Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10Q
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(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2012
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from __________ to ___________
Commission file number: 000-21477
JV GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 27-0514566
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(State of Incorporation) (IRS Employer ID Number)
7609 Ralston Road, Arvada, CO 80002
-----------------------------------
(Address of principal executive offices)
303-422-8127
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(Registrant's Telephone number)
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 past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the 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 for Regulation S-T (ss.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 file, 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 [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]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of November 6, 2012, there were 98,879,655 shares of the registrant's common
stock issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Consolidated Balance Sheets - September 30, 2012 and
June 30, 2012 F-1
Consolidated Statements of Operations -
For Three Months Ended September 30, 2012
and 2011 F-2
Consolidated Statements of Cash Flows -
For the Three Months Ended September 30, 2012
and 2011 F-3
Notes to the Consolidated Financial Statements F-4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 1
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- Not Applicable 4
Item 4. Controls and Procedures 4
PART II - OTHER INFORMATION
Item 1. Legal Proceedings -Not Applicable 4
Item 1A. Risk Factors - Not Applicable 4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 5
-Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable 5
Item 4. Mine Safety Disclosures - Not Applicable 5
Item 5. Other Information - Not Applicable 5
Item 6. Exhibits 6
SIGNATURES 7
PART I
ITEM 1. FINANCIAL STATEMENTS
JV GROUP, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Unaudited)
September 30, June 30,
2012 2012
--------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 12,099 $ 10,407
Prepaid expenses and other current assets 53,560 56,138
--------------------------------
Total current assets 65,659 66,545
Property and equipment, net of $331,252 and $287,754
accumulated depreciation, respectively 426,245 463,808
--------------------------------
Intangible Assets, net of $62,963 and$188,890
accumulated amortization, respectively 68,406 131,317
--------------------------------
Total assets $ 560,310 $ 661,670
================================
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable 64,776 62,885
Accrued liabilities 3,245 3,545
Prepayments, clients 147,871 102,123
Notes payable 452,790 452,439
Advances, related parties 799,393 788,878
--------------------------------
Total current liabilities 1,468,075 1,409,870
Total liabilities 1,468,075 1,409,870
--------------------------------
Stockholders' deficit
Preferred stock, $0.01 par value: 25,000,000 shares authorized, no shares - -
issued and outstanding.
Common stock, $0.01 par value: 1,000,000,000 shares authorized 988,797 988,797
98,879,655 shares issued and outstanding at
September 30, 2012 and June 30, 2012, respectively
Other comprehensive income 4,312 5,013
Accumulated deficit (1,900,874) (1,742,010)
--------------------------------
Total stockholders' deficit (907,765) (748,200)
--------------------------------
Total liabilities and stockholders' deficit $ 560,310 $ 661,670
================================
See accompanying notes to consolidated financial statements.
F-1
JV GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
(Unaudited)
Three Months Ended
September 30,
2012 2011
-----------------------------------
Revenue $ 165,399 $ 87,572
Cost of revenue 20,219 15,515
-----------------------------------
Gross profit 145,180 72,057
Operating expenses
General and administrative 85,799 84,659
Rent and rates 112,041 58,255
Amortization 62,963 -
Depreciation 43,241 21,944
-----------------------------------
Total operating expenses 304,044 164,858
-----------------------------------
Loss from operations (158,864) (92,801)
Other income
Interest and other income - 770
Interest expense - -
-----------------------------------
Total other income - 770
-----------------------------------
Net loss $ (158,864) $ (92,031)
===================================
Other comprehensive income
Foreign currency translation adjustment (701) 3,705
-----------------------------------
Total comprehensive loss $ (159,565) $ (88,326)
===================================
Loss per common share- basic:
Net loss $ (0.00) $ (0.00)
===================================
Weighted average common shares outstanding:
Basic 98,876,655 73,879,655
===================================
See accompanying notes to consolidated financial statements.
