UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2009
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-51861
NEVADA PROCESSING SOLUTIONS
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(Exact name of registrant as specified in its charter)
Nevada 20-4959207
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9646 Giddings, Las Vegas, NV 89148
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (702) 334-4008
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of
the Exchange Act (Check one).
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller Reporting Company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
As of January 20, 2010, the registrant had issued and outstanding 3,375,000
shares of its $0.001 par value Common Stock, 195,000,000 common voting shares
authorized; and, 872,690 convertible and callable preferred issued and
outstanding, 5,000,000 preferred shares authorized.
Table of Contents
Nevada Processing Solutions
Index to Form 10-Q
For the Quarterly Period Ended December 31, 2009
Part I. Financial Information
Page
Item 1. Financial Statements
Condensed Balance Sheets as of December 31, 2009 and
September 30, 2009 3
Condensed Statements of Operations for the three months
ended December 31, 2009 and 2008 4
Condensed Statements of Cash Flows for the three months
ended December 31, 2009 and 2008 5
Notes to the Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
Item 4. Controls and Procedures 16
Part II Other Information
Item 1. Legal Proceedings 18
Item 1A. Risk Factors 18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits 19
Signatures 20
2
Part I. Financial Information
Item 1. Financial Statements
NEVADA PROCESSING SOLUTIONS
(A development stage company)
Condensed Balance Sheets
December 31,
2009 September 30,
(Unaudited) 2009
------------ ------------
ASSETS
Current Assets:
Prepaid expense $ - $ 1,000
------------ ------------
Total current assets - 1,000
------------ ------------
TOTAL ASSETS $ - $ 1,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,500 $ 775
Accrued expense 1,500 -
------------ ------------
Total current liabilities 3,000 775
------------ ------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 872,690 shares issued and
outstanding as of 12/31/09 and 9/30/09,
respectively 873 873
Common stock, $0.001 par value, 195,000,000
shares authorized, 3,375,000, 3,375,000
issued and outstanding as of
12/31/09 and 9/30/09, respectively 3,375 3,375
Additional paid-in capital 734,743 733,768
(Deficit) accumulated during development stage (741,991) (737,791)
------------ ------------
Total stockholders' equity (3,000) 225
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ 1,000
============ ============
The accompanying notes are an integral part of these financial statements.
3
NEVADA PROCESSING SOLUTIONS
(A development stage company)
Condensed Statements of Operations
(Unaudited)
For the Period
For the three from
months ending May 30, 2006
December 31, (Inception) to
-------------------- December 31,
2009 2008 2009
--------- --------- --------------
REVENUE $ - $ - $ -
EXPENSES
General and administrative expenses 4,200 3,250 35,113
--------- --------- --------------
Total Expenses 4,200 3,250 35,113
--------- --------- --------------
Net (Loss) before beneficial interest
and provision for income taxes $ (4,200) $ (3,250) $ (35,113)
--------- --------- --------------
Beneficial Conversion Feature of
Preferred stock (706,878)
--------- ---------- -------------
Income tax expense - - -
--------- ---------- -------------
NET (LOSS) $ (4,200) $ (3,250) $ (741,991)
========= ========== =============
(LOSS) PER SHARE - BASIC AND
FULLY DILUTED $ (0.00) $ (0.00)
========= ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND FULLY DILUTED 3,375,000 3,375,000
========= =========
The accompanying notes are an integral part of these statements
4
NEVADA PROCESSING SOLUTIONS
(A development stage company)
Condensed Statements of Cash Flows
(Unaudited)
For the Period
For the three from
months ending May 30, 2006
December 31, (Inception) to
-------------------- December 31,
2009 2008 2009
--------- --------- --------------
OPERATING ACTIVITIES
Net (loss) $ (4,200) $ (3,250) $ (741,991)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Beneficial Interest on
Conversion - - 706,878
Contributed services - - 10,000
Decrease in prepaid expense 1,000 - -
Increase in accounts payable 725 - 1,500
Increase in accrued expense 1,500 - 1,500
--------- --------- --------------
Cash (used) by operating activities (975) (3,250) (22,113)
FINANCING ACTIVITIES
Sale of Common Stock - - 5,850
Sale of Preferred Stock - - 873
Contributed Capital 975 3,250 15,390
--------- --------- --------------
Cash provided by financing activities 975 3,250 22,113
--------- --------- --------------
NET CHANGE IN CASH - - -
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD - - -
--------- --------- --------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ - $ - $ -
========= ========= ==============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
5
NEVADA PROCESSING SOLUTIONS
(A development stage company)
Notes to the Condensed Financial Statements
(Unaudited)
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at December 31,
2009, and for all periods presented, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It
is suggested that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
September 30, 2009 audited financial statements filed with its annual
report. The results of operations for the periods ended December 31, 2009
and 2008 are not necessarily indicative of the operating results for the
full year.
