Attached files
| file | filename |
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| EXCEL - IDEA: XBRL DOCUMENT - Huntwicke Capital Group Inc. | Financial_Report.xls |
| EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER - Huntwicke Capital Group Inc. | f10q0713ex31i_magnolia.htm |
| EX-32.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER - Huntwicke Capital Group Inc. | f10q0713ex32i_magnolia.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2013
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to______.
Commission File Number: 000-54379
MAGNOLIA LANE INCOME FUND
(Exact name of registrant as specified in its charter)
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Delaware
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||
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employee
Identification No.)
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7 Grove Street
Topsfield, MA 01983
(Address of principal executive offices and Zip code)
(978) 887-5981
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) 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 x No o
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 o No x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer o
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Accelerated Filer o
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Non-Accelerated Filer o
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Smaller Reporting Company x
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Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.
Yes x No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of September 20, 2013, there were 1,796,875 shares of common stock, par value $.0001 per share, issued and outstanding.
MAGNOLIA LANE INCOME FUND
FORM 10-Q
July 31, 2013
INDEX
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Item 1.
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F-1
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Item 2.
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4
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Item 3.
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5
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Item 4.
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5
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Item 1.
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6
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Item 1A.
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6
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Item 2.
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6
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Item 3.
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6
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Item 4.
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6
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Item 5.
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6
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Item 6.
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6
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7
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2
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this quarterly report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the quarterly report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this quarterly report on Form 10-Q.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
Unless the context otherwise indicates, references in this report to the terms “Palmerston,” “Magnolia Lane,” “we,” “us,” “our,” and the “Company” refer to Magnolia Lane Income Fund.
3
ITEM 1. FINANCIAL STATEMENTS
MAGNOLIA LANE INCOME FUND
(fka PALMERSTON STOCK AGENCY, INC.)
July 31, 2013
Index to the Financial Statements
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Contents
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Page(s)
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Balance Sheets at July 31, 2013 and 2012
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F-2
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Statements of Operations for the three months ended July 31, 2013 and 2012 and for the Period from May 12, 2009 (Inception) through July 31, 2013
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F-3
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Statement of Stockholders’ Equity (Deficit) for the Period from May 12, 2009 (Inception) through July 31, 2013
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F-4
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Statements of Cash Flows for the three months ended July 31, 2013 and 2012 and for the Period from May 12, 2009 (Inception) through July 31, 2013
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F-5
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Notes to the Financial Statements
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F-6
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F-1
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MAGNOLIA LANE INCOME FUND
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(fka PALMERSTON STOCK AGENCY, INC.)
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(a development stage company)
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BALANCE SHEETS
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ASSETS
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7/31/2013
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4/30/2013
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| CURRENT ASSETS | (unaudited) | |||||||
| Cash | $ | - | $ | 2,230 | ||||
| Total Current Assets | - | 2,230 | ||||||
| TOTAL ASSETS | $ | - | $ | 2,230 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
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| CURRENT LIABILITIES | ||||||||
| Accrued Expenses | $ | 7,500 | $ | 49,644 | ||||
| Total Current Liabilities | 7,500 | 49,644 | ||||||
| TOTAL LIABILITIES | 7,500 | 49,644 | ||||||
| STOCKHOLDERS' DEFICIENCY | ||||||||
| Preferred Stock - Par value $0.0001; | ||||||||
| Authorized: 100,000,000 | ||||||||
| Issued and Outstanding: None | - | - | ||||||
| Common Stock - Par value $0.0001; | ||||||||
| Authorized: 200,000,000 | ||||||||
| Issued and Outstanding: 1,796,875 and 1,796,875, respectively | 180 | 180 | ||||||
| Additional Paid-In Capital | 121,272 | 73,858 | ||||||
| Deficit accumulated during the development stage | (128,952 | ) | (121,452 | ) | ||||
| Total Stockholders' Deficiency | (7,500 | ) | (47,414 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY | $ | - | $ | 2,230 | ||||
The accompanying notes are an integral part of these financial statements.
