Zhong Ya International Ltd - Quarter Report: 2012 March (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-Q
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2012
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to
Commission file number: 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
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 S
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 S
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 this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes S No *
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," "acceleratedfiler" 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 S
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes S No*
The number of shares outstanding of the issuer's common stock, $.001 par value, as of March 31, 2012 was 8,505,000 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 8
Item 4. Controls and Procedures 9
PART II – OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 1A. Risk Factors 10
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 10
Item 3 Defaults Upon Senior Securities . 10
Item 4. Mine Safety Disclosures 10
Item 5. Other Information 10
Item 6. Exhibits 10
2
ITEM 1. FINANCIAL STATEMENTS
Financial Statements for the 3 month period ended March 31, 2012 have been prepared by the Management Group of Western Lucrative Enterprises, Inc.
WESTERN LUCRATIVE ENTERPRISES, INC.
(A Development Stage Enterprise)
Unaudited Financial Statements
For the Three Months Ended March 31, 2012, and the Period of July 14, 2008 (Inception) to March 31, 2012
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Western Lucrative Enterprises, Inc. (A Development Stage Enterprise) | ||||||
| Balance Sheets | ||||||
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| March 31 December 31, | ||||
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| 2012 |
| 2011 | ||
| ASSETS | ||||||
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| Current assets |
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| Cash | $ | - |
| $ | - |
| Total current assets |
| - |
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| Total assets | $ | - |
| $ | - | |
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| LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | ||||||
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| Current liabilities |
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| Accounts payable | $ | 26,996 |
| $ | 25,197 |
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| Related party loan |
| 10,000 |
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| 10,000 |
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| Beneficial conversion feature |
| (128) |
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| (204) |
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| Accrued interest |
| 403 |
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| 341 |
| Total current liabilities |
| 37,271 |
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| 35,334 | |
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| Long term liabilities |
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| Total long term liabilities |
| 0 |
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| 0 | |
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| Total liabilities |
| 37,271 |
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| 35,334 | |
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| Stockholders' (Deficit) Equity |
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| Common stock, $.001 par value; 750,000,000 shares authorized, 8,505,000 shares issued and outstanding at March 31, 2012 and December 31, 2011 |
| 8,505 |
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| 8,505 |
| Additional paid in capital |
| 56,889 |
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| 56,889 | |
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| Deficit accumulated during the development stage |
| (102,665) |
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| (100,728) |
| Total stockholders' (deficit) equity |
| (37,271) |
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| (35,334) | |
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| Total liabilities and stockholders' (deficit) equity | $ | - |
| $ | - | |
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| See accompanying notes to financial statements
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Western Lucrative Enterprises, Inc.
(A Development Stage Enterprise)
Statement of Operations
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| For the period from July 14, 2008 (inception) to March 31, 2012 | |
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| Three months ended March 31, |
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| Revenue | $ | - |
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| Expenses |
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| General & administrative |
| 300 |
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| 1,930 |
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| 37,382 |
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| Professional fees |
| 1,500 |
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| 8,500 |
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| 64,392 |
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| Total expenses |
| 1,800 |
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| 10,430 |
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| 101,774 | |
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| Other income / (expense) |
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| Interest expense |
| (138) |
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| (138) |
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| (892) |
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| Total other income / (expense) |
| (138) |
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| (138) |
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| (892) | |
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| Net loss | $ | (1,938) |
| $ | (10,568) |
| $ | (102,666) | |
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| Basic and diluted loss per common share | $ | (0.01) |
| $ | (0.01) |
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| Weighted average shares outstanding |
| 8,505,000 |
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| 8,505,000 |
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See accompanying notes to financial statements
5
Western Lucrative Enterprises, Inc.
(a Development Stage Enterprise)
Statements of Cash Flows
For the period
from
July 14, 2008
3 Months Ended 3 Months Ended (inception) to
March 31 2012 March 31, 2011 March 31, 2012
Cash flows from operating activities
Net loss $ (1,938) $ (10,568) $ (102,666)
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 75 75 487
Changes in operating assets and liabilities:
Accounts payable 1,800 10,430 23,997
Accrued interest 63 63 405
Net cash used in 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 $ -- $ -- $ --
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See accompanying notes to financial statements
WESTERN LUCRATIVE ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Three Months Ended March 31, 2012
andfor the period of July 14, 2008 (inception) to March 31, 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 March 31, 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 March 31, 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 March 31, 2011.
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 March 31, 2012, the accrued interest amounts to $403. The note is convertible at the
WESTERN LUCRATIVE ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Three Months Ended March 31, 2012
andfor the period of July 14, 2008 (inception) to March 31, 2012
holder’soption 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 notepayable amount stands at $9,872 as of March 31, 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.
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 $102,666 since inception, which is attributable to
generaland 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.
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.
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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 March 31, 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.
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Our management has concluded that, as of March31, 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 March 31, 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.
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.
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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. SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS.
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 and Financial Officer Certification pursuant to section 302 of the Sarbanes-Ox1ey Act of2002
32.1 Chief Executive and Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of2002.
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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.
Date: June 12, 2012
By: /s/ Neville Pearson
Neville Pearson, President and CFO
(Principal Financial and Accounting Officer and duly authorized officer)
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