SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
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x
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ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the fiscal year ended October 31, 2008
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o
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the
transition period from ___________ to ___________
Commission
File No. 333-149235
MOONSHINE
CREATIONS, INC.
(Name of
small business issuer in its charter)
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NEVADA
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26-0745273
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|
(State
or other jurisdiction of
incorporation
or organization)
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(IRS
Employer Identification No.)
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160
Henry Martin Trail
Statesville,
NC
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28625
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(Address
of principal executive offices)
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(Zip
Code)
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(704)-592-2622
(Registrant’s
telephone number, including area code)
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Securities
registered under Section 12(b) of the Exchange Act:
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Title
of each class registered:
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Name
of each exchange on which registered:
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None
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None
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Securities
registered under Section 12(g) of the Exchange Act:
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Common
Stock, par value $.00001
(Title
of class)
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|
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 xNo o
Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act. Yes xNo o
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large
accelerated
filer o Accelerated
filer o
Non-accelerated
filer o Smaller
reporting
company x
(Do not
check if a smaller reporting company)
Revenues
for year ended October 31, 2008: $0
Aggregate
market value of the voting common stock held by non-affiliates of the registrant
as of October 31, 2008, was: $0
Number of
shares of the registrant’s common stock outstanding as of December 23, 2008 was:
5,635,500
Transitional
Small Business Disclosure Format: Yes x No
o
TABLE
OF CONTENTS
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PART
I
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ITEM
1.
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1
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ITEM
2.
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2
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ITEM
3.
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2
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ITEM
4.
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3
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PART
II
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3
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ITEM
5.
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3
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ITEM
6.
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3
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ITEM
7.
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3
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ITEM
7A.
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4
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ITEM
8.
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F-
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ITEM
9.
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5
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ITEM
9A.
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5
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PART
III
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5
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ITEM
10.
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5
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ITEM
11.
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6
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ITEM
12.
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7
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ITEM
13.
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7
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ITEM
14.
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7
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PART
IV
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8
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ITEM
15.
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8
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SIGNATURES
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9
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PART
I
General
We were
formed in April 2007. Our plan is to create an online craft store which will
focus on one of a kind craft items made in the southeast United States. We
intend to contact artisans and display their items on our website; earning
commissions on each sale for our services. We intend to provide marketing,
payment services including taxation, as well as customer service in connection
with each sale made on our website. Once a sale has been made we will notify the
artisan of the sale and arrange for the shipping. Initially, the artists will be
contacted and the website will be maintained by our President, Ms. Victoria
Callanan. Ms. Callanan intends to hire additional assistants and representatives
as our client base expands.
Marketing
We plan
to utilize different channels for our marketing. We intend for our website to be
promoted by web placement services for example, Google Adwords and www.1-2-3webposition.com.
We also intend to promote our website by advertising in magazines such as
Southern Living, Cottage Living, Cottage Home, Better Homes and Gardens and
various other small regional publications. We also plan to set up booths at
craft fairs and pass out information inviting guest to visit our website. We
intend to further promote our website using a grass roots method by utilizing
Craft Blogs, www.myspace.com,
www.facebook.com, and
www.bizfriends.com.
Website
Currently
our website is being developed under the domain name moonshinecreationsinc.com.
We believe the development cost of our site will be $15,000 and the cost for
hosting will be $350 per month and we intend to use the proceeds from the
offering which we completed in January 2008 to meet these costs. We intend for
our website to use Flash and High resolution photos as well as possess the
capability to show short videos of variously featured craft items. Our website
will be updated on a daily basis to reflect current inventories.
On our
website, all of the craft items will be broken down into different categories
according to the craft medium. For example: pottery, glass, jewelry, home
accessories, stationary, wood, leather, metal, outdoor items and other
categories as well. The website will also have a shopping cart allowing
customers to purchase more than one item at a time. All items will have
descriptions and high resolution photos and certain designated items will have a
short video. In addition, we also plan to have a section featuring different
artist’s profile and their specialty items. Also, there will be a secure log-on
section where artisans can access detailed information related to their
craft.
Competition
Our
business will put us in direct competition with craft fairs, existing craft
websites, individual artisans who have websites and mega
websites. There are many craft fairs in the southeast including but
not limited to National Gospel & Harvest
Celebration, North Carolina Seafood Festival, Red River Revel Arts
Festival, The
Cotton Pickin’ Fair, and Gasparilla. These fairs offer a variety of exhibitors
depending on the individual fairs. Some of the existing craft websites are
craftsfaironline.com, thecountrygallery.net, craftsolutions.com and
indianchild.com. All of these websites provide a variety of services. In
addition to the existing craft websites there are individual artisans that will
have their own websites.
