NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note A Nature of Operations and Basis of Presentation
Nature of Operations
Smart Holdings, Inc. was incorporated in the State of Nevada on December 6, 2005. It is a consulting company, headquartered in Milford, Michigan, which plans to offer a variety of strategic business consulting services to public and private companies. Currently, the main service is providing financial and business consulting services to its clients. The services offered include due diligence, mergers and acquisition consulting, and strategic business planning. Smart Holdings, Inc. works with both private and public companies. Smart Holdings, Inc.s long-term focus is on creating lasting relationships with its clients. It also provides strategic consulting services and business plan development for start-up companies and has the expertise to work with its clients through the public offering process, with introductions to underwriters, broke dealers and market makers, as well as post offering support services such as development of road show and research materials.
As indicated above the company was recently incorporated and is presently in the development stage wherein it is in the process of setting up operations and working to obtain clients. It has not yet realized revenue.
Basis of Presentation
Reference is made to the Explanatory Note on the cover page of this Annual Report, and to the Subsequent Events footnote, below.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.
Revenue Recognition
Consulting service revenue and the related labor costs and payroll are recorded in the period in which services are performed.
Accounts Receivable
Smart Holdings Inc. trade accounts receivable result from the sale of its services, and consist of private and public companies. The Company uses the allowance method to account for uncollectible accounts. Bad debt expense for the twelve months ended December 31, 2008 was $0.
Concentration of Credit Risk
Financial instruments, which potentially expose Smart Holdings to concentrations of credit risk consist principally of trade accounts receivable and restricted securities that are paid as part of consulting fees.
Smart Holdings trade accounts receivable result from the sale of its services to customers, and customers consist of public and private companies. In order to minimize the risk of loss from these companies, credit limits, ongoing credit evaluation of its customers, and account monitoring procedures are utilized. Collateral is not generally required. Management analyzes historical bad debt, customer concentrations, customer credit-worthiness, current economic trends, and changes in customer payment tendencies, when evaluating the allowance for doubtful accounts. As of December 31, 2008, Smart Holdings Inc. had no customers who accounted for 10% or more of gross accounts receivable or 10% or more of the net sales.
The Company is obligated to pay the salaries, wages, related benefit costs, and expenses of consultants. Accordingly, the Companys ability to collect amounts due from customers could be affected by economic fluctuations in its markets or these industries.
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SMART HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note A Nature of Operations and Basis of Presentation (Continued)
Financial Instruments
Smart Holdings estimates that the fair value of all financial instruments at December 31, 2008 do not differ materially from the aggregate carrying value of its financial instruments recorded in the accompanying balance sheets.
Property and Equipment
Property and equipment are recorded at historical cost and include expenditures, which substantially increase the useful lives of existing property and equipment. Maintenance and repairs are charged to operations when incurred.
Depreciation of property and equipment is computed primarily using the straight-line method based on estimated useful lives (furniture and fixtures, 6 to 7 years, office equipment 5 to 7 years, and computers and software, 3 to 5 years). Depreciation for income tax purposes is computed principally using the straight line method and estimated useful lives.
Advertising Cost
Advertising costs, except for costs associated with direct-response advertising, are charged to operations when incurred. The costs of direct-response advertising are capitalized and amortized over the period during which future benefits are expected to be received. Smart Holdings Inc. did not have direct-response advertising costs during the twelve months ended December 31, 2009.
Stock-based Employee Compensation
The company adopted SFAS 123 (R) to account for its stock-based compensation beginning January 1, 2006. Previously, the company elected to account for its stock-based compensation plans under Accounting Principles Board Opinion No. 25. Accounting for Stock Issued to Employees (APB 25). Financial Accounting Standards Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation (FIN 44), and Statement of Financial Accounting Standards No. 148. Accounting for Stock-Based Compensation-Transition and Disclosure (SFAS 148). The Company did not grant any stock options during 2009 or 2008 which would require a calculation as prescribed by SFAS 123 (R).
There are no differences between historical and pro-forma stock based compensation value.
Income Taxes
Smart Holdings records its federal and state income tax liability in accordance with Statement of Financial Accounting Standards Statement No. 109 Accounting for Income Taxes. Deferred taxes are provided for differences between the basis of assets and liabilities for financial statements and income tax purposes, using current tax rates. Deferred tax assets represent the expected benefits from net operating losses carried forward and general business credits that are available to offset future income taxes.
Loss Per Share
Net loss per share is computed based upon the weighted average number of outstanding shares of the Companys common stock for each period presented.
