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EXCEL - IDEA: XBRL DOCUMENT - VDO-PH INTERNATIONAL | Financial_Report.xls |
EX-31.1 - CERTIFICATION - VDO-PH INTERNATIONAL | ex311.htm |
EX-32.1 - CERTIFICATION - VDO-PH INTERNATIONAL | ex321.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For The Quarterly Period Ended September 30, 2011
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Transition Period from to _______________
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Commission file number- 333-168941
VDO-PH INTERNATIONAL, INC
(Exact name of registrant as specified in the charter)
Nevada
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27-2436336
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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2700 East Sunset Road, Building B, Suite 18, Las Vegas, Nevada
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89120
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(Address of principal executive office)
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(Zip Code)
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(702) 570-7700
(Registrant's telephone number including area code)
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 requirement for the past 90 days. Yes ý 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 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 definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o
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Accelerated Filer o
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Non-accelerated filer o
(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 o NO ý
As of September 30, 2011, there were 20,320,768 shares of the Registrant's common stock, $.001 par value outstanding.
-1-
Table of Contents
VDO-PH INTERNATIONAL, INC..
Index
Page No.
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PART I—FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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4
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Balance Sheets at September 30, 2011 (unaudited) and December 31, 2010
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F-1
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Statements of Operations (unaudited) for the six months ended September 30, 2011 and 2010
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F-2
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Statements of Cash Flows (unaudited) for the six months ended September 30, 2011 and 2010
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F-3
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Notes to Financial Statements
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F-4
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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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4
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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7
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Item 4.
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Controls and Procedures
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7
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PART II—OTHER INFORMATION
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Item 1.
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Legal Proceedings
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8
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Item 1A.
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Risk Factors
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8
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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8
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Item 6.
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Exhibits
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8
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Signature
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9
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-2-
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the Securities and Exchange Commission, or SEC, or in connection with oral statements made to the press, potential investors or others. All statements, other than statements of historical facts, including statements regarding our strategy, future operations,
future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "expect," "estimate," "anticipate," "predict," "believe," "think," "plan," "will," "should," "intend," "seek," "potential" and similar expressions and variations are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Forward-looking statements in this report are subject to a number of known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those described in the forward-looking statements, including, but not limited to, the risks and uncertainties described in the section entitled "Risk Factors" in our Annual Report on Form 10-K filed with the SEC on April 13, 2011, in this report as well as in the other documents we file with the SEC from time to time, and such risks and uncertainties are specifically incorporated herein by reference.
Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the SEC, we undertake no obligation to update or revise forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. We caution you not to unduly rely on the forward-looking statements when evaluating the information presented in this report.
-3-
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements of VDO-PH INTERNATIONAL, INC. ("VDO" or the "Company") as of September 30, 2011 included herein have been prepared by the Company, without audit, pursuant to U.S. generally accepted accounting principles and the rules and regulations of the SEC. In addition, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect, in the opinion of management, all adjustments (consisting only
of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K filed with the SEC, on April 13, 2011.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with (i) our financial statements for the years ended December 31, 2010 together with the notes to these financial statements with the unaudited financial statements for the period ended September 30, 2011; and (ii) the section entitled “Business” that appears elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report. You should not place
undue certainty on these forward-looking statements, which apply only as of the date of this report. Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
The statements in this report include forward-looking statements. These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”,
“expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers; and, our ability to maintain a level of investment that is required to remain competitive. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and
financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates and conditions in the advertising industry in particular; and, the continued employment of our key personnel and other risks associated with competition.
For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements see the “Liquidity and Capital Resources” section under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this item of this report and the other risks and uncertainties that are set forth elsewhere in this report or detailed in our other Securities and Exchange Commission reports and filings. We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a development stage company, incorporated on April 8, 2010 and have generated some revenue from business operations. We are a proprietary software development company and have developed a new telephone appliance that combines Audio and Video functions that provides the user multipoint to multipoint conference calling capabilities in addition to computer and standard telephone functions all in one appliance.