Our
business office is located at Moonshine Creations, Inc., 160 Henry Martin Trail,
Statesville, NC 28625.
We are
not presently parties to any litigation, nor to our knowledge and belief is any
litigation threatened or contemplated.
-1-
None.
PART
II
There is
presently no public market for our shares of common stock. We anticipate
applying for trading of our common stock on the Over the Counter Bulletin Board.
However, we can provide any assurance that our shares of common stock will be
traded on the Bulletin Board or, if traded, that a public market will
materialize.
Holders
of Our Common Stock
As of
December 23, 2008, we had 40 shareholders of our common stock.
Stock
Option Grants
To date,
we have not granted any stock options.
Registration
Rights
We have
not granted registration rights to the selling shareholders or to any other
persons.
Not
applicable.
Plan of
Operation
Moonshine
Creations, Inc. was incorporated in the State of Nevada on April 10,
2007. Our plan is to create an online craft store. We will focus on
one of a kind and unique craft items made in the southeast United States.
Moonshine creations will locate and contact the artisans and explain the
opportunity of displaying their items on our website. We will receive
commissions for our website service. We will provide the marketing,
receive payments, be responsible for the taxes and provide the customer service.
We will then notify the artisan of the sale and arrange for the shipping.
Initially, the artist will be contacted and the website will be maintained by
our President, Ms. Victoria Callanan. Ms. Callanan intends to hire additional
assistants and representatives as our client base expands.
Due to
our inability to obtain adequate financing in our inability to sucessfully
implement our business plan, we feel that it is necessary for us to cease
operations and actively pursue a potential reverse merger
candidate.
-2-
Results of
Operation
We did
not have any operating income from inception through October 31, 2008. For the
year ended October 31, 2008, the company recognized a net loss of $65,979 and
for the period from inception through October 31, 2008, the company recognized
net loss of $73,619. Expenses for the year ended October 31, 2008
were comprised of $53,579 in administrative costs, $10,000 in salary, and $2,400
in rent.
Liquidity and Capital
Resources
As of
October 31, 2008, we had $106 in cash.
We
believe we can not satisfy our cash requirements for the next twelve months with
our current cash. If we are unable to satisfy our cash requirements we may be
unable to proceed with our plan of operations. We do not anticipate the purchase
or sale of any significant equipment. We also do not expect any significant
additions to the number of employees. The foregoing represents our best estimate
of our cash needs based on current planning and business conditions. In the
event we are not successful in reaching our initial revenue targets, additional
funds may be required, and we may not be able to proceed with our business plan
for the development and marketing of our core services. Should this occur, we
will suspend or cease operations.
We
anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, our auditors
have raised substantial doubt about our ability to continue as a going
concern.
We are
still pursuing this plan but to date we have not been able to raise additional
funds through either debt or equity offerings. Without this additional cash we
have been unable to pursue our plan of operations and commence generating
revenue. We believe that we may not be able to raise the necessary funds to
continue to pursue our business operations. As a result of the foregoing, we
have recently begun to explore our options regarding the development of a new
business plan and direction. We are currently engaged in discussions with a
company regarding the possibility of a reverse triangular merger (the “Merger”)
involving our company. At this stage, no definitive terms have been agreed to,
and neither party is currently bound to proceed with the Merger.
Critical
Accounting Policies
Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use if estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
Recent Accounting
Pronouncements
In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51”. This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. SFAS No. 160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement.
-3-
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP. The current GAAP hierarchy has been criticized because it is directed
to the auditor rather than the entity, it is complex, and it ranks FASB
Statements of Financial Accounting Concepts, which are subject to the same level
of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process. The Board believes the GAAP hierarchy should be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP. SFAS 162 is effective 60 days following
the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency
of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have
a material impact on the Company’s financial position.
In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. The adoption of FASB 163 is not
expected to have a material impact on the Company’s financial
position.
Off-Balance Sheet
Arrangements
We have
no off-balance sheet arrangements.
Market
risk is the risk of loss from adverse changes in market prices and interest
rates. We do not have substantial operations at this time so they are not
susceptible to these market risks. If, however, they begin to
generate substantial revenue, their operations will be materially impacted by
interest rates and market prices.
