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EX-31.1 - SECTION 302 CERTIFICATION OF THE SARBANES-OXLEY ACT OF 2002 OF HOWARD S. LANDA. - HAVAYA CORPex311q063012.htm
EX-32.1 - SECTION 906 CERTIFICATION OF THE SARBANES-OXLEY ACT OF 2002 OF HOWARD S. LANDA. - HAVAYA CORPex321q063012.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2012
or

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________

Commission file number 333-165083

HAVAYA CORP.
(Exact name of registrant as specified in its charter)

Delaware
 
74-3245242
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
136 East South Temple, Suite 2112
Salt Lake City, Utah
 
 
 
84111
(Address of principal executive offices)
 
(Zip Code)

1-801-521-5703
(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 requirements for the past 90 days.
Yes þ 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 x     No ¨

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨         Accelerated filer ¨         Non-accelerated filer ¨         Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨    No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 6,500,000 shares of common stock as of August 13, 2012.
 
 
 
 

 
 
 
HAVAYA CORP.


TABLE OF CONTENTS

Part I—Financial Information

Item 1.
 
Financial Statements – Unaudited
  F-1
       
Item 2.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
3
       
Item 3.
 
Quantitative and Qualitative Disclosures About Market Risk
5
       
Item 4.
 
Controls and Procedures
5
       
Part II – Other Information
       
Item 1.
 
Legal Proceedings
6
       
Item 1A.
 
Risk Factors
6
       
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds
6
       
Item 3.
 
Defaults upon Senior Securities
6
       
Item 4.
 
 (Removed and Reserved)
6
       
Item 5.
 
Other Information
6
       
Item 6.
 
Exhibits
6
       
Signatures
7
 
2
 
 

 
 

 

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements – (Unaudited)
 
HAVAYA CORP.
(A DEVELOPMENT STAGE COMPANY)
 
INDEX TO FINANCIAL STATEMENTS
JUNE 30, 2012
 
   
Financial Statements-
 
   
Balance Sheets as of June 30, 2012 and December 31, 2011
F-2
   
Statements of Operations for the Three and Six Months Ended
 
June 30, 2012 and 2011, and Cumulative from Inception
F-3
   
Statement of Stockholders’ Equity for the Period from Inception
 
Through June 30, 2012
F-4
   
Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011,
 
and Cumulative from Inception
F-5
   
Notes to Financial Statements
F-6

F-1
 
 

 
 
 
 
HAVAYA CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AS OF JUNE 30, 2012 AND DECEMBER 31, 2011

ASSETS
       
 
     
       
 
 
 
 
       
June 30, 2012
   
December 31, 2011
       
(Unaudited)
   
(Audited)
Current Assets:
         
 
Cash and cash equivalents
                              -
 
                      1,091
 
Prepaid expenses
 
                                -
   
                                -
               
   
Total current assets
 
                                -
   
                        1,091
               
Total Assets
                              -
 
                     1,091
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current Liabilities:
         
 
Accounts payable and accrued liabilities
                    12,249
 
                    11,749
 
Due to shareholders
 
                      12,060
   
                                -
 
Advance customer payments
 
                      44,917
   
                      73,286
               
   
Total current liabilities
 
                      69,226
   
                      85,035
               
   
Total liabilities
 
                      69,226
   
                      85,035
               
Commitments and Contingencies
 
                                -
   
                                -
               
Stockholders' Equity (Deficit):
         
 
Common stock, par value $0.0001 per share, 200,000,000 shares
         
   
authorized; 6,500,000 shares issued and outstanding
 
                           650
   
                           650
 
Additional paid-in capital
 
                      65,824
   
                      65,824
 
(Deficit) accumulated during development stage
 
                  (135,700)
   
                  (150,418)
               
   
Total stockholders' equity (deficit)
 
                    (69,226)
   
                    (83,944)
               
Total Liabilities and Stockholders' Equity
                              -
 
                      1,091

 
The accompanying notes to financial statements are an integral part of these statements.
 
