Attached files
JV GROUP, INC. AND SUBSIDIARIES
For the Nine Months Ended March 31, 2014 and 2013
(Amounts in USD)
(Unaudited)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------
FORM 10Q
-----------------
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from __________ to ___________
Commission file number: 000-21477
JV GROUP, INC.
--------------
(Exact name of registrant as specified in its charter)
Delaware 27-0514566
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(State of Incorporation) (IRS Employer ID Number)
7609 Ralston Road, Arvada, CO 80002
-----------------------------------
(Address of principal executive offices)
303-422-8127
------------
(Registrant's Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 for Regulation S-T (ss.232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated file, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of May 20, 2015, there were 98,879,655 shares of the registrant's common
stock issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Consolidated Balance Sheets - March 31, 2014 and
June 30, 2013 F-1
Consolidated Statements of Operations -
For Three and Nine Months Ended March 31, 2014
and 2013 F-2
Consolidated Statements of Cash Flows -
For the Nine Months Ended March 31, 2014
and 2013 F-3
Notes to the Consolidated Financial Statements F-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 1
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- Not Applicable 4
Item 4. Controls and Procedures 4
PART II - OTHER INFORMATION
Item 1. Legal Proceedings -Not Applicable 4
Item 1A. Risk Factors - Not Applicable 4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 4
-Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable 5
Item 4. Mine Safety Disclosures - Not Applicable 5
Item 5. Other Information - Not Applicable 5
Item 6. Exhibits 5
SIGNATURES 6
PART I
ITEM 1. FINANCIAL STATEMENTS
JV GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in USD)
(Unaudited)
March 31, June 30,
2015 2014
----------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 16 $ 14,363
Prepaid expenses and other current assets 3,079 48,486
----------------------------------
Total current assets 3,095 62,849
Property and equipment, net of $422,736 and $571,371
accumulated depreciation, respectively 9,996 190,523
----------------------------------
Intangible assets, net of $320,456 and $320,456
accumulated amortization, respectively - 8,551
----------------------------------
Total assets $ 13,091 $ 261,923
==================================
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities $ 152,082 150,141
Prepayments, clients 12,986 146,047
Notes payable 452,790 452,790
Advances, related parties 1,425,188 1,086,209
----------------------------------
Total current liabilities 2,043,046 1,835,187
Total liabilities 2,043,046 1,835,187
----------------------------------
Stockholders' deficit
Preferred stock, $0.01 par value: 25,000,000 shares authorized, no shares - -
issued and outstanding.
Common stock, $0.01 par value: 1,000,000,000 shares authorized 988,797 988,797
98,879,655 shares issued and outstanding at
March 31, 2015 and June 30, 2014
Other comprehensive income 5,714 5,904
Accumulated deficit (3,024,466) (2,567,965)
----------------------------------
Total stockholders' deficit (2,029,955) (1,573,264)
----------------------------------
Total liabilities and stockholders' deficit $ 13,091 $ 261,923
==================================
See accompanying notes to consolidated financial statements.
JV GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Amounts in US Dollars)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
2015 2014 2015 2014
-------------------------------- ----------------------------
Revenue - 137,208 $ 78,713 $ 447,091
Cost of revenue 9,452 21,888 38,456 61,984
--------------- --------------- --------------- ----------
Gross profit (9,452) 115,320 40,257 385,107
Operating expenses
General and administrative 18,849 73,518 175,305 277,016
Rent and rates 38,307 74,305 132,376 274,258
Amortization - 8,551 8,551 25,652
Loss on disposal of furniture - - 111,628 -
Depreciation 4,978 34,653 48,477 103,553
Impairment loss 20,421 - 20,421 -
--------------- --------------- -------------- -----------
Total operating expenses 82,555 191,027 496,758 680,479
--------------- --------------- -------------- -----------
Loss from operations (92,007) (75,707) (456,501) (295,372)
Other income
Interest and other income - - - 1,935
Other expense - (137) - (1,008)
--------------- --------------- ------------ ------------
Total other income - (137) - 927
----------------- --------------- ------------- ------------
Net loss $ (92,007) $ (75,844) $ (456,501) $ (294,445)
================= ============== ============== ===========
Other comprehensive income
Foreign currency translation adjustment 34 36 (190) 960
----------------- -------------- -------------- -----------
Total comprehensive loss $ (91,973) $ (75,808) $ (456,691) $ (293,485)
================= ============== ============== ===========
Loss per common share- basic: $ (0.00) $ (0.00) $ (0.00) $ (0.00)
================= ============== ============== ===========
Weighted average common shares outstanding:
Basic 98,879,655 98,879,655 98,879,655 98,879,655
================= ============== ============== ===========
See accompanying notes to consolidated financial statements.