-4-
MOONSHINE
CREATIONS, INC.
(A
DEVELOPMENT STAGE COMPANY)
CONTENTS
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PAGE
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F-1
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REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
PAGE
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F-2
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BALANCE
SHEETS
|
|
PAGE
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F-3
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STATEMENTS
OF OPERATIONS
|
|
PAGE
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F-4
|
STATEMENT
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
|
PAGE
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F-5
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STATEMENTS
OF CASH FLOWS
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|
PAGES
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F-6
- F-9
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NOTES
TO FINANCIAL STATEMENTS.
|
 |
Webb
& Company, P.A.
|
|
Certified
Public Accountants
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors of:
Moonshine
Creations, Inc.
(A
Development Stage Company)
We have
audited the accompanying balance sheets of Moonshine Creations, Inc. (A
Development Stage Company) as of October 31, 2008 and 2007 and the related
statements of operations, changes in stockholders' equity/deficiency and cash
flows for the year then ended October 31, 2008 and the period from April 10,
2007 (inception) to October 31, 2007 and the period from April 10, 2007
(inception) to October 31, 2008. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these 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 audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. 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
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Moonshine Creations, Inc. (A
Development Stage Company) as of October 31, 2008 and 2007 and the results of
its operations and its cash flows for the year then ended October 31, 2008 and
the period from April 10, 2007 (inception) to October 31, 2007 and the period
from April 10, 2007 (inception) to October 31, 2008 in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company is in the development stage with no revenue, used cash
in operations of $56,439 for the year ended October 31, 2008, a working capital
deficiency of $1,029 as of October 31, 2008, and a net loss since inception of
$73,619. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans concerning these matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Webb
& Company, P.A.
WEBB
& COMPANY , P.A.
Certified
Public Accountants
Boynton
Beach, Florida
December
17, 2008
Telephone:
(561) 752-1721 • Fax: (561) 734-8562
www.cpawebb.com
F-1
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Moonshine
Creations, Inc.
|
||||||||
|
(A
Development Stage Company)
|
||||||||
|
Balance
Sheets
|
||||||||
|
ASSETS
|
||||||||
|
October 31, 2008
|
October 31, 2007
|
|||||||
|
Current
Assets
|
||||||||
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Cash
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$ | 106 | $ | 39,500 | ||||
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Prepaid
expense
|
3,260 | - | ||||||
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Total
Assets
|
$ | 3,366 | $ | 39,500 | ||||
|
LIABILITIES AND
STOCKHOLDERS' EQUITY/(DEFICIENCY)
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts
payable
|
$ | 400 | $ | - | ||||
|
Note
payable- related party
|
3,995 | 1,000 | ||||||
|
Total Liabilities
|
4,395 | 1,000 | ||||||
|
Commitments
and Contingencies
|
- | - | ||||||
|
Stockholders'
Equity/(Deficiency)
|
||||||||
|
Preferred
stock, $0.00001 par value, 10,000,000 shares authorized,
|
||||||||
|
none
issued and outstanding
|
- | - | ||||||
|
Common
stock, $0.00001 par value, 100,000,000 shares authorized,
|
||||||||
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5,635,500
and 5,395,000 shares issued and outstanding, respectively
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56 | 54 | ||||||
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Additional
paid-in capital
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72,584 | 46,136 | ||||||
|
Subscriptions
Receivable
|
(50 | ) | (50 | ) | ||||
|
Deficit
accumulated during development stage
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(73,619 | ) | (7,640 | ) | ||||
|
Total
Stockholders' Equity/(Deficiency)
|
(1,029 | ) | 38,500 | |||||
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Total
Liabilities and Stockholders' Equity/(Deficiency)
|
$ | 3,366 | $ | 39,500 | ||||
See accompanying notes to
financial statements.
