UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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[X] | QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 2012 |
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OR |
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[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 333 -175337
RAINBOW INTERNATIONAL, CORP.
(Exact name of registrant as specified in its charter)
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Nevada |
| 3231 |
| None |
(State or Other Jurisdiction of |
| (Primary Standard Industrial |
| (IRS Employer |
Incorporation or Organization) |
| Classification Number) |
| Identification Number) |
Rainbow International, Corp.
Pekarska 36
Brno
Czech Republic 60200.
+420 - 538880012
(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive offices)
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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 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 the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
LARGE ACCELERATED FILER [ ]
ACCELERATED FILER [ ]
NON-ACCELERATED FILER [ ]
SMALLER REPORTING COMPANY [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 3,540,000 as of March 21, 2012.
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TABLE OF CONTENTS
PART I FINANCIAL INFORMATION |
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Item 1 | Financial Statements (Unaudited) | 4 |
| Balance Sheets | 4 |
| Statements of Operations | 5 |
| Statements of Cash Flows | 6 |
| Notes to Financial Statements | 7 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 12 |
Item 4. | Controls and Procedures | 13 |
PART II OTHER INFORMATION |
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Item 1 | Legal Proceedings | 13 |
Item 2. | 11 | |
Item 3 | Defaults Upon Senior Securities | 13 |
Item 4 | 13 | |
Item 5 | Other Information | 14 |
Item 6 | Exhibits | 14 |
| Signatures | 14 |
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RAINBOW INTERNATIONAL, CORP. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS | ||
| FEBRUARY 29, 2012 | MAY 31, 2011 |
ASSETS |
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Current Assets |
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Cash | $ 349 | $ 3,100 |
Prepaid expenses | 5,281 |
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Total Current Assets | 5,630 | 3,100 |
TOTAL ASSETS | $ 5,630 | $ 3,100 |
LIABILITIES |
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Loans from Shareholders | 4,000 | 500 |
TOTAL LIABILITIES | 4,000 | 500 |
STOCKHOLDER’S EQUITY |
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Common stock, par value $0.001; 75,000,000 shares authorized, 3,540,000 (3,000,000 shares issued and outstanding as at May 31, 2011 | 3,540 | 3,000 |
Additional paid-in-capital | 21,060 | - |
Deficit accumulated during the development stage | (22,970) | (400) |
TOTAL STOCKHOLDER’S EQUITY | $ 1,630 | $ 2, 600 |
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TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ 5,630 | $ 3,100 |
See accompanying notes to financial statements
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RAINBOW INTERNATIONAL, CORP. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS | ||||||
| THREE MONTHS ENDED FEBRUARY 29, 2012 | NINE MONTHS ENDED FEBRUARY 29, 2012 | FOR THE PERIOD FROM APRIL 22, 2011 (INCEPTION) TO FEBRUARY 29, 2012 | |||
REVENUES | $ 0 | $ 0 | $ 0 | |||
EXPENSES |
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General & Administrative Expenses | 19,220 | 22,570 | 22,970 | |||
TOTAL EXPENSES | 19,220 | 22,570 | 22,970 | |||
NET LOSS FROM OPERATIONS | (19,220) | (22,570) | (22,970) | |||
PROVISION FOR INCOME TAXES | 0 | 0 | 0 | |||
NET LOSS | $ (19,220) | $ (22,570) | $ (22,970) | |||
NET LOSS PER SHARE: BASIC AND DILUTED | $ (0.00) | $ (0.00) |
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | 3,540,000 | 3,255,237 |
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See accompanying notes to financial statements
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RAINBOW INTERNATIONAL, CORP. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS | ||
| NINE MONTHS ENDED FEBRUARY 29, 2012 | FOR THE PERIOD FROM APRIL 22, 2011 (INCEPTION) TO FEBRUARY 29, 2012 |
Cash Flows from (used in) Operating Activities |
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Net Income (Loss) | $ (22,570) | $ (22,970) |
Prepaid expenses | (5,281) | (5,281) |
Net Cash provided by (used in) Operating Activities | (27,851) | (28,251) |
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Cash Flows from (used in) Financing Activities |
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Loans from Shareholders | 3,500 | 4,000 |
Sale of Common Shares | 21,600 | 24,600 |
Net Cash provided by (used in) Financing Activities | 25,100 | 28,600 |
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Increase (Decrease) in Cash and Cash Equivalents | (2,751) | 349 |
Cash and Cash Equivalents at Beginning of Period | 3,100 | 0 |
Cash and Cash Equivalents at End of Period | $ 349 | $ 349 |
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SUPPLEMENTAL CASH FLOW INFORMATION: |
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Interest paid | $ 0 | $ 0 |
Income taxes paid | $ 0 | $ 0 |
See accompanying notes to financial statements
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RAINBOW INTERNATIONAL, CORP.
