Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report. Our audited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Results of Operations - Years Ended June 30, 2018 and 2017
The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2018 and 2017, which are included herein.
Our operating results for the year ended June 30, 2018 and 2017, and the changes between those periods for the respective items are summarized as follows:
|
|
Year Ended
|
|
|
|
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
|
Change
|
|
Revenue
|
|
$
|
5,917
|
|
|
$
|
-
|
|
|
$
|
5,917
|
|
Cost of Revenue
|
|
$
|
(3,725
|
)
|
|
$
|
-
|
|
|
$
|
(3,725
|
)
|
Operating expenses
|
|
$
|
(57,472
|
)
|
|
$
|
(47,770
|
)
|
|
$
|
(9,702
|
)
|
Net loss from continued operations
|
|
$
|
(53,124
|
)
|
|
$
|
(51,170
|
)
|
|
$
|
(1,954
|
)
|
Net income from discontinued operations
|
|
$
|
35,294
|
|
|
$
|
67,799
|
|
|
$
|
(32,505
|
)
|
Net income (loss)
|
|
$
|
(17,830
|
)
|
|
$
|
16,629
|
|
|
$
|
(34,459
|
)
|
We recognized limited revenues of $5,917 for the year ended June 30, 2018.
Net loss was $17,830 for year ended June 30, 2018 and net income was $16,629 for the year ended June 30, 2017. The increase in net loss was primarily due to the increase in operating expenses.
Operating expenses for the year ended June 30, 2018 and June 30, 2017 were $57,472 and $47,770 respectively. The increase in the operating expenses were primarily attributed to the increase in professional fees.
We recorded $35,294 and $67,799 in total net income from discontinued operations for the years ended June 30, 2018 and 2017, respectively.
Liquidity and Capital
Working Capital
|
|
As of
June 30,
2018
|
|
|
As of
June 30,
2017
|
|
|
Change
|
|
Current Assets
|
|
$
|
3,005
|
|
|
$
|
17,329
|
|
|
$
|
(14,324
|
)
|
Current Liabilities
|
|
$
|
33,961
|
|
|
$
|
45,123
|
|
|
$
|
(11,162
|
)
|
Working Capital (Deficit)
|
|
$
|
(30,956
|
)
|
|
$
|
(27,794
|
)
|
|
$
|
(3,162
|
)
|
|
|
Year Ended
|
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
Cash Flows used in Operating Activities
|
|
$
|
(27,302
|
)
|
|
$
|
8,654
|
|
Cash Flows used in Investing Activities
|
|
|
-
|
|
|
|
-
|
|
Cash Flows provided by Financing Activities
|
|
|
12,978
|
|
|
|
-
|
|
Net Increase (Decrease) in Cash During Period
|
|
$
|
(14,324
|
)
|
|
$
|
8,654
|
|
The financial statements included in this yearly report have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements at June 30, 2018 and June 30, 2017, we had an accumulated deficit of $231,765 and $178,641 of continuing operations, respectively, and retained earnings of $126,286 and $90,992 from discontinued operations, as of June 30, 2018, and June 30, 2017, respectively. We had a working capital deficit (total current liabilities exceeded total current assets) of $30,956 and $27,794, at June 30, 2018 and June 30, 2017, respectively. Our cash balance and revenues generated are not currently sufficient and cannot be projected to cover our operating expenses for the next 12 months from the filing date of this report. These factors among others raise substantial doubt about our ability to continue as a going concern for a reasonable period of time.
As of June 30, 2018 we had $3,005 in cash and a working capital deficit of $30,956. As of June 30, 2017, we had $17,329 in cash and a working capital deficit of $27,794.
Cash Flows from Operating Activities
Net cash used by our operating activities for the year ended June 30, 2018 totaled $27,302, compared to net cash provided by our operations for the year ended June 30, 2017 of $8,654. The change in cash used was due primarily to an increase in net loss from continuing operations, offset by a decrease in net income from discontinued operations, a decrease in change in assets and liabilities form discontinued operations and an increase in accounts payable and accrued liabilities.
Cash Flows Used in Investing Activities
For the years ended June 30, 2018 and 2017, we had no investing activities.
Cash Flows from Financing Activities
Net cash provided by financing activities was $12,978 for the year ended June 30, 2018 from payment made by the shareholder to vendors on behalf of the Company. Net cash provided by financing activities was $0 for the year ended June 30, 2017.
