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EX-32.1 - CERTIFICATION OF CEO AND CFO - Omni Ventures, Inc. | f10k2009ex32i_omni.htm |
EX-31.1 - CERTIFICATION OF CEO AND CFO - Omni Ventures, Inc. | f10k2009ex31i_omni.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-K
|
x
ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended September 30, 2009
OR
|
o
TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
OMNI
VENTURES, INC.
(Exact
name of registrant as specified in the Charter)
KANSAS
|
333-156263
|
26-3404322
|
||
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
File No.)
|
(IRS
Employee Identification No.)
|
15875
S. Cherry Ct, Suite 1
Olathe,
Kansas 66062
(Address
of Principal Executive Offices) (Zip Code)
(913)
681-8193
(Registrants
Telephone number, including area code)
Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.
Yes o No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.
Yes o No x
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x
No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Date 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 period that the
registrant was required to submit and post such
files). Yes o No o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x
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” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act (Check one):
Large
accelerated
filer ¨
|
Accelerated
filer
¨
|
|
Non-accelerated
filer
¨ (Do
not check if a smaller reporting company)
|
Smaller
reporting
company x
|
Indicate
by a check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act): Yes o No x
The
aggregate market value of the voting stock, par value $0.0001 per
share, held by non-affiliates of the registrant on September 30, 2009
(the last business day of the registrant’s most recently completed fourth fiscal
quarter), computed by the average bid and asked price as of September 30, 2009,
at which the stock was sold, was $10,267,517 assuming solely for purposes of
this calculation that all directors and executive officers of the issuer are
“affiliates.” This determination of affiliate status is not
necessarily a conclusive determination for other
purposes.
The
number of shares outstanding of the Registrant’s common stock as of September
30, 2009: 102,675,172 shares of common stock.
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements in this report, including statements in the following discussion, may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. This report on Form 10-K contains
forward-looking statements concerning Omni Ventures Inc. (“Omni,” the “Company”
or the “Group”) and its subsidiaries and its future operations, plans and other
matters. Any statements that involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using phrases such as “expects”,
or “does not expect”, “is expected”, “anticipates” or “does not anticipate”,
“plans”, “estimates” or “intends”, or stating that certain actions, events or
results “may”, “could”, “might”, or “will” be taken or occur or be achieved) are
not statements of historical fact and may be “forward looking
statements.”
The
Company cautions readers regarding certain forward-looking statements in this
document and in all of its communications to shareholders and others, including
press releases, securities filings, and all other communications. Omni also
cautions readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. Such forward-looking
statements are based on the beliefs of Omni’s management as well as on
assumptions made by and information currently available to WLG at the time such
statements were made. Forward-looking statements are subject to a variety of
risks and uncertainties which could cause actual events or results to differ
from those reflected in the forward-looking statements. Actual results could
differ materially from those projected in the forward-looking statements, as a
result of either the matters set forth or incorporated in this report generally
or certain economic and business factors, some of which may be beyond the
control of Omni. These factors include adverse economic conditions, entry of new
and stronger competitors, inadequate capital, unexpected costs, failure to gain
or maintain approvals for the sale and expansion of Omni's services in the
jurisdictions where Omni conducts its business or the failure to capitalize upon
access to new markets and those factors referred to in this Report on Form S-1
for the year ended September 30, 2009. Omni disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.
i
TABLE
OF CONTENTS
PART
I
|
||
ITEM 1. | BUSINESS | 1 |
ITEM 1A. | RISK FACTORS | 2 |
ITEM
1B.
|
UNRESOLVED
STAFF COMMENTS
|
10 |
ITEM
2.
|
PROPERTIES
|
10 |
ITEM
3.
|
LEGAL
PROCEEDINGS
|
10 |
PART
II
|
||
ITEM
4.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITES
|
10 |
ITEM
5.
|
SELECTED
FINANCIAL DATA
|
11 |
ITEM
6.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
11 |
ITEM
6A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
18 |
ITEM
7.
|
FIANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
|
ITEM
8.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
19 |
ITEM 8A | CONTROLS AND PROCEDURES | 19 |
ITEM
8B.
|
OTHER
INFORMATION
|
19 |
PART
III
|
||
ITEM
9.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
20 |
ITEM
10.
|
EXECUTIVE
COMPENSATION
|
21 |
ITEM
11.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
22 |
ITEM
12.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
22 |
ITEM
13.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
22 |
PART
IV
|
||
ITEM
14.
|
EXHIBITS
LIST AND FINANCIAL STATEMENT SCHEDULES
|
23 |
SIGNATURES
|
24 | |
ii
GENERAL
We were
incorporated in August 2008 in the State of Kansas. We plan to provide equity
funding for commercial and recreational projects in the Mid-west and Western
areas of the United States, with specialization in two different categories. One
is apartment projects to house employees that work for gaming and supporting
businesses. The other is recreational activities geared at family oriented
activities. Our founder and Chief Executive Officer, Hollis Cunningham, has been
active in the development of commercial projects for over forty years and has
extensive knowledge and experience in this field.
Our
primary goal is to provide housing and recreational activities that complement
the Native American gaming activities in the area. We believe that tourism in
these areas is becoming more oriented toward family activities. Our management
believes investment in these types of projects appropriately meets the market
need in these areas.
Market
research shows a continued and steady increase in tourism in the targeted areas,
especially in family oriented activities.
Our
management believes the increasing popularity of tourism in these areas is due
in part to demographic and social trends. Annual reports from Chamber of
Commerce and marketing news agencies in these areas indicate a steady trend
toward combining adult gaming with family activities such as winter sports,
water parks, and indoor fun centers.
We are
currently negotiating with several Tribes on various projects and have had
positive input from them. We are working on our web site which will provide
quick response for new customers.
We also
intend to engage Three Fires Development Group, Inc. to assist us in the
introduction of our Company to potential customers and to assist in negotiating
Joint Venture Agreements with them. Three Fires has vast experience in the
development arena and enjoys an excellent reputation with the Native American
Tribes.
Over the
next year our plan is to negotiate joint venture agreements with the Nambe
Pueblo, Santa Fe, New Mexico, Moapa, Las Vegas, Nevada, and the Ysleta Del Sur,
El Paso, Texas. At this time negotiations on these projects are underway and
response has been positive.
We have
budgeted $250,000 over the next year for general expenses. This budget covers
marketing expenses ($60,000), legal and consulting fees ($140,000),
infrastructure fees ($20,000) and due diligence fees ($30,000).
We expect
the first year total cost of marketing and advertising to be $60,000. As
projects come on line we anticipate interest from other Tribes for assistance in
additional projects. We anticipate that new projects will offset any additional
general and marketing costs.
At the
end of the first year we plan to make an assessment on the first year of
operations. By that time we anticipate having additional projects contracted for
funding for the following year.
If we are
unable to effectively market and fund these projects we may have to suspend or
cease our efforts. If we cease our previously stated efforts we do not have
plans to pursue other business opportunities. If we cease operations investors
will not receive any return on their investments.
1
THE
MARKET
Due to
the continued growth and expansion of the gaming and related business activities
in these areas, we believe there will be a continued demand for competitively
priced housing. As an example, the Company is currently negotiating with the
Nambe Pueblo Tribe in Santa Fe, New Mexico to fund a 240 unit apartment project
and an elaborate water park. The project is adjacent and complimentary to the
recently opened Buffalo Thunder Resort-Casino. Buffalo Thunder, at a cost of
several hundred million dollars, is one of the largest Resort-Casinos in New
Mexico and is currently hiring over one thousand employees to manage the
operation.
We
believe that the apartment project and the water park will be a value added
business investment for the local market as well as the Nambe
Pueblo.
These
projects are to be located on Native American Indian tribal land. Our plan,
which is supported by preliminary discussions, is that a lease for the
designated land needed for each project will be negotiated in favor of the
operating entity and subordinated to the Omni Joint Venture Agreement. Since
Native American Indian Tribes do not pay Federal income taxes, real estate
taxes, or State and local taxes, it is our view that these projects are much
safer and more profitable than typical, more conventional ventures.
COMPETITION
The
competition in this marketplace is strong. Many local banks as well as national
banks compete for the financing on these projects. Also, there are many
developers that offer design-build as well as financing for these projects. In
addition, there are several investment and venture capital companies such as
Western International Securities, Inc. Western is well capitalized and has a
long track record in financing procurement and capital investment in this
market. These companies compete directly with us for the financing and equity
capital for these projects. They have substantially greater capital resources,
marketing experience, and more extensive relationships with various Tribes than
we do.
We
believe, however, that our knowledge of the business, previous performance, and
reputation in the industry gives us a competitive edge in the
marketplace.
MARKETING
We are a
new, start-up, company and have not yet commenced any marketing programs. Due to
the nature of our business, we will not use national advertising or promotions.
Instead, we will utilize a direct marketing campaign primarily designed to meet
the needs of Native American developments.
Our
marketing campaign will focus on our web site, annual Tribal conferences, direct
point of contact marketing, and the use of marketing and development companies
with a proven track record in this field. We will also invite on-site visits of
our projects to prospective customers to promote our projects.
Employees
We
currently have one employee who is full-time. None of our employees are
represented by a labor union and we consider our relationships with our
employees to be good.
Item
1A. Risk Factors
You
should carefully consider the following risk factors and all other information
contained herein as well as the information included in this Annual Report on
Form 10-K, in evaluating our business and prospects. The risks and uncertainties
described below are not the only ones we face. Additional risks and
uncertainties, other than those we describe below, that are not presently known
to us or that we currently believe are immaterial, may also impair our business
operations. If any of the following risks occur, our business and financial
results could be harmed. You should refer to the other information contained in
this Annual Report, including our consolidated financial statements and the
related notes.
