UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010
Commission file number 333-154455
ARES VENTURES CORP.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
4600 Lamont Street #4-327
San Diego, CA 92109-3535
(Address of principal executive offices, zip code)
(858)408-2457
(Telephone number, including area code)
Shane Ellis
Ares Ventures Corp.
4600 Lamont Street #4-327
San Diego, CA 92109-3535
Telephone & Facsimile (858)408-2457
(Name and Address of Agent for Service)
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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).? YES [ ] 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 [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 6,000,000 shares as of May 6, 2010
ITEM 1. FINANCIAL STATEMENTS
The financial statements for the quarter ended March 31, 2010 immediately
follow.
2
ARES VENTURES CORP.
(An Exploration Stage Company)
Balance Sheet
--------------------------------------------------------------------------------
As of As of
March 31, September 30,
2010 2009
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 28,690 $ 47,758
-------- --------
TOTAL CURRENT ASSETS 28,690 47,758
-------- --------
TOTAL ASSETS $ 28,690 $ 47,758
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ -- $ 4,000
-------- --------
TOTAL CURRENT LIABILITIES -- 4,000
TOTAL LIABILITIES -- 4,000
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 75,000,000
shares authorized; 6,000,000 shares issued and
outstanding as of March 31, 2010 and
September 30, 2009) 6,000 6,000
Additional paid-in capital 69,000 69,000
Deficit accumulated during development stage (46,310) (31,242)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 28,690 43,758
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 28,690 $ 47,758
======== ========
See Notes to Financial Statements
3
ARES VENTURES CORP.
(An Exploration Stage Company)
Statement of Operations
--------------------------------------------------------------------------------
September 25, 2008
Three Months Three Months Six Months Six Months (inception)
ended ended ended ended through
March 31, March 31, March 31, March 31, March 31,
2010 2009 2010 2009 2010
---------- ---------- ---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES -- -- -- -- --
OPERATIONG EXPENSES
Office and Administration 1,582 456 1,739 3,208 7,869
Mineral Exploration Expenses 8,000 -- 8,000 7,000 23,611
Professional Fees 1,830 1,500 5,330 6,500 14,830
---------- ---------- ---------- ---------- ----------
TOTAL OPERATING EXPENSES (11,412) (1,956) (15,069) (16,708) (46,310)
Provision for Income Taxes -- -- -- -- --
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (11,412) $ (1,956) $ (15,069) $ (16,708) $ (46,310)
========== ========== ========== ========== ==========
BASIC EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.01)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 6,000,000 3,000,000 6,000,000 3,000,000
========== ========== ========== ==========
See Notes to Financial Statements
4
ARES VENTURES CORP.
(An Exploration Stage Company)
Statement of Cash Flows
--------------------------------------------------------------------------------
September 25, 2008
Six Months Six Months (inception)
ended ended through
March 31, March 31, March 31,
2010 2009 2010
-------- -------- --------
(restated)
OPERATING ACTIVITIES
Net income (loss) $(15,069) $(16,708) $(46,310)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Increase (decrease) in Accounts Payable (4,000) (515) --
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (19,069) (17,223) (46,310)
INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
FINANCING ACTIVITIES
Issuance of common stock -- -- 75,000
Stock Subscription Receivable -- 13,000 --
Stock Subscriptions Received -- 18,800 --
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES -- 31,800 75,000
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (19,069) 14,577 28,690
CASH AT BEGINNING OF PERIOD 47,758 2,000 --
-------- -------- --------
CASH AT END OF PERIOD $ 28,690 $ 16,577 $ 28,690
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
5
ARES VENTURES CORP.
(An Exploration Stage Company)
Notes to Financial Statements
March 31, 2010
--------------------------------------------------------------------------------
NOTE 1. CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by Ares Ventures Corp.
(the "Company") without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations, and cash flows at March 31, 2010,
and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's September 30,
2009 audited financial statements. The results of operations for the period
ended March 31, 2010 are not necessarily indicative of the operating results for
the full year.
NOTE 2. GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and other
investors sufficient to meet its minimal operating expenses and seeking equity
and/or debt financing. However management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Below is a listing of the most recent accounting standards, the Company does not
expect that the adoption of any of these changes will have a material impact on
the Company's financial position, or statements.
