NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
1. DESCRIPTION OF BUSINESS
Organization
Grand Perfecta, Inc. (“Grand Perfecta”)
was incorporated in the State of Nevada on March 25, 2002, as STI Holdings, Inc. (“STI”). On May 12, 2012, Grand Perfecta
completed an Agreement and Plan of Reorganization whereby it acquired 100% of the issued and outstanding shares of Link Bit Consulting
Co, Ltd. (“LBC”), a Japanese corporation, for 25,000,000 common shares in a transaction accounted for as a recapitalization
of LBC. Effective March 29, 2013, STI amended its Articles of Incorporation to change its name to Grand Perfecta, Inc. On May 27,
2013, Grand Perfecta issued 272,668 shares in exchange for 100% of the issued and outstanding shares of Umajin Hong Kong Ltd. (“Umajin
HK”), a Hong Kong corporation. In August 2015, Grand Perfecta formed Sports Perfecta, Inc. (“SPI”), as a California
subsidiary to pursue development of a fantasy sports offering to horse racing fans. The operations of Grand Perfecta, LBC, Umajin
HK, and SPI are collectively referred to as the “Company.”
On December 16, 2015, LBC acquired 100%
of the outstanding shares of Basougu Shokuninkai Co., Ltd. (“Basougu”), a Japanese corporation. On January 7, 2016,
SPI acquired 100% of the outstanding stock of Just Mobile Sdn. Bhd. (“Just Mobile”), a Malaysian company. On January
20, 2016, Just Mobile changed its name to Sports Perfecta Technologies Sdn Bhd (“SPT”). The operations of Just Mobile
are referred to as SPT after the acquisition date of January 7, 2016.
In June 2018, Grand Perfecta completed
a disposition of a substantial portion of its assets and operations through two transactions.
On June 26, 2018, the Company transferred
100% of the common stock of Sports Perfecta, Inc., a California corporation and subsidiary of the Company, and a receivable representing
a sum owing to the Company by SPI in the amount of JPY 185,540,908 to Neo Sports Ltd., a Japanese company (“Neo Sports”),
in exchange for (a) 23,600,000 shares of Company common stock, (b) 100,000 shares of Company Series A Convertible Preferred Stock,
and (c) an outstanding contract option right to purchase 3,000,000 shares of the common stock of Company at a price of $1.00 per
share (the “SPI Transaction”). After this transaction, Neo Sports did not own any securities of the Company. All common
and preferred shares delivered to the Company as part of the SPI Transaction were immediately cancelled.
On June 27, 2018, the Company sold 100%
of the capital stock of Link Bit Consulting Co, Ltd., a Japanese company and subsidiary of the Company, to IS Digital Ltd., a Cayman
Islands company (“ISD”) for $420,000 in cash, and a sale to ISD of a receivable representing a sum owing to the Company
by LBC in the amount of JPY 8,089,625 for $80,000 in cash (the “LBC Transaction”).
After the foregoing transactions, the Company
continues to own as subsidiaries Umajin HK and WRN Co. Ltd. (“WRN”).
Nature of Business
The Company is engaged in the business
of gathering, publishing and disseminating horse racing information and other content related to horse racing in Japan and the
Japanese horse racing industry through its wholly owned subsidiaries WRN, a Japanese corporation. Umajin Hong Kong had been delivering
information on horse racing to its users through its website, however, it terminated its services at the end of June 2017. Historically,
through June 27, 2018, our operations were conducted in Japan through wholly-owned subsidiary, LBC Consulting Co, Ltd. LBC historically
had six different websites that it owned and operated through its various subsidiaries, which comprised substantially all of the
Company’s revenue.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated
financial statements of the Company as of January 31, 2019, and for the three and six months ended January 31, 2019 and 2018, have
been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for
interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management,
such financial information includes all adjustments considered necessary for a fair presentation of the Company's financial position
at such date and the operating results and cash flows for such periods. Operating results for the interim period ended January
31, 2019 are not necessarily indicative of the results that may be expected for the entire year.
Certain information and footnote disclosure
normally included in financial statements in accordance with GAAP have been omitted pursuant to the rules of the United States
Securities and Exchange Commission ("SEC"). These unaudited financial statements should be read in conjunction with our
audited financial statements and accompanying notes for the years ended July 31, 2018 and 2017 included in the Company's Form 10-K
filed on January 25, 2019.
