UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended October 31, 2012
[  ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _________ to ________
	Commission file number: 333-171305

 

Avante Systems, Inc.
(Exact name of registrant as specified in its charter)
Nevada	99-0362655
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
695-24-05 Desa Kiara, Jalan Damasara Kuala Lumpur, Malaysia	_________
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number: 86-075-2533705
Securities registered under Section 12(b) of the Exchange Act:
Title of each class	Name of each exchange on which registered
none	not applicable
Securities registered under Section 12(g) of the Exchange Act:
Title of class
none

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [X] No [ ]

 

Indicate by checkmark 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 [ ] No [X]

 

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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.

 

[ ] Large accelerated filer	[ ] Accelerated filer
[ ] Non-accelerated filer	[X] 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 [X] No [ ]

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. Not available

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 2,625,000 as of January 22, 2013 

 

TABLE OF CONTENTS 

 

		Page
PART I
Item 1.	Business	3
Item 2.	Properties	8
Item 3.	Legal Proceedings	8
Item 4.	Mine Safety Disclosures	8
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	8
Item 6.	Selected Financial Data	10
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	11
Item 8.	Financial Statements and Supplementary Data	12
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	13
Item 9A(T).	Controls and Procedures	13
Item 9B.	Other Information	13
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	14
Item 11.	Executive Compensation	15
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	17
Item 13.	Certain Relationships and Related Transactions, and Director Independence	17
Item 14.	Principal Accountant Fees and Services	17
PART IV
Item 15.	Exhibits, Financial Statement Schedules	18

 

PART I

 

Item 1. Business

Company Overview

 

We were incorporated as “Avante Systems, Inc.” on August 12, 2010, in the State of Nevada for the purpose of developing, manufacturing, and selling a cellular video camera specifically for use in schools, child/eldercare facilities, and residences in Asia.

 

Business of Company

 

We are engaged in the business of developing, manufacturing, and selling a video camera integrated with a 3G mobile phone module specifically for use in schools, child/eldercare facilities, and residences in Asia (our "Product"). We intend that our Product will be versatile in function, so that it can be used either as a means of monitoring the care of a family member or as a home security device, or allowing remote surveillance of a residence. This Product will enable parents and guardians to visually and audibly monitor their child while they are in school, daycare, or at home with a nanny. Our product can also be used to monitor an elderly relative while they are in the care of a home nurse, nursing home, or other eldercare facility. Communication with the Product will be accomplished through a 3G mobile phone network. It will therefore be wireless and not require internet access as many of the remote monitoring devices presently available in the Asian market do.

 

We are currently in the process of designing and developing our Product, and we are continually refining our design through experiments, testing the visual and auditory quality and range of the device during production. When we are satisfied that our Product will compete effectively in the Surveillance Industry in Asia by being the most convenient, versatile, and user-friendly remote monitoring device, we will begin the manufacture and distribution of the Product to schools, child/eldercare facilities, and electronic surveillance wholesalers and retailers.

 

Our offices are located at 695-24-05 Desa Kiara, Jalan Damasara, Kuala Lumpur, Malaysia.

 

Third Generation Technology and Wideband Code Division Multiple Access

 

One of the most recent developments in mobile communications is the proliferation of third generation, or “3G” technology. Analog cellular technology is generation one and digital/PCS is generation two. 3G technology was developed to allow true multimedia features on mobile phones - typically smartphones. 3G technology provides the increased bandwidth and transfer rates to accommodate Web-based applications and phone-based audio and video files. 3G is a mobile phone network protocol, which comprises several cellular access technologies. Some common ones are:

 

• WCDMA (UMTS) - Wideband Code Division Multiple Access

• UMTS - Universal Mobile Telecommunication Service

• CDMA2000 - based on 2G Code Division Multiple Access

• TD-SCDMA - Time-division Synchronous Code-division Multiple Access

• HSDPA - High-Speed Downlink Packet Access

• EVDO - Evolution Data Maximized

3G networks have potential transfer speeds of up to 3 Mbps, which for users means about 15 seconds to download a 3-minute MP3 song. For comparison, the fastest 2G phones can achieve up to 144Kbps (about 8 minutes to download a 3-minute song). 3G's high data rates are ideal for downloading information from the Internet and sending and receiving large multimedia files. 3G phones can accommodate broadband applications like video conferencing, receiving streaming video from the Web, sending and receiving faxes, and instantly downloading e-mail messages with attachments.

