ITEM
1. Financial Statements
HUALE
ACOUSTICS CORPORATION
(F.K.A
ILLUMITRY CORP.)
Balance
Sheets
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June 30,2018
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December 31,2017
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(Unaudited)
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(Audited)
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ASSETS
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Current assets
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Prepaid expenses
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5,208
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11,458
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Total current assets
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5,208
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11,458
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Total assets
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$
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5,208
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$
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11,458
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities
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Accounts Payable
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4
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-
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Notes payable to related party
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32,545
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21,346
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Total current liabilities
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32,549
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21,346
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Total liabilities
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32,549
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21,346
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Stockholders’ deficit
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Preferred stock, $0.001 par value, 100,000,000 shares authorized, 0 shares issued, issuable and outstanding at June 30, 2018 and December 31, 2017, respectively
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-
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-
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Common stock, $0.001 par value, 700,000,000 shares authorized, 3,625,000 shares issued, issuable and outstanding at June 30, 2018 and December 31, 2017 , respectively
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3,625
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3,625
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Additional paid-in capital
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100,353
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|
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100,353
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|
Accumulated deficit
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|
|
(131,319
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)
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(113,866
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)
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Total stockholders’ deficit
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(27,341
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)
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(9,888
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)
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Total liabilities and stockholders’ deficit
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$
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5,208
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11,458
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HUALE
ACOUSTICS CORPORATION
(F.K.A
ILLUMITRY CORP.)
Statements
of Operations
For
the Three Months and Six Months Ended June 30,2018 and 2017
(unaudited)
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Three months Ended June 30
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Six months Ended June 30
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2018
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2017
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2018
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2017
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REVENUES
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$
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-
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$
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-
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$
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-
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$
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-
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Cost of goods sold
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-
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-
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-
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-
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Gross profit
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-
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-
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-
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-
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OPERATING EXPENSES
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General and administrative expenses
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6,979
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29,385
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17,453
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48,119
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TOTAL OPERATING EXPENSES
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6,979
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29,385
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17,453
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48,119
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Other income (expense):
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Interest expense
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-
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(1,196
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)
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-
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(1,558
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)
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Total other income (expense)
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-
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(1,196
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)
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-
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(1,558
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)
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Net loss from continuing operations
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(6,979
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)
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-
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(17,453
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)
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-
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Discontinued operations:
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Income (loss) from discontinued operations
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-
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-
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-
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(3,365
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)
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Net income (loss)
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$
|
(6,979
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)
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$
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(30,581
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)
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$
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(17,453
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)
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$
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(53,042
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)
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Net Loss per share, basic and diluted
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From continuing operations
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$
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(0.01
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)
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$
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(0.01
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)
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$
|
(0.01
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)
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$
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-
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From discontinued operations
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-
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|
-
|
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-
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(0.01
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)
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Weighted Average Number of shares outstanding
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3,625,000
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3,625,000
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3,625,000
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3,625,000
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HUALE
ACOUSTICS CORPORATION
(F.K.A
ILLUMITRY CORP.)
Statements
of Cash Flows
For
the Six Months Ended June 30, 2018 and 2017
(unaudited)
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Six months Ended June 30,
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2018
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2017
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Cash flows from operating activities:
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Net loss from continuing operations
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$
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(17,453
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)
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$
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(49,677
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)
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Prepaid expenses
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6,250
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-
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Changes in assets and Liabilities
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4
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-
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Accrued interest - related party
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-
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1,196
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Net cash used in operating activities - continuing operations
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(11,199
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)
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(48,481
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)
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Adjustments to reconcile net loss to net cash provided by discontinued operations:
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Net loss from discontinued operations
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-
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(3,365
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)
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Current assets
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|
-
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6,502
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Current liabilities
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|
-
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(5,895
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)
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Net cash provided by (used in) operating activities - discontinued operations
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-
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9,032
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|
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Net cash used in operating activities
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(11,199
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)
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(39,449
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)
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Net cash used in investing activities – discontinued operations
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-
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3,468
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Net cash used in investing activities - continuing operations
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-
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-
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Cash flows from financing activities - continuing operations:
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|
|
|
|
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Proceeds from note payable - related party
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11,199
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|
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48,266
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|
|
|
|
|
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|
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Net cash provided by financing activities - continuing operations
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11,199
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|
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48,266
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|
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|
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|
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Net cash provided by financing activities - discontinued operations
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|
-
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|
|
|
-
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|
|
|
|
|
|
|
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Net cash provided by financing activities
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11,199
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|
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48,266
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|
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Net increase (decrease) in cash
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|
-
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12,285
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Cash at beginning of period
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-
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-
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|
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Cash at end of period
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$
|
-
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$
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12,285
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|
|
|
|
|
|
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Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
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Related party contribution to paid in capital
|
|
$
|
-
|
|
|
$
|
29,895
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|
Net liabilities discharged by former owners as part of changes in control
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|
$
|
88,646
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|
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$
|
-
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|
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Huale
Acoustics Corporation (“the Company,” “we,” “us,” or “our”) was incorporated in
the State of Nevada on October 17, 2014.
