10-K: Carriage House Event Center Inc. Files 2023 Annual Report, Cites Going Concern Issues and Plans for Future Growth

Carriage House Event Center Inc.'s 2023 annual report reveals ongoing challenges including a going concern opinion from auditors, no revenue generation, and plans to move forward with its original business plan.

Summary

• Carriage House Event Center Inc. was incorporated in Colorado in 2010 and has not generated any revenue to date.
• The company's operations have primarily consisted of researching its event center concept and fulfilling SEC filing requirements.
• The company's independent auditors have expressed a going concern opinion, indicating substantial doubt about its ability to continue as a business.
• In 2020, the company sold 300,000 shares of common stock at $0.10 per share, raising $30,000.
• As of December 31, 2023, management and affiliates own 4,120,000 shares (92.6%) and other shareholders own 300,000 shares (6.7%).
• The company's stock has not been able to trade on the over-the-counter market due to issues with clearing with The Depository Trust and Clearing Corporation (DTCC).
• The COVID-19 pandemic significantly impacted the event center business, causing cancellations and postponements, which negatively affected the company's ability to raise capital.
• The company intends to move forward with its original business plan of developing an event center and is seeking to raise additional capital.
• The company has a letter of intent to purchase an 8,050 sq. ft. building in Mesa, Arizona, with the transaction expected to close in the third quarter of 2024.
• The company's focus for 2024 includes raising capital, researching the event center concept, and completing the purchase of a facility.
• The company may consider a merger, acquisition, or change in business plan if it cannot raise the necessary funds.
• The company is classified as an emerging growth company under the JOBS Act, which provides certain exemptions from SEC regulations.

Sentiment

Score: 3

Explanation: The document highlights significant financial challenges, a going concern opinion, and operational delays, resulting in a negative sentiment. While there are plans for future growth, the current situation is precarious.

Positives

• The company intends to move forward with its original business plan of developing an event center.
• The company has a letter of intent to purchase a building in Mesa, Arizona, which could be a step towards realizing its business plan.
• The company is taking steps to get its stock cleared with DTCC, which could enable trading on the over-the-counter market.
• The company has declared a change in shell company status, indicating a move towards active operations.
• The company has secured a $50,000 loan for working capital.

Negatives

• The company has not generated any revenue since its inception.
• The company's independent auditors have expressed a going concern opinion.
• The company's stock has not been able to trade on the over-the-counter market.
• The COVID-19 pandemic had a significant negative impact on the event center business and the company's ability to raise capital.
• The company has incurred net losses of $15,434 in 2023 and $13,824 in 2022.
• The company has an accumulated deficit of $159,944 as of December 31, 2023.
• The company's disclosure controls and procedures were deemed ineffective due to resource constraints and lack of segregation of duties.
• The company has a material weakness in its internal control over financial reporting.

Risks

• The company's ability to continue as a going concern is dependent on raising additional capital.
• The company may not be able to compete with existing event centers.
• The company's stock may not be able to trade on the over-the-counter market.
• The company may not be able to raise the necessary funds to fulfill its business plan.
• The company may have to move in a different direction, including seeking a possible merger candidate.
• The company's internal controls are not effective, which could lead to material misstatements in financial statements.
• The company's reliance on related party loans poses a risk if those parties are unable or unwilling to provide further funding.

Future Outlook

The company intends to move forward with its original business plan of developing an event center, focusing on raising additional capital, researching the concept, and completing the purchase of a facility. The company may also consider a merger, acquisition, or change in business plan if it cannot raise the necessary funds.

Management Comments

• Management believes the Company will continue to incur losses and negative cash flows from operating activities for the foreseeable future.
• Management plans to seek additional debt and/or equity financing for the Company but cannot be assured that such financing will be available on acceptable terms.
• Our current management has agreed to advance funds to the Company on an as needed basis.
• Management intends to keep the Company current in its filings with the Securities and Exchange Commission and maintain compliance going forward.

Industry Context

The event center industry has been significantly impacted by the COVID-19 pandemic, with many events being canceled or postponed. While the industry is beginning to recover, bookings and guest counts are still lower than pre-pandemic levels. Carriage House Event Center faces competition from numerous existing event centers, hotels, restaurants, and other venues.

Comparison to Industry Standards

• The company's lack of revenue and going concern opinion are significant deviations from industry standards for established event center businesses.
• Many established event centers have diversified revenue streams, including catering, event planning, and other services, which Carriage House Event Center has not yet developed.
• Companies like The Knot Worldwide and WeddingWire provide industry benchmarks for wedding-related businesses, and Carriage House Event Center's current performance is significantly below these standards.
• Publicly traded companies in the hospitality and event space, such as Marriott International and Hilton Worldwide, have established financial track records and operational infrastructure that Carriage House Event Center lacks.
• The company's reliance on related party loans is not typical for established businesses in the event center industry, which often rely on traditional bank financing or equity investments.

Corporate Governance

Related Party Transactions

• The company has entered into promissory notes with related parties, Terayco Enterprises, LTD. and A. Terry Ray.
• The company received proceeds of $55,000 from related parties during the year ended December 31, 2023, and made $13,000 in repayments.
• As of December 31, 2023, the company had $153,800 in loans payable to related parties.
• All promissory notes are interest-free until December 31, 2025, at which time any unpaid balance will bear interest at 4% per annum.

Stakeholder Impact

• Shareholders face significant risk due to the company's going concern status and lack of revenue.
• Employees are limited to the company's officers, and their future is uncertain due to the company's financial challenges.
• Customers are not yet impacted as the company has not yet commenced operations.
• Suppliers and creditors face risk due to the company's financial instability.
• The company's ability to raise capital and execute its business plan will directly impact all stakeholders.

Next Steps

• The company will attempt to raise additional capital.
• The company will continue research on the event center concept.
• The company will contact companies that could be part of the Carriage House Event Center concept.
• The company will locate possible event center locations.
• The company will complete a transaction on a facility.
• The company will seek a merger candidate if it cannot raise the required funds.

Key Dates

Keywords

Event Center, Going Concern, Capital Raise, COVID-19, SEC Filings, Promissory Notes, Related Party Transactions, Internal Controls, Emerging Growth Company, DTCC