NOTE 2 - GOING CONCERN
These condensed financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. As of
December 31, 2009, the Company has not recognized any revenues and has
accumulated operating losses of approximately $35,113 since inception.
The Company's ability to continue as a going concern is contingent upon
the successful completion of additional financing arrangements and its
ability to achieve and maintain profitable operations. Management plans
to raise equity capital to finance the operating and capital requirements
of the Company. Amounts raised will be used to further development of the
Company's services, to provide financing for marketing and promotion, to
secure additional property and equipment, and for other working capital
purposes. While the Company is putting forth its best efforts to achieve
the above plans, there is no assurance that any such activity will generate
funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
6
NEVADA PROCESSING SOLUTIONS
(A development stage company)
Notes to the Condensed Financial Statements
(Unaudited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Recent Accounting Pronouncements
--------------------------------
In June 2009, the FASB issued ASC 105-10, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles".
ASC 105-10 will become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the Securities
and Exchange Commission (SEC) under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. On the effective date
of this Statement, the Codification will supersede all then-existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC
accounting literature not included in the Codification will become non-
authoritative. This statement is effective for financial statements issued
for interim and annual periods ending after September 15, 2009. The
Company does not expect the adoption of ASC 105-10 to have an impact on
the Company's results of operations, financial condition or cash flows.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
7
NEVADA PROCESSING SOLUTIONS
(A development stage company)
Notes to the Condensed Financial Statements
(Unaudited)
NOTE 5 - CONCENTRATION OF CREDIT RISK
Cash Balances
------------
The Company maintains its cash in various financial institutions in the
United States. Balances maintained in the United States are insured by the
Federal Deposit Insurance Corporation (FDIC). This government corporation
insured balances up to $100,000 through October 13, 2008. As of October 14,
2008 all non-interest bearing transaction deposit accounts at an FDIC-insured
institution, including all business checking deposit accounts that do not
earn interest, are fully insured for the entire amount in the deposit
account. This unlimited insurance coverage is temporary and will remain in
effect for participating institutions until December 31, 2009. All other
deposit accounts at FDIC-insured institutions are insured up to at least
$250,000 per depositor until December 31, 2013.
NOTE 6 - SUBSEQUENT EVENTS
None. The Company has evaluated subsequent events through January 20, 2010,
the date which the financial statements were available to be issued.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to
change based on various important factors (some of which are beyond the
Company's control). The following factors, in addition to others not listed,
could cause the Company's actual results to differ materially from those
expressed in forward looking statements: the strength of the domestic and
local economies in which the Company conducts operations, the impact of
current uncertainties in global economic conditions and the ongoing financial
crisis affecting the domestic and foreign banking system and financial
markets, including the impact on the Company's suppliers and customers,
changes in client needs and consumer spending habits, the impact of
competition and technological change on the Company, the Company's ability to
manage its growth effectively, including its ability to successfully integrate
any business which it might acquire, and currency fluctuations. All forward-
looking statements in this report are based upon information available to the
Company on the date of this report. The Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise, except as required by law.
Critical Accounting Policies
----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", included in our
Annual Report on Form 10-K for the fiscal year ended September 30, 2009.
9
Results of Operations
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Overview of Current Operations
------------------------------
Nevada Processing Solutions ("the Company") was formed on May 30, 2006.
Nevada Processing Solutions is a startup company that processes loan
applications for mortgage companies. Activities to date have been limited
primarily to organization, initial capitalization, establishing an appropriate
operating facility in Las Vegas, Nevada, and commencing its initial
operational plans.
Business Strategy
-----------------
Nevada Processing Solutions goal is to develop long-term business
partnerships by providing mortgage processing services to mortgage brokers.
It is managements goal to handle loan processing from submission to funding.
The Company plans to handle all types of loan programs. Management plans to
develop the procedures necessary to process loans accurately and
professionally. The loan processor fee is billed at closing on the as a third
party loan processing fee. Nevada Processing Solutions plans to charge
approximately $500 for each loan processed. Services include:
o Expedite Closing Cycles. Nevada Processing Solutions will handle all
"back-end" loan processing activities associated with closing a loan:
appraisal and title/escrow ordering and follow-up, submission to
underwriting, clearing of conditions, coordination of closing and
confirmation of funding.
o Upon receiving a loan package, Nevada Processing Solutions will
upload it into its system, verify that ratios, income, accuracy of
data and notify the broker of any deficiencies.
o Review a broker's file for compliance issues and/or missing
documentation.
o Order (depending on the Brokers needs) title work, payoffs,
appraisals, and surveys that will be required.
o Keep the mortgage broker up to date as the loan progresses
through underwriting.
o After meeting the conditions, the Company will monitor the status of
the file in the lender's closing department to insure the closing
documents are sent to the title company.
