The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2011, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Companys June 30, 2011 audited financial statements. The results of operations for the periods ended December 31, 2011 and the same period last year are not necessarily indicative of the operating results for the full years.
The Companys financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has a working capital deficit of $13,147, an accumulated deficit of $30,337 and net loss from operations since inception of $30,337. The Company does not have a source of revenue sufficient to cover its operation costs giving substantial doubt for it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The Company is funding its operations by way of related party advances.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Managements plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2011.
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Basic loss per share is computed using the weighted average number of shares outstanding during the period. Fully diluted earnings (loss) per share are computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants). Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Companys net income (loss) position at the calculation date. As of December 31, 2011, there were no stock equivalents outstanding. Diluted and basic loss per share are the same.
The carrying value of cash and cash equivalents and accounts payable approximates fair value due to the short period of time to maturity.
The Company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the Companys financial statements.
The Company has received $5,548 as a loan from a related party. The loan is unsecured, payable on demand and bears no interest.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Green & Quality Home Life, Inc. ("Green & Quality Home Life", "the Company", our or "we") was incorporated in the State of Nevada as a for-profit company on June 1, 2010. The Company is a development stage company that intends to create a portfolio of products and services (controlling heating, ventilation and air conditioning) and develop a set of solutions which would automate these domestic activities, possibly making them less time consuming, easy to manage and leveraging the quality of life of every member of a family. Moreover, our products and services could have the potential to lessen the environmental impact of a home, using technology to better manage energy, water, wastes, heating, ventilation and air conditioning (HVAC). For these reasons, our intention is to develop proprietary software (Green Series and Quality of Life Series) to integrate third-party existing products for full product service functionality for our potential clients. We are not currently planning to develop the hardware-based products needed for the automation of domestic activities (examples: toilets, faucets, sprinkler and irrigation systems, etc.).
Plan of Operation
At the present time, we have generated no revenues from our business operations. We will need additional cash and if we are unable to raise it, we will either suspend marketing operations until we do raise the cash necessary to continue our business plan, or we will cease operations entirely.
If we are unable to complete any phase of our business plan or marketing efforts because we dont have enough money, we will cease our development and/or marketing activities until we raise money.
As of the fiscal quarter ended December 31, 2011 we had $76 of cash on hand. We incurred operating expenses in the amount of $4,640 in the quarter ended December 31, 2011. These operating expenses were comprised of professional fees and office and general expenses.
We have registered 4,500,000 of or our common stock for sale to the public. Our registration statement became effective on June 30, 2011 and we are still in the process of seeking equity financing to fund our operations over the next 12 months.
Management believes that if subsequent private placements are successful, we will generate sales revenue within the following twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.
If Green & Quality Home Life is unsuccessful in raising the additional proceeds through a private placement offering it will then have to seek additional funds through debt financing, which would be very difficult for a new development stage company to secure. Therefore, the company is highly dependent upon the success of the anticipated private placement offering described herein and failure thereof would result in Green & Quality Home Life having to seek capital from other resources such as debt financing, which may
not even be available to the company. However, if such financing were available, because Green & Quality Home Life is a development stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If Green & Quality Home Life cannot raise additional proceeds via a private placement of its common stock or secure debt financing it would be required to cease business operations. As a result, investors in Green & Quality Home Life common stock would lose all of their investment.
Green & Quality Home Life is planning to develop its initial activities in 18 months, in which it is expected to acquire more information, knowledge and experience to create a viable and healthy business. In the table below, it can be found the initial action plan with the duration and investment previewed so far:
Below follows what is being considered in each activity:
Market Analysis for Home Automation responsible: the Companys President.
Acquisition of market studies from specialized market research companies. In our initial search, we found so far 2 potential market reports. We intend to continue searching for other reports so we can evaluate and decide which is more relevant to our business.
Analysis of Home Automation industry and the market for it.
Analysis and segmentation to obtain the target market for our products and services.
Analysis of what is needed and expected by our target market.
Define the product and service portfolio, execute price, place and promotion analysis for it.
Select which third-party products and protocols will integrate with our products, considering the ones which are more common and have the best probability to bring
competitiveness and profitability to our portfolio. Then, define the software requirements for the development of Green and Quality of Life Series Software.