Our existence is dependent upon management’s ability to develop profitable operations. Management is devoting substantially all of its efforts to developing our business and raising capital and there can be no assurance that our efforts will be successful. No assurance can be given that management’s actions will result in profitable operations or the resolution of our liquidity problems. The financial statements do not include any adjustments that might result should we be unable to continue as a going concern. In order to improve our liquidity, management is actively pursuing additional equity financing through discussions with investment bankers and private investors. There can be no assurance that we will be successful in our effort to secure additional equity financing.
Liquidity and Capital Resources
Our cash balance at June 30, 2018 was $3,005, with $33,961 in outstanding current liabilities, consisting of $20,983 in accounts payable and accrued liabilities and $12,978 in due to shareholder. We estimate total expenditures over the next 12 months are expected to be approximately $50,000.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The preparation of financial statements in 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. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Recent Accounting Pronouncements
Management has considered all recent accounting pronouncements issued. Our management believes that these recent pronouncements will not have a material effect on our company’s financial statements.
Item 8. Financial Statements and Supplementary Data
First Priority Tax Solutions Inc.
Index to Consolidated Financial Statements
June 30, 2018 and 2017
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of First Priority Tax Solutions, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of First Priority Tax Solutions, Inc. (the "Company") as of June 30, 2018, the related statement of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2018, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company's auditor since 2018
Lakewood, CO
October 11, 2018
|
805 Third Avenue
New York, NY 10022
212.838-5100
212.838.2676/ Fax
www.rbsmllp.com
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
First Priority Tax Solutions Inc.
We have audited the accompanying balance sheet of First Priority Tax Solutions Inc. (the “Company”) as of June 30, 2017, and the related statement of operations, stockholders’ deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Priority Tax Solutions Inc. at June 30, 2017, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in the Note 3 to the accompanying financial statements, the Company has a working capital deficit and has incurred an accumulated deficit. These raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ RBSM LLP
New York, NY
August 18, 2017
New York, NY Washington DC Mumbai, India San Francisco, CA Las Vegas, NV Beijing, China Athens, Greece
Member: ANTEA International with affiliated offices worldwide
First Priority Tax Solutions Inc.
Consolidated Balance Sheets
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,005
|
|
|
$
|
17,329
|
|
Total Current Assets
|
|
|
3,005
|
|
|
|
17,329
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
3,005
|
|
|
$
|
17,329
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
20,983
|
|
|
$
|
-
|
|
Due to shareholder
|
|
|
12,978
|
|
|
|
-
|
|
Net liabilities of discontinued operations
|
|
|
-
|
|
|
|
45,123
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
33,961
|
|
|
|
45,123
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
Preferred stock par value $0.000001: 8,000,000 shares authorized, none issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Common stock par value $0.000001: 92,000,000 shares authorized, 5,760,000 and 5,740,000 shares issued and outstanding, respectively
|
|
|
6
|
|
|
|
6
|
|
Additional paid-in capital
|
|
|
74,517
|
|
|
|
59,849
|
|
Accumulated deficit
|
|
|
(231,765
|
)
|
|
|
(178,641
|
)
|
Retained earnings from discontinued operations
|
|
|
126,286
|
|
|
|
90,992
|
|
Total Stockholders’ Deficit
|
|
|
(30,956
|
)
|
|
|
(27,794
|
)
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
3,005
|
|
|
$
|
17,329
|
|
See accompanying notes to the audited consolidated financial statements.
First Priority Tax Solutions Inc.