2
We
Are A New Venture With No Operating History
The
Company was recently organized and focus on the Gaming and Factory
Built Real Estate Industry. Due to our limited operating history, our ability to
operate successfully is materially uncertain and our operations are subject to
all risks inherent in a developing business enterprise. We have no operating
history upon which you may evaluate our operations and prospects. Our limited
operating history makes it difficult to evaluate our likelihood of commercial
viability and market acceptance of our proposed operations. Our
potential success must be evaluated in light of the problems; expenses and
difficulties frequently encountered by new businesses in general and
particularly in the Factory-built Real Estate Sector.
We
will require financing to achieve our current business strategy and our
inability to obtain such financing could prohibit us from executing our business
plan and cause us to slow down our expansion of operations.
We will
need to raise additional funds through public or private debt or sale of equity
to achieve our current business strategy. Such financing may not be available
when needed. Even if such financing is available, it may be on terms that are
materially adverse to your interests with respect to dilution of book value,
dividend preferences, liquidation preferences, or other terms. Our capital
requirements to implement our business strategy will be significant. Moreover,
in addition to monies needed to continue operations over the next twelve months,
we anticipate requiring additional funds in order to significantly expand our
operations and acquire the operating entities as set forth in our plan of
operations. No assurance can be given that such funds will be available or, if
available, will be on commercially reasonable terms satisfactory to us. There
can be no assurance that we will be able to obtain financing if and when it is
needed on terms we deem acceptable. If we are unable to obtain financing on
reasonable terms, we could be forced to delay or scale back our plans for
expansion. In addition, such inability to obtain financing on reasonable terms
could have a material adverse effect on our business, operating results, or
financial condition.
Our
auditor has expressed substantial doubt as to our ability to continue as a going
concern.
Based on
our financial history since inception, our auditor has expressed substantial
doubt as to our ability to continue as a going concern. We are a development
stage company that has never generated any revenue. From inception (August 14,
2008) to September 30, 2009, we have incurred a net loss of $609,903; and a
working capital deficit and stockholders’ deficit of $166,899 and a deficit
accumulated during the development stage of $628,403 at September 30, 2009.
These factors raise substantial doubt about the Company’s ability to continue as
a going concern. If we cannot obtain sufficient funding, we may have to delay
the implementation of our business strategy.
We are
presently dependent to a great extent upon the experience, abilities and
continued services of Hollis Cunningham, our chief executive officer. We
currently do not have an employment agreement with Hollis Cunningham. The loss
of the services of Mr. Cunningham could have a material adverse effect on our
business, financial condition or results of operation.
If
our cash flows and capital resources are insufficient to service our
indebtedness, we may be forced to reduce or delay capital expenditures, sell
assets, seek additional capital or restructure or refinance our indebtedness,
including the notes.
If our
cash flows and capital resources are insufficient to service our indebtedness,
we may be forced to reduce or delay capital expenditures, sell assets, seek
additional capital or restructure or refinance our indebtedness, including the
notes. These alternative measures may not be successful and may not permit us to
meet our scheduled debt service obligations. Our ability to restructure or
refinance our debt will depend on the condition of the capital markets and our
financial condition at such time. Any refinancing of our debt could be at higher
interest rates and may require us to comply with more onerous covenants, which
could further restrict our business operations. In addition, the terms of
existing or future debt agreements, including our senior secured credit
facilities and the indenture governing the notes, may restrict us from adopting
some of these alternatives. In the absence of such operating results and
resources, we could face substantial liquidity problems and might be required to
dispose of material assets or operations to meet our debt service and other
obligations. We may not be able to consummate those dispositions for fair market
value or at all. Furthermore, any proceeds that we could realize from any such
dispositions may not be adequate to meet our debt service obligations then due.
The Sponsors have no continuing obligation to provide us with debt or equity
financing.
3
The
recent severe economic downturn and adverse conditions in the local, regional,
national and global markets, high energy, and gasoline prices could negatively
affect our operations, and may continue to negatively affect our operations in
the future and could negatively impact our ability to access
financing.
The
recent severe economic downturn and adverse conditions in the local, regional,
national and global markets, high energy, and gasoline prices could negatively
affect our operations, and may continue to negatively affect our operations in
the future and could negatively impact our ability to access financing. During
periods of economic contraction such as the current period, our revenues may
decrease while some of our costs remain fixed or even increase, resulting in
decreased earnings. Gaming and other leisure activities surrounding our planned
joint ventures, including the planned water park, represents discretionary
expenditures and participation in such activities may decline during economic
downturns, during which consumers generally earn less disposable income. Even an
uncertain economic outlook may adversely affect consumer spending in the gaming
operations, upon which our joint venture relies, as consumers spend less or do
not come at all in anticipation of a potential economic downturn.
We
may have a limited ability to respond to changing business and economic
conditions and to withstand competitive pressures due to our limited cash flow,
which may affect our ability to perform under our proposed joint venture
agreement which could severely affect our financial condition
As a
result of our poor cash position, we will need to secure substantial capital
through debt and/or equity financings in order to fund the planned joint venture
projects including the Nambe Pueblo Tribe in Santa Fe, New Mexico and otherwise
implement our business strategy. Our plans regarding the size, scope and phasing
of the joint venture projects may change as we formulate and finalize our
development plans. These changes may impact the timing and cost of the projects.
Based on preliminary budgets, management estimates total construction costs of
the Nambe Pueblo project to be approximately $100,000,000 (exclusive of
capitalized interest expense and related financing and other pre-opening costs).
We may have a limited ability to respond to changing business and economic
conditions and to withstand competitive pressures due to our limited cash flow,
which may affect our ability to perform under our proposed joint venture
agreement which could severely affect our financial condition.
Even
if we are able to raise additional cash or obtain financing through the public
or private sale of debt or equity securities, funding from joint-venture or
strategic partners, debt financing or short-term loans, the terms of such
transactions may be unduly expensive or burdensome to us or disadvantageous to
our existing stockholders.
Even if
we are able to raise additional cash or obtain financing through the public or
private sale of debt or equity securities, funding from joint-venture or
strategic partners, debt financing or short-term loans, the terms of such
transactions may be unduly expensive or burdensome to us or disadvantageous to
our existing stockholders. For example, we may be forced to sell or issue our
securities at a price below the subscription price for the shares of our common
stock offered hereby, at significant discounts to market, or pursuant to onerous
terms and conditions, including the issuance of preferred stock with
disadvantageous dividend, voting or veto, board membership, conversion,
redemption or liquidation provisions; the issuance of convertible debt with
disadvantageous interest rates and conversion features; the issuance of warrants
with cashless exercise features; the issuance of securities with anti-dilution
provisions; the issuance of high-yield securities and bank debt with restrictive
covenants and security packages; and the grant of registration rights with
significant penalties for the failure to quickly register. If we raise debt
financing, we may be required to secure the financing with all of our business
assets, which could be sold or retained by the creditor should we default in our
payment obligations.
4
It
is uncertain that our negotiations will result in a contractual joint venture
agreement, the lack of which could be detrimental to our current business
plan.
At this
time we are only in preliminary negotiation talks with the Nambe Pueblo Tribe in
Santa Fe, New Mexico, which is a project that we consider vital to the future
success of Omni Ventures, Inc. It is uncertain that our negotiations will result
in a contractual joint venture agreement, the lack of which could be detrimental
to our current business plan. Even if successful in our negotiations with the
Nambe Tribe, because we may be entirely dependent upon a very limited number of
projects for all of our cash flow, we will be subject to greater risks than a
company with more operating properties. We expect to have a limited number of
material assets or operations. As a result, even if we are successful in our
negotiations with the Nambe Pueblo, we likely will be entirely dependent upon
the Nambe Pueblo project for all of our cash flow for the foreseeable future.
Furthermore, the Nambe Pueblo project would not generate any significant
revenue for us until development thereof is at least partially completed and
operating, which is not expected until late early 2010.
We
may be unable to retain our key employees or attract, assimilate and retain
other highly qualified employees in the future.
We will
need to attract, hire and retain talented management and other highly skilled
employees with experience and expertise in all areas of our business to be
successful. Competition for employees in our industry is highly competitive. We
may be unable to retain our key employees or attract, assimilate and retain
other highly qualified employees in the future. If we are not able to hire and
retain key employees our business and financial condition could be
harmed.
Negative
changes in factors affecting discretionary spending could reduce customer demand
for the entertainment services we will offer, thus imposing practical limits on
pricing and harming our operations.
The
strength and profitability of our business will depend on consumer demand for a
discretionary spending on entertainment, like casinos and our planned water
park. The terrorist attacks of September 11, 2001, and ongoing terrorist and war
activities of the United States and Iraq and elsewhere, had a negative impact on
leisure expenditures, including lodging, gaming and entertainment. We cannot
predict the extent to which terrorist and anti-terrorist activities may affect
us, directly or indirectly, in the future. An extended period of reduced
discretionary spending and/or disruptions or declines in travel and business
conventions, etc could significantly harm our operations. In particular, because
we expect that our business will rely heavily upon the adjacent Indian gaming
facilities, factors resulting in a decreased propensity to spend discretionary
income, like the terrorist attacks of September 11, 2001, could have a negative
impact on our future operations.
The
planned water park project is geared toward family recreational activities,
which represent discretionary spending. an economic slow-down would likely cause
a substantial decrease in revenues.
The
planned water park project is geared toward family recreational activities,
which represent discretionary spending. An economic slow-down would likely cause
a substantial decrease in revenues. In addition, these markets are competitive.
If a competing project were built within the market area there might not be
adequate revenues to make the water park a success. Changes in consumer
preferences or discretionary consumer spending could harm the success of our
planned water park.
5
Preliminary
architectural, engineering plans and budgeting for the intended apartment and
water park projects will be completed as much as a year in advance, which could
become obsolete by the time final pricing is calculated.
Preliminary
architectural, engineering plans and budgeting for the intended apartment and
water park projects will be completed as much as a year in advance. By the time
final pricing is calculated, it is possible that costs of materials and labor
have increased to the point that construction of the project is no longer
feasible. Since we are a start-up Company, with very limited resources, the
occurrence of major pricing increases would likely be detrimental to the future
of the Company.
