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EX-31.1 - Grace 3, Inc. | v171267_ex31-1.htm |
EX-32.1 - Grace 3, Inc. | v171267_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
10-Q
(Mark
One)
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
quarterly period ended November 30, 2009
OR
o
|
TRANSACTION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period
from ___________________________ to ___________________________
Commission
file number: 000-52063
GRACE
3, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
|
20-3708559
|
|
(State of Other Jurisdiction of Incorporation or
Organization)
|
(I.R.S. Employer Identification Number)
|
|
735 Broad Street, Suite 400
Chattanooga, TN
|
37402
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(423) 265-5062
(Registrant’s
Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
Copies
to:
The
Sourlis Law Firm
Virginia
K. Sourlis, Esq.
214 Broad
Street
Red Bank,
New Jersey 07701
T: (732)
530-9007
F: (732)
530-9008
www.SourlisLaw.com
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 o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer,”
"non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
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 o
Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.
As of
January 14, 2010, there were 100,000 shares of common stock outstanding and no
shares of preferred stock outstanding.
GRACE 3,
INC.
A
DEVELOPMENT STAGE COMPANY
INDEX
November
30, 2009
TABLE
OF CONTENTS
Page
|
||
PART
I – FINANCIAL INFORMATION
|
||
Item
1.
|
Financial
Statements
|
3
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Plan
of Operations
|
9
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
11
|
Item
4T.
|
Controls
and Procedures
|
12
|
PART
II – OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
12
|
Item
1A.
|
Risk
Factors
|
12
|
Item
2.
|
Unregistered
Sale of Equity Securities and Use of Proceeds
|
12
|
Item
3.
|
Defaults
Upon Senior Securities
|
12
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
12
|
Item
5.
|
Other
Information
|
12
|
Item
6.
|
Exhibits
|
13
|
SIGNATURES
|
13
|
2
PART
I
Item
1. Financial Statements.
GRACE 3,
INC.
A
DEVELOPMENT STAGE COMPANY
BALANCE
SHEETS
November
30,
2009
|
5/31/2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Assets
|
||||||||
Total
Assets
|
$ | - | $ | - | ||||
Liabilities
and Stockholders’ Equity (Deficit)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
7,025 | 4,500 | ||||||
Due
to shareholder
|
27,938 | 16,075 | ||||||
Total
liabilities
|
34,963 | 20,575 | ||||||
Commitment
and contingencies
|
- | - | ||||||
Stockholders’
equity (deficit)
|
||||||||
Preferred
stock $.0001 par value, authorized 10,000,000 shares, none
issued
|
||||||||
Common
stock, $.0001 par value, authorized 100,000,000 shares 100,000 issued
and Outstanding
|
10 | 10 | ||||||
Additional
paid-in capital
|
9,784 | 9,784 | ||||||
Deficit
accumulated during the developmental stage
|
(44,757 | ) | (30,369 | ) | ||||
Total
stockholders’ equity (deficit)
|
(34,963 | ) | (20,575 | ) | ||||
$ | $ |
3
GRACE 3,
INC.
A
DEVELOPMENT STAGE COMPANY
STATEMENTS
OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE
PERIOD OCTOBER 27, 2005 (INCEPTION) TO NOVEMBER 30, 2009
(Unaudited)
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
During the
|
Stockholders'
|
||||||||||||||||||
Common Stock
|
Paid-In
|
Development
|
Equity
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
(Deficit)
|
||||||||||||||||
Balance-October
27, 2005
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Issuance
of common shares
|
100,000 | 10 | 90 | - | 100 | |||||||||||||||
Net
loss
|
- | - | - | (100 | ) | (100 | ) | |||||||||||||
Balance,
June 02, 2006(1)
|
100,000 | 10 | 90 | (100 | ) | - | ||||||||||||||
Capital
contributions-shareholder
|
- | - | 2,694 | - | 2,694 | |||||||||||||||
Net(loss)
|
- | - | - | (5,194 | ) | (5,194 | ) | |||||||||||||
Balance,
May 31, 2007
|
100,000 | 10 | 2,784 | (5,294 | ) | (2,500 | ) | |||||||||||||
Capital
contributions-shareholder
|
- | 5,000 | - | 5,000 | ||||||||||||||||
Net(loss)
|
(4,500 | ) | (4,500 | ) | ||||||||||||||||
Balance,
May 31, 2008
|
100,000 | 10 | 7,784 | (9,794 | ) | (2,000 | ) | |||||||||||||
Capital
contributions-shareholder
|
2,000 | 2,000 | ||||||||||||||||||
Net(loss)
|
(20,575 | ) | (20,575 | ) | ||||||||||||||||
Balance,
May 31, 2009
|
100,000 | 10 | 9,784 | (30,369 | ) | (20,575 | ) | |||||||||||||
Capital
contributions-shareholder
|
||||||||||||||||||||
Net(loss)
|
(14,388 | ) | (14,388 | ) | ||||||||||||||||
Balance,
November 30, 2009
|
100,000 | $ | 10 | $ | 9,784 | $ | (44,757 | ) | $ | (34,963 | ) |
(1)
|
Restated
for comparison purposes
|
The
financial information presented herein has been prepared by management without
audit by independent certified public accountants.
