Attached files
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EX-31.2 - Tia I, Inc | v173212_ex31-2.htm |
EX-32.2 - Tia I, Inc | v173212_ex32-2.htm |
EX-31.1 - Tia I, Inc | v173212_ex31-1.htm |
EX-32.1 - Tia I, Inc | v173212_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20-549
FORM
10-Q
(Mark
One)
x
|
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
quarterly period ended December 31, 2009
o
|
TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE EXCHANGE
ACT
|
For the
transition period from ______________ to _____________
Commission
file number: 0-52285
TIA
I, INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
51-0597955
|
|
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
|
58
Heng Shan Road, Kun Lun Shopping Mall,
|
150090
|
|
Harbin,
The People’s Republic of China
|
(Zip
Code)
|
|
(Address
of principal executive offices)
|
011-86-451-8233-5794
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate
by check mark whether the registrant (1) has filed 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 Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o No
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” ion Rule 12b-2 of the Exchange Act.
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange
Act). Yes x No
o
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes o No
o
APPLICABLE
ONLY TO CORPORATE ISSUERS
Indicate
the number of shares outstanding of each of the issuer’s classes of common
equity, as of the latest practicable date:
As of
February 4, 2010, there are 1,000,000 shares of $0.0001 par value common stock
issued and outstanding.
FORM
10-Q
TIA I,
INC.
INDEX
Page
|
||
PART
I
|
FINANCIAL
INFORMATION
|
|
Item
1. Financial Statements (Unaudited).
|
1
|
|
Balance
Sheets as of December 31, 2009 (Unaudited) and September 30,
2009.
|
1
|
|
Statements
of Operations for the Three Months Ended December 31, 2009 and 2008 and
the Period from August 17, 2006 (Inception) to December 31, 2009
(Unaudited).
|
2
|
|
Statement
of Changes in Stockholders’ Deficiency for the Period from August 17, 2006
(Inception) to December 31, 2009 (Unaudited).
|
3
|
|
Statements
of Cash Flows for the Three Months Ended December 31, 2009 and 2008 and
the Period from August 17, 2006 (Inception) to December 31, 2009
(Unaudited).
|
4
|
|
Notes
to Financial Statements.
|
5—9
|
|
Item
2. Management’s Discussion and Analysis of Financial Condition and results
of Operations.
|
10—14
|
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
|
14
|
|
Item
4. Controls and Procedures.
|
14—15
|
|
PART
II
|
OTHER
INFORMATION
|
|
Item
1. Legal Proceedings.
|
16
|
|
Item
1A. Risk Factors.
|
16
|
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
|
16
|
|
Item
3. Defaults Upon Senior Securities.
|
16
|
|
Item
4. Submission of Matters to a Vote of Security Holders.
|
16
|
|
Item
5. Other Information.
|
16
|
|
Item
6. Exhibits
|
16
|
PART
I - FINANCIAL INFORMATION
Item
1. Financial Statements (Unaudited)
TIA I,
INC.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEETS
December 31, 2009
(Unaudited)
|
September 30, 2009
|
|||||||
ASSETS
|
||||||||
Cash
|
$ | - | $ | - | ||||
TOTAL
ASSETS
|
$ | - | $ | - | ||||
LIABILITIES AND STOCKHOLDER’S
DEFICIENCY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 2,000 | $ | 1,500 | ||||
Advances
- related party
|
19,496 | 16,996 | ||||||
TOTAL
LIABILITIES
|
21,496 | 18,496 | ||||||
STOCKHOLDER’S
DEFICIENCY:
|
||||||||
Preferred
stock, $.0001 par value; 10,000,000 shares authorized, -0-
issued
|
- | - | ||||||
Common
stock, $.0001 par value; 250,000,000 shares authorized, 1,000,000 shares
issued and outstanding.
|
100 | 100 | ||||||
Additional
paid in capital
|
41,295 | 41,295 | ||||||
Deficit
accumulated during the development stage
|
(62,891 | ) | (59,891 | ) | ||||
TOTAL
STOCKHOLDER’S DEFICIENCY
|
(21,496 | ) | (18,496 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
|
$ | - | $ | - |
The
accompanying notes are an integral part of these financial
statements.