Although
phase 1, preliminary engineering and related items for the planned apartment and
water park projects will be completed up front, it is possible that problematic
conditions pertaining to infrastructure requirements could arise.
Although
Phase 1, preliminary engineering and related items for the planned apartment and
water park projects will be completed up front, it is possible that problematic
conditions pertaining to infrastructure requirements could arise that would not
allow our planned project to go forward. Since we are a start-up Company with
very limited resources, the occurrence of a barrier to construction would likely
be detrimental to the future of the Company.
Since
our marketing plan for tenants will be specifically geared toward the working
class population in the surrounding vicinity, it is possible that if the current
recession or economic slow-down continues, it would likely cause a substantial
loss or delay in revenue.
Since our
marketing plan for tenants will be specifically geared toward the working class
population in the surrounding vicinity, it is possible that if the current
recession or economic slow-down continues, it would likely cause a substantial
loss or delay in revenue. Since we are a start-up Company with very limited
resources, a long drawn-out continuation of the current recession or economic
slowdown would likely be detrimental to our specific marketing plan, which would
likely be detrimental to the Company.
New Mexico, like much of the United
States, has seen a significant problem with excess inventory of homes. Although
Santa Fe has faired better than many regions in the country, there is still the
very real possibility that the area could be overbuilt with homes and
apartments, thereby causing deep vacancies which would jeopardize the success of
the project.
During
winter season, the planned water park would likely produce very limited or no
revenues.
Santa Fe,
New Mexico has a relatively long and harsh winter season. During winter season,
the planned water park will likely produce very limited or no revenues. The
typical operating season for the planned is only 120 to 150 days out of the
year. Extended cold or inclement weather conditions could cause a major decrease
in operating revenues.
New
project funding and development has a number of risks, including risks
associated with, construction delays or cost overruns that may increase project
costs, construction defects or noncompliance with construction specifications,
and receipt of zoning, occupancy and other required governmental permits and
authorizations.
We intend
to fund and develop apartments as part of our development of the planned joint
venture projects and other projects as suitable opportunities arise, taking into
consideration the general economic climate. New project funding and development
has a number of risks, including risks associated with, construction delays or
cost overruns that may increase project costs, construction defects or
noncompliance with construction specifications, and receipt of zoning, occupancy
and other required governmental permits and authorizations.
6
There
are significant risks associated with major construction projects that may
substantially increase the development costs of our planned joint ventures or
prevent completion of our development plans on schedule.
There are
significant risks associated with major construction projects that may
substantially increase the development costs of our planned joint ventures or
prevent completion of our development plans on schedule. Major construction
projects of the scope and scale of our proposed projects entail significant
risks, including, shortages of materials or skilled labor, unforeseen
engineering, environmental and/or geological problems, work stoppages,
difficulties in obtaining licenses, permits and authorizations, weather
interference, unanticipated cost increases, unavailability of construction
equipment, development costs incurred for projects that are not pursued to
completion, so-called acts of God such as earthquakes, hurricanes, floods or
fires that could delay the development of a project, the availability and cost
of capital and/or debt financing, and governmental restrictions on the nature or
size of a project or timing of completion. Any one of these risks
could cause one of our development projects to be completed behind schedule or
over budget.
Competition
for the targeted projects of company, especially the Nambe, Santa Fe project is
intense.
We have
several large, well-financed competitors in the market for the Nambe Tribe
project. Our competitors are very strong. Many local banks as well as national
banks compete for the financing on these projects. Also, there are many
developers that offer design-build as well as financing for these projects. In
addition, there are several investment and venture capital companies such as
Western International Securities, Inc. Western is well capitalized and has a
long track record in financing procurement and capital investment in this
market. These companies compete directly with us for the financing and equity
capital for these projects. They have substantially greater capital resources,
marketing experience, and more extensive relationships with various Tribes than
we do.
SPECIFIC
RISKS RELATING TO OUR COMMON STOCK
We
have not paid dividends in the past and do not expect to pay dividends in the
future. Any return on investment may be limited to the value of our common
stock
We have
never paid cash dividends on our common stock and do not anticipate paying cash
dividends in the foreseeable future. The payment of dividends on our common
stock will depend on earnings, financial condition and other business and
economic factors affecting it at such time as the board of directors may
consider relevant. If we do not pay dividends, our common stock may be less
valuable because a return on your investment will only occur if its stock price
appreciates.
There
is a limited market for our common stock which may make it more difficult to
dispose of your stock.
Our
common stock is currently quoted on the Over the Counter Bulletin Board under
the symbol "OMVE". There is a limited trading market for our common stock.
Accordingly, there can be no assurance as to the liquidity of any markets that
may develop for our common stock, the ability of holders of our common stock to
sell our common stock, or the prices at which holders may be able to sell our
common stock.
7
We
cannot give you any assurance that we will not issue additional common or
preferred shares, or options or warrants to purchase those shares, under
circumstances we may deem appropriate at the time.
Our
issuance of additional shares of our common stock, or options or warrants to
purchase those shares, would dilute your proportionate ownership and voting
rights. Our issuance of shares of preferred stock, or options or warrants to
purchase those shares, could negatively impact the value of your shares of
common stock as the result of preferential voting rights or veto powers,
dividend rights, disproportionate rights to appoint directors to our board,
conversion rights, redemption rights and liquidation. We are entitled, under our
certificate of incorporation to issue up to 200 million common and 50 million
“blank check” preferred shares. After taking into consideration our outstanding
common and preferred shares as of September 30, 2009, we will be entitled to
issue up to 107,344,828 additional common shares and 50 million preferred
shares. Our board may generally issue those common and preferred shares, or
options or warrants to purchase those shares, without further approval by our
stockholders based upon such factors as our board of directors may deem relevant
at that time. Any preferred shares we may issue shall have such rights,
preferences, privileges and restrictions as may be designated from time-to-time
by our board, including preferential dividend rights, voting rights, conversion
rights, redemption rights and liquidation provisions.
We
may have difficulty in attracting and retaining management and outside
independent members to our board of directors as a result of their concerns
relating to their increased personal exposure to lawsuits and stockholder claims
by virtue of holding these positions in a publicly held company.
The
directors and management of publicly traded corporations are increasingly
concerned with the extent of their personal exposure to lawsuits and stockholder
claims, as well as governmental and creditor claims which may be made against
them, particularly in view of recent changes in securities laws imposing
additional duties, obligations and liabilities on management and directors. Due
to these perceived risks, directors and management are also becoming
increasingly concerned with the availability of directors and officers liability
insurance to pay on a timely basis the costs incurred in defending such claims.
We currently do not carry limited directors and officer’s liability insurance.
Directors and officers liability insurance has recently become much more
expensive and difficult to obtain. If we are unable to provide directors and
officers liability insurance at affordable rates, it may become increasingly
more difficult to attract and retain qualified outside directors to serve on our
board of directors.
The
elimination of monetary liability against our directors, officers and employees
under our articles of incorporation and the existence of indemnification rights
to our directors, officers and employees may result in substantial expenditures
by omni ventures, inc. and may discourage lawsuits against our directors,
officers and employees.
Our
articles of incorporation contain provisions, which eliminate the liability of
our directors for monetary damages to us and our stockholders. Our bylaws also
require us to indemnify our officers and directors. We may also have contractual
indemnification obligations under our agreements with our directors, officers
and employees. The foregoing indemnification obligations could result in our
incurring substantial expenditures to cover the cost of settlement or damage
awards against directors, officers and employees, which we maybe unable to
recoup. These provisions and resultant costs may also discourage us from
bringing a lawsuit against directors, officers and employees for breaches of
their fiduciary duties, and may similarly discourage the filing of derivative
litigation by our stockholders against our directors, officers and employees
even though such actions, if successful, might otherwise benefit us and our
stockholders.
Our
directors have the right to authorize the issuance of additional shares of our
preferred stock and additional shares of our common stock.
Our
directors, within the limitations and restrictions contained in our articles of
incorporation and without further action by our stockholders, have the authority
to issue shares of preferred stock from time to time in one or more series and
to fix the number of shares and the relative rights, conversion rights, voting
rights, and terms of redemption, liquidation preferences and any other
preferences, special rights and qualifications of any such series. We have no
intention of issuing additional shares of preferred stock at the present time.
Any issuance of additional shares of preferred stock could adversely affect the
rights of holders of our common stock. Should we issue additional shares of our
common stock at a later time, each investor's ownership interest in our stock
would be proportionally reduced. No investor will have any preemptive right to
acquire additional shares of our common stock, or any of our other
securities.
8
A sale of a substantial number of
shares of The Company's common stock may cause the price of its common stock to
decline.
If the
Company’s stockholders sell substantial amounts of the Company’s common stock in
the public market, the market price of its common stock could fall. These sales
also may make it more difficult for the Company to sell equity or equity-related
securities in the future at a time and price that the Company deems reasonable
or appropriate. Stockholders who have been issued shares in connection with the
acquisition of the Patent will be able to sell their shares pursuant to Rule 144
under the Securities Act of 1933, beginning one year after the stockholders
acquired their shares.
Our
common stock is subject to the "Penny Stock" rules of the SEC and the trading
market in our securities is limited, which makes transaction in our stock
cumbersome and may reduce the value of an investment in our stock.
The SEC
has adopted Rule 3a51-1 which establishes the definition of a "penny stock," for
the purposes relevant to us, is any equity security that has a market price of
less than $5.00 per share or with an exercise price of less than $5.00 per
share, subject to certain exceptions. For any transaction involving a penny
stock, unless exempt, Rule 15g-9 requires:
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
|
the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
obtain
financial information and investment experience objectives of the person;
and
|
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the SEC relating to the penny stock market,
which, in highlight form:
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
9
Item
1B. Unresoloved Staff Comments.
None
Our
business office is located at 15875 S. Cherry Ct., Suite 1, Olathe, Kansas
66062. Currently, this space is sufficient to meet our needs; however, if we
expand our business to a significant degree, we will have to find a larger
space.
None
PART
II
Item
4. Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.
Market
Information
Our
common stock is quoted on the Over-the-Counter Bulletin Board under the symbol
“OMVE”.