6
ARES VENTURES CORP.
(An Exploration Stage Company)
Notes to Financial Statements
March 31, 2010
--------------------------------------------------------------------------------
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
* Accounting Standards Update 2010-13Compensation-Stock Compensation (Topic
718): Effect of Denominating the Exercise Price of a Share-Based Payment
Award in the Currency of the Market in Which the Underlying Equity Security
Trades-a consensus of the FASB Emerging Issues Task Force. Effective July
1, 2009.
* Accounting Standards Update 2010-12Income Taxes (Topic 740): Accounting for
Certain Tax Effects of the 2010 Health Care Reform Acts (SEC Update).
Effective July 1, 2009.
* Accounting Standards Update 2010-11Derivatives and Hedging (Topice 815):
Scope Exception Related to Embedded Credit Derivatives. Effective July 1,
2009.
* Accounting Standards Update 2010-10 Consolidation (Topic 810): Amendments
for Certain Investement Funds. Effective July 1, 2009.
* Accounting Standards Update 2010-09 Subsequent Events (topic 855):
Amendments to Certain Recognition and Disclosure Requirements. Effective
July 1, 2009.
* Accounting Standards Update 2010-08 Technical Corrections to Various Topics
* Accounting Standards Update 2010-07 Not-for-Profit Entities (Topic 958):
Not-for-profit Entities: Mergers and Acquisitions. Effective July 1, 2009.
* Accounting Standards Update 2010-06 Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value Measurements. Effective
July 1, 2009.
* Accounting Standards Update 2010-05 Compensation-Stock Compensation
(Topic718):Escrowed share arrangements and the Presumption of Compensation
(SEC Update). Effective July 1, 2009.
* Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various
Topics-Technical Corrections to SEC Paragraphs. Effective July 1, 2009.
* Accounting Standards Update 2010-03 (ASU 2010-03), Extractive
Activities--Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and
Disclosures. (January 2010) Effective for annual reporting periods ending
on or after December 31, 2009. Early adoption is not permitted.
* Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting
and Reporting for Decreases in Ownership of a Subsidiary. (January 2010)
For those entities that have already adopted FAS 160, the amendments are
effective at the beginning of the first interim or annual reporting period
ending on or after December 15, 2009. The amendments should be applied
retrospectively to the first period that an entity adopted FAS 160.
7
ARES VENTURES CORP.
(An Exploration Stage Company)
Notes to Financial Statements
March 31, 2010
--------------------------------------------------------------------------------
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
* Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for
Distributions to Shareholders with Components of Stock and Cash (A
Consensus of the FASB Emerging Issues Task Force). (January 2010) Effective
for interim and annual periods ending on or after December 15, 2009, and
would be applied on a retrospective basis.
* Accounting Standards Update 2009-17, Consolidations (Topic 810):
Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities. This Accounting Standards Update amends the FASB
Accounting Standards Codification for Statement 167. (December 2009) (See
FAS 167 effective date below)
* Accounting Standards Update 2009-16, Transfers and Servicing (Topic 860):
Accounting for Transfers of Financial Assets. (December 2009) This
Accounting Standards Update amends the FASB Accounting Standards
Codification for Statement 166. (See FAS 166 effective date below)
* Accounting Standards Update 2009-15, Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other
Financing. (October 2009) This Accounting Standards Update amends the FASB
Accounting Standard Codification for EITF 09-1. (See EITF 09-1 effective
date below)
* Accounting Standards Update 2009-14, Software (Topic 985): Certain Revenue
Arrangements That Include Software Elements. (October 2009) Effective
prospectively for revenue arrangements entered into or materially modified
in fiscal years beginning on or after June 15, 2010. Early adoption is
permitted.
* Accounting Standards Update 2009-13, Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements. (October 2009) Effective
prospectively for revenue arrangements entered into or materially modified
in fiscal years beginning on or after June 15, 2010. Early adoption is
permitted.
* Accounting Standards Update 2009-12, Fair Value Measurements and
Disclosures (Topic 820): Investments in Certain Entities That Calculate Net
Asset Value per Share (or Its Equivalent). (September 2009) It is effective
for interim and annual periods ending after December 15, 2009. Early
application is permitted in financial statements for earlier interim and
annual periods that have not been issued.