Our Officers and Directors are responsible for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, they will be responsible for the administration of the controls. Should they not have sufficient experience, they may be incapable of creating and implementing the controls which may cause us to be subject to sanctions and fines by the Securities and Exchange Commission which ultimately could cause you to lose your investment. The family members including the management team meet via VDO-Ph’s video telephony method on a daily basis. Their discussions cover such topics as
competition growth, new companies entering the video market, interviewing potential candidates for various managerial positions in the Company, review of Company policies with relations to Human Resources, personnel record keeping, payroll review, bidding of work benches and other requirements needed for production and a broad discussion as to what the Company’s future web site needs to do and what they should look at.
The date of incorporation is not indicative of the time the company was actually founded by the family which was May, 2009 but is representative of the time and date when it was determined by the family members after 12 months of initial research and analysis of the potential financial requirements and financial returns that development of a new business telephony system could require/achieve. From information gathered by an out sourced research company on past, current and future business telephone services the family determined (with this data) to take the next step to analyze (by hiring several programming companies) the complications, if any, in development of the proposed new telephony system. We believe the
Company no longer meets the definition of a “shell” company since the Company has ceased as an issuer described by Rule 144(i)(1)(i) in January 2011. This is based on the fact that its software platform represents a substantial asset other than cash or cash equivalents and that the Company has a viable product to market to the major cable companies. In addition, the Company has built-out its facilities for the purpose of increasing its production capabilities. Substantial man hours and capital have been expended by the Company in the process of developing its new software operating system to be utilized as a telephony appliance.
Since inception the Company has had limited revenues of approximately $34,000. For the nine months and three months ended September 30, 2011 and for the period from inception to September 30, 2011 we had total expenses of $208,128, $134,170 and $380,410, respectively. Such expenses have been incurred in the development of our product, the expansion of our facilities and for administrative expenses. For the same periods reflected above we have a net loss of $194,594 , $120,636, and $366,876, respectively. This is due to development stage costs and costs related to bringing our product to market.
The new appliance developed provides a combination of computer, internet, digital telephone, video telephone, and telepresence capabilities and provide the business market with the same advances the domestic market has had over the last few years with cellular, web cams, and 4G networks.
The Company determined that the three systems that could be used for the appliance were Hp, Micros and Dell. These computers were all running Windows 7 and had no conflict to the new telephony Operating System. In addition, all three fit the design desires. In talking with these firms, it was concluded that HP could provide the quantities that may be required and at a very reasonable OEM fee structure. The Company completed the development of the software and presented a viable product in January 2011.
-4-
Results of Operations
Since January 2011, the Company has received continued interest from Cox Media in connection with the Company’s product. The Company has reached an agreement with Cox Media whereby the Company will assist Cox Media in the development of their SIP communication system for the purpose of facilitating the implementation of the Company’s software based telephony appliance in Las Vegas, Nevada. Our proprietary imbedded software combines Polycom with Hewlett Packard (“HP”) and has the capability of providing telepresence telecommunications. The Company intends to use HP appliances, Logitech web cams and Polycom hand sets in conjunction with its software based product. The Company has expanded its
operational facilities and intends to have additional space of 150,000 square feet available for operations in the fourth quarter of 2011.
Impact of Inflation
We believe that the rate of inflation has had negligible effect on us. We believe we can absorb most, if not all, increased non-controlled operating costs by operating our Company in the most efficient manner possible.
Cash Flows from Investing Activities
We made no investments as of September 30, 2011.
Cash Flows from Financing Activities
We have financed our operations from the issuance of equity securities and loans from family members. Net cash provided by financing activities through September 30, 2011 relates to the sale of shares of common stock to shareholders in private transactions exempt from registration pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended. We intent to continue to raise expansion capital through private placement or debt financing.
Intangible Assets
There were no intangible assets during the period ended September 30, 2011.
Material Commitments
There were no material commitments for the period ended September 30, 2011.
-5-
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Cash and Cash Equivalents
We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. We have no cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Income Taxes
The Company accounts for income taxes as outlined in ASC 740 “Income Taxes”, which was previously Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Fair Value of Financial Instruments
The Company considers that the carrying amount of financial instruments, including accounts payable, approximates fair value because of the short maturity of these instruments.