1
TIA I,
INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF OPERATIONS
(Unaudited)
For the Three Months
Ended
December 31,2009
|
For the Three Months
Ended
December 31,2008
|
For the period
from August 17,
2006 (Date of
Inception) to
December 31, 2009
|
||||||||||
REVENUES
|
$ | - | $ | - | $ | - | ||||||
GENERAL
AND ADMINISTRATION EXPENSES
|
(3,000 | ) | (13,074 | ) | (62,891 | ) | ||||||
NET
LOSS
|
$ | (3,000 | ) | $ | (13,074 | ) | $ | (62,891 | ) | |||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
|
1,000,000 | 1,000,000 | ||||||||||
NET
LOSS PER SHARE - BASIC AND DILUTED
|
$ | (0.00 | ) | $ | (0.01 | ) |
The
accompanying notes are an integral part of these financial
statements.
2
TIA I,
INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CHANGES IN STOCKHOLDER’S DEFICIENCY
FOR THE
PERIOD FROM AUGUST 17, 2006 (DATE OF INCEPTION) TO DECEMBER 31,
2009
Common Stock
|
Additional
Paid in
|
Accumulated
Deficit
During the
Development
|
Total
Stockholder’s
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Deficiency
|
||||||||||||||||
Common
shares issued on August 28, 2006 at $0.0001
per share
|
1,000,000 | $ | 100 | $ | - | $ | - | $ | 100 | |||||||||||
Net
loss for the period ended September 30, 2006
|
- | - | - | (365 | ) | (365 | ) | |||||||||||||
Balance
at September 30, 2006
|
1,000,000 | 100 | - | (365 | ) | (265 | ) | |||||||||||||
Imputed
interest on advance from related parties
|
- | - | 932 | - | 932 | |||||||||||||||
Net
loss for the period ended September 30, 2007
|
- | - | - | (19,077 | ) | (19,077 | ) | |||||||||||||
Balance
at September 30, 2007
|
1,000,000 | 100 | 932 | (19,442 | ) | (18,410 | ) | |||||||||||||
Imputed
interest on advance from related parties
|
- | - | 1,426 | - | 1,426 | |||||||||||||||
Net
loss for the period ended September 30, 2008
|
- | - | - | (19,427 | ) | (19,427 | ) | |||||||||||||
Balance
at September 30, 2008
|
1,000,000 | 100 | 2,358 | (38,869 | ) | (36,411 | ) | |||||||||||||
Imputed
interest on advance from related parties
|
- | - | 976 | - | 976 | |||||||||||||||
Owner
contribution from advance
|
- | - | 37,961 | - | 37,961 | |||||||||||||||
Net
loss for the period ended September 30, 2009
|
- | - | - | (21,022 | ) | (21,022 | ) | |||||||||||||
Balance
at September 30, 2009
|
1,000,000 | 100 | 41,295 | (59,891 | ) | (18,496 | ) | |||||||||||||
Net loss for the
period ended
December 31,
2009(unaudited)
|
- | - | - | (3,000 | ) | (3,000 | ) | |||||||||||||
Balance
at December 31, 2009(unaudited)
|
1,000,000 | $ | 100 | $ | 41,295 | $ | (62,891 | ) | $ | (21,496 | ) |
The
accompanying notes are an integral part of these financial
statements.
3
TIA I,
INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CASH FLOWS
(Unaudited)
For the Three Months
Ended
December 31,2009
|
For the Three Months
Ended
December 31,2008
|
For the period
from August 17,
2006 (Date of
Inception) to
December 31, 2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss
|
$ | (3,000 | ) | $ | (13,074 | ) | $ | (62,891 | ) | |||
Adjustment
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Imputed
interest cost
|
- | 400 | 3,334 | |||||||||
(Decrease)Increase
in accounts payable
|
500 | (10,329 | ) | 2,000 | ||||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(2,500 | ) | (23,003 | ) | (57,557 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds
from the sale of common stock
|
- | - | 100 | |||||||||
Proceeds
from related party
|
2,500 | 22,877 | 57,457 | |||||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
2,500 | 22,877 | 57,557 | |||||||||
NET
DECREASE IN CASH
|
- | (126 | ) | - | ||||||||
CASH
AT BEGINNING OF YEAR
|
- | 126 | - | |||||||||
CASH
AT END OF PERIOD
|
$ | - | $ | - | $ | - | ||||||
Non-cash
investing and financing activities
|
||||||||||||
Owner
contribution from advance to capital
|
$ | - | $ | 37,961 | $ | 37,961 |
The
accompanying notes are an integral part of these financial
statements.
4
TIA I,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
(Unaudited)
NOTE
1 - Organization, Business and Operations
TIA I,
Inc. (the “Company”) was incorporated in Delaware on August 17, 2006, with an
objective to acquire, or merge with, an operating business. As of December
31, 2009, the Company had not yet commenced any operations.
