As filed with the Securities and Exchange Commission on October 11, 2011


Registration No. 333-174196

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

AMENDMENT NO. 4

TO

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

JH DESIGNS, INC.

(Exact name of registrant as specified in its charter)


Nevada

 

7380

 

None

(State or Other Jurisdiction of

 

(Primary Standard Industrial

 

(IRS Employer

Incorporation or Organization)

 

Classification Number)

 

Identification Number)

 

11271 Ventura Blvd. #511

Studio City, California 91604

(818) 472-6001

 

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive offices)

 

Jonathan Hopp

President and Chief Executive Officer

JH Designs, Inc.

11271 Ventura Blvd. #511

Studio City, California 91604

(818) 472-6001


(Address, including zip code, and telephone number,

including area code, of agent for service)

 

Copies to:

 

Thomas E. Puzzo, Esq.

Law Offices of Thomas E. Puzzo, PLLC

4216 NE 70th Street

Seattle, Washington 98115

Telephone No.: (206) 522-2256

Facsimile No.: (206) 260-0111

 

Approximate date of proposed sale to the public: As soon as practicable and from time to time after the effective date of this Registration Statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  X .

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.      .

 

If this Form is a post-effective amendment filed pursuant to rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.      .

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.      .





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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .

 

CALCULATION OF REGISTRATION FEE


Title of Each Class

 

 

 

 

Proposed Maximum

 

 

Proposed Maximum

 

 

of Securities

 

Amount to Be

 

 

Offering Price

 

 

Aggregate

 

Amount of

to be Registered

 

Registered (1)

 

 

per Share

 

 

Offering Price

 

Registration Fee

Common Stock, par value $0.001 per share

 

 

1,170,000

(2)

 

$

0.20

(3)

 

$

234,000

 

$

27.16

TOTAL

 

 

1,170,000

 

 

$

-

 

 

$

234,000

 

 

27.16

 

(1) In the event of a stock split, stock dividend or similar transaction involving our common stock, the number of shares registered shall automatically be increased to cover the additional shares of common stock issuable pursuant to Rule 416 under the Securities Act of 1933, as amended.

(2) Represents the number of shares of common stock currently outstanding to be sold by the selling stockholders.

(3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act.

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.



2



PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED OCTOBER 11, 2011

 

JH DESIGNS, INC.

 

1,170,000 SHARES OF COMMON STOCK

 

This prospectus relates to the resale by certain selling stockholders of JH Designs, Inc. of up to 1,170,000 shares of common stock held by selling stockholders of JH Designs, Inc. We will not receive any of the proceeds from the sale of the shares by the selling stockholders.

 

The selling stockholders will be offering our shares of common stock at a fixed price of $0.20 per share for the duration of the offering. Each of the selling stockholders is an “underwriter” as such term is defined in the Securities Act of 1933, as amended (the “Securities Act”).

 

There has been no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority for our common stock to be eligible for trading on the Over-the-Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. There can be no assurance that our common stock will ever be quoted on a stock exchange or a quotation service or that any market for our stock will develop.


We are a development stage company and our auditors have issued an opinion that substantial doubt exists as to whether we can continue as an ongoing business.


OUR BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN OUR SHARES OF COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS” BEGINNING ON PAGE 7 BEFORE INVESTING IN OUR SHARES OF COMMON STOCK.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

The information in this prospectus is not complete and may be changed. This prospectus is included in the registration statement that was filed by us with the Securities and Exchange Commission. The selling stockholders may not sell these securities until the registration statement becomes effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

The date of this prospectus is ________, 2011.



3



The following table of contents has been designed to help you find information contained in this prospectus. We encourage you to read the entire prospectus.

 

TABLE OF CONTENTS


 

Page

 

 

Prospectus Summary

5

Risk Factors

7

Risk Factors Relating to Our Company

7

Risk Factors Relating to Our Common Stock

9

Use of Proceeds

10

Determination of Offering Price

10

Selling Stockholders

10

Description of Securities

12

Plan of Distribution

13

Description of Business

15

Our Executive Offices

18

Legal Proceedings

18

Market for Common Equity and Related Stockholder Matters

18

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Directors, Executive Officers, Promoters and Control Persons

23

Executive Compensation

26

Security Ownership of Certain Beneficial Owners and Management

26

Certain Relationships and Related Transactions

27

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

27

Where You Can Find More Information

28

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

28

Financial Statements

F-1

 

Until ___ ______, 2011 (90 business days after the effective date of this prospectus) all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.



4



A CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors,” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

PROSPECTUS SUMMARY

 

As used in this prospectus, references to the “Company,” “we,” “our”, “us” or “JH Designs, Inc.” refer to JH Designs, Inc. unless the context otherwise indicates.

 

The following summary highlights selected information contained in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the “Risk Factors” section, the financial statements, and the notes to the financial statements.

 

OUR COMPANY


JH Designs, Inc. was incorporated on July 29, 2010, under the laws of the State of Nevada, for the purpose of providing home staging and interior design services, currently focusing on customers in the San Fernando Valley and the West Side areas of Los Angeles, California.


We are seeking to become a reporting issuer under the Securities Exchange Act of 1934, as amended, because we believe that this will provide us with greater access to capital, that we will become better known, and be able to obtain financing more easily in the future if investor interest in our business grows enough to sustain a secondary trading market in our securities.  Additionally, we believe that being a reporting issuer increases our credibility and that we may be able to attract and retain more highly qualified personnel once we are not a shell company by potentially offering stock options, bonuses, or other incentives with a known market value.

 

We must raise approximately $223,000 to complete our plan of operation for the next 12 months, we do not have any financing arranged and in the absence of such financing, our business will fail. Since the date of our incorporation, we have raised an aggregate of $31,530 through private placements of our securities. Proceeds from these placements were used for working capital. We are a development stage company and our auditors have issued an opinion that substantial doubt exists as to whether we can continue as an ongoing business.


On September 1, 2010, we entered into a LLC Membership Purchase Agreement with Mr. Hopp, whereby we acquired a 100% limited liability company interest in Staged for Success LLC, a California limited liability company (“Staged for Success”).  Staged for Success LLC, formed on February 19, 2009, is an entity through which Mr. Hopp had operated a home staging and interior design services business since its formation.  Staged for Success LLC is a wholly owned subsidiary of JH Designs, Inc.

 

The Company’s principal offices are located at 11271 Ventura Blvd. #511, Studio City, California 91604 and our telephone number is (818) 472-6001.


We are registering the 1,170,000 shares of common stock held by selling stockholders pursuant to verbal representations to such stockholders that the Company would use its best efforts to register such shares for resale.



5



THE OFFERING

 

Securities offered:

 

The selling stockholders are offering hereby up to 1,170,000 shares of common stock.

 

 

 

Offering price:

 

The selling stockholders will offer and sell their shares of common stock at a fixed price of $0.20 per share for the duration of the offering.

 

 

 

Distribution of Shares:

 

The selling shareholder’s determination of when and how to sell the shares will be in accordance with the methods and terms described in the “Plan of Distribution” section on page 14.

 

 

 

Shares outstanding prior to offering:

 

9,845,000

 

 

 

Shares outstanding after offering:

 

9,845,000

 

 

 

Market for the common shares:

 

There is no public market for our shares.  Our common stock is not traded on any exchange or on the over-the-counter market.  After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority (“FINRA”) for our common stock to eligible for trading on the Over The Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application.

 

There is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale.

 

 

 

Use of proceeds:

 

We will not receive any proceeds from the sale of shares by the selling stockholders

 

SUMMARY FINANCIAL INFORMATION

 

The tables and information below are derived from our audited financial statements for the period from February 19, 2009 (Inception) to December 31, 2010. The summary financial data as of December 31, 2010, and 2009 is derived from our audited financial statements, which are included elsewhere in this prospectus. Our cash at June 30, 2011 was $2,639.


 

 

December 31,

2010 ($)

Financial Summary

 

 

Cash and Deposits

 

 

12,719

Total Assets

 

 

22,638

Total Liabilities

 

 

43,808

Total Stockholder’s Equity (Deficit)

 

 

(21,170)

 

 

 

 

 

 

Accumulated From

February 19, 2009

 

 

(Inception) to

December 31,

2010 ($)

 

 

 

 

Statement of Operations

 

 

 

Total Expenses

 

 

140,093

Net Loss for the Period

 

 

89,261

Net Loss per Share

 

 

(0.01)


Financial Summary (Unaudited)

June 30,

2011 ($)

Cash and Deposits

 

2,639

Total Assets

 

7,482

Total Liabilities

 

35,263

Total Stockholder’s Equity (Deficit)

 

27,781



6




 

For the Period from February 19, 2009 (Inception) through June 30, 2011

Statement of Operations (Unaudited)

 

 

Total Expenses

 

145,823

Net Loss for the Period

 

95,872

Net Loss per Share

 

(0.01)


RISK FACTORS

 

An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this prospectus in evaluating our company and its business before purchasing shares of our company’s common stock. You could lose all or part of your investment due to any of these risks.

 

RISKS RELATING TO OUR COMPANY

 

OUR INDEPENDENT PUBLIC ACCOUNTING FIRM HAS EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.


Our financial statements for the year ended December 31, 2010 and 2009 were prepared assuming that we will continue our operations as a going concern. We had a deficit accumulated during the development stage at December 31, 2010 and had a net loss and net cash used in operating activities for the fiscal year then ended. As a result, our independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Continued operations are dependent on our ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.


WE MAY REQUIRE ADDITIONAL FUNDS WHICH WE PLAN TO RAISE THROUGH THE SALE OF OUR COMMON STOCK, WHICH REQUIRES FAVORABLE MARKET CONDITIONS AND INTEREST IN OUR ACTIVITIES BY INVESTORS. IF WE ARE NOT BE ABLE TO SELL OUR COMMON STOCK, FUNDING WILL NOT BE AVAILABLE FOR CONTINUED OPERATIONS, AND OUR BUSINESS WILL FAIL.


We anticipate that our current cash of $2,639 will not be sufficient to operate our business beyond 3 months. Subsequent activities will require additional funding. Our only present means of funding is through the sale of our common stock. The sale of common stock requires favorable market conditions for development stage companies like ours, as well as specific interest in our stock, neither of which may exist if and when additional funding is required by us. If we are unable to raise additional funds in the future, our business will fail.


WE HAVE A VERY LIMITED HISTORY OF OPERATIONS AND ACCORDINGLY THERE IS NO TRACK RECORD THAT WOULD PROVIDE A BASIS FOR ASSESSING OUR ABILITY TO CONDUCT A SUCCESSFUL HOME STAGING AND INTERIOR DESIGN BUSINESS. WE MAY NOT BE SUCCESSFUL IN CARRYING OUT OUR BUSINESS OBJECTIVES.


We were incorporated on July 29, 2010 and to date, have been involved primarily in organizational activities and obtaining financing. Accordingly we have no track record of successful development activities, strategic decision making by management, fund-raising ability, and other factors that would allow an investor to assess the likelihood that we will be successful as a development stage company. Development stage companies often fail to achieve or maintain successful operations, even in favorable market conditions. There is a substantial risk that we will not be successful in our development activities, or if initially successful, in thereafter generating any operating revenues or in achieving profitable operations.


Jonathan Hopp may leave the Company, which could adversely affect the ability of the Company to continue operations which would in turn lead to the loss of your investment.


The Company is entirely dependent on the efforts of its sole officer and director, Jonathan Hopp.  Though Mr. Hopp is obligated to serve as our President and Chief Executive Officer only through August 5, 2011, he has no plan to leave the Company after August 5, 2011.   However, the loss of Mr. Hopp, or of other key personnel that may be hired in the future, could have a material adverse effect on our business and its prospects.  Additionally, the Company does not maintain key person life insurance on Mr. Hopp.



7




OUR SOLE OFFICER AND DIRECTOR BENEFICIALLY OWNS A MAJORITY OF OUR STOCK, AND ACCORDINGLY, MAY HAVE CONTROL OVER STOCKHOLDER MATTERS, OUR BUSINESS AND MANAGEMENT.


Jonathan Hopp, our sole officer and director beneficially owns 9,500,000 shares of our common stock in the aggregate, or approximately 96.4% of our issued and outstanding shares of common stock. As a result, our sole officer and director will have significant influence to:


* Elect or defeat the election of our directors;

* amend or prevent amendment of our articles of incorporation or bylaws;

* effect or prevent a merger, sale of assets or other corporate transaction; and

* affect the outcome of any other matter submitted to the stockholders for vote.


Moreover, because of the significant ownership position held by our sole officer and director, new investors may not be able to effect a change in our business or management, and therefore, stockholders would have no recourse as a result of decisions made by management.


In addition, sales of significant amounts of shares held by our sole officer and director, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.


CURRENT MANAGEMENT’S LACK OF EXPERIENCE IN AND/OR WITH OPERATING A REPORTING ISSUER UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, OR A PUBLIC COMPANY, MEANS THAT IT IS DIFFICULT TO ASSESS, OR MAKE JUDGMENTS ABOUT, OUR POTENTIAL SUCCESS.


Our sole officer and director does not have any prior experience with running or operating a public company. With no direct training or experience in this area, our sole officer and director may not be fully aware of many of the specific requirements related to running a public company. For example, our sole officer and director’s decisions and choices may fail to take into account standard accounting and other managerial approaches public companies commonly use. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to our sole officer and director’s future possible mistakes, lack of sophistication, judgment or experience in running and operating a public company.


OUR SOLE OFFICER AND DIRECTOR IS ENGAGED IN OTHER ACTIVITIES AND MAY NOT DEVOTE SUFFICIENT TIME TO OUR AFFAIRS, WHICH MAY AFFECT OUR ABILITY TO CONDUCT OPERATIONS AND GENERATE REVENUES.


Our officer and director has existing responsibilities and has additional responsibilities to provide management and services to other entities. We initially expect Mr. Hopp to spend approximately 20 hours a week on the business of our company. As a result, demands for the time and attention from Mr. Hopp from our company and other entities may conflict from time to time. Because we rely primarily on Mr. Hopp to maintain our business contacts and to promote our product, his limited devotion of time and attention to our business may hurt the operation of our business.


IF THE SELLING STOCKHOLDERS SELL A LARGE NUMBER OF SHARES ALL AT ONCE OR IN BLOCKS, THE MARKET PRICE OF OUR SHARES WOULD MOST LIKELY DECLINE.


