Longwen Group Corp. - Quarter Report: 2015 March (Form 10-Q)

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: March 31, 2015   Commission file no.: 0-11596

ALLIED VENTURES HOLDINGS CORP.

(Name of Small Business Issuer in its Charter)

 

Nevada		95-3506403
(State or other jurisdiction of		(I.R.S.Employer
incorporation or organization)		Identification No.)
3625 Cove Point Drive Salt Lake City, Utah		84109
(Address of principal executive offices)		(Zip Code)

 

Issuer’s telephone number: (801) 209-0740

Securities registered under Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered

None		None

Securities registered under Section 12(g) of the Act:

 

Common Stock, $0.0001 par value per share 

(Title of class)

Indicate by Check  whether  the issuer (1) filed all  reports  required  to be filed by Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter period that the  registrant was required to file such reports), and (2) has been subject to Xsuch filing requirements for the past 90 days. Yes [X]  No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

Yes [  ]  No [X]

Indicate by check mark whether the registrant is an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

	Large accelerated filer   [  ]	Accelerated filer                        [  ]

	Non-accelerated filer     [  ]	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). [X] Yes   [  ]   No

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

 

As of July 21, 2015 there were 95,164,138 shares of voting stock of the registrant issued and outstanding.

 

 

Allied Ventures Holdings Corp.
(f/k/a Dephasium Corp.)
(f/k/a Pay Mobile, Inc.)
Condensed Balance Sheets
UNAUDITED
ASSETS
				March 31, 2015		December 31, 2014
CURRENT ASSETS
	Cash and cash equivalents			$                  28,602		$                   35,363
		TOTAL CURRENT ASSETS AND TOTAL ASSETS		$                  28,602		$                   35,363
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable and accrued expenses			$                    5,017		$                     2,610
	Short term loan			9,475		9,475
	Note payable			5,000		5,000
		TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES		19,492		17,085
STOCKHOLDERS' EQUITY
	Preferred stock, $0.0001 par value, 50,000,000
	shares authorized, no shares issued and outstanding
	as of March 31, 2015 and December 31, 2014, respectively			-		-
	Common stock, $0.0001 par value, 500,000,000
	shares authorized, 95,164,138 and 95,164,138
	shares issued and outstanding as of March 31, 2015
	and December 31, 2014, respectively			9,516		9,516
	Additional paid-in capital			2,617,301		2,617,301
	Accumulated deficit			(2,617,707)		(2,608,539)
		Total Stockholders' Equity		9,110		18,278
		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$                  28,602		$                   35,363
See accompanying notes to financial statements.

 

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the condensed financial statements not misleading have been included. The balance sheet at December 31, 2014, has been derived from the Company’s audited financial statements as of that date.

The unaudited condensed financial statements included herein should be read in conjunction with the audited financial statements and the notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, that was filed with the SEC on June 11, 2015. The results of operations for the three months ended March 31, 2015, are not necessarily indicative of the results to be expected for the full year.

NOTE 2 – COMPANY BACKGROUND AND ORGANIZATION

The Company was incorporated on March 31, 1980, under the laws of the State of California as Expertelligence, Inc. On June 26, 2006, the Company reincorporated in Nevada. On March 24, 2011, the Company amended its Articles of Incorporation to change its name to Pay Mobile, Inc. On January 2, 2013, the Company amended its Articles of Incorporation to change its name to Allied Ventures Holding Corp. On February 21, 2013, the Company amended its Articles of Incorporation to change its name to Dephasium Corp. On February 23, 2015, the Company amended its Articles of Incorporation to change its name to Allied Ventures Holdings Corp.

 

On March 24, 2011, the Company entered into a Share Exchange Agreement (the Agreement) with Pay Mobile, Inc. (PMD) a Delaware corporation and its shareholders. Pursuant to the terms of the Agreement, the company acquired 100% of the issued and outstanding shares of PMD. On June 11, 2012 the Agreement with PMD was rescinded and the common shares of the Company which were previously issued to the PMD shareholders pursuant to the Agreement were canceled.  

The Company is a “Shell Company” status and is looking for a new business opportunity.

 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accrued expenses, a short-term loan and a short-term note payable. The carrying amounts of the Company’s financial instruments approximate fair value because of the short term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.

Income Taxes

The Company utilizes the asset and liability method to account for income taxes pursuant to ASC 740 “Income Taxes”. 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 and operating loss and tax credit carry forwards. 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. A valuation allowance is used to reduce net deferred tax assets to the amount that, based on management’s estimate, is more likely than not to be realized.

ASC 740 provides guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If the Company determines that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. A liability for uncertain tax positions would then be recorded if the Company determined it is more likely than not that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable. The Company does not believe any uncertain tax positions exist that would result in the Company having a liability to the taxing authorities. The Company classifies interest and penalties related to unrecognized tax benefits, if and when required, as part of interest expense and other expense in the consolidated statements of operations.

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, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Stock Based Compensation

Stock based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Basic Loss Per Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common stock by the weighted average number of shares during the period. Diluted earnings per share is calculated by dividing the Company’s net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There is no dilutive debt or equity.

