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EXCEL - IDEA: XBRL DOCUMENT - US VR Global.com Inc. | Financial_Report.xls |
EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - US VR Global.com Inc. | f10q0911ex32i_aceconsult.htm |
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - US VR Global.com Inc. | f10q0911ex31i_aceconsult.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
_______________
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2011
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to______.
Commission File Number: 000-50413
ACE Consulting Management, Inc.
(Exact name of registrant as specified in its Charter)
Delaware
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98-0407797
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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923 E. Valley Blvd, Suite 103B, San Gabriel, CA
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91776
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(Address of principal executive offices)
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(Zip Code)
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_______________
(626) 307-2273
(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 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 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 xNo 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act
Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨ (Do not check if a smaller reporting company)
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Smaller reporting company x
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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
There were 29,640,000 shares of common stock, with a par value of $0.001 per share, issued and outstanding on November 11, 2011.
ACE CONSULTING MANAGEMENT, INC.
QUARTERLY REPORT ON FORM 10-Q
September 30, 2011
TABLE OF CONTENTS
PAGE
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PART 1 - FINANCIAL INFORMATION
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1
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Item 1.
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Financial Statements
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1
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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12
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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13
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Item 4.
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Controls and Procedures
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13
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PART II - OTHER INFORMATION
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14
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Item 1.
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Legal Proceedings
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14
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Item 1A.
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Risk Factors
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14
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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14
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Item 3.
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Defaults Upon Senior Securities
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14
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Item 4.
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(Removed and Reserved)
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14
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Item 5.
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Other Information
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14
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Item 6.
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Exhibits
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14
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SIGNATURES
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15
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CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
ACE CONSULTING MANAGEMENT, INC.
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( A Development Stage Company)
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Balance Sheets
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September 30, 2011
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December 31, 2010
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(Unaudited)
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ASSETS
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||||||||
CURRENT ASSETS:
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Cash
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$ | 19,157 | $ | 26,179 | ||||
Total Current Assets
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19,157 | 26,179 | ||||||
Total Assets | $ | 19,157 | $ | 26,179 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
CURRENT LIABILITIES:
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Accrued expenses
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$ | 275 | $ | 1,275 | ||||
Total Current Liabilities
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275 | 1,275 | ||||||
STOCKHOLDERS' EQUITY:
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Common stock at $0.001 par value: 50,000,000 shares authorized,
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||||||||
29,640,000 shares issued and outstanding, respectively
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29,640 | 29,640 | ||||||
Additional paid-in capital
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1,460,110 | 1,460,110 | ||||||
Deficit accumulated during the development stage
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(1,470,868 | ) | (1,464,846 | ) | ||||
Total Stockholders' Equity
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18,882 | 24,904 | ||||||
Total Liabilities and Stockholders' Equity | $ | 19,157 | $ | 26,179 | ||||
See accompanying notes to the financial statements.
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1
ACE CONSULTING MANAGEMENT, INC.
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( A Development Stage Company)
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Statements of Operations
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For the Nine Moths
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For the Nine Months
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For the Period from
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||||||||||
Ended | Ended |
(inception) through
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(Unaudited)
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(Unaudited)
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(Unaudited)
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||||||||||
NET REVENUES
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$ | 7,500 | $ | 8,000 | $ | 15,500 | ||||||
OPERATING EXPENSES:
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||||||||||||
Compensation - Officers and directors
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- | 250,000 | 250,100 | |||||||||
Consulting fees
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- | 1,165,500 | 1,165,500 | |||||||||
Professional fees
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13,092 | 33,283 | 67,898 | |||||||||
General and administrative expenses
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430 | 2,440 | 2,870 | |||||||||
Total operating expenses
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13,522 | 1,451,223 | 1,486,368 | |||||||||
LOSS BEFORE TAXES
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(6,022 | ) | (1,443,223 | ) | (1,470,868 | ) | ||||||
INCOME TAX PROVISION
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- | - | - | |||||||||
NET LOSS
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$ | (6,022 | ) | $ | (1,443,223 | ) | $ | (1,470,868 | ) | |||
NET LOSS PER COMMON SHARE
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||||||||||||
- BASIC AND DILUTED:
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$ | 0 | $ | (0 | ) | |||||||
Weighted average common shares outstanding
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||||||||||||
- basic and diluted
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29,640,000 | 14,257,621 | ||||||||||
See accompanying notes to the financial statements.