The selling stockholders are offering up to 1,170,000 shares of our common stock through this prospectus. Our common stock is presently not traded or quoted on any market or securities exchange, but should a market develop, shares sold at a price below the current market price at which the common stock is quoted will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. The shares of common stock for resale covered by this prospectus represent approximately 11.8% of the common shares outstanding as of the date of this prospectus.



8




WE HAVE NOT IMPLEMENTED VARIOUS CORPORATE GOVERNANCE MEASURES DESIGNED TO PROTECT STOCKHOLDERS, WHICH MEANS THAT THERE IS A RISK THAT STOCKHOLDERS HAVE FEWER PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST, CERTAIN NEGLIGENT ACTS OF MANAGEMENT AND SIMILAR MATTERS.


Federal legislation in the last decade has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors’ independence; audit, compensation and nomination committee oversight; and the adoption of a code of ethics.  We have not yet adopted any of these corporate governance measures and, since our securities are not listed on a national securities exchange, we are not required to do so.  It is possible that if we were to adopt some or all of these corporate governance measures, stockholders would benefit from greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct.  For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.


RISKS RELATING TO OUR COMMON STOCK


THERE IS NO LIQUIDITY AND NO ESTABLISHED PUBLIC MARKET FOR OUR COMMON STOCK AND WE MAY NOT BE SUCCESSFUL AT OBTAINING A QUOTATION ON A RECOGNIZED QUOTATION SERVICE. IN SUCH EVENT IT MAY BE DIFFICULT TO SELL YOUR SHARES.


There is presently no public market in our shares, and our stock may not be followed by securities analysts. There can be no assurance that we will be successful at developing a public market or in having our common stock quoted on a quotation facility such as the OTC Bulletin Board. There are risks associated with obtaining a quotation, including that broker dealers will not be willing to make a market in our shares, or to request that our shares be quoted on a quotation service. In addition, even if a quotation is obtained, the OTC Bulletin Board and similar quotation services are often characterized by low trading volumes, and price volatility, which may make it difficult for an investor to sell our common stock on acceptable terms. If trades in our common stock are not quoted on a quotation facility, it may be very difficult for an investor to find a buyer for their shares in our Company.


OUR COMMON STOCK IS SUBJECT TO THE “PENNY STOCK” RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.


Under U.S. federal securities legislation, our common stock will constitute “penny stock.” Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.



9




WE MAY, IN THE FUTURE, ISSUE ADDITIONAL COMMON SHARES, WHICH WOULD REDUCE INVESTORS’ PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE.


Our Articles of Incorporation authorize the issuance of 100,000,000 shares of common stock and 25,000,000 shares of “blank check” preferred stock. As of the date of this prospectus, the Company had 9,845,000 shares of common stock outstanding and no shares of preferred stock outstanding. Accordingly, we may issue up to an additional 90,155,000 shares of common stock and 25,000,000. The future issuance of common stock and/or preferred stock may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.


THERE IS NO CURRENT TRADING MARKET FOR OUR SECURITIES AND IF A TRADING MARKET DOES NOT DEVELOP, PURCHASERS OF OUR SECURITIES MAY HAVE DIFFICULTY SELLING THEIR SHARES.


There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained. We intend to have an application filed for admission to quotation of our securities on the OTC Bulletin Board after this prospectus is declared effective by the SEC. If for any reason our common stock is not quoted on the OTC Bulletin Board or a public trading market does not otherwise develop, purchasers of the shares may have difficulty selling their common stock should they desire to do so. No market makers have committed to becoming market makers for our common stock and none may do so.


BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.


We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.


USE OF PROCEEDS

 

This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any of the proceeds from the sale of the common shares being offered for sale by the selling stockholders.


DETERMINATION OF THE OFFERING PRICE

 

The selling stockholders will sell our shares at $0.20 per share for the duration of the offering.

 

SELLING STOCKHOLDERS

 

The following table sets forth the shares beneficially owned, as of October 11, 2011, by the selling stockholders prior to the offering by existing stockholders contemplated by this prospectus, the number of shares each selling stockholder is offering by this prospectus and the number of shares which each would own beneficially if all such offered shares are sold.

 

Beneficial ownership is determined in accordance with Securities and Exchange Commission rules. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.


The percentages below are calculated based on 9,845,000 shares of our common stock issued and outstanding as of October 11, 2011. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.



10




Name of

Selling Shareholder

 

Shares

Owned

Before

the Offering

 

 

Total

Number of

Shares to be

Offered for

the

Security

Holder’s

Account

 

 

Total Shares

Owned After

the

Offering is

Complete

 

 

Percentage of

Shares owned

After

the Offering is

Complete

Jonathan Hopp (1)

 

 

9,500,000

 

 

 

855,000

 

 

 

9,145,000

 

 

 

92.8

Kevin Sands

 

 

50,000

 

 

 

50,000

 

 

 

0

 

 

 

0

Harvey Carmichael

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Kelly Leger

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Joe D. Thomas

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

AZCAP, LLC (2)

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Shaylene Carter

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Ardeth Celano

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Claudia Donato

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Dorothy Shuput

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

George Shuput

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Solitude Diversified, Inc. (3)

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Alissa Terry

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Cassie Bugnet

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Kelly Jo Campos

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

KJC, LLC (4)

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

David Maynes

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

WECO Leasing & Investments, Inc. (5)

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Rebecca Silverman

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Arlene Faiman

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

John Shaw

 

 

10,000

 

 

 

10,000

 

 

 

0

 

 

 

0

Kamar De Los Reyes

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Kelly Fisher

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Kevin Fisher

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Nathan Fisher

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Nathan R. Fisher

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Patrick Fisher

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Scott Olson

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Charlie Ramsey

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Kara Dubois

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Laura Dubois

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

William Haugh

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

MBA Holdings, LLC (6)

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Rebecca Perhacs

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Red Bank Capital, LLC (7)

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Antony Their

 

 

5,000

 

 

 

5,000

 

 

 

0

 

 

 

0

Total

 

 

9,845,000

 

 

 

1,170,000

 

 

 

0

 

 

 

0


(1)

President and Chief Executive Officer, Secretary, Treasurer and sole Director.

(2)

Voting or investment power of AZCAP, LLC held by Kerry Carter.

(3)

Voting or investment power of Solitude Diversified, Inc. held by Warren Carter.

(4)

Voting or investment power of KJC, LLC held by Kiel Christiansen.

(5)

Voting or investment power of WECO Leasing & Investments, Inc. held by Warren Carter.

(6)

Voting or investment power of MBA Holdings, LLC held by Mark Beychok.

(7)

Voting or investment power of Red Bank Capital, LLC held by Patricia Torchyn.


None of the selling stockholders has a relationship with us other than as a shareholder, has ever been one of our officers or directors, or is a broker-dealer registered under the Securities Exchange Act, as amended, or an affiliate of such a broker-dealer.



11



We may require the selling stockholders to suspend the sales of the securities offered by this prospectus upon the occurrence of any event that makes any statement in this prospectus, or the related registration statement, untrue in any material respect, or that requires the changing of the statements in these documents in order to make statements in those documents not misleading. We will file a post-effective amendment to the registration statement to reflect any such material changes to this prospectus.

 

DESCRIPTION OF SECURITIES


GENERAL

 

There is no established public trading market for our common stock. Our authorized capital stock consists of 100,000,000 shares of common stock, with $0.001 par value per share, and 25,000,000 shares of “blank check” preferred stock, with no par value. As of October 11, 2011, there were 9,845,000 shares of our common stock issued and outstanding that were held by 37 registered stockholders of record, and no shares of preferred stock issued and outstanding.

 

COMMON STOCK

 

The following is a summary of the material rights and restrictions associated with our common stock. This description does not purport to be a complete description of all of the rights of our stockholders and is subject to, and qualified in its entirety by, the provisions of our most current Articles of Incorporation and Bylaws, which are included as exhibits to this Registration Statement.


The holders of our common stock currently have (i) equal ratable rights to dividends from funds legally available therefore, when, as and if declared by the Board of Directors of the Company; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of common stock upon liquidation, dissolution or winding up of the affairs of the Company (iii) do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights applicable thereto; and (iv) are entitled to one non-cumulative vote per share on all matters on which stock holders may vote.


Our Bylaws provide that at all meetings of the stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect.  On all other matters, except as otherwise required by Nevada law or the Articles of Incorporation, a majority of the votes cast at a meeting of the stockholders shall be necessary to authorize any corporate action to be taken by vote of the stockholders.


A “plurality” means the excess of the votes cast for one candidate over any other.  When there are more than two competitors for the same office, the person who receives the greatest number of votes has a plurality.


Please refer to the Company’s Articles of Incorporation, Bylaws and the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of the Company’s securities.


BLANK CHECK PREFERRED STOCK

 

The following is a summary of the material rights and restrictions associated with our preferred stock. This description does not purport to be a complete description of all of the rights of our stockholders and is subject to, and qualified in its entirety by, the provisions of our most current Articles of Incorporation and Bylaws, which are included as exhibits to this Registration Statement.


Our Board of Directors is authorized to determine or alter any or all of the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of preferred stock and, within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares comprising any such series subsequent to the issue of shares of that series, to set the designation of any series, and to provide for rights and terms of redemption, conversion, dividends, voting rights, and liquidation preferences of the shares of any such series.




12



NEVADA ANTI-TAKEOVER LAWS


The Nevada Business Corporation Law contains a provision governing “Acquisition of Controlling Interest.”  This law provides generally that any person or entity that acquires 20% or more of the outstanding voting shares of a publicly-held Nevada corporation in the secondary public or private market may be denied voting rights with respect to the acquired shares, unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights in whole or in part.  The control share acquisition act provides that a person or entity acquires “control shares” whenever it acquires shares that, but for the operation of the control share acquisition act, would bring its voting power within any of the following three ranges: (1) 20 to 33 1/3%, (2) 33 1/3 to 50%, or (3) more than 50%.  A “control share acquisition” is generally defined as the direct or indirect acquisition of either ownership or voting power associated with issued and outstanding control shares.  The stockholders or board of directors of a corporation may elect to exempt the stock of the corporation from the provisions of the control share acquisition act through adoption of a provision to that effect in the Articles of Incorporation or Bylaws of the corporation.  Our Articles of Incorporation and Bylaws do not exempt our common stock from the control share acquisition act.  The control share acquisition act is applicable only to shares of “Issuing Corporations” as defined by the act.  An Issuing Corporation is a Nevada corporation, which; (1) has 200 or more stockholders, with at least 100 of such stockholders being both stockholders of record and residents of Nevada; and (2) does business in Nevada directly or through an affiliated corporation.

 

Pursuant to Nevada law, we have elected to not be governed by the Nevada “Acquisition of Controlling Interest” statute, under Article 8 of our Articles of Incorporation.  Therefore, the provisions of the Acquisition of Controlling Interest statute do not apply to us.


The Nevada “Combination with Interested Stockholders Statute” may also have an effect of delaying or making it more difficult to effect a change in control of the Company. This statute prevents an “interested stockholder” and a resident domestic Nevada corporation from entering into a “combination,” unless certain conditions are met.  The statute defines “combination” to include any merger or consolidation with an “interested stockholder,” or any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions with an “interested stockholder” having; (1) an aggregate market value equal to 5 percent or more of the aggregate market value of the assets of the corporation; (2) an aggregate market value equal to 5 percent or more of the aggregate market value of all outstanding shares of the corporation; or (3) representing 10 percent or more of the earning power or net income of the corporation.  An “interested stockholder” means the beneficial owner of 10 percent or more of the voting shares of a resident domestic corporation, or an affiliate or associate thereof.  A corporation affected by the statute may not engage in a “combination” within three years after the interested stockholder acquires its shares unless the combination or purchase is approved by the board of directors before the interested stockholder acquired such shares.  If approval is not obtained, then after the expiration of the three-year period, the business combination may be consummated with the approval of the board of directors or a majority of the voting power held by disinterested stockholders, or if the consideration to be paid by the interested stockholder is at least equal to the highest of: (1) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which he became an interested stockholder, whichever is higher; (2) the market value per common share on the date of announcement of the combination or the date the interested stockholder acquired the shares, whichever is higher; or (3) if higher for the holders of preferred stock, the highest liquidation value of the preferred stock. The effect of Nevada’s business combination law is to potentially discourage parties interested in taking control of Omega Water Corp. from doing so if it cannot obtain the approval of our board of directors.

 

Pursuant to Nevada law, we have elected to not be governed by the Nevada “Combination with Interested Stockholders Statute,” under Article 8 of our Articles of Incorporation.  Therefore, the provisions of the Combination with Interested Stockholders Statute do not apply to us.


RULE 144 AND REGISTRATION AGREEMENTS

  

All 9,845,000 shares of our issued and outstanding shares of our common stock are “restricted securities” under Rule 144, promulgated pursuant to the Securities Act of 1933, as amended, but none of those 9,845,000 shares can be resold under Rule 144 or are subject to any registration agreement.


DIVIDEND POLICY

 

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.


PLAN OF DISTRIBUTION

 

There is currently no market for any of our shares of common stock, and we cannot give any assurance that the shares offered will have a market value, or that they can be resold at the offered price if and when an active secondary market might develop, or that a public market for our securities may be sustained even if developed.



13




After the date of this prospectus, we expect to have an application filed with the Financial Industry Regulatory Authority for our common stock to be eligible for trading on the OTC Bulletin Board.  Until our common stock becomes eligible for trading on the OTC Bulletin Board, the selling stockholders will be offering our shares of common stock at a fixed price of $0.20 per common share for the duration of the offering.

 

In the event of the transfer by any of the selling stockholders of its shares of common stock to any pledgee, donee or other transferee, we will amend this prospectus and the registration statement of which this prospectus forms a part by the filing of a post-effective amendment in order to have the pledgee, donee or other transferee in place of the selling stockholder who has transferred his, her or its shares.