Consolidated Statements of Operations
|
|
Years Ended
|
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
5,917
|
|
|
$
|
-
|
|
Cost of Revenue
|
|
|
3,725
|
|
|
|
-
|
|
GROSS PROFIT
|
|
|
2,192
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
Professional fees
|
|
$
|
54,755
|
|
|
$
|
46,162
|
|
General and administrative
|
|
|
2,717
|
|
|
|
1,608
|
|
Total Operating Expenses
|
|
|
57,472
|
|
|
|
47,770
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSES)
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(857
|
)
|
|
|
(3,400
|
)
|
Other income
|
|
|
3,013
|
|
|
|
-
|
|
|
|
|
2,156
|
|
|
|
(3,400
|
)
|
|
|
|
|
|
|
|
|
|
NET LOSS FROM CONTINUED OPERATIONS before Income Taxes
|
|
|
(53,124
|
)
|
|
|
(51,170
|
)
|
|
|
|
|
|
|
|
|
|
Income Taxes
|
|
|
-
|
|
|
|
-
|
|
NET LOSS FROM CONTINUED OPERATIONS
|
|
|
(53,124
|
)
|
|
|
(51,170
|
)
|
|
|
|
|
|
|
|
|
|
NET INCOME FROM DISCONTINUED OPERATIONS
|
|
|
35,294
|
|
|
|
67,799
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$
|
(17,830
|
)
|
|
$
|
16,629
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM CONTINUED OPERATIONS PER SHARE: BASIC AND DILUTED
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
INCOME FROM DISCONTINUED OPERATIONS PER SHARE: BASIC AND DILUTED
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
|
|
|
5,742,959
|
|
|
|
5,740,000
|
|
See accompanying notes to the audited consolidated financial statements.
First Priority Tax Solutions Inc.
Consolidated Statements of Stockholders’ Deficit
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
Discontinued
Operations
|
|
|
Total
|
|
|
|
Number of
Shares
|
|
|
Amount
|
|
|
Paid-in
Capital
|
|
|
Accumulated
Deficit
|
|
|
Retained
Earnings
|
|
|
Stockholders'
Deficiency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - June 30, 2016
|
|
|
5,740,000
|
|
|
$
|
6
|
|
|
$
|
59,849
|
|
|
$
|
(130,471
|
)
|
|
$
|
26,193
|
|
|
$
|
(44,423
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(48,170
|
)
|
|
|
-
|
|
|
|
(48,170
|
)
|
Net income from discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64,799
|
|
|
|
64,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - June 30, 2017
|
|
|
5,740,000
|
|
|
$
|
6
|
|
|
$
|
59,849
|
|
|
$
|
(178,641
|
)
|
|
$
|
90,992
|
|
|
$
|
(27,794
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal of net liabilities upon change of ownership
|
|
|
-
|
|
|
|
-
|
|
|
|
16,178
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16,178
|
|
Net loss from continued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(53,124
|
)
|
|
|
-
|
|
|
|
(53,124
|
)
|
Net income from discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
35,294
|
|
|
|
35,294
|
|
Shares issued for acquisition of net assets
|
|
|
20,000
|
|
|
|
-
|
|
|
|
(1,510
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - June 30, 2018
|
|
|
5,760,000
|
|
|
$
|
6
|
|
|
$
|
74,517
|
|
|
$
|
(231,765
|
)
|
|
$
|
126,286
|
|
|
$
|
(30,956
|
)
|
See accompanying notes to the audited consolidated financial statements.
First Priority Tax Solutions Inc.
Consolidated Statements of Cash Flows
|
|
Years Ended
|
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net loss from continuing operations
|
|
$
|
(53,124
|
)
|
|
$
|
(51,170
|
)
|
Net income from discontinued operations
|
|
|
35,294
|
|
|
|
67,799
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Change in Assets (Liabilities) from discontinued operations
|
|
|
(28,945
|
)
|
|
|
(7,975
|
)
|
Accounts payable and accrued liabilities
|
|
|
19,473
|
|
|
|
-
|
|
Net cash provided by (used in) operating activities
|
|
|
(27,302
|
)
|
|
|
8,654
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Advancement from a shareholder
|
|
|
12,978
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
12,978
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(14,324
|
)
|
|
|
8,654
|
|
Cash and cash equivalents - beginning of period
|
|
|
17,329
|
|
|
|
8,675
|
|
Cash and cash equivalents - end of period
|
|
$
|
3,005
|
|
|
$
|
17,329
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Disclosures
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash paid for income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Investing and Financing Activity:
|
|
|
|
|
|
|
|
|
Issuance of shares for acquisition of net assets
|
|
$
|
1,510
|
|
|
$
|
-
|
|
See accompanying notes to the audited consolidated financial statements.
First Priority Tax Solutions Inc.
June 30, 2018
Notes to Consolidated Financial Statements
Note 1 - Organization and Operations
First Priority Tax Solutions, Inc. (“First Priority” or the “Company”) was incorporated on March 31, 2014 under the laws of the State of Delaware.