F-2
JV GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
(Unaudited)
For the Three Months Ended
September 30,
2012 2011
--------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (158,864) $ (92,031)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 43,241 21,944
Amortization 62,963 -
Changes in operating assets and liabilities:
Prepaid expenses, trade, and deposits 2,621 4,625
Accounts payable and accrued liabilities 1,582 22,900
Prepayments from clients 45,633 (3,465)
--------------------------------
Total cash flow used in operating activities (2,824) (46,027)
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of assets (5,348) -
--------------------------------
Total cash flow used in investing activities (5,348) -
CASH FLOW FROM FINANCING ACTIVITIES
Advances from officers and directors 16,345 26,847
Payments on advances from officers and directors (6,445) -
--------------------------------
Total cash flow provided by financing activities 9,900 26,847
Effect of exchange rate changes on cash (37) 723
--------------------------------
NET CHANGE IN CASH 1,691 (18,457)
CASH AT BEGINNING OF PERIOD 10,407 26,506
--------------------------------
CASH AT END OF PERIOD $ 12,099 $ 8,049
================================
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest $ - $ -
--------------------------------
Cash paid for income tax $ - $ -
--------------------------------
See accompanying notes to consolidated financial statements.
F-3
JV GROUP, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Three Months Ended September 30, 2012 and 2011
(Unaudited)
NOTE 1 - BUSINESS AND BASIS OF PRESENTATION
Company History
ASPI, Inc. ("APSI") was formed in Delaware in September 29, 2008. On April 25,
2012, ASPI filed an amendment to its Certificate of Incorporation to change its
name from ASPI, Inc. to JV Group, Inc. ("JV Group.") In addition at that time,
JV Group increased the number of authorized common shares from One Hundred
Million (100,000,000) shares to One Billion (1,000,000,000) shares.
Business
JV Group operates primarily as an office service provider through its
wholly-owned subsidiary, Prestige Prime Office, Limited ("Prestige"). Prestige
provides office space that is fully furnished, equipped and staffed, located at
premier addresses in central business districts with convenient access to
airport or public transportation. Services include advanced communication
systems, network access, updated IT, and world-class administrative support, as
well as a full menu of business services and facilities, such as meeting rooms
and video conferencing.
Basis of Presentation
The accompanying consolidated financial statements include the accounts of JV
Group, Inc., a Delaware corporation, its wholly-owned subsidiaries, Mega Action
Limited ("Mega"), a British Virgin Island Corporation, and Prestige, a Hong Kong
Special Administrative Region Corporation (JV Group and its subsidiaries are
collectively referred to as the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the 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 of
assets and liabilities and 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. Actual results could differ from those
estimates.
Judgments and estimates of uncertainties are required in applying the Company's
accounting policies in certain areas. The following are some of the areas
requiring significant judgments and estimates: a) Going concern; b) valuation
allowance for deferred tax assets based on estimated future taxable income; and
c) depreciable life for property, plant and equipment and intangible assets. The
relevant amounts could be adjusted in the near term if experience differs from
current estimates.
Cash and Cash Equivalents
The Company considers all liquid investments purchased with an initial maturity
of three months or less to be cash equivalents. Cash and cash equivalents
include demand deposits and money market funds carried at cost which
approximates fair value. The Company maintains its cash in institutions insured
by the Federal Deposit Insurance Corporation ("FDIC").
F-4
JV GROUP, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Three Months Ended September 30, 2012 and 2011
(Unaudited)
Foreign Currency Translation
The financial statements of JV Group's wholly-owned subsidiaries, Prestige and
Mega are measured using the local currency (the Hong Kong Dollar (HK$) is the
functional currency). Assets and liabilities of Prestige and Mega are translated
at exchange rates as of the balance sheet date. Revenues and expenses are
translated at average rates of exchange in effect during the period. The
resulting cumulative translation adjustments have been recorded as a component
of comprehensive income (loss), included as a separate item in the statement of
operations.
The Company is exposed to movements in foreign currency exchange rates. In
addition, the Company is subject to risks including adverse developments in the
foreign political and economic environment, trade barriers, managing foreign
operations, and potentially adverse tax consequences. There can be no assurance
that any of these factors will not have a material negative impact on the
Company's financial condition or results of operations in the future.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received upon sale of an asset
or paid upon transfer of a liability in an orderly transaction between market
participants at the measurement date and in the principal or most advantageous
market for that asset or liability. The fair value should be calculated based on
assumptions that market participants would use in pricing the asset or
liability, not on assumptions specific to the entity. In addition, the fair
value of liabilities should include consideration of non-performance risk
including our own credit risk.