 

CNBC reports that in Asia there is significant availability of the broadband access, which our products would require. The percentages of the population that had access to broadband as of November, 2010 are:

 

• Korea 81%

• Japan 80%

• Singapore 80%

• Hong Kong 70%

• Malaysia 65%

While the CNBC Report did not include China, the China Internet Network Information Center (CINIC) reports that there are over 364 million broadband users in China, which makes up 86.7% of the 420 million Internet users in the country as of June 30, 2010, as well as 27.4% of the 1.33 Billion citizens of China. This is supported by data provided by InternetWorldStats.com as well as reports by market research companies such as budde.com, which indicate China passed the U.S. in 2008 to become the largest broadband market in the world.

 

Telecommunications companies are now promoting the current or pending roll out of fourth generation, or “4G” technology. As 3G comprised a variety technologies, so 4G includes both WiMax and LTE technologies. The new generation brings another significant jump in data transfer rates, allowing for even smoother use of large audio and video files. The 3 minute MP3 song discussed above that took 8 minutes to download with 2G and 15 seconds to download with 3G will download in less than 1 second utilizing 4G technology.

 

Our current technology focuses on utilizing 3G to broadcast video and still images to parents. As the market penetration of 4G expands, we will be able to expand our product line by incorporating the faster technology to take advantage of the improved video quality that will result. Also, as the 4G technology spreads, we will be able to build the same 3G products for a reduced cost, and our customers will be able to operate them at a lower cost. By having both high-end and low-end options for our customers, we expect to be able to meet the needs or a wider customer base.

 

Generation	Approximate  Data Rate Stationary (can achieve higher rates at some locations)	Approximate Data Rate Walking
2G	144 Kbit per sec	144 Kbit per sec
3G	2 Mbit per sec	384 kbit per sec
4G	1 Gbit per sec	100 Mb per sec

 

While the penetration rates listed for broadband above are relatively high, there remain large segments of the population that do not have this access. China is building fourth-generation (4G) network based on the long-term evolution (LTE) technology, which could take years to launch, as the country is still ramping up 3G services. China is largely rural and pricing for the technology would be steep giving the infrastructure costs. Given these and other penetration challenges in China and other Asian countries, there remains the possibility a significant portion of our potential customer base will not have access to the 3G (or 4G) signals (or wired broadband) that are necessary to use our products. If we find that a significant portion of our potential customer base (ie day cares) and their customers (ie parents) do not have access to the technology required to utilize our products, we may find that we are not able to sell enough products to remain a going concern.

 

Wideband Code Division Multiple Access

 

Wideband Code Division Multiple Access, or “WCDMA,” is an air interface standard found in 3G mobile telecommunications networks. It is the basis of Japan's NTT DoCoMo's FOMA service, is the most-commonly used member of the UMTS family, and is sometimes used as a synonym for UMTS. It utilizes the DS-CDMA channel access method and the FDD duplexing method to achieve higher speeds and support more users compared to most time division multiple access (“TDMA”) schemes used today. WCDMA uses the same core network as the 2G GSM networks deployed worldwide, allowing dual-mode operation along with GSM/EDGE.

 

The WCDMA system is a new design by NTT DoCoMo, and it differs in many aspects from CDMA2000. From an engineering point of view, WCDMA provides a different balance of trade-offs between cost, capacity, performance, and density. It also promises to achieve a benefit of reduced cost for video phone handsets. WCDMA may also be better suited for deployment in the very dense cities of Europe and Asia. WCDMA has been developed into a complete set of specifications, a detailed protocol that defines how a mobile phone communicates with the tower, how signals are modulated, how datagrams are structured, and how system interfaces are specified, allowing free competition on technology elements.

 

Surveillance Industry in Asia

 

The surveillance market has rapidly expanded over the past few years and gained great importance at the global level. It is expected that the surveillance market will grow at a compound annual growth rate (“CAGR”) of more than 22 percent from 2010, according to a recent report entitled "Global CCTV Market Analysis (2008-2012)" from RNCOS, a market research consulting Services Company. This growth rate clearly indicates that the global market has immense potential in this field.

 

The RNCOS report also states that due to the rising security concerns and high economic growth in a number of Asian countries, the Asian surveillance market is projected to grow at a CAGR of around 28 percent from 2010 to 2013. Research analyst Frost & Sullivan reports that the annual security market growth rate in Asia-Pacific countries is 7.5%, reaching over US $3 billion by 2015.

 

According to the A&S International magazine, over 85 percent of the world's security products are made in Asia. Ranging from video surveillance and access control to intrusion alarms, China, Japan, South Korea, Taiwan, Singapore, and Malaysia are the major supplying countries and regions for the global security markets.

