Attached files
Exhibit 99.1
Stevia Ventures International Ltd.
(A Development Stage Company)
April 30, 2011
Index to Financial Statements
Content Pages
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Report of Independent Registered Public Accounting Firm .................. F-1
Balance Sheet as of April 30, 2011 ....................................... F-2
Statement of Operations for the period from April 11, 2011
(Inception) through April 30, 2011 ...................................... F-3
Statement of Stockholder's Deficit for the period from
April 11, 2011 (Inception) through April 30, 2011 ....................... F-4
Statement of Cash Flows for the period from April 11, 2011
(Inception) through April 30, 2011 ...................................... F-5
Notes to the Financial Statements ........................................ F-6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder of
Stevia Ventures International Ltd.
(A development stage company)
Indianapolis, Indiana
We have audited the accompanying balance sheet of Stevia Ventures
International Ltd (a development stage company) (the "Company"), as of April 30,
2011 and the related statements of operations, stockholder's deficit and cash
flows for the period from April 11, 2011 (inception) through April 30, 2011.
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 audit.
We conducted our audit 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 audit 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 purposes 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 amount 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 audit provides 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 the Company as of April 30,
2011, and the related statements of operations, stockholder's deficit and cash
flows for the period from April 11, 2011 (inception) through April 30, 2011 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 3 to the
financial statements, the Company has a deficit accumulated during the
development stage at April 30, 2011 and had a net loss and net cash used in
operating activities for the period from April 11, 2011 (inception) through
April 30, 2011, respectively with no revenue earned since inception, all of
which raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regards to these matters are also described in
Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Li & Company, PC
--------------------------------
Li & Company, PC
Skillman, New Jersey
June 29, 2011
F-1
Stevia Ventures International Ltd.
(A Development Stage Company)
Balance Sheet
April 30,
2011
--------
Assets
Current Assets
Cash $ --
--------
Total current assets --
Total Assets $ --
========
Liabilities and Stockholder's Deficit
Current Liabilities
Accrued expenses $ 2,145
--------
Total current liabilities 2,145
--------
Stockholder's Deficit
Common stock, $1.00 par value; 50,000 shares authorized;
100 shares issued and outstanding 100
Deficit accumulated during the development stage (2,245)
--------
Total Stockholder's Deficit (2,145)
--------
Total Liabilities and Stockholder's Deficit $ --
========
See accompanying notes to financial statements
F-2
Stevia Ventures International Ltd.
(A Development Stage Company)
Statement of Operations
For the
Period from
April 11, 2011
(Inception)
through
April 30,
2011
--------
REVENUE $ --
--------
OPERATING EXPENSES
Accounting and legal 2,145
Office and miscellaneous 100
--------
Loss before income taxes (2,245)
Provision for income taxes --
--------
Net loss $ (2,245)
========
Net loss per common share - basic and diluted $ (22.45)
========
Weighted average number of common shares outstanding -
basic and diluted 100
========
See accompanying notes to financial statements
F-3
Stevia Ventures International Ltd.
(A Development Stage Company)
Statement of Stockholder's Deficit
For the period from April 11, 2011 (Inception) through April 30, 2011
Deficit
Accumulated
During the Total
Common Stock Development Stockholder's
Shares Amount Stage Deficit
------ ------ ----- -------
Balance, April 11, 2011 (inception) -- $ -- $ -- $ --
Shares issued to founder on April 11, 2011
at par value of $1.00 per share 100 100 -- 100
Net loss -- -- (2,245) (2,245)
------ ------ ------- -------
Balance, April 30, 2011 100 $ 100 $(2,245) $(2,145)
====== ====== ======= =======
See accompanying notes to financial statements
F-4
Stevia Ventures International Ltd.
(A Development Stage Company)
Statement of Cash Flows
For the
Period from
April 11, 2011
(Inception)
through
April 30,
2011
--------
Cash Flows from operating activities:
Net loss $ (2,245)
Adjustments to reconcile net loss to
cash used in operating activities:
Common stock issued for compensation 100
Changes in operating assets and liabilities
Accrued expenses 2,145
--------
Net Cash Used in Operating Activities --
--------
NET CHANGE IN CASH --
CASH AT BEGINNING OF PERIOD --
--------
CASH AT END OF PERIOD $ --
========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ --
========
Taxes paid $ --
========
See accompanying notes to financial statements
F-5
Stevia Ventures International Ltd.