For the
periods indicated, the following table sets forth the high and low bid prices
per share of common stock. These prices represent inter-dealer quotations
without retail markup, markdown, or commission and may not necessarily represent
actual transactions.
Fiscal
Year 2009
|
||||||||
High
|
Low
|
|||||||
First
Quarter
|
$
|
1.01
|
$
|
0.10
|
||||
Second
Quarter
|
$
|
0.50
|
$
|
0.10
|
||||
Third
Quarter
|
$
|
0.44
|
$
|
0.10
|
||||
Fourth
Quarter
|
$
|
0.44
|
$
|
0.10
|
Holders
As of
September 30, 2009, we had approximately 59 holders of our common stock.
The number of record holders was determined from the records of our transfer
agent and does not include beneficial owners of common stock whose shares are
held in the names of various security brokers, dealers, and registered clearing
agencies. The transfer agent of our common stock is Globex Stock Transfer LLC,
780 Deltona Blvd, Suite 202, Deltona Florida 32725.
10
Dividends
The
Company has not paid any cash dividends to date and does not anticipate or
contemplate paying dividends in the foreseeable future. It is the present
intention of management to utilize all available funds for the development of
the Company's business.
Securities
Authorized for Issuance Under Equity Compensation Plans
As of
September 30, 2009, the Company does not have outstanding any common stock that
may be issued upon the exercise of options under an equity compensation
plan.
Item
5. Selected Financial Data.
Not
required under Regulation S-K for “smaller reporting companies.”
The
following information should be read in conjunction with the consolidated
financial statements and the notes thereto contained elsewhere in this report.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Information in this Item 7, "Management's
Discussion and Analysis of Financial Conditions and Results of Operations," and
elsewhere in this Form 10-K that does not consist of historical facts, are
"forward-looking statements." Statements accompanied or qualified by, or
containing words such as "may," "will," "should," "believes," "expects,"
"intends," "plans," "projects," "estimates," "predicts," "potential," "outlook,"
"forecast," "anticipates," "presume," and "assume" constitute forward-looking
statements, and as such, are not a guarantee of future performance. The
statements involve factors, risks and uncertainties including those discussed in
the “Risk Factors” section contained elsewhere in this report, the impact or
occurrence of which can cause actual results to differ materially from the
expected results described in such statements. Risks and uncertainties can
include, among others, fluctuations in general business cycles and changing
economic conditions; changing product demand and industry capacity; increased
competition and pricing pressures; advances in technology that can reduce the
demand for the Company's products, as well as other factors, many or all of
which may be beyond the Company's control. Consequently, investors should not
place undue reliance on forward-looking statements as predictive of future
results. The Company disclaims any obligation to update the forward-looking
statements in this report.
Overview
We were
incorporated in August 2008 in the State of Kansas. We plan to provide equity
funding for commercial and recreational projects in the Mid-west and Western
areas of the United States, with specialization in two different categories. One
is apartment projects to house employees that work for gaming and supporting
businesses. The other is recreational activities geared at family oriented
activities. Our founder and Chief Executive Officer, Hollis Cunningham, has been
active in the development of commercial projects for over forty years and has
extensive knowledge and experience in this field.
Our
primary goal is to provide housing and recreational activities that complement
the Native American gaming activities in the area. We believe that tourism in
these areas is becoming more oriented toward family activities. Our management
believes investment in these types of projects appropriately meets the market
need in these areas.
Market
research shows a continued and steady increase in tourism in the targeted areas,
especially in family oriented activities.
11
Our
management believes the increasing popularity of tourism in these areas is due
in part to demographic and social trends. Annual reports from Chamber of
Commerce and marketing news agencies in these areas indicate a steady trend
toward combining adult gaming with family activities such as winter sports,
water parks, and indoor fun centers.
We have
not begun operations, and we require outside capital to begin operations. We
believe we will be able to competitively market ourselves. All functions will be
coordinated and managed by our founder, including marketing, finance, and
operations.
We are
currently negotiating with several Tribes on various projects and have had
positive input from them. We are working on our web site which will provide
quick response for new customers.
We also
intend to engage Three Fires Development Group, Inc. to assist us in the
introduction of our Company to potential customers and to assist in negotiating
Joint Venture Agreements with them. Three Fires has vast experience in the
development arena and enjoys an excellent reputation with the Native American
Tribes.
Over the
next year our plan is to negotiate joint venture agreements with the Nambe
Pueblo, Santa Fe, New Mexico, Moapa, Las Vegas, Nevada, and the Ysleta Del Sur,
El Paso, Texas. At this time negotiations on these projects are underway and
response has been positive.
We have
budgeted $250,000 over the next year for general expenses. This budget covers
marketing expenses ($60,000), legal and consulting fees ($140,000),
infrastructure fees ($20,000) and due diligence fees ($30,000). We
will rely on third party and related party financing due to our limited cash
results.
We expect
the first year total cost of marketing and advertising to be $60,000. As
projects come on line we anticipate interest from other Tribes for assistance in
additional projects. We anticipate that new projects will offset any additional
general and marketing costs.
At the
end of the first year we plan to make an assessment on the first year of
operations. By that time we anticipate having additional projects contracted for
funding for the following year.
If we are
unable to effectively market and fund these projects we may have to suspend or
cease our efforts. If we cease our previously stated efforts we do not have
plans to pursue other business opportunities. If we cease operations investors
will not receive any return on their investments.
Recent
Developments
The
Company has continued to negotiate joint venture agreements with Nambe Pueblo,
Santa Fe, New Mexico, Moapa, Las Vegas, Nevada, and the Ysleta Del Sur, El Paso,
Texas Native American Tribes.
Fiscal
years ended September 30, 2009 compared to the fiscal year ended September 30,
2008
Net
Revenues –
We had revenues for the
years ended September 30, 2009 and 2008 of $0 and $0, respectively. These levels
of revenues reflect our current status as a development stage enterprise. If we
are unable to implement our plan to manufacture, market and distribute, or
license, our products and rights, our revenues will not significantly increase
during the upcoming fiscal year.
General and
Administrative – Our general and administrative expenses amounted
to $595,003 and $17,500 for the years ended September 30, 2009 and September 30,
2008, respectively. This increase over the comparable period is primarily the
result of professional fees directly related to operation of a public company
and expenses developing our business plan and those incurred in travel and
negotiation with parties. We may incur higher levels of general and
administrative expenses when our operations become established and
increase.
12
Prepaid
consulting fees-Amortization
of
prepaid consulting fees - amounted to $333,403 and $7,500 for the
years ended September 30, 2009 and September 30, 2008, respectively. We amortize
our intangible assets using the straight-line method over periods of future
benefit. We also consider our intangible assets for impairment when
circumstances, if any, arise that indicates that we may not recover these assets
through future revenue streams.
Interest
Expense – Interest expense amounted to $14,900 and
$1,000 for the years ended September 30, 2009 and September 30, 2008,
respectively.
Net Loss –
Our net loss for the year ended September 30, 2009 and September 30, 2008
amounted to ($609,903) and ($18,500), respectively.
Loss Applicable
to Common Shareholders – Loss applicable to common stockholders
represents our net loss, as adjusted. Our loss applicable to common shareholders
and our loss per common share (basic and diluted) amounted to ($609,903) and
($0.01), respectively, for the year ended September 30, 2009 as compared to
($18,500) and ($0.00), respectively, for the year ended September 30,
2008.
Liquidity
and Capital Resources
Cash and
cash equivalents amounted to $186 as of September 30, 2009. As of September 30,
2009, the Company had a working capital deficit of $166,899
and
shareholders’ deficit of $166,899.
Due to
the Company’s continued losses, along with a lack of suitable equity and
liquidity, the Independent Auditor’s Report of the accompanying financial
statements expresses a “going concern” opinion. Going concern contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business over a reasonable length of time.
Based on
our current cash and cash equivalents levels and expected cash flow from
operations, we believe our current cash position is not sufficient to fund our
requirements during the next twelve months, including operations and capital
expenditures. Currently, the Company has the ability to borrow limited amounts
of capital from a private lender in order to sustain short-term business
operations.
The
Company generated a deficit in cash used in operating activities of $32,014 for
the year September 30, 2009. This deficit is primarily attributed to initial
development activities and issuance of common stock.
The
Company’s generated cash flow from financing activities of $32,200 for the year
ended September 30, 2009 primarily through net proceeds of the sale of common
stock and third party debt.
Off-Balance
Sheet Arrangements
We have
not entered into any transactions with unconsolidated entities in which we have
financial guarantees, subordinated retained interests, derivative instruments or
other contingent arrangements that expose us to material continuing risks,
contingent liabilities or any other obligations under a variable interest in an
unconsolidated entity that provides us with financing, liquidity, market risk or
credit risk support.
13
Critical
Accounting Estimates
While our
significant accounting policies are more fully described in the notes to our
audited consolidated financial statements for the years ended September 30, 2009
and 2008, we believe the following accounting policies to be the most critical
in understanding the judgments and estimates we use in preparing our
consolidated financial statements.
Development Stage
Company
The
Company has devoted substantially all of its efforts to business planning and
development. Additionally, the Company has allocated a substantial portion of
their time and investment in bringing their services to the market and the
raising of capital.
Use of
Estimates
The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures 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 could differ from those
estimates.
14
Income
Taxes
The
Company accounts for income taxes under ASC 740, utilizing the liability method
of accounting. Under the liability method, deferred taxes are determined based
on differences between financial statement and tax bases of assets and
liabilities at enacted tax rates in effect in years in which differences are
expected to reverse. Valuation allowances are established, when necessary, to
reduce deferred tax assets to amounts that are expected to be
realized.
(Loss)
Per Share of Common Stock
Basic net
(loss) per common share is computed using the weighted average number of common
shares outstanding. Diluted earnings per share ("EPS") include additional
dilution from common stock equivalents, such as stock issuable pursuant to the
exercise of stock options and warrants.
