Zhong Ya International Ltd - Quarter Report: 2012 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 1O-Q

QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

For the three month period ended June 30, 2012

Commission file number: 333-152950

Western Lucrative Enterprises, Inc.

(Exact Name of Registrant as Specified in its Charter)

             Iowa                      26-3045445

______________________       _______________

(State or Other Jurisdiction of            (IRS Employer

Incorporation or Organization)         Identification No.)

73280 Highway 111, Suite 207, Palm Desert, CA 92260

(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (760) 776-8899

Securities registered pursuant to Section 12(b) of the Act: None

Common Stock, $0.001 par value

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.

Yes  *    No  X

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes   *   No  X

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 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

1

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not 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-Q or any amendment to this Form 10-Q.  X   

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

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

The number of shares outstanding of the issuer's common stock, $.001 par value, as of June 30, 2012 was 8,505,000 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

Western Lucrative Enterprises, Inc.

Form 10-Q Quarterly Report

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1

Financial Statements

4

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

9

Item 3

Quantitative and Qualitative Disclosures about Market Risk

10

Item 4

Controls and Procedures

10

PART II – OTHER INFORMATION

Item 1

Legal Proceedings

11

Item 1A

Risk Factors

11

Item 2

Selected Financial Data

11

Item 3

Defaults Upon Senior Securities

11

Item 4

Mine Safety Disclosures

11

Item 5

Other Information

12

Item 6

Exhibits

13

3

PART 1

ITEM 1.

FINANCIAL STATEMENTS

Financial Statements for the 3 month period ended June 30, 2012 have been prepared by the Management Group of Western Lucrative Enterprises, Inc.

 

4

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Enterprise)

Balance Sheets

June 30,

December 31,

ASSETS

2012

2011

Current Assets

Cash

$

--

$

--

Total Current Assets

--

--

Total Assets

--

--

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current Liabilities

Accounts payable

28,796

25,197

Related party loan

10,000

10,000

Beneficial conversion feature

(53)

(204)

Accrued interest

466

341

Total Current Liabilities

39,209

35,334

Long Term Liabilities

--

--

Total Long Term Liabilities

0

0

Total Liabilities

39,209

35,334

Stockholders' (Deficit) Equity

Common Stock, $.001 par value; 750,000,000 shares

authorized, 8,505,000 shares issued and outstanding,

at June 30, 2012 and December 31, 2011

8,505

8,505

Additional paid-in capital

56,889

56,889

Deficit accumulated during the development stage

(104,603)

(100,728)

Total Stockholders' (Deficit) Equity

(39,209)

(35,334)

Total Liabilities and Stockholders' (Deficit) Equity

$

--

$

--

The accompanying notes are an integral part of the financial statements.

5

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Enterprise)

Statements of Operations

The accompanying notes are an integral part of the financial statements.

6

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Enterprise)

Statements of Cash Flows

From

March 2,

2009

Six Months Ended

(inception) to

June 30,

December 31,

2012

2011

2012

(Unaudited)

(Unaudited)

(Unaudited)

Cash Flows From Operating Activities:

Net (loss)

$

(3,875)

$

(15,090)

$

(104,604)

Adjustments to reconcile net loss to net cash used

  in operating activities:

Issuance of common stock in exchange for services

--

--

39,652

Non-cash interest - beneficial conversion feature

150

150

562

Changes in operating assets and liabilities:

Accounts Payable

3,600

14,815

25,797

Accrued Interest

125

125

468

Net Cash Used by Operating Activities

--

--

(38,125)

Net Cash From Investing Activities

--

--

--

Cash Flows From Financing Activities

Proceeds from related party loan

--

--

10,000

Proceeds from issuance of stock

--

--

28,125

Net Cash Provided by Financing Activities

--

--

38,125

Net Increase in Cash

--

--

--

Cash at Beginning of Period

--

--

--

Cash at End of Period

--

--

--

Supplemental Disclosure of Non-Cash Investing

  and Financing Activities:

Issuance of Common Stock for Professional

  and Consulting Services

$

--

$

--

$

40,452

Supplemental Cash Flow Information:

Cash Paid for Interest

$

--

$

--

$

--

Cash Paid for Income Taxes

$

--

$

--

$

--

The accompanying notes are an integral part of the financial statements.

7

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Three Months Ended June 30, 2012, the six months ended June 30, 2012,

and for the period of July 14, 2008 (inception) to June 30, 2012

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2012, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2011 audited financial statements. The results of operations for the periods ended June 30, 2012 and 2011 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.  

NOTE 3 – SHAREHOLDERS’ EQUITY

No addition common shares were issued for any reason during the three months ended June 30, 2012.

NOTE 4 – RELATED PARTY TRANSACTIONS

A convertible note of $10,000 was issued on August 20, 2010 by the Company to Millennium Group, Inc. (“Millennium”), a California corporation. The owner of Millennium, Jonathan Mork, is a son of Dempsey Mork, who is the beneficial owner of MCC profit Sharing Plan which holds more than 5% of the common shares from the Company. The note is payable in two years and a 5% interest will be charged at maturity unless earlier converted. Interest is to be accrued for each quarter to show the comprehensive amount owed. As of June 30, 2012, the accrued interest amounts to $466. The note is convertible at the holder’s option into 4% of the Company’s fully diluted common shares at the time of conversion, with anti-dilution protection (not adjusted for splits or new issuances).

