NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2017
(unaudited)
NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
Illumitry Corp. (the Company, we, us, or our) was incorporated in the State of Nevada on October 17, 2014.
On February 7, 2017 (the date of the Change of Control), Jaeson Cayne (Cayne), acquired control of Three Million (3,000,000) restricted shares of the Companys issued and outstanding common stock, representing approximately 83% of the Companys total issued and outstanding common stock, from Arusyak Sukiasyan (Sukiasyan), the former officer and director of the Company, in exchange for $315,000 per the terms of a Stock Purchase Agreement by and between Cayne and Sukiasyan.
NOTE 2 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 had limited revenues and incurred losses as of March 31, 2017. The Company currently has negative 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. Therefore, there is substantial doubt about the Companys ability to continue as a going concern.
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 will be able to raise additional funds through the capital markets. In light of managements 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 3 BASIS OF PRESENTATION
The accompanying unaudited financial statements of Illumitry Corp. have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations for the interim period ended March 31, 2017 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2017. In the opinion of the Companys management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Companys results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Companys Form 10-K for the year ended December 31, 2016 filed on March 10, 2017 and Managements Discussion and Analysis of Financial Condition and Results of Operations.
Use of Estimates
The timely preparation of financial statements 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 amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
Discontinued Operations
Due to the Change of Control, the operations of the Company prior to the date of the Change of Control are reflected on the financial statements as discontinued operations.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had cash of $24,985 as of March 31, 2017 and $3,463 as of December 31, 2016. As part
6
ILLUMITRY CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2017
(unaudited)
of the settlement of debt with Sukiasyan, $500 of cash was netted against the outstanding balance due Sukiasyan on the date of the Change of Control. See Note 4.
Inventory
The Company had $0 and $2,755 in raw materials inventory as of March 31, 2017 and December 31, 2016, respectively. As part of the settlement of debt with Sukiasyan, the inventory was netted against the outstanding balance due Sukiasyan on the date of the Change of Control. See Note 4.
Income Taxes
The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of December 31, 2016, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.
Revenue Recognition
The Company will recognize revenue in accordance with ASC topic 605 Revenue Recognition. The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Fair Value of Financial Instruments
AS topic 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets;
Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
7
ILLUMITRY CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2017
(unaudited)
The carrying value of cash and the Companys loan from shareholder approximates its fair value due to their short-term maturity.
Stock-Based Compensation
The Company records stock based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This requires that such
transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50.
Net Loss Per Share
The Company follows ASC Topic 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. There were no potentially dilutive debt or equity instruments issued or outstanding as of March 31, 2017.
Segment Information
In accordance with the provisions of ASC 280-10, Disclosures about Segments of an Enterprise and Related Information, the Company is required to report financial and descriptive information about its reportable operating segments. The Company does not have any operating segments as of March 31, 2017.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.
NOTE 4 RELATED PARTY
As of March 31, 2017 and December 31, 2016, the Company had loans to Sukiasyan, our former sole director of $0 and $24,000, respectively, pursuant to the Verbal Agreement. This loan was unsecured, non-interest bearing and due on demand. The imputed interest was deemed immaterial. As part of the Change of Control, the balance due was $24,000 which was netted against various assets and netted a contribution of $29,895 which was recorded to additional paid-in capital. See Notes 3, 5 and 6.
On January 5, 2017, the Company entered into a loan with Sukiasyan for up to $15,000, which $12,507 was funded to the Company. This loan was unsecured, non-interest bearing and due on demand. The imputed interest was deemed immaterial. As part of the Change of Control, the balance due was $12,507, which was netted against various assets and netted a contribution of $29,895 which was recorded to additional paid-in capital. See Notes 3, 5 and 6.
On February 9, 2017, the Company entered into a loan with Waylon McMullen (W. McMullen), the father of Collin McMullen, the sole officer and director of the Company, for $2,500. The loan is unsecured, 10% interest, and is due on demand. The principal and accrued interest as of March 31, 2017 was $2,500 and $35, respectively. See Note 6.
8
ILLUMITRY CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2017
(unaudited)
On February 16, 2017, the Company entered into a loan with W. McMullen for $26,526. The loan is unsecured, 10% interest, and is due on demand. The principal and accrued interest as of March 31, 2017 was $26,526 and $320, respectively. See Note 6.