F-2
|
Moonshine
Creations, Inc.
|
||||||||||||
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(A
Development Stage Company)
|
||||||||||||
|
Statements of
Operations
|
||||||||||||
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For the Year
|
For the period from April 10,
2007
|
For the period from April 10,
2007
|
||||||||||
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Ended
October 31, 2008
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(inception) to October 31,
2007
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(inception) to October 31,
2008
|
||||||||||
|
Operating
Expenses
|
||||||||||||
|
General
and administrative
|
$ | 53,579 | $ | 1,000 | $ | 54,579 | ||||||
|
Salary
expense
|
10,000 | 5,533 | 15,533 | |||||||||
|
Rent
|
2,400 | 1,107 | 3,507 | |||||||||
|
Total
Operating Expenses
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65,979 | 7,640 | 73,619 | |||||||||
|
LOSS
FROM OPERATIONS BEFORE INCOME TAXES
|
(65,979 | ) | (7,640 | ) | (73,619 | ) | ||||||
|
Provision
for Income Taxes
|
- | - | - | |||||||||
|
NET
LOSS
|
$ | (65,979 | ) | $ | (7,640 | ) | $ | (73,619 | ) | |||
|
Net
Loss Per Share - Basic and Diluted
|
$ | (0.01 | ) | $ | (0.00 | ) | ||||||
|
Weighted
average number of shares outstanding
|
||||||||||||
|
during
the year/period - Basic and Diluted
|
5,604,267 | 2,530,025 | ||||||||||
See accompanying notes to
financial statements.
F-3
|
Moonshine
Creations, Inc.
|
||||||||||||||||||||||||||||||||
|
(A
Development Stage Company)
|
||||||||||||||||||||||||||||||||
|
Statement
of Changes in Stockholders' Equity(Deficiency)
|
||||||||||||||||||||||||||||||||
|
For the period from
April 10, 2007 (Inception) to October 31, 2008
|
||||||||||||||||||||||||||||||||
|
Deficit
|
||||||||||||||||||||||||||||||||
|
Preferred
Stock
|
Common
stock
|
Additional
|
accumulated
during
|
Total
Stockholder's
|
||||||||||||||||||||||||||||
|
paid-in
|
development
|
Subscription
|
Equity/
|
|||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
stage
|
Receivable
|
(Deficiency)
|
|||||||||||||||||||||||||
|
Balance
April 10, 2007
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
|
Common
stock issued for services to founder ($0.00001)
|
5,000,000 | 50 | (50 | ) | - | |||||||||||||||||||||||||||
|
Common
stock issued for cash ($0.10/ per share)
|
395,000 | 4 | 39,496 | 39,500 | ||||||||||||||||||||||||||||
|
In
kind contribution of services
|
5,533 | 5,533 | ||||||||||||||||||||||||||||||
|
In
kind contribution of office space
|
1,107 | 1,107 | ||||||||||||||||||||||||||||||
|
Net
loss for the period April 10, 2007 (inception) to October 31,
2007
|
(7,640 | ) | (7,640 | ) | ||||||||||||||||||||||||||||
|
Balance,
October 31, 2007
|
- | - | 5,395,000 | 54 | 46,136 | (7,640 | ) | (50 | ) | 38,500 | ||||||||||||||||||||||
|
Common
stock issued for cash ($0.10/ per share), net of offering costs of
$10,000
|
240,500 | 2 | 14,048 | 14,050 | ||||||||||||||||||||||||||||
|
In
kind contribution of services
|
10,000 | 10,000 | ||||||||||||||||||||||||||||||
|
In
kind contribution of office space
|
2,400 | 2,400 | ||||||||||||||||||||||||||||||
|
Net
loss for the year ended October 31, 2008
|
- | - | - | - | - | (65,979 | ) | - | (65,979 | ) | ||||||||||||||||||||||
|
Balance,
October 31, 2008
|
- | $ | - | 5,635,500 | $ | 56 | $ | 72,584 | $ | (73,619 | ) | $ | (50 | ) | $ | (1,029 | ) | |||||||||||||||
See accompanying notes to
financial statements.
F-4
|
Moonshine
Creations, Inc.