Share Based Payments
(included in ASC 718 “Compensation-Stock Compensation”)
In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees or independent contractors are required to provide services. Share-based compensation arrangements include stock options and warrants, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005, the SEC issued Staff Accounting Bulletin No. 107, or “SAB
107”. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123(R). Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123.
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The Company has fully adopted the provisions of SFAS No. 123(R) and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant as the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the share-based payments.
Recent Accounting Pronouncements
The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of changes in value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. Changes in these factors could cause fluctuations in results of our operations and cash flows. In the ordinary course of business, we are exposed to interest rate and foreign currency exchange rate risks.
ITEM 4. CONTROLS AND PROCEDURES.
Based upon the required evaluation of our disclosure controls and procedures, our President and Principal Financial Officer concluded that as of September 30, 2011 our disclosure controls and procedures were adequate and effective to ensure that information was gathered, analyzed and disclosed on a timely basis.
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended September 30, 2011, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
-7-
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
There have been no matters submitted to a vote of the Company’s shareholders. The board of directors pursuant to corporate consent, declared a stock dividend.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
No.
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Exhibit
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31.1
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Certification by Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification by Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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-8-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
VDO-PH INTERNATIONAL, INC.
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By:
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/s/ Valeria Stringer
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President, Director, Principal Executive Officer and Principal Financial Officer
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Pursuant to the requirements of the Securities Act of 1933, this report has been signed by the following persons in the capacities and on the dates indicated.
Signature
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Title
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Date
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Principal Executive Officer
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/s/ Valeria Stringer
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Principal Financial Officer
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Valeria Stringer
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President, Director
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/s/ Elizabeth Twitty
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Secretary and Director
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Elizabeth Twitty
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/s/Marion Mattson
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Director
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Marion Mattson
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F-1
INDEX TO EXHIBITS
No.
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Exhibit
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31.1
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Certification by Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification by Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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F-2
VDO-Ph International
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(A Development Stage Company)
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Balance Sheet
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Condensed Balance Sheets
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September 30, 2011 and December 31, 2010
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ASSETS
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September 30, 2011
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December 31, 2010
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(Unaudited)
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Current Assets:
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Cash
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$ | 8,753 | $ | 11,328 | ||||
Prepaid expenses
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125,000 | 1,026 | ||||||
Inventory
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- | - | ||||||
Total current assets
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133,753 | 12,354 | ||||||
Property, Plant and Equipment, net
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50,727 | 16,177 | ||||||
Other Assets
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||||||||
Security deposit
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1,977 | 1,000 | ||||||
$ | 186,457 | $ | 29,531 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Liabilities
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Accounts payable and accrued expenses
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$ | 35,604 | 11,055 | |||||
Loan payable - stockholder
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- | 7,954 | ||||||
Total current liabilities
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35,604 | 19,009 | ||||||
Stockholders' Equity:
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||||||||