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2
ACE CONSULTING MANAGEMENT, INC.
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( A Development Stage Company)
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Statements of Operations
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For the Three Months
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For the Three Months
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Ended
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Ended
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|||||||
September 30, 2011
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September 30, 2010
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(Unaudited)
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(Unaudited)
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REVENUE
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$ | - | $ | 2,000 | ||||
OPERATING EXPENSES:
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Professional fees
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3,910 | 16,722 | ||||||
General and administrative expenses
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291 | 1,266 | ||||||
Total operating expenses
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4,201 | 17,988 | ||||||
LOSS BEFORE TAXES
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(4,201 | ) | (15,988 | ) | ||||
INCOME TAX PROVISION
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- | - | ||||||
NET LOSS
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$ | (4,201 | ) | $ | (15,988 | ) | ||
NET LOSS PER COMMON SHARE
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||||||||
- BASIC AND DILUTED:
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$ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted average common shares outstanding
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||||||||
- basic and diluted
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29,640,000 | 29,640,000 |
See accompanying notes to the financial statements.
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3
ACE CONSULTING MANAGEMENT, INC.
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( A Development Stage Company)
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Statement of Stockholders' Equity (Deficit)
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For the Period from September 19, 2003 (Inception) through September 30, 2011
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(Unaudited)
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||||||||||||||||||||
Deficit
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||||||||||||||||||||
Common Stock, $0.001 Par Value
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Additional
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Accumulated
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Total
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|||||||||||||||||
Number of
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Paid-in
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during the
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Stockholders'
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|||||||||||||||||
Shares
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Amount
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Capital
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Development Stage
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Equity (Deficit)
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||||||||||||||||
September 19, 2003 (inception)
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100,000 | $ | 100 | $ | - | $ | - | $ | 100 | |||||||||||
Net loss
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(1,050 | ) | (1,050 | ) | ||||||||||||||||
Balance, December 31, 2003
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100,000 | 100 | - | (1,050 | ) | (950 | ) | |||||||||||||
Net loss
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(1,250 | ) | (1,250 | ) | ||||||||||||||||
Balance, December 31, 2004
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100,000 | 100 | - | (2,300 | ) | (2,200 | ) | |||||||||||||
Net loss
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(1,650 | ) | (1,650 | ) | ||||||||||||||||
Balance, December 31, 2005
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100,000 | 100 | - | (3,950 | ) | (3,850 | ) | |||||||||||||
Net loss
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(1,800 | ) | (1,800 | ) | ||||||||||||||||
Balance, December 31, 2006
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100,000 | 100 | - | (5,750 | ) | (5,650 | ) | |||||||||||||
Net loss
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(2,250 | ) | (2,250 | ) | ||||||||||||||||
Balance, December 31, 2007
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100,000 | 100 | - | (8,000 | ) | (7,900 | ) | |||||||||||||
Net loss
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(3,250 | ) | (3,250 | ) | ||||||||||||||||
Balance, December 31, 2008
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100,000 | 100 | - | (11,250 | ) | (11,150 | ) | |||||||||||||
Net loss
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(3,250 | ) | (3,250 | ) | ||||||||||||||||
Balance, December 31, 2009
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100,000 | 100 | - | (14,500 | ) | (14,400 | ) | |||||||||||||
Accrued expenses paid by stockholder
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12,650 | - | 12,650 | |||||||||||||||||
Common stock issued for compensation at
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||||||||||||||||||||
$0.05 per share on January 5, 2010
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3,310,000 | 3,310 | 162,190 | 165,500 | ||||||||||||||||
Sale of common stock at $0.05 per share
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||||||||||||||||||||
on February 16, 2010
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1,230,000 | 1,230 | 60,270 | 61,500 | ||||||||||||||||
Common stock issued for compensation at
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||||||||||||||||||||
$0.05 per share on June 14, 2010
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25,000,000 | 25,000 | 1,225,000 | 1,250,000 | ||||||||||||||||
Net loss
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(1,450,346 | ) | (1,450,346 | ) | ||||||||||||||||
Balance, December 31, 2010
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29,640,000 | 29,640 | 1,460,110 | (1,464,846 | ) | 24,904 | ||||||||||||||
Net loss
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(6,022 | ) | (6,022 | ) | ||||||||||||||||
Balance, September 30, 2011
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29,640,000 | $ | 29,640 | $ | 1,460,110 | $ | (1,470,868 | ) | $ | 18,882 | ||||||||||
See accompanying notes to the financial statements.