Fair Value Measurements

The Company follows the provisions of ASC 820, “Fair Value Measurements And Disclosures”. ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted principles, and enhances disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 – Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 – Valuations based on observable inputs other than quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

As of March 31, 2015 and December 31, 2014, the Company did not have any assets or liabilities that were required to be measured at fair value on a recurring basis or on a non-recurring basis.

Recent Accounting Pronouncements

On June 10, 2014 the FASB issued ASU 2014-10, Development Stage Entities, (Topic 915), which eliminates the concept of a development stage entity (DSE) in its entirety from current accounting guidance. The removal of the DSE reporting requirements are effective for public entities for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption of the new standard is permitted and it was adopted by the Company in the quarter ended December 31, 2013.

In August 2014 the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), which requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The amendments in ASU 2014-15 are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early

application is permitted. The Company does not believe the adoption of this accounting pronouncement will have a material impact on its financial statements.

The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations or cash flows.

NOTE 4 – SHORT-TERM LOAN

On December 17, 2012 the Company entered into a $9,475 promissory note obligating the Company to repay the loan one year from the date thereof. The annual interest rate is “US Prime” plus 8%. The prime rate on the note’s execution date was 3.25%; accordingly, the annual interest rate is 11.25%. The note matured in December 2013 and the Company did not pay any of the principal. The Company is in default but has not received notification thereof from the lender as required in the note.   

NOTE 5 – NOTE PAYABLE

On March 24, 2014, the Company entered into a $5,000 promissory note obligating the Company to repay the loan one year from the date thereof. The annual interest rate is “US Prime” plus 8%. The prime rate on the note’s execution date was 3.25%; accordingly, the annual interest rate is 11.25%.

NOTE 6 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company’s’ financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern, as reflected by the Company’s accumulated deficit of $2,617,707 at March 31, 2015. In addition, the Company has not generated any revenues since inception. The ability of the Company to continue as a going concern is dependent upon finding a new business opportunity and obtaining additional capital and financing.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management is considering options in order to address the Company’s financing requirements. Those options include the possible sale of common stock and debt financing. There can be no assurance that management will be able to obtain the necessary financing needed to continue as a going concern.

NOTE 7 – INCOME TAXES

The reconciliation of the federal statutory income tax rate of 34% to the Company’s effective income tax rate is as follows as of March 31, 2015 and March 31, 2014, respectively:

                                                                                                                                                                                                                                                                            

                                                                                                 2015                                           2014

 Income tax benefit using U.S. statutory rate                         34.0%                                       34.0%

Change in valuation allowance                                              (34.0)                                       (34.0%)

Effective income tax rate                                                          0.0%                                         0.0%

The components of the Company’s deferred tax asset are as follows as of March 31, 2015 and December 31, 2014:

The potential deferred tax asset is computed utilizing a 34% federal statutory tax rate. No deferred tax asset has been reported in the financial statements because the Company believes it is more likely than not that the net operating loss (NOL) carryforwards will not be realized. Accordingly, the potential tax benefits of the NOL carryforwards are offset by a valuation allowance of the same amount.

The increase in the valuation allowance of $3,117 for the three months ended March 31, 2015 and $7,495 for the year ended December 31, 2014, respectively, is solely attributable to deferred tax assets arising from the tax benefit of the NOL carryforward.

As of March 31, 2015, the Company had NOL carryforwards for income tax reporting purposes  approximately $871,488 which expire between 2015 and 2035.

The Company has not filed 2012, 2013 and 2014 income tax returns. The Company’s tax returns are subject to examination by the federal tax authorities for years 2011 through 2014.

NOTE 8 – SUBSEQUENT EVENTS  

The Company has evaluated subsequent events through the date the financial statements were issued. Other than what is discussed below, there have been discussed below, there have been no other events that would require adjustments to the financial statement

However, the Company underwent a change of control on January 21, 2016. G. Reed Petersen and White Rim Cattle Company LLC,  each purchased 25,000,000 shares of common stock of the company, from Harold Minsky.  Mr. Petersen is the Member Manager of White Rim Cattle Company, LLC, and thus can be considered a control person of all 50,000,000 shares of stock of the company.

On this same date, Harold Minsky resigned from the company all the positions he held, and at a board of directors meeting, G. Reed Petersen was elected and accepted to all positions that Harold Minsky had previously held.

On January 21,2016 The Company issued a promissory note payable to White Rim Cattle Company LLC in the amount of $20,000, which is payable on demand, and carries an interest rate of 12% per annum.

DESCRIPTION OF BUSINESS

Introduction

 

Allied Ventures Holdings  Corp., (the Company), was incorporated on March 31, 1980, under the laws of the State of California as Expertelligence, Inc. On June 26, 2006, the Company reincorporated in Nevada. On March 24, 2011, the Company amended its Articles of Incorporation to change its name to Pay Mobile, Inc. On January 2, 2013, the Company amended its Articles of Incorporation to change its name to Allied Ventures Holding Corp.  On February 21, 2013 the Company changed its name to Dephasium Corp. and thereafter, on February 23, 2015, the Company amended its Articles of Incorporation to change its name to Allied Ventures Holdings Corp.