* EITF No. 09-1, (ASC Topic 470) "Accounting for Own-Share Lending
Arrangements
* In Contemplation of Convertible Debt Issuance" ("EITF 09-1"). (July 2009).
Effective for fiscal years that beginning on or after December 15, 2009 and
requires retrospective application for all arrangements outstanding as of
the beginning of fiscal years beginning on or after December 15, 2009.
Effective for share-lending arrangements entered into on or after the
beginning of the first reporting period that begins on or after June 15,
2009.
8
ARES VENTURES CORP.
(An Exploration Stage Company)
Notes to Financial Statements
March 31, 2010
--------------------------------------------------------------------------------
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
* SFAS No. 168 (ASC Topic 105), "The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles - a
replacement of FASB Statement No. 162" ("SFAS No. 168"). (June 2009)
Effective for financial statements issued for interim and annual periods
ending after September 15, 2009. SFAS No. 168 is effective for the
Company's interim quarterly period beginning July 1, 2009.
* SFAS No. 167 (ASC Topic 810), "Amendments to FASB Interpretation No. 46(R)
("SFAS 167"). (June 2009) Effective as of the beginning of the first fiscal
year that begins after November 15, 2009. SFAS 167 will be effective for
the Company beginning in 2010.
* SFAS No. 166, (ASC Topic 860) "Accounting for Transfers of Financial
Assets--an amendment of FASB Statement No. 140" ("SFAS 166"). (June 2009)
Effective for financial asset transfers occurring after the beginning of an
entity's first fiscal year that begins after November 15, 2009.
* SFAS No. 164, (ASC Topic 810) "Not-for-Profit Entities: Mergers and
Acquisitions - including an amendment of FASB Statement No. 142" ("SFAS
164"). (April 2009) Effective for mergers occurring on or after the
beginning of an initial reporting period beginning on or after December 15,
2009 and acquisitions occurring on or after the beginning of the first
annual reporting period beginning on or after December 15, 2009.
* Staff Accounting Bulletin (SAB) No. 112. (June 2009)
NOTE 4. RESTATED FINANCIAL STATEMENTS
The Company has restated its financial statements for the year ended September
30, 2008, in conjunction with the PCAOB revocation of the registration of its
prior auditor. The Company had its financial statements re-audited during which
it re-evaluated a transaction involving the sale of common shares to its
founding director in concurrence with its new audit firm. As a result, the
Company determined that funds that had previously been recorded as cash should
be recorded as a Stock Subscription Receivable. This adjustment resulted in a
$13,000 decrease in cash balance and increase in Stock Subscription Receivable
on the Statement of Cash Flows at the beginning of six month period beginning
October 1, 2008. The following is a comparison of the summarized financial
statements of the Company before and after the restatement.
Six Months ended
March 31, 2009
-----------------------------------------
Original Restated Change
-------- -------- ------
STATEMENT OF CASHFLOWS
Stock Subscription Receivable $ -- $ 13,000 $ 13,000
-------- -------- --------
Net cash provided by (used in)
financing activities 18,800 31,800 13,000
-------- -------- --------
Net increase (decrease) in cash 1,577 14,577 13,000
-------- -------- --------
Cash at beginning of period $ 15,000 $ 2,000 $(13,000)
======== ======== ========
NOTE 5. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through
May 6, 2010 and determined there are no items to disclose.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this report and actual results may differ materially from historical
results or our predictions of future results.
RESULTS OF OPERATIONS
We are still in our exploration stage and have generated no revenue to date.
We incurred operating expenses of $11,412 and $1,956 for the three months ended
March 31, 2010 and 2009, respectively. These expenses consisted of general
operating expenses and professional fees, and for the three months ended March
31, 2010 we also incurred $8,000 in exploration expenses.
Our net loss from inception (September 25, 2008) through March 31, 2010 was
$46,310.
In September, 2008, a total of 3,000,000 shares of common stock were issued in
exchange for $15,000 US, or $.005 per share. These securities were issued to
Shane Ellis, the officer and director of the company. On May 12, 2009 the
Company completed its S-1 offering, selling 3,000,000 common shares at $.02 per
share for total proceeds of $60,000.
The following table provides selected financial data about our company for the
period ended March 31, 2010.