F-2
 
 

 
 
 
HAVAYA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011, AND
CUMULATIVE FROM INCEPTION (NOVEMBER 21, 2007)
THROUGH JUNE 30, 2012
(Unaudited)

      Three Months   Three Months   Six Months   Six Months   Cumulative
      Ended   Ended   Ended   Ended   From
      June 30, 2012   June 30, 2011   June 30, 2012   June 30, 2011   Inception
                                 
Revenues
               14,184
 
              11,820
 
             28,369
 
               11,820
 
        68,558
                                 
Expenses:
                           
 
General and administrative-
                           
 
Marketing expenses
 
                          -
   
                          -
   
                          -
   
                          -
   
            1,152
 
Professional fees
 
                   7,000
   
                 26,744
   
                 13,000
   
                 31,749
   
          91,685
 
Consulting fees
 
                          -
   
                 49,426
   
                          -
   
                 49,426
   
          74,426
 
Travel expenses
 
                          -
   
                 22,206
         
                 27,247
   
          45,641
 
Organization costs
 
                          -
   
                          -
   
                          -
   
                          -
   
            1,500
 
Filing Fees
 
                      480
   
                   2,489
   
                      560
   
                   3,018
   
          17,774
 
Franchise tax expense
 
                          -
   
                          -
         
                      400
   
               686
 
Other
 
                          -
   
                      377
   
                        94
   
                      471
   
            2,066
                                 
   
Total general and administrative expenses
 
                   7,480
   
               101,241
   
                 13,654
   
               112,310
   
        234,931
                                 
Net Income (Loss) from Operations
 
                   6,704
   
               (89,421)
   
                 14,715
   
             (100,490)
   
       (166,373)
                                 
Other Income (Expense)
 
                          -
   
                   1,336
   
                          3
   
                   2,825
   
          30,672
                                 
Provision for income taxes
 
                          -
   
                          -
   
                          -
   
                          -
   
                    -
                                 
Net Income (Loss)
                6,704
 
            (88,085)
 
             14,718
 
             (97,664)
 
    (135,700)
                                 
Net Income (Loss) Per Common Share:
                           
 
(Loss) per common share - Basic and Diluted
                  0.00
 
                (0.01)
 
                  0.00
 
                (0.02)
     
                                 
Weighted Average Number of Common Shares
                           
 
Outstanding - Basic and Diluted
 
            6,500,000
   
            6,500,000
   
            6,500,000
   
            6,500,000
     

 
The accompanying notes to financial statements are an integral part of these statements.
 
F-3
 
 

 
 
HAVAYA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (NOVEMBER 21, 2007)
THROUGH JUNE 30, 2012
(Unaudited)


                          (Deficit)      
                          Accumulated      
              Stock   Additional   During the      
   
Common stock
  Subscriptions   Paid-in   Development      
Description
 
Shares
  Amount   Receivable   Capital   Stage   Totals
                                   
Balance - at inception
 
                 -
  $
               -
  $
             -
  $
                 -
  $
                -
  $
                   -
Common stock issued for cash
 
  3,000,000
   
            300
   
         (300)
   
                    -
   
                    -
   
                     -
Common stock issued for cash
 
     500,000
   
              50
   
           (50)
   
                    -
   
                    -
   
                     -
Net (loss) for the period
 
                 -
   
                 -
   
                -
   
                    -
   
           (2,640)
   
            (2,640)
Balance - December 31, 2008
 
  3,500,000
   
            350
   
         (350)
   
                    -
   
           (2,640)
   
            (2,640)
Common stock issued for cash
 
  2,000,000
   
            200
   
                -
   
          39,800
   
                    -
   
           40,000
Net (loss) for the period
 
                 -
   
                 -
   
                -
   
                    -
   
         (26,842)
   
          (26,842)
Balance -December 31, 2009
 
  5,500,000
   
            550
   
         (350)
   
          39,800
   
         (29,482)
   
           10,518
Stock Subscriptions received
 
                 -
   
                 -
   
           350
   
                    -
   
                    -
   
                350
Common stock issued for cash
 
  1,000,000
   
            100
   
                -
   
          19,900
   
                    -
   
           20,000
Net (loss) for the period
 
                 -
   
                 -
   
                -
   
                    -
   
         (42,269)
   
          (42,269)
Balance -December 31, 2010
 
  6,500,000
 
 
            650
 
 
                -
   
          59,700
 
 
         (71,751)
 