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SMART HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note A Nature of Operations and Basis of Presentation (Continued)
Recent Accounting Pronouncements
In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. The statement amends and clarifies accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts, and hedging activities. This statement is designed to improve financial reporting such that contracts with comparable characteristics are accounted for similarly. The statement is generally effective for contracts entered into or modified after June 30, 2003. The Company currently has no such financial instruments outstanding or under consideration and does not expect the adoption of this standard to effect the Companys financial position or results of operations.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" . This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This statement is effective for financial instruments entered into or modified after May 31, 2003, and is otherwise effective at the beginning of the first interim period beginning after June 15, 2003. The Company currently has no such financial instruments outstanding or under consideration and therefore adoption of this standard currently has no financial reporting implications.
In December 2003, the FASB issued FASB Interpretation No. 46, Amended Consolidation of Variable Interest Entities (FIN No. 46). This interpretation clarifies rules relating to consolidation where entities are controlled by means other than a majority voting interest and instances in which equity investors do not bear the residual economic risks. This interpretation is effective immediately for variable interest entities created after January 31, 2003 and, for interim periods beginning after December 15, 2003, for interests acquired prior to February 1, 2003. The Company does not currently have relationships with entities meeting the criteria set forth in FIN No. 46 and is not required to include any such entities in its financial statements pursuant to the provisions of FIN No. 46.
Effective as of December 31, 2004, the Company adopted the revised interpretation of Financial Accounting Standards Board (FASB) Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, (FIN 46-R). FIN 46-R requires that certain variable interest entities be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Company does not have any investments in entities it believes are variable interest entities for which the Company is the primary beneficiary.
In December 2004, FASB issued SFAS No. 123 (revised 2004) Stock Based Payment (SFAS No. 123R), a revision to Statement No. 123. Accounting for Stock-Based Compensation which supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. The revised SFAS 123 eliminates the alternative to use Opinion 25s intrinsic value method of accounting and, instead, requires entities to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards. Furthermore, public entities are required to measure liabilities incurred to employees in share-based payment transactions at fair value as well as estimate the number of instruments for which the requisite service is expected to be rendered. Any incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair values before and after the modification. The company has determined that SFAS No. 123R has no effect on its financial statements.
Note B Income Taxes
For income tax purposes Smart Holdings had $764 of net operating losses in the twelve months ended December 31, 2009 and $942 of losses for the twelve months ended December 31, 2008, which can be used to offset future federal and state taxable income. No income tax benefit has been recorded in the accompanying financial statements since the recoverability of such assets is not reasonably assured through known future revenue sources.
Note C Cash Flow Supplemental Information
Cash paid for interest during the twelve months ended December 31, 2009 amounted to $0.
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SMART HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note D Stockholders Equity
Issuance of Common Stock
The Company issued no shares of common stock during the twelve months ended December 31, 2009.
Common Stock Warrants
As of December 31, 2009 there were no stock warrants issued or outstanding.
Note E Commitments and Contingencies
Operating Leases
Smart Holdings currently has no lease obligations.
Litigation
As of December 31, 2009, Smart Holdings did not have any outstanding legal issues outside of the ordinary course of business.
Note F Subsequent Events
Initially, the Company was engaged in the strategic consulting business. However, on January 5, 2010, the Company experienced a change of control, and became engaged in offering automotive extended service warranties.
The Company remained in that automotive extended service warranty business until April 8, 2013, when there was a change of control, and the Company acquired Anatolian Walnut Company (AWPC), a Turkish company which owns and operates walnut plantations in Turkey, controlled by Ismail Uslu and Mustafa Laz.
The Company continued its ownership of AWPC until June 30, 2017, when Messrs. Uslu and Laz resigned as officers and directors of the Company, appointed Bruno Horn as sole director, and sold all of their common shares and their 20,000 Preferred Shares to Bruno Horn (869,596,180 of the 995,098,061 common shares currently issued and outstanding (87.4%)) and Carla Horn, his wife (96,621,798 common shares (9.7%)), and all 20,000 of their Preferred Shares to Mr. Horn. The 20,000 Preferred Shares were then retired, and there are no Preferred Shares currently issued or outstanding.
Also on June 30, 2017, the Company signed a Reorganization Agreement with SStartrade SA, a Swiss corporation, pursuant to which the Company is to acquire 74% of SStartrade SA in exchange for 40,000,000 pre-reverse split common shares of the Company. At the same time, the Company sold AWPC back to Messrs. Uslu and Laz for $1. In connection with the change of control which took place on June 30, 2017, the Company filed an Amendment to its Articles of Incorporation, changing its corporate name to SStartrade Tech, Inc., and authorizing a 1-for-10 reverse split of its 995,098,061 currently issued and outstanding common shares.
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