The Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant and include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Registrants Financial Statements. The results from operations for the three and nine months ended September 30, 2017, are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The unaudited condensed Financial Statements should be read in conjunction with the December 31, 2016, Financial Statements and footnotes thereto included in the Registrants Form 10-K Annual Report for the year ended December 31, 2016, filed with the Securities and Exchange Commission on April 17, 2017.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1:
SUMMARY OF HISTORY AND SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, including a summary of the Companys significant accounting policies, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended December 31, 2016, included in our Annual Report on Form 10-K for the year ended December 31, 2016.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three month and nine month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year.
Nature of Operations
The Company was incorporated in the State of Colorado on May 9, 1996. The Company originally intended to engage in the business of marine transportation. These plans did not materialize, and the Company is currently considering alternative business opportunities.
Income Taxes
The Company utilizes the liability method of accounting for income taxes as set forth in ASC Topic 740,
Accounting for Income Taxes.
Under the liability method, deferred taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.
Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.
Cash and Cash Equivalents
For purposes of reporting cash flows, the Company considers all highly-liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Revenue Recognition
The Company plans to recognize revenue when the following four conditions are present: (1) persuasive evidence of an agreement exists, (2) the price is fixed or determinable, (3) delivery has occurred or services are rendered, and (4) collection is reasonably assured.
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GULF & ORIENT STEAMSHIP COMPANY, LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Income (Loss) Per Common Share
Income (Loss) per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the periods presented. Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. The Company has no potentially dilutive securities, such as convertible preferred stock, options, or warrants, outstanding during the periods presented. Accordingly, basic and dilutive loss per common share are the same.
Recently Issued Accounting Pronouncements
The Company has reviewed recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.
Fair Value of Financial Instruments
It is not practicable to estimate the fair value of related party loans because there is no established market for these loans and it is inappropriate to estimate future cash flows, which are largely dependent on the Company establishing or acquiring operations at some future point. No financial instruments are held for trading purposes.
NOTE 2:
INCOME TAXES
At September 30, 2017, the Company had a net operating loss carryover of approximately $324,000, which expires from 2017 to 2036.
However, due to the fact that the Company has had a change in control, the loss will most likely never be utilized.
At September 30, 2017, the Company had a deferred tax asset in the amount of $162,192. The amount has been reserved 100% due to the Companys history of losses.
The increase in the valuation allowance was $14,192 and $12,529 for the periods ended September 30, 2017, and 2016, respectively.
Components of income tax are as follows:
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|
|
| |
|
|
Nine Months Ended
September 30,
|
|
|
2017
|
|
2016
|
Current
|
|
|
|
|
Federal
|
$
|
-
|
$
|
-
|
State
|
|
-
|
|
-
|
|
|
-
|
|
-
|
Deferred
|
|
-
|
|
-
|
|
$
|
-
|
$
|
-
|
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GULF & ORIENT STEAMSHIP COMPANY, LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
A reconciliation of the provision for income tax expense with the expected income tax computed by applying the federal statutory income tax to income before provision for income taxes is as follows:
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|
| |
|
|
Nine Months Ended
September 30,
|
|
|
2017
|
|
2016
|
Income tax computed at
|
|
|
|
|
Federal statutory tax rate of 34%
|
$
|
(6,360)
|
$
|
(5,787)
|
Accrued related party interest
|
|
(6,013)
|
|
(5,136)
|
Deferred federal taxes and other
|
|
12,373
|
|
10,923
|
State taxes (net of federal benefit)
|
|
(935)
|
|
(851)
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Accrued related party interest
|
|
(884)
|
|
(755)
|
Deferred state taxes and other
|
|
1,819
|
|
1,606
|
|
$
|
-
|
$
|
-
|
The Company complies with the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. As a result of the implementation of ASC 740-10-65-1, the Company recognized approximately no increase in the liability for unrecognized tax benefits. The Company has no tax position at September 30, 2017, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at September 30, 2017. The Companys utilization of any net operating loss carry forward may be unlikely as a result of its limited activities. Tax years 2014 through 2016 are open to examination by the tax authorities.
NOTE 3: COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS
Management of the Company has conducted a diligent search and concluded that there were no commitments, contingencies, or legal matters pending at the balance sheet dates that have not been disclosed.
NOTE 4: NOTES PAYABLE - RELATED PARTIES
At September 30, 2017, the Company owed $279,110, and as of December 31, 2016, the Company owed $250,795, to related parties for money advanced to the Company or expenses paid on behalf of the Company; $2,500 is non-interest bearing, $2,600 bears annual interest at 24%, $9,286 bears interest at 6%, $3,500 bears annual interest at 7%, $153,512 bears annual interest at 9%, $2,800 bears annual interest at 10% and $1,000 bears annual interest at 18%. The Company received proceeds from these related parties of $10,631 and $11,000 during the nine month periods ended September 30, 2017, and 2016, respectively, and did not make any repayments during those periods. The Company accrued $6,149 and $5,258 in interest expense during the three month periods ended September 30, 2017, and 2016, respectively. The Company accrued $17,684 and $15,106 during the nine month periods ended September 30, 2017, and 2016, respectively. The notes are all due on demand. Total principal and accrued interest at September 30, 2017, was $175,198 and $103,912, respectively, resulting in the total payable balance of $279,110.
During 2014, the Company and the President agreed to accrue $3,000 of interest on previous non-interest bearing obligations of about $29,235 and began charging 9% interest on such obligations, effective January 1, 2015.
During the year ended December 31, 2007, the Company converted two notes into its common stock. One note for $5,000 was due on October 13, 2005, and accrued a total interest of $2,500 on that date. This note was converted to common stock at $.07 per share for 71,429 shares. The $2,500 interest on the note is still outstanding and is included in the note payable balance at September 30, 2017.
A second note for $2,500 was converted to common stock during the year ended December 31, 2007, at $.07 per share for 35,714 shares. Accrued interest on the note was not converted and is included in the note payable balance at September 30, 2017.
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GULF & ORIENT STEAMSHIP COMPANY, LTD.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 5: GOING CONCERN
The Companys financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At September 30, 2017, the Company had a retained deficit of $432,036 and a working capital deficit of $420,255 which raises substantial doubt about the Companys ability to continue as a going concern.
The Companys continued existence is dependent on its ability to generate sufficient cash flow to cover operating expenses and to invest in future operations. Management is actively pursuing possible business opportunities. The Company will look to related parties to fund continuing operations until a suitable business opportunity is identified.
NOTE 6: SUBSEQUENT EVENTS
The Company has evaluated events from September 30, 2017, through the date whereupon the financial statements were issued and has determined that except for the following, there are no additional items to disclose:
Agreement and Plan of Merger
On November 7, 2017, the Company, along with our newly formed wholly-owned subsidiary and our President, entered into an Agreement and Plan or Merger (the Merger Agreement) with US 3D Printing, Inc., a Utah corporation (US 3D), and certain of its principals and majority shareholders. Subject to the closing of the Merger Agreement, if there is a closing, of which no assurance can be given, there will be a change in control of the Company. Additional information about the Merger Agreement is contained in our 8-K Current Report dated November 7, 2017, and filed with the SEC on November 9, 2017, and which, together with a copy of the Merger Agreement, is incorporated herein in Item 6 below.
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