The accompanying unaudited consolidated
financial statements include the accounts of Grand Perfecta and its wholly-owned subsidiaries LBC, Umajin HK, WRN and SPI. The
Company discontinued the operations of its wholly-owned subsidiaries LBC and SPI in June 2018. The accounts for these subsidiaries
have been presented in the discontinued operations in the accompanying consolidated financial statements. All intercompany balances
and transactions have been eliminated in consolidation. The Company has determined that three affiliated entities, Space Cultivation
Mobile, Japan Horse Circle and Basougu Shokuninkai, which LBC conducts business with were variable interest entities and that the
Company was the primary beneficiary of each entity. As a result, the Company has consolidated the accounts of these variable interest
entities into the accompanying consolidated financial statements. As the Company does not have any ownership interest in these
variable interest entities, the Company has allocated the contributed capital in these variable interest entities as a component
of non-controlling interest. These three variable interest entities did business with LBC. Therefore, these three entities have
also been presented in the discontinued operations in the accompanying consolidated financial statements. After the discontinued
operations, the Company consists of Grand Perfecta and its two remaining wholly-owned subsidiaries, Umajin HK and WRN. There are
no variable interest entities since the Company discontinued operations in June 2018.
Financial Statement Reclassification
Certain account balances from prior periods
have been reclassified in these consolidated financial statements to conform to current period classifications. The prior year
amounts have also been modified in these financial statements to properly report amounts under current operations and discontinued
operations (see note 6).
Use of Estimates
The preparation of financial statements
in conformity with GAAP 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 reported periods. Amounts could materially change in the future.
Going Concern
Based on operating losses and negative
cash from operations and the discontinued operations of most of the Company’s operations, substantial doubt exists about
the Company’s ability to continue as a going concern. Management’s plan in this regard is to find new operations to
enter into and focus on building profitable operations. To finance operations while it finds new operations, the Company will continue
financing activity such as taking loans and issuing new shares of the Company’s common stock.
As of January 31, 2019, we had cash of
$5,929 and a working capital deficit of $611,694 as compared to cash of $52,716 and a working capital deficit of 574,780 as of
July 31, 2018.
We continue to have a significant working
capital deficit that adversely affects our business by limiting the resources we have available to pursue the promotion of our
information services and develop new service opportunities for potential customers. Historically, we have relied on extensions
of note payment due dates and new debt financing to repay note obligations as they came due in order to continue operations. Going
forward we will continue to use extensions and new debt financing to address note obligations that come due, endeavor to gradually
reduce obligations with cash flow provided by operations, and pursue over the next 12 months equity financing that we can apply
to debt reduction and business development. Nevertheless, the shortage of working capital adversely affects our ability to develop,
sponsor, or participate in activities that promote our information services to prospective customers and to develop new content,
because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities. There is no assurance
that our plans for addressing our working capital shortages will be successful, and our failure to be reasonably successful should
be expected to result in a significant contraction of our operations and potentially a failure of the business.
Foreign Exchange
The Company’s primary operations
are conducted in Japan and performed by its wholly owned subsidiaries WRN and until sold, LBC. The Company also conducted operations
through SPI, and its Malaysian subsidiary SPT. A wholly owned subsidiary, Umajin HK, had been delivering information on horse racing
to its users through its website similar to LBC, however it terminated its service at the end of June 2017. WRN and LBC’s
functional currency is the Japanese Yen and Umajin HK’s functional currency is the Hong Kong Dollar. SPT’s functional
currency is the Malaysian Ringgit.
The financial statements of each entity
are prepared using the applicable functional currencies, and have been translated into U.S. dollars (“USD”). Assets
and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’ equity is translated
using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period. Any translation
adjustments are included as foreign currency translation adjustments in accumulated other comprehensive income in the Company’s
stockholders’ equity.
The following rates were used to translate
the accounts of Umajin HK and WRN into USD at the following balance sheet dates.
|
|
Balance Sheet Dates
|
|
|
|
January 31, 2019
|
|
|
July 31, 2018
|
|
Japanese Yen to USD
|
|
|
0.0092
|
|
|
|
0.0090
|
|
Hong Kong Dollars to USD
|
|
|
0.1275
|
|
|
|
0.1274
|
|
The following rates were used to translate
the accounts of LBC, Umajin HK, SPT and WRN into USD for the following operating periods.
|
|
For the Six Months Ended
|
|
|
|
January 31, 2019
|
|
|
January 31, 2018
|
|
Japanese Yen to USD
|
|
|
0.0090
|
|
|
|
0.0090
|
|
Hong Kong Dollars to USD
|
|
|
0.1276
|
|
|
|
0.1280
|
|
Malaysian Ringgit to USD
|
|
|
N/A
|
|
|
|
0.2407
|
|
Cash and Cash Equivalents
The Company considers all highly liquid
holdings with maturities of three months or less at the time of purchase to be cash equivalents. The Company had no cash equivalents
as of January 31, 2019 and July 31, 2018.
