ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of Oranco, Inc. (a development stage company) at September 30, 2016 and December 31, 2015, and the related statement of operations for the three and nine months ending September 30 2016 and 2015, and the statement of cash flows for the nine months, ended September 30, 2016 and 2015 have been prepared by the Company's management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.
Operating results for the three and nine months ended September 30, 2016, are not necessarily indicative of the results that can be expected for the year ending December 31, 2016.
ORANCO, INC.
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BALANCE SHEETS
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SEPTEMBER 30, 2016 AND DECEMBER 31, 2015
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September 30,
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December 31,
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2016
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2015
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Assets
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Current Assets:
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Cash
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$
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5,334
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$
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16,792
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Prepaid expenses
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5,833
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7,763
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Total current assets
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11,167
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24,555
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Total Assets
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$
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11,167
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$
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24,555
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Liabilities and Stockholders' Equity
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Current Liabilities:
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Accounts payable
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$
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650
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$
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1,300
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Interest payable, stockholder
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63
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--
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Note payable, stockholder
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10,000
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--
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Total current liabilities
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10,713
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1,300
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Stockholders' Equity:
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Common stock, $.001 par value 100,000,000 shares authorized, 4,269,950 issued and outstanding
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4,270
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4,270
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Additional paid-in capital
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349,898
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349,898
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Accumulated deficit
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(353,714
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(330,913
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Total Stockholders' Equity
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454
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23,255
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Total Liabilities and Stockholders' Equity
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$
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11,167
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$
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24,555
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The accompanying notes are an integral part of the financial statements.
ORANCO, INC.
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STATEMENTS OF OPERATIONS
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For the
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For the
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For the
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For the
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Three Months
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Three Months
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Nine Months
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Nine Months
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Ended
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Ended
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Ended
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Ended
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September 30,
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September 30,
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September 30,
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September 30,
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2016
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2015
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2016
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2015
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Revenues
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$
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--
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$
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--
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$
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--
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$
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--
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Expenses, general and administrative
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7,442
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9,026
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22,741
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39,833
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Operating loss
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(7,442
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(9,026
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(22,741
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(39,833
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Other income (expense):
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Interest income
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1
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3
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3
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14
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Interest expense
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(63
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--
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(63
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--
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Total other income (expense)
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(62
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3
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(60
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14
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Loss before provision for income taxes
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(7,504
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(9,023
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(22,801
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(39,819
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Provision for income taxes
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--
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--
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--
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--
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Net loss
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$
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(7,504
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$
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(9,023
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$
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(22,801
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$
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(39,819
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Net loss per share
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$
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--
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$
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--
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$
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(0.01
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$
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(0.01
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Weighted average shares outstanding
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4,269,950
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4,269,950
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4,269,950
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4,269,950
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The accompanying notes are an integral part of the financial statements.
ORANCO, INC.
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STATEMENTS OF CASH FLOWS
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For the
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For the
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Nine Months
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Nine Months
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Ended
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Ended
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September 30,
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September 30,
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2016
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2015
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Cash flows from operating activities:
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Net loss
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$
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(22,801
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$
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(39,819
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Adjustments to reconcile net loss to cash provided by operating activities:
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(Increase) decrease in prepaid expenses
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1,930
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(5,833
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Increase (decrease) in accounts payable
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(650
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4,490
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Increase in interest payable
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63
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--
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Net cash used by operating activities
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(21,458
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(41,162
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Cash flows from investing activities:
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--
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--
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Cash flows from financing activities:
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Proceeds from related party note payable
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10,000
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--
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Net decrease in cash
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(11,458
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(41,162
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Cash, beginning of period
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16,792
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63,807
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Cash, end of period
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$
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5,334
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$
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22,645
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Interest paid
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$
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--
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$
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--
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Income taxes paid
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$
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--
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$
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--
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The accompanying notes are an integral part of the financial statements.
ORANCO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1.
Summary of Business and Significant Accounting Policies
a.
Summary of Business
The Company was incorporated under the laws of the State of Nevada on June 16, 1977. The Company has been in the business of the development of mineral deposits. During 1983 all activities were abandoned and the Company has remained inactive since that time. The Company has not commenced principal operations.
b. Basis of Presentation
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") as promulgated in the United States of America.
c.
Cash Flows
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents.
d.
Net Loss Per Share
The net loss per share calculation is based on the weighted average number of shares outstanding during the period.
e.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
f.
Fair Value of Financial Instruments
ASC 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2016 and December 31, 2015, the carrying value of certain financial instruments approximates fair value due to the short-term nature of such instruments.
Notes to Financial Statements – Continued
2.
Warrants and Stock Options
No options or warrants are outstanding to acquire the Company's common stock.
3.