(A Development Stage Company)
April 30, 2011
Notes to Financial Statements
NOTE 1 - ORGANIZATION AND OPERATIONS
Stevia Ventures International Ltd. (the "Company") was incorporated in the
British Virgin Islands on April 11, 2011. Initial operations have included
organization and incorporation, target market identification, new product
development, marketing plans, and capital formation. A substantial portion of
the Company's activities has involved developing a business plan and
establishing contacts and visibility in the marketplace. The Company has
generated no revenues since inception. The Company's business activities will be
focused on Stevia agriculture and distribution.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Company's financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S.
GAAP").
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 810-10-20 of
the FASB Accounting Standards Codification. The Company is still devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced. All losses accumulated since inception
have been considered as part of the Company's exploration stage activities.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States 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 year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
FISCAL YEAR END
The Company elected April 30 as its fiscal year ending date.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
F-6
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph
820-10-35-37") to measure the fair value of its financial instruments. Paragraph
820-10-35-37 establishes a framework for measuring fair value in accounting
principles generally accepted in the United States of America (U.S. GAAP), and
expands disclosures about fair value measurements. To increase consistency and
comparability in fair value measurements and related disclosures, Paragraph
820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to
valuation techniques used to measure fair value into three (3) broad levels. The
fair value hierarchy gives the highest priority to quoted prices (unadjusted) in
active markets for identical assets or liabilities and the lowest priority to
unobservable inputs. The three (3) levels of fair value hierarchy defined by
Paragraph 820-10-35-37 are described below:
Level 1 Quoted market prices available in active markets for identical assets
or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.
The carrying amounts of the Company's financial assets and liabilities, such as
accrued expenses, approximate their fair values because of the short maturity of
these instruments.
The Company does not have any assets or liabilities measured at fair value on a
recurring or a non-recurring basis, consequently, the Company did not have any
fair value adjustments for assets and liabilities measured at fair value at
April 30, 2011; no gains or losses are reported in the statement of operations
that are attributable to the change in unrealized gains or losses relating to
those assets and liabilities still held at the reporting date for the period
ended April 30, 2011.
REVENUE RECOGNITION
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company will recognize revenue when it
is realized or realizable and earned. The Company considers revenue realized or
realizable and earned when it has persuasive evidence of an arrangement that the
services have been rendered to the customer, the sales price is fixed or
determinable, and collectability is reasonably assured.
INCOME TAXES
The Company accounts for income taxes under Section 740-10-30 of the FASB
Accounting Standards Codification. Deferred income tax assets and liabilities
are determined based upon 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.
Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be
realized. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date.
F-7
The Company adopted section 740-10-25 of the FASB Accounting Standards
Codification ("Section 740-10-25"). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
fifty percent (50%) likelihood of being realized upon ultimate settlement.
Section 740-10-25 also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures. The Company had no material adjustments to its
liabilities for unrecognized income tax benefits according to the provisions of
Section 740-10-25.
NET LOSS PER COMMON SHARE
Net loss per common share is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification. Basic net loss per share is computed by
dividing net loss by the weighted average number of shares of common stock
outstanding during the period. Diluted net loss per share is computed by
dividing net loss by the weighted average number of shares of common stock and
potentially outstanding shares of common stock during each period. There were no
potentially dilutive shares outstanding as of April 30, 2011.
COMMITMENTS AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Liabilities for loss
contingencies arising from claims, assessments, litigation, fines and penalties
and other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment can be reasonably estimated.
CASH FLOWS REPORTING
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
income that do not affect operating cash receipts and payments. The Company
reports the reporting currency equivalent of foreign currency cash flows, using
the current exchange rate at the time of the cash flows and the effect of
exchange rate changes on cash held in foreign currencies is reported as a
separate item in the reconciliation of beginning and ending balances of cash and
cash equivalents and separately provides information about investing and
financing activities not resulting in cash receipts or payments in the period
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
SUBSEQUENT EVENTS
The Company follows the guidance in Section 855-10-50 of the FASB Accounting
Standards Codification for the disclosure of subsequent events. The Company will
evaluate subsequent events through the date when the financial statements were
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,
the Company as an SEC filer considers its financial statements issued when they
are widely distributed to users, such as through filing them on EDGAR.