 

China is one of Asia's fastest growing security markets with cost-effective security solutions, R&D, and high-tech security products. China’s surveillance industry was estimated to be worth US $17.5 billion in 2008, equivalent to 0.8 per cent of GDP. For 2012, China’s surveillance industry is expected to reach US $51 billion%.

 

Our Product

 

The rising demand for versatile surveillance devices in Asia in general, as well as an increasing demand for effective ways to monitor care providers, has resulted in what we anticipate will be a highly receptive potential market for our Product. We feel that the public is demanding a product that will allow them to observe their loved one’s caretaker while they are away from them, monitor their pet sitters and housekeepers, or check on their house while they are away on vacation. Rising burglary rates and increasing incidents of child and elderly abuse by caregivers have resulted in a growing demand for products that can help prevent or expose such victimization. Advancements in both mobile phone and surveillance camera technology in concurrence with the increased use and consumer comfort level with both technologies has made remote monitoring by mobile phone a reality.

 

We are in the process of developing a device integrating a 3G mobile phone module and a video camera specifically for use in schools, child/eldercare facilities, and residences in Asia. We intend for our Product to be versatile in function. We expect that it will be used as a means of monitoring the care of family members, or as a home security device allowing remote surveillance of a residence or business. Our Product will enable parents and guardians to visually and audibly monitor their child while they are in school, daycare, or at home with a nanny. Our Product can also be used to monitor an elderly relative while they are in the care of a home nurse, nursing home, or other eldercare facility. While this is our primary target market, we fully expect that our Product will also be used as a security device to monitor homes and businesses while owners are away.

 

Our Product will be operated through a 3G mobile phone network. Thus, it will not only be wireless, it won’t require internet access through WIFI – unlike many of the remote monitoring devices presently available in the Asian market. Our Product can be placed conspicuously to deter unwanted behavior, or it can be hidden to prevent detection.

 

As an example, our Product may be installed on the wall of a preschool, constantly capturing a video image of the classroom. A mother could call the Product’s phone number and enter a password, and a real-time video image of her child’s classroom would be streamed to her smartphone. While she is monitoring her child, another child’s father could call and enter the password, and also receive the same real-time video image of the classroom. We intend to initially design the product to allow up to six separate individuals to call and receive images simultaneously. However, we may expand this number to increase the marketability of our Product. The ability to access this video surveillance via their phone regardless of the time and their location will provide increased peace of mind to parents, which becomes a marketing point for the preschool. Similarly, having a surveillance camera in the classroom in and of itself reduces the likelihood of any inappropriate behavior because teachers and other employees will be conscious of fact that children’s parents could be watching them at any moment.

 

We are currently refining the design of our Product, which will be integral to its success. We are designing and developing our Product by conducting experiments to improve on quality and cost. These experiments include testing the video and audio quality and range of the device during use. We do not contract the development of our Product; rather, our officer and director, Xu Hai Bo, currently conducts the testing and development of our Product in Malaysia. With the time devoted to our company, he is searching for the lowest priced components available in the market in our efforts to reduce cost. He is also researching the benefits of adding more components to further improve our Product. Finally, he is investigating the possibility of improving our Product's essential qualities, such as versatility and resolution. Refining these qualities will ensure that our Product is practical, affordable, and user-friendly.

 

Competition

 

We compete with a number of established manufacturers, importers, and distributors who sell monitoring devices to schools, child/eldercare facilities, and electronic surveillance wholesalers and retailers. These companies enjoy brand recognition which exceeds that of our brand name. We compete with several manufacturers, importers, and distributors who have significantly greater financial, distribution, advertising, and marketing resources than we do, including:

 

• Bioaccez Controls sells the MAGGIS 3G Wireless security camera, which can be accessed from a mobile phone by making a video call from a 3G / UMTS video-phone. MAGGIS is a video camera that allows the user to listen to and see what is happening in the light or in the dark where it is installed. The camera can be motion-activated, connecting a motion detector at the NC input contact, remaining off unless there is movement, at which time the camera activates and makes a video call to the user. Bioaccez advertises that MAGGIS is quickly installed, easy to use, and supports the UMTS network. It does not require an internet connection for camera use, nor does it require an IP server or extra software to be downloaded to the phone. The mobile phone used must have 3G connection and the ability to make video calls.

• Shenzhen Ariza Electronic Co., Ltd., sells a 3G GSM alarm with SMS and monitoring functions. The product uses a USIM card and supports the WCDMA 3G network, has a built-in CMOS camera and infrared light, and offers remote control by mobile messaging. It also supports short message service (“SMS”), video call, and voice call alarming, and has 15 wireless alarm sensors.