The
Company, based on proposed business activities, is a "blank check" company. The
Securities and Exchange Commission (“SEC”) defines such a company as “a
development stage company” that has no specific business plan or purpose, or has
indicated that its business plan is to engage in a merger or acquisition with an
unidentified company or companies, or other entity or person; and is issued
‘penny stock,’ as defined in Rule 3a51-1 under the Securities Exchange Act of
1934. Many states have enacted statutes, rules and regulations limiting the sale
of securities of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to develop
in its securities, either debt or equity, until the Company concludes a business
combination.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation and, to a lesser extent, that desires to
employ the Company’s funds in its business. The Company’s principal business
objective for the next 12 months and beyond such time will be to achieve
long-term growth potential through a combination with a business (“Business
Combination”) rather than immediate, short-term earnings. The Company will not
restrict its potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of business.
The analysis of new business opportunities will be undertaken by or under the
supervision of the officers and directors of the Company.
Until a
Business Combination is completed, the sole stockholder has agreed to fund the
Company’s operating costs through the earlier of a Business Combination or
December 31, 2009. There is no assurance that the Company will be able to
successfully complete a Business Combination.
On
December 8, 2008, the Company entered into a Stock Purchase Agreement (the
“Purchase Agreement”) whereby the holder (the “Seller”) of all the common stock
of the Company sold their shares to an individual (the “Buyer”) who is now in
control of the Company. The Buyer subsequent to the Purchase agreement was
appointed by the board of directors as the Company’s new Chief Executive
Officer, Chief Financial Officer and Secretary and sole director pursuant to a
written consent of directors. The Seller in conjunction with the Purchase
Agreement resigned as the Company’s director, President and
Secretary.
NOTE
2 - Basis of Presentation
The
accompanying unaudited financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. In the
opinion of management, the accompanying financial statements include all
adjustments (consisting of normal, recurring adjustments) necessary to make the
Company’s financial position, results of operations and cash flows not
misleading as of and for the period ended December 31, 2009. The results of
operations for the three months ended December 31, 2009 and for the period
August 17, 2006 (Date of Inception) to December 31, 2009, are not necessarily
indicative of the results of operations for the full year or any other interim
period. These financial statements should be read in conjunction with the
audited financial statements and note thereto included in the Company’s Annual
Report on Form 10-K for the year ended September 30, 2009.
5
TIA I,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
(Unaudited)
NOTE
2 - Basis of Presentation (Continued)
Development
Stage Company
The
Company has not generated significant revenues to date; accordingly, the Company
is considered a development stage enterprise as defined in ASC Topic 915
“Development Stage Entities” (SFAS No. 7, "Accounting and Reporting for
Development Stage Companies.") The Company is subject to a number of risks
similar to those of other companies in an early stage of
development.
Going
Concern
The
financial statements have been prepared on the basis of a going concern which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has a working capital deficiency of
$21,496 and $18,496 and an accumulated deficit of $62,891 and $58,891 as of
December 31, 2009 and September 30, 2009 respectively, and has incurred
significant losses since inception. Further losses are anticipated in the
development of an intended business plan. If the Company is unable to obtain
financing in the amounts and on terms deemed acceptable, the business and future
success may be adversely affected. Given the Company's limited operating
history, lack of sales, and its operating losses, there can be no assurance that
it will be able to achieve or maintain profitability. Accordingly, these factors
raise substantial doubt about the Company’s ability to continue as a going
concern.
The
Company will depend almost exclusively on outside capital to complete the
development of a business plan. Such outside capital will include proceeds from
the issuance of equity securities and may include commercial borrowing. There
can be no assurance that capital will be available as necessary to meet these
development costs or, if the capital is available, that it will be on terms
acceptable to the Company.
The
issuances of additional equity securities by the Company may result in a
significant dilution in the equity interests of its current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase the Company's liabilities and future cash commitments.
NOTE
3 - Summary of Significant Accounting Policies
Income
Taxes
The
Company utilizes the liability method of accounting for income taxes. Under the
liability method, deferred income taxes are determined based on the differences
between the bases of assets and liabilities for
financial reporting and income tax purposes. A valuation allowance is
established when necessary to reduce deferred tax assets to the amount expected
to be realized.
Loss
Per Common Share
Basic and
diluted net loss per common share is computed by dividing the net loss by the
weighted-average number of shares of common stock outstanding during the
period.