On May 8, 2018, First Priority Tax Solutions, Inc. entered into an Asset Purchase Agreement with Silverlight International Limited., the Company owned by the owner of Zhoppers, Inc., whereby First Priority Tax Solutions, Inc. has agreed to acquire the net assets of Zhoppers, Inc.
The Company is currently operating the Zshoppers ecommerce website.
Note 2 - Significant and Critical Accounting Policies and Practices
The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.
Going concern
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financials at June 30, 2018 and June 30, 2017, the Company had an accumulated deficit of $231,765 and $178,641 of continuing operations, respectively, and retained earnings of $126,286 and $90,992 from discontinued operations, as of June 30, 2018, and June 30, 2017, respectively. The Company has a working capital deficit (total current liabilities exceeded total current assets) of $30,956 and $27,794, at June 30, 2018 and June 30, 2017, respectively. The Company’s cash balance and revenues generated are not currently sufficient and cannot be projected to cover its operating expenses for the next twelve months from the filing date of this report. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
The Company’s existence is dependent upon management’s ability to develop profitable operations. Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the Company’s efforts will be successful. No assurance can be given that management’s actions will result in profitable operations or the resolution of its liquidity problems. The accompanying consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.
In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional equity financing through discussions with investment bankers and private investors. There can be no assurance that the Company will be successful in its effort to secure additional equity financing.
Basis of Presentation
The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and the acquired assets of Zshoppers, Inc. Inc. All material intercompany balances and transactions have been eliminated.
Fiscal Year End
The Company elected June 30th as its fiscal year end date upon its formation.
Change of Control
On December 1, 2017, as a result of a private transaction, the control block of voting stock of the Company, represented by 4,000,000 shares of common stock (representing approximately 70% of issued and outstanding common shares of the Company), has been transferred from its Chief Executive Officer to an unaffiliated corporation, and a change of control of the Company has occurred. Upon the change of control of the Company, the existing directors and officers resigned immediately and the Company has appointed a new director and officer. The Company entered into an agreement to transfer to its primary shareholder all of its assets and liabilities which include real estate properties for generating rental income and liabilities consists of vendor payables and notes payable.
Discontinued Operations
On December 1, 2017, as a result of the change of control of the Company, the Company transferred all of its assets and liabilities to its primary shareholder. Please refer to Note 4 and 5.
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions
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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:
|
(i)
|
Assumption as a going concern:
Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
|
|
|
|
|
(ii)
|
Fair value of long-lived assets
: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
|
|
(iii)
|
Valuation allowance for deferred tax assets:
Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.
|
These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
Cash Equivalents
For the purpose of the accompanying financial statements, all highly liquid investments with a maturity of six months or less are considered to be cash equivalents.
Real Estate
Effective December 1, 2017, Real Estate reflected on the balance sheet was transferred to the principal shareholder of the Company.
Related Parties
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the related parties include a. affiliates (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act) of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Commitment and Contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Revenue Recognition
The Company recognizes revenue from the sale of products and services in accordance with ASC 606,”
Revenue Recognition
” following the five steps procedure:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Company recognizes revenue when it satisfies its obligation by transferring control of the good or service to the customer. A performance obligation is satisfied over time if one of the following criteria are met:
|
a.
|
the customer simultaneously receives and consumes the benefits as the entity performs;
|
|
|
|
|
b.
|
the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
|
|
|
|
|
c.
|
the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date.
|
The Company’s sales are completed through an online marketplace providing coupons and on-line discounts for products and services provided by third parties.
Cost of services include all expenses directly incurred to generate revenue, which include costs such as products purchases, processing fees, chargebacks and disputes, and shipping costs.
Deferred Tax Assets and Income Tax Provision
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the current enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
Tax years that remain subject to examination by major tax jurisdictions
The Company discloses tax years that remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15.
Earnings per Share
Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.
There were no potentially dilutive common shares outstanding for the reporting periods ending June 30, 2018 and June 30, 2017.