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4
ACE CONSULTING MANAGEMENT, INC.
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( A Development Stage Company)
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Statements of Cash Flows
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For the Period from
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For the Nine Months
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For the Nine Months
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September 19, 2003
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Ended
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Ended
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(inception) through
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September 30, 2011
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September 30, 2010
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September 30, 2011
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(Unaudited)
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(Unaudited)
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(Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (6,022 | ) | $ | (1,443,223 | ) | $ | (1,470,868 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities
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Stock based compensation
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- | 1,415,500 | 1,415,600 | |||||||||
Changes in operating assets and liabilities:
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||||||||||||
Accrued expenses
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(1,000 | ) | (13,375 | ) | 275 | |||||||
NET CASH USED IN OPERATING ACTIVITIES
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(7,022 | ) | (41,098 | ) | (54,993 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
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||||||||||||
Payment of accrued expenses by stockholder
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- | 12,650 | 12,650 | |||||||||
Proceeds from sale of common stock
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- | 61,500 | 61,500 | |||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
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- | 74,150 | 74,150 | |||||||||
NET CHANGE IN CASH
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(7,022 | ) | 33,052 | 19,157 | ||||||||
Cash at beginning of period
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26,179 | - | - | |||||||||
Cash at end of period
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$ | 19,157 | $ | 33,052 | $ | 19,157 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
|
||||||||||||
Interest paid
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$ | - | $ | - | $ | - | ||||||
Income tax paid
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$ | - | $ | - | $ | - | ||||||
See accompanying notes to the financial statements.
|
5
ACE CONSULTING MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
September 30, 2011 and 2010
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND OPERATIONS
ACE Consulting Management, Inc. (the “Company”), a development stage company, was incorporated on September 19, 2003 under the laws of the State of Delaware. 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 minimal revenues since inception. The Company will engage in consulting to corporations to improve growth strategies, performance enhancement and maximization of shareholder value.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation - interim financial information
The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2010 and notes thereto contained in the Company’s Annual Report on Form 10-K as filed with the SEC on March 4, 2011.
Development stage company
The Company is a development stage company as defined by section 915-10-20 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 and assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The Company’s significant estimates and assumptions include the fair value of financial instruments; income tax rate, related income tax provision and valuation allowance of deferred tax assets; and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
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 has adopted 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
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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.
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Level 3
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Pricing inputs that are generally observable inputs and not corroborated by market data.
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Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
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. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
It is not however, practical to determine the fair value of advances from stockholders due to their related party nature.
Cash and cash equivalents
The company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
7
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
Revenue recognition
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Income taxes
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which 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.
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 estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheet, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
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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 common 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 common 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 the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.
There were no potentially dilutive shares outstanding for the interim period ended September 30, 2011 or 2010.
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.
Recently issued accounting pronouncements
In May 2011, the FASB issued the FASB Accounting Standards Update No. 2011-04 “Fair Value Measurement” (“ASU 2011-04”). This amendment and guidance are the result of the work by the FASB and the IASB to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards (IFRSs).
