UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended February 28, 2019
| ☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ___________
Commission File Number 333-170091
AMPERICO CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 7380 | EIN 99-0374076 |
| (State or Other Jurisdiction of | (Primary Standard Industrial | (IRS Employer |
| Incorporation or Organization) | Classification Number) | Identification Number) |
Caves Village Business Centre Suite 1.B
New Providence, Nass
Bahamas
(Address of principal executive offices)
(929)600-2646
(Registrant's telephone number)
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☐ 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" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☐ | Smaller reporting company ☒ |
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☒ Yes ☐ No
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A
Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court.
☒ Yes ☐ No
Applicable Only to Corporate Registrants
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:
| Class | Outstanding as of December 19, 2019 |
| Common Stock, $0.001 | 2,696 |
| 1 |
AMPERICO CORP.
TABLE OF CONTENTS
| Page | ||
| ITEM 1. | FINANCIAL STATEMENTS | 4 |
| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATIONS | 15 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 18 |
| ITEM 4. | CONTROLS AND PROCEDURES | 18 |
| PART II. | OTHER INFORMATION | |
| ITEM 1. | LEGAL PROCEEDINGS | 19 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 19 |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 19 |
| ITEM 4. | MINE SAFETY DISCLOSURES | 19 |
| ITEM 5. | OTHER INFORMATION | 19 |
| ITEM 6. | EXHIBITS | 19 |
| 2 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Amperico Corp. (the "Company"), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "Amperico" refers to Amperico Corp.
| 3 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMPERICO CORP.
TABLE OF CONTENTS
| Balance Sheets as of February 28, 2019 (Unaudited) and May 31, 2018 | 5 |
| Statements of Operations for the three and nine months ended February 28, 2019 and 2018 (Unaudited) | 6 |
| Statement of Stockholders’ Deficit for the nine months ended February 28, 2019 and 2018 (Unaudited) | 7 |
| Statements of Cash Flows for the nine months ended February 28, 2019 and 2018 (Unaudited) | 8 |
| Notes to the Financial Statements | 9 |
| 4 |
AMPERICO CORP
BALANCE SHEETS
| (Unaudited) | ||||||||
| February 28, | May 31, | |||||||
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | - | - | ||||||
| Total Current Assets | - | - | ||||||
| Total Assets | $ | - | $ | - | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 11,116 | $ | 10,216 | ||||
| Loans Payable | 35,600 | 35,600 | ||||||
| Interest Payable | 3,567 | 2,067 | ||||||
| Due to Releted Party | 652 | 652 | ||||||
| Total Liabilities | 50,935 | 48,535 | ||||||
| Stockholders' Deficit | ||||||||
| Common Stock, $0.001 par value; 1,000,000,000 shares authorized, | ||||||||
| 2,696 and 2,696 shares issued and outstanding as of February 28, | - | - | ||||||
| 2019 and May 31, 2018 | 3 | 3 | ||||||
| Additional paid-in capital | 21,797 | 21,797 | ||||||
| Accumulated deficit | (72,735 | ) | (70,335 | ) | ||||
| Total Stockholders' Deficit | (50,935 | ) | (48,535 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | - | $ | - | ||||
The accompanying notes are an integral part of these financial statements.
| 5 |
AMPERICO CORP
STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| February 28, | February 28, | February 28, | February 28, | |||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue | $ | - | $ | - | $ | - | $ | - | ||||||||
| Cost of Goods Sold | - | - | - | - | ||||||||||||
| Gross Profit | - | - | - | - | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| General administrative | 300 | 300 | 900 | 900 | ||||||||||||
| Total operating expenses | 300 | 300 | 900 | 900 | ||||||||||||
| Loss from operations | (300 | ) | (300 | ) | (900 | ) | (900 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense | (500 | ) | (500 | ) | (1,500 | ) | (1,500 | ) | ||||||||
| Total other income (expense) | (500 | ) | (500 | ) | (1,500 | ) | (1,500 | ) | ||||||||
| Net Loss Before Income Taxes | (800 | ) | (800 | ) | (2,400 | ) | (2,400 | ) | ||||||||
| Income tax | - | - | - | - | ||||||||||||
| Net Loss After Income Taxes | $ | (800 | ) | $ | (800 | ) | $ | (2,400 | ) | $ | (2,400 | ) | ||||
| Weighted Average Number of Common Shares Outstanding - Basic and Diluted | 2,696 | 2,696 | 2,696 | 2,696 | ||||||||||||
| Income (Loss) per Common Share - Basic and Diluted | $ | (0.30 | ) | $ | (0.30 | ) | $ | (0.89 | ) | $ | (0.89 | ) | ||||
The accompanying notes are an integral part of these financial statements.