 

In effecting sales, brokers and dealers engaged by the selling stockholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from a selling stockholder or, if any of the broker-dealers act as an agent for the purchaser of such shares, from a purchaser in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Before our common stock becomes eligible for trading on the OTC Bulletin Board, broker-dealers may agree with a selling stockholder to sell a specified number of the shares of common stock at a price per share of $0.20.  After our common stock becomes eligible for trading on the OTC Bulletin Board, broker-dealers may agree with a selling stockholder to sell a specified number of the shares of common stock at a stipulated price per share. Such an agreement may also require the broker-dealer to purchase as principal any unsold shares of common stock at the price required to fulfill the broker-dealer commitment to the selling stockholder if such broker-dealer is unable to sell the shares on behalf of the selling stockholder. Broker-dealers who acquire shares of common stock as principal may thereafter resell the shares of common stock from time to time in transactions which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above. After our common stock becomes eligible for trading on the OTC Bulletin Board, such sales by a broker-dealer could be at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions. In connection with such re-sales, the broker-dealer may pay to or receive from the purchasers of the shares commissions as described above.


The selling stockholders and any broker-dealers or agents that participate with the selling stockholders in the sale of the shares of common stock may are “underwriters” within the meaning of the Securities Act in connection with these sales. In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

 

From time to time, any of the selling stockholders may pledge shares of common stock pursuant to the margin provisions of customer agreements with brokers. Upon a default by a selling stockholder, their broker may offer and sell the pledged shares of common stock from time to time. After our common stock becomes eligible for trading on the OTC Bulletin Board, upon a sale of the shares of common stock, the selling stockholders intend to comply with the prospectus delivery requirements under the Securities Act by delivering a prospectus to each purchaser in the transaction. We intend to file any amendments or other necessary documents in compliance with the Securities Act that may be required in the event any of the selling stockholders defaults under any customer agreement with brokers.

 

To the extent required under the Securities Act, a post effective amendment to this registration statement will be filed disclosing the name of any broker-dealers, the number of shares of common stock involved, the price at which the shares of common stock is to be sold, the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus and other facts material to the transaction.


We and the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations under it, including, without limitation, Rule 10b-5 and, insofar as a selling stockholder is a distribution participant and we, under certain circumstances, may be a distribution participant, under Regulation M. All of the foregoing may affect the marketability of the shares of common stock.

   

All expenses of the registration statement including, but not limited to, legal, accounting, printing and mailing fees are and will be borne by us. Any commissions, discounts or other fees payable to brokers or dealers in connection with any sale of the shares of common stock will be borne by the selling stockholders, the purchasers participating in such transaction, or both.

 

Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.

 



14




PENNY STOCK RULES

 

The Securities Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks” as such term is defined by Rule 15g-9. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

 

The shares offered by this prospectus constitute penny stock under the Securities and Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in our company will be subject to the penny stock rules.


 The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which: (i) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (ii) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities’ laws; (iii) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and significance of the spread between the bid and ask price; (iv) contains a toll-free telephone number for inquiries on disciplinary actions; (v) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (vi) contains such other information and is in such form as the Commission shall require by rule or regulation. The broker-dealer also must provide to the customer, prior to effecting any transaction in a penny stock, (i) bid and offer quotations for the penny stock; (ii) the compensation of the broker-dealer and its salesperson in the transaction; (iii) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (iv) monthly account statements showing the market value of each penny stock held in the customer’s account.

 

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities.

 

REGULATION M

 

During such time as we may be engaged in a distribution of any of the shares we are registering by this registration statement, we are required to comply with Regulation M. In general, Regulation M precludes any selling stockholder, any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of the distribution until the entire distribution is complete. Regulation M defines a “distribution” as an offering of securities that is distinguished from ordinary trading activities by the magnitude of the offering and the presence of special selling efforts and selling methods. Regulation M also defines a “distribution  participant” as an underwriter, prospective underwriter, broker, dealer, or other person who has agreed to participate or who is participating in a distribution.

  

Regulation M under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for or purchasing, for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Regulation M also governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. We have informed the selling stockholders that the anti-manipulation provisions of Regulation M may apply to the sales of their shares offered by this prospectus, and we have also advised the selling stockholders of the requirements for delivery of this prospectus in connection with any sales of the common stock offered by this prospectus.


DESCRIPTION OF BUSINESS

 

ORGANIZATION SINCE INCEPTION ON JULY 29, 2010

 

On July 29, 2010, the Company was incorporated under the laws of the State of Nevada. We are engaged in the business of providing home staging and interior design services focusing on clients in the San Fernando Valley and the west side areas of Los Angeles, California.  We plan to expand our business to other areas of the United States if we have the resources available to make such an expansion.  We are a development stage company and cannot state with certainty whether we will ever achieve profitability.  We have limited revenues, have minimal assets and have incurred losses since inception.

 



15




Jonathan Hopp has served as our President and Chief Executive Officer, Secretary and Treasurer, from August 4, 2010, until the current date.  Our board of directors is comprised of one person:  Jonathan Hopp.


On September 1, 2010, we entered into a LLC Membership Purchase Agreement with Mr. Hopp, whereby for $1.00 we acquired a 100% limited liability company interest in Staged for Success LLC, a California limited liability company, which was owned 100% by Mr. Hopp.  Staged for Success LLC, formed on February 19, 2009, is an entity through which Mr. Hopp had operated a home staging and interior design services business.  Staged for Success LLC (“Staged for Success”) is a wholly owned subsidiary of JH Designs, Inc. We operate our business through our Staged for Success LLC, which has operated a home staging and interior design services business since its inception.


There is no established public trading market for our common stock. Our authorized capital stock consists of 100,000,000 shares of common stock, with $0.001 par value per share, and 25,000,000 shares of “blank check” preferred stock, with no par value.  As of October 11, 2011, there were 9,845,000 shares of our common stock issued and outstanding that were held by 37 registered stockholders of record, and no shares of preferred stock issued and outstanding. On August 5, 2010, we issued Mr. Hopp 9,500,000 shares of common stock in exchange for him acting as our President and Chief Executive Officer for a term of one year, which term ends on August 5, 2011.


IN GENERAL

 

We are a development stage company engaged in the business of providing home staging and interior design services focusing on clients in the San Fernando Valley and the west side areas of Los Angeles, California.  Our design vision is that of Jonathan Hopp, our sole officer and director, whose home staging and design method and design has formed from over two decades of experience.

 

We have not little in the way revenues to date, have minimal assets and have incurred losses since inception. Our plan of operation is forward-looking. It is likely that we will not be able to achieve profitability and might need to cease operations due to the lack of funding.  Our independent public accounting firm has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern.

 

We have no current plans, proposals or arrangements, written or otherwise, to seek a business combination with another entity in the near future.


We will not receive any proceeds from the sale of the shares by selling stockholders in this offering.  Our 12-month plan of operation on page 17 requires that we spend $223,000 to develop our business.  We will need to borrow additional funds or privately sell our equity or debt securities to raise sufficient funds to commence our plan of operation.  We cannot provide any assurance that we will be able to raise sufficient funds to proceed with our 12-month plan of operation.   We have not commenced any activities to raise such funds and have no current plans on how to raise such funds.  


HOME STAGING AND INTERIOR DESIGN SERVICES


We provide home staging and interior design services to sellers of residential properties.  Real estate agents are our primary customers.


We define “home staging” is the act of preparing the interior appearance of a private residence for sale in the real estate marketplace by the placement of furnishings, including furniture, art work and accessories, in the residence for the purpose of enhancing the appeal of the residence to potential purchasers of the residence.  Our home staging strategy is twofold.  We use the interior furnishing of a residence as a device to (i) visually emphasize the best qualities of the interior design of a residence and (ii) make the residence appeal to the highest number of potential purchasers.  A residence successfully staged by us will improve the ability of a seller to sell a residence and obtain a higher price of the residence than if the residence were not staged.  Our home staging techniques focus on improving a property's appeal by transforming it into a welcoming, attractive product that anyone might want.

 

Once the home closes escrow we remove the inventory and use it in the next project.


OPERATIONS SINCE INCEPTION


Steps we have taken to initiate operations include the acquisition of Staged for Success, LLC, on September 1, 2010, and continuing the operation of that business, specifically the staging of homes listed for sale. Presently our inventory, all of which is owned by us, allows for 13 staged properties. The items included in a staged property are furniture, art, lighting and accessories to furnish a living, dining and family rooms, as well as a kitchen and/or breakfast room, master bedroom and bath, and 1 office or guest room. Depending on the contract with a client, there may be additional pieces use on the exterior of a residence.



16




In terms of costs, there is little beyond paying for installation and removal of all staging materials.  Additional costs include storage, salaries and ongoing promotional materials such as a brochure and business cards.


JH Designs utilizes a number of vendors to purchase tools and supplies for staging interiors. Supplies for staging a home are mainly: bins to move items; cleaning supplies and packing blankets.  Inventory, as mentioned above includes everything that is used to furnish a home.  This would include pillows, linens, art, lamps, plants, furniture and accessories. The sources are numerous, ranging from retail stores, such as Pier 1 to Restoration Hardware, to art stores, fabric stores, picture framers and upholstery workrooms. All agreements with these vendors are pro-forma.  Payment is required in full prior to receiving goods. A professional trade discount is offered by some sources ranging from 10% at Pottery Barn to 40% off suggested retail pricing at a furniture vendor, such as Lee Industries.  There is no industry standard, and the trade discount is offered solely at the discretion of the manufacturer or retail shop. No specific action has been taken to further these relations.  Everything is purchased on a cash basis as needed for projects.


On September 28, 2011, Mr. Hopp published a book, Interior Bliss:  How to Decorate Like a Pro Without Breaking the Bank, with No Limit Publishing Group. The purpose of the book is to aid in establishing JH Designs as a premier interior design and staging company. Specifically, the book offers advice and tips that anyone can implement in decorating their interiors.  Interior Bliss will be used in conjunction with public speaking appearances Mr. Hopp will attempt to make in order to promote JH Designs.  While the book will be available for sale as a paperback, there will also be an online video book (see, vook.com), to attempt to help establish JH Designs as an authority on decorating by becoming a published author.  The book will also be a promotional tool to give to real estate agents and potential clients.  At present the book is complete and in the final stages of editing.  Mr. Hopp has granted an oral, non-exclusive license for an indefinite term to us to use the book in the promotion and marketing of our business.


FUTURE PLANS


Our plan of operation for the twelve months following the date of this prospectus is as follows:


Item(1)

Estimated Cost

Anticipated Date of

Completion

from Date of this

Prospectus

· Hire computer consultant to install new computer system and inventory programs 

$16,000 one time cost

120 days

· Develop a training program for employees for staging systems 

$10,000 one time cost

120 days

· Add 2 employees experienced in interior design and staging 

$100,000 per year

60 days

· Hire a consultant (not Jonathan Hopp) for sales and development of marketing programs and speaking engagements  (2)

$36,000 annually

ongoing

· Implement monthly staging newsletter 

$12,000 annually

ongoing

· Engage retailers to sponsor furnishing for staging 

$12,000 annually

120 days

· Completed first draft of book by June 1, published on September 28, 2011

$25,000

Complete and in printing

· Improve website by client testimonials, video of staging projects, and newsletter articles

$12,000 one time cost and $1,200 annually

120 days

Total Estimated Cost:

$201,000

 


(1) Our planned future business activities reflected in our plan of operation that will receive priority over others in the event we are not able to conduct all of these activities due to a lack of funding are first to complete printing of book published September 28, 2011, and then all other activities listed in order of in which they are listed in this chart.


(2) Our subsidiary, Staged for Success, LLC, hired a consultant in the past to provide support obtaining speaking engagements with real estate firms.  In our experience, real estate offices are not responsive to requests to give presentations.  We plan to use our consultant, as Staged for Success has, to use his or her contacts and acquaintances to meet with the real estate professional at their weekly meetings.  We have found that the advantage of this approach is that nearly all the agents are present as such meetings, which increases our ability to garner staging jobs.  In conjunction with the distribution of brochures, we have found that agents continued to refer business for staging contracts and meetings with clients.



17




As Mr. Hopp’s book, Interior Bliss:  How to Decorate Like a Pro Without Breaking the Bank, is complete and is currently being printed.  Once this item is completed, our first priority will be to install new computer system and inventory programs.  Our second priority will be using marketing to reach key players in the real estate market.  Using Mr. Hopp’s book as a means of introduction, presentations are planned for the most active real estate offices in key markets that are known to employ stagers, which markets we have identified as Santa Monica, Pacific Palisades, Beverly Hills, Holmby Hills, Hollywood, Studio City, Sherman Oaks, Hidden Hills and Thousand Oaks, all of which are in California.  As we provide home staging and interior design services to sellers of residential properties, we plan to increase our staff commensurate with the work increase we may experience, and simultaneously implement our planned training program to control the consistency and efficiency of staging and installation.  Additionally, we plan to acquire additional inventory as our business grows, if at all.


Mr. Hopp anticipates initially spending approximately 20 hours per week on our business


MARKETING

 

Marketing


Our primary means of marketing will be through our subsidiary, Staged for Success, LLC, which is, in turn, currently marketed primarily on Facebook and MySpace.   We will also develop a website to help promote sales and reach out to consumers and the building industry.  We will attempt to market our website in the United States through interior design magazines, trade shows and conventions and conferences.  


Currently, information about our services can be found at www.jonathanhopp.com and www.stagedforsuccessinc.com.  


COMPETITIVE CONDITIONS

 

The home staging and interior design services business is an extremely competitive industry. We are competing with many other home staging and interior design services companies in the Los Angeles area who provide home staging and interior design services. We are a very early stage home staging and interior design services company and a very small participant in the home staging and interior design services business. Being a development stage home staging and interior design services company, we compete with other companies like ours for financing.  

 

GOVERNMENT APPROVALS AND RECOMMENDATIONS


We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction which we would conduct activities. We do not believe that government regulation will have a material impact on the way we conduct our business because there are no special licenses, permits or regulations specific to our business.

 

EMPLOYEES

 

John Hopp, our sole officer and director, is our sole employee.


OUR EXECUTIVE OFFICES

 

Our executive offices are located at 11271 Ventura Blvd. #511, Studio City, California 91604. Our office space has been provided by Mr. Hopp at no cost.


LEGAL PROCEEDINGS

 

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or stockholder is a party adverse to the Company or has a material interest adverse to the Company.