F-2
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MAGNOLIA LANE INCOME FUND
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(fka PALMERSTON STOCK AGENCY, INC.)
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(a development stage company)
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STATEMENTS OF OPERATIONS
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For the
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For the
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Period from
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three months
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three months
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May 12, 2009
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ended
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ended
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(Inception) to
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July 31, 2013
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July 31, 2012
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July 31, 2013
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| (unaudited) | (unaudited) | (unaudited) | ||||||||||
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REVENUE
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$ | - | $ | - | $ | - | ||||||
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COST OF SERVICES
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- | - | - | |||||||||
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GROSS PROFIT OR (LOSS)
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- | - | - | |||||||||
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OPERATING EXPENSES:
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GENERAL AND ADMINISTRATIVE EXPENSES
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- | 798 | 12,477 | |||||||||
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PROFESSIONAL FEES
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7,500 | 8,275 | 116,475 | |||||||||
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TOTAL OPERATING EXPENSES
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7,500 | 9,073 | 128,952 | |||||||||
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NET LOSS
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(7,500 | ) | (9,073 | ) | (128,952 | ) | ||||||
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Loss per share, Basic and Diluted
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$ | (0.00 | ) | $ | (0.01 | ) | ||||||
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Weighted average number of common shares outstanding
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1,796,875 | 1,796,875 | ||||||||||
The accompanying notes are an integral part of these financial statements.
F-3
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MAGNOLIA LANE INCOME FUND
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(fka PALMERSTON STOCK AGENCY, INC.)
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(a development stage company)
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STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
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From inception (May 12, 2009) through July 31, 2013
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| DEFICIT | ||||||||||||||||||||
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ACCUMULATED
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ADDITIONAL
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DURING THE |
TOTAL
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COMMON
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PAID-IN
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DEVELOPMENT |
EQUITY
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SHARES
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STOCK
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CAPITAL
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STAGE
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(DEFICIENCY)
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Stock issued as founders' shares on May 12, 2009 (inception) at $0.0008 per share
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1,250,000 | $ | 125 | $ | (125 | ) | $ | - | $ | - | ||||||||||
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Stock issued for cash on January 21, 2010 at $0.08 per share
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500,000 | 50 | 39,950 | - | 40,000 | |||||||||||||||
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In-Kind Contribution
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- | - | 4 | - | 4 | |||||||||||||||
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Net Loss
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- | - | - | (11,166 | ) | (11,166 | ) | |||||||||||||
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Total, April 30, 2010
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1,750,000 | 175 | 39,829 | (11,166 | ) | 28,838 | ||||||||||||||
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Loan converted to capital
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- | - | 168 | - | 168 | |||||||||||||||
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Stock issued for cash on September 23, 2010 at $ 0.08 per share
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46,875 | 5 | 3,745 | - | 3,750 | |||||||||||||||
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Net Loss
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- | - | - | (32,849 | ) | (32,849 | ) | |||||||||||||
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Total, April 30, 2011
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1,796,875 | 180 | 43,742 | (44,015 | ) | (93 | ) | |||||||||||||
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Capital Contribution
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- | - | 16,146 | - | 16,146 | |||||||||||||||
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Net Loss
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- | - | - | (57,899 | ) | (57,899 | ) | |||||||||||||
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Total, April 30, 2012
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1,796,875 | 180 | 59,888 | (101,914 | ) | (41,846 | ) | |||||||||||||
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Capital Contribution
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- | - | 13,970 | - | 13,970 | |||||||||||||||
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Net Loss
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- | - | - | (19,538 | ) | (19,538 | ) | |||||||||||||
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Total, April 30, 2013
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1,796,875 | $ | 180 | $ | 73,858 | $ | (121,452 | ) | $ | (47,414 | ) | |||||||||
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Capital Contribution
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- | - | 47,414 | - | 47,414 | |||||||||||||||
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Net Loss
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- | - | - | (7,500 | ) | (7,500 | ) | |||||||||||||
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Total, July 31, 2013
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1,796,875 | $ | 180 | $ | 121,272 | $ | (128,952 | ) | $ | (7,500 | ) | |||||||||
The accompanying notes are an integral part of these financial statements.