| 6 |
AMPERICO CORP.
STATEMENTS OF STOCKHOLDERS' DEFICIT
| Shares Outstanding | Additional Paid-In | Total Stockholders’ | ||||||||||||||||||
| Common | Common Stock | Capital | Accumulated Deficit | Deficit | ||||||||||||||||
| Balance as of May 31, 2017 | 2,696 | $ | 3 | $ | 21,797 | $ | (67,135 | ) | $ | (45,335 | ) | |||||||||
| Net loss | - | - | - | (3,200 | ) | (3,200 | ) | |||||||||||||
| Balance as of May 31, 2018 | 2,696 | 3 | 21,797 | (70,335 | ) | (48,535 | ) | |||||||||||||
| Net loss | - | - | - | (2,400 | ) | (2,400 | ) | |||||||||||||
| Balance as of February 28, 2019 (Unaudited) | 2,696 | $ | 3 | $ | 21,797 | $ | (72,735 | ) | $ | (50,935 | ) | |||||||||
| Balance as of May 31, 2016 | 2,696 | $ | 3 | $ | 21,797 | $ | (59,349 | ) | $ | (37,549 | ) | |||||||||
| Net loss | - | - | - | (7,786 | ) | (7,786 | ) | |||||||||||||
| Balance as of May 31, 2017 | 2,696 | 3 | 21,797 | (67,135 | ) | (45,335 | ) | |||||||||||||
| Net loss | - | - | - | (2,400 | ) | (2,400 | ) | |||||||||||||
| Balance as of February 28, 2018 (Unaudited) | 2,696 | $ | 3 | $ | 21,797 | $ | (69,535 | ) | $ | (47,735 | ) | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 7 |
AMPERICO CORP
STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended February 28, | ||||||||
| 2019 | 2018 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | (2,400 | ) | $ | (2,400 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts Payable | 900 | 900 | ||||||
| Interest Payable | 1,500 | 1,500 | ||||||
| Net Cash Used In (Provided By) Operating Activities | - | - | ||||||
| Cash Flows From Investing Activities | - | - | ||||||
| Cash Flows From Financing Activities | ||||||||
| Advances from Related Party | - | - | ||||||
| Net Cash Provided by Financing Activities | - | - | ||||||
| Net Increase (Decrease) In Cash | - | - | ||||||
| Cash, Beginning of Period | - | - | ||||||
| Cash, End of Period | $ | - | $ | - | ||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
The accompanying notes are an integral part of these financial statements.
| 8 |
AMPERICO CORP.
Notes to Financial Statements
February 28, 2019
NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS
Amperico Corp. (the “Company”) was incorporated under the laws of the State of Nevada on December 20, 2011. The Company is a Nevada corporation organized for the purpose of engaging in any lawful business.
From inception in 2011 through March 12, 2014, the Company was in the business of developing on-site web-state analytical software designed to capture customer's behavior and feedback on the visited websites.
On March 12, 2014, the Company signed a letter of intent to acquire intellectual property through an Intellectual Property License Agreement from SecureCom Plus Limited, a non-related company based in Hong Kong. The closing of the contemplated transactions as per the letter of intent was to occur on or before April 11, 2014. The closing was extended to April 30, 2014 by mutual agreement of all parties, and ultimately did not occur. From May 1, 2014 through February 28, 2019, the Company’s activities consisted solely of seeking other business opportunities and potential merger candidates, none of which materialized.
