Quarterly Report (10-q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: Not applicable

Commission file number 0-4454

INTERDYNE COMPANY

(Exact name of registrant as specified in its charter)

	CALIFORNIA		95-2563023
	(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)

	26 Briarwood, Irvine, California		92604
	(Address of principal executive offices)		(Zip Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☐		Smaller reporting company ☒
(do not check if smaller reporting company)

Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☒ No ☐

As of February 2, 2018, there were 39,999,942 shares of Common Stock, no par value, issued and outstanding.

INTERDYNE COMPANY

FORM 10-Q

INDEX

	Page
PART I. FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Balance Sheets as of December 31, 2017 (unaudited) and June 30, 2017	3
Statements of Operations for the Three and Six Months ended December 31, 2017 and 2016 (unaudited)	4
Statements of Cash Flows for the Six Months ended December 31, 2017 and 2016 (unaudited)	5
Notes to Unaudited Financial Statements	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3. Quantitative and Qualitative Disclosures about Market Risk	7
Item 4. Controls and Procedures	7
PART II. OTHER INFORMATION	8
Item 1. Legal Proceedings	8
Item 1A. Risk Factors	8
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	8
Item 3. Defaults upon Senior Securities	8
Item 4. Submission of Matters to a Vote of Security Holders	8
Item 5. Other Information	8
Item 6. Exhibits	9
Signatures	10

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

INTERDYNE COMPANY

BALANCE SHEETS

	December 31, 2017			June 30, 2017
		(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS
Cash	$	133,419		$	147,611
Total current assets	$	133,419		$	147,611
TOTAL ASSETS	$	133,419		$	147,611

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued professional fees	$	2,500		$	7,100
Due to related party		6,000			3,000
Other accrued expenses		2,619			2,375
Total current liabilities		11,119			12,475

STOCKHOLDERS' EQUITY
Preferred stock, no par value, 50,000,000 shares authorized, 0 shares issued and outstanding		—			—
Common stock, no par value, 100,000,000 shares authorized, 39,999,942 shares issued and outstanding as of December 31, 2017 and June 30, 2017		500,000			500,000
Accumulated deficit		(377,700	)		(364,864	)
Total stockholders’ equity	$	122,300		$	135,136
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	133,419		$	147,611

The accompanying notes are an integral part of these unaudited financial statements.

INTERDYNE COMPANY

STATEMENTS OF OPERATIONS

	Three Months Ended						Six Months Ended
	December 31, 2017			December 31, 2016			December 31, 2017			December 31, 2016
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
OPERATING EXPENSES
Professional fees	$	2,500		$	1,500		$	5,025		$	3,796
General and administrative		1,868			2,400			4,011			4,296
Management fees to related party		1,500			1,500			3,000			3,000
Total expenses		5,868			5,400			12,036			11,092

OPERATING LOSS		(5,868	)		(5,400	)		(12,036	)		(11,092	)

OTHER INCOME
Interest from related party		—			—			—			1,100
Total other income		—			—			—			1,100

LOSS BEFORE INCOME TAXES		(5,868	)		(5,400	)		(12,036	)		(9,992	)

INCOME TAX EXPENSE		—			—			(800	)		(800	)

NET LOSS	$	(5,868	)	$	(5,400	)	$	(12,836	)	$	(10,792	)

NET LOSS PER COMMON SHARE BASIC AND DILUTED	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED		39,999,942			39,999,942			39,999,942			39,999,942

The accompanying notes are an integral part of these unaudited financial statements.

INTERDYNE COMPANY

STATEMENTS OF CASH FLOWS

	Six Months Ended
	December 31, 2017			December 31, 2016
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(12,836	)	$	(10,792	)

Adjustments to reconcile net loss to net cash used in operating activities
Changes in operating assets and liabilities
Interest due from related party		—			(1,100	)
Due to related party		3,000			(20,000	)
Accrued professional fees		(4,600	)		(5,100	)
Other accrued expenses		269			(3,246	)
Net cash used in operating activities		(14,167	)		(40,238	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from related party		—			195,204
Net cash provided by investing activities		—			195,204

CASH FLOWS FROM FINANCING ACTIVITIES
Repayment to related party		(25	)		(674	)
Net cash used in financing activities		(25	)		(674	)

NET INCREASE (DECREASE) IN CASH		(14,192	)		154,292

CASH, BEGINNING OF PERIOD		147,611			2,065

CASH, END OF PERIOD	$	133,419		$	156,357

Supplemental Cash Flow Disclosures
Income taxes paid	$	800		$	800
Interest paid	$	—		$	—

NON-CASH TRANSACTION
Operating expenses paid by related party	$	25		$	25

The accompanying notes are an integral part of these unaudited financial statements.