On
February 7, 2017 (the date of the “Change of Control”), Jaeson Cayne (“Cayne”), on behalf of and as agent
for PetsZX, Inc. has acquired control of Three Million (3,000,000) restricted shares of the Company’s issued and outstanding
common stock, representing approximately 83% of the Company’s total issued and outstanding common stock, from Arusyak Sukiasyan
(“Sukiasyan”), the former officer and director of the Company, in exchange for $315,000 per the terms of a Stock Purchase
Agreement by and between Cayne and Sukiasyan.
On
May 31, 2017, the Company entered into an agreement to acquire approximately 98.8% of the issued and outstanding shares of PetsZX,
Inc., a company affiliated with Cayne. This agreement was cancelled on September 1, 2017, pursuant to the terms of a Cancellation
of Stock Purchase Agreement.
On
October 6, 2017, as a result of a private transaction, the control block of voting stock of Huale Acoustics Corporation (formerly
known as Illumitry Corp.) presented by 3,000,000 shares of common stock was transferred from Jaeson Cayne to a syndicated group
of investors led by Ms. Xu Dantong (“Purchasers”). The consideration paid for the Shares, which represents 82.75%
of the issued and outstanding share capital of the Company on a fully-diluted basis, was $342,000. The source of the cash consideration
for the shares was personal funds of the Purchasers. In connection with the transaction, Jaeson Cayne and Collin McMullen released
the Company from all debts owed. The extinguishment of the Company’s accounts payable and related party note payable was
recorded as of the date of the transaction.
On
October 17, 2017, our shareholders and board of directors approved (1) change of our company name to Huale Acoustics Corporation
and (2) an increase in the authorized shares of capital stock to 800,000,000, with 700,000,000 common stock and 100,000,000 preferred
stock (the “Amendments”). The Amendments became effective with the State of Nevada on October 26, 2017. FINRA announced
on November 6, 2017 that the new name of Huale Acoustics Corporation was effective on November 7, 2017, and the new ticker symbol
of “HYAS” was effective on November 7, 2017.
As
of June 4, 2018, Ms. Xu Dantong resigned from her positions with the Company, including that of Chief Executive Officer, President,
Secretary,Treasurer and Chairman of Board of Directors of the Company. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices. Ms. Xu Dantong has been the
Chief Executive Officer, President, Secretary, Treasure and Chairman of Board of Directors since October 2017.
As
of June 4, 2018, the Board of Director appointed Mr. Huang Zhicheng as new Chief Executive Officer, President, Secretary, Treasurer
and Chairman of Board of Directors of the Company.
NOTE
2 – GOING CONCERN
The
accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company had limited revenues and incurred losses as of June 30, 2018.The
Company currently has negative working capital, and has not completed its efforts to establish a stabilized source of revenues
sufficient to cover operating costs over an extended period of time. Due to these factors, there is substantial doubt about the
Company’s ability to continue as a going concern.
Management
anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses
The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light
of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or
become financially viable and continue as a going concern.
NOTE
3 – BASIS OF PRESENTATION
The
accompanying unaudited financial statements of Huale Acoustics Corporation have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The
results of operations for the interim period ended June 30, 2018 shown in this report are not necessarily indicative of results.
In the opinion of the Company’s management, the information contained herein reflects all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of the Company’s results of operations, financial position and
cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in
the Company’s Form 10-K for the year ended December 31, 2017 filed on May 30, 2018 and Management’s Discussion and
Analysis of Financial Condition and Results of Operations.