18




MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

MARKET INFORMATION

 

ADMISSION TO QUOTATION ON THE OTC BULLETIN BOARD

 

We intend to have our common stock be quoted on the OTC Bulletin Board.  If our securities are not quoted on the OTC Bulletin Board, a stockholder may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of our securities. The OTC Bulletin Board differs from national and regional stock exchanges in that it:


(1) is not situated in a single location but operates through communication of bids, offers and confirmations between broker-dealers, and (2) securities admitted to quotation are offered by one or more broker-dealers rather than the “specialist” common to stock exchanges.


To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market maker, willing to list bid or sale quotations and to sponsor the company listing. We do not yet have an agreement with a registered broker-dealer, as the market maker, willing to list bid or sale quotations and to sponsor the Company listing. If the Company meets the qualifications for trading securities on the OTC Bulletin Board our securities will trade on the OTC Bulletin Board until a future time, if at all, that we apply and qualify for admission to quotation on the NASDAQ Capital Market. We may not now and it may never qualify for quotation on the OTC Bulletin Board or be accepted for listing of our securities on the NASDAQ Capital Market.


TRANSFER AGENT

 

We have not retained a transfer agent to serve as transfer agent for shares of our common stock.  Until we engage such a transfer agent, we will be responsible for all record-keeping and administrative functions in connection with the shares of our common stock.

 

HOLDERS

 

As of October 11, 2011, the Company had 9,845,000 shares of our common stock issued and outstanding held by 37 holders of record.

 

The selling stockholders are offering hereby up to 1,170,000 shares of common stock at fixed price of $0.20 per share for the duration of the offering.

 

DIVIDEND POLICY

 

We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future.  Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends. See the Risk Factor entitled “BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.”


SECURITIES AUTHORIZED UNDER EQUITY COMPENSATION PLANS

 

We have no equity compensation or stock option plans. We may in the future adopt a stock option plan as our business activities progress.


MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATION

 

Certain statements contained in this prospectus, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and the products we expect to offer and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements, because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

 

All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.



19




PLAN OF OPERATION


OVERVIEW


Our Company was incorporated in the State of Nevada on July 29, 2010 to engage in the development of interior design services, currently focusing on customers in the San Fernando Valley and the West Side areas of Los Angeles, California. We are a development stage company with very limited financial backing and assets. We are only in the early stages of developing our business. We currently have nominal revenues and an extremely limited operating history, and few current clients for our services. We anticipate that we will not be profitable for at least 24-30 months from the date hereof, which is dependent on completion of a financing of $226,000 to complete our plan of operation. From inception until the date of this filing we have had limited operating activities, primarily consisting of the incorporation of our company, the acquisition of Staged for Success, LLC, our subsidiary which we purchased from Jonathan Hopp, our sole officer and director, and the initial equity funding by our officer and director. We received our initial funding of $31,500 through the sale of common stock to 35 investors in a private placement, who purchased 350,000 shares at a purchase price of $0.10 per share.


We currently have only one employee, our sole office and director, Jonathan Hopp. During the first stages of our company's growth, our sole officer and director will provide his time free of charge to execute our business plan at no charge. Since we intend to operate with very limited administrative support, the officer and director will continue to be responsible for administering the company for at least the first year of operations. Management has the intention at this time to hire one consultant during the first year of operations, subject to financing. Due to limited financial resources, Mr. Hopp is planning to dedicate between 20 hours per week, to ensure all operations are executed.


We cannot guarantee we will be successful in our business operations. Our business is subject to all of the risks inherent in the establishment of a new business enterprise and we are at least 12 months away from generating any meaningful revenue.


Our plan of operation for the twelve months following the date of this prospectus is as follows:


Item

Estimated Cost

Anticipated Date of

Completion

from Date of this

Prospectus

Hire computer consultant to install new computer system and inventory programs 

$16,000 one time cost

120 days

Develop a training program for employees for staging systems 

$10,000 one time cost

120 days

Add 2 employees experienced in interior design and staging 

$100,000 per year

60 days

Hire a consultant (not Jonathan Hopp) for sales and development of marketing programs and speaking engagements 

$36,000 annually

ongoing

Implement monthly staging newsletter 

$12,000 annually

ongoing

Engage retailers to sponsor furnishing for staging 

$12,000 annually

120 days

Completed first draft of book by June 1, published on September 28, 2011

$25,000

Complete and in printing

Improve website by client testimonials, video of staging projects, and newsletter articles

$12,000 one time cost and $1,200 annually

120 days

 

Total Estimated Cost:

$223,000

 


In addition to the $201,000 we anticipate spending for the plan of operation as outlined in the chart immediately above, we anticipate spending an additional $25,000 on general and administration expenses including fees payable in connection with the filing of our registration statement and complying with reporting obligations, and general administrative costs.  Total expenditures over the next 12 months are therefore expected to be approximately $223,000.  We will experience a shortage of funds prior to funding.  While we may utilize funds from our Jonathan Hopp, however he has no formal commitment, arrangement or legal obligation to advance or loan funds to the company.



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During 2009, the U.S. residential real estate and credit markets experienced significant disruption as housing prices generally declined, unemployment increased, consumer delinquencies increased, and credit availability contracted and became more expensive for consumers and financial institutions.  Many of these 2009 trends carried over into 2010 and 2011.  As a consequence, we believe that the U.S. residential real estate market is currently in a significant downturn due to various factors including downward pressure on housing prices, credit constraints inhibiting new buyers and an exceptionally large inventory of unsold homes at the same time that sales volumes are decreasing.   We believe our business is affected by these market conditions not because of falling residential real estate prices so much as by the lower volume of homes being sold. The higher the inventory of residential homes on the market, the larger the market for our services.


We will require additional funding to commence with our plan of operation; we have no current plans on how to raise the additional funding. We cannot provide any assurance that we will be able to raise sufficient funds to proceed with our plan of operation.

   

ACCOUNTING AND AUDIT PLAN

 

We intend to continue to have our current accountants prepare our quarterly and annual financial statements and have these financial statements reviewed or audited by our independent public accounting firm.  Our accountants are to charge us approximately $750 to prepare our quarterly financial statements and approximately $2,000 to prepare our annual financial statements. Our independent public accounting firm is expected to charge us approximately $1,500 to review our quarterly financial statements and approximately $4,000 to audit our annual financial statements.  In the next twelve months, we anticipate spending approximately $7,000 to pay for our accounting and audit requirements.

 

SEC FILING PLAN

 

We intend to become a reporting company in 2011 after our registration statement on Form S-1 is declared effective. This means that we will file documents with the United States Securities and Exchange Commission on a quarterly basis.

 

We expect to incur filing costs of approximately $2,000 per quarter to support our quarterly and annual filings. In the next twelve months, we anticipate spending approximately $10,000 for legal costs in connection with our three quarterly filings, annual filing, and costs associated with filing the registration statement to register our common stock.

 

RESULTS OF OPERATIONS


We generated revenues of $5,243 for the year ended December 31, 2010, and $129,702 for the year ended December 31, 2009. The revenues are a result solely of our acquisition of Staged for Success, LLC, on September 1, 2010, and which was in business in 2009. The revenues decreased significantly as our business was effected by the downturn in the economy. We were not formed as a corporation until July 29, 2010, and have never generated revenues except as a result of our acquisition of Staged for Success.  Future revenue generation is dependent on the successful execution of our plan of operation.


For the six months ended June 30, 2011 we did not generate any revenues for the period compared to $5,072 during the quarter ended June 30, 2010. The lack of revenues in 2011 is a result of not yet completing our plan of operation.


During the period from inception February 19, 2009 through December 31, 2010, our activities have been financed from the proceeds of share subscriptions.  From our inception to December 31, 2010 we have raised a total of $31,500 from private offerings of our common stock.  

 

For the period from inception to December 31, 2010, we incurred total expenses of $140,093, consisting of $10,432 of advertising and promotion, $5,092 of depreciation expense, $12,046 of insurance expense, $11,478 of payroll expense, $31,061 of professional fees, $24,530 of storage rental, $20,466 of office rental and $24,989 of general and administration expenses. Our expenses in 2010 compared to 2009 were substantially less, $41,947 compared to $98,146, as we reduced our storage costs and rent due to our lack of business.


During the first six months of 2011 we incurred total expenses and losses of $5,730 consisting of depreciation of $1,076, professional fees of $4,000, storage of $309 and general and administrative of $345. The above compared to losses in the first quarter of 2010 of $8,104 which comprised of total expenses of $14,264, minus revenue of $5,072. The expenses consisted of advertising of $7,997, depreciation of $1,274 insurance of $883, storage of $310, rent of 2,020, and general and administrative of $1,601.



21




LIQUIDITY AND CAPITAL RESOURCES

 

At December 31, 2010, we had a cash balance of $12,719. Our expenditures over the next 12 months are expected to be approximately $223,000.


At June 30, 2011 our cash position reduced to $2,639 from $12,719 to fund operations.


We must raise approximately $223,000, to complete our plan of operation for the next 12 months. Additional funding will likely come from equity financing from the sale of our common stock, if we are able to sell such stock. If we are successful in completing an equity financing, existing stockholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operation. In the absence of such financing, our business will fail.


There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our business and our business will fail.

 

GOING CONCERN CONSIDERATION

 

Although we have recognized some nominal amount of revenues since inception, we are still devoting substantially all of our efforts on establishing the business and, therefore, still qualifies as a development stage company. From inception to December 31, 2010, the Company had accumulated losses of $89,261.  Our independent public accounting firm included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent public accounting firm.  Our financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.


OFF BALANCE SHEET ARRANGEMENTS.

 

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

 

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

BASIS OF PRESENTATION

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.  The Company’s fiscal year-end is December 31.

 

CASH AND CASH EQUIVALENTS

 

The Company considers all highly liquid investments with original maturity of three months or less to be cash equivalents.

 

USE OF ESTIMATES AND ASSUMPTIONS

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.


DEVELOPMENT STAGE COMPANY

 

The Company is a development stage company as defined by section 915-10-20 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification.



22




FAIR VALUE OF FINANCIAL INSTRUMENT

 

The Company’s financial instrument consisted of cash and accounts payable. Unless otherwise noted, it is management’s opinion the Company is not exposed to significant interest, currency or credit risks arising from this financial instrument.  Because of the short maturity of such assets and liabilities the fair value of these financial instruments approximate their carrying values, unless otherwise noted.

 

INCOME TAXES  

 

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740-10-50 “Accounting for Income Taxes” as of its inception. Pursuant to the standard, the Company is required to compute tax asset benefits for net operating losses carried forward.

 

BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

 

The Company computes net income (loss) per share in accordance with ASC 260-10-4-5, “Earnings per Share.” The standard requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In February 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-09, “Amendments to Certain Recognition and Disclosure Requirements” (“ASU 2010-09”), which is included in the FASB Accounting Standards CodificationTM ( the “ASC”) Topic 855 (Subsequent Events).  ASU 2010-09 clarifies that an SEC filer is required to evaluate subsequent events through the date that the financial statements are issued.  ASU 2010-09 is effective upon the issuance of the final update and did not have a significant impact on the Company’s consolidated financial statements.


In June 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 168, FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of SFAS No. 162 (“Statement 168”). Statement 168 establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied in the preparation of financial statements in conformity with generally accepted accounting principles. Statement 168 explicitly recognizes rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under federal securities laws as authoritative GAAP for SEC registrants. Statement 168 is effective for financial statements issued for fiscal years and interim periods ending after September 15, 2009. The Company has adopted Statement 168 for the year ended December 31, 2010.


Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company.


DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

The Directors and Officers currently serving our Company is as follows:

 

Name

 

Age

 

Positions and Offices

 

 

 

 

 

Mr. Jonathan Hopp (1)

 

49

 

President, Chief Executive Officer, Secretary, Treasurer and Director

 

(1) c/o JH Designs, Inc., 11271 Ventura Blvd. #511, Studio City, California 91604.


The director named above will serve until the next annual meeting of the stockholders or until his respective resignation or removal from office.  Thereafter, directors are anticipated to be elected for one-year terms at the annual stockholders’ meeting. Officers will hold their positions at the pleasure of the Board of Directors, absent any employment agreement, of which none currently exists or is contemplated.

 



23




JONATHAN HOPP

 

Mr. Hopp has served as our President, Chief Executive Officer, Secretary and a Director since July 29, 2010.  Since 2001, Mr. Hopp has owned and operated Jonathan Hopp Interior Design, a sole proprietorship, based in the Los Angeles, California.  Through his business, Jonathan Hopp Interior Design, Mr. Hopp works as an advisor regarding interior design, from interior finish designs and construction consultation, to furniture selection, specification and purchasing.  In February 2009, Mr. Hopp formed Staged for Success, LLC, a California limited liability company, now a subsidiary of JH Designs, Inc.   Mr. Hopp recently completed Interior Bliss:  How to Decorate Like A Pro Without Breaking The Bank, a book about teaching the tips and strategies employed in the staging company Staged For Success.   Interior Bliss is being published in August 2011.  Mr. Hopp has also been published in Good Housekeeping Magazine as well as Valley Magazine.   Additionally, he has appeared on Designer’s Challenge and Beautiful Homes and Great Estates.  Mr. Hopp’s background as a business owner, an interior designer and a published author on interior design led to our conclusion that Mr. Hopp should be serving as a member of our board of directors in light of our business and structure.


DIRECTOR INDEPENDENCE

 

Our board of directors is currently composed of one member, whom does not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market (the Company has no plans to list on the NASDAQ Global Market).  The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to our director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by our director and us with regard to our director’s business and personal activities and relationships as they may relate to us and our management.

 

Our Bylaws state that our board of directors may, by resolution passed by a majority of the Board of Directors, designate one or more committees, each committee to consist of two or more of the directors of the Corporation.  Additionally, our Bylaws required our board of directors to maintain two (2) standing committees consisting of (i) a Corporate Governance Committee; and (2) an Audit Committee. The Corporate Governance Committee shall consist of at least three (3) members of the Board of Directors who are “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, and who are “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. The Board of Directors has not established any committees.


SIGNIFICANT EMPLOYEES AND CONSULTANTS

 

Our officer and director, Jonathan Hopp, is our sole employee.


CONFLICTS OF INTEREST

 

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our director. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is an early development stage company and has only one director, and to date, such director has been performing the functions of such committees. Thus, there is a potential conflict of interest in that our director and officer has the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.

 

Other than as described above, we are not aware of any other conflicts of interest of our executive officer and director.