F-4
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MAGNOLIA LANE INCOME FUND
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(fka PALMERSTON STOCK AGENCY, INC.)
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(a development stage company)
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STATEMENTS OF CASH FLOWS
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For the
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For the
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Period from
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three months
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three months
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May 12, 2009
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ended
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ended
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(Inception) to
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July 31, 2013
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July 31, 2012
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July 31, 2013
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| (unaudited) | (unaudited) | (unaudited) | ||||||||||
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$ | (7,500 | ) | $ | (9,073 | ) | $ | (128,952 | ) | |||
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Interest as In-Kind Contribution
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- | - | 4 | |||||||||
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(Decrease)/Increase in Accrued Expenses
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(42,144 | ) | 5,954 | 7,500 | ||||||||
| Total adjustments to net loss | (42,144 | ) | 5,954 | 7,504 | ||||||||
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Net cash used in operating activities
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(49,644 | ) | (3,119 | ) | (121,448 | ) | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES
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Shareholder Loan
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- | - | 168 | |||||||||
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Capital Contribution
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47,414 | 3,970 | 77,530 | |||||||||
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Common Stock Proceeds
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- | - | 43,750 | |||||||||
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Net cash flows provided by financing activities
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47,414 | 3,970 | 121,448 | |||||||||
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CASH RECONCILIATION
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Net (decrease)/increase in cash
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(2,230 | ) | 851 | - | ||||||||
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Cash - beginning balance
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2,230 | 273 | - | |||||||||
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CASH BALANCE - END OF PERIOD
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$ | - | $ | 1,124 | $ | - | ||||||
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SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
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Conversion of Debt to Equity
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$ | - | $ | - | $ | 168 | ||||||
The accompanying notes are an integral part of these financial statements.
F-5
MAGNOLIA LANE INCOME FUND
(fka PALMERSTON STOCK AGENCY, INC.)
(A Development Stage Company)
July 31, 2013
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
Magnolia Lane Income Fund, formerly known as Palmerston Stock Agency, Inc. (the “Company,” ”We,” “Ours,” “Us”), a development stage company, was incorporated on May 12, 2009 under the laws of the State of Delaware. The Company was formed to commence business as a stock agent in the wool trade. Contacts in the industry were developed through our experience and background in the wool trade and through those contacts we intended to buy sheared grease wool direct from farmers in the Manawatu-Wanganui region of New Zealand and eventually expand to Australia as business operations grew.
On May 13, 2013, we entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Ian Raleigh and Michael Raleigh (the “Sellers”) and Magnolia Lane Financial, Inc. (the “Purchaser”), whereby the Purchaser purchased from the Sellers, 10,000,000 shares of common stock, par value $0.0001 per share, of the Company (the “Shares”), representing approximately 69.57% of the issued and outstanding shares of the Company. As a result, the Purchaser became the majority shareholder of the Company.
In connection with the Stock Purchase Agreement, we have ceased pursuing our prior business plan and have begun focusing on our new business which is to manage and invest in real property. Our current Chief Executive Officer and sole director, Brian Woodland, has numerous years in the real estate acquisition, syndication and asset management business. We intend to acquire real estate in small markets with high degrees of safety to provide income streams to our shareholders. In addition, we will develop property, syndicate, manage and acquire property for capital appreciation.
In connection with this change of control and change of business, we have conducted a name change and reverse stock split. On August 1, 2013, we filed a Certificate of Amendment to our Articles of Incorporation to change our name from “Palmerston Stock Agency, Inc.” to “Magnolia Lane Income Fund” and to memorialize an 8 to 1 reverse stock split.