Accounts Receivable
Accounts receivable are carried at net
realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding
amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and
considering each customer's financial condition and credit history, as well as current economic conditions. Accounts receivable
are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.
The Company had no allowance for doubtful accounts as of January 31, 2019 and July 31, 2018.
Fair Value of Financial Instruments
In accordance with ASC 820, the carrying
value of cash and cash equivalents and accounts payable approximates fair value due to the short-term maturity of these instruments.
ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy
to classify the inputs used in measuring fair value as follows:
Level 1- Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the measurement date.
Level 2- Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data.
Level 3- Inputs are unobservable inputs
which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the
asset or liability based on the best available information.
The Company has determined that the book
value of its outstanding financial instruments as of January 31, 2019 and July 31, 2018 approximates the fair value.
Concentration of Credit Risk
Financial instruments that potentially
expose the Company to concentration of credit risk include cash and accounts receivable. The Company maintains its cash in banks
located in Japan, Hong Kong and the United States in financial institutions with high credit ratings. Substantially all of the
Company’s revenues are generated from customers in Japan. The Company conducts periodic reviews of the financial condition
and payment practices of its customers. The Company had no losses related to the write off of accounts receivable during the six
months ended January 31, 2019 and 2018.
Revenue Recognition
Effective August 1, 2018 we adopted the
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 606-10,
Revenue from Contracts with Customers (“ASC 606-10”). The adoption of ASC 606-10 had no impact on prior year or previously
disclosed amounts. In accordance with ASC 606-10, revenue is measured based on a consideration specified in a contract with a customer
and recognized when we satisfy the performance obligation specified in each contract.
The Company’s revenue consists primarily
of sales of comprehensive horse racing information through multiple websites focusing on all aspects of the horse racing industry
in Japan. Publication of horse racing digital magazines, and participating in other public events and media programs related to
the horse racing industry do not generate significant revenue directly. These activities are undertaken for the purpose of increasing
the number of horse racing fans and driving potential customers to our websites so as to hopefully eventually convert them to paying
customers.
The majority of the Company’s revenue
is generated by per-item sales. For certain users, payment is received at the time of purchase and for others it is received after
purchase. In either case, our performance obligation is to provide the requested information to users. Therefore, we recognize
revenue for per-item sales when the requested information is supplied to the user or for information packages that span a period
of time, ratably over the subscription period. Revenues are presented net of refunds, credits and known and estimated credit card
chargebacks. The Company reports revenue net of any required taxes collected from customers and remitted to government authorities,
with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Rights to information
purchased by customers in advance of the information being provided are recorded as deferred.
As of January 31, 2019, the Company had
$5,447 in deferred revenues. The Company will amortize these deferred revenues based on the monthly subscriptions and record revenue
in line with the amortization of these advance payments.
Income Taxes
The Company accounts for income taxes in
accordance with ASC 740, Income Taxes, using the asset and liability method. Under this method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Advertising Costs
The Company expenses advertising costs
as incurred. Advertising costs incurred amounted to $0 and $70,384 (all from discontinued operations) for the six months ended
January 31, 2019 and 2018, respectively.
Basic and Diluted Earnings Per Share
In accordance with ASC 260, Earnings Per
Share, the basic income per common share is computed by dividing the net income available to common stockholders by the weighted
average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted
if diluted potential common stock had been converted to common stock. No dilutive potential common shares were included in the
computation of diluted net income per share because their impact was anti-dilutive. As of January 31, 2018, the Company had total
options of 3,000,000 which were excluded from the computation of net income per share because they are anti-dilutive. As of January
31, 2019, the Company did not have any convertible notes or the options of 3,000,000. As a result, the basic and diluted earnings
per share were the same for each of the periods presented.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements
are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that
the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial
statements upon adoption.
3. STOCKHOLDERS’ EQUITY
Preferred Stock
The Company is authorized to issue up to
100,000,000 shares of preferred stock with a par value of $0.001, with 100,000 shares designated as Series A Preferred Stock. The
Series A Preferred Stock receive a 10 to 1 voting preference over common stock. Accordingly, for every share of Series A Preferred
Stock held, the holder receives the voting rights equal to 10 shares of common stock. As such, the holders of the Series A Preferred
Stock have the equivalent voting capability of 1,000,000 shares of common stock. The Series A Preferred Stock also has a $0.05
per share liquidation preference over common stock, and can be redeemed by the Company at any time, upon thirty days’ notice,
for $0.05 per share.