Common
stock equivalents were not included in the computation of diluted earnings per
share when the Company reported a loss because to do so would be ant dilutive
for periods presented.
15
The
following is a reconciliation of the computation for basic and diluted
EPS:
September
30,
2009
|
September
30,
2008
|
|||||||
Net
Loss
|
$
|
(609,903
|
)
|
$
|
(18,500
|
)
|
||
Weighted-average
common shares
|
||||||||
Outstanding
(Basic)
|
94,802,036
|
80,000,000
|
||||||
Weighted-average
common stock
|
||||||||
Equivalents
|
||||||||
Stock options
|
-
|
-
|
||||||
Warrants
|
-
|
-
|
||||||
Weighted-average
common shares
|
||||||||
Outstanding
(Diluted)
|
94,802,036
|
80,000,000
|
||||||
Net
loss per common share – Basic and Diluted
|
$ |
(0.01
|
) | $ |
(0.00
|
) |
Recently
Issued Accounting Pronouncements
Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting
Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards
Codification (the “Codification”) as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with U.S.
GAAP. Rules and interpretive releases of the SEC under authority of federal
securities laws are also sources of authoritative U.S. GAAP for SEC registrants.
All guidance contained in the Codification carries an equal level of authority.
The Codification superseded all existing non-SEC accounting and reporting
standards. All other non-grandfathered, non-SEC accounting literature not
included in the Codification is non-authoritative. The FASB will not issue new
standards in the form of Statements, FASB Staff Positions or Emerging Issues
Task Force Abstracts. Instead, it will issue Accounting Standards Updates
(“ASUs”). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.
Effective
June 30, 2009, the Company adopted three accounting standard updates which
were intended to provide additional application guidance and enhanced
disclosures regarding fair value measurements and impairments of securities.
They also provide additional guidelines for estimating fair value in accordance
with fair value accounting. The first update, as codified in ASC 820-10-65,
provides additional guidelines for estimating fair value in accordance with fair
value accounting. The second accounting update, as codified in ASC 320-10-65,
changes accounting requirements for other-than-temporary-impairment
(OTTI) for debt securities by replacing the current requirement that a
holder have the positive intent and ability to hold an impaired security to
recovery in order to conclude an impairment was temporary with a requirement
that an entity conclude it does not intend to sell an impaired security and it
will not be required to sell the security before the recovery of its amortized
cost basis. The third accounting update, as codified in ASC 825-10-65, increases
the frequency of fair value disclosures. These updates were effective for fiscal
years and interim periods ended after June 15, 2009. The adoption of these
accounting updates did not have a material impact on the Company’s financial
statements.
16
Effective
June 30, 2009, the Company adopted a new accounting standard for subsequent
events, as codified in ASC 855-10. The update modifies the names of the two
types of subsequent events either as recognized subsequent events (previously
referred to in practice as Type I subsequent events) or non-recognized
subsequent events (previously referred to in practice as Type II subsequent
events). In addition, the standard modifies the definition of subsequent events
to refer to events or transactions that occur after the balance sheet date, but
before the financial statements are issued (for public entities) or available to
be issued (for nonpublic entities). It also requires the disclosure of the date
through which subsequent events have been evaluated. The update did not result
in significant changes in the practice of subsequent event disclosures, and
therefore the adoption did not have a material impact on the Company’s financial
statements.
Effective
January 1, 2009, the Company adopted an accounting standard update
regarding the determination of the useful life of intangible assets. As codified
in ASC 350-30-35, this update amends the factors considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under intangibles accounting. It also requires a
consistent approach between the useful life of a recognized intangible asset
under prior business combination accounting and the period of expected cash
flows used to measure the fair value of an asset under the new business
combinations accounting (as currently codified under ASC 850). The update also
requires enhanced disclosures when an intangible asset’s expected future cash
flows are affected by an entity’s intent and/or ability to renew or extend the
arrangement. The adoption did not have a material impact on the Company’s
financial statements.
In
February 2008, the FASB issued an accounting standard update that delayed
the effective date of fair value measurements accounting for all non-financial
assets and non-financial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at
least annually), until the beginning of the first quarter of fiscal 2009. These
include goodwill and other non-amortizable intangible assets. The Company
adopted this accounting standard update effective January 1, 2009. The
adoption of this update to non-financial assets and liabilities, as codified in
ASC 820-10, did not have a material impact on the Company’s financial
statements.
Effective
January 1, 2009, the Company adopted a new accounting standard update
regarding business combinations. As codified under ASC 805, this update requires
an entity to recognize the assets acquired, liabilities assumed, contractual
contingencies, and contingent consideration at their fair value on the
acquisition date. It further requires that acquisition-related costs be
recognized separately from the acquisition and expensed as incurred; that
restructuring costs generally be expensed in periods subsequent to the
acquisition date; and that changes in accounting for deferred tax asset
valuation allowances and acquired income tax uncertainties after the measurement
period be recognized as a component of provision for taxes. The adoption did not
have a material impact on the Company’s financial statements.
Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurements and
Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments
to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using certain techniques. ASU
2009-05 also clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in
an active market for the identical liability at the measurement date and the
quoted price for the identical liability when traded as an asset in an active
market when no adjustments to the quoted price of the asset are required are
Level 1 fair value measurements. Adoption of ASU 2009-05 did not have a material
impact on the Company’s results of operations or financial
condition.
17
Not
required under Regulation S-K for “smaller reporting companies.”
18
Item 8. Financial
Statements.
Omni
Ventures, Inc.
(A
Development Stage Company)
Financial
Statements
September
30, 2009 and 2008
CONTENTS
Page(s) | |
Report of
Independent Registered Public Accounting
Firm
|
F-1
|
Balance Sheets – As of September 30, 2009 and September 30, 2008 | F-2 |
Statements
of Operations –
For
the year ended September 30, 2009, the period from
August
14, 2008 (inception) to September 30, 2008 and for the
period
from August 14, 2008 (inception) to September 30,
2009
|
F-3
|
Statement
of Changes in Stockholders’ Deficit
For the
year ended September 30, 2009, the period from
August 14, 2008 (inception) to September 30, 2008 and for the
period from August 14, 2008 (inception) to September 30,
2009
|
F-4 |
Statements of
Cash Flows –
For
the year ended September 30, 2009, the period from
August
14, 2008 (inception) to September 30, 2008 and for the
period
from August 14, 2008 (inception) to September 30,
2009
|
F-5 |
Notes to Financial Statements | F-6 - F-14 |
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Omni
Ventures, Inc.
We have
audited the accompanying balance sheets of Omni Ventures, Inc. (a development
stage company) as of September 30, 2009 and 2008, and the related statements of
operations, changes in stockholders' deficit and cash flows for the year ended
September 30, 2009, the period from August 14, 2008 (inception) to September 30,
2008, and for the period from August 14, 2008 (inception) to September 30, 2009.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not
required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our
audits included consideration of internal control over financial reporting as a
basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the
effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Omni Ventures, Inc. (a development
stage company) as of September 30, 2009 and 2008, and the results of its
operations and its cash flows for the year ended September 30, 2009, the period
from August 14, 2008 (inception) to September 30, 2008, and for the period from
August 14, 2008 (inception) to September 30, 2009, in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has a net loss of $609,903 and net cash used in
operations of $32,014 for the year ended September 30, 2009; and a working
capital deficit of $166,899 and a deficit accumulated during the development
stage of $628,403 at September 30, 2009. These factors raise substantial doubt
about the Company's ability to continue as a going concern, Management's plan in
regards to these matters is also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Berman
& Company, P.A.
Boca
Raton, Florida
January
12, 2010
551
NW 77th Street 107 * Boca Raton, FL 33487
Phone:
(561) 864-4444 * Fax: (561) 892-3715
www.bermancpas.com
* info@bermancpas.com
Registered with the PCAOB * Member AICPA Center for
Audit Quality
Member American Institute of Certified Public
Accountants
Member Florida Institute of Certified Public
Accountants
F-1
(A
Development Stage Company)
|
||||||||
Balance Sheets
|
||||||||
September
30,
|
||||||||
2009
|
2008
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 186 | $ | - | ||||
Prepaid
expense
|
- | 92,500 | ||||||
Total
Current Assets
|
186 | 92,500 | ||||||
Total
Assets
|
$ | 186 | $ | 92,500 | ||||
Liabilities and Stockholders'
Deficit
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ | 47,085 | $ | 3,000 | ||||
Notes
payable
|
120,000 | 100,000 | ||||||
Total
Current Liabilities
|
167,085 | 103,000 | ||||||
Stockholders'
Deficit
|
||||||||
Preferred
stock, $0.001 par value, 50,000,000 shares authorized;
|
||||||||
none
issued and outstanding
|
- | - | ||||||
Common
stock, $0.0001 par value, 200,000,000 shares authorized;
|
||||||||
102,675,172
and 80,000,000 shares issued and outstanding
|
10,268 | 8,000 | ||||||
Additional
paid-in capital
|
451,236 | - | ||||||
Deficit
accumulated during the development stage
|
(628,403 | ) | (18,500 | ) | ||||
Total
Stockholders' Deficit
|
(166,899 | ) | (10,500 | ) | ||||
Total
Liabilities & Stockholders' Deficit
|
$ | 186 | $ | 92,500 | ||||
See
accompanying notes to finacial statements.
F-2
(A
Development Stage Company)
|
||||||||||||
Statements of Operations
|
||||||||||||
For
the period from
|
For
the period from
|
|||||||||||
For
the year ended
|
August
14, 2008 (inception) to
|
August
14, 2008 (inception) to
|
||||||||||
September 30, 2009
|
September 30, 2008
|
September 30, 2009
|
||||||||||
General
and administrative expenses
|
$ | 595,003 | $ | 17,500 | $ | 612,503 | ||||||
Interest
expense
|
14,900 | 1,000 | 15,900 | |||||||||
Net
loss
|
$ | (609,903 | ) | $ | (18,500 | ) | $ | (628,403 | ) | |||
Net
loss per common share - basic and diluted
|
$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | |||
Weighted
average number of common shares outstanding
|
||||||||||||
during
the year/period - basic and diluted
|
94,802,036 | 80,000,000 | 93,113,163 | |||||||||
See accompanying notes to finacial statements.
