Delaware
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41-2254388
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(State or other jurisdiction of incorporation or formation)
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(I.R.S. employer identification number)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Page
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PART I – FINANCIAL INFORMATION:
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Item 1.
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Financial Statements:
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1
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Balance Sheets at July 31, 2010 (Unaudited) and October 31, 2009
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F-1
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Statements of Changes in Stockholder’s Deficit for the Period from Date of Inception (September 24, 2007) through July 31, 2010 (Unaudited)
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F-2
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Statements of Operations for the Three and Nine Months Ended July 31, 2010 and 2009 and for the Cumulative Period from September 24, 2007 (Inception) to July 31, 2010 (Unaudited)
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F-3
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Statements of Cash Flows for the Nine Months Ended July 31 2010 and 2009 and for the Cumulative Period from September 24, 2007 (Inception) to July 31 2010 (Unaudited)
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F-4
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Notes to Financial Statements
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F-5 - F-7
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Item 2.
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Management’s Discussion and Analysis or Plan of Operation
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2
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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3
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Item 4.
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Controls and Procedures
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3
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PART II – OTHER INFORMATION:
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Item 1.
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Legal Proceedings
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4
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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4
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Item 3.
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Defaults Upon Senior Securities
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4
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Item 4.
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Submission of Matters to a Vote of Security Holders
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4
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Item 5.
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Other Information
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4
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Item 6.
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Exhibits
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4
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Signatures
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5
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FINANCIAL REPORTS
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AT
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JULY 31, 2010
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Balance Sheets at July 31, 2010 (Unaudited) and October 31, 2009
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F-1
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Statement of Changes in Stockholder’s Deficit for the Period from Date of
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Inception (September 24, 2007) through July 31, 2010 (Unaudited)
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F-2
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Statements of Operations for the Three and Nine Months Ended July 31, 2010
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and 2009 and for the Period from Date of Inception (September 24, 2007)
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through July 31, 2010 (Unaudited)
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F-3
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Statements of Cash Flows for the Nine Months Ended July 31, 2010
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and 2009 and for the Period from Date of Inception (September 24, 2007)
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through July 31, 2010 (Unaudited)
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F-4
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Notes to Financial Statements
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F-5 – F-7
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AFH ACQUISITION III, INC.
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(A DEVELOPMENT STAGE COMPANY)
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(A DELAWARE CORPORATION)
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Beverly Hills, CA
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BALANCE SHEETS
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(Unaudited)
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July 31,
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October 31,
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2010
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2009
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ASSETS
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Cash and Cash Equivalents
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— | — | |||||||
Total Assets
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$ | — | $ | — | |||||
LIABILITIES AND STOCKHOLDER'S DEFICIT
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Liabilities
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Accrued Expenses
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$ | 2,881 | $ | 6,080 | |||||
Due to Parent
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12,661 | 6,581 | |||||||
Total Liabilities
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15,542 | 12,661 | |||||||
Stockholder's Deficit
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Preferred Stock: |
$.001 Par; 20,000,000 Shares Authorized,
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-0- Issued and Outstanding
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— | — | |||||||
Common Stock: |
$.001 Par; 100,000,000 Shares Authorized;
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5,000,000 Issued and Outstanding
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5,000 | 5,000 | |||||||
Additional Paid-In-Capital
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20,000 | 20,000 | |||||||
Deficit Accumulated During Development Stage
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(40,542 | ) | (37,661 | ) | |||||
Total Stockholder's Deficit
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(15,542 | ) | (12,661 | ) | |||||
Total Liabilities and Stockholder's Deficit
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$ | — | $ | — |
AFH ACQUISITION III, INC.