In addition to defining fair value, the standard expands the disclosure
requirements around fair value and establishes a fair value hierarchy for
valuation inputs. The hierarchy prioritizes the inputs into three levels based
on the extent to which inputs used in measuring fair value are observable in the
market. Each fair value measurement is reported in one of the three levels which
is determined by the lowest level input that is significant to the fair value
measurement in its entirety. These levels are:
Level 1 - inputs are based upon unadjusted quoted prices for identical
instruments traded in active markets.
Level 2 - inputs are based upon significant observable inputs other
than quoted prices included in Level 1, such as quoted prices for
identical or similar instruments in markets that are not active, and
model-based valuation techniques for which all significant assumptions
are observable in the market or can be corroborated by observable
market data for substantially the full term of the assets or
liabilities.
Level 3 - inputs are generally unobservable and typically reflect
management's estimates of assumptions that market participants would
use in pricing the asset or liability. The fair values are therefore
determined using model-based techniques that include option pricing
models, discounted cash flow models, and similar techniques.
The carrying value of the Company's financial assets and liabilities which
consist of cash, accounts payable, and advances from related parties in
management's opinion approximate their fair value due to the short maturity of
such instruments. These financial assets and liabilities are valued using Level
3 inputs, except for cash which is at Level 1. Unless otherwise noted, it is
F-5
JV GROUP, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Three Months Ended September 30, 2012 and 2011
(Unaudited)
management's opinion that the Company is not exposed to significant interest,
exchange, or credit risks arising from these financial instruments.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed principally on the straight-line method over the
estimated useful life of each type of asset which ranges from three to five
years. Major improvements are capitalized, while expenditures for repairs and
maintenance are expensed when incurred. Upon retirement or disposition, the
related costs and accumulated depreciation are removed from the accounts, and
any resulting gains or losses are credited or charged to income.
Intangible Asset
On September 8, 2011, the Company entered into an Agreement to purchase certain
leaseholds and as result recognized certain intangibles, such as customer lists,
as a result which are considered an intangible assets. These intangible assets
are being amortized over a weighted average period of 1.7 years at a rate of
$188,890 per year.
Revenue Recognition
The Company recognizes revenue when it is earned and expenses are recognized
when they occur. The Company recognizes revenue from its office service
operations. Clients pay a monthly fee and such fees are recognized at that time.
Advertising
The Company put advertisements on local newspaper and internet in order to
attract potential customers. It is recognized as expense when it occurs. The
Company paid $4,236 and $4,892 as advertising cost for the three months ended
September 30, 2012 and 2011, respectively.
Net Loss per Common Share
Basic net loss per common share is calculated by dividing total comprehensive
loss applicable to common shares by the weighted average number of common and
common equivalent shares outstanding during the period. For the three months
ended September 30, 2012 and 2011, there were no potential common equivalent
shares used in the calculation of weighted average common shares outstanding as
the effect would be anti-dilutive.
Impairment of Long Lived Assets
Long-lived assets are reviewed for impairment in accordance with the applicable
FASB standard, "Accounting for the Impairment or Disposal of Long-Lived Assets."
Under the standard, long-lived assets are tested for recoverability whenever
events or changes in circumstances indicate that their carrying amounts may not
be recoverable. An impairment charge is recognized for the amount, if any, which
the carrying value of the asset exceeds the fair value.
F-6
JV GROUP, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Three Months Ended September 30, 2012 and 2011
(Unaudited)
Stock-Based Compensation
Beginning January 1, 2006, the Company adopted the provisions of and accounts
for stock-based compensation using an estimate of value in accordance with the
fair value method. Under the fair value recognition provisions of this
statement, stock-based compensation cost is measured at the grant date based on
the fair value of the award and is recognized as expense on a straight-line
basis over the requisite service period, which generally is the vesting period.
