operating losses raise substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/Rotenberg
& Co. LLP
Rochester,
New York
January
28, 2009
F-1
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
BALANCE
SHEETS
|
October
31,
|
2008
|
2007
|
||||||
|
ASSETS
|
||||||||
|
Cash
and Cash Equivalents
|
$ | 3,076 | $ | 12,098 | ||||
|
Prepaid
Expenses
|
2,083 | — | ||||||
|
Total
Assets
|
$ | 5,159 | $ | 12,098 | ||||
|
LIABILITIES
AND STOCKHOLDER'S DEFICIT
|
||||||||
|
Liabilities
|
||||||||
|
Accrued
Expenses
|
$ | 2,350 | $ | 11,250 | ||||
|
Due
to Parent
|
12,975 | 10,571 | ||||||
|
Total
Liabilities
|
15,325 | 21,821 | ||||||
|
Stockholder's
Deficit
|
||||||||
|
Preferred
Stock: $.001 Par; 20,000,000 Shares Authorized,
|
||||||||
|
-0-
Issued and Outstanding
|
— | — | ||||||
|
Common
Stock: $.001 Par; 100,000,000 Shares
Authorized;
|
||||||||
|
5,000,000
Issued and Outstanding
|
5,000 | 5,000 | ||||||
|
Additional
Paid-In-Capital
|
20,000 | 20,000 | ||||||
|
Stock
Subscription Receivable
|
— | (12,900 | ) | |||||
|
Deficit
Accumulated During Development Stage
|
(35,166 | ) | (21,823 | ) | ||||
|
Total
Stockholder's Deficit
|
(10,166 | ) | (9,723 | ) | ||||
|
Total
Liabilities and Stockholder's Deficit
|
$ | 5,159 | $ | 12,098 | ||||
SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-2
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
STATEMENTS
OF OPERATIONS
|
For the Year
Ended October
31, 2008
|
Period From
Date of Inception
(October 18,
2007) through
October 31, 2007
|
Period From Date
of Inception
(October 18, 2007)
through October
31, 2008
|
||||||||||
|
Revenues
|
$ | — | $ | — | $ | — | ||||||
|
Expenses
|
||||||||||||
|
Consulting
|
$ | 785 | $ | — | $ | 785 | ||||||
|
Legal
and Professional
|
11,107 | 21,250 | 32,357 | |||||||||
|
Office
Expenses
|
1,296 | 2 | 1,298 | |||||||||
|
Organizational
Costs
|
155 | 571 | 726 | |||||||||
|
Total
Expenses
|
$ | 13,343 | $ | 21,823 | $ | 35,166 | ||||||
|
Net
Loss
|
$ | (13,343 | ) | $ | (21,823 | ) | $ | (35,166 | ) | |||
|
Loss
per Share - Basic and Diluted
|
$ | (0.00 | ) | $ | (0.04 | ) | $ | (0.01 | ) | |||
|
Weighted
Average Common Shares Outstanding
|
5,000,000 | 500,000 | 5,000,000 | |||||||||
SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-3
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
|
STATEMENTS
OF CHANGES IN STOCKHOLDER'S DEFICIT FOR THE PERIOD FROM
|
|
|
DATE
OF INCEPTION (OCTOBER 18, 2007) THROUGH OCTOBER 31, 2008
|
|
|
Deficit
|
||||||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||||||
|
Common
Stock
|
Additional
|
Stock
|
During
|
Total
|
||||||||||||||||||||
|
Number
|
Paid-In
|
Subscription
|
Development
|
Stockholder's
|
||||||||||||||||||||
|
of
Shares
|
Value
|
Capital
|
Receivable
|
Stage
|
Deficit
|
|||||||||||||||||||
|
Balance
- October 18, 2007
|
— | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
|
Common
Stock Issued for Cash
|
5,000,000 | 5,000 | 20,000 | (12,900 | ) | — | 12,100 | |||||||||||||||||
|
Net
Loss
|
— | — | — | — | (21,823 | ) | (21,823 | ) | ||||||||||||||||
|
Balance
- October 31, 2007
|
5,000,000 | 5,000 | 20,000 | (12,900 | ) | (21,823 | ) | (9,723 | ) | |||||||||||||||
|
Cash
Received for Stock Subscriptions
|
— | — | — | 12,900 | — | 12,900 | ||||||||||||||||||
|
Net
Loss
|
— | — | — | — | (13,343 | ) | (13,343 | ) | ||||||||||||||||
|
Balance
- October 31, 2008
|
5,000,000 | $ | 5,000 | $ | 20,000 | $ | — | $ | (35,166 | ) | $ | (10,166 | ) | |||||||||||
SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENT
F-4
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
STATEMENTS
OF CASH FLOWS
|
For the Year
Ended
October 31,
2008
|
Period From
Date of
Inception
(October 18,
2007)
Through
October 31,
2007
|
Period From
Date of
Inception
(October 18,
2007) Through
October 31,
2008
|
||||||||||
|
Cash
Flows from Operating Activities
|
||||||||||||
|
Net
Loss
|
$ | (13,343 | ) | $ | (21,823 | ) | $ | (35,166 | ) | |||
|
Changes
in Assets and Liabilities:
|
||||||||||||
|
Prepaid
Expenses
|
(2,083 | ) | — | (2,083 | ) | |||||||
|
Accrued Expenses
|
(8,900 | ) | 11,250 | 2,350 | ||||||||
|
Net Cash Flows from Operating