On August 12, 2013, the Company received approval from the Financial Industry Regulatory Authority (“FINRA”) to effectuate the Name Change and Stock Split. FINRA also confirmed that the new stock symbol is MIFC.
NOTE 2 – SUMMARY OF ACCONTING POLICIES
Basis of presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, the rules and regulations of the United States Securities and Exchange Commission.
Development Stage Company
The Company is a development stage company and has recognized no revenue, is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception, have been considered as part of the Company’s development stage activities.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
F-6
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Fair Value of Financial Instruments
The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts of financial assets and liabilities, such as cash, prepaid expenses, and accrued expenses, approximate their fair values because of the short maturity of these instruments.
Net loss per common share
Net loss per common share is computed pursuant to section 260-10-45 of the Financial Accounting Standards Board Accounting Standards Codification. Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period.
There were no potentially dilutive shares outstanding for any periods presented.
Income Taxes
The Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The Company had adopted the provisions of Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainties in tax positions and requires that the Company recognizes in its financial statements the impact of an uncertain tax position, if that position has more likely than not chance of not being sustained on audit, based on technical merits of that position. The adoption of this standard did not have an impact on the Company’s financial statements.
The Company is subject to the United States federal and state income tax examinations by the tax authorities for the 2012, 2011, and 2010 tax years.
Subsequent Events
The Company has evaluated all subsequent events through the date the financial statements were issued for possible disclosure and recognition in the financial statements.
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company had a deficit accumulated during the development stage of $128,952 and net cash used in operations of $121,448 for the period from May 12, 2009 (Inception) to July 31, 2013, respectively. These conditions raise substantial doubt about its ability to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern.
The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
F-7
NOTE 4 - STOCKHOLDERS’ EQUITY
Preferred stock
Preferred stock includes 100,000,000 shares authorized at a par value of $0.0001, of which none are issued or outstanding.
Common stock
Common Stock includes 200,000,000 shares authorized at a par value of $0.0001, of which 10,000,000 have been issued for the amount of $1,000 on May 12, 2009 to the Company’s officers as founders’ shares.
On January 21, 2010, the Company issued 500,000 shares of common stock for cash in the amount of $40,000, or $0.08 per share.
On September 23, 2010, the Company issued 46,875 shares of common stock for cash in the amount of $3,750, or $0.08 per share.
On May 13, 2013, we entered into a stock purchase agreement with Ian Raleigh and Michael Raleigh (the “Sellers”) and Magnolia Lane Financial, Inc. (the “Purchaser”), whereby the Purchaser purchased from the Sellers, 10,000,000 shares of common stock, par value $0.0001 per share, of the Company (the “Shares”), representing approximately 69.57% of the issued and outstanding shares of the Company. As a result, the Purchaser became the majority shareholder of the Company.
On July 22, 2013, the Company authorized a 1:8 reverse split of its common shares. Prior to the split, the Company had 14,375,000 shares and post-split shares outstanding are 1,796,879.
Capital Contribution
For the period from May 12, 2009 (inception) through July 31, 2013, the Company received advances from its founder of $77,530 in aggregate for working capital purposes, which were recorded as contribution of capital.
NOTE 6 – SUBSEQUENT EVENTS
Effective August 1, 2013, the Company changed its name to Magnolia Lane Income Fund and Effected an 8 to 1 reverse stock split.
F-8
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Plan of Operations
Magnolia Lane Income Fund (formerly, Palmerston Stock Agency, Inc.) was incorporated in the state of Delaware on May 12, 2009. We were formed to commence business as a stock agent in the wool trade. Our founder and President, Ian Raleigh has numerous years of experience in the wool trade. He was raised on his parent’s sheep farming community in New Zealand and owns his own sheep which he has farmed and bred for the wool industry.