The
accompanying notes should be read in conjunction with the financial
statements.
4
GRACE 3,
INC.
A
DEVELEOPMENT STAGE COMPANY
STATEMENT
OF OPERATIONS
For the three
|
For the three
|
For the six
|
||||||||||
months ended
|
months ended
|
months ended
|
||||||||||
November 30, 2009
|
November 30, 2008
|
November 30, 2009
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
Net
Sales
|
$ | - | $ | - | $ | - | ||||||
Cost
of sales
|
- | - | - | |||||||||
Gross
profit
|
- | - | - | |||||||||
General
and administrative expenses
|
3,525 | 2,000 | 14,388 | |||||||||
Net
loss
|
(3,525 | ) | (2,000 | ) | (14,388 | ) | ||||||
Weighted
average number of common shares
|
||||||||||||
Outstanding
(basic and fully diluted)
|
100,000 | 100,000 | 100,000 | |||||||||
Basic
and diluted (loss) per common share
|
$ | (0.035 | ) | (0.020 | ) | (0.144 | ) |
5
GRACE 3,
INC.
A
DEVELEOPMENT STAGE COMPANY
STATEMENT
OF OPERATIONS
For the period
|
||||||||
For the six
|
October 27, 2005
|
|||||||
months ended
|
(Inception) to
|
|||||||
November 30, 2008
|
November 30, 2009
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Net
sales
|
$ | - | $ | - | ||||
Cost
of sales
|
- | - | ||||||
Gross
Profit
|
- | - | ||||||
General
and administrative expense
|
10,500 | 44,757 | ||||||
Net
loss
|
(10,500 | ) | (44,757 | ) | ||||
Weighted
average number of common shares
|
||||||||
Outstanding
(basic and fully diluted)
|
100,000 | 100,000 | ||||||
Basic
and diluted (loss) per common share
|
$ | (0.105 | ) | $ | (0.448 | ) |
The
financial information presented herein has be prepared by management without
audit by independent certified public accountants.
The
accompanying notes should be read in conjunction with the financial
statements.
6
GRACE 3,
INC.
A
DEVELOPMENT STAGE COMPANY
STATEMENT
OF CASH FLOWS
For the three
|
For the three
|
For the six
|
||||||||||
months ended
|
months ended
|
months ended
|
||||||||||
November 30, 2009
|
November 30, 2008
|
November 30, 2009
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
Cash
flows from operating activities
|
||||||||||||
Net
(loss)
|
$ | (3,525 | ) | $ | (2,000 | ) | $ | (14,388 | ) | |||
Adjustments
to reconcile net (loss) to net cash
|
||||||||||||
Used
in operating activities:
|
||||||||||||
(Increase)
decrease in prepaid expenses
|
||||||||||||
Increase
(decrease) in accounts payable
|
(375 | ) | (5,750 | ) | 2,525 | |||||||
Net
cash (used in) operating activities
|
(3,900 | ) | (7,750 | ) | (11,863 | ) | ||||||
Cash
flows from financing activities
|
||||||||||||
Proceeds
from shareholders loan
|
3,900 | 7,750 | 11,863 | |||||||||
Proceeds
from issuance of common stock
|
||||||||||||
Proceeds
from additional capital contributions
|
||||||||||||
Net
cash provided by financing activities
|
- | - | - | |||||||||
Net
increase in cash and cash equivalents
|
- | - | - | |||||||||
Cash-beginning
of period
|
- | - | ||||||||||
Cash-end
of period
|
$ | - | $ | - | $ | - | ||||||
Supplemental
disclosure of cash flow information:
|
||||||||||||
Taxes
paid
|
- | - | - | |||||||||
Interest
paid
|
- | - | - |
7
GRACE 3,
INC.