 

 

Current Status of our Business

 

The Company  has not yet generated or realized any revenues from business operations. The Company's business strategy has changed to seeking potential merger candidates and we are now considered a shell as defined by the SEC. The Company's auditors have issued a going concern opinion in our audited financial statements for the fiscal year ended December 31, 2014 and the March 31, 2015 financial statements include a going concern disclosure. This means that our auditors believe there is doubt that the Company can continue as an on-going business for the next twelve months unless it obtains additional capital to pay its bills. This is because the Company has not generated any revenues and no revenues are currently anticipated. Accordingly, we must raise cash from sources such as investments by others in the Company and through possible transactions with strategic or joint venture partners. We do not plan to use any capital raised for the purchase or sale of any plant or significant equipment. The following discussion and analysis should be read in conjunction with the financial statements of the Company and the accompanying notes appearing subsequently under the caption "Financial Statements."

 

Comparison of Operating Results for the Three Months Ended March 31, 2015 to the Three Months Ended March 31, 2014

Revenues

 

The Company did not generate any revenues from operations for the three months ended March 31, 2015 or for the three months ended March 31, 2014. Accordingly, comparisons with prior periods are not meaningful. The Company is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and cost increases in services.

Operating Expenses

General and administrative expenses for the three months ended March 31, 2015 were $8,761 as compared to $2,605 for the three month period ended March 31, 2014. The increase of  $6,156 is primarily attributable to the increase in professional, accounting and auditor expenses in the quarter ended March 31, 2015.   

Net Loss

Our net loss for the three month period ended March 31, 2015 was $9,168 as compared to a net loss for the three month period ended March 31, 2014 of $2,605. The reason for the increase in loss is explained in the “Operating Expenses” section in the preceding paragraph.  

At March 31, 2015, our accumulated deficit was $2,617,707 as compared to an accumulated deficit of $2,608,539 as of December 31, 2014. The increase in the accumulated deficit is a result of the $9,168 loss for the three months ended March 31, 2015.

Assets and Liabilities

As of March 31, 2015, our total assets were $28,602 as compared to $35,363 at December 31, 2014. The decrease of $6,761 is attributable to the decline in cash used  for the payment of expenses during the quarter.  

Total current liabilities (and total liabilities)  were $19,492 at March 31, 2015 as compared to $17,085 at  December 31, 2014. The increase of $2,407 is attributable to an increases in accounts payable of $2,000 and accrued interest payable of $407 during the three months ended March 31, 2015.

Financial Condition, Liquidity and Capital Resources

At March 31, 2015, we had cash and cash equivalents of $28,602.  As of March 31, 2015 the Company’s only liabilities to non-vendors  was comprised of a short term loan payable in the amount of $9,475 which is in default and a $5,000 short-term note payable.

The Company had  working capital  of $9,110 at March 31, 2015 and $18,278 at December 31, 2014, respectively. The decline in working capital of $9,168 during the three months ended March 31, 2015 is due to $6,761 of cash used in operating activities and an increase in accounts payable and accrued expenses of $2,407.

No trends have been identified which would materially increase or decrease our results of operations or liquidity.

Off-Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial position, operating results, liquidity, capital expenditures of capital resources.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

 Not applicable for a smaller reporting company.

Forward-Looking Statements

This Form 10-Q includes Forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things

as future capital expenditures (including the amount and nature thereof), finding suitable merger or acquisition candidates, expansion and growth of the Company’s business and operations, and other such matters are forward-looking statements.  These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances.  However, whether actual results or developments will conform with the Company’s expectations and predictions is subject to a number of risks and uncertainties, general economic market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.  Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations.  The Company assumes no obligations to update any such forward-looking statements.

ITEM 4T.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

 

In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by our management, with the participation of the Chief Executive Officer / Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of March 31, 2015. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer / Chief Financial Officer, to allow timely decisions regarding required disclosures.

We lack proper internal controls and procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e). In designing and evaluating the disclosure controls and procedures, our 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, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management has identified certain material weaknesses relating to our internal controls and procedures. The reason for the ineffectiveness of our disclosure controls and procedures was the result of the lack of segregation of duties and responsibilities with respect to our cash control over the disbursements related thereto. The lack of segregation of duties resulted from our limited accounting staff.

In order to mitigate the material weakness over financial reporting attributable to a lack of segregation of duties, the Company engages an independent CPA who analyzes transactions quarterly and annually and prepares the Company’s quarterly and annual financial statements.  

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended March 31, 2014 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

The  Company  knows  of no legal  proceedings  to which it is a party or to which any of its  property  is the  subject  which are  pending,  threatened  or contemplated or any unsatisfied judgments against the Company.

None.

None

None

None.

(a)  The exhibits required to be filed herewith by Item 601 of Regulation S-K, as described in the following index of exhibits, are incorporated herein by reference, as follows:

 

 

* Filed herewith

SIGNATURES

In accord with Section 13 or 15(d) of the Securities Act of 1933, as amended, the Company caused this report to be signed on its behalf by the undersigned, thereto duly authorized.