Use
of Estimates
The
timely preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
Discontinued
Operations
Due
to the Change of Control, the operations of the Company prior to the date of the Change of Control are reflected on the financial
statements as discontinued operations.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The
Company has cash and cash equivalents of $0 and $12,285 as of June 30, 2018 and June 30, 2017, respectively.
Income
Taxes
The
Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based
upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal
tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or
benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce
the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance
are included in the provision for deferred income taxes in the period of change.
Deferred
income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and
tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of
assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset
or liability are classified as current or non-current depending on the periods in which the temporary differences are expected
to reverse.
The
Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition
of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities.
As of December 31, 2018 the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions
with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not
had a material effect on the Company.
Revenue
Recognition
The
Company recognizes revenue in accordance with ASC 605 “Revenue Recognition.” The Company recognizes revenue when products
are fully delivered or services have been provided and collection is reasonably assured.
Fair
Value of Financial Instruments
ASC
820 “Fair Value Measurements and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the
inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used
in measuring fair value are observable in the market.
The
carrying value of the Company’s loan from shareholder approximates its fair value due to their short-term maturity.
Stock-Based
Compensation
The
Company records stock based compensation in accordance with the guidance in ASC 718 which requires the Company to recognize expenses
related to the fair value of its employee stock option awards. This requires that such transactions be accounted for using a fair-value-based
method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
The
Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance
with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration
received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or
completion of performance by the provider of goods or services as defined by ASC 505-50.
Net
Loss Per Share
The
Company follows ASC 260 to account for the loss per share. Basic loss per common share calculations are determined by dividing
net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per common share
calculations are determined by dividing net loss by the weighted average number of common shares and dilutive common share equivalents
outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
There were no potentially dilutive debt or equity instruments issued or outstanding as of June 30, 2018.
Recent
Accounting Pronouncements
We
have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements
will have a material impact on the Company.
NOTE
4 – RELATED PARTY TRANSACTIONS
At
June 30, 2018 and December 31, 2017 the Company had loans payable to Ms. Xu Dantong, our former sole director of $32,545 and $21,346,
respectively This loan was unsecured, non-interest bearing and due on demand. The imputed interest on this note was deemed immaterial.
NOTE
5 – FIXED ASSETS
As
of June 30, 2018 and December 31, 2017 the Company had no fixed assets.
NOTE
6 – NOTES PAYABLE
As
of June 30, 2018, the Company had a note payable to Ms. Xu Dantong, the Company’s former Chief Executive Officer and controlling
shareholder, in the amount of $32,545. This loan is unsecured, non-interest bearing and due on demand. As of December 31, 2017,
the Company had a note payable of $21,346
NOTE
7 – STOCKHOLDERS’ EQUITY
The
Company has 700,000,000, $0.001 par value shares of common stock authorized.
There
were 3,625,000 shares of common stock issued and outstanding as at December 31, 2017 and June 30, 2018.
NOTE
8 – COMMITMENTS AND CONTINGENCIES
Legal
Matters
From
time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of its
business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any other pending
or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows
or financial condition should such litigation be resolved unfavorably.
NOTE
9 – SUBSEQUENT EVENTS
As
of June 4, 2018, Ms. Xu Dantong resigned from the positions with the Company, including that of Chief Executive Officer, President,
Secretary, Treasurer and Chairman of Board of Directors of the Company. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices. Ms. Xu Dantong has been the
Chief Executive Officer, President, Secretary, Treasure and Chairman of Board of Directors since October 2017.
As
of June 4, 2018, the Board of Director appointed Mr. Huang Zhicheng as new Chief Executive Officer, President, Secretary, Treasurer
and Chairman of Board of Directors of the Company.
NOTE
10 – RECLASSIFICATION OF DISCONTINUED OPERATIONS
We
have reclassified certain prior-period amounts to conform to the current-year’s presentation. The reclassifications relate
to operations which have been discontinued as of the current period due to the change in control.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION
Overview
Huale
Acoustics Corporation (formerly known as Illumitry Corp.), was incorporated in the State of Nevada on October 17, 2014, and established
a fiscal year end of December 31. We generated limited revenues, have minimal assets and have incurred losses since inception.