F-2
JV GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
(Amounts in USD)
(Unaudited)
Preferred Stock Common Stock Accumulated
Shares Amount Shares Amount Deficit
-------------- ------------------------------- ---------- ----------------
Balance, June 30, 2012 - - 98,879,65 $988,797 $ (1,742,010)
Foreign currency translation - - - - -
Net loss - - - - (479,335)
-------------- ------------------------------- ---------- ----------------
Balance, June 30, 2013 - - 98,879,655 988,797 (2,221,345)
Foreign currency translation - - - - -
Net loss - - - - (346,620)
-------------- ------------------------------- ---------- ----------------
Balance, June 30, 2014 - - 98,879,655 988,797 (2,567,965)
Foreign currency translation
Net loss (456,501)
-------------- ------------------------------- ---------- ----------------
Balance, March 31, 2015 - - 98,879,655 $ 988,797 $ (3,024,466)
============== =============================== ========== ================
See accompanying notes to consolidated financial statements.
F-3
JV GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
(Amounts in USD)
(Unaudited)
(continued)
Accumulated
Comprehensive
Profit / (Loss) Total
----------------- ---------------
Balance, June 30, 2012 $ 5,013 $ (748,200)
Foreign currency translation 779 779
Net loss - (479,335)
----------------- ---------------
Balance, June 30, 2013 5,792 (1,226,756)
Foreign currency translation 112 112
Net loss - (346,620)
----------------- ---------------
Balance, June 30, 2014 5,904 (1,573,264)
Foreign currency translation (190) (190)
Net loss (456,501)
----------------- ---------------
Balance, March 31, 2015 5,714 $ (2,029,955)
================= ===============
See accompanying notes to consolidated financial statements.
F-4
JV GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 2015 AND 2014
(Amounts in USD)
(Unaudited)
2015 2014
-----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (456,501) $ (294,445)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 48,477 103,553
Amortization 8,551 25,652
Loss on disposal of assets 111,628 872
Loss on impairment of assets 20,421 -
Changes in operating assets and liabilities:
Prepaid expenses and other current assets 45,407 9,555
Accounts payable and accrued liabilities 1,942 34,869
Prepayments from clients (133,061) 50,046
-----------------------------
Total cash flow used in operating activities (353,136) (69,898)
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of assets - (11,777)
------------ -------------
Total cash flow used in investing activities - (11,777)
CASH FLOW FROM FINANCING ACTIVITIES
Advances from officers and directors 338,979 122,248
Payments on advances from officers and directors - (10,062)
------------ -------------
Total cash flow provided by financing activities 338,979 112,186
Effect of exchange rate changes on cash (190) (674)
-----------------------------
NET CHANGE IN CASH (14,347) 29,837
CASH AT BEGINNING OF PERIOD 14,363 4,774
-----------------------------
CASH AT END OF PERIOD $ 16 $ 34,611
=============================
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest $ - $ -
-----------------------------
Cash paid for income tax $ - $ -
-----------------------------
See accompanying notes to consolidated financial statements.