A
DEVELOPMENT STAGE COMPANY
STATEMENT
OF CASH FLOWS
For
the period
|
||||||||
For
the six
|
October
27, 2005
|
|||||||
months
ended
|
(Inception)
to
|
|||||||
November
30, 2008
|
November
30, 2009
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Cash
flows from operating activities
|
$ | (10,500 | ) | $ | (44,757 | ) | ||
Net
(loss)
|
||||||||
Adjustments
to reconcile net (loss) to net cash
|
||||||||
Used
in operating activities:
|
||||||||
(Increase)
decrease in prepaid expenses
|
||||||||
Increase
(decrease) in accounts payable
|
750 | 7,025 | ||||||
Net
cash (used in) operating activities
|
(9,750 | ) | (37,732 | ) | ||||
Cash
flows from financing activities
|
||||||||
Proceeds
from shareholders loan
|
7,750 | 27,938 | ||||||
Proceeds
from issuance of common stock
|
10 | |||||||
Proceeds
from additional capital contributions
|
2,000 | 9,784 | ||||||
Net
cash provided by financing activities
|
9,750 | 37,732 | ||||||
Net
cash provided by financing activities
|
- | - | ||||||
Net
increase in cash and cash equivalents
|
- | - | ||||||
Cash-beginning
of period
|
- | |||||||
Cash-end
of period
|
$ | - | $ | - | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Taxes
paid
|
- | - | ||||||
Interest
paid
|
- | - |
8
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
Forward-Looking
Statements
This
Report contains statements that we believe are, or may be considered to be,
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than statements of
historical fact included in this Report regarding the prospects of our industry
or our prospects, plans, financial position or business strategy, may constitute
forward-looking statements. In addition, forward-looking statements generally
can be identified by the use of forward-looking words such as “may,” “will,”
“expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,”
“plans,” “forecasts,” “continue” or “could” or the negatives of these terms or
variations of them or similar terms. Furthermore, such forward-looking
statements may be included in various filings that we make with the SEC or press
releases or oral statements made by or with the approval of one of our
authorized executive officers. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot assure
you that these expectations will prove to be correct. These forward-looking
statements are subject to certain known and unknown risks and uncertainties, as
well as assumptions that could cause actual results to differ materially from
those reflected in these forward-looking statements. Readers are cautioned not
to place undue reliance on any forward-looking statements contained herein,
which reflect management’s opinions only as of the date hereof. Except as
required by law, we undertake no obligation to revise or publicly release the
results of any revision to any forward-looking statements. You are advised,
however, to consult any additional disclosures we make in our reports to the
SEC. All subsequent written and oral forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirety by
the cautionary statements contained in this Report.
Plan
of Operation; Going Concern
The
Company has not realized any revenues from operations since inception, and its
plan of operation for the next twelve months is to locate a suitable acquisition
or merger candidate and consummate a business combination. The Company may need
additional cash advances from its stockholder or loans from other parties to pay
for operating expenses until the Company consummates a merger or business
combination with a privately-held operating company. Although it is currently
anticipated that the Company can satisfy its cash requirements with additional
cash advances or loans from other parties, if needed, for at least the next
twelve months, the Company can provide no assurance that it can continue to
satisfy its cash requirements for such period.
Since our
formation on October 27, 2005 through the date of this filing, our purpose has
been to effect a business combination with an operating business which we
believe has significant growth potential. We are currently considered to be a
“blank check” company in as much as we have no specific business plans, no
operations, revenues or employees. We currently have no definitive agreements or
understanding with any prospective business combination candidates and have not
targeted any business for investigation and evaluation nor are there any
assurances that we will find a suitable business with which to combine. The
implementation of our business objectives is wholly contingent upon a business
combination and/or the successful sale of securities in the
company.