This update does not modify the requirements for when fair value measurements apply; rather, they generally represent clarifications on how to measure and disclose fair value under ASC 820, Fair Value Measurement, including the following revisions:
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An entity that holds a group of financial assets and financial liabilities whose market risk (that is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those risks.
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In the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market participants would do so when pricing the asset or liability consistent with the unit of account.
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Additional disclosures about fair value measurements.
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The amendments in this Update are to be applied prospectively and are effective for public entity during interim and annual periods beginning after December 15, 2011.
In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05 “Comprehensive Income (“ASU 2011-05”), which was the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income, by eliminating the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance now gives entities the option to present all nonowner changes in stockholders’ equity either as a single continuous statement of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the amendments require entities to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.
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The amendments in this Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within those years, beginning after December 15, 2011.
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.
3. GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has a deficit accumulated during the development stage at September 30, 2011, and had a net loss and net cash used in operating activities for the interim period then ended, respectively.
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 increase 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.
4. STOCKHOLDERS’ EQUITY
Shares authorized
Common stock includes 50,000,000 shares authorized at a par value of $0.001, of which 100,000 have been issued to its Chief Executive Officer at par value of $0.001 per share or $100 for compensation at inception on September 19, 2003.
Common shares
on September 19, 2003, 100,000 have been issued to its Chief Executive Officer at par value of $0.001 per share or $100 for compensation at inception.
On January 5, 2010, the Company authorized the issuance of 3,310,000 shares of its common stock for compensation valued at $0.05 per share for a total of $165,500.
On February 16, 2010, the Company sold 1,230,000 shares of its common stock at $0.05 per share to 69 individuals for a total of $61,500.
On June 14, 2010, the Company authorized the issuance of 25,000,000 shares of its common stock for compensation valued at $0.05 per share for a total of $1,250,000.
5. RELATED PARTY TRANSACTIONS
Advances from chief executive officer and stockholder
During the year ended December 31, 2010, a stockholder of the Company paid professional fees on behalf of the Company aggregating $12,650. Such payment has been shown as a contribution to capital and included in additional paid-in capital.
Free office space
The Company is provided the office space by an officer of the Company without cost. The management determined that such cost is nominal and did not recognize rent expense in its financial statements.
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6. COMMITMENTS
On August 8, 2010, the Company (the “Provider”) entered into a Services Agreement with Shanghai Gaogo Design Construction, Inc. (“the Client”). The agreement calls for the Company to perform certain design and construction services, which include project cost estimation, engineering design, construction and financial management of the project. The initial term of the agreement is for a period of two years, which is renewable for successive one year periods unless a party sends a written notice of non-renewal to the other party no later than 45 days prior to the expiry of the term. For the services, the Client shall pay to the Company a fixed 8% of the contract amount as a consulting fee for the completed service contract.
On August 8, 2010, the Company (the “Provider”) entered into a Services Agreement with Beijing Poly Design Co Ltd. (the “Client”). The agreement calls for the Company to perform certain design and construction services, which include project cost estimation, engineering design, construction and financial management of the project. The initial term of the agreement is for a period of two years, which is renewable for successive one year periods unless a party sends a written notice of non-renewal to the other party no later than 45 days prior to the expiry of the term. For the services, the Client shall pay to the Company a fixed 7.5% of the contract amount as a consulting fee for the completed service contract.
On November 10, 2010, the Company (the “Consultant”) entered into a Business Consultant Agreement with Shanghai Tonggao Investment Consulting Co, Ltd. (the “China Company”). The agreement calls for Consultant to perform general business advisory services. The term of the agreement is for a period of two years, which can be cancelled by either party on a 30-day written notice to the other party. The compensation for this agreement shall be paid at the rate of $80/hour for work performed in accordance with this agreement. However, the Consultant shall be paid at least $12,000 per year regardless of the amount of time spent in accordance with this agreement.