 
          (11,401)
Capital contribution
 
                 -
   
                 -
   
                -
   
            6,124
   
                    -
   
             6,124
Net (loss) for the period
 
                 -
   
                 -
   
                -
   
                    -
   
         (78,667)
   
          (78,667)
Balance - December 31, 2011
 
  6,500,000
 
$
         650
 
$
             -
  $
        65,824
 
$
   (150,418)
 
$
       (83,944)
Net income for the period
 
                 -
   
                 -
   
                -
   
                    -
   
           14,718
   
           14,718
Balance - June 30, 2012
 
  6,500,000
 
$
          650
 
$
             -
  $
        65,824
 
$
    (135,700)
 
$
       (69,226)


 
The accompanying notes to financial statements are an integral part of these statements.
 
F-4
 
 

 
HAVAYA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011,
AND CUMULATIVE FROM INCEPTION (NOVEMBER 21, 2007)
THROUGH JUNE 30, 2012
(Unaudited)

      Six Months   Six Months
 
Cumulative
      Ended   Ended
 
From
      June 30, 2012   June 30, 2011
 
Inception
                     
Operating Activities:
 
 
           
 
Net (loss)
$
                       14,718
  $
                    (97,664)
  $
                   (135,700)
 
Adjustments to reconcile net (loss) to net cash
               
 
  provided by operating activities:
               
   
Changes in net assets and liabilities-
               
   
Prepaid expenses
 
                                   -
   
                                62
   
                                   -
   
Accounts payable and accrued liabilities
 
                              500
   
                           3,611
   
                         12,249
   
Advance customer payments
 
                       (28,369)
   
                       101,655
   
                         44,917
                     
Net Cash Used in Operating Activities
 
                       (13,151)
   
                           7,663
   
                       (78,534)
                     
Investing Activities:
               
 
Cash used by investing activities
 
                                   -
   
                                   -
   
                                   -
                     
Net Cash Used by Investing Activities
 
                                   -
   
                                   -
   
                                   -
                     
Financing Activities:
               
 
Proceeds from shareholder loans
 
                         12,060
   
                              400
   
                         12,060
 
Proceeds from common stock
 
                                 -
   
                                 -
   
                         66,474
                     
Net Cash Provided by Financing Activities
 
                         12,060
   
                              400
   
                         78,534
                     
Net (Decrease) Increase in Cash
 
                         (1,091)
   
                           8,063
   
                                   -
                     
Cash - Beginning of Period
 
                           1,091
   
                         10,297
   
                                   -
                     
Cash - End of Period
$
                               0
  $
                       18,360
  $
                                -
                     
Supplemental Disclosure of Cash Flow Information:
               
 
Cash paid during the period for:
               
   
Interest
$
                                -
  $
                                -
  $
                                -
   
Income taxes
$
                                -
  $
                                -
  $
                                -
                     
Supplemental schedule of noncash investing and financing activities:                
Conversion of shareholder loans to capital
$
                                 -
  $
                                 -
  $
                         6,124

 
The accompanying notes to financial statements are an integral part of these statements.
 
F-5
 
 

 
 
HAVAYA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012
 
1. Summary of Significant Accounting Policies
 
Basis of Presentation and Organization

Havaya Corp. (the “Company”) is in the development stage, and has limited operations. The Company was incorporated under the laws of the State of Delaware on November 21, 2007 and began activity in 2008. The business plan of the Company is to import and market home teeth whitening kits. The accompanying financial statements of the Company were prepared from the accounts of the Company under the accrual basis of accounting.

Unaudited Interim Financial Statements

The interim financial statements of the Company as of June 30, 2012, and for the periods then ended, and cumulative from inception, are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Company’s financial position as of June 30, 2012, and the results of its operations and its cash flows for the periods ended June 30, 2012, and cumulative from inception. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2012. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States. Refer to the Company’s audited financial statements as of December 31, 2011, filed with the SEC, for additional information, including significant accounting policies.

Cash and Cash Equivalents

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

Revenue Recognition

The Company recognizes revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

Earnings/Loss per Common Share

Basic earnings/loss per share is computed by dividing the net income/loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted earnings/loss per share is computed similar to basic earnings/loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the period ended June 30, 2012.
 
F-6
 
 

 
Income Taxes

The Company accounts for income taxes pursuant to FASB ASC 740. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
 
Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. The carrying value of accounts payable, accrued liabilities and loans approximated fair value due to the short-term nature and maturity of these instruments.