F-3
(A
Development Stage Company)
|
||||||||||||||||||||||||
Statement of Changes in Stockholders'
Deficit
|
||||||||||||||||||||||||
Deficit
|
||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Common Stock, $0.0001 |
Additional
|
Additional
|
During
the
|
Total
|
||||||||||||||||||||
Par
Value
|
Paid-In
|
Paid-in
|
Development
|
Stockholders'
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Capital
|
Stage
|
Deficit
|
|||||||||||||||||||
Common
stock issued for pre-incorporation services - founder
($0.0001/share)
|
80,000,000 | $ | 8,000 | $ | - | $ | - | $ | - | $ | 8,000 | |||||||||||||
Net
loss for the period from August 14, 2008 (inception) to September 30,
2008
|
- | - | - | - | (18,500 | ) | (18,500 | ) | ||||||||||||||||
Balance
- September 30, 2008
|
80,000,000 | 8,000 | - | - | (18,500 | ) | (10,500 | ) | ||||||||||||||||
Common
stock issued for cash ($0.02/share)
|
610,000 | 61 | - | 12,139 | - | 12,200 | ||||||||||||||||||
Common
stock issued for services ($0.02/share)
|
12,045,172 | 1,205 | - | 239,699 | - | 240,904 | ||||||||||||||||||
Common
stock issued for compensation - related party
($0.02/share)
|
10,000,000 | 1,000 | - | 199,000 | - | 200,000 | ||||||||||||||||||
Common
stock issued for interest ($0.02/share)
|
20,000 | 2 | - | 398 | - | 400 | ||||||||||||||||||
Net
loss for the year ended September 30, 2009
|
- | - | - | - | (609,903 | ) | (609,903 | ) | ||||||||||||||||
Balance
- September 30, 2009
|
102,675,172 | $ | 10,268 | $ | - | $ | 451,236 | $ | (628,403 | ) | $ | (166,899 | ) | |||||||||||
See accompanying notes to finacial statements.
F-4
(A
Development Stage Company)
|
||||||||||||
Statements of Cash Flows
|
||||||||||||
For
the period from
|
For
the period from
|
|||||||||||
For
the year ended
|
August
14, 2008 (inception) to
|
August
14, 2008 (inception) to
|
||||||||||
September 30, 2009
|
September 30, 2008
|
September 30, 2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (609,903 | ) | $ | (18,500 | ) | $ | (628,403 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Amortization
of prepaid consulting services
|
333,403 | 7,500 | 340,903 | |||||||||
Common
stock issued for compensation - related party
|
200,000 | - | 200,000 | |||||||||
Common
stock issued for interest
|
400 | - | 400 | |||||||||
Common
stock issued for pre-incorporation services - founder
|
- | 8,000 | 8,000 | |||||||||
Change
in operating assets and liabilities
|
||||||||||||
Increase
(decrease) in:
|
||||||||||||
Accounts
payable and accrued expenses
|
44,085 | 3,000 | 47,085 | |||||||||
Net
Cash Used In Operating Activities
|
(32,014 | ) | - | (32,014 | ) | |||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from loan payable - related party
|
13,300 | - | 13,300 | |||||||||
Repayment
of loan payable - related party
|
(13,300 | ) | - | (13,300 | ) | |||||||
Proceeds
from notes payable
|
20,000 | - | 20,000 | |||||||||
Proceeds
from sale of common stock
|
12,200 | - | 12,200 | |||||||||
Net
Cash Provided by Financing Activities
|
32,200 | - | 32,200 | |||||||||
Net
Increase in Cash
|
186 | - | 186 | |||||||||
Cash
- Beginning of Period/Year
|
- | - | - | |||||||||
Cash
- End of Period/Year
|
$ | 186 | $ | - | $ | 186 | ||||||
SUPPLEMENTARY
CASH FLOW INFORMATION:
|
||||||||||||
Cash
paid during the period/year for:
|
||||||||||||
Income
taxes
|
$ | - | $ | - | $ | - | ||||||
Interest
|
$ | 3,000 | $ | - | 3,000 | |||||||
SUPPLEMENTARY
DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||||||
Note
payable issued for future services
|
$ | - | $ | 100,000 | $ | 100,000 | ||||||
Common
stock issued for future services
|
$ | 240,903 | $ | - | $ | 240,903 | ||||||
See accompanying notes to finacial
statements.
F-5
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
Note 1 Nature of Operations
and Summary of Significant Accounting Policies
Nature
of Operations
Omni
Ventures, Inc. (the “Company”), was incorporated in the State of Kansas
on August 14, 2008.
The
Company previously intended to develop properties on Indian reservations. The
Company is currently inactive.
Development
Stage
The
Company's financial statements are presented as those of a development stage
enterprise. Activities during the development stage primarily include equity
based financing and further implementation of the business plan. The Company has
not generated any revenues since inception.
Risks
and Uncertainties
The
Company's operations will be subject to significant risk and uncertainties
including financial, operational, regulatory and other risks associated with a
development stage company, including the potential risk of business
failure.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles ("GAAP") 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.
Such
estimates and assumptions impact, among others, a 100% valuation allowance for
deferred taxes due to the Company’s continuing and expected future
losses.
Making
estimates requires management to exercise significant judgment. It is at least
reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the financial statements, which
management considered in formulating its estimate could change in the near term
due to one or more future confirming events. Accordingly, the actual results
could differ significantly from estimates.
F-6
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
Cash
The
Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At September 30, 2009
and 2008, respectively, there were no balances that exceeded the federally
insured limit.
The
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents. At September 30, 2009 and 2008,
respectively, the Company had no cash equivalents.
Share-Based
Payments
Generally,
all forms of share-based payments, including stock option grants, restricted
stock grants and stock appreciation rights, are measured at their fair value on
the awards’ grant date, and based on the estimated number of awards that are
ultimately expected to vest. Share-based payment awards issued to non-employees
for services rendered are recorded at either the fair value of the services
rendered or the fair value of the share-based payment, whichever is more readily
determinable. The expense resulting from share-based payments are recorded as a
component of general and administrative expense.
Income
Taxes
The
Company accounts for income taxes under the liability
method. Deferred income tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.
The
Company uses a two-step approach to recognizing and measuring uncertain tax
positions. The first step is to evaluate the tax position for recognition by
determining if the weight of available evidence indicates it is more likely than
not, that the position will be sustained on audit, including resolution of
related appeals or litigation processes, if any. The second step is to measure
the tax benefit as the largest amount, which is more than 50% likely of being
realized upon ultimate settlement. The Company considers many factors when
evaluating and estimating our tax positions and tax benefits, which may require
periodic adjustments. At September 30, 2009 and 2008, respectively,
the Company did not record any liabilities for uncertain tax
positions.
F-7
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
Earnings
per share
Basic
earnings per share (“EPS”) is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding during
the period, excluding the effects of any potentially dilutive securities.
Diluted EPS gives effect to all dilutive potential of shares of common stock
outstanding during the period including stock options or warrants, using the
treasury stock method (by using the average stock price for the period to
determine the number of shares assumed to be purchased from the exercise of
stock options or warrants), and convertible debt or convertible preferred stock,
using the if-converted method. Diluted EPS excludes all dilutive potential of
shares of common stock if their effect is anti-dilutive.
The
computation of basic and diluted loss per share since inception are equivalent
since the Company has had continuing losses. The Company also has no
common stock equivalents.
Segment
Information
During
fiscal year-end 2009 and 2008, the Company only operated in one segment;
therefore, segment information has not been presented.
Recent
Accounting Pronouncements
Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally "Accepted Accounting
Principles – Overall" (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards
Codification (the “Codification”) as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with U.S.
GAAP. Rules and interpretive releases of the SEC under authority of federal
securities laws are also sources of authoritative U.S. GAAP for SEC registrants.
All guidance contained in the Codification carries an equal level of authority.
The Codification superseded all existing non-SEC accounting and reporting
standards. All other non-grandfathered, non-SEC accounting literature not
included in the Codification is non-authoritative. The FASB will not issue new
standards in the form of Statements, FASB Staff Positions or Emerging Issues
Task Force Abstracts. Instead, it will issue Accounting Standards Updates
(“ASUs”). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.
Effective
June 30, 2009, the Company adopted three accounting standard updates which
were intended to provide additional application guidance and enhanced
disclosures regarding fair value measurements and impairments of securities.
They also provide additional guidelines for estimating fair value in accordance
with fair value accounting. The first update, as codified in ASC 820-10-65,
provides additional guidelines for estimating fair value in accordance with fair
value accounting. The second accounting update, as codified in ASC 320-10-65,
changes
F-8
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
accounting
requirements for other-than-temporary-impairment (OTTI) for debt securities
by replacing the current requirement that a holder have the positive intent and
ability to hold an impaired security to recovery in order to conclude an
impairment was temporary with a requirement that an entity conclude it does not
intend to sell an impaired security and it will not be required to sell the
security before the recovery of its amortized cost basis. The third accounting
update, as codified in ASC 825-10-65, increases the frequency of fair value
disclosures. These updates were effective for fiscal years and interim periods
ended after June 15, 2009. The adoption of these accounting updates did not
have a material impact on the Company’s financial statements.
Effective
June 30, 2009, the Company adopted a new accounting standard for subsequent
events, as codified in ASC 855-10. The update modifies the names of the two
types of subsequent events either as recognized subsequent events (previously
referred to in practice as Type I subsequent events) or non-recognized
subsequent events (previously referred to in practice as Type II subsequent
events). In addition, the standard modifies the definition of subsequent events
to refer to events or transactions that occur after the balance sheet date, but
before the financial statements are issued (for public entities) or available to
be issued (for nonpublic entities). It also requires the disclosure of the date
through which subsequent events have been evaluated. The update did not result
in significant changes in the practice of subsequent event disclosures, and
therefore the adoption did not have a material impact on the Company’s financial
statements.