The Company had zero shares of Series A
Preferred Stock issued and outstanding as of January 31, 2019 and July 31, 2018.
Common Stock
The Company had 4,977,332 shares of Common
Stock issued and outstanding as of January 31, 2019 and July 31, 2018.
4. COMMITMENTS AND CONTINGENCIES
Operating Leases
Prior to June 27, 2018, the Company was
leasing its corporate headquarters and administrative offices in Tokyo, Japan, as well as the administrative offices of SPT in
Kuala Lumpur, Malaysia under non-cancelable operating leases extending through April 15, 2019. These leases were transferred with
the discontinued operations. The Company also leases other office space as needed on a month-to-month basis.
The Company incurred rent expense of $0
for the six months ended January 31, 2019 and $0 for continuing operations and $207,695 for discontinued operations for the six
months ended January 31, 2018.
Litigation
In the ordinary course of business, the
Company may be or has been involved in legal proceedings from time to time. As of the date of this annual report, there have been
no material legal proceedings relating to the Company.
5. RELATED PARTY TRANSACTIONS
In June 2018, the Company entered into
a consulting agreement with its new CEO and sole director. The agreement was for five months from June through October. The Company
agreed to pay him $3,000 per month for his services in running the Company and making sure that the required audit and filings
get completed. This agreement was extended for three additional months through January 2019. During the three and six months ending
January 31, 2019 the Company had expensed $9,000 and $18,000 in consulting fees for this agreement, respectively.
The following related party transactions
were all related to the Company’s previous management and the discontinued operations. These related party transactions all
were eliminated with the discontinuation of LBC and SPI:
The Company and Umajin Co., Ltd.(“Umajin
Japan”), a related party entity owned by a former director, modified the service agreement between them effective November
1, 2015, to set the monthly fee payable by the Company to Umajin Japan for providing horserace information at 16 million Yen per
month (inclusive of consumption tax), and to set the monthly fee payable for providing a horseracing related email magazine and
web page content at 7 million Yen per month (inclusive of consumption tax) for a total of 23 million Yen per month. The Company
and Umajin Japan agreed to reduce the monthly fees from 23 million Yen to 11 million Yen subsequent to October 2016. Subsequent
to February 2017, the Company and Umajin Japan agreed to reduce the fee to 8 million Yen per month through October 2017.
Total fees paid to Umajin Japan for the
three months ended January 31, 2019 and 2018 amounted to $0 and $217,505, respectively. Total fees paid to Umajin Japan for the
six months ended January 31, 2019 and 2018 amounted to $0 and $433,534, respectively. The fees paid to Umajin Japan are included
in discontinued operations under cost of sales in the accompanying consolidated statements of operations.
During the three months ended January 31,
2019 and 2018, the Company received consulting services from Cheval Attache Co., Ltd. (“Cheval Attache”) of $0 and
$29,160, respectively. During the six months ended January 31, 2019 and 2018, the Company received consulting services from Cheval
Attache Co., Ltd. (“Cheval Attache”), a related party entity owned by a former director (inclusive of consumption tax)
of $0 and $58,320, respectively, which are included in discontinued operations under cost of sales in the accompanying consolidated
statements of operations.
G-Liberta, a subsidiary of Cheval Attache,
performed certain advertising and research services for the Company. Total expenses related to G-Liberta during the three months
ended January 31, 2019 and 2018 amounted to $0 and $364, respectively. Total expenses related to G-Liberta during the six months
ended January 31, 2019 and 2018 amounted to $0 and $1,312, respectively, and are reflected as part of discontinued operations under
cost of sales in the accompanying consolidated financial statements.
6. DISCONTINUED OPERATIONS
During the year ended July 31, 2018, the
Company decided to discontinue operations of most of its operating activities. These discontinued operations consisted of two transactions
as follows:
On June 26, 2018, the Company exchanged
all the issued and outstanding shares of common stock of its wholly owned subsidiary, Sports Perfecta, Inc. to Neo Sports, Ltd,
a Japanese company, for 100,000 shares of the Company’s series A preferred stock, 23,600,000 shares of the Company’s
common stock and an option contract right for 3,000,000 shares of the Company’s common stock. This transaction included SPI’s
wholly owned subsidiary, Sports Perfecta Technologies Sdn Bhd.
On June 27, 2018, the Company exchanged
all the issued and outstanding shares of common stock of its wholly owned subsidiary, Link Bit Consulting Co. Ltd. to IS Digital
Ltd., a Cayman Island company for $420,000 in cash and 100% of the account receivable balance owed to the Company by LBC for $80,000
in cash. This transaction included all of LBC’s subsidiaries, except for WRN Co. Ltd. WRN’s issued and outstanding
common stock was transferred to the Company from LBC on this date.