6
TIA I,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
(Unaudited)
NOTE
3 - Summary of Significant Accounting Policies (Continued)
Use
of Estimates
The
preparation of 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 disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Fair
Value of Financial Instruments
As of
January 1, 2008, we adopted on a prospective basis certain required provisions
of Topic 820, “Fair Value Measurements.” Those provisions relate to our
financial assets and liabilities carried at fair value and our fair value
disclosures related to financial assets and liabilities. Topic 820 defines fair
value, expands related disclosure requirements and specifies a hierarchy of
valuation techniques based on the nature of the inputs used to develop the fair
value measures. Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. There are three levels of inputs to
fair value measurements - Level 1, meaning the use of quoted prices for
identical instruments in active markets;
Level 2, meaning the use of quoted prices for similar instruments in active
markets or quoted prices for identical or similar instruments in markets that
are not active or are directly or indirectly observable; and Level 3, meaning
the use of unobservable inputs. Observable market data should be used when
available.
The
carrying amounts reported in the balance sheet for cash, accounts payable and
amounts due to related party approximate their fair market value based on the
short-term maturity of these instruments. Virtually all of our valuation
measurements are Level 1 measurements. The adoption of Topic 820 did not have a
significant
impact on our consolidated financial statements.
Reclassifications
Certain
reclassifications have been made to the prior periods' financial statements to
conform to the current year classification. These reclassifications had no
effect on previously reported results of operations or retained
earnings.
Recent
Accounting Standards
On June
5, 2003, the United States Securities and Exchange Commission (“SEC”) adopted
final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”),
as amended by SEC Release No. 33-9072 on October 13, 2009.
Commencing with its annual report for the year ending September 30, 2010, the
Company will be required to include a report of management on its internal
control over financial reporting. The internal control report must include a
statement of (i) management’s responsibility for establishing and maintaining
adequate internal control over its financial reporting; (ii) management’s
assessment of the effectiveness of its internal control over financial reporting
as of year end; and (iii) the framework used by management to evaluate the
effectiveness of the Company’s internal control over financial reporting.
Furthermore, it is required to file the auditor’s attestation report separately
on the Company’s internal control over financial reporting on whether it
believes that the Company has maintained, in all material respects, effective
internal control over financial reporting. The Company is working to meet the
requirements.
7
TIA I,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
(Unaudited)
In
September 2009, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update 2009-13, “Multiple-Deliverable Revenue
Arrangements,” which amends the multiple-element arrangement guidance under
Accounting Standards Codification (ASC) 605, “Revenue Recognition.” This
guidance amends the criteria for separating consideration of products or
services in multiple-deliverable arrangements. This guidance establishes a
selling price hierarchy for determining the selling price of a deliverable,
eliminates the residual method of allocation, and requires that arrangement
consideration be allocated at the inception of the arrangement to all
deliverables using the relative selling price method. In addition, this guidance
significantly expands required disclosures related to a vendor’s
multiple-deliverable revenue arrangements. This guidance is effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. The Company is currently
evaluating the provisions of this guidance but does not anticipate that it will
have a material effect on its consolidated financial statements.
In August
2009, the FASB issued Accounting Standards Update 2009-05, Fair Value
Measurements and Disclosures (Topic 820) Measuring Liabilities at Fair Value.
This guidance clarifies that in circumstances in which a quoted price in an
active market for an identical liability is not available, a reporting entity is
required to measure fair value of such liability using one or more of the of the
techniques prescribed by the update. This guidance is effective for the first
reporting period beginning after issuance which is the period ending December
31, 2009. We are currently evaluating the potential effect on the financial
statements.
In June
2009, the FASB issued ASC 810-10-65-2, “Transition Related to FASB Statement No.
167, Amendments to FASB Interpretation No. 46(R)” (SFAS No. 167, “Amendments to
FASB Interpretation No. 46(R)”), which amends the consolidation guidance that
applies to variable interest entities under ASC 810-10-05, “Consolidation of
VIE’s” (FIN 46(R), “Consolidation of Variable Interest Entities”). ASC
810-10-65-2 changes how a company determines when an entity that is
insufficiently capitalized or is not controlled through voting (or similar
rights) should be consolidated. This guidance is effective for financial
statements issued in fiscal years (and interim periods) beginning after November
15, 2009. The Company is currently evaluating the provisions of this guidance
but does not anticipate that it will have a material effect on its financial
statements.
In May
2009, the FASB issued ASC 855, “Subsequent Events” (SFAS No. 165, “Subsequent
Events”) which establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. This guidance is effective
prospectively for interim and annual periods ending after June 15, 2009. The
Company included the requirements of this guidance in the preparation of the
accompanying financial statements, and has evaluated subsequent events through
December 17, 2009, the date that the accompanying financial statements were
issued.