Effective
January 1, 2009, the Company adopted an accounting standard update
regarding the determination of the useful life of intangible assets. As codified
in ASC 350-30-35, this update amends the factors considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under intangibles accounting. It also requires a
consistent approach between the useful life of a recognized intangible asset
under prior business combination accounting and the period of expected cash
flows used to measure the fair value of an asset under the new business
combinations accounting (as currently codified under ASC 850). The update also
requires enhanced disclosures when an intangible asset’s expected future
cashflows are affected by an entity’s intent and/or ability to renew or extend
the arrangement. The adoption did not have a material impact on the Company’s
financial statements.
In
February 2008, the FASB issued an accounting standard update that delayed
the effective date of fair value measurements accounting for all non-financial
assets and non-financial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at
least annually), until the beginning of the first quarter of fiscal 2009. These
include goodwill and other non-amortizable intangible assets. The Company
adopted this accounting standard update effective January 1, 2009. The
adoption of this update to non-financial assets and liabilities, as codified in
ASC 820-10, did not have a material impact on the Company’s financial
statements.
F-9
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
Effective
January 1, 2009, the Company adopted a new accounting standard update
regarding business combinations. As codified under ASC 805, this update requires
an entity to recognize the assets acquired, liabilities assumed, contractual
contingencies, and contingent consideration at their fair value on the
acquisition date. It further requires that acquisition-related costs be
recognized separately from the acquisition and expensed as incurred; that
restructuring costs generally be expensed in periods subsequent to the
acquisition date; and that changes in accounting for deferred tax asset
valuation allowances and acquired income tax uncertainties after the measurement
period be recognized as a component of provision for taxes. The adoption did not
have a material impact on the Company’s financial statements.
Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurements and
Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments
to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using certain techniques. ASU
2009-05 also clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in
an active market for the identical liability at the measurement date and the
quoted price for the identical liability when traded as an asset in an active
market when no adjustments to the quoted price of the asset are required are
Level 1 fair value measurements. Adoption of ASU 2009-05 did not have a material
impact on the Company’s results of operations or financial
condition.
Note 2 Going
Concern
As
reflected in the accompanying financial statements, the Company has a net loss
of $609,903 and net cash used in operations of $32,014 for the year ended
September 30, 2009; and a working capital deficit of $166,899 and a deficit
accumulated during the development stage of $628,403 at September 30, 2009. The
Company is in the development stage and has not yet generated any
revenues.
The
ability of the Company to continue as a going concern is dependent on
Management's plans, which include potential asset acquisitions, mergers or
business combinations with other entities, further implementation of its
business plan and continuing to raise funds through debt or equity
raises. The accompanying financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. These
financial statements do not include any adjustments relating to the recovery of
the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going
concern.
F-10
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
Note 3 - Fair
Value
The
Company has categorized our assets and liabilities recorded at fair value based
upon the fair value hierarchy specified by GAAP.
The
levels of fair value hierarchy are as follows:
|
·
|
Level
1 inputs utilize unadjusted quoted prices in active markets for identical
assets or liabilities that the Company has the ability to
access;
|
|
·
|
Level
2 inputs utilize other-than-quoted prices that are observable, either
directly or indirectly. Level 2 inputs include quoted prices for similar
assets and liabilities in active markets, and inputs such as interest
rates and yield curves that are observable at commonly quoted intervals;
and
|
|
·
|
Level
3 inputs are unobservable and are typically based on our own assumptions,
including situations where there is little, if any, market
activity.
|
In
certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy. In such cases, the Company categorizes such
financial asset or liability based on the lowest level input that is significant
to the fair value measurement in its entirety. Our assessment of the
significance of a particular input to the fair value measurement in its entirety
requires judgment and considers factors specific to the asset or
liability.
Both
observable and unobservable inputs may be used to determine the fair value of
positions that are classified within the Level 3 category. As a result, the
unrealized gains and losses for assets within the Level 3 category can
include changes in fair value that were attributable to both observable and
unobservable inputs. The Company has no instruments that require additional
disclosure.
Note 4 Loan Payable -
Related Party
On
October 6, 2008, the Company’s Chairman provided a $20,000 revolving line of
credit. The debt bore interest at 12%, with interest due
monthly. All advances were due on demand and were
unsecured. During the year ended September 30, 2009, the Company
borrowed and repaid $13,300 on this line of credit.
Note 5 Notes Payable and
Default
On
September 3, 2008, the Company entered into an agreement for future consulting
services. In exchange for these future services, the Company issued a $100,000,
one-year note payable. The note bears interest at 12% and is due
monthly. The note is secured by the Company’s assets and 80,000,000
shares issued to the Company’s founder (see Note 7). The note was due
on September 3, 2009. At of September 30, 2009 and 2008,
respectively, the Company had accrued interest of $14,850 and $1,000 relating to
this note. During the year ended September 30, 2009, the Company had repaid
$3,000 of interest.
The
Company did not pay the interest due in January 2009; therefore, beginning in
February 2009, the note holder began charging the default interest rate of 18%.
The note holder granted a six-month extension until July 1, 2009 to repay all
unpaid accrued interest On July 1, 2009; the extension was
amended to August 14, 2009. The Company did not repay the note or
related accrued interest by August 14, 2009, and is in default.
F-11
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
The
Company and its founder have been notified that they are in default under the
terms of the note. As a result, the note holder has the right to foreclose on
the assets and shares that are held in escrow as collateral at any time.
However, to date the note holder has not taken actions to foreclose on the
Company’s assets and the founder’s shares, even though they have notified all
parties about the default as required under the note.
The
Company amortized these related services, of $100,000, over a one-year
period. The Company expensed $92,500 and $7,500 during the years
ended September 30, 2009 and 2008, respectively.
On May
18, 2009, the Company issued two $10,000, one-year notes payable, to third
parties. The notes require payment of interest in the form of shares
of common stock. 20,000 shares were issued on May 18, 2009 and an
additional 20,000 shares were issued on November 18, 2009. The stock
issued as interest was valued by the debt holders at $400 ($0.02/share) at both
dates. Fair value was based upon recent cash offerings to third
parties at $0.02/share in October 2008. The Company believes that the
valuation of these shares based upon a quoted closing trading price is not the
best available evidence among willing buyers or sellers due to the stock being
restricted and thinly traded at the date of issuance. Furthermore,
the Company was inactive, so no valuation could be ascribed that would indicate
the shares had any additional value. These notes are unsecured and
due on May 18, 2010.
Note 6 Income
Taxes
The
Company recognized deferred tax assets and liabilities for both the expected
impact of differences between the financial statements and the tax basis of
assets and liabilities, and for the expected future tax benefit to be derived
from tax losses and tax credit carryforwards. The Company will
establish a valuation allowance to reflect the likelihood of realization of
deferred tax assets.
The
Company has a net operating loss carryforward, for tax purposes, totaling
approximately $179,000 at September 30, 2009, expiring through 2029. There is a
limitation on the amount of taxable income that can be offset by carryforwards
after a change in control (generally greater than a 50% change in
ownership). Temporary differences, which give rise to a net deferred
tax asset, are as follows:
F-12
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
Significant
deferred tax assets at September 30, 2009 and 2008 are approximately as
follows:
Gross
deferred tax assets:
|
2009
|
2008
|
||||||
Net
operating loss carryforwards
|
$ | (66,000 | ) | $ | (4,000 | ) | ||
Total
deferred tax assets
|
(66,000 | ) | (4,000 | ) | ||||
Less:
valuation allowance
|
66,000 | 4,000 | ||||||
Net
deferred tax asset recorded
|
$ | - | $ | - |
The
valuation allowance at September 30, 2008 was approximately $4,000. The net
change in valuation allowance during the year ended September 30, 2009, was an
increase of approximately $62,000. In assessing the realizability of
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred income tax assets will not be
realized. The ultimate realization of deferred income tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management
considers the scheduled reversal of deferred income tax liabilities, projected
future taxable income, and tax planning strategies in making this
assessment. Based on consideration of these items, management
has determined that enough uncertainty exists relative to the realization of the
deferred income tax asset balances to warrant the application of a full
valuation allowance as of September 30, 2009.
The
actual tax benefit differs from the expected tax benefit for the periods ended
September 30, 2009 and 2008, respectively (computed by applying the U.S. Federal
Corporate tax rate of 34% to income before taxes and 4% for State income taxes,
a blended rate of 36.64%) approximately as follows:
2009
|
2008
|
|||||||
Expected
tax expense (benefit) - Federal
|
$ | (199,000 | ) | $ | (6,000 | ) | ||
Expected
tax expense (benefit) - State
|
(25,000 | ) | (1,000 | ) | ||||
Stock
issued for pre-incorporation services
|
- | 3,000 | ||||||
Stock
issued for non-deductible compensation
|
162,000 | - | ||||||
Change
in valuation allowance
|
62,000 | 4,000 | ||||||
Actual
tax expense (benefit)
|
$ | - | $ | - |
Note 7 Stockholders’
Deficit
On August
14, 2008, the Company issued 80,000,000 shares of common stock, having a fair
value of $8,000 ($0.0001/share), to its founder for pre-incorporation
services. Fair value of the services provided reflected a more
readily determinable fair value of the shares issued. At September
30, 2008, the Company expensed this stock issuance as a component of general and
administrative expense. These shares are being held by a third
party escrow agent as security on a note payable in the event of default on the
$100,000 note (See Note 5).
F-13
Omni
Ventures, Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September 30, 2009 and
2008
In
October 2008, the Company issued 610,000 shares of common stock, for $12,200
($0.02/share), under a private placement to third party investors.
On
November 26, 2008, the Company issued 12,045,172 shares of common stock to
consultants for future services having a fair value of $240,903 ($0.02/share),
based upon the recent cash offering price. The services were rendered
during the period December 1, 2008 through August 31, 2009. The Company expensed
$240,903 during the year ended September 30, 2009.