In accordance with the provisions of ASC
205-20, the results of operations for these entities have been reflected as discontinued operations in the Consolidated Statements
of Operations and Comprehensive Loss for the six months ended January 31, 2019 and 2018, and consist of the following:
|
|
For the Six Months Ended
|
|
|
|
January 31, 2019
|
|
|
January 31, 2018
|
|
REVENUES OF DISCONTINUED OPERATIONS
|
|
$
|
–
|
|
|
$
|
5,773,195
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES OF DISCONTINUED OPERATIONS:
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
–
|
|
|
|
1,199,810
|
|
Depreciation and amortization expense
|
|
|
–
|
|
|
|
13,999
|
|
Advertising expense
|
|
|
–
|
|
|
|
70,384
|
|
Rent Expense
|
|
|
–
|
|
|
|
207,695
|
|
Salaries and wages expense
|
|
|
–
|
|
|
|
1,691,404
|
|
Other general and administrative expenses
|
|
|
–
|
|
|
|
1,455,220
|
|
|
|
|
–
|
|
|
|
4,638,512
|
|
OPERATING INCOME (LOSS) OF DISCONTINUED OPERATIONS
|
|
|
–
|
|
|
|
1,134,683
|
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
|
Other (income) expense
|
|
|
–
|
|
|
|
(73
|
)
|
(Gain) loss on foreign exchange
|
|
|
–
|
|
|
|
(10,414
|
)
|
Interest income
|
|
|
–
|
|
|
|
(3,253
|
)
|
Interest expense
|
|
|
–
|
|
|
|
456,470
|
|
|
|
|
–
|
|
|
|
442,730
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS
|
|
|
–
|
|
|
|
691,953
|
|
Provision for income taxes of discontinued operations
|
|
|
–
|
|
|
|
158,103
|
|
NET INCOME (LOSS) OF DISCONTINUED OPERATIONS
|
|
$
|
–
|
|
|
$
|
533,850
|
|
In accordance with the provisions of ASC 205-20, the cash flow
activity from discontinued operations have been reflected as discontinued operations in the Consolidated Statements of Cash Flows
for the six months ended January 31, 2019 and 2018, and consist of the following:
|
|
For the Six Months Ended
|
|
|
|
January 31, 2019
|
|
|
January 31, 2018
|
|
DISCONTINUED OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
–
|
|
|
$
|
533,850
|
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
–
|
|
|
|
13,999
|
|
Amortization of debt discount
|
|
|
–
|
|
|
|
16,333
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
–
|
|
|
|
(215,825
|
)
|
Accounts receivable - related party
|
|
|
–
|
|
|
|
27,000
|
|
Prepaid expenses and other current assets
|
|
|
–
|
|
|
|
(7,035
|
)
|
Other assets
|
|
|
–
|
|
|
|
(5,886
|
)
|
Accounts payable and accrued expenses
|
|
|
–
|
|
|
|
35,005
|
|
Accounts payable to related party
|
|
|
–
|
|
|
|
16,427
|
|
Deferred revenue
|
|
|
–
|
|
|
|
(38,409
|
)
|
Taxes payable
|
|
|
–
|
|
|
|
416,115
|
|
Net cash provided by operating activities of discontinued operations
|
|
$
|
–
|
|
|
$
|
791,574
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
$
|
–
|
|
|
$
|
(4,212
|
)
|
Proceeds from collection of notes receivables
|
|
|
–
|
|
|
|
79,426
|
|
Payments for notes receivable lending
|
|
|
–
|
|
|
|
(132,458
|
)
|
Net cash provided by (used in) investing activities of discontinued operations
|
|
$
|
–
|
|
|
$
|
(57,244
|
)
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
|
Proceeds from notes payable
|
|
$
|
–
|
|
|
$
|
180,000
|
|
Payments on note payable
|
|
|
–
|
|
|
|
(702,000
|
)
|
Payments on notes payable - related parties
|
|
|
–
|
|
|
|
(86,400
|
)
|
Proceeds from notes payable - related parties
|
|
|
–
|
|
|
|
90,000
|
|
Net cash used in financing activities of discontinued operations
|
|
$
|
–
|
|
|
$
|
(518,400
|
)
|
7. SUBSEQUENT EVENTS
Management has evaluated subsequent events, in accordance with
FASB ASC Topic 855, “Subsequent Events,” through the date which the consolidated financial statements were issued and
there are no material subsequent events.