Balance Sheet Data: 3/31/10
------------------- -------
Cash $28,690
Total assets $28,690
Total liabilities $ 0
Shareholders' equity $28,690
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at March 31, 2010 was $28,690. If we experience a shortage of
funds in the next twelve months we may utilize funds from our director, who has
agreed to advance funds for operations, however he has no formal commitment,
arrangement or legal obligation to advance or loan funds to us.
PLAN OF OPERATION
Our plan of operation for the twelve months is to determine if the company will
proceed with further exploration and if so to complete Phases 2 of the
exploration program. In addition to the $9,500 we would spend for Phase 2, as
10
outlined below, we anticipate spending an additional $10,000 on professional
fees, including fees payable in complying with reporting obligations, and
general administrative costs. Total expenditures over the next 12 months are
therefore expected to be approximately $19,500.
The following work program has been recommended by the consulting geologist who
prepared the geology report.
PHASE 1 (COMPLETED)
Detailed prospecting, mapping and soil geochemistry. The
estimated cost for this program is all inclusive. The
timeline for accomplishing this phase of fieldwork
including the turn-around time on analyses is approximately
two months $ 8,500 (paid)
PHASE 1A (COMPLETED)
Fill-n MMI sampling to establish a more exact pattern of
Anomalies found in Phase 1. $ 8,000 (paid)
PHASE 2
Magnetometer and VLF electromagnetic, grid controlled
surveys over the areas of interest determined by the Phase 1
survey. Included in this estimated cost is transportation,
accommodation, board, grid installation, two
geophysical surveys, maps and report $ 9,500
PHASE 3
Induced polarization survey over grid controlled anomalous
area of interest outlined by Phase 1&2 fieldwork. Hoe or
bulldozer trenching, mapping and sampling of bedrock
anomalies. Includes assays, maps and reports $25,000
-------
Total $51,000
=======
Each phase following phase 1 is contingent upon favorable results from the
previous phase.
The geologist completed Phase 1 in October 2009 and recommended a followup Phase
1 at a cost of $8,000. He completed the field work for the followup Phase 1A,
prepared his report and we are currently reviewing his recommendation regarding
further exploration based upon our remaining cash resources.
The above program costs are management's estimates based upon the
recommendations of the professional consulting geologist's report and the actual
project costs may exceed our estimates.
11
Following phase one of the exploration program, if it proves successful in
identifying mineral deposits, we intend to proceed with phase two of our
exploration program. The estimated cost of this program is $9,500 and will take
approximately 3 weeks to complete and an additional two to three months for the
consulting geologist to receive the results from the assay lab and prepare his
report.
Following phase two of the exploration program, if it proves successful and we
are able to raise additional funding, we intend to proceed with phase three of
our exploration program. The estimated cost of this program is $25,000 and will
take approximately one month to complete and an additional two to three months
for the consulting geologist to receive the results from the assay lab and
prepare his report.
If we determine the best course of action is to proceed with further
exploration, we anticipate commencing the second phase of our exploration
program in summer 2010. We have a verbal agreement with Western Minerals Inc.,
the consulting geology company who prepared the geology report on our claim, to
retain their services for our planned exploration program. We cannot provide
investors with any assurance that we will be able to raise sufficient funds to
proceed with any work after the exploration program if we find mineralization.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 4. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the company;
- Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and
12
- Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of March 31, 2010 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of March 31, 2010.
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
13
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2010. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2010.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
14
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
Exhibit No. Exhibit Incorporated by Reference or Filed Herewith
----------- ------- -------------------------------------------
3.1 Articles of Incorporation Incorporated by reference to the Registration
Statement on Form S-1 filed with the SEC on
October 20, 2008, File No. 333-154455
3.2 Bylaws Incorporated by reference to the Registration
Statement on Form S-1 filed with the SEC on
October 20, 2008, File No. 333-154455
31.1 Section 302 Certification of Filed herewith
Chief Executive Officer
31.2 Section 302 Certification of Filed herewith
Chief Financial Officer
32 Section 906 Certification of Filed herewith
Chief Executive Officer and
Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
May 6, 2010 Ares Ventures Corp.
/s/ Shane Ellis
---------------------------------------------------
By: Shane Ellis
(Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer, President, Secretary,
Treasurer & Sole Director)
15