INTERDYNE COMPANY

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1. Interim Financial Statements

The accompanying financial statements are unaudited, but in the opinion of the management of Interdyne Company (“the Company”), contain all adjustments, consisting of only normal recurring accruals, necessary to present fairly the financial position as of December 31, 2017 and the results of operations for the three and six months ended December 31, 2017 and 2016 and changes in cash flows for the six months ended December 31, 2017 and 2016. Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these financial statements are adequate to make the information presented therein not misleading. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report in Form 10-K as of June 30, 2017, as filed with the Securities and Exchange Commission. The results of operations for the six months ended December 31, 2017 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending June 30, 2018.

Certain amounts from the prior period have been reclassified to conform to the current period presentation. This reclassification has no impact on the Company’s net earnings and financial position.

Note 2. Changes in Significant Accounting Policies

There are no newly issued accounting pronouncements that the Company expects to have a material effect on the financial statements and there have been no changes in our significant accounting policies.

Note 3. Related Party Transactions

An officer of the Company charged a management fee totaling $3,000 for the six months ended December 31, 2017 and 2016, respectively, for the use of a home office, accounting and other services. During the six months ended December 31, 2017 and 2016, the officer also paid operating expense of $25 and $25, respectively, on behalf of the Company and these payments were fully reimbursed to him. The balances due to this officer as of December 31, 2017 and June 30, 2017 were $6,000 and $3,000, respectively. The amounts due to this officer are unsecured, bearing no interest and are repayable on demand.

Note 4. Commitments and Contingencies

In March 2017, the Company received a letter from the County of Santa Clara, California, which claimed that the Company is delinquent on its property taxes relating to tax year 1988/1989 in the amount of $80,238.07 including penalties which should be paid immediately. The Company believes that these property taxes were related to the period prior to the filing of the reorganization of the Company under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Central District of California on November 22, 1988 and the eventual confirmation of the Company’s Amended Plan of Reorganization (the “Plan”) by the Bankruptcy Court on May 17, 1990, and thus have been settled in accordance with the terms of the Plan and are therefore invalid. The Company has informed the County of Santa Clara that if it wants to assert its claim, it would have to petition to the Bankruptcy Court for relief. The Company does not recognize the said claim and therefore has not recorded any tax liabilities related to this claim. If the County of Santa Clara claim is adjudicated to be valid and the Company is liable, the tax liabilities imposed could have a material effect on the Company’s result of operations and financial position.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The Company is at present dormant and is looking for new opportunities.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

N/A

Item 4. Controls and Procedures

Our management, comprising the Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer, is responsible for establishing and maintaining disclosure controls and procedures for the Company. It has designed such disclosure controls and procedures to ensure that material information is made known to it, particularly during the period in which this report was prepared.

As of the end of the period covered by this report, our management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (or Exchange Act)). Based on this evaluation, as of the end of the period covered by this report, our management has concluded that our disclosure controls and procedures are not effective considering the fact that the Company, being dormant, has only one person on staff, the Chief Financial Officer/Principal Accounting Officer, to (1) handle all accounting transactions (consisting of primarily paying all expenses, including fees to this same officer); (2) reconcile the bank account, and (3) prepare all financial statement disclosures. The above duties have no supervision or review to insure proper segregation of duties and review of disclosures. As a result, material weaknesses over disclosure controls and procedures exist.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2017 based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organization of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2017 because of the following material weakness as of December 31, 2017: (i) lack of supervision or review to insure proper internal control over financial reporting, (ii) inadequate segregation of duties and effective risk assessment, (iii) lack of well-established procedures to authorize and approve related party transactions. As a result, material weakness over internal control over financial reporting exists.

Our independent auditors have not audited and are not required to audit this assessment of our internal control over financial reporting for the period covered by this report.

During our most recent fiscal three months, there has not occurred any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

None.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits

Exhibit No.	Description
31.1	Certification of the Company's Chief Executive Officer, Sun Tze Whang, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Company's Chief Financial Officer/Principal Accounting Officer, Kit H. Tan, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of the Company's Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		INTERDYNE COMPANY
		(Registrant)

Date: February 2, 2018	By:	/s/ Sun Tze Whang
		Sun Tze Whang
		Director / Chief Executive Officer


Date: February 2, 2018	By:	/s/ Kit H. Tan
		Kit H. Tan
		Director / Chief Financial Officer / Principal Accounting Officer