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.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
Plan of Operation
We have commenced limited operations and will require additional capital to recruit personnel to operate business and to implement our business plan.
We seek to become a bridge between China and the United States, with our business back ground and experience we can assist China companies to acquire U.S. technology to facilitate and implement their existing businesses in China. Currently we have consulting revenues from Hero International USA Holding Corp. and Vivid Spa Corp. Hero International USA Corp. is in the dietary food business. They intend to import raw materials from China to produce quality products in a U.S. based factory and will market its products in the U.S. Vivid Spa Corp. is a company specializing in health care, specializing in skin care and massage therapy. We are assisting them to open a Spa in Shanghai and Beijing where they will introduce U.S. made products, including essential oils and aroma formula therapy. Our current business is generated through referrals. We plan to initiate marketing efforts through a variety of venues for our future business, including marketing through trade associations, chamber of commerce’s and alumni associations.
We terminated the service agreements with Beijing Poly Design Ltd. and Shanghai Gaogo Design and Construction Ltd. on August 30, 2011due to the change of business environment in China which has caused difficulties to us in conducting businesses contemplated under these service agreements in reasonable profit margin.
Additionally, Shanghai Tongao Investment Consulting Co., Ltd, which is located at Block B, 20th Fl, No.238 East Nandan Rd, Shanghai, 200030, has signed a consulting agreement and agreed to pay us a retainer fee to provide services to their clients in regard consulting on Chinese companies doing business in US. Shanghai Tongao has an established client base which they believe can take advantage of our services. Our cooperation with Shanghai Tongao Investment Consulting, Co., Ltd. has not generated any revenue to date. We believe the future services for Shanghai Tongao Investment Consulting Ltd may potentially provide revenue in the coming 12 months.
In the next 12 months if the company is unable satisfy its cash requirements our major shareholders have indicated they are willing to loan additional funds to the company to cover any shortfalls, although there is no written agreement or guarantee.
Results of Operation
For the nine months ended September 30, 2011 and September 30, 2010, we had revenue of $7,500 and $8,000, respectively. Expenses for the period ended September 30, 2011 totaled $13,522 resulting in a net loss of $6,022. Expenses for the period ended September 30, 2011 consisted of $430 in general and administrative expenses, $13,092 in professional fees. In comparison, expenses for the same period ended September 30, 2010 totaled $ 1,451, 223 resulting in a net loss of 1,443,223. Expenses for the period ended September 30, 2010 consisted of $2,440 in general and administrative expenses, $33,283 in professional fees, and $1,165,500 in consulting fees, and $250,000 in compensation to officer and directors. The decrease in the expenses for the same period ended September 30, 2011 and 2010 is primarily due to the reduction of professional fees.
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Liquidity and Capital Resources
At September 30, 2011 the Company had $19,157 in cash and will rely upon the issuance of common stock and additional capital contributions from shareholders to fund administrative expenses for our planned business strategy.
As reflected in the accompanying condensed financial statements, the Company, in the development stage with minimal operations, has net cash used in operations from inception of $54,933 and has a net loss since inception of $1,470,868. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Smaller reporting companies are not required to provide the information required by this item.
Item 4. Controls and Procedures
Disclosure controls and procedures
Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that, as of the end of the period covered by this quarter report, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission (the “SEC”)’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Item 1A. Risk Factors
Smaller reporting companies are not required to provide the information required by this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. (Removed and Reserved)
Item 5. Other Information
None.
Item 6. Exhibits
(a) Exhibits
Exhibit
Number
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Description
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31.1*
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1+
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101**
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Interactive Data File (Form 10-Q for the quarterly period ended September 30, 2011 furnished in XBRL)
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* Filed herewith.
+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.
**Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ACE CONSULTING MANAGEMENT, INC.
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Date: November 18, 2011
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By:
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/s/ Alex Jen
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Chief Executive Officer and
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Chief Financial Officer
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(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer).
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