 

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

 

During the past ten years, Mr. Hopp has not been the subject of any the following events:


(1) A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of Mr. Hopp, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;



24




(2) Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);


(3) The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:


(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;


(ii) Engaging in any type of business practice; or


(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;


(4) The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) of this section, or to be associated with persons engaged in any such activity;


(5) Being found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;


(6) Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;


(7) The subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:


(i) Any Federal or State securities or commodities law or regulation; or


(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or


(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or


(8) The subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.


PROMOTERS


Jonathan Hopp, our sole officer and director, is also a promoter of the Company because he took the initiative in founding and organizing the business of the Company.


Pursuant to a Letter Agreement, dated August 5, 2010, by and between Registrant and Jonathan Hopp, our sole officer and director, we issued Mr. Hopp 9,500,000 shares of common stock in exchange for him acting as our President and Chief Executive Officer for a term of one year, which term ends on August 5, 2011.


On September 1, 2010, we entered into a LLC Membership Purchase Agreement with Mr. Hopp, whereby for $1.00 we acquired a 100% limited liability company interest in Staged for Success LLC, a California limited liability company, which was owned 100% by Mr. Hopp.  Staged for Success LLC, formed on February 19, 2009, is an entity through which Mr. Hopp had operated a home staging and interior design services business.  Staged for Success LLC (“Staged for Success”) is a wholly owned subsidiary of JH Designs, Inc.




25



EXECUTIVE COMPENSATION

 

SUMMARY COMPENSATION TABLE

 

The table below summarizes all compensation awarded to, earned by, or paid to our officers for all services rendered in all capacities to us for the fiscal periods indicated.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity

 

 

 

 

 

 

 

 

 

 

Name and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive

 

 

Nonqualified

 

 

 

 

 

 

 

Principal

 

 

 

 

 

 

 

 

 

Stock

 

 

Option

 

 

Plan

 

 

Deferred

 

 

All Other

 

 

 

 

Position

 

Year

 

Salary($)

 

 

Bonus($)

 

 

Awards($)

 

 

Awards($)

 

 

Compensation($)

 

 

Compensation($)

 

 

Compensation($)

 

 

Total($)

 

Jonathan Hopp (1)

 

2010

 

0

 

 

0

 

 

9,500 (2)(3)

 

 

0

 

 

0

 

 

0

 

 

0

 

$

9,500

 

 

(1) President and Chief Executive Officer, Secretary, Treasurer and Director.


(2)  Pursuant to a Letter Agreement, dated August 5, 2010, by and between Registrant and Jonathan Hopp, our sole officer and director, we issued Mr. Hopp 9,500,000 shares of common stock, at a value of $0.001 per share in exchange for him acting as our President and Chief Executive Officer for a term of one year, which term ends on August 5, 2011.


(3) This valuation was calculated as of the grant date fair value in accordance with FASB ASC 718.


STOCK OPTION GRANTS

 

We have not granted any stock options to our executive officer since our inception. 


EMPLOYMENT AGREEMENTS


Pursuant to a Letter Agreement, dated August 5, 2010, by and between Registrant and Jonathan Hopp, our sole officer and director, we issued Mr. Hopp 9,500,000 shares of common stock, at a value of $0.001 per share in exchange for him acting as our President and Chief Executive Officer for a term of one year, which term ends on August 5, 2011.

  

DIRECTOR COMPENSATION

 

The following table sets forth director compensation as of December 31, 2010:


 

 

Fees

 

 

 

 

 

Non-Equity

 

Nonqualified

 

 

 

 

 

 

 

Earned

 

 

 

 

 

Incentive

 

Deferred

 

 

 

 

 

 

 

Paid in

 

Stock

 

Option

 

Plan

 

Compensation

 

All Other

 

 

 

Name

 

Cash($)

 

Awards($)

 

Awards($)

 

Compensation($)

 

Earnings($)

 

Compensation($)

 

Total($)

 

Jonathan Hopp

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 


We currently do not pay any compensation to our director serving on our board of directors.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table lists, as of October 11, 2011, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.  




26



The percentages below are calculated based on 9,845,000 shares of our common stock issued and outstanding as of October 11, 2011. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock. 


 

 

Name and Address

 

Number of Shares

 

 

Percent of

 

Title of Class

 

of Beneficial Owner

 

Owned Beneficially

 

 

Class Owned

 

 

 

 

 

 

 

 

 

 

Common Stock:

 

Mr. Jonathan Hopp, President, Chief Executive Officer, Secretary, Treasurer and Director (1)

 

 

9,500,000

 

 

 

96.4

%

 

 

 

 

 

 

 

 

 

 

 

All executive officers and directors as a group

 

 

 

 

9,500,000

 

 

 

96.4

%

 

(1) c/o JH Designs, Inc., 11271 Ventura Blvd. #511, Studio City, California 91604.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Pursuant to a Letter Agreement, dated August 5, 2010, by and between Registrant and Jonathan Hopp, our sole officer and director, we issued Mr. Hopp 9,500,000 shares of common stock in exchange for him acting as our President and Chief Executive Officer for a term of one year, which term ends on August 5, 2011.


On September 1, 2010, we entered into a LLC Membership Purchase Agreement with Mr. Hopp, whereby we acquired a 100% limited liability company interest in Staged for Success LLC, a California limited liability company (“Staged for Success”).  Staged for Success LLC, formed on February 19, 2009, is an entity through which Mr. Hopp had operated a home staging and interior design services business since its formation.  Staged for Success LLC is a wholly owned subsidiary of JH Designs, Inc.


We have received loans of $4,509 Mr. Hopp at December 31, 2010.  The loans have no term, bear no interest and are due on demand.


The Company has been provided office space by its majority stockholder and Chief Executive Officer at no cost.  


On September 1, 2010, we entered into a LLC Membership Purchase Agreement with Mr. Hopp, whereby for $1.00 we acquired a 100% limited liability company interest in Staged for Success LLC, a California limited liability company, which was owned 100% by Mr. Hopp.  Staged for Success LLC, formed on February 19, 2009, is an entity through which Mr. Hopp had operated a home staging and interior design services business.  Staged for Success LLC (“Staged for Success”) is a wholly owned subsidiary of JH Designs, Inc.


DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

 

Our Bylaws provide to the fullest extent permitted by law that our directors or officers, former directors and officers, and persons who act at our request as a director or officer of a body corporate of which we are a shareholder or creditor shall be indemnified by us. We believe that the indemnification provisions in our By-laws are necessary to attract and retain qualified persons as directors and officers.


Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Company pursuant to provisions of the State of Nevada, the Company has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.



27




WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the Commission a Registration Statement on Form S-1, under the Securities Act of 1933, as amended, with respect to the securities offered by this prospectus. This prospectus, which forms a part of the registration statement, does not contain all the information set forth in the registration statement, as permitted by the rules and regulations of the Commission. For further information with respect to us and the securities offered by this prospectus, reference is made to the registration statement. We do not file reports with the Securities and Exchange Commission, and we will not otherwise be subject to the proxy rules. The registration statement and other information may be read and copied at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains a web site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the Commission.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

 

Consent of Li & Company, PC, is our registered independent public accounting firm. There have not been any changes in or disagreements with accountants on accounting and financial disclosure or any other matter.


 



28



JH Designs, Inc.


(A Development Stage Company)


December 31, 2010 and 2009


Index to Consolidated Financial Statements


Contents

Page(s)

Report of Independent Registered Public Accounting Firm

F-2

 

 

Consolidated Balance Sheets at December 31, 2010 and 2009

F-3

 

 

Consolidated Statements of Operations for the Year Ended December 31, 2010, for the Period from February 19, 2009 (Inception) through December 31, 2009 and for the Period from February 19, 2009 (Inception) through December 31, 2010

F-5

 

 

Consolidated Statement of Stockholders’ Deficit for the Period from February  19, 2009 (Inception) through December 31, 2010

F-6

 

 

Consolidated Statements of Cash Flows for the Year Ended December 31, 2010, for the Period from February 19, 2009 (Inception) through December 31, 2009 and for the Period from February 19, 2009 (Inception) through December 31, 2010

F-7

 

 

Notes to the Consolidated Financial Statements

F-8

 

 

Interim Consolidated Financial Statements for the Interim Periods  Ended June 30, 2011 and 2010, and for the Period from February  19, 2009  (Inception) through June 30, 2011 (Unaudited)

F-15




F-1



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of

JH Designs, Inc.

(A development stage company)

Studio City, California


We have audited the accompanying consolidated balance sheets of JH Designs, Inc., a development stage company (the “Company”) as of December 31, 2010 and 2009 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the fiscal year ended December 31, 2010, for the period from February 19, 2009 (Inception) through December 31, 2009 and for the period from February 19, 2009 (Inception) through December 31, 2010.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.


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


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the fiscal year ended December 31, 2010, for the period from February 19, 2009 (Inception) through December 31, 2009 and for the period from February 19, 2009 (Inception) through December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the consolidated financial statements, the Company had a deficit accumulated during the development stage at December 31, 2010 and had a net loss and net cash used in operating activities for the fiscal year then ended.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/Li & Company, PC

Li & Company, PC


Skillman, New Jersey

May 13, 2011




F-2




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Balance Sheets

 

 

 

 

 

 

 

December 31,

2010

 

December 31,

2009

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash

$

12,719

 

$

542

Prepaid expenses

 

4,000

 

 

-

 

 

 

 

 

 

Total current assets

 

16,719

 

 

542

 

 

 

 

 

 

FIXED ASSETS

 

 

 

 

 

Computer equipment

 

10,761

 

 

10,761

Less accumulated depreciation

 

(5,092)

 

 

(2,544)

 

 

 

 

 

 

Total fixed assets

 

5,669

 

 

8,217

 

 

 

 

 

 

OTHER ASSETS

 

 

 

 

 

Security deposit

 

250

 

 

250

 

 

 

 

 

 

Total Assets

$

22,638

 

$

9,009

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Line of credit

$

15,699

 

$

10,527

Accrued expenses

 

10,400

 

 

-

Notes payable

 

13,200

 

 

38,004

Advances from the majority stockholder and Chief Executive Officer

 

4,509

 

 

-

 

 

43,808

 

 

48,531

 

 

 

 

 

 

Total current liabilities

 

43,808

 

 

48,531

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

Member's capital

 

-

 

 

3,535

Preferred stock: $0.001 par value; 25,000,000 shares authorized;

 

 

 

 

 

none issued or outstanding

 

-

 

 

-

Common stock: $0.001 par value; 100,000,000 shares authorized;

 

 

 

 

 

9,845,000 and 9,500,000 shares issued and outstanding, respectively

 

9,845

 

 

9,500

Additional paid-in capital

 

(2,296)

 

 

-

Deficit accumulated during the development stage

 

(28,719)

 

 

(52,557)

 

 

 

 

 

 

Total stockholders' deficit

 

(21,170)

 

 

(39,522)

 

 

 

 

 

 

Total Liabilities and Stockholders' Deficit

$

22,638

 

$

9,009

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.




F-3




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Period from

 

For the Period from

 

For the Year

 

February 19, 2009

 

February 19, 2009

 

Ended

 

(Inception) through

 

(Inception) through

 

December 31, 2010

 

December 31, 2009

 

December 31, 2010

 

 

 

 

 

 

 

 

 

 Net Revenues

$

5,243

 

$

129,702

 

$

134,945

 

 

 

 

 

 

 

 

 

 Cost of Services

 

-

 

 

83,686

 

 

83,686

 

 

 

 

 

 

 

 

 

 Gross Profit

 

5,243

 

 

46,016

 

 

51,259

 

 

 

 

 

 

 

 

 

 Operating Expenses

 

 

 

 

 

 

 

 

 Advertising and promotion

 

7,997

 

 

2,435

 

 

10,432

 Depreciation expense

 

2,548

 

 

2,544

 

 

5,092

 Insurance expense

 

883

 

 

11,163

 

 

12,046

 Payroll expenses

 

-

 

 

11,478

 

 

11,478

 Professional fees

 

26,150

 

 

4,911

 

 

31,061

 Rent - storage

 

-

 

 

24,530

 

 

24,530

 Rent - office

 

2,200

 

 

18,266

 

 

20,466

    General and administrative

 

2,169

 

 

22,820

 

 

24,989

 

 

 

 

 

 

 

 

 

 Total operating expenses

 

41,947

 

 

98,146

 

 

140,093

 

 

 

 

 

 

 

 

 

 Loss from Operations

 

(36,704)

 

 

(52,130)

 

 

(88,834)

 

 

 

 

 

 

 

 

 

 Other (Income) Expenses

 

 

 

 

 

 

 

 

 Interest expense

 

-

 

 

427

 

 

427

 

 

 

 

 

 

 

 

 

 Total other (income) expense

 

-

 

 

427

 

 

427

 

 

 

 

 

 

 

 

 

 Loss before Income Taxes

 

(36,704)

 

 

(52,557)

 

 

(89,261)

 

 

 

 

 

 

 

 

 

 Income Taxes

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 Net Loss

$

(36,704)

 

$

(52,557)

 

$

(89,261)

 

 

 

 

 

 

 

 

 

 Pro Forma:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Loss before Income Taxes

 

(36,704)

 

 

(52,557)

 

 

(89,261)

 

 

 

 

 

 

 

 

 

 Pro Forma Income Tax Provision

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 Pro Forma Net Income (Loss)

$

(36,704)

 

$

(52,557)

 

$

(89,261)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 NET LOSS PER COMMON SHARE

 

 

 

 

 

 

 

 

  - BASIC AND DILUTED:

$

(0.00)

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 Weighted average common shares outstanding

 

 

 

 

 

 

 

 

  - Basic and Diluted

 

9,595,969

 

 

9,500,000

 

 

 

 

 

 

 

 

 

 

 

 

 See accompanying notes to the financial statements.