Cash Flows Reporting
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
Subsequent Events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605).” This ASU requires an entity to recognize revenue when goods are transferred or services are provided to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606), deferral of the Effective Date.” With the issuance of ASU 2015-14, the new revenue guidance ASU 2014-09 will be effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, using one of two prescribed retrospective methods. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customer (Topic 606), Identifying Performance Obligations and Licensing.” The guidance is applicable from the date of applicability of ASU 2014-09. This ASU finalizes the amendments to the guidance on the new revenue standard on the identification of performance obligations and accounting for licenses of intellectual property. In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements (Topic 606)” which is applicable from the date of applicability of ASU 2014-09. This guidance provides optional exemptions from the disclosure requirement for remaining performance obligations for specific situations in which an entity need not estimate variable consideration to recognize revenue. In May 2016, FASB issued ASU No. 2016-12, “Narrow-Scope Improvements and Practical Expedients”. This amendment clarified certain aspects of Topic 606 and will be applicable from the date of applicability of ASU 2014-09. The Company is in process of evaluating the impact of the foregoing updates.
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This new standard replaces the existing guidance on leases and requires the lessee to recognize a right-of-use asset and a lease liability for all leases with lease terms equal to or greater than twelve months. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize total lease expense on a straight-line basis. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2018. Upon adoption, entities will be required to use a modified retrospective transition which provides for certain practical expedients. Entities are required to apply the new standard at the beginning of the earliest comparative period presented. Early adoption of this new standard is permitted. The Company is currently evaluating the effect this new standard will have on its consolidated financial statements and related disclosures. The Company does not expect the requirement to recognize a right-of-use asset and a lease liability for operating leases to have a material impact on the presentation of its consolidated statements of financial position.
Note 3 – Contribution of Assets
On May 8, 2018, the Company entered into a Capital Contribution Agreement with our principal shareholder, Silverlight International Limited. Under the terms of the Capital Contribution Agreement, Silverlight contributed the assets of Zshoppers.com, an electronics and general products ecommerce website, valued at $100,000 to the Company, in exchange for the issuance of an additional 20,000 shares to Silverlight at $5 per share. The assets contributed to our Company consist of all assets used in the operation of the Zshoppers.com business, including, but not limited to Zshoppers domain names, social media accounts and email lists. In connection with the capital contribution, our Company pay the former owner of Zshoppers.com 25% profit share for one year from the date of acquisition, plus $1,000 per month for the Payment Period.
The acquisition of Zshoppers, Inc. met the definition of a business in accordance with FASB ASC Topic 805,
"Business Combinations".
As such, the Company accounted for the acquisition as a business combination.
The net assets (liabilities) acquired by First Priority Tax Solutions, Inc. from Zhoppers, Inc. on May 8, 2018 is summarized as follows:
Net Assets (Liabilities) Acquisition
|
|
|
|
Cash and cash equivalents
|
|
$
|
951
|
|
Accounts payable
|
|
|
(2,461
|
)
|
|
|
$
|
(1,510
|
)
|
Revenues of $5,917 and net loss of $2,968 since the acquisition date are included in the consolidated statements of operations for the year ended June 30, 2018.
Note 4 – Disposal of Net Liabilities
On December 1, 2017, as a result of the change of control of the Company, the Company transferred all of its assets and liabilities to its primary shareholder summarized as follows:
Net Liabilities Disposition
|
|
|
|
Deferred rent asset
|
|
$
|
7,293
|
|
Due from shareholders
|
|
|
39,657
|
|
Building, net
|
|
|
53,000
|
|
Land
|
|
|
15,000
|
|
Bank indebtedness
|
|
|
(942
|
)
|
Accrued expenses
|
|
|
(19,340
|
)
|
Accrued Interest
|
|
|
(11,346
|
)
|
Lease deposits from customers
|
|
|
(4,500
|
)
|
Note payable
|
|
|
(85,000
|
)
|
Note payable - related party
|
|
|
(10,000
|
)
|
|
|
$
|
(16,178
|
)
|
Note 5 – Discontinued Operations
On December 1, 2017, as a result of the change of control of the Company, the Company transferred to its primary shareholder all of its assets and liabilities which include real estate properties for generating rental income.
The sales of net liabilities qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of the operations from its Condensed Statements of Operations to present the revenue and cost of revenue from the real estate activity in discontinued operations.