On May 5,
2009, the Company issued 10,000,000 shares of common stock, having a fair value
of $200,000 ($0.02/share), to its Chairman and CEO as compensation for past
services rendered. Fair value was based upon recent cash offerings to third
parties at $0.02/share in October 2008. The Company believes that the
valuation of these shares based upon a quoted closing trading price is not the
best available evidence among willing buyers or sellers due to the stock being
restricted and thinly traded at the date of issuance. Furthermore,
the Company was inactive, so no valuation could be ascribed that would indicate
the shares had any additional value. These shares were cancelled and
retired in January 2010.
Note 8 Subsequent
Events
The
Company has evaluated for subsequent events between the balance sheet date of
September 30, 2009 and January 12, 2010, the date the financial statements were
issued.
On
January 1, 2010, the Company executed a $15,000 convertible note, with a
maturity date of July 1, 2010. The note is unsecured. The note bears interest at
12%, commencing after the maturity date. The note is convertible at
$0.0025/share. The Company has determined that since the terms of the
note could require physical delivery of free trading shares within three days of
conversion, this event is outside the control of the Company, and the Company
has determined this requires fair value accounting under ASC
815. Additionally, if the Company is unable to deliver registered
shares, certain liquidated damage provisions are applicable. As of
January 12, 2009, none of these clauses for conversion or liquidated damages has
occurred or could be reasonable estimable.
F-14
ITEM
8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM
8A. CONTROLS AND PROCEDURES
Evaluation of disclosure
controls and procedures
Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, have evaluated the effectiveness of our disclosure controls
and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act) as of the end of the period covered by this report. Based on
that evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of such period, our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is (i) recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms; and (ii) accumulated and communicated to management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required
disclosure.
Management's
Report on Internal Control over Financial Reporting
Management is
responsible for establishing and maintaining adequate internal control over
financial reporting. Our internal control over financial reporting has been
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles in the United States of
America.
Our internal control
over financial reporting includes policies and procedures that pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
transactions and dispositions of our assets; provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the
United States of America, that receipts and expenditures are being made only in
accordance with authorization of our management and directors; and provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect
on our financial statements.
Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Management assessed
the effectiveness of our internal control over financial reporting at September
30, 2009. In making this assessment, management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission in Internal
Control—Integrated Framework. Based on that assessment under those criteria,
management has determined that, at September 30, 2009, our internal control over
financial reporting was effective.
This annual 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 annual report.
Changes
in Internal Control over Financial Reporting
There have been no
changes in our internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fourth quarter of fiscal year 2009 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
ITEM
8B. Other Information
None.
19
PART
III
ITEM
9. Directors, Executive Officers and Corporate
Governance
Set forth
below is certain information with respect to the individuals who are our
directors, executive officers and significant employees.
NAME
|
AGE
|
POSITION
|
||
Hollis
Cunningham
|
70
|
Chairman,
Chief Executive Officer, and President
|
||
Carolyn
Cunningham
|
66
|
Secretary,
Treasurer
|
Hollis
Cunningham
Our
Chairman, Chief Executive Officer, and founder, Mr. Hollis Cunningham has been
active in the successful development and construction of apartment projects,
commercial projects, and industrial projects in the mid-west for 44 years.
From 1957 to 1959, Mr. Cunningham was a financial analyst with Dun &
Bradstreet and from 1960 to 1963 he was Vice President of Kansas Quality Homes,
Inc., in charge of sales and marketing. Since 1963, Mr. Cunningham has been self
employed as a contractor-developer, registered in most mid-west states,
including Florida, Texas, Arizona, and California. His areas of expertise
include architectural and engineering, infrastructure needs such as utilities,
zoning, due diligence needs, design-build, marketing, rent-up assistance,
management services, and project financing.
Carolyn
Cunningham
Mrs.
Carolyn Cunningham is our Secretary and Treasurer. Mrs. Cunningham’s duties with
us include office management, accounting oversight, document preparation and due
diligence, and coordination of in-house accounting with our independent auditor.
From 1964 to 1966, Mrs. Cunningham worked in the accounting and billing
department at Universal Atlas Cement, a division of U.S. Steel. From 1966 to
present she has been self employed. Areas of expertise include office
management, construction accounting, apartment management, Section 42 low income
housing management and compliance reporting, preparation of documents and
records for Section 42 auditing and preparation of tax returns for various
partnerships and limited liability companies.
Carolyn
Cunningham is the wife of Hollis Cunningham
Directors
and Officers
Each director is
elected for a period of one year at our annual meeting of stockholders and
serves until the next such meeting and until his or her successor is duly
elected and qualified. The board of directors may also appoint additional
directors up to the maximum number permitted by our By-Laws. A director so
chosen or appointed will hold office until the next annual meeting of
stockholders.
Each of our executive
officers serves at the discretion of our board of directors and holds office
until his or her successor is elected or until his or her earlier resignation or
removal in accordance with our Second Amended and Restated Certificate of
Incorporation and By-Laws.
Meetings
and Committees of the Board
During the year ended
September 30, 2009, our board of directors held one meeting and took no actions
by written consent.
Compliance
with Section 16(a) of the Exchange Act
Section 16(a) of the
Exchange Act requires our directors and officers, and persons who own more than
10% of a registered class of our equity securities, to file reports of ownership
and changes in ownership with the SEC. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish us with copies of all the
Section 16(a) forms they file.
20
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table provides the names and addresses of each person known to us to
own more than 5% of our outstanding shares of common stock as of September 30,
2009 and by the officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.
Title
of Class
|
Name
and Address
of
Beneficial Owner
|
Amount
and Nature
of
Beneficial Owner
|
Percent
of
Class
(1)
|
Common
Stock
|
Hollis
Cunningham
11260
W 155th
Terrace
Overland
Park, KS 66221
|
90,000,000
|
77.92%
|
Common
Stock
|
Carolyn
Cunningham
11260
W 155th
Terrace
Overland
Park, KS 66221
|
0
|
0%
|
Common
Stock
|
All
executive officers and directors as a group
|
90,000,000
|
77.92%
|
(1) Based
upon 102,675,172 shares outstanding as of September 30, 2009.
ITEM
10. Executive Compensation
SUMMARY
COMPENSATION TABLE
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Non-Qualified
Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
|
Totals
($)
|
||||||||||||
Hollis
Cunningham
Chairman,
and
Chief
Executive Officer
|
2009(1)
|
$
|
0
|
0
|
$
|
8,000
|
0
|
0
|
0
|
0
|
$
|
8,000(2)
|
(1) We
do not have any plans to pay our officers and directors any compensation at this
time and our financial situation would be worse than currently disclosed if we
were required to make such payments.
(2) Effective
August 14, 2008, Hollis Cunningham, our Founder and CEO was issued 80,000,000
common stock shares, par value $0.0001 and 20,000,000 preferred stock shares,
par value $0.0001 for pre-incorporation services. Effective September 25, 2008,
Hollis Cunningham returned 20,000,000 preferred shares of his stock to our
treasury. We do not intend to issue additional shares to Mr. Cunningham in the
future as consideration for his services.
Option
Grants Table. There were no individual grants of stock options to
purchase our common stock made to the executive officer named in the Summary
Compensation Table through September 30, 2009.
Aggregated
Option Exercises and Fiscal Year-End Option Value Table. There
were no stock options exercised during year ending September 30, 2009 by
the executive officer named in the Summary Compensation
Table.
Long-Term
Incentive Plan ("LTIP") Awards Table. There were no awards made to a
named executive officer during the year ended September 30, 2009 under any
LTIP.
21
ITEM
11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table provides the names and addresses of each person known to us to
own more than 5% of our outstanding shares of common stock as of January 14,
2009 and by the officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.
Title
of Class
|
Name
and Address
of
Beneficial Owner
|
Amount
and Nature
of
Beneficial Owner
|
Percent
of
Class
(1)
|
Common
Stock
|
Hollis
Cunningham
11260
W 155th
Terrace
Overland
Park, KS 66221
|
90,000,000
|
77.92%
|
Common
Stock
|
Carolyn
Cunningham
11260
W 155th
Terrace
Overland
Park, KS 66221
|
0
|
0%
|
Common
Stock
|
All
executive officers and directors as a group
|
90,000,000
|
77.92%
|
ITEM
12. Certain Relationsihps and Related Transactions, and
Director Independence
Our
policy is to enter into transactions with related parties on terms that, on the
whole, are more favorable, or no less favorable, than those available from
unaffiliated third parties. Based on our experience in the business sectors in
which we operate and the terms of our transactions with unaffiliated third
parties, we believe that all of the transactions described below met this policy
standard at the time they occurred.
Except as
otherwise indicated below, we have not been a party to any transaction, proposed
transaction, or series of transactions required to be disclosed pursuant to Item
404 of Regulation S-K.
ITEM
13. Prinicipal
Accounting Fees and Services
As of
September 30, 2009 and 2008, aggregate fees billed to us by our independent
registered public accounting firm is as follows:
Summary:
|
2009
|
2008
|
||||||
Audit
fees
|
$
|
$22,000
|
$
|
6,000
|
||||
Audit
related fees
|
-
|
-
|
||||||
Tax
fees
|
-
|
-
|
||||||
Other
fees
|
-
|
-
|
22
PART
IV
ITEM
14. EXHIBITS
Method
of Filing
|
Exhibit
Number
|
Exhibit
Title
|
Filed
herewith
|
31.1
|
Certification
of CEO and CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
Filed
herewith
|
32.1
|
Certification
of CEO and CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002.
|
23
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
OMNI VENTURES, INC. | |
By:
|
/s/
Hollis
Cunningham
|
Hollis
Cunningham
President, Chief Executive Officer,
Chief
Financial Officer,
Chairman
of the Board of Directors
|
Dated
|
January
14, 2010
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
Name
|
Title
|
Date
|
|
/s/ Hollis Cunningham | President, Chief Executive Officer, |
January
14, 2010
|
|
Hollis
Cunningham
|
Chief
Financial Officer,
Chairman
of the Board of Directors
|
|
24