F-4




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Statement of Stockholders' Deficit

For the period February 19, 2009 (inception) through December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deficit

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Additional

 

during the

 

Total

 

Member's

 

Common Stock, $0.001 Par Value

 

Paid-In

 

Development

 

Stockholders'

 

Capital

 

Shares

 

Amount

 

Capital

 

stage

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 19, 2009 ( inception )

$

-

 

-

 

$

-

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued to founder for membership interest upon formation

 

-

 

9,500,000

 

 

9,500

 

 

(9,500)

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Member's capital contributed

 

3,535

 

-

 

 

-

 

 

-

 

 

-

 

 

3,535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

-

 

-

 

 

-

 

 

-

 

 

(52,557)

 

 

(52,557)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2009

 

3,535

 

9,500,000

 

 

9,500

 

 

(9,500)

 

 

(52,557)

 

 

(49,022)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Member's capital contributed for the period from January 1, 2010 through July 29, 2010

 

33,026

 

-

 

 

-

 

 

-

 

 

-

 

 

33,026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period from January 1, 2010 through July 29, 2010

 

-

 

-

 

 

-

 

 

-

 

 

(7,984)

 

 

(7,984)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification of LLC member capital as additional paid-in capital

 

(36,561)

 

-

 

 

-

 

 

36,561

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification of accumulated deficit and net loss as of July 29, 2010

 

-

 

-

 

 

-

 

 

(60,541)

 

 

60,541

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash at $0.001 par value per share on August 4, 2010

 

-

 

30,000

 

 

30

 

 

-

 

 

-

 

 

30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash at $0.1 per share From September 1, 2010 through December 30, 2010

 

-

 

315,000

 

 

315

 

 

31,185

 

 

-

 

 

31,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period from July 30, 2010 through December 30, 2010

 

-

 

-

 

 

-

 

 

-

 

 

(28,720)

 

 

(28,720)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance December 31, 2010

$

-

 

9,845,000

 

$

9,845

 

$

(2,295)

 

$

(28,720)

 

$

(21,170)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.





F-5




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Period

from

 

For the Period

from

 

 

 

February 19,

2009

 

February 19,

2009

 

For the Year

Ended

 

(Inception)

through

 

(Inception)

through

 

December 31,

2010

 

December 31,

2009

 

December 31,

2010

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 Net loss  

$

(36,704)

 

$

(52,557)

 

$

(89,261)

 Adjustments to reconcile net loss to net cash  

 

 

 

 

 

 

 

 

 used in operating activities:

 

 

 

 

 

 

 

 

 Depreciation

 

2,548

 

 

2,544

 

 

5,092

 Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 Prepaid expenses

 

(4,000)

 

 

-

 

 

(4,000)

 Security deposit

 

-

 

 

(250)

 

 

(250)

 Accrued expenses

 

10,402

 

 

-

 

 

10,402

 

 

 

 

 

 

 

 

 

 NET CASH USED IN OPERATING ACTIVITIES

 

(27,754)

 

 

(50,263)

 

 

(78,017)

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 Purchase of fixed assets

 

-

 

 

(10,761)

 

 

(10,761)

 

 

 

 

 

 

 

 

 

 NET CASH USED IN INVESTING ACTIVITIES

 

-

 

 

(10,761)

 

 

(10,761)

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Line of credit

 

5,172

 

 

10,527

 

 

15,699

 Proceed from notes payable

 

-

 

 

58,999

 

 

58,999

 Repayment of notes payable

 

(24,805)

 

 

(20,995)

 

 

(45,800)

 Proceeds from majority stockholder

 

4,509

 

 

-

 

 

4,509

 Proceeds from sale of common shares

 

31,500

 

 

-

 

 

31,500

 Member's capital

 

23,555

 

 

13,035

 

 

36,590

 

 

 

 

 

 

 

 

 

 NET CASH PROVIDED BY FINANCING ACTIVITIES

 

39,931

 

 

61,566

 

 

101,497

 

 

 

 

 

 

 

 

 

 NET CHANGE IN CASH

 

12,177

 

 

542

 

 

12,719

 

 

 

 

 

 

 

 

 

 Cash at beginning of period

 

542

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 Cash at end of period

$

12,719

 

$

542

 

$

12,719

 

 

 

 

 

 

 

 

 

 SUPPLEMENTAL DISCLOSURE OF

 

 

 

 

 

 

 

 

   CASH FLOWS INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Interest paid

$

-

 

$

-

 

$

-

   Income tax paid

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 See accompanying notes to the financial statements.



F-6



JH Designs, Inc.

(A Development Stage Company)

December 31, 2010 and 2009

Notes to the Consolidated Financial Statements



NOTE 1 - ORGANIZATION AND OPERATIONS


On February 19, 2009, Mr. Jonathan Hopp formed Staged for Success LLC (“LLC”), a single member LLC under the laws of the State of California.  LLC engages in home staging and interior design services business.


JH Designs, Inc. (the “Company”), was incorporated under the laws of the State of Nevada on July 29, 2010. Upon formation the Company issued 9,500,000 shares of its common stock to Mr. Jonathan Hopp, the founder, in exchange for the existing business of the LLC.  No value was given to the stock issued by the newly formed corporation.  Therefore, the shares were recorded to reflect the $.001 par value and paid in capital was recorded as a negative amount ($9,500). The sole purpose of the formation of the Company is to acquire Staged for Success LLC, a single member LLC owned and operating by Mr. Jonathan Hopp.  The Company was inactive prior to the acquisition of Staged for Success LLC.


Merger of Staged for Success, LLC


On September 1, 2010, the Company acquired from Mr. Jonathan Hopp, the 100% interest in LLC for one (1) dollar.  The acquisition of LLC (“Predecessor”) by the Company has been accounted for as a reverse acquisition for financial accounting purposes. The reverse acquisition is deemed a capital transaction and the net assets of Predecessor (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination.  The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Predecessor which are recorded at historical cost. The equity of the Company is the historical equity of Predecessor retroactively restated to reflect the number of shares issued by the Company in the transaction.


The Company applied paragraph 505-10-S99-3 of the FASB Accounting Standards Codification (formerly Topic 4B of the Staff Accounting Bulletins (“SAB”) (“SAB Topic 4B”) issued by the United States Securities and Exchange Commission (the “SEC”), by reclassifying the single member LLC’s owner capital account inclusive of capital contribution of $3,535 and a deficit accumulated during the development stage of ($60,541) to additional paid-in capital as of July 29, 2010.


The accompanying consolidated financial statements have been prepared as if the Company had its corporate capital structure as of the first date of the first period presented.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of presentation


The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).


The accompanying consolidated financial statements include all of the accounts of the Company as of December 31, 2010 and for the period from July 29, 2010 (inception) through December 31, 2010.  LLC is included as of December 31, 2010 and 2009, for the year ended December 31, 2010 and for the period from February 19, 2009 (date of formation) through December 31, 2009.  All intercompany balances and transactions have been eliminated.


Development stage company


The Company is a development stage company as defined by section 915-10-20 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification.  Although the Company has recognized some nominal amount of revenues since inception, the Company is still devoting substantially all of its efforts on establishing the business and, therefore, still qualifies as a development stage company.  All losses accumulated since inception have been considered as part of the Company’s development stage activities.



F-7




Use of estimates


The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates include the estimated useful lives of property and equipment.  Actual results could differ from those estimates.


Cash equivalents


The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.


Fair value of financial instruments


The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.  To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:


Level 1

 

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

 

 

Level 2

 

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

 

 

Level 3

 

Pricing inputs that are generally observable inputs and not corroborated by market data.


The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments.  The Company’s line of credit and notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2010 and 2009.


The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at December 31, 2010 or 2009; no gains or losses are reported in the consolidated statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date ended December 31, 2010 or for the period from February 19, 2009 (inception) through December 31, 2009.


Computer equipment


Computer equipment is recorded at cost. Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred. Depreciation of computer equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of five (5) years.  Upon sale or retirement of computer equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.


Impairment of long-lived assets


The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which includes computer equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.



F-8




The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.


The Company determined that there were no impairments of long-lived assets as of December 31, 2010 or 2009.


Commitments and contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.


Revenue recognition


The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company will recognize revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.


Income taxes


The Company was a single member LLC, until July 29, 2010 during which time the Company was treated as a disregarded entity for income tax purposes.  The operating results prior to July 29, 2010 of LLC were included in the tax return of the Company’s founder.


Effective July 29, 2010, the Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date.


The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes.  Section 740-10-25 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 Section 740-10-25, 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 should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.


Unaudited pro forma income tax information


The operating results prior to July 29, 2010 of LLC were included in the tax return of the Company’s founder for income tax purposes.  The unaudited pro forma income tax amounts included in the accompanying consolidated statements of operations and income taxes note reflect the provision for income taxes which would have been recorded if the Company had been incorporated as of the beginning of the first date presented.



F-9




Net income (loss) per common share


Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.  The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.


There were no potentially dilutive shares outstanding as of December 31, 2010 or 2009.


Cash flows reporting

 

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.  The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.


Subsequent events


The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.


Recently issued accounting pronouncements


In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value Measurements”, which provides amendments to Subtopic 820-10 that requires new disclosures as follows:


1.

Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers.


2.

Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number).


This Update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows:


1.

Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities.


2.

Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3.



F-10




This Update also includes conforming amendments to the guidance on employers' disclosures about postretirement benefit plan assets (Subtopic 715-20). The conforming amendments to Subtopic 715-20 change the terminology from major categories of assets to classes of assets and provide a cross reference to the guidance in Subtopic 820-10 on how to determine appropriate classes to present fair value disclosures. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.


In April 2010, the FASB issued ASU No. 2010-13, “Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades” (“ASU 2010-13”). This update provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. 


In August 2010, the FASB issued ASU 2010-21, “Accounting for Technical Amendments to Various SEC Rules and Schedules: Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies” (“ASU 2010-21”), was issued to conform the SEC’s reporting requirements to the terminology and provisions in ASC 805, Business Combinations, and in ASC 810-10, Consolidation. ASU No. 2010-21 was issued to reflect SEC Release No. 33-9026, “Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies,” which was effective April 23, 2009. The ASU also proposes additions or modifications to the XBRL taxonomy as a result of the amendments in the update.


In August 2010, the FASB issued ASU 2010-22, “Accounting for Various Topics: Technical Corrections to SEC Paragraphs” (“ASU 2010-22”), which amends various SEC paragraphs based on external comments received and the issuance of SEC Staff Accounting Bulletin (SAB) No. 112, which amends or rescinds portions of certain SAB topics.  The topics affected include reporting of inventories in condensed financial statements for Form 10-Q, debt issue costs in conjunction with a business combination, sales of  stock by subsidiary, gain recognition on sales of business, business combinations prior to an initial public offering, loss contingent and liability assumed in business combination, divestitures, and oil and gas exchange offers. 


In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-28 “Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (“ASU 2010-28”).Under ASU 2010-28, if the carrying amount of a reporting unit is zero or negative, an entity must assess whether it is more likely than not that goodwill impairment exists. To make that determination, an entity should consider whether there are adverse qualitative factors that could impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a result of the new guidance, an entity can no longer assert that a reporting unit is not required to perform the second step of the goodwill impairment test because the carrying amount of the reporting unit is zero or negative, despite the existence of qualitative factors that indicate goodwill is more likely than not impaired. ASU 2010-28 is effective for public entities for fiscal years, and for interim periods within those years, beginning after December 15, 2010, with early adoption prohibited.


In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-29 “Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.


Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.


NOTE 3 – GOING CONCERN


As reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit of $28,719 at December 31, 2010 and had a net loss of $36,704 and net cash used in operating activities of $27,754 for the year then ended, respectively.



F-11




While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations.  Management intends to raise additional funds by way of a public or private offering.  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.  While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect.  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 revenues.


The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


NOTE 4 – COMPUTER EQUIPMENT


Computer equipment, stated at cost, less accumulated depreciation at December 31, 2010 and 2009, consisted of the following: 


 

 

December 31,

2010

 

December 31,

2009

 

 

 

 

 

 

 

Computer equipment

 

$

10,761

 

$

10,761

Less accumulated depreciation

 

 

(5,092)

 

 

(2,544)

 

 

$

5,669

 

$

8,217


Depreciation expense


Depreciation expense for the year ended December 31, 2010 and for the period from February 18, 2009 (inception) through December 31, 2009 was $2,548, and $2,544, respectively.


NOTE 5 – LINE OF CREDIT


LLC has an open line of credit of $16,600 with a financial institution with interest at 9.75%, per annum, payable monthly and the principal due on demand.  The usage and availability of the line of credit at December 31, 2010 were as follows:


 

Date of

Expiration

 

Total

Facilities

 

Facilities

Used

 

Facilities

Available

 

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo Bank, N.A.

 

Due on

demand

 

$

16,600

 

$

15,699

 

$

901

 

 

 

 

$

16,600

 

$

15,699

 

$

901

 

NOTE 6 – NOTES PAYABLE


LLC has notes payable to an unrelated third party. The notes are unsecured, bear no interest and are due on demand.


Notes payable at December 31, 2010 and 2009, consisted of the following:


 

December 31,

2010

 

December 31,

2009

 

 

 

 

 

 

Notes payable

$

13,200

 

$

38,004

 

$

13,200

 

$

38,004




F-12




NOTE 7 – RELATED PARTY TRANSACTIONS


Advances from majority stockholder and Chief Executive Officer


Advances from majority stockholder and Chief Executive Officer at December 31, 2010 and 2009, consisted of the following:


 

December 31,

2010

 

December 31,

2009

 

 

 

 

 

 

Advances from major stockholder and Chief Executive Officer

$

4,509

 

$

-

 

$

4,509

 

$

-


The advances from major stockholder and Chief Executive Officer bear no interest and are due on demand.


Free office space from its majority stockholder and Chief Executive Officer


The Company has been provided office space by its majority stockholder and Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.


NOTE 8 – STOCKHOLDERS’ DEFICIT


Shares authorized


The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 per share, and 25,000,000 shares of preferred stock with a par value of $0.001 per share.


Common stock


The Company was incorporated on July 29, 2010 at which time 9,500,000 shares of common stock were issued to the Company’s founder in exchange for the existing business of the LLC. No value was given to the stock issued by the newly formed corporation.  Therefore, the shares were recorded to reflect the $.001 par value and paid in capital was recorded as a negative amount ($9,500).  In other words, no net value was assigned to these shares..


On August 4, 2010, the Company sold 30,000 shares of common stock at par value $0.001 per share for $30.


For the period from September 1, 2010 through December 30, 2010, the Company sold 315,000 shares of common stock at $0.1 per share, or $31,500 in aggregate for cash.


NOTE 9 – INCOME TAX


Deferred tax assets


At December 31, 2010, the Company has available for federal income tax purposes a net operating loss (“NOL”) carry-forwards of $28,719 that may be used to offset future taxable income through the fiscal year ending December 31, 2030.  No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying consolidated financial statements since the Company believes that the realization of its net deferred tax asset of approximately $9,764 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $9,764.


Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.  The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.  The valuation allowance increased approximately $9,764 for the period from July 29, 2010 through December 31, 2010.



F-13




Components of deferred tax assets as of December 31, 2010 are as follows:


 

December 31,

2010

Net deferred tax assets – Non-current:

 

 

 

 

 

Expected income tax benefit from NOL carry-forwards

$

9,764

Less valuation allowance

 

(9,764)

Deferred tax assets, net of valuation allowance

$

-


Income taxes in the consolidated statements of operations


A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:


 

For the Period from July 29, 2010 (inception) through December 31, 2010

 

 

 

 

 

Federal statutory income tax rate

 

34.0

%

Change in valuation allowance on net operating loss carry-forwards

 

(34.0

)%

Effective income tax rate

 

0.0

%


Pro forma income tax information (Unaudited)


Pro forma deferred tax assets


If the Company had been incorporated as of the beginning of the first date presented at December 31, 2010, the Company’s net operating loss (“NOL”) carry–forwards for Federal income tax purposes would have been $89,261 that may be offset against future taxable income through 2030; and the Company’s net deferred tax assets and valuation allowance would have been $30,349; and its valuation allowance would have increased approximately $12,480 and $17,869 for the fiscal year ended December 31, 2010 and for the period from February 19, 2009 (date of formation) through December 31, 2009.


Components of pro forma deferred tax assets as of December 31, 2010 and 2009 are as follows:


 

December 31, 2010

 

 

December 31, 2009

 

Net deferred tax assets – Non-current:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected income tax benefit from NOL carry-forwards

$

30,349

 

 

$

17,869

 

Less valuation allowance

 

(30,349

)

 

 

(17,869

)

Deferred tax assets, net of valuation allowance

$

-

 

 

$

-

 




F-14




Pro forma income taxes in the consolidated statements of operations


A reconciliation of the pro forma federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:


 

For the Fiscal Year Ended

December 31, 2010

 

 

For the Period from February 19, 2009 (inception) through December 31, 2009

 

 

 

 

 

 

 

 

 

Federal statutory income tax rate

 

34.0

%

 

 

34.0

%

Change in valuation allowance on net operating loss carry-forwards

 

(34.0)

%

 

 

(34.0)

%

Effective income tax rate

 

0.0

%

 

 

0.0

%


NOTE 10 – SUBSEQUENT EVENTS


The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.  The Management of the Company determined that there were no reportable subsequent events to be disclosed.



F-15




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Balance Sheets

 

 

 

 

 

 

 

June 30,

2011

 

December 31,

2010

 

(Unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

     Cash

$

2,639

 

$

12,719

Prepaid expenses

 

-

 

 

4,000

 

 

 

 

 

 

Total current assets

 

2,639

 

 

16,719

 

 

 

 

 

 

FIXED ASSETS

 

 

 

 

 

Computer equipment

 

10,761

 

 

10,761

Less accumulated depreciation

 

(6,168)

 

 

(5,092)

 

 

 

 

 

 

Total fixed assets

 

4,593

 

 

5,669

 

 

 

 

 

 

OTHER ASSETS

 

 

 

 

 

Security deposit

 

250

 

 

250

 

 

 

 

 

 

Total Assets

$

7,482

 

$

22,638

 

 

 

 

 

 

 LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 CURRENT LIABILITIES:

 

 

 

 

 

 Line of credit

$

14,216

 

$

15,699

 Accrued expenses

 

-

 

 

10,400

 Notes payable

 

13,200

 

 

13,200

    Advances from the majority stockholder and Chief Executive Officer

 

7,847

 

 

4,509

 

 

35,263

 

 

43,808

 

 

 

 

 

 

Total current liabilities

 

35,263

 

 

43,808

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

   

 

 

 

 

 

Preferred stock: $0.001 par value; 25,000,000 shares authorized;

 

 

 

 

 

  none issued or outstanding

 

-

 

 

-

Common stock: $0.001 par value; 100,000,000 shares authorized;

 

 

 

 

 

  9,845,000 shares issued and outstanding

 

9,845

 

 

9,845

 Additional paid-in capital

 

(2,295)

 

 

(2,295)

Deficit accumulated during the development stage

 

(35,331)

 

 

(28,720)

 

 

 

 

 

 

Total stockholders' deficit

 

(27,781)

 

 

(21,170)

 

 

 

 

 

 

Total Liabilities and Stockholders' Deficit

$

7,482

 

$

22,638

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.




F-16




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Statements of Operations

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

   

For the Period from

 

 

 

For the Six Months

For the Six Months

February 19, 2009

 

 

 

Ended

Ended

(inception) through

 

 

 

June 30, 2011

June 30, 2010

June 30, 2011

 

 

 

(Unaudited)

(Unaudited)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 Net Revenues

 

 

 

 

$

-

$

5,072

$

134,945

 

 

 

 

 

 

 

 

 

 

 

 Cost of Services

 

 

 

 

 

-

 

-

-

83,686

 

 

 

 

 

 

 

 

 

 

 

 Gross Profit

 

 

 

 

 

-

 

5,072

 

51,259

 

 

 

 

 

 

 

 

 

 

 

 Operating Expenses

 

 

 

 

 

 

 

 

 

 

 Advertising and promotion

 

 

 

 

 

-

 

7,997

 

10,432

 Depreciation expense

 

 

 

 

 

1,076

 

1,274

 

6,168

 Insurance expense

 

 

 

 

 

-

 

883

 

12,046

 Payroll expenses

 

 

 

 

 

-

 

-

 

11,478

 Professional fees

 

 

 

 

 

4,000

 

-

 

35,061

 Rent - storage

 

 

 

 

 

309

 

310

 

24,839

 Rent - office

 

 

 

 

 

-

 

2,200

 

20,466

    General and administrative

 

 

 

 

 

345

 

1,601

-

25,333

 

 

 

 

 

 

 

 

 

 

 

 Total operating expenses

 

 

 

 

 

5,730

 

14,264

 

145,823

 

 

 

 

 

 

 

 

 

 

 

 Income (Loss) from Operations

 

 

 

 

 

(5,730)

 

(9,192)

 

(94,564)

 

 

 

 

 

 

 

 

-

 

 

 Other (Income) Expenses

 

 

 

 

 

 

 

 

 

 

 Interest expense

 

 

 

 

 

881

 

-

 

1,308

 

 

 

 

 

 

 

 

 

 

 

 Total other (income) expense

 

 

 

 

 

881

 

(9,192)

 

1,308

 

 

 

 

 

 

 

 

 

 

 

 Income (Loss) before Income Taxes

 

 

 

 

 

(6,611)

 

(9,192)

 

(95,872)

 

 

 

 

 

 

 

 

 

 

 

 Income Tax Provision

 

 

 

 

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 Net Income (Loss)

 

 

 

 

$

(6,611)

$

(9,192)

$

(95,872)

 

 

 

 

 

 

 

 

 

 

 

 Pro Forma:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Income (Loss) before Income Taxes

 

 

 

 

 

(6,611)

 

(9,192)

 

(95,872)

 

 

 

 

 

 

 

 

 

 

 

 Pro Forma Income Tax Provision

 

 

 

 

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 Pro Forma Net Income (Loss)

 

 

 

 

$

(6,611)

 

(9,192)

 

(95,872)

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED:

 

 

 

 

$

(0.00)

$

(0.00)

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic and Diluted

 

 

 

 

 

9,845,000

 

9,500,000

 

9,500,000

 

 

 

 

 

 

 

 

 

 

 

 See accompanying notes to the consolidated financial statements.




F-17




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Statement of Stockholders' Deficit

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

Common Stock,

Additional

Accumulated

Total

 

Member's

$0.001 Par Value

Paid-In

during the

Stockholders'

 

Capital

Shares

Amount

Capital

Development stage

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 February 19, 2009 ( inception )

$

-

-

$

-

$

-

$

-

$

-

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued to founder for membership interest upon formation

 

-

9,500,000

 

9,500

 

(9,500)

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 Member's capital contributed

 

3,535

-

 

-

 

-

 

-

 

3,535

 

 

 

 

 

 

 

 

 

 

 

 

 Net loss

 

-

-

 

-

 

-

 

(52,557)

 

(52,557)

 

 

 

 

 

 

 

 

 

 

 

 

 Balance, December 31, 2009

 

3,535

9,500,000

 

9,500

 

(9,500)

 

(52,557)

 

(49,022)

 

 

 

 

 

 

 

 

 

 

 

 

 Member's capital contributed for the period

 

 

 

 

 

 

 

 

 

 

 

   from January 1, 2010 through July 29, 2010

 

33,026

-

 

-

 

-

 

-

 

33,026

 

 

 

 

 

 

 

 

 

 

 

 

 Net loss for the period

 

 

 

 

 

 

 

 

 

 

 

   from January 1, 2010 through July 29, 2010

 

-

-

 

-

 

-

 

(7,984)

 

(7,984)

 

 

 

 

 

 

 

 

 

 

 

 

 Reclassification of LLC member capital

 

 

 

 

 

 

 

 

 

 

 

   as additional paid-in capital

 

(36,561)

-

 

-

 

36,561

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 Reclassification of accumulated deficit and net loss

 

 

 

 

 

 

 

 

 

 

 

   as of July 29, 2010

 

-

-

 

-

 

(60,541)

 

60,541

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 Shares issued for cash at $0.001 par value per share

 

 

 

 

 

 

 

 

 

 

 

   on August 4, 2010

 

-

30,000

 

30

 

-

 

-

 

30

 

 

 

 

 

 

 

 

 

 

 

 

 Shares issued for cash at $0.1 per share

 

-

315,000

 

315

 

31,185

 

-

 

31,500

 

 

 

 

 

 

 

 

 

 

 

 

 Net loss for the period

 

 

 

 

 

 

 

 

 

 

 

   from July 30, 2010 through December 30, 2010

 

-

-

 

-

 

-

 

(28,720)

 

(28,720)

 

 

 

 

 

 

 

 

 

 

 

 

 Balance December 31, 2010

 

-

9,845,000

 

9,845

 

(2,295)

 

(28,720)

 

(21,170)

 

 

 

 

 

 

 

 

 

 

 

 

 Net loss  

 

 

 

 

 

 

 

 

(6,611)

 

(6,611)

 

 

 

 

 

 

 

 

 

 

 

 

 Balance  June 30, 2011

$

-

9,845,000

$

9,845

$

(2,295)

$

(35,331)

$

(27,781)

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.




F-18




JH Designs, Inc. and Subsidiary

(A Development Stage Company)

Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Period

from

 

For the Six

 

For the Six

 

February 19,

2009

 

Months

Ended

 

Months

Ended

 

(Inception)

through

 

June 30, 2011

 

June 30, 2010

 

June 30, 2011

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 Net loss  

$

(6,611)

 

$

(9,192)

 

$

(95,872)

 Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 Depreciation

 

1,076

 

 

1,274

 

 

6,168

 Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 Prepaid expenses

 

4,000

 

 

-

 

 

-

 Security deposit

 

-

 

 

-

 

 

(250)

 Accrued expenses

 

(10,400)

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 NET CASH USED IN OPERATING ACTIVITIES

 

(11,935)

 

 

(7,918)

 

 

(89,954)

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 Purchase of fixed assets

 

-

 

 

-

 

 

(10,761)

 

 

 

 

 

 

 

 

 

 NET CASH USED IN INVESTING ACTIVITIES

 

-

 

 

-

 

 

(10,761)

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Cash overdraft

 

-

 

 

(640)

 

 

-

Line of credit

 

(1,483)

 

 

(941)

 

 

14,216

Proceed from notes payable

 

-

 

 

-

 

 

59,000

Repayment of notes payable

 

-

 

 

(12,000)

 

 

(45,800)

Proceeds from majority stockholder

 

3,338

 

 

-

 

 

7,848

Proceeds from sale of common shares

 

-

 

 

-

 

 

31,500

Member's capital

 

 

 

 

21,320

 

 

36,590

 

 

 

 

 

 

 

 

 

 NET CASH PROVIDED BY FINANCING ACTIVITIES

 

1,855

 

 

7,739

 

 

103,354

 

 

 

 

 

 

 

 

 

 NET CHANGE IN CASH

 

(10,080)

 

 

(179)

 

 

2,639

 

 

 

 

 

 

 

 

 

 Cash at beginning of period

 

12,719

 

 

542

 

 

-

 

 

 

 

 

 

 

 

 

 Cash at end of period

$

2,639

 

$

363

 

$

2,369

 

 

 

 

 

 

 

 

 

 SUPPLEMENTAL DISCLOSURE OF

 

 

 

 

 

 

 

 

   CASH FLOWS INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Interest paid

$

-

 

$

-

 

$

-

   Income tax paid

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 See accompanying notes to the consolidated financial statements.




F-19



JH Designs, Inc.

(A Development Stage Company)

June 30, 2011and 2010

Notes to the Consolidated Financial Statements

(Unaudited)


NOTE 1 - ORGANIZATION AND OPERATIONS


On February 19, 2009, Mr. Jonathan Hopp formed Staged for Success LLC (“LLC”), a single member LLC under the laws of the State of California.  LLC engages in home staging and interior design services business.


JH Designs, Inc. (the “Company”), was incorporated under the laws of the State of Nevada on July 29, 2010. Upon formation the Company issued 9,500,000 shares of its common stock to Mr. Jonathan Hopp, its founder, in exchange for the existing business of LLC.  No value was given to the stock issued by the Company.  Therefore, the shares were recorded to reflect the $.001 par value and paid in capital was recorded as a negative amount ($9,500). The sole purpose of the formation of the Company is to acquire LLC, owned and operated by Mr. Jonathan Hopp.  The Company was inactive prior to the acquisition of Staged for Success LLC.


Merger of Staged for Success, LLC


On September 1, 2010, the Company acquired from Mr. Jonathan Hopp, the 100% interest in LLC for one (1) dollar.  The acquisition of LLC (“Predecessor”) by the Company has been accounted for as a reverse acquisition for financial accounting purposes. The reverse acquisition is deemed a capital transaction and the net assets of Predecessor (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination.  The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Predecessor which are recorded at historical cost. The equity of the Company is the historical equity of Predecessor retroactively restated to reflect the number of shares issued by the Company in the transaction.