10
Further, the Company plans to utilize a software program designed to track all
of the steps required to approve a mortgage loan application. As each step is
completed, the software updates the information in the applicants' file. The
loan applicant is able to determine the progress of their loan by checking the
status of the loan approval process through a secure internet site.
Nevada Processing Solutions plans to provide information to loan applicants as
to the approval status of their individual mortgage loan. Via a user name and
password, the loan applicants can check daily through a secure website on the
progress of their mortgage loan(s). A mortgage loan, on average, goes through
twenty steps before it is approved. The loan applicant can check the status
of the mortgage approval process as it passes through these twenty steps. It
allows the loan applicant to understand what has taken place and what needs to
take place before their mortgage funds are released.
Market
------
Nevada Processing Solutions plans to offer loan mortgage processing and
tracking services to mortgage companies. According to the U.S. Census Bureau
2005 Report, there are approximately 8,967 mortgage and non-mortgage loan
brokers in the U.S. In the State of Nevada alone there are 96 mortgage and
non-mortgage loan brokers. These loan brokers who represent the future
customer base of Nevada Processing Solutions.
Plan of Operations
------------------
Short term goal (twelve-month period)
-------------------------------------
The two key elements of management's short term plan is to create an initial
customer base, and to utilize a software program which tracks the approval
status of loans. The Company's plan of operation for the next 12 months will
be focused on three major areas: (i) Operations; (ii) Marketing; and (iii)
Financing.
Operations
----------
Management has designed a software program to track all of the steps required
to approve a mortgage loan application: The Company now has the infurstucture
and software program in place and ready to use.
11
Marketing
---------
The Company plans to develop a strategic marketing plan by working together
with mortgage brokers to generate awareness about our services. The marketing
plan will cover the following:
o Active promotional program including printing promotional materials,
educating mortgage brokers about our services
o Media relations program by developing a website that markets our
services;
o Developing an advertising campaign to market the Company's services.
Competition
-----------
Management has developed a software program to track the process of mortgage
approvals. This software program is not trademarked or protect by any patents.
Any who can develop a similar software program can infringe on the Company's
business, by offering the same service to the Company's customers at a lower
price. Many other companies are better funded and more established than
Nevada Processing Solutions.
Results of Operations for the three months ended December 31, 2009
------------------------------------------------------------------
Nevada Processing Solutions earned no revenues since our inception on May 30,
2006 through December 31, 2009. Management does not anticipate earning any
significant revenues until such time as the Company's business plan becomes
fully operational. Nevada Processing Solutions is presently in the
development stage of its business and management can provide no assurances
that the Company will be successful in developing its business.
For the period inception through December 31, 2009, Nevada Processing Solutions
generated no income. Since the Company's inception on May 30, 2006, Nevada
Processing Solutions experienced a net loss of $(741,991). This loss was
attributed to organizational expenses, legal and accounting fees of $35,113
and the beneficial conversion feature of our preferred stock of $706,878.
The bulk of the Company's expenses since inception dealt with keeping the
Company fully reporting. Management anticipates the Company's operating
expenses will increase as the Company begins its operations.
12
For the three months ending December 31, 2009, Nevada Processing Solutions
experienced a net loss of $(4,200) as compared to a net loss of $(3,250) for
the same period last year. The net loss for the three months ending
December 31, 2009 was attributed to general and administrative expenses of
$4,200. Most of the general and administrative expenses since the Company's
inception consist of legal and audit fees. The Company had no cash on hand
as of December 31, 2009. In the September 30, 2009 year-end financials and
the December 31, 2009 interim financials, the Company's auditor issued an
opinion that Nevada Processing Solutions financial condition raises
substantial doubt about the Company's ability to continue as a going concern.
Revenues
--------
The Company generated no revenues for the period from May 30, 2006 (inception)
through December 31, 2009. Management does not anticipate generating any
revenues for at least the next year.
Going Concern
-------------
Our independent auditors included an explanatory paragraph in their report
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 auditors.
Summary of any product research and development that we will perform for the
term of our plan of operation.
-----------------------------------------------------------------------------
Nevada Processing Solutions does not anticipate performing any additional
significant product research and development under its current plan of
operation.
Expected purchase or sale of plant and significant equipment.