|
||||||||||||
|
(A
Development Stage Company)
|
||||||||||||
|
Statements of Cash
Flows
|
||||||||||||
|
For the Year
|
For the Period from April 10,
2007
|
For the Period from April 10,
2007
|
||||||||||
|
Ended
October 31, 2008
|
(Inception) to October 31,
2007
|
(Inception) to October 31,
2008
|
||||||||||
|
Cash
Flows Used in Operating Activities:
|
||||||||||||
|
Net
Loss
|
$ | (65,979 | ) | $ | (7,640 | ) | $ | (73,619 | ) | |||
|
Adjustments
to reconcile net loss to net cash used in operations
|
||||||||||||
|
In-kind
contribution of office expenses
|
2,400 | 1,107 | 3,507 | |||||||||
|
In-kind
contribution of services
|
10,000 | 5,533 | 15,533 | |||||||||
|
Changes
in operating assets and liabilities:
|
||||||||||||
|
Increase
(Decrease) in prepaid expense
|
(3,260 | ) | (3,260 | ) | ||||||||
|
Increase
(Decrease) in accounts payable
|
400 | 400 | ||||||||||
|
Net
Cash Used In Operating Activities
|
(56,439 | ) | (1,000 | ) | (57,439 | ) | ||||||
|
Cash
Flows From Financing Activities:
|
||||||||||||
|
Proceeds
from issuance of common stock
|
14,050 | 39,500 | 53,550 | |||||||||
|
Proceeds
from note payable- related party
|
2,995 | 1,000 | 3,995 | |||||||||
|
Net
Cash Provided by Financing Activities
|
17,045 | 40,500 | 57,545 | |||||||||
|
Net
Increase/(Decrease) in Cash
|
(39,394 | ) | 39,500 | 106 | ||||||||
|
Cash
at Beginning of Year/Period
|
39,500 | - | - | |||||||||
|
Cash
at End of Year/Period
|
$ | 106 | $ | 39,500 | $ | 106 | ||||||
|
Supplemental
disclosure of cash flow information:
|
||||||||||||
|
Cash
paid for interest
|
$ | - | $ | - | $ | - | ||||||
|
Cash
paid for taxes
|
$ | - | $ | - | $ | - | ||||||
See accompanying notes to
financial statements.
F-5
MOONSHINE
CREATIONS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF OCTOBER 31, 2008 and
2007
NOTE 1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES AND ORGANIZATION
(A)
Organization
Moonshine
Creations, Inc. (a development stage company) (the “Company”) was incorporated
under the laws of the State of Nevada on April 10, 2007. The Company was
organized to create an online craft store focusing on one of a kind and unique
craft items made in the southeastern United States. Activities during the
development stage include developing the business plan and raising
capital.
(B) Use of
Estimates
In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period. Actual results could differ from those
estimates.
(C) Cash and Cash
Equivalents
For
purposes of the cash flow statements, the Company considers all highly liquid
investments with original maturities of three months or less at the time of
purchase to be cash equivalents.
F-6
MOONSHINE
CREATIONS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF OCTOBER 31, 2008 and
2007
(D) Income
Taxes
The
Company accounts for income taxes under the Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under
Statement 109, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.
As of
October 31, 2008, the Company has a net operating loss carryforward of $54,579
available to offset future taxable income through 2028. The valuation allowance
at October 31, 2008 was $21,042. The net change in valuation allowance for the
period ended October 31, 2008 was an increase of $20,702.
(E) Loss Per
Share
Basic and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by Financial Accounting Standards No. 128,
“Earnings Per Share.” As of October 31, 2008 and 2007, there were no common
share equivalents outstanding.
(F) Business
Segments
The
Company operates in one segment and therefore segment information is not
presented.
(G) Revenue
Recognition
Revenue
from support services is recognized when earned and realizable, which is when
persuasive evidence of an arrangement exists, services, if requested by the
customers, have been rendered and are determinable, and collectability is
reasonably assured. Revenue from telephone support service contracts is
recognized as the services are provided, determined on an hourly
basis.
(H)
Reclassification
Certain 2007 balances have
been reclassified to conform with 2008 presentation.
(I)
Recent Accounting Pronouncements
In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling
Interests in Consolidated Financial Statements – an amendment of ARB No.
51”. This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. SFAS No. 160 affects
those entities that have an outstanding noncontrolling interest in one or more
subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008. Early adoption is prohibited. The adoption of this
statement is not expected to have a material effect on the Company's financial
statements.
F-7
MOONSHINE
CREATIONS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF OCTOBER 31, 2008 and
2007
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP. The current GAAP hierarchy has been criticized because it is directed
to the auditor rather than the entity, it is complex, and it ranks FASB
Statements of Financial Accounting Concepts, which are subject to the same level
of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process. The Board believes the GAAP hierarchy should be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP. SFAS 162 is effective 60 days following
the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency
of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have
a material impact on the Company’s financial position.
In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. The adoption of FASB 163 is not
expected to have a material impact on the Company’s financial
position.