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(A DEVELOPMENT STAGE COMPANY)
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(A DELAWARE CORPORATION)
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Beverly Hills, CA
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STATEMENTS OF CHANGES IN STOCKHOLDER'S DEFICIT FOR THE PERIOD FROM
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DATE OF INCEPTION (SEPTEMBER 24, 2007) THROUGH JULY 31, 2010 - UNAUDITED
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Deficit
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Accumulated
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Common Stock
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Additional
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Stock
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During
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Total
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Number
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Paid-In
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Subscription
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Development
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Stockholder's
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of Shares
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Value
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Capital
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Receivable
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Stage
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Deficit
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Balance - September 24, 2007
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— | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Common Stock Issued for Cash
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5,000,000 | 5,000 | 20,000 | (4,900 | ) | — | 20,100 | |||||||||||||||||
Net Loss for the Period
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— | — | — | — | (21,859 | ) | (21,859 | ) | ||||||||||||||||
Balance - October 31, 2007
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5,000,000 | 5,000 | 20,000 | (4,900 | ) | (21,859 | ) | (1,759 | ) | |||||||||||||||
Cash Received for Stock Subscriptions
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— | — | — | 4,900 | — | 4,900 | ||||||||||||||||||
Net Loss for the Period
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— | — | — | — | (7,899 | ) | (7,899 | ) | ||||||||||||||||
Balance - October 31, 2008
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5,000,000 | 5,000 | 20,000 | — | (29,758 | ) | (4,758 | ) | ||||||||||||||||
Net Loss for the Period
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— | — | — | — | (7,903 | ) | (7,903 | ) | ||||||||||||||||
Balance - October 31, 2009
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5,000,000 | 5,000 | 20,000 | — | (37,661 | ) | (12,661 | ) | ||||||||||||||||
Net Loss for the Period
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— | — | — | — | (2,881 | ) | (2,881 | ) | ||||||||||||||||
Balance - July 31, 2010
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5,000,000 | $ | 5,000 | $ | 20,000 | $ | — | $ | (40,542 | ) | $ | (15,542 | ) |
AFH ACQUISITION III, INC.
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(A DEVELOPMENT STAGE COMPANY)
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(A DELAWARE CORPORATION)
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Beverly Hills, CA
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STATEMENTS OF OPERATIONS - UNAUDITED
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Period From
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Date of Inception
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For the Three Months Ended
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For the Nine Months Ended
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(September 24, 2007)
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July 31,
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July 31,
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Through
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2010
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2009
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2010
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2009
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July 31, 2010
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Revenues
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$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Expenses
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Consulting
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$ | — | $ | 250 | $ | — | $ | 728 | $ | 1,254 | ||||||||||
Interest
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— | 15 | — | 15 | 15 | |||||||||||||||
Legal and Professional
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725 | 500 | 2,756 | 5,908 | 37,121 | |||||||||||||||
Office Expenses
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— | 125 | — | 125 | 708 | |||||||||||||||
Organizational Costs
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— | — | — | 552 | 1,244 | |||||||||||||||
Total Expenses
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$ | 725 | $ | 890 | $ | 2,756 | $ | 7,328 | $ | 40,342 | ||||||||||
Net Loss for the Period Before Taxes
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$ | (725 | ) | $ | (890 | ) | $ | (2,756 | ) | $ | (7,328 | ) | $ | (40,342 | ) | |||||
Franchise Tax
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$ | — | $ | 75 | $ | 125 | $ | 75 | $ | 200 | ||||||||||
Net Loss for the Period After Taxes
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$ | (725 | ) | $ | (965 | ) | $ | (2,881 | ) | $ | (7,403 | ) | $ | (40,542 | ) | |||||
Loss per Share - Basic and Diluted
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||||
Weighted Average Common Shares Outstanding
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5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 |
(A DEVELOPMENT STAGE COMPANY)
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(A DELAWARE CORPORATION)
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Beverly Hills, CA
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STATEMENTS OF CASH FLOWS - UNAUDITED
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Period From
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Date of Inception
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For the Nine Months Ended
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(September 24, 2007)
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July 31,
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Through
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2010
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2009
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July 31, 2010
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Cash Flows from Operating Activities
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Net Loss for the Period
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$ | (2,881 | ) | $ | (7,403 | ) | $ | (40,542 | ) | |||
Changes in Assets and Liabilities:
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Prepaid Expenses
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— | 2,083 | — | |||||||||
Accrued Expenses
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(3,199 | ) | 2,980 | 2,881 | ||||||||
Net Cash Flows from Operating Activities
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(6,080 | ) | (2,340 | ) | (37,661 | ) | ||||||
Net Cash Flows from Investing Activities
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— | — | — | |||||||||
Cash Flows from Financing Activities
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Cash Advance by (Repayment to) Parent
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6,080 | 2,340 | 12,661 | |||||||||
Cash Proceeds from Stock Subscriptions
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— | — | 4,900 | |||||||||
Cash Proceeds from Sale of Stock
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— | — | 20,100 | |||||||||
Net Cash Flows from Financing Activities
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6,080 | 2,340 | 37,661 | |||||||||
Net Change in Cash and Cash Equivalents
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— | — | — | |||||||||
Cash and Cash Equivalents - Beginning of Period
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— | — | — | |||||||||
Cash and Cash Equivalents - End of Period
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$ | — | $ | — | $ | — | ||||||
Cash Paid During the Period for:
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Interest
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$ | — | $ | — | $ | — | ||||||
Franchise Taxes
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$ | — | $ | — | $ | — |
Note A –
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The Company
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AFH Acquisition III, Inc., a development stage company (the “Company”), was incorporated under the laws of the State of Delaware on September 24, 2007. The Company is 100% owned by AFH Holding & Advisory, LLC (the “Parent”). The financial statements presented represent only those transactions of AFH Acquisition III, Inc. The Company is looking to acquire an existing company or acquire the technology to begin operations.