-------------------------------------------------------------
Nevada Processing Solutions does not anticipate the purchase or sale of any
plant or significant equipment; as such items are not required by the Company
at this time.
13
Significant changes in the number of employees.
-----------------------------------------------
As of December 31, 2009, the Company does not have any employees. The
Company is dependent upon its sole officer and a director for the Company's
future business development. As the Company's operations expand management
anticipates the need to hire additional employees, consultants and
professionals; however, the exact number is not quantifiable at this time.
Liquidity and Capital Resources
-------------------------------
The Company's balance sheet as of December 31, 2009 reflects no current
assets and $3,000 in current liabilities. Cash and cash equivalents from
inception to date have been sufficient to provide the operating capital
necessary to operate to date. Since the Company has no cash reserves,
management has agreed to donate funds to the operations of the
Company, in order to keep it fully reporting for the next twelve (12) months,
without seeking reimbursement for the funds donated.
During the period from inception to December 31, 2009, proceeds were received
from the sale of common stock and preferred stock in connection with various
private placements. At the time of incorporation, we issued 872,690
non-voting Callable and Convertible Preferred shares. We filed with the
Nevada Secretary of State the designation that "These Series A Preferred
shares shall be designated as 'Callable and Convertible Preferred Stock.'"
The corporation has the right to call for and purchase these shares at any
time, within twelve months of issue, either at par value or at a slight
premium above par value, or if corporation should designate that these
shares are deemed not callable, the holders of these non-voting Series A
Preferred Shares shall have the right to cause the corporation to redeem
shares for Common Stock at any time. Each holder of the non voting Series A
Callable and Convertible Preferred Stock shall have the right to convert all
or any portion of such shares as such holder desires to convert, into shares
of the Common Stock of the corporation, as follows: each share of Series A
Convertible Preferred Stock can be exchanged for ten (10) shares of Common
Stock of the corporation."
Through a Board Resolution, it was resolved that we shall not call nor redeem
our Series A non-voting Callable and Convertible Preferred shares. The
shareholders of the Series A Preferred shares will be permitted to convert
each Series A Preferred share owned for ten common shares, at their
sole discretion. The conversion of 872,690 Series A Preferred Shares
converts into 8,726,900 registered common shares.
A critical component of our operating plan impacting our continued existence
is the ability to obtain additional capital through additional equity and/or
debt financing. We do not anticipate generating sufficient positive internal
operating cash flow until such time as we can deliver our product to market,
complete additional financial service company acquisitions and generate
substantial revenues, which may take the next few years to fully realize.
In the event we cannot obtain the necessary capital to pursue our strategic
plan, we may have to cease or significantly curtail our operations. This
would materially impact our ability to continue operations.
14
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations. These
limitations have adversely affected the Company's ability to obtain certain
projects and pursue additional business. Without realization of additional
capital, it would be unlikely for the Company to continue as a going concern.
In order for the Company to remain a Going Concern it will need to find
additional capital. Additional working capital may be sought through
additional debt or equity private placements, additional notes payable to
banks or related parties (officers, directors or stockholders), or from other
available funding sources at market rates of interest, or a combination of
these. The ability to raise necessary financing will depend on many factors,
including the nature and prospects of any business to be acquired and the
economic and market conditions prevailing at the time financing is sought.
No assurances can be given that any necessary financing can be obtained on
terms favorable to the Company, or at all.
As a result of the Company's current limited available cash, no officer or
director received compensation through the quarter ended December 31, 2009.
The Company has no employment agreements in place with its officers.
Future Financing
----------------
Management anticipates continuing to rely on equity sales of its common shares
in order to continue to fund its business operations. Issuances of additional
shares will result in dilution to our existing shareholders. There are no
assurances that the Company will achieve any sales of its equity securities
or arrange for debt or other financing to fund its business plan.
The Company seeks to raise a $100,000 in an offering of its common stock. In
the event the Company is unable to raise $100,000, the Company may be unable
to conduct any operations and may consequently go out of business. There are
no formal or informal agreements to attain such financing and management
cannot make any assurances that any financing can be obtained. If management
is unable to raise these funds, the Company will not be able to implement any
of its proposed business activities and may be forced to cease operations.
Management has been seeking funding from a number of sources, but has yet to
secure any funding, especially during this current economic downturn.
Management continues to seek different funding sources in order to initiate
its business plan. The downturn in the economy has limited various sources
of financing. Management continues to seek financing with no success. If we
are unable to raise these funds, we will not be able to implement any of our
proposed business activities and may be forced to cease operations.
15
Off-Balance Sheet Arrangements
------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results or operations,
liquidity, capital expenditures or capital resources that is material
to investors.