F-5
NOTE 1 - BUSINESS AND BASIS OF PRESENTATION
Company History
ASPI, Inc. ("APSI") was formed in Delaware in September 29, 2008. On April 25,
2012, ASPI filed an amendment to its Certificate of Incorporation to change its
name from ASPI, Inc. to JV Group, Inc. ("JV Group.") In addition, at that time,
JV Group increased the number of authorized common shares from One Hundred
Million (100,000,000) shares to One Billion (1,000,000,000) shares.
Business
JV Group operates primarily as an office service provider through its
wholly-owned subsidiary, Prestige Prime Office, Limited ("Prestige"). Prestige
provides office space that is fully furnished, equipped and staffed, located at
premier addresses in central business districts with convenient access to
airport or public transportation. Services include advanced communication
systems, network access, updated IT, and world-class administrative support, as
well as a full menu of business services and facilities, such as meeting rooms
and video conferencing.
Basis of Presentation
The accompanying consolidated financial statements include the accounts of JV
Group, Inc., a Delaware corporation, its wholly-owned subsidiaries, Mega Action
Limited ("Mega"), a British Virgin Island Corporation, and Prestige, a Hong Kong
Special Administrative Region Corporation (JV Group and its subsidiaries are
collectively referred to as the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation. It is
management's opinion that all necessary recurring adjustments have been made for
these financial statements.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.
Judgments and estimates of uncertainties are required in applying the Company's
accounting policies in certain areas. The following are some of the areas
requiring significant judgments and estimates: a) Going concern; and b)
Depreciable life for property, plant and equipment and intangible assets. The
relevant amounts could be adjusted in the near term if experience differs from
current estimates.
Cash and Cash Equivalents
The Company considers all liquid investments purchased with an initial maturity
of three months or less to be cash equivalents. Cash and cash equivalents
include demand deposits and money market funds carried at cost which
approximates fair value. The Company maintains its cash in institutions insured
by the Federal Deposit Insurance Corporation ("FDIC").
F-6
Foreign Currency Translation
The financial statements of JV Group's wholly-owned subsidiaries, Prestige and
Mega are measured using the local currency (the Hong Kong Dollar (HK$) is the
functional currency). Assets and liabilities of Prestige and Mega are translated
at exchange rates as of the balance sheet date. Revenues and expenses are
translated at average rates of exchange in effect during the period. The
resulting cumulative translation adjustments have been recorded as a component
of comprehensive income (loss), included as a separate item in the statement of
operations.
The Company is exposed to movements in foreign currency exchange rates. In
addition, the Company is subject to risks including adverse developments in the
foreign political and economic environment, trade barriers, managing foreign
operations, and potentially adverse tax consequences. There can be no assurance
that any of these factors will not have a material negative impact on the
Company's financial condition or results of operations in the future.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received upon sale of an asset
or paid upon transfer of a liability in an orderly transaction between market
participants at the measurement date and in the principal or most advantageous
market for that asset or liability. The fair value should be calculated based on
assumptions that market participants would use in pricing the asset or
liability, not on assumptions specific to the entity. In addition, the fair
value of liabilities should include consideration of non-performance risk
including our own credit risk.
In addition to defining fair value, the standard expands the disclosure
requirements around fair value and establishes a fair value hierarchy for
valuation inputs. The hierarchy prioritizes the inputs into three levels based
on the extent to which inputs used in measuring fair value are observable in the
market. Each fair value measurement is reported in one of the three levels which
is determined by the lowest level input that is significant to the fair value
measurement in its entirety. These levels are:
Level 1 - inputs are based upon unadjusted quoted prices for identical
instruments traded in active markets.
Level 2 - inputs are based upon significant observable inputs other
than quoted prices included in Level 1, such as quoted prices for
identical or similar instruments in markets that are not active, and
model-based valuation techniques for which all significant assumptions
are observable in the market or can be corroborated by observable
market data for substantially the full term of the assets or
liabilities.
Level 3 - inputs are generally unobservable and typically reflect
management's estimates of assumptions that market participants would
use in pricing the asset or liability. The fair values are therefore
determined using model-based techniques that include option pricing
models, discounted cash flow models, and similar techniques.
