The accompanying notes are an integral part
of these financial statements.
The accompanying notes are an integral part
of these financial statements.
The accompanying notes are an integral part
of these financial statements.
NOTES TO
THE FINANCIALS STATEMENTS
YEARS ENDED
JUNE 30, 2017 AND 2016
NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A)
Organization
Hunt
for Travel, Inc. (the “Company”) was incorporated in Nevada on December 15, 2009 to design and market enrichment excursions
for U.S. travelers. The enrichment component of these trips can be educational, informational or experiential and is tailored
to the travelers’ specific interests and tastes. Enrichment travel can also be referred to as adventure travel.
Effective
February 21, 2012, the Company filed with the State of Nevada a Certificate of Amendment to the Articles of Incorporation changing
the Company’s name from Hunt for Travel, Inc. to Praco Corporation. At the same time the Company ceased being a travel agency
and became a Public Shell.
On April 19, 2017, the Company,
entered into a Share Exchange Agreement, (the “Share Exchange Agreement”), by and among the Company, Arista Capital
LTD. (“Arista”), and the holders of common stock of Arista (the “Arista Shareholders”). The closing of
the Share Exchange (the “Closing”) was scheduled to take place on July 19, 2017 conditioned upon the completion of
due diligence by Arista and the Company.
On July 18, 2017 an addendum to
the Share Exchange Agreement between the Company and Arista was signed. The closing date was extended to September 15, 2017 pending
a $15,000 deposit by Arista into an escrow account. Arista will also reimburse the Company $15,000 in expenses related to the preparation
and filing of the Form 10-K for the year ended June 30, 2017. Arista has also been granted the ability to extend the closing date
in thirty day intervals pending additional $10,000 deposits for each extension requested. All deposits are non-refundable.
(B)
Use of Estimates
In
preparing financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”),
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.
Actual results could differ from those estimates. Significant estimates include the valuation of deferred tax assets.
(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 June 30, 2017 and 2016, respectively, the Company had no 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”) ASC No. 260, “Earnings Per Share.” As of June 30, 2017 and 2016, respectively,
there were no common share equivalents outstanding.
(E)
Income Taxes
The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC
740-10-25, 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 740-10-25, 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.
(F)
Fair Value of Financial Instruments
The
carrying amounts on the Company’s financial instruments including accounts payable and notes payable, approximate fair value
due to the relatively short period to maturity for these instruments.
NOTE
2 - GOING CONCERN
As reflected in the accompanying
financial statements, the Company has minimal operations, used cash in operating activities of $58,954 and has a net loss of $143,056
for the year ended June 30, 2017. The Company also has a working capital deficit and stockholders’ deficit of $479,446 as
of June 30, 2017. 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 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, but currently do not believe they have sufficient cash for the next 12 months from this report date.
NOTE
3 – NOTE PAYABLE
On
June 5, 2012, the Company received $9,000 from a third party. Pursuant to the terms of the note, the note is non-interest bearing,
unsecured and is due on demand. Total balance due at June 30, 2017 and 2016 is $9,000. For the years ended June 30, 2017 and 2016,
the Company recorded $0 and $806, respectively as an in-kind contribution of imputed interest.
The
imputed interest is not accrued for but charged to additional paid in capital as it is not an obligation of the Company to pay
in cash or stock.
NOTE
4 - STOCKHOLDERS’ DEFICIT
In-Kind
Contribution of services and interest
For
the year ended June 30, 2016, the president contributed services having a fair value of approximately $5,200. In 2017 the Company
did not receive contributed services.
For the years ended June 30, 2017
and 2016, the Company recorded $0 and $24,420, respectively, as in-kind contribution of interest.
NOTE
5 - COMMITMENTS
On
April 1, 2012, the Company entered into a consulting agreement with Europa Capital Investments, LLC for administrative and other
miscellaneous services.