Deferred Offering Costs

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

Common Stock Registration Expenses

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

Lease Obligations

All non-cancellable leases with an initial term greater than one year are categorized as either capital leases or operating leases. Assets recorded under capital leases are amortized according to the methods employed for property and equipment or over the term of the related lease, if shorter.

Estimates

The financial statements are prepared on the basis of accounting principles generally accepted in the United States. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. Actual results could differ from those estimates made by management.

Fiscal Year End

The Company has adopted a fiscal year end of December 31.
 
F-7
 
 

 
2. Development Stage Activities

The Company is currently in the development stage, and has limited operations. The business plan of the Company is to import and market home teeth whitening kits.

3. Common Stock

On July 15, 2008, the Company issued 3,000,000 shares of common stock to an officer and director of the Company, for cash payment of $300.

On November 24, 2008, the Company issued 500,000 shares of common stock to an officer and director of the Company, for cash payment of $50.

On January 31, 2009, the Company began a capital formation activity through a PPO, exempt from registration under the Securities Act of 1933, to raise up to $40,000 through the issuance of 2,000,000 shares of its common stock, par value $0.0001 per share, at an offering price of $0.02 per share. As of December 31, 2009, the Company had received $40,000 in proceeds from the PPO.

The Company also commenced an activity to submit a Registration Statement on Form S-1 to the Securities and Exchange Commission (“SEC”) to register 2,000,000 of its outstanding shares of common stock on behalf of selling stockholders. The Company will not receive any of the proceeds of this registration activity once the shares of common stock are sold.

On April 22, 2010, the Company issued 1,000,000 shares of common stock to officers and directors of the Company, for cash payment of $20,000.

4. Income Taxes

The provision (benefit) for income taxes for the periods ended June 30, 2012 and 2011 was as follows (assuming a 23% effective tax rate):

    2012   2011
Current Tax Provision:
         
 
Federal-
         
 
  Taxable income
           -
 
  15,811
 
  Net operating loss carryforward
 
             -
   
     (15,811)
 
     Total current tax provision
         -
 
            -
             
Deferred Tax Provision:
         
 
Federal-
         
 
  Taxable loss carryforwards
   3,140
 
           -
 
  Change in valuation allowance
 
     (3,140)
   
               -
             
 
     Total deferred tax provision
         -
 
            -
             
             
    2012   2011
             
 
  Loss carryforwards
 20,880
 
  17,740
 
  Less - Valuation allowance
 
   (20,880)
   
     (17,740)
             
 
     Total net deferred tax assets
          -
 
            -
 
F-8
 
 

 

 
The Company had deferred income tax assets as of June 30, 2012 and December 31, 2011 as follows:

  2012   2011
           
  Loss carryforwards
   20,880
 
  17,740
  Less - Valuation allowance
 
   (20,880)
   
     (17,740)
           
     Total net deferred tax assets
         -
 
           -

The Company provided a valuation allowance equal to the deferred income tax assets for the periods ended June 30, 2012 and December 31, 2011 because it was not known whether future taxable income will be sufficient to utilize the loss carryforwards.
 
As of June 30, 2012, the Company had approximately $90,700 in tax loss carry-forwards that can be utilized in future periods to reduce taxable income, and expire by the year 2032.
 
The Company did not identify any material uncertain tax positions.  The Company did not recognize any interest or penalties for unrecognized tax benefits.
 
The federal income tax returns of the Company are subject to examination by the IRS, generally for three years after they are filed.
 
5.   Related Party Loans and Transactions
 
On July 15, 2008, the Company issued 3,000,000 shares of common stock to an officer and director of the Company, for cash payment of $300.

On November 24, 2008, the Company issued 500,000 shares of common stock to an officer and director of the Company, for cash payment of $50.

On April 22, 2010, the Company issued 1,000,000 shares of common stock to officers and directors of the Company, for cash payment of $20,000.

As of June 30, 2012, loans from related parties amounted to $12,060, and represented working capital advances from officers who are also stockholders of the Company. The loans are unsecured, non-interest bearing, and due on demand.

6. Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRSs")." Under ASU 2011-04, the guidance amends certain accounting and disclosure requirements related to fair value measurements to ensure that fair value has the same meaning in U.S. GAAP and in IFRS and that their respective fair value measurement and disclosure requirements are the same. ASU 2011-04 is effective for public entities during interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not believe that the adoption of ASU 2011-04 will have a material impact on the Company's results of operation and financial condition.
 
In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income," ("ASU 2011-05") which amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders' equity. Instead, comprehensive income must be reported in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after Dec. 15, 2011 with early adoption permitted. The Company does not believe that the adoption of ASU 2011-05 will have a material impact on the Company's results of operation and financial condition.
 
F-9
 
 

 
 
There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries.  None of the updates are expected to a have a material impact on the Company's financial position, results of operations or cash flows.

7. Concentration of Revenues
 
On April 14, 2011, the Company entered into a license agreement with an Israeli corporation, (“ CTL ”), pursuant to which the Company granted CTL an exclusive license to sell teeth whitening kits/systems under the Havaya brand name in the State of Israel. Under the Agreement, the Company also agreed to provide CTL with support and assistance relating to the sale of the Products in Israel .
 
In consideration for the grant of the exclusive license, CTL paid the Company a one-time license fee of $110,000. In addition, CTL will pay the Company a fee on the sale of each Product sold in Israel in an amount equal to 5% of the Product purchase price. CTL will purchase Products either from the Company or from the Company’s supplier at the same price that the Company pays for the Products.
 
The Agreement has an initial term of 12 months, and the term shall automatically renew each year for an additional year unless one party provides the other party with prior written notice of non-renewal. The Company recognizes the one-time license fee over the estimated term of the license.
 
F-10
 
 

 
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
FORWARD-LOOKING STATEMENTS
 
Certain statements that the Company may make from time to time, including all statements contained in this report that are not statements of historical fact, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the safe harbor provisions set forth in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words such as “plans,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should,” and other words of similar meaning used in conjunction with, among other things, discussions of future operations, financial performance, product development and new product launches, market position and expenditures. The Company assumes no obligation to update any forward-looking statement. Additional information concerning factors which could cause differences between forward-looking statements and future actual results is discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K, as filed with the SEC on April 13, 2012.
 
Executive Overview
 
We are a development stage company with limited operations and no revenues from our business operations prior to 2011. In the year ended December 31, 2011 we had $40,189 in revenues. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months. We do not anticipate that we will generate significant revenues until we are able to market the private label teeth whitening kits and generate customers. Accordingly, we must raise cash from sources other than our operations in order to implement our marketing plan.

In our management’s opinion, there is a market for reasonably priced teeth whitening kits intended for application at home.

We believe that we will need to raise additional funds in order to allow us to continue our market development, investigate new business opportunities and to remain in business for twelve months. If we raise the necessary funds, but are unable to generate sufficient revenues within the next twelve months for any reason, or if we are unable to make a reasonable profit within the next twelve months, we may have to suspend or cease operations. At the present time, we have not made any arrangements to raise additional cash to finance our operations. We may seek to obtain additional funds through a second public offering, a private placement of securities, or loans. Other than as described in this paragraph and in our Registration Statement on Form S-1 that went effective on November 12, 2010, we have no financing plans at this time, except for a commitment by our directors to loan us up to $10,000 in the aggregate, if necessary to help cover our costs to comply with the federal securities laws in 2012.

Our goal is to become a leading seller of teeth whitening kits for the home market.  Our plan of operation is as follows:

 
·
Commence a test marketing campaign
 
·
Market our teeth whitening kits with a campaign which will entail advertising on cable TV and through internet marketing.
 
·
Purchase privately labeled teeth whitening kits for resale to customers.
 
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Recent Developments

On April 14, 2011, the Company entered into a license agreement with an Israeli corporation, (“CTL”), pursuant to which the Company granted CTL an exclusive license to sell teeth whitening kits/systems under the Havaya brand name in the State of Israel. Under the Agreement, the Company also agreed to provide CTL with support and assistance relating to the sale of the Products in Israel.
 
In consideration for the grant of the exclusive license, CTL paid the Company a one-time license fee of $110,000. In addition, CTL will pay the Company a fee on the sale of each Product sold in Israel in an amount equal to 5% of the Product purchase price. CTL will purchase Products either from the Company or from the Company’s supplier at the same price that the Company pays for the Products.
 