The carrying value of the Company's financial assets and liabilities which
consist of cash, prepaid expenses and other current assets, accounts payable,
accrued liabilities, prepayments and advances from related parties in
management's opinion approximate their fair value due to the short maturity of
such instruments. These financial assets and liabilities are valued using Level
3 inputs, except for cash which is at Level 1. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant interest,
exchange, or credit risks arising from these financial instruments.
F-7
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed principally on the straight-line method over the
estimated useful life of each type of asset which ranges from three to five
years. Major improvements are capitalized, while expenditures for repairs and
maintenance are expensed when incurred. Upon retirement or disposition, the
related costs and accumulated depreciation are removed from the accounts, and
any resulting gains or losses are credited or charged to income.
Intangible Asset
On September 8, 2011, the Company entered into an Agreement to purchase certain
leaseholds and as a result recognized certain intangibles, such as customer
lists. These intangible assets are being amortized over a weighted average
period of 1.7 years at a rate of HK$1,953,870 per year. At March 31, 2015 and
June 30, 2014, accumulated amortization was translated to equal US$320,456 and
US$320,456 respectively and amortization expense for the quarters ended March
31, 2015 and 2014 was US$0 and US$8,551 respectively and for the nine months
ended March 31, 2015 and 2014 was US$ 8,551 and US$ 25,652 respectively.
Revenue Recognition
The Company recognizes revenue when it is earned and expenses are recognized
when they occur in accordance with FASB ASC 605 "Revenue Recognition" ("ASC
605"). The Company recognizes revenue from its office service operations.
Clients pay a monthly fee and such fees are recognized at that time.
Advertising
The Company put advertisements on local newspaper and the internet in order to
attract potential customers. It is recognized as expense when it occurs. The
Company paid $2,262 and $10,348 as advertising cost for the nine months ended
March 31, 2015 and 2014, respectively ($0 and $3,577 for the three months ended
March 31, 2015 and 2014, respectively).
Net Loss per Common Share
Basic net loss per common share is calculated by dividing total net loss
applicable to common shares by the weighted average number of common and common
equivalent shares outstanding during the period. For the period ended March 31,
2015 and 2014, there were no potential common equivalent shares used in the
calculation of weighted average common shares outstanding as the effect would be
anti-dilutive.
Impairment of Long Lived Assets
Long-lived assets are reviewed for impairment in accordance with the applicable
FASB standard, "Accounting for the Impairment or Disposal of Long- Lived
Assets". Under the standard, long-lived assets are tested for recoverability
whenever events or changes in circumstances indicate that their carrying amounts
may not be recoverable. An impairment charge is recognized for the amount, if
any, when the carrying value of the asset exceeds the fair value.
F-8
Stock-Based Compensation
Beginning January 1, 2006, the Company adopted the provisions of and accounts
for stock-based compensation using an estimate of value in accordance with the
fair value method. Under the fair value recognition provisions of this
statement, stock-based compensation cost is measured at the grant date based on
the fair value of the award and is recognized as expense on a straight-line
basis over the requisite service period, which generally is the vesting period.
The Company elected the modified-prospective method, under which prior periods
are not revised for comparative purposes. The valuation method applies to new
grants and to grants that were outstanding as of the effective date and are
subsequently modified.
Other Comprehensive Income (Loss)
The Company recognizes unrealized gains and loss on the Company's foreign
currency translation adjustments as components of other comprehensive income
(loss).
Income Taxes
Provisions for income taxes represents actual or estimated amounts payable on
tax return filings each year. Deferred tax assets and liabilities are recorded
for the estimated future tax effects of temporary differences between the tax
basis of assets and liabilities and amounts reported in the accompanying balance
sheets, and for operating loss and tax credit carry forwards. The change in
deferred tax assets and liabilities for the period measures the deferred tax
provision or benefit for the period. Effects of changes in enacted tax laws on
deferred tax assets and liabilities are reflected as adjustments to the tax
provision or benefit in the period of enactment.
