x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended October 31, 2013.

 

or

 

¨	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 001-34998

(Exact name of registrant as specified in its charter)

 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ¨

 

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). Yesx No o

 

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).

Yesx No ¨

 

The Registrant had 2,080,873 shares of common stock outstanding on December 13, 2013.

 

 

 

 

 

 

		October 31, 2013			April 30, 2013
		(Unaudited)
ASSETS
CURRENT ASSETS
TOTAL CURRENT ASSETS		$	-		$	-
TOTAL ASSETS		$	-		$	-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Other payable –related party		$	142,766		$	47,000
TOTAL CURRENT LIABILITIES			142,766			47,000
TOTAL LIABILITIES			142,766			47,000
STOCKHOLDERS’ DEFICIT
Preferred stock, $0.01 par value 100,000,000 shares     authorized; none issued			-			-
Common stock, $0.01 par value 50,000,000 shares     authorized; 2,080,873 shares issued and outstanding     at October 31, 2013 and April 30, 2013, respectively			20,808			20,808
Additional paid-in-capital			33,156,398			33,156,398
Accumulated deficit			(33,319,972)			(33,224,206)
TOTAL STOCKHOLDERS’DEFICIT			(142,766)			(47,000)
TOTAL LIABILITIES AND STOCKHOLDERS’DEFICIT		$	-		$	-

		Three months ended October 30,						Six months ended October 30,
		2013			2012			2013			2012
		(unaudited)			(unaudited)			(unaudited)			(unaudited)
OPERATING EXPENSES
Professional fees		$	48,698		$	2,628		$	94,741		$	14,130
Other			-			330			1,025			640
TOTAL OPERATING EXPENSE			48,698			2,958			95,766			14,770
LOSS FROM OPERATIONS			(48,698)			(2,958)			(95,766)			(14,770)
OTHER EXPENSE
Interest expense			-			(2,727)			-			(5,453)
TOTAL OTHER EXPENSE			-			(2,727)			-			(5,453)
NET LOSS			(48,698)			(5,685)			(95,766)			(20,223)
LOSS PER SHARE BASIC AND DILUTED		$	(0.02)		$	(0.00)		$	(0.05)		$	(0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED			2,080,873			2,039,660			2,080,873			2,023,094

		Six months ended October 31,
		2013			2012
		(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(95,766)		$	(20,223)
Adjustments to reconcile net loss to net cash used in operating activities
Changes in operating assets and liabilities:
Accrued interest payable			-			5,452
Accounts payable			-			9,999
NET CASH USED IN OPERATING ACTIVITIES			(95,766)			(4,772)
CASH FLOWS FROM INVESTING ACTIVITIES:
NET CASH PROVIDED BY INVESTING ACTIVITIES			-			-
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from a related party			95,766			3,500
NET CASH PROVIDED BY FINANCING ACTIVITIES			95,766			3,500
Net (decrease)/increase in cash and cash equivalents			-			(1,272)
Cash and cash equivalents at beginning of period			-			2,131
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	-		$	859
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for Interest Expenses		$	-		$	-
Cash paid for Income Taxes		$	-		$	-
SUPPLEMENTAL DISCLOSURES OF NONCASH TRANSACTIONS
Shares issued for a liability transferred to a shareholder		$	-		$	74,345

					Estimated
		NOL			Tax						Change in
		Carry-			Benefit			Valuation			Valuation			Net Tax
Period Ending		forward			from NOL			Allowance			Allowance			Benefit
October 31, 2013		$	488,646		$	90,400		$	(90,400)		$	(17,717)		$	-
April 30, 2013		$	392,880		$	72,683		$	(72,683)		$	(13,349)		$	-

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

FORWARD LOOKING STATEMENTS

 

The information in this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports we file with the Securities and Exchange Commission (the "SEC"). These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

 

THE COMPANY

 

The Company was incorporated pursuant to the laws of the State of Colorado on September 5, 1975, and completed a $500,000 public offering of its common stock in March 1976. The Company made several acquisitions and divestments of businesses. The Company was delisted from NASDAQ's Small Cap Market on February 26, 1998. In July 1998 all employees of the Company were terminated. Its directors and officers have since provided unpaid services on a part-time basis to the Company.

 

On April 28, 2011, at the special meeting, a majority of the shareholders of the Company approved the adoption of a proposed Agreement and Plan of Merger, to reincorporate the Company, then a Colorado corporation, in the State of Nevada by merger with and into a Nevada corporation with the name Camelot Corporation (the "Migratory Merger").

 

On September 21, 2012, Andrea Lucanto ("Ms. Lucanto"), the sole officer and director of the Company agreed to assume the debt of $74,345 owed by the Company to a third party. In exchange Ms. Lucanto was issued 74,345 shares of the Company's Common Stock. The stock was valued at $1.00 per share, which was negotiated by both parties. Upon issuance of the shares Ms. Lucanto owns 1,784,497 shares of Common Stock, or approximately 85.76% of the total issued and outstanding Common Stock.

 

On December 12, 2012, Comjoyful International Ltd., a company incorporated under the laws of the British Virgin Islands (the "Purchaser") and Andrea Lucanto (the "Seller" or "Ms. Lucanto") entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the Seller sold to the Purchaser 1,784,497 shares of Common Stock, representing approximately 85.76% of the total issued and outstanding shares of Common Stock, for a total consideration of $300,000, of which $212,381 was used to pay off certain liabilities of the Company. The source of the purchase price was from personal funds of certain of the shareholders of the Purchaser's parent company. We refer to the transaction consummated under the Stock Purchase Agreement as the "Transaction". Upon the closing of such Transaction, the Purchaser acquired 1,784,497 shares of Common Stock, or approximately 85.76% of the issued and outstanding Common Stock and attained voting control of the Company.