Income Taxes
The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling $330,913 that may be offset against future federal income taxes. If not used, the carryforwards will expire 20 years after they are incurred. Due to the Company being in the development stage and incurring net operating losses, a valuation allowance has been provided to reduce the deferred tax assets from the net operating losses to zero. Therefore, there are no tax benefits recognized in the accompanying statement of operations.
4.
Note Payable, Stockholder
Stockholder note payable outstanding at September 30, 2016 and 2015 was $10,000 and $-0-, respectively. On August 5, 2016, an individual who is also a stockholder and director of the company loaned $10,000. Interest is being charged at 4% and the note matures on August 5, 2017. The note is unsecured and the note principal and accrued interest are convertible into common stock at $0.001 per share.
5.
Office Rent
The Company's board of directors approved a office rent to a former director of the Company. The amount expensed for the six-months ended September 30, 2016 and 2015 amounted to $-0- and $2,850, respectively.
6.
Travel Expense, Related Party
In March 2015, the board of directors approved to reimburse its current board member $15,000 for travel expenses incurred related to merger and acquisition activities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operations.
The Company has not engaged in any material operations or had any revenues from operations since inception. The Company's plan of operation for the next 12 months is to continue to seek the acquisition of assets, properties or businesses that may benefit the Company and its stockholders. Management has recently focused is efforts in Europe, Africa, and South America both because management is located Europe and because management believes that the Company can locate superior acquisition opportunities in these geographical areas. Management has held talk with various parties regarding a merger or acquisition. However, no definitive agreement as to any such has been reached, at this time. Management anticipates that to achieve any such acquisition, the Company will issue shares of its common stock as the sole consideration for such acquisition.
During the next 12 months, the Company's only foreseeable cash requirements will relate to maintaining the Company in good standing or the payment of expenses associated with reviewing or investigating any potential business venture, which the Company expects to pay from its cash resources Management believes that these funds are sufficient to cover its cash needs for the next 12 months. If additional funds are required during this period, such funds may be advanced by management or stockholders as loans to the Company. Because the Company has not identified any such venture as of the date of this Report, it is impossible to predict the amount of any such loan. However, any such loan will be on terms no less favorable to the Company than would be available from a commercial lender in an arm's length transaction.
On July 15, 2015, the Company announced that it had entered into a non-binding letter of intent for the acquisition of or merger with Capcom Limited. Since that time the Company has been completing its due diligence of Capcom. However no definitive agreement has been reached with Capcom and no assurance can be given that any will be.
Results of Operations.
Other than restoring and maintaining its good corporate standing in the State of Nevada, obtaining an audit of the Company's financial statements, submitting the Company's common stock for quotation on the NASD OTC Bulleting Board, the filing of a Form 10 Registration, and the completion of a private placement, the Company has had no material business operations and in the two most recent calendar years, it activities have been limited to evaluating possible merger or acquisition candidates..
Three and nine Month Period Ended June 30, 2016 and 2015
The Company did not generate any revenue during the three and nine months ended September 30, 2016 and 2015, respectively. It had interest income of $1 and $3 for the three months and $3 and $14 for the nine months ended September 30, 2016 and 2015, respectively, the decrease of which is attributable to decreased interest income.
General and administrative expenses were $7,442 and $9,026 for the three months and $22,741 and $39,833 for the nine months ended September 30, 2016 and 2015, respectively . The changes in expenses for the three and nine months ended September 30, 2016 were largely due to decreases in accounting, legal, other professional costs As a result of the foregoing, the Company realized net losses of $7,504 and $9,023 for the three months and $ 22,801 and $39,819 for the nine months ended September 30, 2016 and 2015, respectively. The Company's decreased net loss is attributable to decrease in ongoing professional costs associated with preparing the Company's public reports, legal, and travel related expenses..
Liquidity and Capital Resources
At September 30, 2016, assets consisted of $5,334 in cash and $5,833 prepaid expenses compared to $16,792 in cash and $7,763 in prepaid expenses on December 31, 2015. As of September 30, 2016, the Company had $650 in accounts payable, $63 interest payable to a shareholder, and $10,000 in notes payable to a shareholder. Currently, the Company has no material commitments for capital expenditures. Management anticipates that operating expenses for the next twelve months will be approximately $20,000 to $25,000. . The Company intends to maintain its operations in a manner which will minimize expenses but believes that present cash resources are not sufficient for its operations for the next 12 months. However, it believes that present officers and shareholders will provide any necessary funds through either the purchase of stock or loans to the Company. Notwithstanding, management could be incorrect in its belief and no commitment has been made by any party to further fund the Company's operations
ITEM 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
Our management, with the participation of our president/chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of our last fiscal quarter, September 30, 2016, (the "Evaluation Date"). Based upon that evaluation, our president/chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our president and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting.
There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter (ended September 30, 2016) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.