The Company has no business operations, and very limited assets or capital resources. The Company's business plan is to seek one or more potential business ventures that, in the opinion of management, may warrant involvement by the Company. The Company recognizes that because of its limited financial, managerial and other resources, the type of suitable potential business ventures which may be available to it will be extremely limited. The Company's principal business objective will be to seek long-term growth potential in the business venture in which it participates rather than to seek immediate, short-term earnings. In seeking to attain the Company's business objective, it will not restrict its search to any particular business or industry but may participate in business ventures of essentially any kind or nature.
The Company will not restrict its search for any specific kind of firms but may participate in a venture in its preliminary or development stage, may participate in a business that is already in operation or in a business in various stages of its corporate existence. It is impossible to predict at this stage the status of any venture in which the Company may participate, in that the venture may need additional capital, may merely desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer. In some instances, the business endeavors may involve the acquisition of or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock.
The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding as well as identifying a sustainable and profitable business model.
Subsequent to the reporting period of these financial statements, the Company identified an opportunity in the cryptocurrency industry and now has two wholly owned subsidiaries. Refer to NOTE 8 – SUBSEQUENT EVENTS for further detail.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is May 31.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase and money market accounts to be cash equivalents. As of February 28, 2019, the Company had $0 in cash. As of February 28, 2018, the Company had $0 in cash.
| 9 |
Fair Value of Financial Instruments
The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities.
We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements.
The Company had no assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at February 28, 2019 and May 31 2018.
Income Taxes
Income taxes are provided in accordance with ASC 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Provision for income taxes consists of federal and state income taxes in the United States. Due to the uncertainty as to the realization of benefits from our deferred tax assets, including net operating loss carry-forwards and other tax credits, we have a full valuation allowance reserved against such assets. We expect to maintain this full valuation allowance at least in the near term.
The Company records interest and penalties related to unrecognized tax benefits in income tax expense. There were no interest or penalties related to unrecognized tax benefits for nine months ended February 28, 2019 and for the year ended May 31, 2018.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts and valuations of intangible assets, among others. Actual results could differ from those estimates.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
| 10 |
Basic Income (Loss) Per Share
The Company computes basic and diluted income (loss) per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic loss per share is computed by dividing net loss available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share is computed by dividing net loss available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.
Risk and Uncertainties
The Company operates in an industry that is subject to rapid change and intense competition. The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks, including the potential risk of business failure.
Stock-Based Compensation
Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.
Recent Accounting Pronouncements
Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.
NOTE 3 – COMMON STOCK
Common stock:
As of February 28, 2019, the Company had authorized a total of 1,000,000,000 shares of common stock, par value $0.001 per share.
There was no common stock issued during the nine months ended February 28, 2019 and the year ended May 31, 2018
As of February 28, 2019, and May 31, 2018, a total of 2,696 shares of common stock were issued and outstanding.
NOTE 4 – RELATED PARTY TRANSACTIONS
As at February 28, 2019 and May 31, 2018, the Company owes $652 and $652, respectively, to the President and Director of the Company for working capital advances. The amounts owing are unsecured, non-interest bearing, and due on demand. The imputed interest is deemed immaterial as of February 28, 2019.
| 11 |
NOTE 5 – INCOME TAXES
The provision (benefit) for income taxes for the nine months ended February 28, 2019 and the year ended May 31, 2018 consists of the following:
| For the nine | For the year | |||||||
| months ended | ended | |||||||
| February 28, | May 31, | |||||||
| 2019 | 2018 | |||||||
| Current | ||||||||
| Federal | $ | - | $ | - | ||||
| State | - | - | ||||||
| Deferred | ||||||||
| Federal | (816 | ) | (1,088 | ) | ||||
| State | (79 | ) | (106 | ) | ||||
| Change in valuation allowance | 895 | 1,194 | ||||||
| Total | $ | - | $ | - | ||||
For the nine months ended February 28, 2019 and the year ended May 31, 2018 the Company's income tax rate computed at the statutory federal rate of 34% differs from its effective tax rate primarily due to permanent items, state taxes and the change in the deferred tax asset valuation allowance.