Common stock, $0.001 par value; 100,000,000 shares authorized,
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||||||||
20,195,768 and 19,660,268 shares issued and outstanding, respectively
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20,197 | 19,661 | ||||||
Additional paid in capital
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497,532 | 163,143 | ||||||
Deficit accumulated during development stage
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(366,876 | ) | (172,282 | ) | ||||
150,853 | 10,522 | |||||||
$ | 186,457 | $ | 29,531 |
F-3
VDO-Ph International
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(A Development Stage Company)
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Condensed Statements of Operations
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For the Nine Months Ended September 30, 2011 and for the Period
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From April 8, 2010 (Inception) to September 30, 2011
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From April 8, 2010 (Inception) to September 30, 2011
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For the Three Months Ended September 30,
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For the Nine Months Ended September 30,
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|||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
Revenue, net
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$ | 34,250 | $ | 34,250 | $ | 34,250 | $ | 34,250 | $ | 34,250 | ||||||||||
Cost of goods sold
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8,523 | 8,523 | - | 8,523 | - | |||||||||||||||
Gross income
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25,727 | 25,727 | 34,250 | 25,727 | 34,250 | |||||||||||||||
Expenses:
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||||||||||||||||||||
General and administrative expenses
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380,410 | 134,170 | 124,863 | 208,128 | 124,863 | |||||||||||||||
Loss from operations
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- | |||||||||||||||||||
380,410 | 134,170 | 124,863 | 208,128 | 124,863 | ||||||||||||||||
Net loss before other income and expenses
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(354,683 | ) | (108,443 | ) | (90,613 | ) | (182,401 | ) | (90,613 | ) | ||||||||||
Other income and (expenses)
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||||||||||||||||||||
Loss on disposal of equipment
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(12,193 | ) | (12,193 | ) | - | (12,193 | ) | - | ||||||||||||
(12,193 | ) | (12,193 | ) | - | (12,193 | ) | - | |||||||||||||
Net loss
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$ | (366,876 | ) | $ | (120,636 | ) | $ | (90,613 | ) | $ | (194,594 | ) | $ | (90,613 | ) | |||||
Loss per common share - Basic and
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||||||||||||||||||||
fully diluted
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$ | (0.02 | ) | $ | (0.01 | ) | $ | - | $ | (0.01 | ) | $ | - | |||||||
Weighted average number of shares
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||||||||||||||||||||
outstanding - Basic and fully diluted
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19,603,933 | 19,660,268 | 19,540,823 | 19,982,782 | 19,540,823 |
F-4
(A Development Stage Company)
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||||||||||||||||||||
Statement of Stockholders' Equity
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||||||||||||||||||||
For the Period from April 8, 2010 (Inception) to September 30, 2011
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||||||||||||||||||||
Additional Paid in Capital
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Accumulated Deficit During Development Stage
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Total Stockholders' Equity
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||||||||||||||||||
Common Stock
|
||||||||||||||||||||
Shares
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Amount
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|||||||||||||||||||
Issuance of common shares for cash at
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||||||||||||||||||||
$0.001 per share
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13,333,328 | $ | 13,334 | $ | - | $ | - | $ | 13,334 | |||||||||||
Issuance of common shares for services
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||||||||||||||||||||
at $0.001 per share
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6,000,000 | 6,000 | - | - | 6,000 | |||||||||||||||
Issuance of common shares for cash at
|
||||||||||||||||||||
$0.50 per share
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196,940 | 197 | 98,273 | - | 98,470 | |||||||||||||||
Issuance of common shares for cash at
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||||||||||||||||||||
at $0.50 per share
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1,000 | 1 | 499 | - | 500 | |||||||||||||||
Issuance of common shares for cash at
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||||||||||||||||||||
$0.50 per share
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10,000 | 10 | 4,990 | - | 5,000 | |||||||||||||||
Issuance of common shares for cash at
|
||||||||||||||||||||
$0.50 per share
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4,000 | 4 | 1,996 | - | 2,000 | |||||||||||||||
Issuance of common shares for services
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||||||||||||||||||||
at $0.50 per share
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4,000 | 4 | 1,996 | - | 2,000 | |||||||||||||||
Issuance of common shares for cash at
|
||||||||||||||||||||
$0.50 per share
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60,000 | 60 | 29,940 | - | 30,000 | |||||||||||||||
Issuance of common shares for cash at
|
||||||||||||||||||||
$0.50 per share
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20,000 | 20 | 9,980 | - | 10,000 | |||||||||||||||
Issuance of common shares for cash at
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||||||||||||||||||||