The Company elected the modified-prospective method, under which prior periods
are not revised for comparative purposes. The valuation method applies to new
grants and to grants that were outstanding as of the effective date and are
subsequently modified.
Other Comprehensive Income (Loss)
The Company recognizes unrealized gains and loss on the Company's foreign
currency translation adjustments as components of other comprehensive income
(loss).
Recent Accounting Pronouncements
There were various other accounting standards and interpretations issued in 2012
and 2011, none of which are expected to have a material impact on the Company's
financial position, operations, or cash flows.
NOTE 3 - GOING CONCERN
The Company's financial statements for the three months ended September 30, 2012
have been prepared on a going concern basis, which contemplates the realization
of assets and the settlement of liabilities and commitments in the normal course
of business. The Company reported a net loss of $158,864 for the three months
ended September 30, 2012 and an accumulated deficit of $1,900,874 at September
30, 2012. At September 30, 2012, the Company had total current assets of $65,659
and total liabilities, all current of $1,468,075 for a working capital deficit
of $1,402,416.
The Company's ability to continue as a going concern may be dependent on the
success of management's plan discussed below. The financial statements do not
include any adjustments relating 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.
To the extent the Company's operations are not sufficient to fund the Company's
capital requirements, the Company may attempt to enter into a revolving loan
agreement with financial institutions or attempt to raise capital through the
sale of additional capital stock or through the issuance of debt. At the present
time, the Company does not have a revolving loan agreement with any financial
institution nor can the Company provide any assurance that it will be able to
enter into any such agreement in the future or be able to raise funds through
the further issuance of debt or equity in the Company.
During the 2013 fiscal year, the Company intends to continue its efforts in
growing its office service operations.
F-7
JV GROUP, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Three Months Ended September 30, 2012 and 2011
(Unaudited)
NOTE 4 - PROPERTY AND EQUIPMENT
At September 30, 2012 and June 30, 2012, Property and Equipment consisted of:
September 30, June 30,
2012 2012
-------------------- ---------------------
Furniture and Fixtures $ 594,088 $ 593,627
Office Equipment 137,999 137,893
Computer Equipment 25,410 20,042
-------------------- ---------------------
757,497 751,562
Accumulated Depreciation (331,252) (287,754)
-------------------- ---------------------
Total $ 426,245 $ 463,808
==================== =====================
Property and equipment held by Prestige have an original cost basis valued in
Hong Kong Dollars. During the three months ended September 30, 2012, Prestige
purchased $5,348 in computer equipment. The change in value in furniture and
fixtures and office equipment is a result of foreign currency exchange
differences.
NOTE 5 - NOTE PAYABLE
On September 8, 2011, the Company entered into an Agreement to purchase certain
leaseholds from an unrelated third party in exchange for 25,000,000 of shares of
the Company's restricted common stock and a $450,000 promissory note. The
$450,000 promissory note has a term of six months and therefore would be due on
March 1, 2012. The promissory note does not accrue interest. At September 30,
2012, the promissory note is still outstanding and includes an additional $2,790
to account for exchange rate differences.
NOTE 6 - ADVANCES, RELATED PARTIES
During the year ended June 30, 2012, Mr. Yeung Cheuk Hung, the manager of
Prestige and the majority shareholder of the Company, has advanced funds of
$363,524, to support the operations of Prestige. During the three months ended
September 30, 2012, the Company did not receive any such funds from Mr. Hung,
but did make a payment of $6,445 to Mr. Hung. The Company owes him $703,170 and
$709,070 as of September 30, 2012 and June 30, 2012, respectively. Such funds
are unsecured, bear no interest, and are due on demand.
During the three months ended September 30, 2012 and the year ended June 30,
2012, Ms. Look, an officer and director of the Company and the manager of Mega,
advanced funds of $16,345 and $65,727, respectively to Mega to support
operations. Ms. Look is owed $96,223 and $79,808 as of September 30, 2012 and
June 30, 2012, respectively. Such funds are unsecured, bear no interest, and are
due on demand.