The Company applied paragraph 505-10-S99-3 of the FASB Accounting Standards Codification (formerly Topic 4B of the Staff Accounting Bulletins (“SAB”) (“SAB Topic 4B”) issued by the United States Securities and Exchange Commission (the “SEC”), by reclassifying the single member LLC’s owner capital account inclusive of capital contribution of $36,561 and a deficit accumulated during the development stage of ($60,541) to additional paid-in capital as of July 29, 2010.


The accompanying consolidated financial statements have been prepared as if the Company had its corporate capital structure as of the first date of the first period presented.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of presentation – unaudited interim financial information


The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.  Unaudited interim results are not necessarily indicative of the results for the full fiscal year.  These financial statements should be read in conjunction with the financial statements of the Company for the period from February 19, 2009 (inception) through December 31, 2010 and notes thereto contained in the information filed as part of the Company’s Registration Statement on Form S-1, of which this Prospectus is a part.


Principle of consolidation


The accompanying consolidated financial statements include all of the accounts of the Company as of June 30, 2011, for the interim period then ended and for the period from July 29, 2010 (inception) through June 30, 2011.  LLC is included as of June 30, 2011 and 2010, for the interim periods then ended and for the period from February 19, 2009 (date of formation) through June 30, 2011.  All intercompany balances and transactions have been eliminated.



F-20




Development stage company


The Company is a development stage company as defined by section 915-10-20 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification.  Although the Company has recognized some nominal amount of revenues since inception, the Company is still devoting substantially all of its efforts on establishing the business and, therefore, still qualifies as a development stage company.  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 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 period.


The Company’s significant estimates include the fair value of financial instruments; the carrying value and recoverability of long-lived assets, including the values assigned to and estimated useful lives of computer equipment; interest rate; income tax rate, income tax provision and valuation allowance of deferred tax assets; and the assumption that the Company will continue as a going concern.  Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.


Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.


Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly.  Actual results could differ from those estimates.


Fair value of financial instruments


The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.  To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

 

 

Level 1

 

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

 

 

Level 2

 

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

 

 

Level 3

 

Pricing inputs that are generally observable inputs and not corroborated by market data.


Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.


The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.


The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments.



F-21




The Company’s line of credit and notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at June 30, 2011 and 2010.


Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.


It is not however, practical to determine the fair value of advances from stockholders due to their related party nature.


Carrying value, recoverability and impairment of long-lived assets


The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include computer equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.


The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.


The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes.  The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.


The impairment charges, if any, is included in operating expenses in the accompanying consolidated statements of operations.


Cash equivalents


The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.


Computer equipment


Computer equipment is recorded at cost. Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred. Depreciation of computer equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of five (5) years.  Upon sale or retirement of computer equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.


Related parties


The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.



F-22




Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d.principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.


The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include:  a. the nature of the relationship(s) involvedb.  description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. mounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.


Commitments and contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.  The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.


If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements.  If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.


Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.  Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.


Revenue recognition


The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company will recognize revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.


Income taxes


The Company was a single member LLC, until July 29, 2010 during which time the Company was treated as a disregarded entity for income tax purposes.  The operating results prior to July 29, 2010 of LLC were included in the tax return of the Company’s founder.



F-23




Effective July 29, 2010, the Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date.


The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes.  Section 740-10-25 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 Section 740-10-25, 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 should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.


The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.


Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.


Unaudited pro forma income tax information


The operating results prior to July 29, 2010 of LLC were included in the tax return of the Company’s founder for income tax purposes.  The unaudited pro forma income tax amounts included in the accompanying consolidated statements of operations and income taxes note reflect the provision for income taxes which would have been recorded if the Company had been incorporated as of the beginning of the first date presented.


Net income (loss) per common share


Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.  The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.


There were no potentially dilutive shares outstanding for the interim period ended June 30, 2011 or 2010.



F-24




Cash flows reporting

 

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.  The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.


Subsequent events


The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.


Recently issued accounting pronouncements


In May 2011, the FASB issued the FASB Accounting Standards Update No. 2011-04 “Fair Value Measurement” (“ASU 2011-04”).  This amendment and guidance are the result of the work by the FASB and the IASB to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards (IFRSs).


This update does not modify the requirements for when fair value measurements apply; rather, they generally represent clarifications on how to measure and disclose fair value under ASC 820, Fair Value Measurement, including the following revisions:


·

An entity that holds a group of financial assets and financial liabilities whose market risk (that is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those risks.

·

In the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market participants would do so when pricing the asset or liability consistent with the unit of account.

·

Additional disclosures about fair value measurements.


The amendments in this Update are to be applied prospectively and are effective for public entity during interim and annual periods beginning after December 15, 2011.


In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05 “ Comprehensive Income (“ASU 2011-05”), which was the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income, by eliminating the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance now gives entities the option to present all nonowner changes in stockholders’ equity either as a single continuous statement of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the amendments require entities to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.


The amendments in this Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within those years, beginning after December 15, 2011.


Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.



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NOTE 3 – GOING CONCERN


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As reflected in the accompanying consolidated financial statements, the Company had a deficit accumulated during the development stage of $35,331 at June 30, 2011, a net loss of $6,611 and net cash used in operating activities of $11,935 for the interim period then ended, respectively.


While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations.  Management intends to raise additional funds by way of a public or private offering.  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.  While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect.  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 revenues.


The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


NOTE 4 – COMPUTER EQUIPMENT


Computer equipment, stated at cost, less accumulated depreciation at June 30, 2011 and December 31, 2010, consisted of the following:

 

 

June 30,

2011

 

December 31,

2010

Computer equipment

$

10,761

 

$

10,761

 

 

 

 

 

 

Less accumulated depreciation

 

(6,168)

 

 

(5,092)

 

 

 

 

 

$

4,593

 

$

5,669


Depreciation expense


Depreciation expense for the period ended June 30, 2010 and 2010 was $1,076 and $1,274, respectively.


NOTE 5 – LINE OF CREDIT


LLC has an open line of credit of $16,600 with a financial institution with interest at 9.75% per annum, payable monthly and with principal due on demand.  The usage and availability of the line of credit at June 30, 2011 were as follows:


 

Date of Expiration

 

Total Facility

 

Facility Used

 

Facility Available

 

 

 

 

 

 

 

 

 

 

 

 

Wells Fargo Bank, N.A.

 

Due on demand

 

$

16,600

 

$

14,216

 

$

2,384

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

16,600

 

$

14,216

 

$

2,384


NOTE 6 – NOTES PAYABLE


Notes payable at June 30, 2011 and December 31, 2010, consisted of the following:


 

 

June 30

2011

 

December 31,

2009

Notes payable

 

$

13,200

 

$

13,200

 

 

 

 

 

 

 

$

13,200

 

$

13,200


LLC has notes payable to an unrelated third party. The notes are unsecured, non-interest bearing and due on demand.



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NOTE 7 – RELATED PARTY TRANSACTIONS


Advances from majority stockholder and Chief Executive Officer


Advances from majority stockholder and Chief Executive Officer at June 30, 2011 and December 31, 2010, consisted of the following:


 

 

June 30,

2011

 

December 31,

2010

Advances from major stockholder and Chief Executive Officer

 

$

7,847

 

$

4,509

 

 

 

 

 

 

 

$

7,847

 

$

4,509


The advances from major stockholder and Chief Executive Officer are non-interest bearing and due on demand.


Free office space from its majority stockholder and Chief Executive Officer


The Company has been provided office space by its majority stockholder and Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.


NOTE 8 – STOCKHOLDERS’ DEFICIT


Shares authorized


The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 per share, and 25,000,000 shares of preferred stock with a par value of $0.001 per share.


Common stock


The Company was incorporated on July 29, 2010 at which time 9,500,000 shares of common stock were issued to the Company’s founder in exchange for the existing business of LLC. No value was given to the stock issued by the newly formed corporation.  Therefore, the shares were recorded to reflect the $.001 par value and paid in capital was recorded as a negative amount ($9,500).  In other words, no net value was assigned to these shares.


On August 4, 2010, the Company sold 30,000 shares of common stock at par value $0.001 per share for $30.


For the period from September 1, 2010 through December 30, 2010, the Company sold 315,000 shares of common stock at $0.1 per share, or $31,500 in aggregate for cash.


NOTE 9 – SUBSEQUENT EVENTS


The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.  The Management of the Company determined that there were no reportable subsequent events to be disclosed.




F-27




PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

 

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

The following table sets forth the estimated expenses in connection with the issuance and distribution of the securities being registered hereby. All such expenses will be borne by the Company; none shall be borne by any selling stockholders.


Item

 

Amount

SEC Registration Fee

 

$

27.16

Transfer Agent Fees

 

 

900.00

Legal Fees

 

 

10,000.00

Accounting Fees

 

 

10,000.00

Printing Costs

 

 

500.00

Miscellaneous

 

 

500.00

TOTAL

 

$

21,927.16

 

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

The Company’s Bylaws provide that we shall, to the full extent permitted by the Nevada General Business Corporation Law, as amended from time to time (the “Nevada Corporate Law”), indemnify all of our directors and officers.  Section 78.7502 of the Nevada Corporate Law provides in part that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

 

Similar indemnity is authorized for such persons against expenses (including attorneys’ fees) actually and reasonably incurred in defense or settlement of any threatened, pending or completed action or suit by or in the right of the corporation, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation.  Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors that indemnification is proper because the indemnitee has met the applicable standard of conduct.  Under our Bylaws, the indemnitee is presumed to be entitled to indemnification and we have the burden of proof to overcome that presumption.  Where an officer or a director is successful on the merits or otherwise in the defense of any action referred to above, we must indemnify him against the expenses which such officer or director actually or reasonably incurred. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.


RECENT SALES OF UNREGISTERED SECURITIES


Since our formation on July 29, 2010, we have issued and sold the following securities without registration:


On August 4, 2010, we issued 30,000 shares of common stock to one person, legal counsel to the Company, at a purchase price of $0.001 per share, for aggregate proceeds of $30.  The offer and sale was made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), in a non-public offering where the purchaser was a “sophisticated investor” who had access to registration-type information about the Company.


On August 5, 2010, we issued 9,500,000 shares of common stock to Jonathan Hopp, our sole officer and director, in exchange for Mr. Hopp acting as President and Chief Executive Officer for a term of one year.  The offer and sale was made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act, in a non-public offering where the purchaser was a “sophisticated investor” who had access to registration-type information about the Company.



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Between August 18, 2010 and November 30, of 2010, we offered and sold 315,000 shares of our common stock to 35 investors, at a purchase price of $0.10 per share, for aggregate proceeds of $31,500.  The offer and sale was made in a private offering to solely “accredited investors” in reliance on the exemption from registration provided by Section 4(2) of the Securities Act, and Rule 506, promulgated thereunder. 

 

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

The following exhibits are filed as part of this registration statement:


Exhibit

 

Description

 

 

 

2.1

 

LLC Membership Purchase Agreement, dated September 1, 2010, by and between Registrant and Jonathan Hopp (1)

3.1

 

Articles of Incorporation of Registrant (2)

3.2

 

Bylaws of the Registrant (1)

5.1

 

Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the legality of the securities being registered

10.1

 

Letter Agreement, dated August 5, 2010, by and between Registrant and Jonathan Hopp (1)

10.2

 

Subscription Agreement, dated August 4, 2010, by and between Registrant and Thomas Puzzo (2)

10.3

 

Form of Subscription Agreement by and between Registrant and purchasers in private offering between August 18, 2010 and November 26,2010 (2)

21.1

 

Subsidiaries of Registrant (2)

23.1

 

Consent of Law Offices of Thomas E. Puzzo, PLLC (included in Exhibit 5.1)

23.2

 

Consent of Li & Company, PC


(1) Incorporated by reference to Form S-1 (File No. 333-174196), filed with the Commission on May 13, 2011.

(2) Incorporated by reference to Amendment No. 1 to Form S-1 (File No. 333-174196), filed with the Commission on July 21, 2011.


UNDERTAKINGS

 

The undersigned Registrant hereby undertakes:


(a)(1) To file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statement to:


 

(i)

Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

 

(ii)

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

 

 

(iii)

To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.


(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:



II-2




(i) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or our securities provided by or on behalf of the undersigned registrant; and

 

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

 

In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.



II-3



SIGNATURES

 

In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has authorized this registration statement to be signed on its behalf by the undersigned, in Los Angeles, California, on the 11th day of October, 2011.

 

 

 

JH DESIGNS, INC.

(Registrant)

 

 

   

 

By:

/s/ Jonathan Hopp

 

Name:

Jonathan Hopp

 

Title:

President and Chief Executive Officer

 

 

(principal executive officer, principal

financial office and principal accounting officer)


 

POWER OF ATTORNEY

 

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jonathan Hopp, as his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement on Form S-1 of JH Designs, Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, grant unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the foregoing, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.

 

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.


Signature

 

Title

 

Date

 

 

 

 

 

/s/ Jonathan Hopp

 

President and Chief Executive Officer,

 

October 11, 2011

Jonathan Hopp

 

Secretary, Treasurer and Director

(principal executive officer, principal

financial office and principal accounting officer)

 

 




EXHIBIT INDEX


Exhibit

 

Description

 

 

 

2.1

 

LLC Membership Purchase Agreement, dated September 1, 2010, by and between Registrant and Jonathan Hopp (1)

3.1

 

Articles of Incorporation of Registrant (2)

3.2

 

Bylaws of the Registrant (1)

5.1

 

Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the legality of the securities being registered

10.1

 

Letter Agreement, dated August 5, 2010, by and between Registrant and Jonathan Hopp (1)

10.2

 

Subscription Agreement, dated August 4, 2010, by and between Registrant and Thomas Puzzo (2)

10.3

 

Form of Subscription Agreement by and between Registrant and purchasers in private offering between August 18, 2010 and November 26,2010 (2)

21.1

 

Subsidiaries of Registrant (2)

23.1

 

Consent of Law Offices of Thomas E. Puzzo, PLLC (included in Exhibit 5.1)

23.2

 

Consent of Li & Company, PC


(1) Incorporated by reference to Form S-1 (File No. 333-174196), filed with the Commission on May 13, 2011.

(2) Incorporated by reference to Amendment No. 1 to Form S-1 (File No. 333-174196), filed with the Commission on July 21, 2011.





II-4