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EXCEL - IDEA: XBRL DOCUMENT - Hengyi International Industries Group Inc.Financial_Report.xls
EX-31.1 - CERTIFICATIONS REQUIRED BY RULE 13A-14, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - Hengyi International Industries Group Inc.ex311.htm
EX-32.1 - CERTIFICATION OF CEO AND CFO - Hengyi International Industries Group Inc.ex321.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q
(Mark One)
 
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2011

OR

oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to

COMMISSIONFILE NUMBER 333-171148

LYONS LIQUORS, INC.
(Exact Name of small business issuer as specified in its charter)

Nevada
 
27-1656207
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)

PO Box 344, Ellenton, Florida 34222
(Address of principal executive offices) (Zip Code)

Issuer’s telephone Number: (941) 932-8234

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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  ¨

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 ¨    No x

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. (Check one):

Large accelerated filer ¨
 
Accelerated filer  ¨
     
Non-accelerated filer ¨
 
Smaller reporting company  x
(Do not check if a smaller
reporting company)
   
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨   No x
 
As of February 7, 2012, the issuer had 10,193,000 outstanding shares of Common Stock.

 
 

 
 
Form 10-Q
December 31, 2011
 
TABLE OF CONTENTS

   
Page
 
PART I
 
Item 1.
Financial Statements
     
 
Balance Sheets
3
 
 
Statements of Operations
           4
 
 
Statements of Cash Flows
5
 
 Notes to the Financials Statements
 6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
7
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
9
Item 4T
Controls and Procedures
9
     
 
PART II
 
Item 1.
Legal Proceedings
 9
Item 1A.
Risk Factors
9
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
9
Item 3.
Defaults Upon Senior Securities
9
Item 4.
Removed and Reserved
9
Item 5.
Other Information
9
Item 6.
Exhibits
9
   
SIGNATURES
10
 
 
 

 
 
PART I.

ITEM 1. FINANCIAL INFORMATION

Lyons Liquors, Inc.
(A Development Stage Company)
 Balance Sheets
 
   
December 31, 
2011
   
Sept. 30, 2011
 
   
(Unaudited)
       
ASSETS
           
Current Assets:
           
Cash
 
$
166
   
$
266
 
    Total Current Assets
   
166 
     
266
 
Other Assets:
               
    Deferred Offering Costs
   
     
 
Deposits
   
797
     
797
 
TOTAL ASSETS
 
$
963
   
$
1,063
 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
Current Liabilities:
               
Accounts payable
 
$
5,000
   
$
-
 
Accrued expenses
   
59,612
     
47,712
 
                 
Total Current Liabilities
   
64,612
     
47,712
 
                 
STOCKHOLDERS' DEFICIT
               
Common stock - $.001 par value; 75,000,000 shares authorized; 10,193,000 shares issued and outstanding
   
10,193
     
10,193
 
Additional paid-in capital
   
19,107
     
19,107
 
Deficit accumulated during the development stage
   
(92,949)
   
(75,949)
 
TOTAL STOCKHOLDERS' DEFICIT
   
(63,649)
     
(46,649)
 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
 
$
963
   
$
1,063
 

The accompanying notes are an integral part of these financial statements.

 
3

 
 
Lyons Liquors, Inc.
(A Development Stage Company)
Statements of Operations
Three Months Ended December 31, 2011 and 2010, and
Inception (December 17, 2009) through December 31, 2011
(Unaudited)
  
   
Three Months Ended
December 31, 2011
   
Three Month Ended
December 31, 2010
   
Inception to December 
31, 2011
 
                   
REVENUE
 
$
-
   
$
-
   
$
-
 
OPERATING EXPENSES:
                       
    General & Administrative Expenses
   
17,000
     
7,500
     
92,949
 
TOTAL OPERATING EXPENSES
   
17,000
     
7,500
     
92,949
 
LOSS BEFORE INCOME TAXES
   
(17,000)
     
(7,500)
     
(92,949)
 
                         
INCOME TAXES
   
-
     
-
     
-
 
NET LOSS 
 
$
(17,000) 
   
$
(7,500)
   
$
(92,949)
 
Net Loss Per Common Share, basic & diluted
 
$
(0.00)
   
$
(0.00)
   
$
-
 
Weighted Common Shares Outstanding, basic & diluted
 
$
10,193,000
   
$
10,160,000
   
$
-
 
 
The accompanying notes are an integral part of these financial statements.