On March 17, 2017, the Company entered into a loan with W. McMullen for $1,700. The loan is unsecured, 10% interest, and is due on demand. The principal and accrued interest as of March 31, 2017 was $1,700 and $7, respectively. See Note 6.
NOTE 5 FIXED ASSETS
The fixed assets of the Company, net of depreciation, is as follows:
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2017
|
|
2016
|
Equipment
|
|
$
-
|
|
$
4,452
|
Website
|
|
-
|
|
800
|
Total fixed assets
|
|
-
|
|
5,252
|
Less: accumulated depreciation and amortization
|
|
-
|
|
(1,784)
|
Fixed assets, net
|
|
$
-
|
|
$
3,468
|
We recognized depreciation and amortization expense of $111 and $223 in for the three months ended March 31, 2017 and 2016, respective. For the period ended March 31, 2017, the $111 was reclassified to discontinued operations.
Due to the Change of Control, the fixed assets, net of accumulated depreciation, were part of the settlement of the debt owed to Sukiasyan, resulting in $3,357 of net fixed assets being transferred to Sukiasyan. See Note 4.
NOTE 6 NOTES PAYABLE
As of March 31, 2017 and December 31, 2016, the Company had the following notes payable:
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable to related party
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Accrued
|
|
|
|
|
|
Accrued
|
|
|
|
|
Principal
|
|
Interest
|
|
Total
|
|
Principal
|
|
Interest
|
|
Total
|
Waylon McMullen
|
|
$
2,500
|
|
$
35
|
|
$
2,535
|
|
$
-
|
|
$
-
|
|
$
-
|
Waylon McMullen
|
|
26,526
|
|
320
|
|
26,846
|
|
-
|
|
-
|
|
-
|
Waylon McMullen
|
|
1,700
|
|
7
|
|
1,707
|
|
-
|
|
-
|
|
-
|
Total
|
|
$
30,726
|
|
$
362
|
|
$
31,088
|
|
$
-
|
|
$
-
|
|
$
-
|
On January 5, 2017, the Company entered into a loan with Sukiasyan for up to $15,000, which $12,507 was funded to the Company. The loan was unsecured, non-interest bearing and due on demand. The imputed interest was deemed immaterial. As part of the Change of Control, the balance due was $12,507, which was netted against various assets and netted a contribution of $29,895 which was recorded to additional paid-in capital. See Notes 3, 4 and 5.
9
ILLUMITRY CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2017
(unaudited)
On February 9, 2017, the Company entered into a loan with W. McMullen for $2,500. The loan is unsecured, 10% interest, and is due on demand. The principal and accrued interest as of March 31, 2017 was $2,500 and $35, respectively. See Note 4.
On February 16, 2017, the Company entered into a loan with W. McMullen for $26,526. The loan is unsecured, 10% interest, and is due on demand. The principal and accrued interest as of March 31, 2017 was $26,526 and $320, respectively. See Note 4.
On March 17, 2017, the Company entered into a loan with W. McMullen for $1,700. The loan is unsecured, 10% interest, and is due on demand. The principal and accrued interest as of March 31, 2017 was $1,700 and $7, respectively. See Note 4.
NOTE 7 STOCKHOLDERS EQUITY
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
During January 2016, the company issued a total of 50,000 common shares for cash contribution of $955 at $0.02 per share.
During February 2016, the company issued a total of 525,000 common shares for cash contribution of $10,392 at $0.02 per share.
During March 2016, the company issued a total of 25,000 common shares for cash contribution of $500 at $0.02 per share.
There were 3,625,000 shares of common stock issued and outstanding as of March 31, 2017.
NOTE 8 RESTATEMENT
As of March 31, 2016, there were adjustments made in the structure of the Companys liabilities and shareholders equity: $500 increase in Loan from Director and $25 decrease in Common Stock and $475 decrease in Additional Paid In Capital, due to error in records of accounting entries.
|
|
|
|
|
|
|
As Reported
|
As Restated
|
Loans
|
10,900
|
11,400
|
Common stock
|
3,650
|
3,625
|
Additional paid in capital
|
12,182
|
11,707
|
NOTE 9 COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of its business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any other pending or threatened litigation that would have a material adverse effect on the Companys business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.
NOTE 10 SUBSEQUENT EVENTS
As of the date of this report, management has determined that there are no significant subsequent events.
10