In April
2009, the FASB issued new guidance under ASC 320, “Investments—Debt and Equity
Securities,” (FASB Staff Position (FSP) FAS 115-2 and FAS 124-2, “Recognition
and Presentation of Other-Than-Temporary Investments”) which provides a new
other-than-temporary impairment model for debt and equity securities. This
guidance was effective for financial statements issued in fiscal years (and
interim periods) ending after June 15, 2009. The application of the requirements
of this guidance did not have a material effect on the accompanying financial
statements.
A variety
of proposed or otherwise potential accounting standards are currently under
study by standard setting organizations and various regulatory agencies. Due to
the tentative and preliminary nature of those proposed standards, management has
not determined whether implementation of such proposed standards would be
material to our financial statements.
8
TIA I,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - Advances-
Related Party
In
December 2008 all the issued shares of the Company were sold to a new
shareholder, accordingly the control and management of the Company changed
subsequent to this transaction. Prior to this transaction the Company received a
$139 advance on August 17, 2006 and a $10,000 advance on August 28, 2006 from
the former sole stockholder. On August 28, 2006, the amount owed by the Company
for these advances was reduced by $100 when the former sole shareholder
purchased 1,000,000 shares of common stock at .0001 per share. The Company
received a further advance of $13,753 and $10,087 from the former sole
shareholder during the years ended September 30, 2009 and 2008, respectively.
During the year ended September 30, 2009, the Company received $16,996 from the
current sole shareholder. As of September 30, 2009, the former sole stockholder
has given up her advance totaling $37,961 without restriction. The Company has
recorded this as a capital contribution. As of September 30, 2009, the Company
owes $0 to the former sole stockholder and $16,996 to the current sole
stockholder. As of December 31, 2009, the Company owes $19,496 to the current
sole stockholder.
Through
the year ended September 30, 2009 the Company recorded an imputed interest on
all advances from related parties. From October 1, 2009 the Company deems all
advances from related parties as payable on demand and non-interest bearing; in
addition, no imputed interest is to be accounted for from that date forward on
advances from related party.
NOTE
5 - Preferred Stock
The
Company is authorized to issue 10,000,000 shares of preferred stock with such
designations, voting and other rights and preferences as may be determined from
time to time by the Board of Directors.
9
Item 2.
Management’s
Discussion and Analysis of Financial Condition or Plan of
Operations.
General
We were
originally incorporated on August 17, 2006 under the laws of the State of
Delaware. We were initially formed as a "blank check" entity for the
purpose of seeking a merger, acquisition or other business combination
transaction with a privately owned entity seeking to become a publicly-owned
entity.
Our
current principal business activity is to seek a suitable reverse acquisition
candidate through acquisition, merger or other suitable business combination
method.
It is the
intent of management and our significant stockholder to provide sufficient
working capital necessary to support and preserve the integrity of the corporate
entity. However, there is no legal obligation for either management or
significant stockholder to provide additional future funding. Should this pledge
fail to provide financing and we have not identified any alternative sources of
funding. There will be substantial doubt about our ability to continue as
a going concern.
Our need
for capital may change dramatically because of any business acquisition or
combination transaction. There can be no assurance that we will identify
any such business, product, technology or company suitable for acquisition in
the future. Further, there can be no assurance that we will be successful
in consummating any acquisition on favorable terms or that we will be able to
profitably manage the business, product, technology or company we
acquire.
Plan of
Operation
Our
current purpose is to seek, investigate and, if such investigation warrants,
merge or acquire an interest in business opportunities presented to us by
persons or companies who or which desire to seek the perceived advantages of a
Securities Exchange Act of 1934 registered corporation. As of the date
hereof, we have no particular acquisitions in mind and have not entered into any
negotiations regarding such an acquisition, and neither our officer and director
nor any promoter has engaged in any negotiations with any representatives of the
owners of any business or company regarding the possibility of a merger or
acquisition between us and such other company.
Pending
negotiation and consummation of a combination, we anticipate that we will have,
aside from carrying on our search for a combination partner, no business
activities, and, thus, will have no source of revenue. Should we incur any
significant liabilities prior to a combination with a private
company, we may not be able to satisfy
such liabilities as are incurred.
If our
management pursues one or more combination opportunities beyond the preliminary
negotiations stage and those negotiations are subsequently terminated, it is
foreseeable that such efforts will exhaust our ability to continue to seek such
combination opportunities before any successful combination can be consummated.
In that event, our common stock will become worthless and holders of our
common stock will receive a nominal distribution, if any, upon our liquidation
and dissolution.