$0.50 per share
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8,000 | 8 | 3,992 | - | 4,000 | |||||||||||||||
Issuance of common shares for services
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||||||||||||||||||||
at $0.50 per share
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8,000 | 8 | 3,992 | - | 4,000 | |||||||||||||||
Issuance of common shares for services
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||||||||||||||||||||
at $0.50 per share
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15,000 | 15 | 7,485 | - | 7,500 | |||||||||||||||
Net loss
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- | - | - | (172,282 | ) | (172,282 | ) | |||||||||||||
Balance - December 31, 2010
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19,660,268 | 19,661 | 163,143 | (172,282 | ) | 10,522 | ||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
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20,000 | 20 | 9,980 | - | 10,000 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
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5,000 | 5 | 2,495 | - | 2,500 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
|
10,000 | 10 | 4,990 | - | 5,000 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
|
10,000 | 10 | 4,990 | - | 5,000 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
|
11,000 | 11 | 5,489 | - | 5,500 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
|
32,000 | 32 | 15,968 | - | 16,000 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
28,000 | 28 | 13,972 | - | 14,000 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
5,000 | 5 | 2,495 | - | 2,500 | |||||||||||||||
Subtotals
|
19,781,268 | 19,782 | 223,522 | (172,282 | ) | 71,022 |
F-5
VDO-Ph International
|
||||||||||||||||||||
(A Development Stage Company)
|
||||||||||||||||||||
Statement of Stockholders' Equity
|
||||||||||||||||||||
For the Period from April 8, 2010 (Inception) to September 30, 2011
|
||||||||||||||||||||
Additional Paid in Capital
|
Accumulated Deficit During Development Stage
|
Total Stockholders' Equity
|
||||||||||||||||||
Common Stock
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||
Subtotals
|
19,781,268 | 19,782 | 223,522 | (172,282 | ) | 71,022 | ||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
1,500 | 2 | 748 | - | 750 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
4,000 | 4 | 1,996 | - | 2,000 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
|
250,000 | 250 | 124,750 | - | 125,000 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
100,000 | 100 | 49,900 | - | 50,000 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
|
30,000 | 30 | 14,970 | - | 15,000 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
1,000 | 1 | 499 | - | 500 | |||||||||||||||
Issuance of common shares for services
|
||||||||||||||||||||
at $0.50 per share
|
1,000 | 1 | 499 | - | 500 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
1,000 | 1 | 499 | - | 500 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.50 per share
|
1,000 | 1 | 499 | - | 500 | |||||||||||||||
Issuance of common shares for cash
|
||||||||||||||||||||
at $0.40 per share
|
25,000 | 25 | 9,975 | - | 10,000 | |||||||||||||||
Contribution of additional paid in capital
|
- | - | 28,000 | - | 28,000 | |||||||||||||||
Recapitalization of Officer's loan
|
41,675 | 41,675 | ||||||||||||||||||
Net loss
|
- | - | - | (194,594 | ) | (194,594 | ) | |||||||||||||
Balance - September 31, 2011
|
20,195,768 | $ | 20,197 | $ | 497,532 | $ | (366,876 | ) | $ | 150,853 |
F-6
VDO-Ph International
|
||||||||||||
(A Development Stage Company)
|
||||||||||||
Condensed Statements of Cash Flows
|
||||||||||||
For the Nine Months Ended September 30, 2011 and for the Period
|
||||||||||||
From April 8, 2010 (Inception) to September 30, 2011
|
||||||||||||
From April 8, 2010 (Inception) to September 30, 2011
|
||||||||||||
For the Nine Months Ended September 30,
|
||||||||||||
2011 | 2010 | |||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$ | (366,876 | ) | $ | (194,594 | ) | $ | (172,282 | ) | |||
Adjustments to reconcile net loss to net cash used
|
||||||||||||
by operating activities:
|
||||||||||||
Common stock issued for services
|
204,000 | 184,500 | 19,500 | |||||||||
Depreciation expense
|
2,361 | 1,861 | 500 | |||||||||
Prepaid expenses
|
(125,000 | ) | (123,974 | ) | (1,026 | ) | ||||||
Security deposit
|
(1,977 | ) | (977 | ) | (1,000 | ) | ||||||
Accounts payable and accrued expenses
|
35,604 | 24,549 | 11,055 | |||||||||
Net cash used by operating activities
|
(251,888 | ) | (108,635 | ) | (143,253 | ) | ||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of equipment
|
(53,088 | ) | (36,411 | ) | (16,677 | ) | ||||||
Net cash used by investing activities
|
(53,088 | ) | (36,411 | ) | (16,677 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of common stock
|
244,054 | 80,750 | 163,304 | |||||||||
Contribution of additional paid in capital
|
28,000 | 28,000 | - | |||||||||
Shareholder's loan
|
- | (7,954 | ) | 7,954 | ||||||||
Recapitalization of shareholder loan
|
41,675 | 41,675 | - | |||||||||
Net cash provided by financing activities
|
313,729 | 142,471 | 171,258 | |||||||||
Net increase in cash
|
8,753 | (2,575 | ) | 11,328 | ||||||||
Cash at beginning of period
|
- | 11,328 | - | |||||||||
Cash at end of period
|
$ | 8,753 | $ | 8,753 | $ | 11,328 | ||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid during the period for:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | - | ||||||
Income taxes
|
$ | - | $ | - | $ | - |
F-7
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
VDO-Ph International ("VDO-Ph" or the "Company") was incorporated in Nevada in April 2010. The Company is in the development stage and intends to sell a state-of-the-art telephony appliance for commercial and residential use employing proprietary software. The appliance, which will serve as a digital telephone, full motion video and advanced computer system, will be marketed and sold through cable companies to their commercial and residential customers.