• Witura Corporation’s wireless surveillance Camera, 3G EYE, has 3G compatibility. The WT-1041 3G camera is a 1.3 MP with T-flash stored in the multi-media card (“MMC”) & static image format; JPEG, that enables the user to view ‘LIVE’ video images captured from installed cameras or closed-circuit television (“CCTV”) systems. The camera comes bundled with master reset functions and password changes, photography, video and sound recording, loudspeakers, and a high quality recording microphone. The device also has infrared and night vision function capability, enables sharing of up to a maximum of 50 people, and comes complete with a built in lithium battery and external power supply.

• Multisecu Electronics Co., Ltd., sells a security system that features the ability to connect to the user’s local 3G network, allowing broadcasts to the user’s phone while also allowing the user to remotely control the system while away from their home. Anywhere that the user has a signal on their mobile phone they can control their home security system as well as receive updates and alerts should anything trip the motion sensor or included magnet door/window alarm.

• Tekstorm Holdings Limited sells a 3G video camera alarm system that uses a USIM card, supporting the CDMA 3G network. The matching CMOS camera and infrared led support 24-hour wireless monitoring. The product has a multimode alarm that can send alarm messages to the user’s mobile phone by SMS, video call, and voice call. A maximum of 15 wireless alarm sensors can be added to the product.

These competing products offer a wide variety of features, many of which are similar to or more advanced than features we intend to offer. However, we intend to offer a combination of features designed specifically for constant surveillance of childcare and eldercare, whereas these competitors have features designed to maximize their functionality as security devices. We also intend to compete on the basis of quality, brand name recognition, the reduced physical size of our Product, and price. We believe that our success will depend upon our ability to remain competitive in our product areas. The failure to compete successfully in the future could result in a material deterioration of customer loyalty and our image and could have a material adverse effect on our business.

 

Intellectual Property

 

Once we determine the final design for our Product, we intend to file a patent on its unique design. We will file for patent pending status as we develop a design for our first device. We will apply for patent protection and/or copyright protection in Asia, the United States, and other jurisdictions.

 

We intend to aggressively assert our rights under trade secret, unfair competition, trademark and copyright laws to protect our intellectual property, including product design, proprietary manufacturing processes and technologies, product research and concepts and recognized trademarks. These rights are protected through the acquisition of patents and trademark registrations, the maintenance of trade secrets, the development of trade dress, and, where appropriate, litigation against those who are, in our opinion, infringing these rights.

 

While there can be no assurance that registered trademarks will protect our proprietary information, we intend to assert our intellectual property rights against any infringer. Although any assertion of our rights can result in a substantial cost to, and diversion of effort by, our company, management believes that the protection of our intellectual property rights is a key component of our operating strategy.

 

Regulatory Matters

 

We are unaware of and do not anticipate having to expend significant resources to comply with any governmental regulations of the surveillance industry in Asia. We are subject to the laws and regulations of those jurisdictions in which we plan to sell our product, which are generally applicable to business operations, such as business licensing requirements, income taxes and payroll taxes. In general, the development, manufacture, and sale of our Product in Asia is not subject to special regulatory and/or supervisory requirements. The requirements of governmental regulatory agencies regarding frequency usage are met by the manufacturers of the 3G components, which will be utilized in our Product.

 

Employees

 

We have no other employees other than our officers and directors. Our President oversees all responsibilities in the areas of corporate administration, business development, and research. We intend to expand our current management to retain skilled directors, officers, and employees with experience relevant to our business focus. Our current management team is highly skilled in technical areas such as researching and developing our product, but not skilled in areas such as marketing our product and business management. Obtaining the assistance of individuals with and in-depth knowledge of operations and markets will allow us to build market share more effectively. We intend on employing sales representatives in China when our product is ready for production and shipping, and in various other countries when we are ready to expand internationally.

 

Environmental Laws

 

We have not incurred and do not anticipate incurring any expenses associated with environmental laws.

 

Item 2. Properties

 

We do not lease or own any real property. We maintain our operations office in 695-24-05 Desa Kiara, Jalan Damasara, Kuala Lumpur, Malaysia. This office space is being provided free of charge by our officer and director, Xu Hai Bo.

