The un-audited quarterly financial statements for the period ended December 31, 2014, prepared by the company, immediately follow.
Notes to Financial Statements
December 31, 2014
NOTE 1. NATURE AND BACKGROUND OF BUSINESS
MedBook World, Inc. (“the Company” or “the Issuer”) was organized under the laws of the State of Delaware on November 17, 2009. The Company was established as part of the Chapter 11 reorganization of AP Corporate Services, Inc. (“AP”). Under AP’s Plan of Reorganization, as confirmed by the U.S. Bankruptcy Court for the Central District of California, the Company was incorporated to: (1) receive and own any interest which AP had in the development of a mail order and on line medical bookseller; and (2) issue shares of its common stock to AP’s general unsecured creditors, to its administrative creditors, and to its shareholders.
Management believes the Company lacks the resources to effectively develop such a bookseller on its own at this time and is therefore engaged in a search for a strategic business partner or a merger or acquisition partner with the resources to take the Company in a new direction and bring greater value to its shareholders. The Company has been in the development stage since its formation and has not yet realized any revenues from its planned operations.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.
b. BASIC EARNINGS PER SHARE
The Company computes net income (loss) per share in accordance with the FASB Accounting Standards Codification (“ASC”). The ASC specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock.
Basic net earnings (loss) per share amounts are computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding. The equity instruments such as 5,000,000 warrants were not included in the loss per share calculations because the inclusion would have been anti-dilutive.
c. ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.
d. CASH and CASH EQUIVALENT
Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. As of December 31, 2014 and 2013, the Company had no cash equivalents.
f. STOCK-BASED COMPENSATION
The Company records stock-based compensation in accordance with the FASB Accounting Standards Classification using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
g. INCOME TAXES
Income taxes are provided in accordance with the FASB Accounting Standards Classification. 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 or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
h. RECENT ACCOUNTING PRONOUNCE MENTS
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted.
The Company adopted ASU 2014-10 during the years since January 31, 2014, thereby no longer presenting or disclosing any information required by Topic 915.
In February 2013, the FASB issued ASU No. 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.
In January 2015, FASB issued Accounting Standards Update (ASU) No. 201501 Income Statement – Extraordinary and Unusual Items, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. Eliminating the concept of extraordinary items will save time and reduce costs for preparers because they will not have to assess whether a particular event or transaction event is extraordinary (even if they ultimately would conclude it is not). This also alleviates uncertainty for preparers, auditors, and regulators because auditors and regulators no longer will need to evaluate whether a preparer treated an unusual and/or infrequent item appropriately. This update is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early application is permitted.
In April 2015, the FASB issued ASU 2015-03,
Interest—Imputation of Interest (Subtopic 835-30)
(“ASU 2015-03”), as part of the initiative to reduce complexity in accounting standards. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and for interim periods within those fiscal years.
The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP.
The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendment in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our financial statements.
In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our financial statements.
NOTE 3. GOING CONCERN
The Company sustained operating losses during the years ended September 30, 2014 and 2013 and the three month periods ended December 31, 2014 and 2013. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. The officers and directors have committed to advancing certain operating costs of the Company.
Management plans to seek a strategic partner to assist in the development of the book sales business, or a merger or acquisition partner with the resources to take the Company in a new direction and bring greater value to its shareholders. Management has yet to identify any of these and there is no guarantee that the Company will be able to identify such opportunities in the future.
NOTE 4. STOCKHOLDERS' EQUITY
The authorized share capital of the Company consists of 100,000,000 shares of common stock with $0.0001 par value, and 20,000,000 shares of preferred stock also with $0.0001 par value. No other classes of stock are authorized.
COMMON STOCK: As of December 31, 2014, there were a total of 11,150,000 common shares issued and outstanding.
The Company’s first issuance of common stock, totaling 1,085,000 shares, took place on November 17, 2009 pursuant to the Chapter 11 Plan of Reorganization confirmed by the U.S. Bankruptcy Court in the matter of AP Corporate Services, Inc. (“AP”). The Court ordered the distribution of shares in MedBook World, Inc. to all general unsecured creditors of AP, with these creditors to receive their
pro rata
share (according to amount of debt held) of a pool of 80,000 shares in the Company. The Court also ordered the distribution of shares in the Company to all shareholders of AP, with these shareholders to receive their
pro rata
share (according to number of shares held) of a pool of 5,000 shares in the Company. The Court also ordered the distribution of shares in the Company to all administrative creditors of AP, with these creditors to receive one share of common stock in the Company for each $0.10 of AP’s administrative debt which they held. The value of these shares was calculated by the intrinsic value. AP has a total claim of $743,449 by the unsecured creditors and $80,000 cash were settled at the date of liquidation. The remaining claims were settled by the issuance of common stock and warrants issued per court order. The Company allocates the remaining claims at $663,449 to ten different companies or $66,345 were allocated to the common stock and warrants issued per court order.