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As a blank check company, the Company’s business is to pursue a business combination through acquisition, or merger with, an existing company. As of the date of the financial statements, the Company is not conducting negotiations with any target business. No assurances can be given that the Company will be successful in locating or negotiating with any target company.
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Since inception, the Company has been engaged in organizational efforts.
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The condensed financial statements of AFH Acquisition III, Inc., (the “Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the annual audited financial statements and the notes thereto included in the Company’s registration statement on Form 10-K and other reports filed with the SEC.
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The accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. Certain information that is not required for interim financial reporting purposes has been omitted.
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Note B –
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Summary of Significant Accounting Policies
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Method of Accounting
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The Company maintains its books and prepares its financial statements on the accrual basis of accounting.
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- continued -
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Note B –
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Summary of Significant Accounting Policies – continued
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Development Stage
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The Company has operated as a development stage enterprise since its inception by devoting substantially all of its efforts to financial planning, raising capital, research and development, and developing markets for its services. The Company prepares its financial statements in accordance with the requirements of FASB ASC 915 (Prior authoritative literature Statement of Financial Accounting Standards No. 7, “Accounting and Reporting by Development Stage Enterprises”).
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Cash and Cash Equivalents
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Cash and cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company maintains cash and cash equivalents at financial institutions, which periodically may exceed federally insured amounts.
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Loss Per Common Share
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Loss per common share is computed in accordance with FASB ASC 260-10 (Prior authoritative literature Statement of Financial Accounting Standards No. 128, “Earnings Per Share”), by dividing income (loss) available to common stockholders by weighted average number of common shares outstanding for each period.
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Use of Estimates
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The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results can differ from those estimates.
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Organizational Costs
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Organizational costs represent management, consulting, legal, accounting, and filing fees incurred to date in the formation of the company. Organizational costs are expensed as incurred in accordance with FASB ASC 720-15 (Prior authoritative literature Statement of Position 98-5, “Reporting on the Costs of Start-Up Activities”).
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Income Taxes
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The Company accounts for income taxes in accordance with FASB ASC 740-10 (Prior authoritative literature Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”), using the asset and liability approach, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of such assets and liabilities. This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences are expected to reverse and gives immediate effect to changes in income tax rates upon enactment. Deferred tax assets are recognized, net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards. Deferred income tax expense represents the change in net deferred assets and liability balances.
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Note B –
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Summary of Significant Accounting Policies – continued
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Financial Instruments
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The Company’s financial instruments consist of cash and due to parent. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying value, unless otherwise noted.
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Recent Pronouncements
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The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.
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Note C –
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Equity Securities
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Holders of shares of common stock shall be entitled to cast one vote for each common share held at all stockholder’s meetings for all purposes, including the election of directors. The common stock does not have cumulative voting rights.
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The preferred stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time.
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No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.
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Note D –
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Going Concern
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The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations. As a result, there is an accumulated deficit of $40,542 at July 31, 2010.
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The Company’s continued existence is dependent upon its ability to raise capital or acquire a marketable company. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
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Note E –
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Due to Parent
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Due to parent represents cash advances from AFH Holding & Advisory LLC. AFH Holding & Advisory LLC is the sole shareholder of the Company. There are no repayment terms.
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Note F –
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Subsequent Events
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On August 31, 2010, the Company elected Timothy J. Brasel to serve as Vice President of the Company, effectively immediately. The Company’s Board of Directors voted to expand the size of the Board from one person to two persons and then Timothy J. Brasel was elected to fill the vacancy on the Board effective immediately.
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Item 2.
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Management’s Discussion and Analysis or Plan of Operation.
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Item 3.
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Quantitative and qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures.
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Item 1.
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Legal Proceedings.
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds.
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Item 3.
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Defaults Upon Senior Securities.
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Item 4.
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Submission of Matters to a Vote of Security Holders.
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Item 5.
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Other Information.
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Item 6.
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Exhibits.
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AFH ACQUISITION III, INC.
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(Registrant)
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/s/ Amir F. Heshmatpour, President
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Amir F. Heshmatpour, President
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