| For the nine | For the year | |||||||
| months ended | ended | |||||||
| February 28, | May 31, | |||||||
| 2019 | 2018 | |||||||
| Income tax at statutory rate | 34.00 | % | 34.00 | % | ||||
| State income taxes, net of federal benefit | 3.30 | 3.30 | ||||||
| Change in valuation allowance | (37.30 | ) | (37.30 | ) | ||||
| Total | 0.00 | % | 0.00 | % | ||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, Management evaluates whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on Management's evaluation, the net deferred tax asset was offset by a full valuation allowance in all periods presented. The Company's deferred tax asset valuation allowance will be reversed if and when the Company generates sufficient taxable income in the future to utilize the tax benefits of the related deferred tax assets.
| 12 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and tax liabilities as of February 28, 2019 and May 31, 2018 are as follows:
| For the nine | For the year | |||||||
| months ended | ended | |||||||
| February 28, | May 31, | |||||||
| 2019 | 2018 | |||||||
| Net operating loss | $ | 2,400 | $ | 3,200 | ||||
| Gross deferred tax assets | 2,400 | 3,200 | ||||||
| Less: Valuation allowance | (2,400 | ) | (3,200 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
As of February 28, 2019, the Company had a net operating loss carry-forward of approximately $61,000 which may be used to offset future taxable income and begins to expire in 2038. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
NOTE 6 – GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has not generated any revenues as of February 28, 2019. The Company currently has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of December 19, 2019, there were no pending or threatened lawsuits.
NOTE 8 – SUBSEQUENT EVENTS
On April 23, 2019, the Board of Directors and the majority shareholder of the Company approved a Plan of Conversion of the Company from a Nevada corporation into a Bahamas corporation (the “Plan”). The Company filed Articles of Continuation (the “Bahamas Articles of Continuation”) in such form as required by the provisions of Chapter 309, Part VIII, Sections 84-88 of the Bahamas International Business Companies Act, as amended (the "Bahamas Law") with the Registrar of Companies in the Bahamas as provided in the Bahamas Law, and Articles of Conversion (the “Nevada Articles of Conversion”) in such form as required by the provisions of Section 92A. 205 of the Nevada Revised Statutes (“Nevada Law”) with the Secretary of State of the State of Nevada.
In accordance with the Plan, upon the effective time of conversion, the Articles of Incorporation and Bylaws of the Company currently in place shall be replaced by the Bahamas Articles of Continuation and Articles of Association respectively, to comply in all respects with the applicable provisions of Bahamas Law.
In addition, and in accordance with the Plan, the Bahamas Articles of Continuation, and Articles of Association, the following changes were approved on April 23, 2019 and become effective upon the effective time of conversion:
| · | The Company’s name changed from Amperico Corp. to Bitsian Ltd. |
| 13 |
| · | The authorized common shares of the Company increased from 500,000,000 to 1,000,000,000. |
| · | The outstanding common shares of the Company decreased from 134,400,000 to 2,696 on a pro rata basis as a result of a 50,000 to 1 reverse split in which any fractional shares shall be rounded up (NOTE: the effects have been applied on a retroactive basis in these financial statements). |
The Company received its Certificate of Continuation from the Registrar of Companies in the Bahamas on May 13, 2019, with an effective time of conversion of April 30, 2019.
The Company plans to file the foregoing changes with FINRA, but there is no guarantee FINRA will effectuate the changes.
Bitsian Inc. Transaction
On June 11, 2019, the Company issued a total of 300,000,000 shares of common stock to seven individuals and two companies (collectively referred to as the “Bitsian Shareholders”) as full consideration for the acquisition of a 100% interest in Bitsian Inc. (hereinafter referred to as "Bitsian"), a Delaware corporation based in New York. The Company, Bitsian, and the Bitsian Shareholders entered into a share exchange agreement on June 7, 2019 whereby the Bitsian Shareholders exchanged their shares in Bitsian for shares in the Company. The Bitsian Shareholders represented a total of 100% of the issued and outstanding share capital in Bitsian.
Bitsian Inc. was recently formed to develop, own and operate the PriceCoin Platform, an online platform whereby users will be able to buy and sell crypto currencies on a variety of exchanges through one simple interface. The PriceCoin Platform will initially be accessible by institutional investors and upon receiving all regulatory approvals to global investors and will be available in web format.
