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Zhong Ya International Ltd - Quarter Report: 2013 June (Form 10-Q)

Western Lucrative Enterprises

 



                             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, 2013

                                                 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.)


64 North Pecos, Suite 900

Henderson, NV 89074

(Address of Principal Executive Offices)


 

Registrant's telephone number, including area code: (760) 673-9430

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    X No

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        X No  

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.

X Yes     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," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

               Large Accelerated Filer                                                                                    Accelerated Filer


               Non-accelerated filer                                                                                                               X Smaller reporting company



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



As of June 30, 2013, there was no active trading market for the issuer's common stock, $.001 par value and therefore the value of shares held by affiliates cannot be ascertained.


The number of shares outstanding of the issuer's common stock, $.001 par value, as of June 30, 2013 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                                                                                   9                          

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                                                                                                                                                       11

Item 6.      Exhibits                                                                                                                                                                       11















2

                                                                         PART 1




ITEM 1.         FINANCIAL STATEMENTS


Financial Statements for the 3 month period ended June 30, 2013 have been prepared by the Management Group of Western Lucrative Enterprises, Inc.




3



 


 


 








 




 


 







 

 Western Lucrative Enterprises, Inc.

 

(A Development Stage Enterprise)

 

Balance Sheets

 








 



As of

 



June 30, 2013


Dec. 31, 2012

 

ASSETS

 








 

Current assets






 


Cash

$

               -


$

              -

 

Total current assets

 

               -


 

              -

 








 

Total assets

$

               -


$

              -

 








 

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 








 

Current liabilities






 


Accounts payable

$

1,360


$

     1,361

 


Accrued expense


4,000



     4,000

 


Accrued interest


903



         591

 


Related party loan (current portion)


7,500



7,500

 


Loan discount – Beneficial conversion feature


(7,500)



     (7,500)

 

Total current liabilities

 

        6,263


 

      5,952

 








 

Long term liabilities






 


Related party loan


10,000



      10,000

 

Total long term liabilities

 

      10,000


 

10,000

 








 

Total liabilities

 

      16,263


 

     15,952

 








 

Stockholders' (deficit) equity






 


Common stock, $0.001 par value; 75,000,000 shares authorized, 8,505,000 shares issued and outstanding as of June 30, 2013 and December 31, 2012


        8,505



       8,505

 


Additional paid in capital


      64,389



     64,389

 


Deficit accumulated during the development stage

 

     (89,002)


 

  (89,157)

 

Total stockholders' (deficit) equity

 

     (16,263)


 

     (15,952)

 








 

Total liabilities and stockholders' (deficit) equity

$

              -


$

              -

 








 

See accompanying notes to financial statements


4

 

 

Western Lucrative Enterprises, Inc.(A Development Stage Enterprise)

 

Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

For Period

 

 

 

 

 

 

 

 

 

 

From

 

 

 

 

 

 

 

 

 

 

July 11,

 

 

 

 

 

 

 

 

 

 

2008

 

 

 

 

 

 

 

 

 

 

(inception)

 

 

Three Months Ended

 

Six Months Ended

 

to

 

 

June 30,

 

June 30,

 

June 30,

 

 

2012

 

2011

 

2012

 

2011

 

2012

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

--

$

--

$

--

$

--

$

--

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

General & Administrative

 

-

 

300

 

--

 

600

 

37,682

Professional Fees

 

--

 

1,500

 

--

 

3,000

 

68,891

 

 

 

 

 

 

 

 

 

 

 

Total Expenses

 

--

 

1,800

 

--

 

3,600

 

106,573

 

 

 

 

 

 

 

 

 

 

 

Other Income /(expense)

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(156)

 

(138)

 

(312)

 

(275)

 

(1,520)

Total Other Income /(expense)

 

(156)

 

(138)

 

(312)

 

(275)

 

17,416

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(156)

$

(1,938)

$

(312)

$

(275)

$

(89,157)

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss Per Common Share

$

(0)

$

(0)

$

(0)

$

(0)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding

 

8,505,000

 

8,505,000

 

8,505,000

 

8,505,000

 

 




5


Western Lucrative Enterprises, Inc.