Management
We
are in the development stage and currently have no full-time employees.
Mr. Xiqun Yu is our sole officer, director and controlling shareholder.
Mr. Yu has agreed to allocate a limited portion of his time to the
activities of the Company without compensation. Potential conflicts may
arise with respect to the limited time commitment by Mr. Yu and the potential
demands of our activities.
10
The
amount of time spent by Mr. Yu on the activities of the Company is not
predictable. Such time may vary widely from an extensive amount when reviewing a
target company to an essentially quiet time when activities of management focus
elsewhere or some amount in between. It is impossible to predict with any
precision the exact amount of time Mr. Yu will actually be required to spend to
locate a suitable target company. Mr. Yu estimates that the business plan of the
Company can be implemented by devoting less than five hours per month but such
figure cannot be stated with precision.
Search for Business
Opportunity
Our
search will be directed toward small and medium-sized enterprises, which have a
desire to become reporting corporations and which are able to provide audited
financial statements. We do not propose to restrict our search for investment
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of our limited
resources. Our discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors. No assurance can be given that we will be
successful in finding or acquiring a desirable business opportunity, and no
assurance can be given that any acquisition, which does occur, will be on terms
that are favorable to us or our current stockholder.
We may merge with a company that has
retained one or more consultants or outside advisors. In that situation, we
expect that the business opportunity will compensate the consultant or outside
advisor. As of the date of this filing, there have been no discussions,
agreements or understandings with any party regarding the possibility of a
merger or acquisition between the Company and such other company. Consequently,
we are unable to predict how the amount of such compensation would be calculated
at this time. It is anticipated that any finder that the target company retains
would be a registered broker-dealer.
We will
not restrict our search to any specific kind of firm, but may acquire a venture,
which is in its preliminary or development stage, one which is already in
operation or in a more mature stage of its corporate existence. The acquired
business may need to seek additional capital, may desire to have its shares
publicly traded, or may seek other perceived advantages which the Company may
offer. We do not intend to obtain funds to finance the operation of any acquired
business opportunity until such time as we have successfully consummated the
merger or acquisition transaction. There are no loan arrangements or
arrangements for any financing whatsoever relating to any business
opportunities.
Evaluation of Business
Opportunities
The
analysis of business opportunities will be under the supervision of our sole
officer and director, who is not a professional business analyst. In analyzing
prospective business opportunities, management will consider such matters as
available technical, financial and managerial resources; working capital and
other financial requirements; history of operations, if any; prospects for the
future; nature of present and expected competition; the quality and experience
of management services which may be available and the depth of that management;
the potential for further research, development, or exploration; specific risk
factors not now foreseeable, but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or expansion; the
potential for profit; the perceived public recognition or alternatively,
acceptance of products, services, or trades; name identification; and other
relevant factors. In many instances, it is anticipated that the historical
operations of a specific business opportunity may not necessarily be indicative
of the potential for the future because of a variety of factors, including, but
not limited to, the possible need to expand substantially, shift marketing
approaches, change product emphasis, change or substantially augment management,
raise capital and the like. Management intends to meet personally with
management and key personnel of the target business entity as part of its
investigation. To the extent possible, we intend to utilize written reports and
personal investigation to evaluate the above factors. Prior to making a decision
to participate in a business opportunity, we will generally request that we be
provided with written materials regarding the business opportunity containing as
much relevant information as possible, including, but not limited to, such items
as a description of products, services and company history; management resumes;
financial information; available projections, with related assumptions upon
which they are based; an explanation of proprietary products and services;
evidence of existing patents, trademarks, alternatively, service marks, or
rights thereto; present and proposed forms of compensation to management; a
description of transactions between such company and its affiliates during the
relevant periods; a description of present and required facilities; an analysis
of risks and competitive conditions; a financial plan of operation and estimated
capital requirements; audited financial statements, or if they are not available
at that time, un-audited financial statements, together with reasonable
assurance that audited financial statements would be able to be produced within
a required period of time; and the like.
11
In the
event we successfully complete the acquisition of or merger with an operating
business entity, that business entity must provide audited financial statements
for at least two most recent fiscal years or, in the event the business entity
has been in business for less than two years, audited financial statements will
be required from the period of inception. Acquisition candidates that do
not have or are unable to obtain the required audited statements may not be
considered appropriate for acquisition. We will not acquire or merge
with any entity which cannot provide audited financial statements at or within a
required period after closing of the proposed transaction. The audited
financial statements of the acquired company must be furnished within 15 days
following the effective date of a business combination.
