NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2017
(UNAUDITED)
NOTE 1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
|
(A)
Organization and Basis of Presentation
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”) shall take place sixty days after the execution of this Agreement
(the “Closing Date”), conditioned upon the completion of due diligence by the Parties.
On
July 18, 2017, the Parties entered into the First Addendum to the Share Exchange Agreement, pursuant to which the Closing date
for the transaction is scheduled for September 15, 2017. In addition, Arista has agreed to provide the Company with a $15,000
non-refundable deposit, and has the right to extend the closing date in intervals of thirty (30) days, and shall be required to
deposit an additional non-refundable deposit of $10,000 per each requested extension interval. All non-refundable deposits are
to be placed in an escrow account.
On
September 15, 2017, Arista exercised its right to extend the closing for an additional thirty days. The non-refundable $10,000
deposit was put into the escrow account.
On October 6, 2017, the Company
completed a 13.2 to 1 reverse stock split in accordance with the Share Exchange Agreement. As a result of the stock split, the
number of the Company’s authorized shares of common stock was decreased from 100,000,000 to 7,575,758 shares and the number
of its authorized shares of preferred stock was decreased from 5,000,000 to 378,788 shares. Upon the effectiveness of the stock
split, the Company’s issued and outstanding shares of common stock decreased from approximately 6.9 million shares to approximately
520,000 shares of common stock, all with a par value of $0.001. The Company has no outstanding shares of preferred stock. Fractional
shares resulting from the stock split were rounded up to the next whole number.
The Company has recast the presentation
of share and per share data in the accompanying condensed financial statements to reflect the reverse stock split, which occurred
on October 6, 2017.
On
October 15, 2017 Arista exercised its right to extend the closing for an additional thirty days. The Company has not received
the $10,000 non-refundable deposit in conjunction with the extension yet.
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission for
interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation
of financial position and results of operations.
While
the Company believes that the disclosures presented are adequate to make the information not misleading, these unaudited condensed
financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company’s
annual Report on Form 10-K for the year ended June 30, 2017.
It
is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made,
which are necessary for a fair presentation of these unaudited condensed financial statements. The results for the interim period
are not necessarily indicative of a full year.
PRACO
CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2017
(UNAUDITED)
(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 September 30, 2017 and June 30, 2017, the Company had cash and cash equivalents of
$5,167
and $2,041, respectively
.
(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 September 30, 2017 and 2016,
there were no common share equivalents outstanding.
(E)
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.
PRACO
CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2017
(UNAUDITED)
As
reflected in the accompanying unaudited condensed financial statements, the Company has minimal operations, used cash in
operating activities of $6,874 and has a net loss of $65,255 for the three months ended September 30, 2017. The Company also
has a working capital deficit and stockholders’ deficit of $544,701 as of September 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 unaudited condensed
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.
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 September 30, 2017 and June 30, 2017 was $9,000.
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 three months ended
September 30
, 2017 and 2016, the fees incurred were $0 and $10,000, 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
$ 24,000 in compensation expense for the three months ended September 30, 2017.
NOTE 5
|
RELATED
PARTY TRANSACTIONS
|
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 Scott Williams and David Callan. Total balance
due at September 30, 2017 and June 30, 2017 was $157,000. Pursuant to the terms of the notes, the notes are non-interest
bearing, unsecured and are due on demand.
PRACO
CORPORATION
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF SEPTEMBER 30, 2017
(UNAUDITED)
NOTE 5
|
RELATED
PARTY TRANSACTIONS (CONTINUED)
|
The
Company received $8,500 on June 25, 2012, $20,000 on September 14, 2012 and $27,578 on January 17, 2013, $10,500 on January
11, 2017, $5,000 on April 5, 2017, $5,000 on April 24, 2017, $2,500 on May 24, 2017, $5,000 on July 31, 2017, and $5,000 on August
25, 2017 from Hawk Opportunity Fund, LP, an entity indirectly owned by Scott Williams and David Callan. Total balance due at September
30, 2017 and June 30, 2017 was $89,078 and $79,078, respectively. Pursuant to the terms of the notes, the notes are non-interest
bearing, unsecured and are due on demand.
The
Company received $12,500 on January 11, 2017, and $4,665 on April 11, 2017 from HWC, LLC, an entity indirectly owned by Scott
Williams and David Callan. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demand.
Total balance due at September 30, 2017 and June 30, 2017 was $17,165.
As
needed, Green Homes Real Estate, LP, an entity indirectly owned by Hawk Opportunity Fund, LP, a 29% owner of the company which
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 September 30, 2017 and June 30, 2017 was $99,652. Pursuant to the terms of the notes, the notes are non-interest
bearing, unsecured and due on demand.
As
needed, Philly Residential Acquisition LP, an entity indirectly owned by Hawk Opportunity Fund, LP, a 29% owner of the company
which 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 September
30, 2017 and June 30, 2017 was $21,371. Pursuant to the terms of the notes, the notes are non-interest bearing, unsecured and
are due on demand.
The
Company recorded no income tax expense for the three months ended September 30, 2017 and 2016 because the estimated annual effective
tax rate was zero. As of September 30, 2017, the Company continues to provide a valuation allowance against its net deferred tax
assets especially since the Company believes it is more than likely than not that its deferred tax assets will not be realized.
On October 6, 2017, the Company
completed a 13.2 to 1 reverse stock split in accordance with the Share Exchange Agreement. As a result of the stock split, the
number of the Company’s authorized shares of common stock was decreased from 100,000,000 to 7,575,758 shares and the number
of its authorized shares of preferred stock was decreased from 5,000,000 to 378,788 shares. Upon the effectiveness of the stock
split, the Company’s issued and outstanding shares of common stock decreased from approximately 6.9 million shares to approximately
520,000 shares of common stock, all with a par value of $0.001. The Company has no outstanding shares of preferred stock. Fractional
shares resulting from the stock split were rounded up to the next whole number. All amounts presented in these financial statements
have been adjusted for this stock split.
On
October 15, 2017 Arista exercised its right to extend the closing for an additional thirty days. The Company has not received
the $10,000 non-refundable deposit in conjunction with the extension yet.