The Agreement has an initial term of 12 months, and the term shall automatically renew each year for an additional year unless one party provides the other party with prior written notice of non-renewal.

On January 16, 2012, the officers and directors of the Company were replaced with Howard S. Landa and Steven D. Zimmer.  Mr. Landa will act as Director, president and treasurer of the Company and Mr. Zimmer will act as Director, vice president and secretary. New management hopes to achieve an increase in current product activity, raise money, represent the Company in the United States and search for additional business opportunities. While new management conducts its review of the Company’s operations, the Company will continue to conduct its current business as described below.

Messrs. Landa and Zimmer are negotiating the purchase of 25% of the issued and outstanding shares of the Company from the former insiders. They expect to complete that purchase within the next sixty days.
 
Results of Operations
 
During the period from November 21, 2007 (date of inception) through June 30, 2012, we generated net loss from operations in the amount of $166,373.  For the three months ended June 30, 2012, we generated net income from operations in the amount of $6,704.  During the three months ended June 30, 2012, we incurred expenses in the amount of $7,480.  These expenses consisted primarily of general and administrative expenses, comprising professional fees paid for legal and accounting services provided to us and filing fees. Since inception, we have sold 4,500,000 shares of common stock to our Directors.

Revenues

We had revenues of $68,558 for the period from November 21, 2007 (date of inception) through June 30, 2012.  For the three months ended June 30, 2012, we had revenues of $14,184.  

Liquidity and Capital Resources

Our balance sheet as of June 30, 2012 reflects no assets at all. Prior to the signing of the license agreement on April 14, 2011, cash and cash equivalents from inception to date have been insufficient to provide the working capital necessary to operate to date.

If we require additional capital, we would have to issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.
 
Going Concern Consideration
 
Our independent auditors included an explanatory paragraph in their report on the financial statements attached to our Annual Report on Form 10-K for the year ended December31, 2011 regarding concerns about our ability to continue as a going concern.  
 
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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.
 
CRITICAL ACCOUNTING POLICIES

Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.
 
The accounting policies identified as critical are as follows:

Development Stage Company

We are considered a development stage company as defined by ASC 915 “Development Stage Entities,” as we have limited principal operations to date and limted revenue from our operations. Operations from the inception of the development stage have been devoted primarily to strategic planning, raising capital and research and development activities.
 
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 reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
 
Item 3.  Quantitative and Qualitative Disclosures About Market Risk.
 
Not Applicable.
 
Item 4.  Controls and Procedures.
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president (who is acting as our principal executive officer) and our chief financial officer (who is acting as our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.  In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
 
As of June 30, 2012, the end of the three-month period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our management, including our president and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on the foregoing, our president and our chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
 
There have been no changes in our internal controls over financial reporting that occurred during the quarter ended June 30, 2012, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
 
5
 
 

 

PART II - OTHER INFORMATION
 
Item 1.  Legal Proceedings.
 
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us.  However, from time to time, we may become a party to certain legal proceedings in the ordinary course of business.
 
Item 1A.  Risk Factors.
 
Not Applicable.
 
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
 
None.
 
Item3.  Defaults Upon Senior Securities.
 
None.
 
Item4.  (Removed and Reserved).

Not applicable.
 
Item5.  Other Information.
 
None.

Item 6.  Exhibits
 
Exhibit No.
 
Description
     
3.1
 
Articles of Incorporation (Incorporated by reference from our Registration Statement on Form S-1).
     
3.2
 
Bylaws (Incorporated by reference from our Registration Statement on Form S-1).
     
4.1
 
Specimen ordinary share certificate (Incorporated by reference from our Registration Statement on Form S-1).
     
31*
 
Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Howard S. Landa.
     
32*
 
Section 906 Certification of the Sarbanes-Oxley Act of 2002 of Howard S. Landa.
     
 101**   Interactive Data File
 
* Filed herewith.
** To be filed as amendment.
 
6
 
 

 
 

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Dated:  August 14, 2012
 
HAVAYA CORP.
(Registrant) 
 
 
By:
/s/ Howard S. Landa
 
Name: Howard S. Landa
 
Title: President, Treasurer (Principal
Executive Officer and Principal Financial
and Accounting Officer) and Director
 
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