 

On December 13, 2012, the former sole director and officer, Ms. Lucanto resigned from her positions, and upon closing of the Transaction Mr. Yazhong Liao ("Mr. Liao") was appointed as Chief Executive Officer, President, Chief Financial Officer and sole director of the Company.

 

On December 28, 2012, the Company and its wholly-owned subsidiary (the "Company Sub") entered into an Agreement and Plan of Merger and on January 2, 2013 filed with the Secretary of State of Nevada Articles of Merger, pursuant to which the Company Sub was merged with and into the Company (the "Name Change Merger"). The legal existence of the Company Sub, which had no assets or operations on the date of the Name Change Merger, was terminated effective as of the consummation of the Name Change Merger. Under Nevada law (NRS Section 92A.180), the Company may merge the Company Sub into itself without stockholder approval and effectuate a name change without stockholder approval. As a result, the Company changed its name to Comjoyful International Company.

 

In November 2011, the Company determined it was in its best interests to terminate the mineral lease entered into with Timberwolf Minerals, Ltd on June 11, 2010. The Company is now seeking an operating company to acquire.

 

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

The financial statements have been prepared on the basis that the Company will continue to operate throughout the next twelve months as a going concern. The Company has recurring losses and an accumulated deficit of $33,319,972 and $33,224,206 as of October 31, 2013 and April 30, 2013, respectively. The Company currently does not have any revenue generating operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company through advances from existing shareholders. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. In the event that the Company is not able to obtain funding, it will not be able to implement or may be required to delay all or part of the business plan, and the ability to attain profitable operations, generate positive cash flows from operating and investing activities and materially expand the business will be materially adversely affected. The accompanying financial statements do not include any adjustments relating to the classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

 

Net cash used in operating expenses for the six months ended October 31, 2013 was $95,766 compared with $4,772 for the six months ended October 31, 2012. This was mainly because of the increase of net loss. Net cash provided by investing activities were both $nil for the six months ended October 31, 2013 and 2012. Net cash provided by financing activities for the six months ended October 31, 2013 was $95,766 compared with $3,500 provided for the six months ended October 31, 2012. This was mainly due to increase advance from related party for professional service.

 

The Company does not have any plans for capital expenditures. The Company has negligible cash resources and will experience liquidity problems over the next twelve months due to its lack of revenue unless it is able to raise funds from outside sources. There are no known trends, demands, commitments or events that would result in or that are reasonably likely to result in the Company's liquidity increasing or decreasing in a material way.

 

RESULTS OF OPERATIONS

 

The Company's revenue for the three months ended October 31, 2013 and 2012 were both nil. For the three months ended October 31, 2013, the Company incurred a net loss from operations of $48,698, and a net loss of $48,698. For the three months ended October 31, 2012 the Company incurred a net loss from operations of $2,958 and a net loss of $5,685. The increase in net loss is due to the increase in fees for professional services.

 

The Company's revenue for the six months ended October 31, 2013 and 2012 were both nil. For the six months ended October 31, 2013, the Company incurred a net loss from operations of $95,766, and a net loss of $95,766. For the six months ended October 31, 2012 the Company incurred a net loss from operations of $14,770 and a net loss of $20,223. The increase in net loss is due to the increase in fees for professional services

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

 

 

Item 4. Controls and Procedures

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

As of the end of the period covered by this Report, our sole officer performed an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on the evaluation and the identification of the material weaknesses in internal control over financial reporting described below, our sole officer concluded that, as of October 31, 2013, the Company's disclosure controls and procedures were not effective.

 

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In connection with management's assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we identified the following material weaknesses in our internal control over financial reporting as of October 31, 2013:

 

 

REMEDIATION OF MATERIAL WEAKNESSES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

 

As a small business, without a viable business and revenues, the Company does not have the resources to install a dedicated staff with deep expertise in all facets of SEC disclosure and GAAP compliance. As is the case with many small businesses, the Company will continue to work with its external consultants as it relates to new accounting principles and changes to SEC disclosure requirements. The Company has found this approach worked well in the past and believes it to be the most cost effective solution available for the foreseeable future.

 

The Company will conduct a review of existing sign-off and review procedures as well as document control protocols for critical accounting spreadsheets. The Company will also increase management's review of key financial documents and records.

 

As a small business, the Company does not have the resources to fund sufficient staff to ensure a complete segregation of responsibilities within the accounting function. However, Company management does review, and will increase the review of, financial statements on a monthly basis. These actions, in addition to the improvements identified above, will minimize any risk of a potential material misstatement occurring.

 

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

 

There were no significant changes in our internal control over financial reporting during the quarter ended October 31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We know of no material, active or pending legal proceedings against the Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

ITEM 1A.RISK FACTORS

 

As a smaller reporting company, the Company is not required to make disclosures under this Item 1A.

 

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5.OTHER INFORMATION

 

None.

 

ITEM 6:EXHIBITS

 

The exhibits listed on the Exhibit Index are provided as part of this report.

 

 

 

 

 

 

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

 

 

 

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