 

Item 3. Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

PART II

 

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

 

Market Information

 

Our common stock is quoted under the symbol “AVTS” on the OTCBB operated by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the OTCQB operated by OTC Markets Group, Inc.  Few market makers continue to participate in the OTCBB system because of high fees charged by FINRA.  Consequently, market makers that once quoted our shares on the OTCBB system may no longer be posting a quotation for our shares. The criteria for listing on either the OTCBB or OTCQB are similar and include that we remain current in our SEC reporting. Our reporting is presently current and, since inception, we have filed our SEC reports on time.

 

Only a limited market exists for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell his securities in our company.

The following tables set forth the range of high and low prices for our common stock for the each of the periods indicated as reported by the OTCQB. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

 

Fiscal Year Ending October 31, 2012
Quarter Ended		High $		Low $
October 31, 2012		N/A		N/A
July 31, 2012		N/A		N/A
April 30, 2012		N/A		N/A
January 31, 2012		N/A		N/A

 

Fiscal Year Ending October 31, 2011
Quarter Ended		High $		Low $
October 31, 2011		N/A		N/A
July 31, 2011		N/A		N/A
April 30, 2011		N/A		N/A
January 31, 2011		N/A		N/A

 

Penny Stock

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

 

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.

 

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

 

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

 

Holders of Our Common Stock

 

As of October 31, 2012, we had 2,625,000 shares of our common stock issued and outstanding, held by 38 shareholders of record.

 

Dividends

 

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:

 

1.

we would not be able to pay our debts as they become due in the usual course of business, or;

2.

our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

 

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

We do not have any equity compensation plans.

 

Item 6. Selected Financial Data

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Results of Operations for the Years Ended October 31, 2012 and 2011 and for the period from inception (August 12, 2010) to October 31, 2012

 

We have not earned any revenues since our inception. We are presently in the development stage of our business and we can provide no assurance that we will develop a viable product, or if such product is developed, that we will be able to generate sufficient sales and enter into commercial production.

 

Our operating expenses for the year ended October 31, 2012 consisted of professional fees in the amount of $20,715, as compared with professional fees in the amount of $37,268 for the year ended October 31, 2011. Our operating expenses for the period from inception (August 12, 2010) through October 31, 2012 consisted mainly of professional fees in the amount of $73,175.

 

We had a net loss of $20,715 for the year ended October 31, 2012, as compared with a net loss of $37,268 for the year ended October 31, 2011. We had a net loss of $73,175 for the period from inception (August 12, 2010) to October 31, 2012.

 

Liquidity and Capital Resources

 

As of October 31, 2012, we had total current assets of $675. Our total current liabilities as of October 31, 2012 were $21,350. Thus, we had a working capital deficit of $20,675 as of October 31, 2012.

 

Operating activities used $25,459 in cash for the year ended October 31, 2012. Our net loss of $20,715 was the main reason for our negative operating cash flow. Cash flows provided by financing activities during year ended October 31, 2012 consisted of $15,400 as loans from our officer and director.

 

The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

 

Going Concern

 

We have incurred losses since inception, have negative working capital, and have not yet received revenues from sales of products or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

 

Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

 

Purchase or Sale of Equipment

 

We do not expect to purchase or sell any plant or significant equipment.

 

Critical Accounting Policies

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that any accounting policies currently fit this definition.

 

Recently Issued Accounting Pronouncements

 

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

 

Off Balance Sheet Arrangements

 

As of October 31, 2012, there were no off balance sheet arrangements.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 8. Financial Statements and Supplementary Data

 

Index to Financial Statements Required by Article 8 of Regulation S-X:

 

Audited Financial Statements:
F-1	Report of Independent Registered Public Accounting Firm
F-2	Consolidated Balance Sheets as of October 31, 2012  and 2011
F-3	Statements of Operations for the Years Ended October 31, 2012 and 2011 and period from inception (August 12, 2010) to October 31, 2012
F-4	Statement of Stockholders’ Equity (Deficit) for period from inception (August 12, 2010) to October 31, 2012
F-5	Statements of Cash Flows for the Years Ended October 31, 2012 and 2011 and period from inception (August 12, 2010) to October 31, 2012
F-6	Notes to Financial Statements

 

Silberstein Ungar, PLLC CPAs and Business Advisors

Phone (248) 203-0080

Fax (248) 281-0940

30600 Telegraph Road, Suite 2175

Bingham Farms, MI 48025-4586

www.sucpas.com

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors of

Avante Systems, Inc.