(A Development Stage Company)
Notes to Financial Statements
FEBRUARY 29, 2012
1. ORGANIZATION AND BUSINESS OPERATIONS
RAINBOW INTERNATIONAL, CORP. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on April 22, 2011. Our business is the distribution of Bohemian Crystal produced in Czech Republic. The Company is in the development stage as defined under Accounting Codification Standard, Development Stage Entities (“ASC-915”). The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception on April 22, 2011 through February 29, 2012 the Company has accumulated losses of $22,970.
2. 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.
Going Concern
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $22,970 as of February 29, 2012 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company had $349 cash and $-0- cash equivalents as of February 29, 2012.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. In management’s opinion, all adjustments necessary for a fair statement of the results for the interim periods have been made, and all adjustments are of a normal recurring nature.
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Foreign Currency Translation
The Company's functional currency and its reporting currency is the United States dollar.
Financial Instruments
The carrying value of the Company's financial instruments approximates their fair value because of the short maturity of these instruments.
Stock-based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Income Taxes
Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Basic and Diluted Loss Per Share
The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.
Fiscal Periods
The Company's fiscal year end is May 31.
Recent accounting pronouncements
We have reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and we do not believe any of these pronouncements will have a material impact on the company.
Advertising
The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $-0- in advertising costs during the period April 22, 2011 (inception) to February 29, 2012.
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3. COMMON STOCK
The authorized capital of the Company is 75,000,000 common shares with a par value of $ 0.001 per share. On May 27, 2011, the Company issued 3,000,000 shares of common stock at a price of $0.001 per share for total cash proceeds of $3,000.
For the nine months period ended February 29, 2012 the Company issued 540,000 shares of common stock at a price of $0.04 per share for total cash proceeds of $21,600.
As of February 29, 2012 there were 3,540,000 shares of common stock issued and outstanding.
4. INCOME TAXES
As of February 29, 2012 the Company had net operating loss carry forwards of $22,970 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
5. RELATED PARTY TRANSACTIONS
On April 22, 2011 a Director had loaned the Company $75.On April 28, 2011 a Director had loaned the Company $325. On May 27, 2011 a Director had loaned the Company $100. On January 9, 2012 a Director loaned the Company $3,500.
As of February 29, 2012 total loan amount was $4,000. The loan is non-interest bearing, due upon demand and unsecured.
On May 27, 2011, the Company sold 3,000,000 shares of common stock at a price of $0.001 per share to its director.
6. PREPAID EXPENSE
As of February 29, 2012 the Company had $5,281 in prepaid expenses paid to Transfer Agent for 12 months Premier Service plan.
7. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from February 29, 2012 through March 20, 2012 the date whereupon the financial statements were issued, and has determined that there are no items to disclose.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
INTRODUCTION
Our Company was incorporated in the State of Nevada on April 22, 2011.Our business is the distribution if Bohemian crystal produced in Czech Republic to Europe and North America. We have not generated any revenues and our principal business activities to date consist of creating a business plan and entering into a Supply Agreement, dated June 30, 2011, with Autodily Rachot S.R.O., a Czech Republic limited liability company (“Autodily Rachot”), which is an established distributor of Bohemian crystal. Autodily Rachot is a large and well-established supplier and distributor of Bohemian crystal of almost any kind in the Czech Republic.
We will distribute our crystal in the European and North American markets to both retail and wholesale customers. We do not intend to store inventory for any period of time. The orders will be shipped to the customers depending on customers’ requests. Customers will be responsible for the custom duties, taxes or any other additional charges that might incur. All shipments will be 100% insured for the value of the shipping, and the insurance cost for risk of damage or loss will be customers’ responsibility.
RESULTS OF OPERATION
We are a development stage company and have not generated any revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
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NINE MONTH PERIOD ENDED FEBRUARY 29, 2012 COMPARED TO THE PERIOD FROM INCEPTION (APRIL 22, 2011) TO FEBRUARY 29, 2012
Our net loss for the nine month period ended February 29, 2012 was $22,570 compared to a net loss of $22,970 during the period from inception (April 22, 2011) to February 29, 2012. During the nine month period ended February 29, 2012, we did not generate any revenue.
During the nine month period ended February 29, 2012, we incurred general and administrative expenses $22,570 compared to $22,970 incurred during the period from inception (April 22, 2011) to February 29, 2012. General and administrative and professional fee expenses incurred during the nine month period ended February 29, 2012 were generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting, developmental costs, and marketing expenses.