We were formerly in cloth and fabric embroidery business in Armenia.
On
February 7, 2017 (the date of the “Change of Control”), Jaeson Cayne (“Cayne”), acquired control of Three
Million (3,000,000) restricted shares of the Company’s issued and outstanding common stock, representing approximately 83%
of the Company’s total issued and outstanding common stock, from Arusyak Sukiasyan (“Sukiasyan”), the former
officer and director of the Company, in exchange for $315,000 per the terms of a Stock Purchase Agreement by and between Cayne
and Sukiasyan. As a result of the Change in Control, the Company ceased its cloth and fabric embroidery business in Armenia.
On
February 21, 2017, (i) Arusyak Sukiasyan resigned from all positions with the Company, including the sole member of the Company’s
Board of Directors and the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer.
The resignation of Sukiasyan was not the result of any disagreement with the Company on any matter relating to the Company’s
operations, policies or practices. On February 21, 2017, Mr. Collin McMullen was appointed to the Company’s Board of Directors
and as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Secretary.
On
May 31, 2017, the Company entered into an agreement to acquire approximately 98.8% of the issued and outstanding shares of PetsZX,
Inc., a company affiliated with Cayne. This agreement was cancelled on September 1, 2017, pursuant to the terms of a Cancellation
of Stock Purchase Agreement.
On
October 6, 2017, as a result of a private transaction, the control block of voting stock of Huale Acoustics Corporation represented
by 3,000,000 shares of common stock was transferred from Jaeson Cayne to a syndicated group of (“Purchasers”). The
consideration paid for the Shares, which represents 82.75% of the issued and outstanding share capital of the Company on a fully-diluted
basis, was $342,000. The source of the cash consideration for the shares was personal funds of the Purchasers. In connection with
the transaction, Jaeson Cayne and Collin McMullen released the Company from all debts owed.
There
are no arrangements or understandings among members of both the former and new control persons and their associates with respect
to the election of directors of the Company or other matters. Upon the change of control of the Company the existing director
and officer resigned immediately. Accordingly, Collin McMullen, serving as the sole director and as the only officer, ceased to
be the Company’s President and Principal Accounting Officer. At the effective date of the transfer, Ms. Xu Dantong consented
to act as the new President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company.
On
October 26, 2017, an amendment to the Company’s Articles of Incorporation became effective with the State of Nevada. The
amendment changed the name of the Company to Huale Acoustics Corporation and increased the number of authorized shares of common
stock to 700,000,000 shares and preferred stock to 100,000,000 shares.
As
of June 4, 2018, Ms. Xu Dantong resigned from the positions with the Company, including that of Chief Executive Officer, President,
Secretary, Treasurer and Chairman of Board of Directors of the Company. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices. Ms. Xu Dantong has been the
Chief Executive Officer, President, Secretary, Treasure and Chairman of Board of Directors since October 2017.
As
of June 4, 2018, the Board of Director appointed Mr. Huang Zhicheng as new Chief Executive Officer, President, Secretary, Treasurer
and Chairman of Board of Directors of the Company.
Employees
We
currently do not have any full time or part time employees. Our former Chief Executive Officer, Chief Financial Officer, and Secretary,
Ms. Xu Dantong carried out all administrative functions and stepped down on June 4, 2018 Mr. Huang Zhicheng as new Chief Executive
Officer, President, Secretary, Treasurer and Chairman of Board of Directors of the Company will carry out all administrative functions
from June 4, 2018 onwards.
We
do not have any union employees.
Financial
Condition – Going Concern
We
generated no revenues for the three months ended June 30, 2018 and have recurring net losses for continuing operations for the
three months ended June 30, 2018 of $6,979. These conditions raise substantial doubt about the Company’s ability to continue
as a going concern.
The
accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company
as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability
of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising
of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working
capital requirements. If the Company was not to continue as a going concern, it would likely not be able to realize its assets
at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of
the financial statements.
There
can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources
to be used for operations. The financial statements do not include any adjustments relating to the recoverability of assets and
classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company
will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining
the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or
contemplate the sale of its assets, if necessary.
RESULTS
OF OPERATIONS
Comparison
of the three months ended June 30, 2018 and June 3, 2017
Revenues
. We did not generate any revenues from continuing operations during the three months ended June 30, 2018 or June 30, 2017.