Las Vegas, Nevada

 

We have audited the accompanying balance sheets of Avante Systems, Inc. (the “Company”) as of October 31, 2012 and 2011 and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended and the period from August 12, 2010 (Date of Inception) through October 31, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Avante Systems, Inc. as of October 31, 2012 and 2011 and the results of its operations and its cash flows for the years then ended and the period from August 12, 2010 (Date of Inception) through October 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has negative working capital, has not yet received revenue from sales of products or services, and has incurred losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are described in Note 8. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Silberstein Ungar, PLLC

 

Bingham Farms, Michigan

January 22, 2013

 

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

AS OF OCTOBER 31, 2012 AND 2011 

 

	2012				2011
ASSETS
Current Assets
Cash and equivalents	$	0			$	10,059
Prepaid expenses		675				0
TOTAL ASSETS	$	675			$	10,059
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accrued expenses	$	4,450			$	8,519
Due to officer		16,900				1,500
Total Liabilities		21,350				10,019
Stockholders’ Equity (Deficit)
Common Stock, $.001 par value, 100,000,000 shares authorized, 2,625,000 shares issued and outstanding		2,625				2,625
Preferred Stock, $.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding		0				0
Additional paid-in capital		49,875				49,875
Deficit accumulated during the development stage		(73,175	)			(52,460	)
Total stockholders’ equity (deficit)		(20,675	)			40
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	675			$	10,059

 

See accompanying notes to financial statements. 

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED OCTOBER 31, 2012 AND 2011

FOR THE PERIOD FROM AUGUST 12, 2010 (INCEPTION) TO OCTOBER 31, 2012

 

	Year ended October 31, 2012				Year ended October 31, 2011				Period from August 12, 2010 (Inception) to October 31, 2012
REVENUES	$	0			$	0			$	0
OPERATING EXPENSES
Organization costs		0				0				320
Bank charges		0				0				20
Professional fees		20,715				37,268				72,835
TOTAL OPERATING EXPENSES		20,715				37,268				73,175
LOSS FROM OPERATIONS		(20,715	)			(37,268	)			(73,175	)
PROVISION FOR INCOME TAXES		0				0				0
NET LOSS	$	(20,715	)		$	(37,268	)		$	(73,175	)
NET LOSS PER SHARE: BASIC AND DILUTED	$	(0.01	)		$	(0.01	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		2,625,000				2,625,000

 

See accompanying notes to financial statements.

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE PERIOD FROM AUGUST 12, 2010 (INCEPTION) TO OCTOBER 31, 2012 

 

	Common stock								Additional paid-in				Deficit accumulated during the development
	Shares				Amount				capital				stage				Total
Issuance of common stock for cash @ $0.02		2,625,000			$	2,625			$	49,875			$	—			$	52,500
Net loss for the period ended October 31, 2010		—				—				—				(15,192	)			(15,192	)
Balance, October 31, 2010		2,625,000				2,625				49,875				(15,192	)			37,308
Net loss for the year ended October 31, 2011		—				—				—				(37,268	)			(37,268	)
Balance, October 31, 2011		2,625,000				2,625				49,875				(52,460	)			40
Net loss for the year ended October 31, 2012		—				—				—				(20,715	)			(20,715	)
Balance, October 31, 2012		2,625,000			$	2,625			$	49,875			$	(73,175	)		$	(20,675	)

 

See accompanying notes to financial statements.

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED OCTOBER 31, 2012 AND 2011

FOR THE PERIOD FROM AUGUST 12, 2010 (INCEPTION) TO OCTOBER 31, 2012 

 

	Year ended October 31, 2012				Year ended October 31, 2011				Period from August 12, 2010 (Inception) to October 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(20,715	)		$	(37,268	)		$	(73,175	)
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses		(675	)			4,000				(675	)
Increase (decrease) in accrued expenses		(4,069	)			8,519				4,450
Net Cash Used by Operating Activities		(25,459	)			(24,749	)			(69,400	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of common stock		0				0				52,500
Proceeds from officer loan		15,400				1,500				16,900
Net Cash Provided by Financing Activities		15,400				1,500				69,400
Net Increase (Decrease) in Cash and Cash Equivalents		(10,059	)			(23,249	)			0
Cash and cash equivalents, beginning of period		10,059				33,308				0
Cash and cash equivalents, end of period	$	0			$	10,059			$	0
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	$	0			$	0			$	0
Income taxes paid	$	0			$	0			$	0

 

 See accompanying notes to financial statements. 

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

OCTOBER 31, 2012

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Business

Avante Systems, Inc. (“Avante” and the “Company”) is a development stage company and was incorporated in Nevada on August 12, 2010. The Company was formed for the purpose of developing, manufacturing, and selling a video camera integrated with a 3G mobile phone module specifically for use in schools, child/eldercare facilities, and residences in Asia.