Basis of Presentation
The accompanying unaudited financial statements of MIC have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such principles and regulations of the Securities and Exchange Commission for Form 10-Q. All adjustments, consisting of normal recurring adjustments, have been made which, in the opinion of management, are necessary for a fair presentation of the results of interim periods. The results of operations for such interim periods are not
necessarily indicative of the results that may be expected for a full year because of, among other things, seasonality factors in the retail business. The unaudited financial statements contained herein should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2009.
The balance sheet at September 30, 2011 has been derived from the audited financial statements at that date but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and notes thereto for the fiscal year ended December 31, 2010.
Revenue Recognition
In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:
Revenue is recognized at the time the product is delivered or services are performed. Provision for sales returns are estimated based on the Company's historical return experience. Revenue is presented net of returns.
F-8
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Net Income (Loss) Per Common Share
The Company calculates net income (loss) per share based on the authoritative guidance. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses common stock equivalents, if any, are not considered, as their effect would be anti-dilutive.
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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Segment Information
The Company follows Accounting Standards Codification ("ASC") 280, "Segment Reporting". The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.
Income Taxes
Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.
ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
F-9
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock-Based Compensation
The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
Recent Pronouncements
In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS).” This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level three fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011. The
adoption of ASU 2011-04 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.
In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance allows two presentation alternatives; present items of net income and other comprehensive income in (1) one continuous statement, referred to as the statement of comprehensive income, or (2) in two separate, but consecutive, statements of net income and other comprehensive income. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. Early adoption is permitted, but full retrospective application is required under both sets of
accounting standards. The Company is currently evaluating which presentation alternative it will utilize.
F-10
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property, Plant and Equipment, net
Property, plant and equipment are stated at cost. Maintenance, repairs and minor renewals are expensed as incurred. Property, plant or equipment that is retired or sold, and the related gain or loss, if any, is taken into income currently. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.
The estimated useful lives for computing depreciation are:
Equipment and vehicles
|
5 - 10 years
|
||||
Furniture and fixtures
|
5 - 7 years
|
||||
Improvements
|
10 years
|
The Company reviews long-lived assets, such as equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds the estimated future cash flows, an impairment loss will be recorded by the amount the carrying value exceeds the fair value of the asset.
Note 2. PROPERTY, PLANT AND EQUIPMENT (NET)
Equipment is recorded at cost and consisted of the following at September 30, 2010:
Computer equipment
|
$ |
51,998
|
||
Less: accumulated depreciation
|
(1,271)
|
|||
$ |
50,727
|
Depreciation expense was $1,861 and $334 for the nine months ended September 30, 2011 and 2010, respectively.
F-11
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 3. STOCKHOLDERS' EQUITY
In April 2010 the Company issued 13,333,328 shares of common stock at par value.
In April 2010 the Company issued 6,000,000 shares of common stock at par value for services provided to the Company.
In April 2010 the Company issued 196,940 shares of common stock at $0.50 per share.
In April 2010, the Company issued 1,000 shares of common stock at $0.50 per share.
In April 2010, the Company issued 10,000 shares of common stock at $1.00 per share for services provided to the Company.
In September 2010, the Company issued 4,000 shares of common stock at $0.50 per share.
In September 2010, the Company issued 4,000 shares of common stock at $.50 per share for services provided to the Company.
In November 2010, the Company issued 60,000 shares of common stock at $0.50 per share.