Activities
|
(24,326 | ) | (10,573 | ) | (34,899 | ) | ||||||
|
Net Cash Flows from Investing
Activities
|
— | — | — | |||||||||
|
Cash
Flows from Financing Activities
|
||||||||||||
|
Cash
Advance by Parent
|
2,404 | 10,571 | 12,975 | |||||||||
|
Cash Proceeds from Sale of
Stock
|
12,900 | 12,100 | 25,000 | |||||||||
|
Net Cash Flows from Financing
Activities
|
15,304 | 22,671 | 37,975 | |||||||||
|
Net
Change in Cash and Cash Equivalents
|
(9,022 | ) | 12,098 | 3,076 | ||||||||
|
Cash and Cash Equivalents - Beginning of
Year
|
12,098 | — | — | |||||||||
|
Cash and Cash Equivalents - End of
Year
|
$ | 3,076 | $ | 12,098 | $ | 3,076 | ||||||
|
Cash
Paid During the Year for:
|
||||||||||||
|
Interest
|
$ | — | $ | — | $ | — | ||||||
|
Income Taxes
|
$ | — | $ | — | $ | — | ||||||
SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-5
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
NOTES
TO FINANCIAL STATEMENTS
|
Note
A -
|
The
Company
|
|
AFH
Acquisition X, Inc., a development stage company (the “Company”), was
incorporated under the laws of the State of Delaware on October 18,
2007. The Company is 100% owned by AFH Holding & Advisory,
LLC. The financial statements presented represent only those
transactions of AFH Acquisition X, Inc. The Company is looking
to acquire an existing company or acquire the technology to begin
operations.
|
|
|
As
a blank check company, the Company’s business is to pursue a business
combinationthrough acquisition, or merger with, an existing company. As of
the date of the financial statements, the Company is not conducting
negotiations with any target business. No assurances can be given that the
Company will be successful in locating or negotiating with any target
company.
|
|
|
Since
inception, the Company has been engaged in organizational
efforts.
|
|
Note
B -
|
Summary
of Significant Accounting Policies
|
|
|
Method
of Accounting
|
|
|
The
Company maintains its books and prepares its financial statements on the
accrual basis of accounting.
|
|
|
Development
Stage
|
|
|
The
Company has operated as a development stage enterprise since its inception
by devoting substantially all of its efforts to financial planning,
raising capital, research and development, and developing markets for its
services. The Company prepares its financial statements in
accordance with the requirements of Statement of Financial Accounting
Standards No. 7, “Accounting and Reporting by Development Stage
Enterprises.”
|
|
|
Cash
and Cash Equivalents
|
|
|
Cash
and cash equivalents include time deposits, certificates of deposit, and
all highly liquid debt instruments with original maturities of three
months or less. The Company maintains cash and cash equivalents
at financial institutions, which periodically may exceed federally insured
amounts.
|
|
|
.
|
|
|
-
continued -
|
F-6
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
NOTES
TO FINANCIAL STATEMENTS
|
Note
B -
|
Summary
of Significant Accounting Policies –
continued
|
|
|
Loss
Per Common Share
|
|
|
Loss
per common share is computed in accordance with Statement of Financial
Accounting Standards No. 128, “Earnings Per Share,” by dividing income
(loss) available to common stockholders by weighted average number of
common shares outstanding for each
period
|
|
|
Use
of Estimates
|
|
|
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results can differ from
those estimates.
|
Income
Taxes
The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, “Accounting for Income Taxes”, using the asset and
liability approach, which requires recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of such assets and
liabilities. This method utilizes enacted statutory tax rates in
effect for the year in which the temporary differences are expected to reverse
and gives immediate effect to changes in income tax rates upon
enactment. Deferred tax assets are recognized, net of any valuation
allowance, for temporary differences and net operating loss and tax credit carry
forwards. Deferred income tax expense represents the change in net
deferred assets and liability balances.