Critical Accounting Policies and Estimates
------------------------------------------
Revenue Recognition: We recognize revenue from service sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonable assured.
New Accounting Standards
------------------------
In June 2009, the FASB issued ASC 105-10, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles".
ASC 105-10 will become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the Securities
and Exchange Commission (SEC) under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. On the effective date
of this Statement, the Codification will supersede all then-existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC
accounting literature not included in the Codification will become non-
authoritative. This statement is effective for financial statements issued
for interim and annual periods ending after September 15, 2009. The
Company does not expect the adoption of ASC 105-10 to have an impact on
the Company's results of operations, financial condition or cash flows.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
16
Item 4T. Controls and Procedures
(a) Evaluation of Internal Controls and Procedures
Nevada Processing Solutions is committed to maintaining disclosure controls
and procedures that are designed to ensure that information required to be
disclosed in its Exchange Act reports is recorded, processed, summarized, and
reported within the time periods specified in the U.S. Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to its management, including its Chief Executive Officer and
Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.
As required by Rule 13a-15(b) of the Exchange Act, Nevada Processing
Solutions has carried out an evaluation, under the supervision and with the
participation of its management, including its Chief Executive Officer who
also serves as the Chief Financial Officer, who is also the sole member of our
Board of Directors, to provide reasonable assurance regarding the reliability
of financial reporting and the reparation of the financial statements in
accordance with U. S. generally accepted accounting principles.
The evaluation examined those disclosure controls and procedures as of
December 31, 2009, the end of the period covered by this report. Based
on that evaluation, they concluded that, during the period covered by this
report, such internal controls and procedures were not effective to detect
the inappropriate application of US GAAP rules as more fully described below.
This was due to deficiencies that existed in the design or operation of our
internal controls over financial reporting that adversely affected our
internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public
Company Accounting Oversight Board were: (1) lack of a functioning audit
committee due to a lack of a majority of independent members and a lack of a
majority of outside directors on our board of directors, resulting in
ineffective oversight in the establishment and monitoring of required
internal controls and procedures; (2) inadequate segregation of duties
consistent with control objectives; and (3) ineffective controls over period
end financial disclosure and reporting processes. The aforementioned
material weaknesses were identified by our Chief Executive Officer in
connection with the review of our financial statements as of December 31, 2009.
Management believes that the material weaknesses set forth in items (2) and
(3) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the
lack of a majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required
internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
17
Additional procedures were performed in order for management to conclude with
reasonable assurance that the Company's financial statements contained in
this Quarterly Report on Form 10-Q present fairly, in all material respects,
the Company's financial position, results of operations and cash flows for
the periods presented.
This quarterly report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation
by the Corporation's registered public accounting firm pursuant to temporary
rules of the SEC that permit the Corporation to provide only the management's
report in this quarterly report.
(b) Management's Remediation Initiatives
-----------------------------------------
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us.
And, we plan to appoint one or more outside directors to our board of
directors who shall be appointed to an audit committee resulting in a fully
functioning audit committee who will undertake the oversight in the
establishment and monitoring of required internal controls and procedures
such as reviewing and approving estimates and assumptions made by management
when funds are available to us.
(c) Changes in internal controls over financial reporting
----------------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
18
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
From time to time, the Company may become involved in various lawsuits and
legal proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
Nevada Processing Solutions is not presently a party to any material
litigation, nor to the knowledge of management is any litigation threatened
against the Company, which may materially affect the Company.
Item 1A - Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 2009 and the discussion
in Item 1, above, under "Financial Condition - Liquidity and Capital resources.
Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
None.
19
Item 6 -- Exhibits
Incorporated by reference
-------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
------------------------------------------------------------------------------
3.1 Articles of Incorporation, S-1 9/30/08 3.1 11/04/08
dated May 30, 2006
------------------------------------------------------------------------------
3.2 Bylaws dated May 31, 2006 S-1 9/30/08 3.2 11/04/08
as currently in effect
------------------------------------------------------------------------------
3.3 Amended Articles of Incorporation S-1 9/30/08 3.3 11/04/08
dated February 23, 2007
as currently in effect
------------------------------------------------------------------------------
3.4 Articles/Designation dated S-1 9/30/08 3.4 11/04/08
April 29, 2008 as currently
in effect
------------------------------------------------------------------------------
10.1 Preferred share lock-up 10-Q 3/31/09 10.1 4/21/09
agreement dated Apr. 1, 2009
------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
32.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Nevada Processing Solutions
---------------------------
Registrant
Date: January 20, 2010 By: /s/ J. Chad Guidry
---------------- ----------------------
J. Chad Guidry
President
21