In December 2010, the Company issued 20,000 shares of common stock at $0.50 per share.
In December 2010, the Company issued 8,000 shares of common stock at $0.50 per share.
In December 2010, the Company issued 8,000 shares of common stock at $.50 per share for services provided to the Company.
In December 2010, the Company issued 15,000 shares of common stock at $.50 per share for services provided to the Company.
In January 2011 the Company issued 20,000 shares of common stock at $0.50 per share for services provided to the Company.
In January 2011 the Company issued 5,000 shares of common stock at $0.50 per share for services provided to the Company.
F-12
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 3. STOCKHOLDERS' EQUITY (continued)
In January 2011 the Company issued 10,000 shares of common stock at $0.50 per share for services provided to the Company.
In January 2011 the Company issued 10,000 shares of common stock at $0.50 per share for services provided to the Company.
In January 2011 the Company issued 11,000 shares of common stock at $0.50 per share for services provided to the Company.
In February 2011 the Company issued 32,000 shares of common stock at $0.50 per share for services provided to the Company.
In February 2011 the Company issued 28,000 shares of common stock at $0.50 per share.
In February 2011 the Company issued 5,000 shares of common stock at $0.50 per share.
In February 2011 the Company issued 1,500 shares of common stock at $0.50 per share.
In February 2011 the Company issued 4,000 shares of common stock at $0.50 per share.
In February 2011 the Company issued 250,000 shares of common stock at $0.50 per share for services provided to the Company.
In February 2011 the Company issued 100,000 shares of common stock at $0.50 per share.
In February 2011 the Company issued 30,000 shares of common stock at $0.50 per share for services provided to the Company.
In April 2011 the Company issued 1,000 shares of common stock at $0.50 per share.
In April 2011 the Company issued 1,000 shares of common stock at $0.50 per share for services provided to the Company.
In May 2011, certain stockholders of the company contributed $22,500 in additional paid in capital to the Company.
F-13
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 3. STOCKHOLDERS' EQUITY (continued)
In June 2011 the Company issued 1,000 shares of common stock at $0.50 per share.
In June 2011, certain stockholders of the company contributed $5,500 in additional paid in capital to the Company.
In July 2011 the Company issued 1,000 shares of common stock at $0.50 per share.
In September 2011 the Company issued 25,000 shares of common stock at $0.40 per share.
In September 2011, the Company, with the agreement of the stockholder recapitalized a stockholder loan of $41,675.
Note 4. COMMITMENTS AND CONTINGENCIES
The Company leases its offices pursuant to an agreement entered into in January 2011. The lease calls for minimum monthly lease payments plus its pro-rata share of certain operating expenses.
Rent expense for the nine months ended September 30, 2011 and 2010 totaled $7,674 and $10,396, respectively.
Note 5. INCOME TAXES
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:
Income tax provision at the federal
|
||||||||
statutory rate
|
34
|
%
|
||||||
Effect of operating losses
|
(34)
|
%
|
||||||
0
|
%
|
As of September 30, 2010, the Company has a net operating loss carryforward of approximately $149,000. This loss will be available to offset future taxable income. If not used, this carryforward will begin to expire in 2030. The deferred tax asset relating to the operating loss carryforward has been fully reserved at September 30, 2011. The principal difference between the operating loss for income tax purposes and reporting purposes results from the issuance of common shares for services.
F-14
VDO-Ph International
|
||||||||
(A Development Stage Company)
|
||||||||
Notes to Financial Statements
|
||||||||
September 30, 2011
|
Note 6. BASIS OF REPORTING
The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company has experienced a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan, which is long-range in nature. For the period from inception to September 30, 2011, the Company incurred a net loss of approximately $367,000. In addition, the Company has no significant assets or revenue generating operations.
The Company currently does not have sufficient cash to sustain itself for the next 12 months, and will require additional funding in order to execute its plan of operations and to continue as a going concern. To meet its cash needs, management expects to raise capital through a private placement offering. In the event that this funding does not materialize, certain stockholders have agreed, orally, to loan, on a non-interest bearing demand basis, sufficient funds to maintain the Company's operations for the next 12 months.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
F-15