 

Development Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, and there has been no significant revenues there from.

 

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

 

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted an October 31 fiscal year end.

 

Use of Estimates

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 and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

 

Fair Value of Financial Instruments

Avante’s financial instruments consist of cash and cash equivalents, prepaid expenses, accrued expenses and an amount due to an officer. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

  

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

OCTOBER 31, 2012

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Revenue Recognition

The Company will recognize revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

Loss Per Common Share

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

As of October 31, 2012, the Company has not issued any stock-based payments to its employees.

 

Recent Accounting Pronouncements

Avante does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

 

NOTE 2 – PREPAID EXPENSES

 

Prepaid expenses at October 31, 2012 consisted of an advance paid to the Company’s attorney for services to be rendered for periods after the Company’s year-end.

 

NOTE 3 – ACCRUED EXPENSES

 

Accrued expenses consisted of the following at October 31, 2012 and 2011:

 

	2012				2011
Audit fees	$	3,750			$	4,000
Legal fees		0				3,079
Transfer agent fees		700				1,440
Total Accrued Expenses	$	4,450			$	8,519

 

NOTE 4 – DUE TO OFFICER

 

During the year ended October 31, 2011, an officer and shareholder loaned the Company $1,500 to help fund operations. The officer loaned an additional $15,400 during the year ended October 31, 2012. The balance due to the officer was $16,900 and $1,500 as of October 31, 2012 and 2011, respectively. The loans are non-interest bearing, unsecured and due upon demand.

 

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

OCTOBER 31, 2012

 

NOTE 5 – CAPITAL STOCK

 

The Company has 100,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred stock authorized.

 

During the period ended October 31, 2010, the Company issued 2,625,000 shares of common stock at $0.02 per share for total cash proceeds of $52,500.

 

There were no additional shares of common stock issued during the years ended October 31, 2012 and 2011, respectively.

 

The Company has 2,625,000 shares of common stock issued and outstanding as of October 31, 2012. There are no shares of preferred stock issued and outstanding as of October 31, 2012.

 

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

Avante neither owns nor leases any real or personal property. An officer has provided office space without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

NOTE 7 – INCOME TAXES

 

For the period ended October 31, 2012, Avante has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $73,175 at October 31, 2012, and will expire beginning in the year 2031.

 

The provision for Federal income tax consists of the following for the periods ended October 31:

 

	2012				2011
Federal income tax benefit attributable to:
Current operations	$	7,043			$	12,671
Less: valuation allowance		(7,043	)			(12,671	)
Net provision for Federal income taxes	$	0			$	0

 

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

 

	2012				2011
Deferred tax asset attributable to:
Net operating loss carryover	$	24,879			$	17,836
Less: valuation allowance		(24,879	)			(17,836	)
Net deferred tax asset	$	0			$	0

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $73,175 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

 

AVANTE SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

OCTOBER 31, 2012

 

NOTE 8 – LIQUIDITY AND GOING CONCERN

 

Avante has negative working capital, has not yet received revenues from sales of products or services, and has incurred operating losses since its inception. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

 

The ability of Avante to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

 

NOTE 9 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to October 31, 2012 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

 

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

 

No events occurred requiring disclosure under Item 304 of Regulation S-K during the fiscal year ending October 31, 2012.

 

Item 9A. Controls and Procedures

 

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, being October 31, 2012. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of October 31, 2012 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of October 31, 2012, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending October 31, 2013: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

Item 9B. Other Information

 

None

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

 

The following information sets forth the names of our current directors and executive officers, their ages as of October 31, 2012 and their present positions.

 

Name	Age	Position Held with the Company
Xu Hai Bo Tian Bei W. Rd. Yung Guang Tian Di Ming Xing Ge, Unit 1503, Shenzhen, China	32	President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and Director
Ran Hong Dan Tian Bei W. Rd. Yung Guang Tian Di Ming Xing Ge, Unit 1503, Shenzhen, China	29	Director

 

 

 

 

Set forth below is a brief description of the background and business experience of our executive officer and Directors.

 

Xu Hai Bo is our President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting President and Director. Mr. Bo received his Bachelor of Science degree from Chengdu Institue of Technology located in Chengdu, Sichuan, China. Since 2002 he has been employed as an engineer for Pakka Co., Ltd.

 

Ran Hong Dan is our Director. In 2004, Mr. Dan graduated with a Bachelor of Science degree from Chengdu Institute of Technology located in Chengdu, Sichuan, China. Since 2002 he has been employed as an engineer for Pakka Co., Ltd.