Coin Trader Ltd. Transaction
On June 11, 2019, the Company issued a total of 300,000,000 shares of common stock to three individuals and two companies (collectively referred to as the “Coin Trader Shareholders”) as full consideration for the acquisition of a 100% interest in Coin Trader Ltd. (hereinafter referred to as "Coin Trader"), a company incorporated and based in the Bahamas. The Company, Coin Trader, and the Coin Trader Shareholders entered into a share exchange agreement on June 7, 2019 whereby the Coin Trader Shareholders exchanged their shares in Coin Trader for shares in the Company. The Coin Trader Shareholders represented a total of 100% of the issued and outstanding share capital in Coin Trader.
Coin Trader was recently formed to develop, own and operate the CoinTraders Platform, an online exchange whereby users will be able to buy and sell crypto currencies, utility tokens, and other digital assets. The CoinTraders Platform will be accessible by non-US investors and will be available in both web and mobile formats. Users will have access to over 100 crypto pairs and will be able to fund their accounts with fiat currency. There will be no deposit or withdrawal limits and the CoinTraders Platform will simplify utility token offerings.
In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to May 31, 2014 to the date these financial statements were available to be issued, and has determined that there are no additional material subsequent events to disclose in these financial statements.
| 14 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward- looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
GENERAL
We were incorporated in the State of Nevada on December 20, 2011.
Stock Split
On March 11, 2014, our Board of Directors authorized and approved a stock split of thirty for one (30:1) of our total issued and outstanding shares of common stock (the “Stock Split”). The Stock Split was effectuated as part of the re-organization mandate and contemplated actions to acquire certain new technologies. The Board of Directors considered further factors regarding approval of the Stock Split including, but not limited to: (i) further increase our authorized share capital to a sufficient number similar to other industry public offerings, such as our direct competitors; (ii) the contemplated new Intellectual Property License Agreement as defined in the letter of intent outlined below; (iii) the projected trading price of our shares of common stock on the OTC Bulletin Board Market and potential to increase the marketability and liquidity of our common stock; (iv) desire to meet future requirements of a larger share cap as required for market demand and interest by larger shareholder networks to decrease share price volatility; and (v) desire to meet future requirements regarding per-share price and net tangible assets and shareholders’ equity relating to admission for trading on other markets.
The Stock Split was effectuated on March 11, 2014 upon filing the appropriate documentation with FINRA. The Stock Split increased our total issued and outstanding shares of common stock from 4,480,000 shares of common stock to 134,400,000 shares of common stock. The common stock will continue to carry a $0.001 par value. The shareholder record date was February 8, 2014.
As of the date of this Quarterly Report, there are 2,696 shares issued and outstanding.
Letter of Intent
As reported on Form 8-K on as filed on March 14, 2014, the Company signed a letter of intent on March 12, 2014, to acquire intellectual property through an Intellectual Property License Agreement (the “Agreement”) from SecureCom Plus Limited, a non-related company based in Hong Kong. Under the terms of the Agreement, the Company will acquire a ten-year use of the license within the Agreement in exchange for 90,000,000 restricted common shares of the Company, a promissory note of $250,000 which is unsecured, bears interest at 7.5% per annum, and is due within 90 days of the completion date of the Agreement, and royalty payments of 5% of the gross revenues generated from Agreement. As of the date of filing, due diligence is ongoing and the Agreement has not been completed. Further negotiations to finalize this arrangement are ongoing; original intentions to obtain a definitive agreements by the parties no later than April 11, 2014 have been extended by through April 30, 2014 through mutual consent of the parties to the Agreement.
| 15 |
About SecureCom Mobile: SecureCom Plus Limited is the creator of the SecureCom Mobile brand of software and hardware for mobile communications platforms that enables people to communicate, in privacy, with ease for both voice and text. Cryptographically strong algorithms and protocols shield communication from surveillance. Software downloads and hardware products are in development and deployment stages being prepared for individual, commercial, and enterprise markets.