F-8
JV GROUP, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the Three Months Ended September 30, 2012 and 2011
(Unaudited)
NOTE 7 - PREPAYMENTS, CLIENTS
Clients pay a deposit on the Company's provided services upon entering into a
lease agreement with the Company. Such deposits are recognized by the Company
not only as deposits, but as a corresponding liability. At September 30, 2012
and June 30, 2012, the Company had $147,871 and $102,123, respectively in
prepayment liabilities.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Prestige operates from Silvercord, No. 30 Canton Road, Tsimshatsui, which is a
premier commercial building in Hong Kong. The center is located on two floors
and occupies approximately 10,000 square feet. We paid $112,041 and $367,324 for
the lease of our center for the three months ended September 30, 2012 and the
year ended June 30, 2012, respectively. The Company's minimum annual rent rate
for the following three years are:
Fiscal Year Ended
June 30, Annual Rent
-------- -----------
2013 $306,486
2014 $418,257
2015 $247,083
NOTE 9 - STOCKHOLDERS' DEFICIT
The authorized capital stock of the Company is 1,000,000,000 shares of common
stock with a $0.01 par value and 25,000,000 shares of preferred stock with a par
value of $0.01 per share. At September 30, 2012, the Company had 98,879,655
shares of its common stock issued and outstanding.
During the three months ended September 30, 2012, the Company did not issue any
shares of its common stock.
NOTE 10 - SUBSEQUENT EVENTS
The Company has evaluated it activities subsequent to the three months ended
September 30, 2012 and found no other reportable subsequent events.
F-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
The independent registered public accounting firm's report on the Company's
financial statements as of June 30, 2012, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
PLAN OF OPERATIONS
------------------
ASPI's strategy is to be a serviced office provider in the Far East through its
wholly-owned subsidiary, Prestige Prime Office Ltd. in Hong Kong.
The office space provided is fully furnished, equipped and staffed, located at
premier addresses in central business districts with convenient access to
airports or public transportation. Services include advanced communication
system, network access, updated IT, and world-class administrative support, as
well as a full menu of business services and facilities, such as meeting rooms
and video conferencing.
Prestige intends to provide services that will support the growing trend of
mobile and at home working. Supporting workers at home and on the road with
services such as Virtual Office and Virtual PA, providing dedicated business
addresses as their business base, as well as mail and call handling services.
The Company will need substantial additional capital to support its budget. The
Company has had minimal revenues. The Company has no committed source for any
funds as of date hereof. In the event funds cannot be raised when needed, the
Company may not be able to carry out its business plan, may never achieve sales
or royalty income, and could fail in business as a result of these
uncertainties.
The Company may borrow money to finance its future operations, although it does
not currently contemplate doing so. Any such borrowing will increase the risk of
loss to the investor in the event the Company is unsuccessful in repaying such
loans.
The independent registered public accounting firm's report on the Company's
financial statements as of June 30, 2012, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
1
RESULTS OF OPERATIONS
---------------------
For the Three Months Ended September 30, 2012 Compared to the Three Months Ended
September 30, 2011
During the three months ended September 30, 2012 and 2011, we recognized
revenues of $165,399 and $87,572 from our service office operations. The
increase of $77,827 is a result of an increase in clients, combined with an
increase in the number leases held by the Company due to the acquisition of such
leases on October 1, 2011. During the three months ended September 30, 2012 and
2011, we incurred cost of revenues of $20,219 and $15,515, respectively. During
the three months ended September 30, 2012 and 2011, we recognized resulting
gross profits of $145,180 and $72,057, respectively. The resulting increase in
gross profits is a result of the increase in revenues offset by an increase in
cost of revenues.
During the three months ended September 30, 2012, we incurred operational
expenses of $304,044. During the three months ended September 30, 2011, we
incurred $164,858 in operational expenses. The increase of $139,186 was a result
of a $53,786 increase in rent and rates combined with a $62,693 increase in
amortization expense and an increase of $21,297 in depreciation expense over the
prior period. General and administrative expenses showed a slight increase of
$1,140 over the prior period.
During the three months ended September 30, 2012, we incurred a net loss of
$158,864. During the three months ended September 30, 2011, we incurred a net
loss of $92,031. The increase of $66,833 was a result of the increase of $77,827
in revenues offset by a $139,186 increase in operational expenses, as discussed
above.