Financial
Instruments
The
Company’s financial instruments consist of cash and due to parent. Unless
otherwise noted, it is management’s opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these financial
instruments. The fair value of these financial instruments
approximates their carrying value, unless otherwise noted.
Recent
Pronouncements
The
Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company’s results of
operations, financial position, or cash flow.
F-7
AFH
ACQUISITION X, INC.
(A
DEVELOPMENT STAGE COMPANY)
(A
DELAWARE CORPORATION)
Beverly
Hills, CA
NOTES
TO FINANCIAL STATEMENTS
|
Note
C -
|
Equity
Securities
|
Holders
of shares of common stock shall be entitled to cast one vote for each common
share held at all stockholder’s meetings for all purposes, including the
election of directors. The common stock does not have cumulative
voting rights.
The
preferred stock of the Company shall be issued by the Board of Directors of the
Company in one or more classes or one or more series within any class and such
classes or series shall have such voting powers, full or limited, or no voting
powers, and such designations, preferences, limitations or restrictions as the
Board of Directors of the Company may determine, from time to time.
No holder
of shares of stock of any class shall be entitled as a matter of right to
subscribe for or purchase or receive any part of any new or additional issue of
shares of stock of any class, or of securities convertible into shares of stock
or any class, whether now hereafter authorized or whether issued for money, for
consideration other than money, or by way of dividend.
|
Note
D -
|
Going
Concern
|
The
Company’s financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has
reportedrecurring losses from operations. As a result, there is an
accumulated deficit of $35,166 at October 31, 2008.
|
|
The
Company’s continued existence is dependent upon its ability to raise
capital or acquire a marketable company. The financial statements do not
include any adjustments that might be necessary should the Company be
unable to continue as a going
concern.
|
|
Note
E –
|
Due
to Parent
|
|
|
Due
to parent represents cash advances from AFH Holding & Advisory
LLC. AFH Holding & Advisory LLC is related to the Company
through common ownership. There are no repayment
terms.
|
F-8
Item
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.
There are
not and have not been any disagreements between the Company and its accountants
on any matter of accounting principles, practices or financial statement
disclosure.
Item
9A(T). Controls and Procedures.
Evaluation of Disclosure
Controls and Procedures
The
Company’s management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by the Company in the reports that the Company files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and
forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by an issuer in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the issuer’s management,
including its principal executive officer or officers and principal financial
officer or officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
In
accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
completed under the supervision and with the participation of the Company’s
management, including the Company’s President, Principal Financial Officer and
Secretary, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures as of the end of the period covered by this
Annual Report. Based on that evaluation, the Company’s sole officer
concluded that the Company’s disclosure controls and procedures were effective
in providing reasonable assurance that information required to be disclosed in
the Company’s reports filed or submitted under the Exchange Act was recorded,
processed, summarized, and reported within the time periods specified in the
Commission’s rules and forms.
Evaluation of Internal
Controls over Financial Reporting
This
annual report does not include a report of management's assessment regarding
internal control over financial reporting or an attestation report of the
company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.
Changes in Internal Controls
over Financial Reporting
There
have been no significant changes to the Company’s internal controls over
financial reporting that occurred during our last fiscal quarter of the year
ended October 31, 2008, that materially affected, or were reasonably likely to
materially affect, our internal controls over financial reporting.
Item
9B. Other Information.
None.
8
PART
III
Item
10. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.
(a) Identification
of Directors and Executive Officers. The following table sets forth
certain information regarding the Company’s directors and executive
officers:
|
Name
|
Age
|
Position
|
||
|
Amir
F. Heshmatpour
|
42
|
President,
Secretary, Chief Financial Officer and Director
|
The
Company’s officers and directors are elected annually for a one year term or
until their respective successors are duly elected and qualified or until
their earlier resignation or removal.