The lack of revenues is primarily attributable to the cessation of our embroidery business upon our change in control in February,
2017.
Cost
of Revenues
. The Company’s cost of revenue was $0 for the three months ended June 30, 2018 and June 30, 2017.
Operating
Expenses
. Operating expenses for continuing operations for the three months ended June 30, 2018, and 2017, were $6,979 and
$29,385, respectively. General and administrative expenses consisted primarily of consulting fees, management fees, and preparing
reports and SEC filings relating to being a public company.
Net
Loss
. Net loss for continuing operations for the three months ended June 30, 2018, was $6,979, compared with net loss of
$30,581 for the three months ended June 30, 2017. The increase in net loss is primarily due to increase in general and administrative
expenses.
Comparison
of the six months ended June 30, 2018 and June 30, 2017
Revenues
. We did not generate any revenues from continuing operations during the six months ended June 30,2018 or June 30, 2017.
Cost
of Revenues
. The Company’s cost of revenue was $0 for the six months ended June 30, 2018 and June 30, 2017.
Operating
Expenses
. Operating expenses for continuing operations for the six months ended June 30, 2018, and 2017, were $17,453 and
$48,119, respectively. General and administrative expenses consisted primarily of consulting fees, management fees, and preparing
reports and SEC filings relating to being a public company. Operating expenses for discontinued operations for the six months
ended June 30, 2018, and 2017, were $0 and $3,365, respectively.
Net
Loss
. Net loss for continuing operations for the six months ended June 30, 2018, was $17,453, compared with net loss of $53,042
for the six months ended June 30, 2017. The increase in net loss is primarily due to increase in general and administrative expenses.
Net loss for discontinuing operations for the six months ended June 30, 2018, was $0, compared with net loss of $3,365 for the
six months ended June 30, 2017.
Liquidity
and Capital Resources
Our
financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be
unable to continue in operation. For these reasons our auditors stated in their report on our audited financial statements for
the year ended December 31, 2017 that they have substantial doubt we will be able to continue as a going concern.
As
of June 30, 2018, the Company had $0 in cash. We do not have sufficient resources to effectuate our business. We expect to incur
a minimum of $50,000 in expenses during the next twelve months of operations. We expect that these expenses will be comprised
primarily of general expenses including overhead, legal and accounting fees.
We
have not paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions
or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.
The
success of our business strategy is dependent upon the availability of additional capital resources on terms satisfactory to management.
Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions
and loans from executive officers and other third parties. There can be no assurance that we can raise such additional capital
resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate
to support operations for at least the next 12 months. We anticipate continuing to rely on equity sales of our common shares and
shareholder loans in order to continue to fund our business operations. Issuances of additional shares will result in dilution
to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange
for debt or other financing to fund our plan of operations.
Net
Cash Used In Operating Activities
During
the six months ended June 30, 2018, net cash of $11,199 was used in operating activities for continuing operations compared with
$48,481 for the same period ended June 30, 2017. Net cash used by operating activities for continuing operations was related to
general and administrative expenses. Net cash used in operating activities for discontinued operations was $0 for the six months
ended June 30, 2018 and $9,032 for the period ended June 30, 2017.
Net
Cash Used in Investing Activities
During
the six months ended June 31, 2018 the Company generated $0 cash from the investing activities of its discontinued operations
compare $3,468 the same period ended June 30, 2017.
Net
Cash Provided By Financing Activities
During
the six months ended June 30, 2018, the Company had cash from financing activities from continuing operations of $11,199 consisting
of notes from related parties. During the six months ended June 30, 2017, the Company had cash from financing activities for continuing
operations of $48,266 and net cash from financing activities for discontinued operations of $48,266.
Off
Balance Sheet Arrangements
We
currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect
on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources.
Critical
Accounting Policies
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires us to make a number of 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. Such estimates and assumptions affect the reported
amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other
assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates
under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial
statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors
and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ
from these estimates under different future conditions. See Item 2, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and Note 3, “Summary of Significant Accounting Policies” in our audited
financial statements for the year ended December 31, 2017, included in our Annual Report on Form 10-K as filed on May 30, 2018,
for a discussion of our critical accounting policies and estimates.