Management
anticipates seeking out a target company through solicitation. Such solicitation
may include newspaper or magazine advertisements, mailings and other
distributions to law firms, accounting firms, investment bankers, financial
advisors and similar persons, the use of one or more Internet websites and
similar methods. No estimate can be made as to the number of persons who will be
contacted or solicited. Management may engage in such solicitation directly or
may employ one or more other entities to conduct or assist in such solicitation.
Management and its affiliates will pay referral fees to consultants and others
who refer target businesses for mergers into public companies in which
management and its affiliates have an interest. Payments are made if a business
combination occurs, and may consist of cash or a portion of the stock in the
Company retained by management and its affiliates, or both.
The
Company’s management will supervise the search for target companies as potential
candidates for a business combination. The Company may enter into agreements
with other consultants to assist in locating a target company and may share
stock received by it or cash resulting from the sale of its securities with such
other consultants.
As a
result of our limited resources, we expect to effect only a single business
combination. Accordingly, the prospects for our success will be entirely
dependent upon the future performance of a single business. Unlike certain
entities that have the resources to consummate several business combinations or
entities operating in multiple industries or multiple segments of a single
industry, we will not have the resources to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses. A target business
may be dependent upon the development or market acceptance of a single or
limited number of products, processes or services, in which case there will be
an even higher risk that the target business will not prove to be commercially
viable.
Our
officers and directors are only required to devote a very limited portion of
their time to our affairs on a part-time or as-needed basis. We expect to use
outside consultants, advisors, attorneys and accountants as necessary, none of
which will be hired on a retainer basis. We do not anticipate hiring any
full-time employees so long as we are seeking and evaluating business
opportunities.
9
We expect
our present management to play no managerial role in the Company following a
merger or business combination. Although we intend to scrutinize closely the
management of a prospective target business in connection with our evaluation of
a business combination with a target business, our assessment of management may
be incorrect. We cannot assure you that we will find a suitable business with
which to combine.
Changes
in Control of Registrant
On July
7, 2008 (the “Effective Date”), pursuant to the terms of a Stock Purchase
Agreement (the “Agreement”), Broad Street Ventures, LLC, a limited liability
company formed in the State of Colorado (“BSV”) purchased a total of 96,000
shares of the issued and outstanding common stock of Grace 3, Inc., a Delaware
corporation (the “Company”), from Getting You There, LLC, the sole shareholder
of the Company (“GYT”). The total of 96,000 shares represents 96% of the shares
of outstanding common stock of the Company (the “Acquisition”).
Also, as
part of the Acquisition and pursuant to the Agreement, the following changes to
the Company’s directors and officers occurred:
|
·
|
Virginia
K. Sourlis resigned as the Company’s President, Chief Executive Officer,
Chief Financial Officer and Secretary and Sole Director effective July 18,
2008
|
|
·
|
As
of July 18, 2008, Douglas Dyer was appointed as the Company’s President
and Sole Director.
|
Results
of Operations
General. The Company has not
conducted any active operations since inception, except for its efforts to
locate a suitable acquisition or merger transaction. No revenue has been
generated by the Company during such period, and it is unlikely the Company will
have any revenues unless it is able to effect an acquisition of or merger with
another operating company, of which there can be no assurance.
Assets. At November 30, 2009,
the Company had $0 in assets, compared to $0 at May 31, 2009.
Liabilities. At November
30, 2009, the Company had $34,963 in total liabilities. At May 31, 2009, the
Company had total liabilities of $20,575. Total liabilities consisted of
Accounts Payable and Amounts due to a Shareholder. The Accounts Payable consists
of legal and accounting fees accrued for the preparation and filing the
Registration Statement on Form 10-SB filed on June 19, 2006 and annual and
quarterly reports filed since the effectiveness of such registration statement.
Accounts Payable increased from $4,500 at May 31, 2009 to $7,025 at November 30,
2009. Amounts due to a Shareholder increased from $16,075 at May 31,
2009 to $27,938 at November 30, 2009.
Comparison
of Three Months Ended November 30, 2009 to November 30, 2008
Revenues. For the three
months ended November 30, 2009 and November 30, 2008 and for the period from
October 27, 2005 (Inception) to November 30, 2009, the Company had no activities
that produced revenues from operations.