NOTE 2 GOING
CONCERN
As
reflected in the accompanying financial statements, the Company is in the
development stage with no revenue, used cash in operations for the year ended
October 31, 2008 of $56,439, a working capital deficiency of $1,029 as of
October 31, 2008, and a net loss since inception of $73,619. This raises
substantial doubt about its ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Company’s
ability to raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. In the event the
Company cannot continue as a going concern, it may seek a potential
take-over target and may enter into a reverse merger
transaction.
NOTE 3 NOTE PAYABLE- RELATED
PARTY
During
2007, a related party of the Company paid $1,000 of operating expenses on behalf
of the Company.
During
2008, a related party of the Company paid an additional $2,995 of operating
expenses on behalf of the Company. On October 31, 2008, the Company converted
the total amount of $3,995 owed into a note payable The $3,995 includes the
$1,000 from the prior year and the additional amount of $2,995 from the current
year. Under the terms of the promissory note, the loan is non interest bearing
and payable on demand. Upon demand, the Company has ten days to pay the amount
before interest starts to accrue at a rate of 10% per annum. As of October 31,
2008, the note payable is $3,995 and is not default (See Note 5).
F-8
MOONSHINE
CREATIONS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF OCTOBER 31, 2008 and
2007
NOTE 4 STOCKHOLDERS’
EQUITY
(A) Common Stock Issued for
Cash
On July
25, 2007, the Company issued 5,000,000 shares of common stock to its founder for
cash of $50 ($0.00001 per share) (See Note 5).
During
the period from April 10, 2007 (Inception) to October 31, 2008 the Company
issued 635,500 shares of common stock for cash of $63,550 ($.10 per share) and
paid offering costs of $10,000.
(B) In-kind Contribution of
Services
During
the period from April 10, 2007 (Inception) to October 31, 2008 the Company’s
president contributed services and office space with a fair value of $15,533 and
$3,507 respectively (See Note 5).
NOTE
5 RELATED PARTY
TRANSACTIONS
The
president of the Company received 5,000,000 shares of common stock for cash of
$50 ($0.00001 per share) (See Note 4). The president has subsequently reimbursed
$50 to the company (See Note 6).
During
2007, a related party of the Company paid $1,000 of operating expenses on behalf
of the Company. During 2008, this amount was converted into a related party
note payable (See Note 3)
During
2008, a related party of the Company loaned the Company $2,995 to pay for
operating expenses on behalf of the Company. During 2008, this amount was
converted into a related party note payable (See Note 3)
During
the period from April 10, 2007 (Inception) to October 31, 2008 the Company’s
president contributed services and office space with a fair value of $15,533 and
$3,507 respectively (See Note
4).
NOTE 6 SUBSEQUENT EVENTS
On
December 10, 2008, the Company received $50 from the collection of a
subscription receivable (See Note 5).
In
November 2008, a related party of the Company loaned the Company $400 to
pay for operating expenses on behalf of the Company.
F-9
Our
accountant is Webb & Company. P.A, independent certified public accountants.
We do not presently intend to change accountants. At no time have there been any
disagreements with such accountants regarding any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure.
Not
Applicable
PART
III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
We have
one Director and Officer as follows:
|
Name
|
Age
|
Positions
and Offices Held
|
|
Victoria
Callanan
|
30
|
Chairman,
Chief Executive Officer, Principal Accounting
Officer
|
Victoria
Callanan, 30,
President. Ms. Callanan is
our founder and has served as President, Chief Executive Officer and Chairman of
our Board of Directors since inception in April 2007. Since 1997 Ms. Callanan
has been involved in management and the day to day operations of a small
business that she co-founded. Her responsibilities include management of 10
employees, meeting customers, payroll, bookkeeping, scheduling, website creation
and various other duties in a small business. In the spring of 2006 Ms. Callanan
opened a gift shop featuring items from North Carolina. In this company she is
responsible for marketing, locating artisans, inventory, bookkeeping, paying
vender’s commissions, paying sales tax and various other tasks. Her degree is
from NCSU where she studied Textile Technology, receiving a bachelors of science
in textile technology with a concentration in textile design and also completing
a certificate in Fashion Design from California State University in Los
Angeles.
Term of
Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
Audit
Committee
We do not
have a standing audit committee of the Board of Directors. Management has
determined not to establish an audit committee at present because of our limited
resources and limited operating activities do not warrant the formation of an
audit committee or the expense of doing so. We do not have a financial
expert serving on the Board of Directors or employed as an officer based on
management’s belief that the cost of obtaining the services of a person who
meets the criteria for a financial expert under Item 401(e) of Regulation S is
beyond its limited financial resources and the financial skills of such an
expert are simply not required or necessary for us to maintain effective
internal controls and procedures for financial reporting in light of
the limited scope and simplicity of accounting issues raised in its
financial statements at this stage of its development.