Amir Farrokh Heshmatpour has
served as the Company’s President, Secretary and sole director since
inception. Mr. Heshmatpour has been the Managing Director of AFH Holding
& Advisory LLC from July 2003 to the present. Prior to that, he took
some time off. From 1996 through January 2002, Mr. Heshmatpour served as
Chairman and Chief Executive Officer of Metrophone Telecommunications, Inc.
Mr. Heshmatpour has a background in venture capital, mergers and
acquisitions, investing and corporate finance. Mr. Heshmatpour was the recipient
of the Businessman of the Year award in 2003 at the National Republican
Congressional Committee. Mr. Heshmatpour currently serves as sole officer
and director of AFH Acquisition III, Inc., AFH Acquisition IV, Inc., AFH
Acquisition V, Inc., AFH Acquisition VI, Inc., and AFH Acquisition VII, Inc.,
AFH Acquisition VIII, Inc, AFH Acquisition IX, Inc., AFH Acquisition XI, Inc.
and AFH Acquisition XII, Inc., all of which are publicly reporting, non-trading,
blank check shell companies. Since October 10, 2007 Mr. Heshmatpour
has served as President, Secretary and a member of the board of directors of AFH
Holding I, Inc. and AFH Holding II, Inc. Since inception, Mr.
Heshmatpour has served as President, Secretary and sole director of AFH Holding
III, Inc., AFH Holding IV, Inc., AFH Holding V, Inc., AFH Holding VI, Inc. and
AFH Holding VII, Inc. Mr. Heshmatpour received a Bachelor of Arts
from Pennsylvania State University in 1988.
(b) Significant
Employees.
As
of the date hereof, the Company has no significant employees.
(c) Family
Relationships.
There are no family relationships among
directors, executive officers, or persons nominated or chosen by the issuer to
become directors or executive officers.
(d) Involvement
in Certain Legal Proceedings.
There have been no events under any
bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or
decrees material to the evaluation of the ability and integrity of any director,
executive officer, promoter or control person of Registrant during the past five
years.
Compliance
with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act
requires the Company’s directors and officers, and persons who beneficially own
more than 10% of a registered class of the Company’s equity securities, to file
reports of beneficial ownership and changes in beneficial ownership of the
Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and
greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
9
Based solely on the Company’s review of
the copies of the forms received by it during the fiscal year ended
October 31, 2008 and written representations that no other reports were
required, the Company believes that believes that no person who, at any
time during such fiscal year, was a director, officer or beneficial owner of
more than 10% of the Company’s common stock failed to comply with all
Section 16(a) filing requirements during such fiscal years.
Code
of Ethics
We have
not adopted a Code of Business Conduct and Ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions in that our sole officer and
director serve in these capacities.
Nominating
Committee
We have not adopted any procedures by
which security holders may recommend nominees to our Board of
Directors.
Audit
Committee
The Board of Directors acts as the
audit committee. The Company does not have a qualified financial expert at this
time because it has not been able to hire a qualified candidate. Further, the
Company believes that it has inadequate financial resources at this time to hire
such an expert. The Company intends to continue to search for a
qualified individual for hire.
Item
11. Executive Compensation.
The
following table sets forth the cash compensation paid by the Company to its
President and all other executive officers who earned annual compensation
exceeding $100,000 for services rendered during the fiscal year ended October
31, 2008 and October 31, 2007.
|
Name and Position
|
Year
|
Other Compensation
|
||
|
Amir
F. Heshmatpour, President, Secretary, Chief Financial
Officer and Director |
2008
2007
|
None
None
|
Director
Compensation
We do not currently pay any cash fees
to our directors, nor do we pay directors’ expenses in attending board
meetings.
Employment
Agreements
The
Company is not a party to any employment agreements.
10
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
(a) The
following tables set forth certain information as of January 29, 2009, regarding
(i) each person known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of Common Stock, (ii) each director, nominee and
executive officer of the Company and (iii) all officers and directors as a
group.
|
Name and Address
|
Amount and Nature of
Beneficial Ownership
|
Percentage
of Class
|
||||||
|
Amir
F. Heshmatpour (1)
9595
Wilshire Blvd, Suite 900
Beverly
Hills, CA 90212
|
5,000,000 | (2) | 100.00 | % | ||||
|
AFH
Holding & Advisory, LLC
9595
Wilshire Blvd, Suite 900
Beverly
Hills, CA 90212
|
5,000,000 | 100.00 | % | |||||
|
All
Officers and Directors
as a group
|
5,000,000 | 100.00 | % | |||||
_________________________
|
|
(1)
|
Amir
F. Heshmatpour serves as the sole officer and director of the
Company.