Net Loss. For the
three month periods ended November 30, 2009 and November 30, 2008, the Company
had a net loss of $3,525 and $2,000, respectively. From the Company’s date of
inception (October 27, 2005) to November 30, 2009, the Company had net losses of
$44,757. These losses were mostly due to legal, accounting, audit and other
professional service fees incurred in relation to the filing of the Company’s
Registration Statement on Form 10-SB filed on June 19, 2006 and annual and
quarterly reports filed since the effectiveness of such registration
statement.
General and Administrative
Expenses. For the three months ended November 30, 2009 and November 30,
2008, the Company had general and administrative expenses of $3,525 and $2,000,
respectively. From the Company’s date of inception (October 27, 2005) to
November 30, 2009, the Company had general and administrative expenses of
$44,757. These expenses were due to legal, accounting, audit and other
professional service fees incurred in relation to the filing of the Company’s
Registration Statement on Form 10-SB filed on June 19, 2006 and annual and
quarterly reports filed since the effectiveness of such registration
statement.
Comparison
of Six Months Ended November 30, 2009 to November 30, 2008
Revenues. For the six months
ended November 30, 2009 and November 30, 2008 and for the period from October
27, 2005 (Inception) to November 30, 2009, the Company had no activities that
produced revenues from operations.
Net Loss. For the
six month periods ended November 30, 2009 and November 30, 2008, the Company had
a net loss of $14,388 and $10,500, respectively. From the Company’s date of
inception (October 27, 2005) to November 30, 2009, the Company had net losses of
$44,757. These losses were mostly due to legal, accounting, audit and other
professional service fees incurred in relation to the filing of the Company’s
Registration Statement on Form 10-SB filed on June 19, 2006 and annual and
quarterly reports filed since the effectiveness of such registration
statement.
10
General and Administrative
Expenses. For the three months ended November 30, 2009 and November 30,
2008, the Company had general and administrative expenses of $3,525 and $2,000,
respectively. From the Company’s date of inception (October 27, 2005) to
November 30, 2009, the Company had general and administrative expenses of
$44,757. These expenses were due to legal, accounting, audit and other
professional service fees incurred in relation to the filing of the Company’s
Registration Statement on Form 10-SB filed on June 19, 2006 and annual and
quarterly reports filed since the effectiveness of such registration
statement.
Liquidity
and Capital Resources
At
November 30, 2009, the Company had $0 in total assets. At May 31, 2009, the
Company had $0 in total assets. The Company’s current liabilities at November
30, 2009 and at May 31, 2009, totaled $34,963 and $20,575, respectively,
comprised of accounts payable and advances/loans from
shareholders’.
The
following is a summary of the Company's cash flows from operating, investing,
and financing activities:
For the
Six Months Ended November 30, 2009 and November 30, 2008 and
The
Period from (October 27, 2005) Date of Inception to November 30,
2009
|
For the Six Months Ended
November 30,
|
Period from
October 27,
2005 to
November 30,
|
||||||||||
|
2009
|
2008
|
2009
|
|||||||||
Net
Cash (Used In)
Operating Activities
|
$ | 11,863 | $ | 9,750 | $ | 37,732 | ||||||
Investing
Activities
|
$ | 0 | $ | 0 | $ | 0 | ||||||
Net
Cash Provided from Financing
Activities
|
$ | 11,683 | $ | 9,750 | $ | 37,732 | ||||||
Net
Effect on Cash
|
$ | 0 | $ | 0 | $ | 0 |
The
Company has no assets and has generated no revenues since inception. The Company
is also dependent upon the receipt of capital investment or other financing to
fund its ongoing operations and to execute its business plan of seeking a
combination with a private operating company. If continued funding and capital
resources are unavailable at reasonable terms, the Company may not be able to
implement its plan of operations.
At
November 30, 2009, the Company had no capital resources to fund administrative
expenses pending acquisition of an operating company. The Company has not
realized any revenues from operations since inception, and its plan of operation
for the next twelve months is to locate a suitable acquisition or merger
candidate and consummate a business combination. There is substantial doubt that
we will continue as a going concern. The Company may need additional cash
advances from its stockholder or loans from other parties to pay for operating
expenses until the Company consummates a merger or business combination with a
privately-held operating company. Although it is currently anticipated that the
Company can satisfy its cash requirements with additional cash advances or loans
from other parties, if needed, for at least the next twelve months, the Company
can provide no assurance that it can continue to satisfy its cash requirements
for such period.