 
4

 
 
Lyons Liquors, Inc.
(A Development Stage Company)
Statements of Cash Flows
Three Months Ended December 31, 2011 and 2010, and
Inception (December 17, 2009) through December 31, 2011
(Unaudited)
  
   
Three Months Ended
December 31, 2011
   

Three Months Ended
December 31, 2010

   
Inception to
December
31, 2011
 
CASH FLOWS FROM OPERATING ACTIVITIES 
                 
Net Loss
 
$
(17,000)
   
$
(7,500)
   
$
(92,949)
 
(Increase) in Deposits
   
-
     
-
     
(797)
 
Common Shares Issued for Services
   
-
     
-
     
1000
 
(Increase) in Deferred Offering Costs
   
-
     
(5,000)
     
-
 
Increase in Accounts Payable & Accrued Expenses
   
11,000
     
7,500
     
52,212
 
Total Adjustments to Net Income
   
11,000
     
2,500
     
52,415
 
Net Cash (used in) Operating Activities
   
(6,000)
     
(5,000)
     
(40,534)
 
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
Net Cash Flows provided by (used in) Investing Activities
   
-
     
-
     
-
 
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Officer Loans
   
5,900
     
-
     
12,400
 
Common Shares Issued for Cash
   
-
     
-
     
28,300
 
Net Cash provided by Financing Activities
   
5,900
     
-
     
40,700
 
Net increase (decrease) in cash
   
(100)
     
(5,000)
     
166
 
Cash – Beginning Balance
   
266
     
7,736
     
-
 
     
-
     
-
     
-
 
CASH ENDING BALANCE
 
$
166
   
$
2,736
   
$
166
 
                         
Cash paid for:
Interest
 
$
-
   
$
-
   
$
-
 
Income taxes
 
$
-
   
$
-
   
$
-
 
 
The accompanying notes are an integral part of these financial statements.

 
5

 
 
LYONS LIQUORS, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2011
(UNAUDITED)

(1)           Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and Rule 8.03 of Regulation SX. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.

The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.  For further information, refer to the consolidated financial statements of the Company as of September 30, 2011, and for the year ended and period from inception through September 30, 2011, including notes thereto.

(2)           Earnings per Share

The Company calculates net income (loss) per share as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260, "Earnings per Share." Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods when anti-dilutive common stock equivalents are not considered in the computation.

(3)           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 is in the development stage and has experienced a loss from operations as a result of its investment necessary to achieve its operatingplan, which is long-range in nature. The Company has no revenues and has incurred net losses through December 31, 2011, aggregating $92,949. In addition, the Company has negative working capital of $64,446 and negative stockholders’ equity of $63,649 at December 31, 2011.

The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase ownership equity and develop profitable operations. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.

The Company is pursuing financing for its operations and seeking additional private investments. In addition, the Company is seeking to expand its revenue base. Failure to secure such financing or to raise additional equity capital and to expand its revenue base may result in the Company depleting its available funds and not being able pay its obligations.

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.

(4)           Accrued Expenses

Accrued expenses consist of amounts incurred from normal operations of the business.  As of December 31, 2011, the Company has accrued $47,212 in compensation payable to its president and CEO. In addition, this officer has advanced the Company $12,400 for working capital purposes.  These balances are due on demand.

 
6

 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
Forward-Looking Statements

The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Overview
 
We are a Nevada Corporation founded in December 17, 2009. We are currently a development stage company looking to enter the B2C retail and liquor industry, specifically we intend to own and operate a premier chain of retail stores. We have not yet commenced operations and currently are in the process of developing a business and marketing plan for capital formation. Once we have raised sufficient capital we will begin our operations. However, there is no guarantee that we will be successful in raising the required capital.  If we are not successful at raising any capital we may have to change our business plan to a more suitable business and industry sector to be able to raise capital or commence operations.  Some possible options include such sectors as Semiconductor, Component Technology, Oil & Gas, Clean Energy and Food Distribution.  However, there can be no assurance that the raising of future equity or change in business sectors will be successful and that the Company’s anticipated financing will be available in the future, at terms satisfactory to the Company. Failure to achieve the equity and financing at satisfactory terms and amounts could have a material adverse effect on the Company’s ability to continue as a going concern.

Critical Accounting Policies

Basis of presentation - Going concern

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 is in the development stage and has experienced a loss from operations as a result of its investment necessary to achieve its operatingplan, which is long-range in nature. The Company has no revenues and has incurred net losses through December 31, 2011, aggregating $92,949. In addition, the Company has negative working capital of $64,446 and negative stockholders’ equity of $63,649 at December 31, 2011.