Analysis of the Porters five forces: the threat of the entry of new competitors, the intensity of competitive rivalry; the threat of substitute products or services, the bargaining power of customers (buyers) and the bargaining power of suppliers.
Channel strategy definition and development: Direct selling channel: using our own sales team to focus on major clients, such as home materials retailers (i.e. Home Depot), home constructors; Indirect selling channel: via electronic and home materials stores and developing partners to act as our solution integrators, delivering Green & Quality Home Lifes products and services.
Risk assessment: review the previous risk analysis and update it according to new information raised at this point.
Legal and regulation research responsible: the Companys President. Support, if required: the Companys attorney
Verify legal and regulation requirements applicable to home automation industry.
Verify certifications and possible government approvals needed to execute our business.
Understand how to be part and apply the Certification Program LEED for Homes from U.S. Green Building Council (a non-profit organization committed to a prosperous and sustainable future for U.S. through cost-efficient and energy-saving green buildings).
Development of the product portfolio concept responsible: the Companys President.
Define the product line following the requirements defined in the market analysis.
Define the products features and requirements for future development of the Green and Quality of Life Series Software and website.
Select software developer and web designer for the development of the Green and Quality of Life Series Software and website.
Development of the services portfolio concept responsible: the Companys President.
Define the service line following the requirements defined in the market analysis.
Define the services characteristics and requirements for future development.
Developing the Green and Quality of Life Series Software/ Website pilot responsible: software developer and web designer to be selected and contracted.
Contract Software developers and Web designers.
Develop the software which will be the base of the product and service portfolio of Green and Quality of Life Series.
Develop the website pilot which will provide web services to all software series and will help to integrate every systems and products.
Run tests and quality validation on products and services responsible: the Companys President.
According to the concepts defined for the product and service portfolio, prototypes will be developed and concepts tested to assure and refine the previous definitions of the portfolio.
Data analysis from the tests will determine if further research is needed or able to move forward.
Development of the Implementation Plan responsible: the Companys President.
Define the scope and all the tasks required to develop the product and service portfolio, including a manufacture plan if hardware products are needed.
Define the resources and/or partner required to develop the portfolio.
Define the schedule and the key indicator to manage the implementation.
Define the budget needed to do the implementation.
Development of the Marketing Plan responsible: the Companys President.
Define how to promote and divulgate Green & Quality Home Life and its portfolio.
Define the budget required for it.
Development of the Sales Plan responsible: the Companys President.
Define the policy to be applied in the direct and indirect sales channels, concerning salary, commission, benefits, and key performance indicators to manage and evaluate the sales team.
We do not currently have any employees and management does not plan to hire employees at this time. We do not expect the purchase or sale of any significant equipment and have no current material commitments.
If Green & Quality Home Life is unsuccessful in raising the additional proceeds through a private placement offering it will then have to seek additional funds through debt financing, which would be highly difficult for a new development stage company to secure. Therefore, the company is highly dependent upon the success of the anticipated private placement offering and failure thereof would result in Green & Quality Home Life having to seek capital from other sources such as debt financing, which may not even be available to the company. However, if such financing were available, because Green & Quality Home Life is a development stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If Green & Quality Home Life cannot raise additional proceeds via a private placement of its common stock or secure debt financing it would be required to cease business operations. As a result, investors in Green & Quality Home Life common stock would lose all of their investment.
Off Balance Sheet Arrangements
The company is dependent upon the sale of its common shares to obtain the funding necessary to carry its business plan. Our President, Fabio Alexandre Narita has undertaken to provide the Company with operating capital to sustain its business over the next twelve month period, as the expenses are incurred, in the form of a non-secured loan. However, there is no contract in place or written agreement securing these agreements. Investors should be aware that Mr. Narita expression is neither a contract nor agreement between him and the company.
Other than the above described situation the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
As reported in our Annual Report on Form 10-K for the year ended June 30, 2011, management is aware that there is a significant deficiency and a material weakness in our internal control over financial reporting and therefore has concluded that the Companys internal controls over financial reporting were not effective as of December 31, 2011. The significant deficiency relates to a lack of segregation of duties due to the small number of employees involved with general administrative and financial matters. The material weakness relates to a lack of formal policies and procedures necessary to adequately review significant accounting transactions.
There have not been any changes in the Company's internal control over financial reporting during the quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.