 

(A Development Stage Enterprise)

 

Statements of Cash Flows

 


6 Months Ended December 31,


For the Period July 14, 2008 (Inception) to June 30, 2013

 


2013


2012



 

Cash flows from operating activities









 

Net income / (loss)

$

      (312)


$

    (3,875)


$

      (89,157)

 

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



              616

 

Changes in operating assets and liabilities:









 

Accounts payable


     -



      3,600



         1,361

 

Accrued expense


         -



                -



           4,000

 

Accrued interest

 

               312


 

           125


 

              903

 

Net cash used in operating activities

 

               -


 

                -


 

       (42,625)

 










 

Cash flows from investing activities

 

                  -


 

                -


 

                  -

 










 

Cash flows from financing activities









 

Proceeds from related party loan


         -



                -



         17,500

 

Proceeds from issuance of stock

 

                 -


 

                -


 

         28,125

 

Net cash provided by financing activities

 

                 -


 

                -


 

         45,625

 

Net change in cash


                 -



                -



                  -

 

Cash at beginning of year

 

                 -


 

                -


 

                  -

 

Cash at end of year

$

                 -


$

                -


$

                  -

 

Supplemental disclosure of non-cash investing and financing activities:








 

Issuance of common stock for professional and consulting services

$

                 -


$

                -


$

         40,452

 

Issuance of convertible notes with beneficial conversion        feature

$

         -


$

                -


$

           7,500

 

Supplemental cash flow information:









 

Cash paid for interest

$

                 -


$

                -


$

                  -

 

Cash paid for income taxes

$

                 -


$

                -


$

                  -









 


 

 

                                             See accompanying notes to financial statements

6


WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Three Months Ended June 30, 2013

and for the period of July 14, 2008 (inception) to June 30, 2013



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, 2013, 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, 2012 audited financial statements. The results of operations for the periods ended June 30, 2013 and 2012 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, 2013.


NOTE 4 – RELATED PARTY TRANSACTIONS


The holder (Millenium Group, Inc.) of the $10,000 convertible note is owned by Jonathan Mork who is a son of Dempsey Mork, the owner of Orion Investment which holds more than 5% of the common shares from the Company.


The holder (Magellan Capital Partners) of the $6,000 convertible note is owned by Dempsey Mork owner of MCC Profit Sharing Plan which holds more than 5% of the common shares from the Company.


7


WESTERN LUCRATIVE ENTERPRISES, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Three Months Ended June 30, 2013

and for the period of July 14, 2008 (inception) to June 30, 2013



The holder (Savile Town Investments, Inc.) of the $1,500 convertible note is owned by Neville Pearson a Director of the Company and also its current President, Treasurer, and Secretary.


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 $89,157 since inception, which is attributable to

general and administrative expenses. The losses incurred for the six month period to June 30, 2013 and the three month period to June 30, 2013 were $312 and $156 respectively. These losses can be attributed to accrued interest on Convertible Notes. There are no General & Administrative expenses being incurred other than audit fees. The sole officer provides all necessary administrative services free of charge.

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.


8

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.


Convertible Notes to Magellan Capital Partner, Inc. and Savile Town Investments, Inc.  During the Year Ended December 31, 2012, the Company received service through issuing a total of $7,500 convertible notes to Magallen Capital Partners Inc. and Savile Town Investments, Inc. In exchanging for the $7,500 notes, the two lenders would have option to receive a total of 750,000 common shares by fully converting these shares at $0.01 per diluted common shares.


In accordance with ASC 470-20, Debt with conversions and other options, as the conversion price of the share is a fixed price at $0.01 per diluted common shares, the beneficial conversion features or BCF of these Notes were calculated based on the intrinsic value.  The fair value of the shares at the issuance date, December 31, 2012 was $0.52 and the BCF is $0.51 per share.  As the total BCF is greater than the total proceed of the $7,500 convertible notes, in accordance with ASC 470-20, the BCF is limited to the total proceed of the convertible notes which is $7,500.  We recorded the total convertible value of the notes issued to the Company in the amount of $7,500 as a debt discount upon issuance, and amortized this debt discount as interest expense over the life of the note. We recorded interest expense in the amount of $156.25 for the period ended June 30, 2013 in connection with these Notes.

9


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, 2013. 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, 2013, 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, 2013, 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.

                                                                                       

10

                                                                                      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, 2012.



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


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 of2002


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.



11


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: May 15, 2013

By: lsi 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 14, 2013

By: lsi Neville Pearson

Neville Pearson, President and Director

(Principal Executive Officer)



Date: May 15, 2013

By: lsi Neville Pearson

Neville Pearson, Chief Financial Officer

(Principal Financial and Accounting Officer)









12