FASB ASC 740, "Income Taxes" ("ASC 740") addresses the determination of whether
tax benefits claimed or expected to be claimed on a tax return should be
recorded in the financial statements. Under ASC 740, the Company may recognize
the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits
recognized in the financial statements from such a position would be measured
based on the largest benefit that has a greater than 50% likelihood of being
realized upon ultimate settlement. ASC 740 also provides guidance on
de-recognition of income tax assets and liabilities, classification of current
and deferred tax assets and liabilities, and accounting for interest and
penalties associated with tax positions. As of March 31, 2015 and June 30, 2014,
the Company does not have a liability for any uncertain tax positions.
The income tax laws of various jurisdictions in which the Company operates are
summarized as follows:
United States
JV Group is subject to United States tax at 35%. No provision for
income tax in the United States has been made as the Company had no
U.S. taxable income for the quarters ended March 31, 2015 and 2014.
BVI
Mega is incorporated in BVI and is governed by the income tax laws of
BVI. According to current BVI income tax law, the applicable income tax
rate for the Company is 0%.
Hong Kong
F-9
Prestige is incorporated in Hong Kong. Pursuant to the income tax laws
of Hong Kong, the Company is subject to the tax rate 16.5%.
Recent Accounting Pronouncements
There were various other accounting standards and interpretations issued in 2015
and 2014, none of which are expected to have a material impact on the Company's
financial position, operations, or cash flows.
NOTE 3 - GOING CONCERN
The Company's financial statements for the quarters ended March 31, 2015 and
2014 have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments in the
normal course of business. The Company reported a net loss of $82,555 for the
quarter ended March 31, 2015 and an accumulated deficit of $3,024,446 at March
31, 2015. At March 31, 2015, the Company had total current assets of $3,095 and
total current liabilities of $2,043,046 for a working capital deficit of
$2,039,951. The reduction in assets was due to the removal of a net value
furniture and fixtures of $107,500 due to the surrender of the lease on 10F,
disposal of office equipment of $4,128 and impairment of assets of $20,421.
The Company's ability to continue as a going concern may be dependent on the
success of management's plan discussed below. The financial statements do not
include any adjustments relating to the recoverability and classification of
assets or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
To the extent the Company's operations are not sufficient to fund the Company's
capital requirements, the Company may attempt to enter into a revolving loan
agreement with financial institutions or attempt to raise capital through the
sale of additional capital stock or through the issuance of debt. At the present
time, the Company does not have a revolving loan agreement with any financial
institution nor can the Company provide any assurance that it will be able to
enter into any such agreement in the future or be able to raise funds through
the further issuance of debt or equity in the Company.
As of March 31, 2015 the Company has effectively ceased all of its operations
and is investigating other opportunities that may have plausible viable ability
to promote future business for the Company. There are no assurances whatsoever
that any of these opportunities will prove to have merit.
F-10
NOTE 4 - PROPERTY AND EQUIPMENT
At March 31, 2015 and June 30, 2014, Property and Equipment consisted of:
March 31, June 30,
2015 2014
-------------------- ------------
Furniture and Fixtures $262,506 $598,783
Office Equipment 93,863 138,410
Computer Equipment 24,701 24,701
-------------------- ------------
381,070 761,894
Accumulated Depreciation (371,074) (571,371)
-------------------- ------------
Total $ 9,996 $190,523
==================== =============
Property and equipment held by Prestige have an original cost basis valued in
Hong Kong Dollars. During the nine months ended March 31, 2015, furniture and
fixture values decreased by $268,320 and related depreciation was reduced by
$156,692 due to the disposition of furniture and fixtures that were surrendered
in relation to the non-renewal of the lease on 10/F and disposal of office
equipment. The difference of $111,628 is accounted for as a loss on disposal of
assets on the income statement. Due to the cessation of operations the
management concluded the necessity of showing an impairment on the value of the
remaining assets. To accomplish this impairment the value of Furniture and
Fixtures has been reduced by $47,570 and Office Equipment has been reduced by
$44,513. The related depreciation accounts have been reduced by $92,083. The
loss on this impairment of $20,421 has been reported on the income statement as
an Impairment loss. Other changes in value are a result of foreign currency
exchange differences. During the quarters ended March 31, 2015 and 2014,
depreciation expense was $4,978 and $34,653 respectively and for the nine months
ended March 31, 2015 and 2014 was $48,477 and $103,553, respectively.