Off-Balance
Sheet Arrangements
The
Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company’s financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
Going
Concern
The
Company’s financial statements have been presented on the basis that it is a
going concern in the development stage, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. As
of the date of these financial statements, the Company has made no efforts to
identify a possible business combination.
The
Company’s shareholder shall fund the Company’s activities while the Company
takes steps to locate and negotiate with a business entity through acquisition,
or merger with, an existing company; however, there can be no assurance these
activities will be successful. These matters raise substantial doubt about
the Company’s ability to continue as a going concern.
Item 3. Quantitative and Qualitative
Disclosures about Market Risk
N/A.
11
Item
4T. Controls and Procedures.
Evaluation
of Controls and Procedures.
In
accordance with Exchange Act Rules 13a-15 and 15d-15, our management is required
to perform an evaluation under the supervision and with the participation of the
Company’s management, including the Company’s principal executive officer and
principal financial officer, of the effectiveness of the design and operation of
the Company’s disclosure controls and procedures as of the end of the
period.
Evaluation
of Disclosure Controls and Procedures
Based on
their evaluation of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of November 30, 2009, our
Principal Executive Officer and Principal Financial Officer have concluded that
our disclosure controls and procedures were not effective to
ensure that the information required to be disclosed by us in this Report was
(i) recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and instructions for Form 10-Q.
Our
Principal Executive Officer and Principal Financial Officer have concluded that
our disclosure controls and procedures had the following
deficiency:
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●
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We
were unable to maintain any segregation of duties within our business
operations due to our reliance on a single individual fulfilling the role
of sole officer and director. While this control deficiency did not result
in any audit adjustments to our 2007 through 2009 interim or annual
financial statements, it could have resulted in a material misstatement
that might have been prevented or detected by a segregation of duties.
Accordingly we have determined that this control deficiency constitutes a
material weakness.
|
To the
extent reasonably possible, given our limited resources, our goal is, upon
consummation of a merger with a private operating company, to separate the
responsibilities of principal executive officer and principal financial officer,
intending to rely on two or more individuals. We will also seek to expand our
current board of directors to include additional individuals willing to perform
directorial functions. Since the recited remedial actions will require that we
hire or engage additional personnel, this material weakness may not be overcome
in the near term due to our limited financial resources. Until such remedial
actions can be realized, we will continue to rely on the advice of outside
professionals and consultants.
Changes
in Internal Controls.
No change
in our internal control over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended
November 30, 2009 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
PART
II
OTHER
INFORMATION
Item
1. Legal Proceedings.
The
Company is currently not a party to any pending legal proceedings and no such
action by or to the best of its knowledge, against the Company has been
threatened.
Item
1A. Risk Factors.
N/A.
Item
2. Unregistered Sale of Equity Securities and Use of Proceeds.
On
October 27, 2005, the Company issued 100,000 shares of common stock for total
consideration of $100 to the sole shareholder of the Company under the exemption
from registration afforded the Company under Section 4(2) of the Securities Act
of 1933, as amended due to the fact that the issuance did not involve a public
offering of securities.
Item
3. Defaults Upon Senior Securities.
None.
Item
4. Submission of Matters to a Vote of Security Holders.
None.
Item
5. Other Information.
None
12
Item
6. Exhibits.
Exhibit No.
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|
Description
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*3.1
|
Certificate
of Incorporation, as filed with the Delaware Secretary of State on October
27, 2005.
|
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*3.2
|
Bylaws
|
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31.1
|
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Certification
by Douglas A. Dyer, the Principal Executive Officer and Principal
Financial Officer of Grace 3, Inc., pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
32.1
|
|
Certification
by Douglas A. Dyer, the Principal Executive Officer and Principal
Financial Officer of Grace 3, Inc., pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
* Filed
as an exhibit to the Company’s Registration Statement on Form 10-SB (File No.
000-52061), as filed with the Securities and Exchange Commission on June 19,
2006, and incorporated herein by this reference.
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: January
14, 2010
GRACE
3, INC.
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By: /s/ DOUGLAS A. DYER
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Douglas
A. Dyer
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President
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(Principal
Executive Officer)
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(Principal
Financial Officer)
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13