When a
non-reporting company becomes the successor of a reporting company by merger,
consolidation, exchange of securities, and acquisition of assets or otherwise,
the successor company is required to provide in a Current Report on Form 8-K the
same kind of information that would appear in a Registration Statement or an
Annual Report on Form 10-K, including audited and pro forma financial
statements. The Commission treats these Form 8-K filings in the same way
it treats the Registration Statements on Form 10 filings. The Commission
subjects them to its standards of review selection, and the Commission may issue
substantive comments on the sufficiency of the disclosures represented. If
we enter into a business combination with a non-reporting company, such
non-reporting company will not receive reporting status until the Commission has
determined that it will not review the 8-K filing or all of the comments have
been cleared by the Commission.
We
believe that various types of potential merger or acquisition candidates might
find a business combination with the Company to be attractive. These include
acquisition candidates desiring to create a public market for their shares in
order to enhance liquidity for current stockholders, acquisition candidates,
which have long-term plans for raising capital through public sale of securities
and believe that the possible prior existence of a public market for their
securities would be beneficial, and acquisition candidates which plan to acquire
additional assets through issuance of securities rather than for cash, and
believe that the possibility of development of a public market for their
securities will be of assistance in that process. Acquisition candidates,
who have a need for an immediate cash infusion, are not likely to find a
potential business combination with us to be an attractive alternative.
Nevertheless, we have not conducted market research and are not aware of
statistical data that would support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity. We are unable
to predict when we may participate in a business opportunity. We expect,
however, that the analysis of specific proposals and the selection of a business
opportunity may take several months or more. There can also be no
assurances that we are able to successfully pursue a business opportunity.
In that event, there is a substantial risk to us that failure to complete
a business combination will significantly restrict our business operation and
force management to cease operations and liquidate the Company.
Acquisition of Business
Opportunity
In
implementing a structure for a particular business acquisition, we may become a
party to a merger, consolidation, and reorganization, joint venture or licensing
agreement with another entity. We may also acquire stock or assets of an
existing business. In connection with a merger or acquisition, it is
highly likely that an amount of stock constituting control of the Company would
either be issued by us or be purchased from our current principal stockholder by
the acquiring entity or its affiliates, and accordingly, the shareholders of the
target company, typically, become the majority of the shareholders of the
combined company, the board of directors and officers of the target company
become the new board and officers of the combined company and often the name of
the target company becomes the name of the combined company.
12
There are
currently no arrangements that would result in a change of control of the
Company. It is anticipated that any securities issued as a result of
consummation of a business combination will be issued in reliance upon one or
more exemptions from registration under applicable federal and state securities
laws to the extent that such exemptions are available. In some
circumstances, however, as a negotiated element of the transaction, we may agree
to register all or a part of such securities immediately after the transaction
is consummated or at specified times thereafter. If such registration
occurs, of which there can be no assurance; it will be undertaken by the
surviving entity after the Company has entered into an agreement for a business
combination or has consummated a business combination and we are no longer
considered a dormant shell company. Until this occurs, we will not attempt
to register any additional securities.
The
issuance of substantial additional securities and their potential sale into any
trading market may have a depressive effect on the market value of our
securities in the future if such a market develops, of which there is no
assurance. There have been no plans, proposals, arrangements or understandings
with respect to the sale or issuance of additional securities. While the actual
terms of a transaction to which we may be a party cannot be predicted, it may be
expected that the parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the acquisition in a
"tax-free” reorganization under Sections 351 or 368 of the Internal Revenue Code
of 1986, as amended.
In order
to obtain tax-free treatment, it may be necessary for the owners of the
surviving entity to own 80% or more of the voting stock of the surviving entity.
In this event, our current shareholder would retain less than 20% of the issued
and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholder. However, treatment as a
tax-free reorganization will not be a condition of any future business
combination and if it is not the case, we will not obtain an opinion of counsel
that the reorganization will be tax-free. With respect to any merger or
acquisition, negotiations with target company management are expected to focus
on the percentage of the Company which the target company shareholders would
acquire in exchange for all of their shareholdings in the target company.
Depending upon, among other things, the target company's assets and liabilities,
our only shareholder will in all likelihood hold a substantially lesser
percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the event we acquire a target company with substantial assets.