The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase ownership equity and develop profitable operations. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.

The Company is pursuing financing for its operations and seeking additional private investments. In addition, the Company is seeking to expand its revenue base. Failure to secure such financing or to raise additional equity capital and to expand its revenue base may result in the Company depleting its available funds and not being able pay its obligations.

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.

However, there can be no assurance that the raising of future equity will be successful and that the Company’s anticipated financing will be available in the future, at terms satisfactory to the Company. Failure to achieve the equity and financing at satisfactory terms and amounts could have a material adverse effect on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
7

 
  
Recent Accounting Pronouncements

The company does not believe that any recently issued accounting pronouncements will have a material impact on its financial statements.

Results of operations
 
Results of Operations for the Three Months Ended December 31, 2011 Compared to the Three Months Ended December 31, 2010.

Due to the fact that we are a development stage company in both periods, we had revenues of $0 for the three months ended December 31, 2011, which wasunchanged from our revenue of $0 for the three months ended December 31, 2010.  Ourcost of goods sold and gross profits were $0 in both periods.

Our net loss for the three months ended December 31, 2011 was $17,000, which was an increase of $9,500 from our net loss of $7,500 in the threemonth period ended December 31, 2010.

Results of Operations from Inception December 17, 2009 through December 31, 2011.

Due to the fact that we are a development stage company since inception to our current period, we had revenues of $0 since inception or December 17th 2009 through December 31, 2011.   Ourcost of goods sold and gross profits were $0 also.

Our net loss since inceptionor December 17th 2009 through December 31, 2011 was $ 92,949.
 
Liquidity and Capital Resources
 
As of December 31, 2011, we had cash of $166 as compared to cash of $266 as of September 30, 2011. Net cash used in operating activities totaled $6,000 for the three months ended December 31, 2011. Net cash provided by financing activities totaled $5,900 for the three months ended December 31, 2011 which included $5,900 advanced by the company officer for working capital purposes.

Net cash used in operating activities totaled $40,534 for the period December 17, 2009 (Inception) to December 31, 2011. Net cash provided by financing activities totaled $40,700 for the period December 17, (Inception) to December 31, 2011.

In order for us to execute our business plan we will need to raise at least $150,000 to $ 175,000 in debt or equity. The funds are needed for building out the first retail store, deposits, sales and marketing and working capital. There can be no assurance that we will be able to raise the funds needed to execute our business plan.

If we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations.  We do not anticipate the purchase or sale of any significant equipment. The foregoing represents our best estimate of our cash needs based on current planning and business conditions.  In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations.
 
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
Not Applicable
 
ITEM 4T. CONTROLS AND PROCEDURES.
 
Evaluation of Disclosure Controls and Procedures . Under the supervision and with the participation of our management, including our President, Chief Executive Officer, Chief Financial Officer and Secretary, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our President, Chief Executive Officer, Chief Financial Officer and Secretary concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
 
 
8

 
 
Changes in Internal Control Over Financial Reporting. During the most recent quarter ended December 31, 2011, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
PART II
 
ITEM 1. LEGAL PROCEEDINGS.
 
None
 
ITEM 1A. RISK FACTORS.
 
Not Applicable
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
 
None
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
 
None
 
ITEM 4. REMOVED AND RESERVED.
 
None
 
ITEM 5. OTHER INFORMATION.
 
Not Applicable 
 
ITEM 6. EXHIBITS.

Exhibit
Number
 
Description of Exhibit
     
31.1
 
32.1
 
Exhibit
101
 
Interactive data files formatted in XBRL (extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) theConsolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the ConsolidatedFinancial Statements.*
101.ins*XBRL Instance Document
101.xds*XBRL Taxonomy Extension Schema Document
101.cal*XBRL Taxonomy Extension Calculation Linkbase Document
101.def*XBRL Taxonomy Extension Definition Linkbase Document
101.lab*XBRL Taxonomy Extension Labels Linkbase Document
101.pre*XBRL Taxonomy Extension Presentation Linkbase Document

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to theliabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the SecuritiesExchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 
9

 
 
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.

 
LYONS LIQUORS, INC.
 
 
/s/ Shefali Vibhakar
 February 7, 2012
Shefali Vibhakar
 
Chief Executive Officer, Chief Financial Officer and Director
     

 
10