Our Current Operations as defined below may change upon the successful completion of negotiations with SecureCom Plus Limited and the contemplated acquisition of the Agreement.
OPERATIONS
The Company has no business operations, and very limited assets or capital resources. The Company's business plan is to seek one or more potential business ventures that, in the opinion of management, may warrant involvement by the Company. The Company recognizes that because of its limited financial, managerial and other resources, the type of suitable potential business ventures which may be available to it will be extremely limited. The Company's principal business objective will be to seek long-term growth potential in the business venture in which it participates rather than to seek immediate, short-term earnings. In seeking to attain the Company's business objective, it will not restrict its search to any particular business or industry but may participate in business ventures of essentially any kind or nature.
The Company will not restrict its search for any specific kind of firms but may participate in a venture in its preliminary or development stage, may participate in a business that is already in operation or in a business in various stages of its corporate existence. It is impossible to predict at this stage the status of any venture in which the Company may participate, in that the venture may need additional capital, may merely desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer. In some instances, the business endeavors may involve the acquisition of or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock.
The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding as well as identifying a sustainable and profitable business model.
Revenue
There are several ways how the company will generate its profit.
RESULTS OF OPERATIONS
WORKING CAPITAL
| February 28, | May 31, | |||||||
| 2019 | 2018 | |||||||
| Current Assets | $ | - | $ | - | ||||
| Current Liabilities | $ | 50,935 | $ | 48,535 | ||||
| Working Capital (Deficit) | $ | (50,935 | ) | $ | (48,535 | ) | ||
CASH FLOWS
| Nine Months | Six Months | |||||||
| Ended | Ended | |||||||
| February 28, | February 28, | |||||||
| 2019 | 2018 | |||||||
| Cash Flows used in Operating Activities | $ | - | $ | - | ||||
| Cash Flows from Financing Activities | $ | - | $ | - | ||||
| Net Decrease in Cash During the Period | $ | - | $ | - |
| 16 |
Operating Revenues
We have not generated any revenues since inception.
Operating Expenses and Net Loss
Operating expenses and net loss for the three months ended February 28, 2019 were $2,400 compared with $2,400 for the three months ended February 28, 2018.
For the nine months ended February 28, 2019, the Company incurred operating expenses and net loss of $2,400 compared with a net loss of $2,400 for the nine months ended February 28, 2018.
Liquidity and Capital Resources
As of February 28, 2019, the Company had cash and total asset balance of $0 compared with cash and total asset balance of $0 as at May 31, 2018.
As of February 28, 2019, the Company had total liabilities of $50,935 compared with total liabilities of $48,535 as at May 31, 2018. The increase in total liabilities was attributed to increases of $2,400 for outstanding accounts payable and interest payable.
As of February 28, 2019, the Company had a working capital deficit of $50,935 compared with $48,535 as of May 31, 2018. The increase in working capital deficit was attributed to the expenditures incurred during the period.
Cashflow from Operating Activities
We have not generated positive cash flows from operating activities. During the nine months ended February 28, 2019, the Company used $0 of cash for operating activities compared to the use of $0 of cash for operating activities during the nine months ended February 28, 2018. The change in net cash used in operating activities is attributed to the fact that the Company had a decrease in operating activities as compared with the prior period.
Cashflow from Financing Activities
We have financed our operations primarily from either debt advances or from the issuance of equity. During the nine months ended February 28, 2019, the Company did not provide or use any cash from financing activities. During the nine months ended February 28, 2018, the Company did not provide or use any cash from financing activities.
Going Concern
The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company has not generated any revenues as of the quarter ended February 28, 2019 and at the date of this quarterly filing. The Company currently has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.
Management anticipates that the Company will be dependent, for the near future, on additional investment debe and/or equity capital to fund operating expenses. The Company intends to position itself so that it can be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
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.
Future Financings
We expect that working capital requirements will continue to be funded through a combination of advances from our management, third parties, or issuances of debt or equity instruments. Our working capital requirements are expected to increase in line with the growth of our business.
| 17 |
We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date primarily through the proceeds of the private placement of equity and advances from management. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition or investment in assets connected to our current and proposed business objectives; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. 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 our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No report required.
