Common stock retroactively adjusted for 20:1 forward stock split, effective November 3, 2016.
Common stock retroactively adjusted for 20:1 forward stock split, effective November 3, 2016.
Notes to the Audited Financial Statements
December 31, 2016 and 2015
Note 1. Background information
TRON Group Inc. (“the Company”) was incorporated in the State of Nevada on October 20, 2015, as Plush Corp., and it is based in Las Vegas, Nevada. On November 3, 2016, a majority of stockholders of our company and our board of directors approved a change of name of our company from Plush Corp. to TRON Group Inc. The company intends to design, market, and sell luxury accessories for men online through its website. To date, the company’s activities have been limited to raising capital, organizational matters, launching the website and the structuring of its business plan. The company has not generated any revenues since inception.
Note 2. Going concern
The accompanying financial statements have been prepared assuming that the company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the year ended December 31, 2016, the company had a net loss of $50,518. As of December 31, 2016, the company has not generated any revenues from operations. These factors, among others, raise substantial doubt about the ability of the company to continue as a going concern for a reasonable period of time. The company’s continuation as a going concern is dependent upon the company’s ability to begin operations and to achieve a level of profitability. The company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the company be unable to continue as a going concern.
Note 3. Summary of significant accounting policies
Basis of Presentation
The accounting and reporting policies of the company conform to accounting principles generally accepted in the United States of America (GAAP).
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Start-Up Costs
In accordance with ASC 720, “
Start-up Costs”,
the company expenses all costs incurred in connection with the start-up and organization of the company.
Cash
Cash includes cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
Fair Value Measurements
The company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or liabilities
Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
The company has no assets or liabilities valued at fair value on a recurring basis.
Concentrations of Credit Risks
The company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and related party payables it will likely incur in the near future. The company places its cash with financial institutions of high credit worthiness. At times, its cash with a particular financial institution may exceed any applicable government insurance limits. The company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Loss per Share
The company has adopted ASC 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
The company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
Related party transaction
The Company follows ASC 850, "Related Party Disclosures," for the identification of related parties and disclosure of related party transactions.
Income Taxes
The company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of December 31, 2016 and 2015, the Company did not have any amounts recorded pertaining to uncertain tax positions.
Recent Accounting Pronouncements
Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The company’s management believes that these recent pronouncements will not have a material effect on the company’s financial statements.
Note 4. Prepaid expense
As of December 31, 2016 and 2015, the Company had prepaid expense of $5,000 and $0, respectively. Prepaid expense consists of a one year subscription agreement with the transfer agent.
Note 5. Accounts payable and accrued liabilities
The Company's accounts payable and accrued liabilities consist of the following:
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
Accounts payable
|
|
$
|
1,711
|
|
|
$
|
-
|
|
Accrued liabilities
|
|
|
-
|
|
|
|
3,500
|
|
|
|
$
|
1,711
|
|
|
$
|
3,500
|
|
Note 6. Income taxes
The Company provides for income taxes under ASC 740, "Income Taxes." Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. The Company provided a full valuation allowance for the deferred tax asset.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:
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|
December 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
Federal income tax benefit attributable to:
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|
|
|
|
|
|
Current operations
|
|
$
|
17,176
|
|
|
$
|
1,580
|
|
Less: valuation allowance
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|
|
(17,176
|
)
|
|
|
(1,580
|
)
|
Net provision for Federal income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Net deferred tax assets consist of the following components as of:
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
Deferred tax asset attributable to:
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|
|
|
|
|
|
Net operating loss carry over
|
|
$
|
18,754
|
|
|
$
|
1,580
|
|
Less: valuation allowance
|
|
|
(18,754
|
)
|
|
|
(1,580
|
)
|
Net deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
The Company has approximately $55,159 of net operating losses (“NOL”) carried forward to offset taxable income, if any, in future years which begin to expire in fiscal 2035. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will 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 the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.
Note 7. Related party transactions
During the year ended December 31, 2016, the Company received $9,886 from the current director and officer for payment of operating expenses. This amount is non-interest bearing and due on demand.
As of December 31, 2015 the company was obligated to a founder of the company the amount of $1,111 for payments made to vendors for operating expenses. This amount is non-interest bearing and due on demand. During the year ended December 31, 2016, the Company fully repaid $1,111.
As of December 31, 2016 and 2015, due to related parties was $9,886 and $1,111, respectively.
Note 8. Shareholders' Equity
Authorized Stock
The Company has authorized 500,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
On November 3, 2016, a majority of stockholders of our company and our board of directors approved an increase to authorized capital from 75,000,000 shares of common stock, par value $0.001 to 500,000,000 shares of common stock, par value $0.001 and a forward stock split of our issued and outstanding shares of common stock on a basis of one (1) old share for twenty (20) new shares of common stock. Forward stock split became effective with the OTC Markets at the opening of trading on December 28, 2016.
All relevant information relating to the number of shares and per share information have been retrospectively adjusted to reflect the forward stock split for all periods presented.
Common Share Issuances
During the year ended December 31, 2016 the Company issued a total of 60,000,000 common shares for $3,000 cash.
Since inception (October 20, 2015) to December 31, 2015, the company has issued a total of 100,000,000 common shares to its founders for a subscription of $5,000. As of December 31, 2015, $3,635 cash was received and $1,365 has been recorded as a stock subscription receivable.
As of December 31, 2016 and 2015, the Company had 160,000,000 and 100,000,000 shares of common stock issued and outstanding.
Capital Contribution
During the year ended December 31, 2016 a stockholder of the company contributed $40,562 to the Company as a capital contribution.
Note 9. Subsequent events
Management has evaluated subsequent events through the date that these financial statements were available to be issued. There have been no events that would require adjustment to or disclosure in the financial statements.