The NET note payable amount stands at $9,947 as of June 30, 2012 due to the deduction of the “beneficial conversion feature”, a more detailed description of which can be found in the foot notes to the financial statements of December 31, 2011.

8

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Three Months Ended June 30, 2012, the six months ended June 30, 2012,

and for the period of July 14, 2008 (inception) to June 30, 2012

NOTE 5 - SUBSEQUENT EVENTS

Management has reviewed material subsequent events in accordance with FASB ASC 855 “Subsequent Events”.  No additional disclosure is required.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Certain statements in this report and elsewhere (such as in other filings by the Company with the Securities and Exchange Commission ("SEC"), press releases, presentations by the Company of its management and oral statements) may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and "should," and variations of these words and similar expressions, are intended to identify these forward-looking statements. Actual results may materially differ from any forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures and constantly changing technology and market acceptance of the Company's products and services. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Western Lucrative Enterprises, Inc. was incorporated on July 14, 2008. As of the date of this document, we have generated no revenues and substantial expenses. This resulted in a net loss of $104,604 since inception, which is attributable to general and administrative expenses.

Since incorporation, we have financed our operations primarily through minimal initial capitalization.

To date we have not implemented our planned principal operations.

We do not expect to conduct any research and development.

We do not own any plant or equipment.

Our management does not anticipate any significant changes in the number of employees in the next 12 months.  Currently, we believe the services provided by our officers and directors are sufficient at this time.

We have not paid for expenses on behalf of any director. Additionally, we believe that this practice will not materially change.

In 2010, we engaged Millennium Group, Inc to assist the Company with new business strategies and options. Millennium Group is a consulting services firm owned and managed by Jonathan Mork, 47. A pension plan of which his father, Dempsey Mork, is a beneficiary owns more than 5% of our stock. We issued to Millennium Group a $10,000 convertible note as a non-refundable retainer to Millennium Group.  We also agreed to pay $400,000 to Millennium if it is able to introduce a major acquisition to the Company.   The note is due and payable to Millennium in two years, and bears a 5% interest rate which shall accrue annually and be payable at maturity. At Millennium’s election, this note and any accrued interest can be retired at any earlier time by conversion into common shares. The note is convertible into 4.0% of the Company’s fully diluted common shares at the time of conversion, with full anti-dilution protection (not adjusted for splits or new issuances). The Company has also agreed that any shares issued under this note will have piggyback registration rights. The Board of Directors of the Company has approved and ratified the terms of this note.

9

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Three Months Ended June 30, 2012, the six months ended June 30, 2012,

and for the period of July 14, 2008 (inception) to June 30, 2012

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.

ITEM 4

CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our president and chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Exchange Act Rules 13a-15(e) and 15d-15 (e) as of the end of the period covered by this report (the "Evaluation Date"). Based upon that evaluation, the president and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our president and chief financial officer, as appropriate to allow timely decisions regarding required disclosure since our auditor had to make audit adjustments. Our management intends to work more closely with our auditors to correct this ineffectiveness.

(b) Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-I5(f) and 15(d)-15(f) under the 1934 Act). Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Our management has concluded that, as of June 30, 2012, our internal control over financial reporting was not effective based on these criteria. In its assessment of the effectiveness of internal control over financial reporting as of June 30, 2012, we determined that the following deficiencies constituted a material weakness, as described below.

1.

Certain entity level controls establishing a “tone at the top” were considered material weaknesses. The Company has no audit committee. There is no policy on fraud and no code of ethics at this time.  A whistleblower policy is not necessary given the small size of the organization.

2.

Management override of existing controls is possible given the small size of the organization and lack of personnel.

3.

There is no system in place to review and monitor internal control over financial reporting. The Company maintains an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.

Management is currently evaluating remediation plans for the above control deficiencies.

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

10

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Three Months Ended June 30, 2012, the six months ended June 30, 2012,

and for the period of July 14, 2008 (inception) to June 30, 2012

This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our  registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this quarterly report.

(c) Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

11

WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Three Months Ended June 30, 2012, the six months ended June 30, 2012,

and for the period of July 14, 2008 (inception) to June 30, 2012

PART II

ITEM 1

LEGAL PROCEEDINGS

None.

ITEM 1A

RISK FACTORS

There are no material changes in the risk factors set forth in Part 1, Item 1A of the Company’s 10K dated Dec. 31, 2011.

ITEM 2

SELECTED FINANCIAL DATA.

As a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we are not required to provide the information required by this item.

ITEM 3

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4

MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5

OTHER INFORMATION.

None.

ITEM 6

EXHIBITS.

Exhibits Incorporated by Reference or Filed with this Report.

Exhibit No.

Description

31.1

Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Ox1ey Act of 2002

31.2

Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of2002

32.1

Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of2002.

32.2

Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of2002.

12

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Western Lucrative Enterprises, Inc.

Date: August 13, 2012

By:

/s/ Neville Pearson

Neville Pearson, President

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: August 13, 2012

By:

/s/ Neville Pearson

Neville Pearson, President and Director

(Principal Executive Officer)

Date: August 13, 2012

By:

/s/ Neville Pearson

Neville Pearson, Chief Financial Officer

(Principal Financial and Accounting Officer)

13