|
|
|
(2)
|
Represents
5,000,000 shares of common stock owned by AFH Holding & Advisory LLC
(“AFH Holding”). Mr. Heshmatpour is the sole member of AFH
Holding and has sole voting and investment control over the shares of
Common Stock owned of record by AFH Holding. Accordingly, he may be deemed
a beneficial owner of the 5,000,000 shares of Common Stock owned by AFH
Holding.
|
|
(b)
|
The
Company currently has not authorized any compensation plans or individual
compensation arrangements.
|
Item
13. Certain Relationships and Related Transactions.
Except as
otherwise indicated herein, there have been no related party transactions, or
any other transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-K.
Item
14. Principal Accounting Fees and Services
Rotenberg
and Co. LLC (“Rotenberg”) is the Company's independent registered public
accounting firm.
Audit
Fees
The
aggregate fees billed by Rotenberg for professional services rendered for the
audit of our annual financial statements and review of financial statements
included in our quarterly reports on Form 10-Q or services that are normally
provided in connection with statutory and regulatory filings were $2,750 for the fiscal year
ended October 31, 2008 and $1,250 for the fiscal year
ended October 31, 2007.
Audit-Related
Fees
There
were no fees billed
by Rotenberg for assurance and related services that are reasonably related to
the performance of the audit or review of the Company’s financial statements for
the fiscal year ended October 31, 2008 and for the fiscal year ended October 31,
2007.
Tax
Fees
There
were no fees billed by Rotenberg for professional services for tax compliance,
tax advice, and tax planning for the fiscal year ended October 31, 2008 and for the fiscal year
ended October 31, 2007.
11
All
Other Fees
There
were no fees billed by Rotenberg for other products and services for the fiscal
year ended October 31, 2008 and for the fiscal year
ended October 31, 2007.
Audit
Committee’s Pre-Approval Process
The Board of Directors acts as
the audit committee of the Company, and accordingly, all services are approved
by all the members of the Board of Directors.
Part
IV
Item
15. Exhibits, Financial Statement Schedules
(a) We
set forth below a list of our audited financial statements included in Item 8 of
this annual report on Form 10-K.
|
Statement
|
Page*
|
|||
|
Report
of Independent Registered Public Accounting Firm
|
F-1 | |||
|
Balance
Sheet
|
F-2 | |||
|
Statement
of Operations
|
F-3 | |||
|
Statement
of Changes in Stockholder’s Equity (Deficit)
|
F-4 | |||
|
Statement
of Cash Flows
|
F-5 | |||
|
Notes
to Financial Statements
|
F-6 | |||
_____________________________
*Page F-1
follows page 7 to this annual report on Form 10-K.
(b) Index
to Exhibits required by Item 601 of Regulation S-K.
|
Exhibit
|
Description
|
|
|
*3.1
|
Certificate
of Incorporation
|
|
|
*3.2
|
By-laws
|
|
|
31.1
|
Certification
of the Company’s Principal Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual
Report on Form 10-K for the year ended October 31, 2008
|
|
|
31.2
|
Certification
of the Company’s Principal Executive Officer and Principal Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
respect to the registrant’s Annual Report on Form 10-KSB for the year
ended October 31, 2008
|
|
|
32.1
|
Certification
of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of
2002
|
|
|
32.1
|
Certification
of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of
2002
|
|
*
|
Filed
as an exhibit to the Company's registration statement on Form 10-SB, as
filed with the Securities and Exchange Commission on February 1, 2008 and
incorporated herein by this
reference.
|
12
SIGNATURES
In accordance with Section 13 or 15(d)
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.
|
AFH
ACQUISITION X, INC.
|
||
|
Dated:
January 29, 2009
|
By:
|
/s/ Amir
F. Heshmatpour
|
|
Amir
F. Heshmatpour
|
||
|
President
and Director
|
||
|
Principal
Executive Officer
|
||
|
Principal
Financial Officer
|
||
In accordance with Section 13 or 15(d)
of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
|
Title
|
Date
|
|||
|
President,
Secretary, Chief
|
January
29, 2009
|
|||
|
Amir
F. Heshmatpour
|
Financial
Officer and Sole Director
|
|
13