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 28, 2019. Based on that evaluation, our management concluded that our disclosure controls and procedures were not 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 28, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 18 |
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. MINE SAFETY DISCLOSURES
No report required.
No report required.
| Exhibit | ||||
| Number | Description of Exhibit | Filing | ||
| 31.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). | Filed herewith. | ||
| 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. | Filed herewith. |
| 101.INS ** | XBRL Instance Document | |
| 101.SCH ** | XBRL Taxonomy Extension Schema Document | |
| 101.CAL ** | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF ** | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB ** | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE ** | XBRL Taxonomy Extension Presentation Linkbase Document |
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
| 19 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMPERICO CORP. | ||
| Dated: December 26, 2019 | /s/ Richard DiBiase | |
| By: | RICHARD DIBIASE | |
| Its: | President, Chief Executive Officer and | |
| Chief Financial Officer | ||
20
EXHIBIT 31.1
302 CERTIFICATION
I, Richard DiBiase, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Amperico Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a 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 this 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. I am 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 controls and procedures, to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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; and
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. I have disclosed, based on my 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: December 26, 2019 | By: | /s/ Richard DiBiase | |
| Richard DiBiase | |||
| President, Chief Executive Officer and 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
The undersigned, officer of Amperico Corp. (the “Company”), hereby certifies, to such officer’s knowledge, that the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: December 26, 2019 | By: | /s/ Richard DiBiase | |
| Richard DiBiase | |||
| President, Chief Executive Officer and Chief Financial Officer |
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Feb. 28, 2019 |
Feb. 28, 2018 |
Feb. 28, 2019 |
Feb. 28, 2018 |
|
| Income Statement [Abstract] | ||||
| Revenue | ||||
| Cost of Goods Sold | ||||
| Gross Profit | ||||
| Operating Expenses: | ||||
| General administrative | 300 | 300 | 900 | 900 |
| Total operating expenses | 300 | 300 | 900 | 900 |
| Loss from operations | (300) | (300) | (900) | (900) |
| Other Income (Expense) | ||||
| Interest expense | (500) | (500) | (1,500) | (1,500) |
| Total other income (expense) | (500) | (500) | (1,500) | (1,500) |
| Net Loss Before Income Taxes | (800) | (800) | (2,400) | (2,400) |
| Income tax | ||||
| Net Loss After Income Taxes | $ (800) | $ (800) | $ (2,400) | $ (2,400) |
| Weighted Average Number of Common Shares Outstanding - Basic and Diluted (in shares) | 2,696 | 2,696 | 2,696 | 2,696 |
| Income (Loss) per Common Share - Basic and Diluted (in dollars per share) | $ (0.30) | $ (0.30) | $ (0.89) | $ (0.89) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
|---|---|
Feb. 28, 2019 | |
| Accounting Policies [Abstract] | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is May 31.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase and money market accounts to be cash equivalents. As of February 28, 2019, the Company had $0 in cash. As of February 28, 2018, the Company had $0 in cash.
Fair
Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities.
We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements.
The Company had no assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at February 28, 2019 and May 31 2018.
Income Taxes
Income taxes are provided in accordance with ASC 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Provision for income taxes consists of federal and state income taxes in the United States. Due to the uncertainty as to the realization of benefits from our deferred tax assets, including net operating loss carry-forwards and other tax credits, we have a full valuation allowance reserved against such assets. We expect to maintain this full valuation allowance at least in the near term.
The Company records interest and penalties related to unrecognized tax benefits in income tax expense. There were no interest or penalties related to unrecognized tax benefits for nine months ended February 28, 2019 and for the year ended May 31, 2018.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts and valuations of intangible assets, among others. Actual results could differ from those estimates.
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
Basic Income (Loss) Per Share
The Company computes basic and diluted income (loss) per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic loss per share is computed by dividing net loss available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share is computed by dividing net loss available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.
Risk and Uncertainties
The Company operates in an industry that is subject to rapid change and intense competition. The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks, including the potential risk of business failure.
Stock-Based Compensation
Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.
Recent Accounting Pronouncements
Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. |