Certain Legal
Proceedings
No
director, nominee for director, or executive officer of the Company has appeared
as a party in any legal proceeding material to an evaluation of his ability or
integrity during the past five years.
Compliance With Section
16(A) Of The Exchange Act.
Section
16(a) of the Exchange Act requires the Company’s officers and directors, and
persons who beneficially own more than 10% of a registered class of the
Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company’s knowledge, any
reports required to be filed were timely filed in fiscal year ended October 31,
2008.
Code of
Ethics
The
company has adopted a Code of Ethics applicable to its Chief Executive Officer
and Chief Financial Officer. This Code of Ethics is filed herewith as an
exhibit.
-5-
Compensation of Executive
Officers
The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers paid by us during the fiscal
years ended October 31, 2008 and 2007 in all capacities for the accounts of our
executives, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO):
SUMMARY
COMPENSATION TABLE
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Non-Qualified
Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
|
Totals
($)
|
||||||||||||||||||||||||
|
Victoria
Callanan
Chairman,
Chief Executive Officer and Chief Financial Officer
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
0
|
|||||||||||||||||||||||
|
2007
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||||||||
Employment
Agreements
We do not
have any employment agreements in place with our sole officer and
director.
Compensation of
Directors
Directors
do not receive any compensation for their services as directors. The Board of
Directors has the authority to fix the compensation of directors. No amounts
have been paid to, or accrued to, directors in such capacity.
The
following table sets forth each person known by us to be the beneficial owner of
five percent or more of the Company's Common Stock, all directors individually
and all directors and officers of the Company as a group. Except as noted, each
person has sole voting and investment power with respect to the shares
shown.
|
Name
and Address of
Beneficial
Owner
|
Amount
of
Beneficial
Ownership
|
Percentage
of
Class
|
|
Victoria
Callanan
160
Henry Martin Trail
Statesville,
NC 28625
|
5,000,000
|
88.72%
|
None
Audit
Fees
For the
Company’s fiscal years ended October 31, 2008 and 2007, we were billed
approximately $10,434
and $0 for professional services rendered for the audit and review of our
financial statements.
Audit Related
Fees
There
were no fees for audit related services for the years ended October 31, 2008 and
2007.
-6-
Tax Fees
For the
Company’s fiscal years ended October 31, 2008 and 2007, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.
All Other
Fees
The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal years ended October 31, 2008 and
2007.
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require
that before our auditor is engaged by us to render any auditing or permitted
non-audit related service, the engagement be:
-approved
by our audit committee; or
-entered
into pursuant to pre-approval policies and procedures established by the audit
committee, provided the policies and procedures are detailed as to the
particular service, the audit committee is
informed of each service, and such policies and procedures do not include
delegation of the audit committee's responsibilities to management.
We do not
have an audit committee. Our entire board of directors pre-approves
all services provided by our independent auditors. The pre-approval process has
just been implemented in response to the new rules. Therefore, our board of
directors does not have records of what
percentage of the above fees were pre-approved. However, all of the
above services and fees were reviewed and approved by the entire board of
directors either before or after the respective services were
rendered.
-7-
PART
IV
a)
Documents filed as part of this Annual Report
1.
Consolidated Financial Statements
2.
Financial Statement Schedules
3.
Exhibits
| Exhibits # | Title |
| 14 | Code of Ethics |
|
31.1
|
Certification
of President, Chief Executive Officer, Chief Financial Officer, Chairman
of the Board of Directors Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
32.1
|
Certification
of President, Chief Executive Officer, Chief Financial Officer, Chairman
of the Board of Directors Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
-8-
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
|
MOONSHINE
CREATIONS, INC.
|
|
|
By:
|
/s/Victoria
Callanan
|
|
Chairman
of the Board of Directors,
Chief
Executive Officer,
Chief
Financial Officer, Controller,
Principal
Accounting Officer
|
|
Dated:
|
December
29, 2008
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
|
Name
|
Title
|
Date
|
|
|
/s/
Victoria Callanan
|
Chairman of the Board of Directors, Chief Executive Officer, |
December
29, 2008
|
|
|
Victoria
Callanan
|
Chief
Financial Officer, Controller, Principal Accounting
Officer
|
-9-