NOTES TO THE FINANCIAL STATEMENTS
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NOTE 1
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
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(A) Organization.
USA InvestCo Holdings, Inc. (a development stage company) (the "Company") was incorporated under the laws of the State
of Nevada on January 20, 2011 under the name of Lambent Solutions Corp.
On July 25, 2012, the Company
entered into a Stock Purchase Agreement (the “SPA”) with the former sole director and officer of the Company (the “Seller”),
and the current sole director and officer (the “Purchaser”), under which the Purchaser purchased 4,500,000 shares of
common stock, par value $0.001 per share, of the Company (the “Shares”), for an aggregate purchase price of $126,000,
payable in full to the Seller (a “Change of Control”). The Shares represent all of the Seller’s interest in and
to any securities of the Company, and make up 81.227% of the issued and outstanding shares of common stock of the Company. The
SPA closed and the Change of Control occurred on July 25, 2012.
In connection with the Change
of Control, on September 5, 2012, the Company amended its Articles of Incorporation to change its name to USA InvestCo Holdings,
Inc.
The Company previously offered
an advertising system for real estate brokers and agents. The Company has ceased operations in this area in anticipation of a potential
merger with USA InvestCo, LLC. However, no definitive agreements or merger with USA InvestCo, LLC has occurred. At this point,
the Company is deciding its best path for future progress. They have not completed the acquisition of USA InvestCo, LLC and may
decide it is in their best interest not to pursue this and pursue a transaction with another business.
(B) Use of Estimates
In preparing financial statements
in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reported period. Significant estimates include the valuation of deferred taxes
assets and the valuation of in kind contribution of services, rent and interest. Actual results could differ from those estimates.
USA
Investco Holdings, inc.
(F/K/A
LAMBENT SOLUTIONS CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
(C) Cash and Cash Equivalents
The Company considers all highly
liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At February 28, 2014
and 2013, the Company had no cash or cash equivalents.
(D) Loss Per Share
Basic and diluted net loss per common share is computed
based upon the weighted average common shares outstanding as defined by Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 260,
Earnings Per Share
. As of February 28, 2014 and 2013, there
were no common share equivalents outstanding.
(E) Income Taxes
The Company accounts for income
taxes under FASB ASC Topic 740,
Income Taxes
(“ASC Topic 740”). Under ASC Topic 740, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. Under ASC Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
Components of deferred taxes
are as follows:
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February 28, 2014
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February 28, 2013
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Statutory rate applied to earnings before income taxes:
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$
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(33,524
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)
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$
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(29,188
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)
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Increase (decrease) in income taxes resulting from:
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|
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State income taxes
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(4,486
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)
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(3,906
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)
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NOL Carryforward
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-
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-
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In-Kind Contribution of Services
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15,327
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5,948
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Change in deferred tax asset valuation allowance
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22,683
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27,146
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Income Tax Expense
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$
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-
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$
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-
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USA
Investco Holdings, inc.
(F/K/A
LAMBENT SOLUTIONS CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
As of February 28, 2014 and
2013, the company had a net operating loss carry forward of approximately $58,839 and $70,417, respectively, available to offset
future taxable income through April 30, 2034. The valuation allowance was established to reduce the deferred tax asset to the amount
that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty
of the Company’s ability to utilize all of the net operating loss carryforwards before they will expire through the year
2034. All other losses incurred by the Company in previous years and through the quarter ended May 31, 2012 are limited due to
Internal Revenue Code Section 382 which restricts the deductibility of prior net operating losses where there has been a change
in control.
The net change in the valuation
allowance for the years ended February 28, 2014 and 2013 was an increase of $22,683 and $27,146 respectively.
The Company’s income tax
expense differed from the statutory rates (federal 34% and state 4.55%) as follows:
Federal tax rate
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34.00
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%
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Add: State taxes, net of federal benefit
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4.55
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%
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Less: Valuation allowance
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|
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-38.55
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%
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Tax Rate
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0.00
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%
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The company’s federal
income tax returns for the year ended February 28, 2014 and 2013 remain subject to examination by the Internal Revenue Service.
(F) Business Segments
The Company operates in one
segment and therefore segment information is not presented.
(G) Recent Accounting
Pronouncements
In July 2013, the FASB issued
ASU 2013-11,
Income Taxes (Topic 740)
, which clarifies the presentation requirements of unrecognized tax benefits when
a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments
in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 and should
be applied prospectively. The adoption of this ASU is not expected to have a material effect on our consolidated statements of
financial condition, results of operations, or cash flows.
In February 2013, FASB issued
Accounting Standards Update 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements
for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force).
This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total
amount of the obligation within the scope of this guidance is fixed at the reporting date. This stipulates that (1) it will include
the amount the entity agreed to pay for the arrangement between them and the other entities that are also obligated to the liability
and (2) any additional amount the entity expects to pay on behalf of the other entities. The objective of this update is to provide
guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements.
USA
Investco Holdings, inc.
(F/K/A
LAMBENT SOLUTIONS CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
The amendments in this update
are effective for fiscal periods (and interim reporting periods within those years) beginning after December 15, 2013. This standard
is not expected to have a material impact on the Company’s reported results of operations or financial position.
As reflected in the accompanying
financial statements, the Company is in the development stage with minimal operations, used cash in operations of $37,678 from
inception and has a net loss since inception of $218,958. There is also a working capital and stockholders’ deficiency of
$102,820. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue
as a going concern is dependent on the Company’s ability to raise additional capital through stockholder loans and implement
its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to
continue as a going concern.
Management believes that actions presently being
taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going
concern.
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NOTE 3
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STOCKHOLDERS’ EQUITY
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(A) In-Kind Contribution
For the year ended February
28, 2014, the CEO who is also a majority stockholder of the Company contributed services having a fair value of $31,200 (See Note
5).