The agreement is to remain in effect unless either party desired to cancel
the agreement. During the years ended June 30, 2017 and 2016, the fees incurred were $0 and $20,000, respectively.
On
October 1, 2016, the Company signed two employment agreements, one with the CEO/President and the other with one of the Directors.
Both agreements are the same which are effective October 1, 2016 to September 30, 2019. The agreements call for an annual salary
of $48,000 each and if not paid by the end of the year, the compensation would be paid in Company stock at a 25% discount to the
market value. All refinancing, fund raising, debt or equity sales, and acquisitions when completed by the individuals would be
subject to a bonus payment of 10% of the gross proceeds. In connection with the two employment agreements, the Company has accrued
$72,000 in compensation expense as of June 30, 2017.
NOTE
6 - RELATED PARTY TRANSACTIONS
For each of the years ended June
30, 2017 and June 30, 2016, Mr. Williams contributed services having a fair value of approximately $0 and $5,200, respectively.
On January 29, 2015, the Company
received $7,000 from an entity owned by a Mr. Williams and Mr. Callan. Pursuant to the terms of the note, the note is non-interest
bearing, unsecured and is due on demand. On January 10, 2017 the Company repaid the $7,000 to the related entity. Total balance
due at June 30, 2017 and 2016 is $0 and $7,000, respectively. For the years ended June 30, 2017 and 2016, the Company recorded
$0 and $521, respectively as an in-kind contribution of imputed interest.
The Company received $30,000 on
April 30, 2013, $30,000 on July 12, 2013, $25,000 on October 9, 2013, $25,000 on January 9, 2014, $25,000 on April 11, 2014 and
$25,000 on July 10, 2014 from an entity owned by a Mr. Williams and Mr. Callan . On January 10, 2017 the Company repaid $3,000
to the related entity. Total balance due at June 30, 2017 and 2016 is $157,000 and $160,000, respectively. Pursuant
to the terms of the notes, the notes are non-interest bearing, unsecured and are due on demand. For the years ended
June 30, 2017 and 2016, the Company recorded $0 and $12,952, respectively as an in-kind contribution of imputed interest.
The Company received $8,500 on June
25, 2012, $20,000 on September 14, 2012 and $27,578 on January 17, 2013, and $10,500 on January 11, 2017, $5,000 on April
5, 2017, $5,000 on April 24, 2017, and $2,500 on May 24, 2017 from Hawk Opportunity Fund, LP, a 29% owner of the Company, which
is also owned indirectly by Scott Williams and David Callan. Total balance due at June 30, 2017 and June 30, 2016 was $79,078 and
$56,078, respectively. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured and are due on demand.
For the years ended June 30, 2017 and 2016, the Company recorded $0 and $4,880, respectively as an in-kind contribution of imputed
interest.
The Company received $12,500 on
January 17, 2017, and $4,665 on April 1, 2017 from HWC, LLC, an entity owned by Hawk Opportunity Fund, LP, a 29% owner of the Company,
which is also owned indirectly by Scott Williams and David Callan. . Total balance due at June 30, 2017 and June 30, 2016 was $17,165
and $0, respectively. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured and are due on demand.
As needed, Green Homes Real Estate,
LP, an entity owned by Hawk Opportunity Fund, LP, a 29% owner of the Company, which is also owned indirectly by Scott Williams
and David Callan, transfers funds to the Company to cover operating expenses. Those transfers are as follows: $20,722 on November
13, 2014, $10,000 on March 17, 2015, $4,500 on May 22, 2015, $20,000 on July 27, 2015, $20,000 on November 30, 2015, $15,000 on
February 11, 2016, $5,000 on July 26, 2016, $3,830 on August 25, 2016 and $600 on December 31, 2016, in exchange for various notes
payable. Total balance due at June 30, 2017 and June 30, 2016 was $99,652 and $90,222, respectively. Pursuant to the terms of the
notes, the notes are non-interest bearing, unsecured and due on demand. For the years ended June 30, 2017 and 2016, the Company
recorded $0 and $5,261, respectively as an in-kind contribution of imputed interest.