The weighted average number of shares outstanding was 3,255,237 for the nine month period ended February 29, 2012.
LIQUIDITY AND CAPITAL RESOURCES
NINE MONTH PERIOD ENDED FEBRUARY 29, 2012
As at February 29, 2012, our current assets were $5,630 compared to $3,100 in current assets at May 31, 2011. Current assets were comprised of $349 in cash and $5,281 in prepaid expenses. As at February 29, 2012, our current liabilities were $4,000. Current liabilities were comprised of $4,000 in loan from Director.
Stockholders’ equity decreased from $2,600 as of May 31, 2011 to $1,630 as of February 29, 2012.
CASH FLOWS FROM OPERATING ACTIVITIES
We have not generated positive cash flows from operating activities. For the nine month period ended February 29, 2012, net cash flows used in operating activities was $27,851 consisting of a net loss of $22,570 and prepaid expenses of $5,281. Net cash flows used in operating activities was $28,251 for the period from inception (April 22, 2011) to February 29, 2012.
CASH FLOWS FROM FINANCING ACTIVITIES
We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the nine month period ended February 29, 2012 net cash provided by financing activities was $25,100. For the period from inception (April 22, 2011) to February 29, 2012, net cash provided by financing activities was $28,600 received from proceeds from issuance of common stock and loan from Director.
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PLAN OF OPERATION AND FUNDING
Our cash reserves are not sufficient to meet our obligations for the next twelve month period. As a result, we will need to seek additional funding in the near future. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of shares of our common stock. We may also seek to obtain short-term loans from our directors or unrelated parties, although no such arrangements have been made. We do not have any arrangements in place for any future equity financing.
MATERIAL COMMITMENTS
As of February 29, 2012, we had no material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent auditors' audit report accompanying our May 31, 2011 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
No report required.
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ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of February 29, 2012. Based on that evaluation, our management concluded that our disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the nine-month period ended February 29, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
No report required.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No report required.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No report required.
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ITEM 5. OTHER INFORMATION
No report required.
ITEM 6. EXHIBITS
Exhibits:
31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1 Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101 Interactive data files pursuant to Rule 405 of Regulation S-T.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RAINBOW INTERNATIONAL, CORP. |
Dated: March 21, 2012 | By: /s/ Vladimir Bibik |
| Vladimir Bibik, President and Chief Executive Officer and Chief Financial Officer |
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Exhibit 31.1
CERTIFICATION
I, Vladimir Bibik, President and Chief Executive Officer of RAINBOW INTERNATIONAL, CORP., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of RAINBOW INTERNATIONAL, CORP.;
2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 21, 2012
/s/ Vladimir Bibik
____________________________
Vladimir Bibik, President and
Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Vladimir Bibik, Chief Financial Officer of RAINBOW INTERNATIONAL, CORP., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of RAINBOW INTERNATIONAL, CORP.;
2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 21, 2012
/s/ Vladimir Bibik
____________________________
Vladimir Bibik,
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of RAINBOW INTERNATIONAL, CORP. (the "Company") on Form 10-Q for the period ended February 29, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Vladimir Bibik
__________________________
Vladimir Bibik, President,
Chief Executive Officer and
Chief Financial Officer
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BALANCE SHEETS (USD $)
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Feb. 29, 2012
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May 31, 2011
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| Current Assets | ||
| Cash and equivalents | $ 349 | $ 3,100 |
| Prepaid expenses | 5,281 | |
| Total current assets | 5,630 | 3,100 |
| Total Assets | 5,630 | 3,100 |
| Current Liabilities: | ||
| Loans from Shareholders | 4,000 | 500 |
| Total current liabilities | 4,000 | 500 |
| Total liabilities | 4,000 | 500 |
| Stockholders' Equity | ||
| Common Stock, $0.001 par value, 75,000,000 shares authorized, 3,540,000 shares issued and outstanding (3,000,000 shares issued and outstanding as at May 31, 2011) | 3,540 | 3,000 |
| Additional paid-in-capital | 21,060 | |
| Deficit accumulated during the development stage | (22,970) | (400) |
| Total stockholders' equity | 1,630 | 2,600 |
| Total liabilities and stockholders' equity | $ 5,630 | $ 3,100 |
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STATEMENTS OF OPERATIONS (USD $)
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9 Months Ended | 10 Months Ended |
|---|---|---|
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Feb. 29, 2012
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Feb. 29, 2012
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| Expenses: | ||
| General and Administrative Expenses | $ 22,570 | $ 22,970 |
| Total Expense | 22,570 | 22,970 |
| Net (loss) | $ (22,570) | $ (22,970) |
| (Loss) per common share Basic | $ 0 | |