The Court also ordered the distribution of warrants in the Company to all administrative creditors of AP, with these creditors to receive five warrants in the Company for each $0.10 of AP’s administrative debt which they held. These creditors received an aggregate of 5,000,000 warrants consisting of 1,000,000 “A Warrants” each convertible into one share of common stock at an exercise price of $1.00; 1,000,000 “B Warrants” each convertible into one share of common stock at an exercise price of $2.00; 1,000,000 “C Warrants” each convertible into one share of common stock at an exercise price of $3.00; 1,000,000 “D Warrants” each convertible into one share of common stock at an exercise price of $4.00; and 1,000,000 “E Warrants” each convertible into one share of common stock at an exercise price of $5.00. All warrants are exercisable at any time prior to January 4, 2014. This warrant distribution also took place on November 17, 2009.
Also on November 17, 2009 the Officers of the Company and the Company’s counsel acquired a total of 10,065,000 common shares as founders shares and it is recorded as a discount to common stock.
As a result of these issuances there were a total 11,150,000 common shares issued and outstanding, and a total of 5,000,000 warrants to acquire common shares issued and outstanding, at November 17, 2009 and also at September 30, 2013 (latest year end), and also at December 31, 2014 (latest quarter end).
PREFERRED STOCK: The authorized share capital of the Company includes 20,000,000 shares of preferred stock with $0.0001 par value. As of December 31, 2014 no shares of preferred stock had been issued and no shares of preferred stock were outstanding.
NOTE 5. NET LOSS PER SHARE
The computation of loss per share for the three months ended December 31, 2014 and 2013 is as follows:
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|
December 31,
2014
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|
|
December 31,
2013
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|
INCOME/LOSS PER COMMON SHARE, BASIC
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|
|
|
|
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Numerator Net income (loss)
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$
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(835
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)
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|
$
|
(13,850
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)
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Denominator Weighted-average shares
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|
|
11,150,000
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|
|
|
11,150,000
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|
Net loss per common share
|
|
$
|
(0.001
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)
|
|
$
|
(0.001
|
)
|
For the period from inception (November 17, 2009) to December 31, 2014 there were 5,000,000 shares issuable upon exercise of warrants, however the exercise prices are
such that issuance of these shares would be non-dilutive. Thus diluted earnings per share were the same as basic earnings per share at all times.
NOTE 6. INCOME TAXES
The Company has had no business activity and made no U.S. federal income tax provision since its inception on November 17, 2009.
NOTE 7. RELATED PARTY TRANSACTIONS
On May 7, 2014, the Company issued a note of $15,000 payable to a major shareholder. The note bears 5% annual interest and due on demand. The Company accrued interest of $192 on the note for the three months ended December 31, 2014; and during the three months ended December 31, 2013, the Company received $6,000 to cover its expenses. As of December 31 and September 30, 2014, the balances of due to related party were $15,798 and $15,606, respectively.
The Company neither owns nor leases any real or personal property. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.
NOTE 8. CONVERTIBLE LOAN./RECLASSIFICATION
On July 24, 2011 the Company entered in to a convertible promissory note(s) and received advances from an unrelated party in the amount of $200,065 this note is non-interest bearing, has a conversion price of $0.01 and maybe converted only in part up to 9.9% of the issued and outstanding shares at one time, and is payable upon demand. As of December 31, 2014 no amounts have been paid to the note holder and no conversions have taken place.
Originally it was thought that the advances and requisite convertible promissory note was from a related party and was later determined that the advances and note were from an unrelated party and has since been reclassified as such as of September 30, 2014.
NOTE 9. WARRANTS
On November 17, 2009 (inception), the Company issued 5,000,000 warrants exercisable into 5,000,000 shares of the Company’s common stock. These warrants were issued per order of the U.S. Bankruptcy Court in the matter of AP Corporate Services, Inc. (“AP”) to the administrative creditors of AP. These creditors received an aggregate of 5,000,000 warrants consisting of 1,000,000 “A Warrants” each convertible into one share of common stock at an exercise price of $1.00; 1,000,000 “B Warrants” each convertible into one share of common stock at an exercise price of $2.00; 1,000,000 “C Warrants” each convertible into one share of common stock at an exercise price of $3.00; 1,000,000 “D Warrants” each convertible into one share of common stock at an exercise price of $4.00; and 1,000,000 “E Warrants” each convertible into one share of common stock at an exercise price of $5.00. All warrants were originally exercisable at any time prior to January 4, 2014, however on December 27, 2013 the Board of Directors voted to extend them by one year to January 4, 2015. As of the date of this report, no warrants have been exercised.
The value of these shares was calculated by the intrinsic value. AP has a total claim of $743,449 by the unsecured creditors and $80,000 cash were settled at the date of liquidation. The remaining claims were settled by the issuance of common stock and warrants issued per court order. The Company allocates the remaining claims at $663,449 to ten different companies or $66,345 were allocated to the common stock and warrants issued per court order.
NOTE 10. SUBSEQUENT EVENTS
On September 23, 2015 Daniel Masters resigned his positions as an officer and director Of MedBook World Inc.
On September 29, 2016 Mr. Kenneth Beam CPA was appointed to the Board of Directors and as an Officer and Director in the capacity of Secretary, Treasurer and CFO.