As needed, Philly Residential Acquisition
LP, an entity owned by Hawk Opportunity Fund, LP, a 29% owner of the Company, which is also owned indirectly by Scott Williams
and David Callan, transfers funds to the Company to cover operating expenses. Those transfers are as follows: $3,831 on August
25, 2016, $1,000 on October 19, 2016, $5,000 on December 1, 2016, $600 on December 15, 2016, $10,940 on March 8, 2017. Total balance
due at June 30, 2017 and June 30, 2016 was $21,371 and $0, respectively. Pursuant to the terms of the notes, the notes are non-interest
bearing, unsecured and are due on demand.
NOTE
7 - INCOME TAXES
As
of June 30, 2017, the Company has a net operating loss carryforward of approximately $724,600 available to offset future taxable
income through June 30, 2037. A valuation allowance 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.
The
components of the Company’s deferred tax asset (liability) are as follows:
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
Deferred tax asset (liability):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforward
|
|
$
|
246,371
|
|
|
$
|
197,732
|
|
|
Valuation allowance
|
|
|
(246,371
|
)
|
|
|
(197,732
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset (liability)
|
|
$
|
-
|
|
|
$
|
-
|
|
The
Company’s income tax expense differed from the statutory rates (federal 34%) as follows:
|
Statutory rate applied to loss before income taxes
|
|
$
|
(48,639
|
)
|
|
$
|
(28,679
|
)
|
|
Increase in income taxes resulting from:
|
|
|
|
|
|
|
|
|
|
Change in deferred tax asset valuation allowance
|
|
|
48,639
|
|
|
|
18,607
|
|
|
Non-deductible expenses
|
|
|
-
|
|
|
|
10,072
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
$
|
-
|
|
|
$
|
-
|
|
Tax
benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain
a position taken on an income tax return. The Company has no liability for uncertain tax positions as of June 30, 2017 and 2016.
Interest and penalties, if any, related to unrecognized tax benefits would be recognized as income tax expense. The Company does
not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense
recognized during the years ended June 30, 2017 and 2016.
NOTE
8 - SUBSEQUENT EVENTS
On July 31, 2017, the Company received $5,000 from Hawk Opportunity Fund, L.P. This brings the total balance
due to Hawk Opportunity Fund, L.P. to $84,078. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured
and are due on demand.
Exhibits:
The
exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.
(b)
|
The
following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with
the SEC in which the exhibit was included.
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
Exchange Agreement dated July 3, 2012 (1)
|
|
|
|
3.1
|
|
Articles of Incorporation (2)
|
|
|
|
3.2
|
|
Certificate of Amendment to the Articles of Incorporation (3)
|
|
|
|
3.3
|
|
By-Laws (2)
|
|
|
|
10.1
|
|
Share Exchange Agreement, dated April 19, 2017, by and between the Company, Arista Capital, Ltd., a Nevada corporation, and the holders of the commons stock of Arista Capital, Ltd. (4)
|
|
|
|
10.2*
|
|
First Addendum to the Share Exchange Agreement, by and between the Company, Arista Capital, Ltd., a Nevada corporation, and the holders of commons stock of Arista Capital, Ltd.
|
|
|
|
31.1*
|
|
Certification of Principal Executive and Principal Financial Officer, pursuant to 18 U. S. C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1*
|
|
Certification of Principal Executive and Principal Financial Officer, pursuant to 18 U. S. C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Schema
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Calculation
Linkbase
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Definition
Linkbase
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Label Linkbase
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Presentation
Linkbase
|
(1)
Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 3, 2012.
(2)
Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on October 7, 2010.
(3)
Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 22, 2012.
(4) Incorporated by reference to the Company’s Current
Report on Form 8-K filed with the SEC on April 25, 2017.
* Filed herewith.