NOTE 5 - ADVANCES, RELATED PARTIES
On September 8, 2011, the Company entered into an Agreement to purchase certain
leaseholds from an unrelated third party in exchange for 25,000,000 shares of
the Company's restricted common stock and a $450,000 promissory note. The
$450,000 promissory note has a term of nine months and therefore became due on
March 1, 2012. The promissory note does not accrue interest. At March 31, 2015
and June 30, 2014, the promissory note is still outstanding and includes an
additional $2,790 on account of exchange rate differences. The note is now
considered in default status however the creditor has made no demands for
repayment.
During the quarters ended March 31, 2015 and 2014, Mr. Hung, the manager of
Prestige and the majority shareholder of the Company, advanced funds of $46,453
and $40,442 respectively and during the nine months ended funds advanced were
$299,654 and $90,171 respectively, to support the operations of Prestige. The
Company owes him $1,217,210 and $917,556 as of March 31, 2015 and June 30, 2014,
respectively. Such funds are unsecured, bear no interest, and are due on demand.
During the quarter ended March 31, 2015 and, 2014, Ms. Look, an officer and
director of the Company and manager of Mega, advanced additional funds of
$10,818 and $9,477 respectively and for the nine months of the referenced date
the advances were $39,325 and $27,567 to both the Company and its subsidiary
Mega. She is owed $207,978 and $168,653 as of March 31, 2015 and June 30, 2014,
respectively. Such funds are unsecured, bear no interest, and are due on demand.
F-11
NOTE 6 - PREPAYMENTS, CLIENTS
Clients pay a deposit on the Company's provided services upon entering into a
lease agreement with the Company. These deposits are recognized by the Company
as a corresponding liability. At March 31, 2015 and June 30, 2014, the Company
had $12,986 and $146,047, respectively in prepayment liabilities.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Prestige operates from Silvercord, No.30 Canton Road, Tsimshatsui, which is a
premier commercial building in Hong Kong. The center is located on one floor and
occupies approximately 5,000 square feet. We paid $132,376 and $274,258 for the
lease of our center for the nine months ended March 31, 2015 and 2014,
respectively. The Company's minimum annual rent rate for the following year is:
Fiscal Year Ended
June 30, Annual Rent
-------- -----------
2015 $57,147
NOTE 8 - STOCKHOLDERS' DEFICIT
The authorized capital stock of the Company is 1,000,000,000 shares of common
stock with a $0.01 par value and 25,000,000 shares of preferred stock with a par
value of $0.01 per share. At March 31, 2015 and June 30, 2014 the Company had
98,879,655 shares of its common stock issued and outstanding and no shares of
preferred stock issued and outstanding.
During the period ended March 31, 2015 the Company did not issue any shares of
its common stock.
NOTE 9 - SUBSEQUENT EVENTS
The Company has evaluated it activities subsequent to the quarter ended March
31, 2015 through May 20, 2015 and has determined that there are no events to
disclose.
F-12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
The independent registered public accounting firm's report on the Company's
consolidated financial statements as of June 30, 2014, and for each of the years
in the two-year period then ended, includes a "going concern" explanatory
paragraph, that describes substantial doubt about the Company's ability to
continue as a going concern.
PLAN OF OPERATIONS
JV Group's strategy is to be a serviced office provider in the Far East through
its wholly-owned subsidiary, Prestige Prime Office Ltd. in Hong Kong.
The office space provided is fully furnished, equipped and staffed, located at
premier addresses in central business districts with convenient access to
airports or public transportation. Services include advanced communication
system, network access, updated IT, and world-class administrative support, as
well as a full menu of business services and facilities, such as meeting rooms
and video conferencing.