The following table shows the results of operations of the rental property operations for years ended June 30, 2018 and 2017 which are included in the net income from discontinued operations:
|
|
Years Ended
|
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
38,855
|
|
|
$
|
78,040
|
|
Cost of Revenue
|
|
|
1,000
|
|
|
|
13,241
|
|
GROSS PROFIT
|
|
|
37,855
|
|
|
|
64,799
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
583
|
|
|
|
3,000
|
|
Bad debt expense
|
|
|
(3,144
|
)
|
|
|
-
|
|
|
|
|
(2,561
|
)
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
Net Income before Income Tax Provision
|
|
|
35,294
|
|
|
|
67,799
|
|
|
|
|
|
|
|
|
|
|
Income Tax Provision
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
NET INCOME FROM DISCONTINUED OPERATIONS
|
|
$
|
35,294
|
|
|
$
|
67,799
|
|
Note 6 – Equity Transactions
Shares Authorized
Upon formation, the total number of shares of all classes of stock which the Company is authorized to issue is Ninety Two Million (92,000,000) shares of Common Stock, par value $0.000001 per share, and Eight Million (8,000,000) shares of Preferred Stock, par value $0.000001 per share.
Common Stock
On March 31, 2014, upon formation, the Company issued an aggregate of 4,000,000 shares of the newly formed corporation’s common stock to its then Chief Executive Officer at the par value of $0.000001 per share or $4 for compensation.
From March 31, 2014 through June 30, 2014, the Company authorized the issuance of 1,740,000 shares of its common stock for cash at $0.02 per share for a total of $36,951.
In June 2014, the Company’s then president paid $14,000 in legal expenses for the Company which has been treated as a contribution to capital.
On May 8, 2018, the Company issued 20,000 shares of common stock to acquire the net assets from Zshoppers.
As of June 30, 2018 and June 30, 2017, the issued and outstanding common stock was 5,760,000 shares and 5,740,000 shares, respectively.
Note 7 – Related Party Transactions
On May 8, 2018, the Company entered into a Capital Contribution Agreement with our principal shareholder, Silverlight International Limited. Under the terms of the Capital Contribution Agreement, Silverlight contributed the assets of Zshoppers.com, an electronics and general products ecommerce website, valued at $100,000 to the Company, in exchange for the issuance of an additional 20,000 shares to Silverlight at $5 per share. The assets contributed to our Company consist of all assets used in the operation of the Zshoppers.com business, including, but not limited to Zshoppers domain names, social media accounts and email lists. In connection with the capital contribution, our Company pay the former owner of Zshoppers.com 25% profit share for one year from the date of acquisition, plus $1,000 per month for the Payment Period.
During the year ended June 30, 2018, the shareholder of the Company has made $12,978 payment for paying off operating expenses on behalf of the Company. As of June 30, 2018, the amount due to the shareholder was $12,978.
Note 8 – Income Tax
The Company provides for income taxes under ASC 740, “
Income Taxes.”
Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has considered the accounting impact of the effects of the Act during the year ended June 30, 2018 including a reduction in the corporate tax rate from 34% to 21% among other changes.
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the new statutory rate of 21% to the income tax amount recorded as of June 30, 2018 and June 30, 2017 are as follows:
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2018
|
|
|
2017
|
|
Net operating loss carryforward
|
|
$
|
(105,479
|
)
|
|
$
|
(87,649
|
)
|
Effective tax rate
|
|
|
21
|
%
|
|
|
34
|
%
|
Deferred tax asset
|
|
|
(22,151
|
)
|
|
|
(29,801
|
)
|
Less: Valuation allowance
|
|
|
22,151
|
|
|
|
29,801
|
|
Net deferred asset
|
|
$
|
-
|
|
|
$
|
-
|
|
The change in the valuation allowance during the years ended June 30, 2018 and June 30, 2017 was $22,151 and $29,801, respectively.
As of June 30, 2018, the Company had $105,479 in net operating losses (“NOLs”) that may be available to offset future taxable income, which begin to expire between 2034 and 2038. In accordance with Section 382 of the U.S. Internal Revenue Code. The usage of the Company’s net operating loss carry forwards is subject to annual limitations following greater than 50% ownership changes. Tax returns for the years ended 2014 through 2018 are subject to review by the tax authorities.
The changes in deferred tax assets related to the changes in tax rates are as follows:
|
|
Tax Rate at 21%
|
|
|
Tax Rate at 34%
|
|
|
Changes
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30, 2017
|
|
$
|
3,492
|
|
|
$
|
5,654
|
|
|
$
|
(2,162
|
)
|
Year Ended June 30, 2018
|
|
$
|
(3,744
|
)
|
|
$
|
(6,062
|
)
|
|
$
|
2,318
|
|
Note 9 – Subsequent Events
Management has evaluated subsequent events through the date these audited consolidated financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.