We intended to buy sheared grease wool direct from farmers in the Manawatu-Wanganui region of New Zealand and eventually expand to Australia as we grow our business operations. We intended to oversee the purchase of the wool, process the wool and separate it for sale at auction or sell direct to the textile manufacturing industry. We anticipated consulting with representatives in Asia and Europe to assist marketing our product to the textile manufacturing industry.
We have not commenced business operations. On May 13, 2013, upon the change of control, we ceased this business operation and changed our business to a business plan that is focused on managing real property. Specifically, we intend to acquire real estate in small markets with high degrees of safety to provide income streams to our shareholders. In addition, we will develop property, syndicate, manage and acquire property for capital appreciation.
In connection with this change of control and change of business, we have conducted a name change and reverse stock split. On August 1, 2013 we filed a Certificate of Amendment to our Articles of Incorporation (the “Amendment”) to change its name from “Palmerston Stock Agency, Inc.” to “Magnolia Lane Income Fund” (the “Name Change”) and to memorialize a 8 to 1 reverse stock split (the “Stock Split”). The Amendment was effective as of August 1, 2013. A copy of the Amendment is attached to this Quarterly Report on Form 10-Q as Exhibit 3.3.
On August 12, 2013, the Company received approval from the Financial Industry Regulatory Authority (“FINRA”) to effectuate the Name Change and Stock Split. FINRA also confirmed that the new stock symbol is MIFC.
Limited Operating History
We have generated no independent financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods.
Going Concern
We have negative working capital, negative stockholders’ equity and have not earned any revenues from operations to date. These conditions raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon the Company’s ability to further implement our business plan and generate sufficient revenues.
Results of Operations
For the three months ended July 31, 2013 and 2012
We have not generated any revenue since inception. Operating expenses for the three months ended July 31, 2013 totaled $7,500 resulting in a loss of $7,500, as compared with operating expenses of $9,073 for the three month period ended July 31, 2012. Our operating expenses for the three months ended July 31, 2013, consisted of $7,500 in professional fees, decreased by $775, from $8,275 for the three months ended July 31, 2012.
4
Capital Resources and Liquidity
As of July 31, 2013 we have $0 cash on hand.
Brian Woodland is the only employee initially as the company seeks contracts. Additionally there will be little if any capital expenditures due to the nature of the business. Finally, it should be noted that materials will be bought on an as needed basis and will be purchased as a part of a contract with either cash on hand or a receivable in place.
Based upon the above, we believe that we have enough cash to support our daily operations while we are attempting to commence operations and produce revenues. However, if we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations.
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.
Recent Accounting Pronouncements
There are no new accounting pronouncements that are expected to have a material impact on the Company's financial position or results of operations.
Critical Accounting Policies and Estimates
None.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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Quantitative and Qualitative Disclosures About Market Risk
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Smaller reporting companies are not required to provide the information required by this item.
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Controls and Procedures
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Disclosure controls and procedures.
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
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Changes in internal control over financial reporting.
There have been no changes in our internal control over financial reporting that occurred during the quarter covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Legal Proceedings
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We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting the Company, any of our officer or director in their capacities as such, in which an adverse decision could have a material adverse effect.
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Risk Factors
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Smaller reporting companies are not required to provide the information required by this item.
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Unregistered Sales of Equity Securities and Use of Proceeds
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None.
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Defaults Upon Senior Securities
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None.
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Mine Safety Disclosures
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Not applicable.
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Other Information
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None
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Exhibits
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(a)
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Exhibits
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1+
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Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101*
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Interactive Data File (Form 10-Q for the quarterly period ended July 31, 2013 furnished in XBRL).
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+ In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
* Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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MAGNOLIA LANE INCOME FUND
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Date: September 23, 2013
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By:
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/s/ Brian Woodland
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Brian Woodland
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President and Chief Financial Officer
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(Duly Authorized Officer, Principal Executive Officer and
Principal Financial and Accounting Officer)
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