Prestige intends to provide services that will support the growing trend of
mobile and at home working. Supporting workers at home and on the road with
services such as Virtual Office and Virtual PA, providing dedicated business
addresses as their business base, as well as mail and call handling services.
The Company will need substantial additional capital to support its budget. The
Company has had minimal revenues. The Company has no committed source for any
funds as of date hereof. In the event funds cannot be raised when needed, the
Company may not be able to carry out its business plan, may never achieve sales
or royalty income, and could fail in business as a result of these
uncertainties.
The Company may borrow money to finance its future operations, although it does
not currently contemplate doing so. Any such borrowing will increase the risk of
loss to the investor in the event the Company is unsuccessful in repaying such
loans.
The independent registered public accounting firm's report on the Company's
financial statements as of June 30, 2014, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
1
RESULTS OF OPERATIONS
For the Three Months Ended March 31, 2015 Compared to the Three Months Ended
March 31, 2014
During the three months ended March 31, 2015 and 2014, we recognized revenues of
$0 and $137,208 from our service office operations. The decrease of $137,208 is
a result of the cessation of operations. During the three months ended March 31,
2015 and 2014, we incurred cost of revenues of $9,452 and $21,888, respectively.
During the three months ended March 31, 2015 and 2014, we recognized gross
profits of $(9,452) and $115,320, respectively. The resulting decrease in gross
profits is a result of the decrease in revenues.
During the three months ended March 31, 2015, we incurred operational expenses
of $82,555. During the three months ended March 31, 2014, we incurred $191,027
in operational expenses. The decrease of $108,472 was a result of an $8,551
decrease in amortization expense, and a decrease of $29,675 in depreciation
expense, a decrease in general and administrative expenses of $54,669, $35,998
decrease in rents and rates and an increase of impairment loss of $20,421 over
the prior period.
During the three months ended March 31, 2015, we incurred a net loss of $92,007.
During the three months ended March 31, 2014, we incurred a net loss of $75,707.
The decrease of $16,300 was a result of the decrease of $137,208 in revenues
combined with a $108,472 decrease in operational expenses and a decrease in cost
of revenue of $12,436, as discussed above.
For the Nine Months Ended March 31, 2015 Compared to the Nine Months Ended March
31, 2014
During the nine months ended March 31, 2015 and 2014, we recognized revenues of
$78,713 and $447,091 respectively from our service office operations. The
decrease of $368,378 is the result of not renewing the lease on 10/F and
effectively ceasing operations as of March 31, 2015. During the nine months
ended March 31, 2015 and 2014, we incurred cost of revenues of $38,456 and
$61,984 respectively. During the nine months ended March 31, 2015 we recognized
gross profits of $40,257 and $385,107, respectively. The decrease is the result
of cessation of operations as mentioned above.
During the nine months ended March 31, 2015 we incurred operational expenses of
$496,758. During the nine months ended March 31, 2014 we incurred operational
expenses of $680,479. The decrease of $183,721 is composed of a decrease of
$101,711 in general and administrative costs, a decrease of $141,882 in rent and
rates, a decrease of $17,101 in amortization expense, a decrease of $55,076 in
depreciation expense, an increase of $20,421 in impairment loss and an increase
of $111,628 in losses from disposal of furniture and fixtures.
LIQUIDITY
At March 31, 2015, we had total current assets of $3,095 consisting of $16 in
cash and cash equivalents and $3,079 in prepaid expenses and other assets. At
March 31, 2015, we had total liabilities of $2,043,046, all current. Total
liabilities included $152,082 in accounts payable and accrued liabilities,
$12,986 in client prepayments, $452,790 in note payables and $1,425,188 in
advances from related parties.