F-8
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-06 "FAIR VALUE MEASUREMENTS AND DISCLOSURES (TOPIC 820) IMPROVING
DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS", which provides amendments to
Subtopic 820-10 that require new disclosures as follows:
1. Transfers in and out of Levels 1 and 2. A reporting entity should
disclose separately the amounts of significant transfers in and out of
Level 1 and Level 2 fair value measurements and describe the reasons
for the transfers.
2. Activity in Level 3 fair value measurements. In the reconciliation for
fair value measurements using significant unobservable inputs (Level
3), a reporting entity should present separately information about
purchases, sales, issuances, and settlements (that is, on a gross
basis rather than as one net number).
This Update provides amendments to Subtopic 820-10 that clarify existing
disclosures as follows:
1. Level of disaggregation. A reporting entity should provide fair value
measurement disclosures for each class of assets and liabilities. A
class is often a subset of assets or liabilities within a line item in
the statement of financial position. A reporting entity needs to use
judgment in determining the appropriate classes of assets and
liabilities.
2. Disclosures about inputs and valuation techniques. A reporting entity
should provide disclosures about the valuation techniques and inputs
used to measure fair value for both recurring and nonrecurring fair
value measurements. Those disclosures are required for fair value
measurements that fall in either Level 2 or Level 3.
This Update also includes conforming amendments to the guidance on employers'
disclosures about postretirement benefit plan assets (Subtopic 715-20). The
conforming amendments to Subtopic 715-20 change the terminology from MAJOR
CATEGORIES of assets to CLASSES of assets and provide a cross reference to the
guidance in Subtopic 820-10 on how to determine appropriate classes to present
fair value disclosures. The new disclosures and clarifications of existing
disclosures are effective for interim and annual reporting periods beginning
after December 15, 2009, except for the disclosures about purchases, sales,
issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years beginning after
December 15, 2010, and for interim periods within those fiscal years.
In August 2010, the FASB issued ASU 2010-21, "ACCOUNTING FOR TECHNICAL
AMENDMENTS TO VARIOUS SEC RULES AND SCHEDULES: AMENDMENTS TO SEC PARAGRAPHS
PURSUANT TO RELEASE NO. 33-9026: TECHNICAL AMENDMENTS TO RULES, FORMS, SCHEDULES
AND CODIFICATION OF FINANCIAL REPORTING POLICIES" ("ASU 2010-21"), was issued to
conform the SEC's reporting requirements to the terminology and provisions in
ASC 805, BUSINESS COMBINATIONS, and in ASC 810-10, CONSOLIDATION. ASU No.
2010-21 was issued to reflect SEC Release No. 33-9026, "Technical Amendments to
Rules, Forms, Schedules and Codification of Financial Reporting Policies," which
was effective April 23, 2009. The ASU also proposes additions or modifications
to the XBRL taxonomy as a result of the amendments in the update.
In August 2010, the FASB issued ASU 2010-22, "ACCOUNTING FOR VARIOUS TOPICS:
TECHNICAL CORRECTIONS TO SEC PARAGRAPHS" ("ASU 2010-22"), which amends various
SEC paragraphs based on external comments received and the issuance of SEC Staff
Accounting Bulletin (SAB) No. 112, which amends or rescinds portions of certain
SAB topics. The topics affected include reporting of inventories in condensed
financial statements for Form 10-Q, debt issue costs in conjunction with a
business combination, sales of stock by subsidiary, gain recognition on sales of
business, business combinations prior to an initial public offering, loss
contingent and liability assumed in business combination, divestitures, and oil
and gas exchange offers.
F-9
In December 2010, the FASB issued the FASB Accounting Standards Update No.