 

Term of Office

 

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

 

Significant Employees

 

We do not currently have any significant employees aside from Xu Hai Bo.

 

Family Relationships

 

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Committees of the Board

 

Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the board of directors.

 

Our company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

 

A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our President and director, Tee Kai Shen, at the address appearing on the first page of this annual report.

 

Code of Ethics

 

As of October 31, 2012, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

 

Item 11. Executive Compensation

 

Summary Compensation Table

 

The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal years ended October 31, 2012 and 2011.

 

SUMMARY COMPENSATION TABLE
Name and principal position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Xu Hai Bo, President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and Director	2012 2011	0 0	0 0	0 0	0 0	0 0	0 0	0 0	0 0

 

Narrative Disclosure to the Summary Compensation Table

 

We have not entered into any employment agreement or consulting agreement with our executive officers. There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers.

 

Although we do not currently compensate our officers, we reserve the right to provide compensation at some time in the future. Our decision to compensate officers depends on the availability of our cash resources with respect to the need for cash to further our business purposes.

 

Stock Option Grants

 

We have not granted any stock options to the executive officers or directors since our inception.

 

Outstanding Equity Awards at Fiscal Year-End

 

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of October 31, 2012.

 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS						STOCK AWARDS
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)
Xu Hai Bo	-	-	-	-	-	-	-	-	-

 

Director Compensation

 

The table below summarizes all compensation of our directors as of October 31, 2012.

 

DIRECTOR COMPENSATION
Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Xu Hai Bo	-	-	-	-	-	-	-

 

Narrative Disclosure to the Director Compensation Table

 

We do not pay any compensation to our directors at this time. However, we reserve the right to compensate our directors in the future with cash, stock, options, or some combination of the above.

 

Stock Option Plans

 

We did not have a stock option plan in place as of October 31, 2012.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table sets forth, as of January 23, 2013, the beneficial ownership of our common stock by each executive officer and director, by each person known by us to beneficially own more than 5% of the our common stock and by the executive officers and directors as a group:

 

Except as otherwise indicated, all Shares are owned directly and the percentage shown is based on 2,625,000 Shares of Common Stock issued and outstanding as of January 23, 2012.

 

Name and Address of Beneficial Owners of Common Stock1	Title of Class	Amount and Nature of Beneficial Ownership	% of Common Stock2
Xu Hai Bo 695-24-05 Desa Kiara, Jalan Damasara Kuala Lumpur, Malaysia	Common Stock	637,500 Shares	24%
Ran Hong Dan 695-24-05 Desa Kiara, Jalan Damasara Kuala Lumpur, Malaysia	Common Stock	637,500 Shares	24%
DIRECTORS AND OFFICERS – TOTAL		1,275,000 Shares	48%
5% SHAREHOLDERS
NONE	Common Stock	NONE	NONE

 

(1)

As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence

 

None of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction over the last two years or in any presently proposed transaction which, in either case, has or will materially affect us.

 

As of the date of this annual report, our common stock is traded on the OTC Bulletin Board (the “Bulletin Board”). The Bulletin Board does not impose on us standards relating to director independence or the makeup of committees with independent directors, or provide definitions of independence.

 

Item 14. Principal Accounting Fees and Services

 

Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:

 

Financial Statements for the Year Ended October 31	Audit Services	Audit Related Fees	Tax Fees	Other Fees
2012	$8,250	$0	$0	$0
2011	$9,500	$0	$0	$0

 

 

PART IV

 

Item 15. Exhibits, Financial Statements Schedules

 

(a)	Financial Statements and Schedules

 

The following financial statements and schedules listed below are included in this Form 10-K.

 

Financial Statements (See Item 8)

 

(b)

Exhibits

 

Exhibit Number	Description
3.1	Articles of Incorporation, as amended (1)
3.2	Bylaws, as amended (1)
23.1	Consent of Maddox Ungar Silberstein, PLLC
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Annual Report on Form 10-K for the year ended October 31, 2010 formatted in Extensible Business Reporting Language (XBRL).

 

1

Incorporated by reference to the Registration Statement on Form S-1 filed on December 21, 2010.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Avante Systems, Inc.

 

By:	/s/ Xu Hai Bo
	Xu Hai Bo President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director
	January 25, 2013

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:	/s/ Xu Hai Bo
	Xu Hai Bo President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director
	January 25, 2013

 

By:	/s/ Ran Hong Dan
	Ran Hong Dan Director
	January 25, 2013