LIQUIDITY
---------
At September 30, 2012, we had total current assets of $65,659 consisting of
$12,099 in cash and cash equivalents and $53,560 in prepaid expenses and other
assets. At September 30, 2012, we had total liabilities of $1,468,075, all
current. Total liabilities included $64,776 in accounts payable, $3,245 in
accrued liabilities, $147,871 in client prepayments, $452,790 in note payables
and $799,393 in advances from related parties.
During the three months ended September 30, 2012, we used funds of $2,824 in our
operational activities. During the three months ended September 30, 2012, we
recognized a net loss of $158,864, which was adjusted for depreciation of
$43,241 and amortization expense of $62,963. During the three months ended
September 30, 2011, we used funds of $46,027 in our operational activities.
During the three months ended September 30, 2011, we incurred a net loss of
$92,031 which was adjusted for depreciation of $21,944.
During the three months ended September 30, 2012, we used $5,348 to acquire
computer equipment. During the three months ended September 30, 2011, we did not
receive or use any funds in our investing activities.
During the three months ended September 30, 2012, we received $9,900 from our
financing activities. During the three months ended September 30, 2011, we
received $26,847 from our financing activities.
During the year ended June 30, 2012, Mr. Yeung Cheuk Hung, the manager of
Prestige and the majority shareholder of the Company, has advanced funds of
$363,524, to support the operations of Prestige. During the three months ended
September 30, 2012, the Company did not receive any such funds from Mr. Hung,
but did make a payment of $6,445 to Mr. Hung. The Company owes him $703,170 and
2
$709,070 as of September 30, 2012 and June 30, 2012, respectively. Such funds
are unsecured, bear no interest, and are due on demand.
During the three months ended September 30, 2012 and the year ended June 30,
2012, Ms. Look, an officer and director of the Company and the manager of Mega,
advanced funds of $16,345 and $65,727, respectively to Mega to support
operations. Ms. Look is owed $96,223and $79,808 as of September 30, 2012 and
June 30, 2012, respectively. Such funds are unsecured, bear no interest, and are
due on demand.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements nor do we have any
unconsolidated subsidiaries.
Short Term
On a short-term basis, we generate limited revenues, which are not sufficient to
cover operations. Based on our limited operating history in the service office
industry, we will continue to have insufficient revenue to satisfy current and
recurring liabilities for the near future. For short term needs we will be
dependent on receipt, if any, of offering proceeds.
Capital Resources
We have only common stock as our capital resource.
We have no material commitments for capital expenditures within the next year,
however if operations are commenced, substantial capital will be needed to pay
for working capital.
Need for Additional Financing
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
3
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an
evaluation under the supervision and with the participation of our management,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period
covered by this report. Based on the foregoing evaluation, our Chief Executive
Officer has concluded that our disclosure controls and procedures are effective
in timely alerting them to material information required to be included in our
periodic SEC filings and to ensure that information required to be disclosed in
our periodic SEC filings is accumulated and communicated to our management,
including our Chief Executive Officer, to allow timely decisions regarding
required disclosure as a result of the deficiency in our internal control over
financial reporting discussed below.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended September 30, 2012, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE.
ITEM 1A. RISK FACTORS
Not Applicable to Smaller Reporting Companies.
ITEM 2. CHANGES IN SECURITIES
The Company did not make any unregistered sales of its securities from July 1,
2012 through September 30, 2012.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
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Exhibit 31.1 Certification of Chief Executive and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
Exhibit 32.1 Certification of Principal Executive and Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
Exhibit 101.INS XBRL Instance Document
Exhibit 101.SCH XBRL Taxonomy Extension Schema Document (1)
Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (1)
Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document (1)
Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document (1)
Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (1)
------------
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed
not filed for purposes of Section 18 of the Securities Exchange Act of
1934, and otherwise is not subject to liability under these sections.
5
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
JV GROUP, INC.
(Registrant)
Dated: November 14, 2012 By: /s/ Look Yuen Ling
-------------------
Look Yuen Ling
President, Chief Executive Officer
and Chief Financial Officer