2010-28 "INTANGIBLES--GOODWILL AND OTHER (TOPIC 350): WHEN TO PERFORM STEP 2 OF
THE GOODWILL IMPAIRMENT TEST FOR REPORTING UNITS WITH ZERO OR NEGATIVE CARRYING
AMOUNTS" ("ASU 2010-28").Under ASU 2010-28, if the carrying amount of a
reporting unit is zero or negative, an entity must assess whether it is more
likely than not that goodwill impairment exists. To make that determination, an
entity should consider whether there are adverse qualitative factors that could
impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a
result of the new guidance, an entity can no longer assert that a reporting unit
is not required to perform the second step of the goodwill impairment test
because the carrying amount of the reporting unit is zero or negative, despite
the existence of qualitative factors that indicate goodwill is more likely than
not impaired. ASU 2010-28 is effective for public entities for fiscal years, and
for interim periods within those years, beginning after December 15, 2010, with
early adoption prohibited.
In December 2010, the FASB issued the FASB Accounting Standards Update No.
2010-29 "BUSINESS COMBINATIONS (TOPIC 805): DISCLOSURE OF SUPPLEMENTARY PRO
FORMA INFORMATION FOR BUSINESS COMBINATIONS" ("ASU 2010-29"). ASU 2010-29
specifies that if a public entity presents comparative financial statements, the
entity should disclose revenue and earnings of the combined entity as though the
business combination(s) that occurred during the current year had occurred as of
the beginning of the comparable prior annual reporting period only. The
amendments in this Update also expand the supplemental pro forma disclosures
under Topic 805 to include a description of the nature and amount of material,
nonrecurring pro forma adjustments directly attributable to the business
combination included in the reported pro forma revenue and earnings. The amended
guidance is effective prospectively for business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2010. Early adoption is permitted.
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying consolidated financial statements.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has a deficit accumulated
during the development stage of $2,245 at April 30, 2011, and had a net loss of
$2,245, with no revenues earned since inception.
While the Company is attempting to generate sufficient revenues, the Company's
cash position may not be enough to support the Company's daily operations.
Management intends to raise additional funds by way of a public or private
offering. Management believes that the actions presently being taken to further
implement its business plan and generate sufficient revenues provide the
opportunity for the Company to continue as a going concern. While the Company
believes in the viability of its strategy to generate sufficient revenues and in
its ability to raise additional funds, there can be no assurances to that
effect. The ability of the Company to continue as a going concern is dependent
upon the Company's ability to further implement its business plan and generate
sufficient revenues.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
NOTE 4 - STOCKHOLDER'S DEFICIT
Common stock includes 50,000 shares authorized at a par value of $1.00, of which
100 have been issued to its Chief President at par value of $1.00 per share or
$100 for compensation at inception on April 11, 2011.
F-10
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company is provided the office space by the president of the Company without
cost. The management determined that such cost is nominal and did not recognize
rent expense in its financial statements.
NOTE 6 - INCOME TAXES
DEFERRED TAX ASSETS
At April 30, 2011, the Company had net operating loss ("NOL") carry-forwards for
Federal income tax purposes of $2,245 that may be offset against future taxable
income through 2031. No tax benefit has been reported with respect to these net
operating loss carry-forwards in the accompanying financial statements because
the Company believes that the realization of the Company's net deferred tax
assets of approximately $763 was not considered more likely than not and
accordingly, the potential tax benefits of the net loss carry-forwards are fully
offset by a valuation allowance of $763.
Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.
The Company has provided a full valuation allowance on the deferred tax assets
because of the uncertainty regarding its realization. The valuation allowance
increased approximately $1,273 for the period ended April 30, 2011.
Components of deferred tax assets at April 30, 2011are as follows:
Net Deferred Taxes - Non- Current:
Expected income tax benefit from NOL carry-forward $ 763
Less valuation allowance (763)
-------
Deferred tax assets, net of valuation allowance $ --
=======
INCOME TAXES IN THE STATEMENTS OF OPERATIONS
A reconciliation of the federal statutory income tax rate and the effective
income tax rate as a percentage of income before income taxes is as follows:
Federal statutory income tax rate 34.0%
Change in valuation allowance on net (34.0)%
-------
Effective income tax rate 0.0%
=======
NOTE 7 - SUBSEQUENT EVENTS
Management has evaluated all events that occurred after the balance sheet date
through the date when these financial statements were issued to determine if
they must be reported. The Management of the Company has determined that there
were no reportable subsequent events to be disclosed.
F-1