For the year ended February
28, 2014, a total of $2,560 in imputed interest relating to the notes payable due to the CEO, was recorded as an in-kind contribution
(See Notes 4 & 5).
For the year ended February
28, 2014, the Company recorded an in-kind contribution of rent having a fair value of $6,000 for facilities and related overhead
provided by a company controlled by the CEO (See Note 5).
For the year ended February
28, 2013, the CEO who is also a majority stockholder of the Company contributed services having a fair value of $16,928 (See Note
5).
USA
Investco Holdings, inc.
(F/K/A
LAMBENT SOLUTIONS CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
For the year ended February
28, 2013, a total of $72 in imputed interest relating to the notes payable due to the CEO, was recorded as an in-kind contribution
(See Notes 4 & 5).
For the year ended February
28, 2013, the Company recorded an in-kind contribution of rent having a fair value of $500 per month for facilities and related
overhead provided by a company controlled by the CEO (See Note 5).
For the year ended February
28, 2013, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $21,200, which was forgiven
and recorded as an in-kind contribution of capital (See Note 5).
In connection with the change
in control in July 2012, the former CEO forgave a note payable in the amount of $12,378 (See Notes 4 & 5).
(B) Stock Issued for
Cash
On February 22, 2011, the Company
issued 4,500,000 shares of common stock to its sole director having a fair value of $4,500 ($0.001/share) in exchange for cash
(See Note 5).
For the year ended February
29, 2012 the Company sold 1,040,000 common shares at $0.02 per share to various investors, for gross proceeds of $20,800.
The authorized capital of the
Company is 75,000,000 common shares with a par value of $ 0.001 per share.
(C) Amendment to Articles
of Incorporation
On September 5, 2012, the Company
amended its Articles of Incorporation to change its name to USA InvestCo Holdings, Inc.
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NOTE 4
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NOTES PAYABLE – RELATED PARTY
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During the year ended February
28, 2014, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $80,666 in exchange for notes
payable. Pursuant to the terms of the notes, the loans are non-interest bearing, unsecured and due on demand. The Company recorded
a total of $2,560 in imputed interest as in-kind contributions during the year ended February 28, 2014 (See Notes 3(A) & 5).
During the year ended February
28, 2013, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $13,090 in exchange for two
notes payable. Pursuant to the terms of the notes, the loans are non-interest bearing, unsecured and due on demand. The Company
recorded a total of $72 in imputed interest as an in-kind contribution during the year (See Notes 3(A) & 5).
USA
Investco Holdings, inc.
(F/K/A
LAMBENT SOLUTIONS CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
As of February 29, 2012, the
Company was indebted to the former controlling stockholder of the Company for the amount of $4,156. During the year ended February
28, 2013, the Company received an additional $8,222 from the former controlling stockholder. Pursuant to the terms of the loan,
the loan was non-interest bearing, unsecured and was due on demand. In connection with the change in control in July 2012, the
former CEO forgave the full amount due of $12,378 (See Notes 3(A) & 5).
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NOTE 5
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RELATED PARTY TRANSACTIONS
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During the year ended February
28, 2014, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $80,666 in exchange for notes
payable. Pursuant to the terms of the notes, the loans are non-interest bearing, unsecured and due on demand. The Company recorded
a total of $2,560 in imputed interest as in-kind contributions during the year ended February 28, 2014 (See Notes 3(A) & 4).
During the year ended February
28, 2013, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $13,090 in exchange for two
notes payable. Pursuant to the terms of the notes, the loans are non-interest bearing, unsecured and due on demand. The Company
recorded a total of $72 in imputed interest as an in-kind contribution during the year (See Notes 3(A) & 4).
As of February 29, 2012, the
Company was indebted to the former controlling stockholder of the Company for the amount of $4,156. During the year ended February
28, 2013, the Company received an additional $8,222 from the former controlling stockholder. Pursuant to the terms of the loan,
the loan was non-interest bearing, unsecured and was due on demand. In connection with the change in control in July 2012, the
former CEO forgave the full amount due of $12,378 (See Notes 3(A) & 4).
For the year ended February
28, 2014, the CEO who is also a majority stockholder of the Company contributed services having a fair value of $31,200 (See Note
3(A)).
For the year ended February
28, 2013, the CEO who is also a majority stockholder of the Company contributed services having a fair value of $16,928 (See Notes
3(A) & 5).
For the year ended February
28, 2013, a total of $72 in imputed interest relating to the notes payable due to the CEO, was recorded as an in-kind contribution
(See Notes 3(A) & 5).
For the year ended February
28, 2014, a total of $2,560 in imputed interest relating to the notes payable due to the CEO, was recorded as in-kind contributions
(See Notes 3(A) & 4).
For the year ended February
28, 2014, the Company recorded an in-kind contribution of rent having a fair value of $6,000 for facilities and related overhead
provided by a company controlled by the CEO (See Note 3(A)).
USA
Investco Holdings, inc.
(F/K/A
LAMBENT SOLUTIONS CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
For the year ended February
28, 2013, the Company recorded an in-kind contribution of rent having a fair value of $500 per month for facilities and related
overhead provided by a company controlled by the CEO (See Note 3(A)).
For the year ended February
28, 2013, a company controlled by the CEO paid operating expenses on behalf of the Company totaling $21,200, which was forgiven
and recorded as an in-kind contribution of capital (See Note 3(A)).
In connection with the change
in control in July 2012, the former CEO forgave a note payable in the amount of $12,378 (See Notes 3(A) & 4).
On February 22, 2011, the Company
issued 4,500,000 shares of common stock to its sole Director having a fair value of $4,500 ($0.001/share) in exchange for cash
(See Note 3 (B)).