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During the nine months ended March 31, 2015, we used funds of $353,136 in our
operational activities. During the nine months ended March 31, 2015, we
recognized a net loss of $456,501, which was adjusted for depreciation of
$48,477, amortization expense of $8,551, impairment loss of $20,421 and loss on
disposal of assets of $111,628. During the nine months ended March 31, 2014, we
used funds of $69,898 in our operational activities. During the nine months
ended March 31, 20144, we incurred a net loss of $294,445 which was adjusted for
depreciation of $103,553 and amortization expense of $25,652 and a loss on
disposal of assets of $872.
During the nine months ended March 31, 2015, we used $0 to acquire computer
equipment. During the nine months ended March 31, 2014, we used $11,777 to
acquire computer equipment.
During the nine months ended March 31, 2015, we received $338,979 from our
financing activities. During the nine months ended March 31, 2014, we received a
net of $122,248 from our financing activities and repaid advances of $10,062.
During the nine months ended March 31, 2015 and 2014, Mr. Yeung Cheuk Hung, the
manager of Prestige and the majority shareholder of the Company, has advanced
funds of $299,653 and $90,171, respectively, to support the operations of
Prestige. During the nine months ended March 31, 2014, the Company paid Mr.
Hung, $10,062 on the funds owed. Mr. Hung is owed $1,217,209 and $917,556 as at
March 31, 2015 and June 30, 2014 respectively. Such funds are unsecured and bear
no interest, and are due on demand.
During the nine months ended March 31, 2015 and 2014, Ms. Look, an officer and
director of the Company and the manager of Mega, advanced funds of $39,326 and
$27,567, respectively to Mega to support operations. Ms. Look is owed $207,978
and $168,653 as of March 31, 2015 and June 30, 2014, respectively. Such funds
are unsecured, bear no interest, and are due on demand.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements nor do we have any
unconsolidated subsidiaries.
Short Term
Since we have ceased operations there is no revenue coming in to the Company
however, there will be limited ongoing expenses that will need to be covered..
For short term needs we will be dependent on receipt, if any, of offering
proceeds and/or loans from officers/stockholders.
Capital Resources
We have only common stock as our capital resource.
We have no material commitments for capital expenditures within the next year,
substantial capital will be needed to pay for working capital.
Need for Additional Financing
We do not have capital sufficient to meet our cash needs. We will have to seek
loans or equity placements to cover such cash needs.
3
No commitments to provide additional funds have been made by our management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to us to allow it to cover our expenses as they may be
incurred.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an
evaluation under the supervision and with the participation of our management,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period
covered by this report. Based on the foregoing evaluation, our Chief Executive
Officer has concluded that our disclosure controls and procedures are effective
in timely alerting them to material information required to be included in our
periodic SEC filings and to ensure that information required to be disclosed in
our periodic SEC filings is accumulated and communicated to our management,
including our Chief Executive Officer, to allow timely decisions regarding
required disclosure as a result of the potential deficiency in our internal
control over financial reporting.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended March 31, 2015, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not Applicable to Smaller Reporting Companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Company did not make any unregistered sales of its securities from January
1, 2014 through March 31, 2015.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
On September 8, 2011, Prestige entered into an Agreement with Huge Earn
Investments Limited ("Huge Earn") to purchase a leasehold, as described below,
in exchange for 25,000,000 shares of the Company's restricted common stock and a
$450,000 promissory note with anticipated due date of six months from issuance.
The promissory note was due on March 1, 2012. The promissory note does not
accrue interest. Despite Prestige's default on the promissory note Huge Earn has
not entered into any extension of the promissory note or indicated a willingness
to repossess the leases.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Executive and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive and Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act
Exhibit 101.INS XBRL Instance Document (1)
Exhibit 101.SCH XBRL Taxonomy Extension Schema Document (1)
Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (1)
Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document (1)
Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document (1)
Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (1)
------------
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed
not filed for purposes of Section 18 of the Securities Exchange Act of
1934, and otherwise is not subject to liability under these sections.
5
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
JV GROUP, INC.
(Registrant)
Dated: May 26, 2015 By: /s/ Look Yuen Ling
-------------------
Look Yuen Ling
President, Chief Executive
Officer and Chief Financial
Officer
6