Any
merger or acquisition effected by us can be expected to have a significant
dilutive effect on the percentage of shares held by our shareholder at such
time. We will participate in a business opportunity only after the negotiation
and execution of appropriate agreements. Although the terms of such agreements
cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, outline the
manner of bearing costs, including costs associated with our attorneys and
accountants, and will include miscellaneous other terms. It is anticipated that
we will not be able to diversify, but will essentially be limited to the
acquisition of one business opportunity because of our limited financing. This
lack of diversification will not permit us to offset potential losses from one
business opportunity against profits from another, and should be considered an
adverse factor affecting any decision to purchase our securities. There are no
present plans, proposals, arrangements or understandings to offer the shares of
the post-merger companies to third parties if any mergers occur, and there is no
marketing plan to distribute the shares of the post-merger companies to third
parties. Mr. Yu has not had any preliminarily contact, agreements or
understandings with anyone to help sell these shares.
We intend
to seek to carry out our business plan as discussed herein. In order to do so,
we need to pay ongoing expenses, including particularly legal and accounting
fees incurred in conjunction with preparation and filing of this registration
statement, and in conjunction with future compliance with our on-going reporting
obligations.
We do not
intend to make any loans to any prospective merger or acquisition candidates or
unaffiliated third parties.
13
LIQUIDITY
AND CAPITAL RESOURCES
It is the
belief of management that sufficient working capital necessary to support and
preserve the integrity of the corporate entity will be present. However, there
is no legal obligation for either management or our significant stockholder to
provide additional future funding. Should this pledge fail to provide
financing, we have not identified any alternative sources. Consequently, there
is substantial doubt about our ability to continue as a going
concern.
We have
no current plans, proposals, arrangements or understandings with respect to the
sale or issuance of additional securities prior to the location of a merger or
acquisition candidate. Accordingly, there can be no assurance that
sufficient funds will be available to us to allow us to cover the expenses
related to such activities.
Our need
for capital may change dramatically because of any business acquisition or
combination transaction. There can be no assurance that we will identify
any such business, product, technology or company suitable for acquisition in
the future. Further, there can be no assurance that we will be successful
in consummating any acquisition on favorable terms or that we will be able to
profitably manage the business, product, technology or company we
acquire.
Regardless
of whether our cash assets prove to be inadequate to meet our operational needs,
we might seek to compensate providers of services by issuances of stock in lieu
of cash.
Item 3. Quantitative and Qualitative
Disclosures About Market Risk.
There are
numerous factors that affect the Company's business and the results of its
operations. These factors include general economic and business conditions; our
ability to raise such funds as are necessary to maintain our operations; the
ability of management to execute its business plan.
Item
4. Controls and Procedures.
Evaluation
of our Disclosure Controls
As of the
end of the period covered by this Quarterly Report on Form 10-Q, our principal
executive officer and principal financial officer have evaluated the
effectiveness of our “disclosure controls and procedures” (“Disclosure
Controls”). Disclosure Controls, as defined in Rule 13a-15(e) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), are procedures that are
designed with the objective of ensuring that information required to be
disclosed in our reports filed under the Exchange Act, such as this Quarterly
Report, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and forms.
Disclosure Controls are also designed with the objective of ensuring that such
information is accumulated and communicated to our management, including the CEO
and CFO, as appropriate to allow timely decisions regarding required disclosure.
Our management, including the CEO and CFO, does not expect that our Disclosure
Controls will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. The design of any
system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future
conditions.
Based
upon their controls evaluation, our CEO and CFO have concluded that our
Disclosure Controls are effective at a reasonable assurance level.
14
Changes
in internal control over financial reporting
There
have been no changes in our internal controls over financial reporting during
our first fiscal quarter that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.
15
PART
II - OTHER INFORMATION
Item 1. Legal
Proceedings.
There is
no material legal proceeding pending against us.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
None.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Submission of Matters to a Vote of Security Holders.
None.
Item
5. Other Information
Not
applicable.
Item
6. Exhibits
Copies of
the following documents are included as exhibits to this report pursuant to Item
601 of Regulation S-K.
Exhibit No.
|
SEC Ref. No.
|
Title of Document
|
||
1
|
|
31.1
|
|
Certification
of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
2.
|
|
31.2
|
|
Certification
of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
3
|
|
32.1
|
|
Certification
of the Principal Executive Officer pursuant to U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002*
|
4
|
|
32.2
|
|
Certification
of the Principal Financial Officer pursuant to U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002*
|
* The Exhibits attached to
this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to
liability under that section, nor shall it be deemed incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in such
filing.
16
SIGNATURES
In
accordance with the Exchange Act, the registrant caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
TIA
I, INC.
|
|
Date:
February 4, 2010
|
|
/s/ Xiqun Yu
|
|
Xiqun
Yu
|
|
Chief
Executive Officer and Chief Financial
Officer
|
17