| Weighted Average Number of Common Shares Outstanding | 3,255,237 |
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Document and Entity Information
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9 Months Ended |
|---|---|
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Feb. 29, 2012
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| Document and Entity Information | |
| Entity Registrant Name | RAINBOW INTERNATIONAL, CORP. |
| Document Type | 10-Q |
| Document Period End Date | Feb. 29, 2012 |
| Amendment Flag | false |
| Entity Central Index Key | 0001522538 |
| Current Fiscal Year End Date | --05-31 |
| Entity Common Stock, Shares Outstanding | 3,540,000 |
| Entity Filer Category | Smaller Reporting Company |
| Entity Current Reporting Status | No |
| Entity Voluntary Filers | No |
| Entity Well-known Seasoned Issuer | No |
| Document Fiscal Year Focus | 2012 |
| Document Fiscal Period Focus | Q3 |
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STATEMENTS OF CASH FLOWS (USD $)
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9 Months Ended | 10 Months Ended |
|---|---|---|
|
Feb. 29, 2012
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Feb. 29, 2012
|
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| Operating Activities | ||
| Net (loss) | $ (22,570) | $ (22,970) |
| Decrease (Increase) in Prepaid expenses | (5,281) | (5,281) |
| Net cash (used) for operating activities | (27,851) | (28,251) |
| Financing Activities | ||
| Loan from Shareholders | 3,500 | 4,000 |
| Sale of Common Shares | 21,600 | 24,600 |
| Net cash provided by financing activities | 25,100 | 28,600 |
| Net increase (decrease) in cash and equivalents | (2,751) | 349 |
| Cash and equivalents at beginning of the period | 3,100 | |
| Cash and equivalents at end of the period | 349 | 349 |
| Supplemental cash flow information: | ||
| Interest paid | 0 | 0 |
| Income taxes paid | $ 0 | $ 0 |
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Organization, Consolidation and Presentation of Financial Statements
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9 Months Ended |
|---|---|
|
Feb. 29, 2012
|
|
| Organization, Consolidation and Presentation of Financial Statements | |
| Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | 1. ORGANIZATION AND BUSINESS OPERATIONS
RAINBOW INTERNATIONAL, CORP. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on April 22, 2011. Our business is the distribution of Bohemian Crystal produced in Czech Republic. The Company is in the development stage as defined under Accounting Codification Standard, Development Stage Entities (“ASC-915”). The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception on April 22, 2011 through February 29, 2012 the Company has accumulated losses of $22,970.
2. 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. Going Concern The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $22,970 as of February 29, 2012 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock.
Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company had $349 cash and $-0- cash equivalents as of February 29, 2012.
Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. In management’s opinion, all adjustments necessary for a fair statement of the results for the interim periods have been made, and all adjustments are of a normal recurring nature.
Foreign Currency Translation The Company's functional currency and its reporting currency is the United States dollar.
Financial Instruments The carrying value of the Company's financial instruments approximates their fair value because of the short maturity of these instruments. Stock-based Compensation Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Income Taxes Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Basic and Diluted Loss Per Share The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.
Fiscal Periods The Company's fiscal year end is May 31.
Recent accounting pronouncements We have reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and we do not believe any of these pronouncements will have a material impact on the company.
Advertising The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $-0- in advertising costs during the period April 22, 2011 (inception) to February 29, 2012. 3. COMMON STOCK
The authorized capital of the Company is 75,000,000 common shares with a par value of $ 0.001 per share. On May 27, 2011, the Company issued 3,000,000 shares of common stock at a price of $0.001 per share for total cash proceeds of $3,000. For the nine months period ended February 29, 2012 the Company issued 540,000 shares of common stock at a price of $0.04 per share for total cash proceeds of $21,600. As of February 29, 2012 there were 3,540,000 shares of common stock issued and outstanding.
As of February 29, 2012 the Company had net operating loss carry forwards of $22,970 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
5. RELATED PARTY TRANSACTIONS
On April 22, 2011 a Director had loaned the Company $75.On April 28, 2011 a Director had loaned the Company $325. On May 27, 2011 a Director had loaned the Company $100. On January 9, 2012 a Director loaned the Company $3,500. As of February 29, 2012 total loan amount was $4,000. The loan is non-interest bearing, due upon demand and unsecured. On May 27, 2011, the Company sold 3,000,000 shares of common stock at a price of $0.001 per share to its director.
6. prepaid expense
As of February 29, 2012 the Company had $5,281 in prepaid expenses paid to Transfer Agent for 12 months Premier Service plan.
7. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from February 29, 2012 through March 20, 2012 the date whereupon the financial statements were issued, and has determined that there are no items to disclose.
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