NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended June 30, 2018 and notes thereto included in the Company’s annual report. The Company follows the same accounting policies in the preparation of interim reports.
Results of operations for the interim period are not indicative of annual results.
Organization
The Company was incorporated on May 11, 2015 under the laws of the State of Nevada, as Interlink Plus, Inc.
Nature of operations
The Company provides services for overseas travel agents on hotel price quotation and negotiation, contract reviewing, detailed guests’ arrangements, hotel check-in assistance, as well as tradeshow services to domestic and international businesses. Additionally, the Company offers marketing materials and other products for the tradeshows.
Year end
The Company’s year-end is June 30.
Cash and cash equivalents
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. As of March 31, 2019, the Company had no cash equivalents.
Accounts receivable
The allowance for uncollectible accounts receivables is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends. Since the inception of the Company through today, the Company has had no material bad debt write offs and believes its current policy is reasonable.
Fixed assets
The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Company’s internal development and construction department. Depreciation periods are as follows:
Computer equipment
3 years
F-6
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Website
The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company commenced amortization upon completion and release of the Company’s fully operational website.
Revenue recognition
The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five steps to evaluate revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation.
Revenue recognition occurs as the services are rendered to customers and upon completion of the hotel stay, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only record revenue when collectability is reasonably assured.
The Company provides travelers access to book hotel room reservations through our contracts with lodging suppliers, which provide the Company with rates and availability information for rooms but for which we have no control over the rooms and do not bear inventory risk. The customers pay the Company for merchant hotel transactions prior to departing on their trip, generally when they book the reservation. The payment is recorded in customer deposits until the stayed night occurs, at which point the Company recognize the revenue, net of amounts paid to suppliers, as this is when our performance obligation is satisfied.
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.
F-7
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Earnings per share
The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income 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. As of March 31, 2019 and 2018, 274,927,462 and 274,563,239 dilutive shares were excluded from the calculation of diluted loss per common share.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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.
Recent pronouncements
ASU 2016-02 - In February 2016, the FASB issued ASU No. 2016-02, "Leases", ("ASC 842") which amended the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASC 842 is effective for public companies during interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, which permits entities to record the right-of-use asset and lease liability on the date of adoption, with no requirement to recast comparative periods.
We adopted ASC 842 effective January 1, 2019 using the optional transition method of recognizing a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019. Therefore, comparative financial information was not adjusted and continues to be reported under the prior lease accounting guidance in ASC 840. We elected the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. We elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less, as well as the land easement practical expedient for maintaining our current accounting policy for existing or expired land easements. No material impact to the condensed financial statements as we do not have and leases greater than one year.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company had an accumulated deficit as of March 31, 2019 of $298,826. In addition, the Company’s activities since inception have been financially sustained through debt and equity financing. The Company plans to raise capital through debt and equity financing and to continue to generate additional revenue to continue operations.
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
F-8
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - PREPAID EXPENSES
As of March 31, 2019, the Company had prepaid transfer agent expenses totaling $563. The prepaid professional fees will be expensed on a straight-line basis over the remaining life of the service period. During the nine months ended March 31, 2019 the Company incurred an additional $750 of prepaid transfer agent fees and amortized transfer agent expenses of $1,125.
Additionally, the Company had prepaid expense related to deposits at hotels totaling $4,448. The prepaid expenses will be reclassified against revenue when our clients complete their stay at the hotel.
NOTE 4 - FIXED ASSETS
The following is a summary of fixed asset costs:
|
|
|
| |
|
|
|
March 31,
2019
|
|
Fixed asset
|
|
$
|
1,176
|
|
Less: accumulated amortization
|
|
|
(588)
|
|
Fixed asset, net
|
|
$
|
588
|
Depreciation expense for the nine months ended March 31, 2019 was $294.
NOTE 5 - WEBSITE
The following is a summary of website costs:
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|
|
| |
|
|
|
March 31,
2019
|
|
Website
|
|
$
|
3,500
|
|
Less: accumulated amortization
|
|
|
(2,965)
|
|
Website, net
|
|
$
|
535
|
Amortization expense for the nine months ended March 31, 2019 was $667.
NOTE 6 - NOTES PAYABLE
On June 15, 2018, the Company executed a promissory note with an entity for $150,000. The unsecured note bears interest at 10% per annum and is due in two business days after demand for payment. As of March 31, 2019, the principal balance is $150,000 and accrued interest is $12,041. The interest expense for the nine months ended March 31, 2019 was $11,384.
F-9
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 7 - CONVERTIBLE DEBT
On May 22, 2015, the Company executed a convertible promissory note with a related party for $4,000. The unsecured note bears interest at 10% per annum and is due on May 22, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of May 22, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.
On April 25, 2016, the Company executed a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 10% per annum and is due on April 25, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of April 25, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.
On July 15, 2016, the Company executed a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 10% per annum and is due on July 15, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of July 15, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.
On August 18, 2016, the Company executed a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 10% per annum and is due on August 18, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of September 27, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.
As of March 31, 2019, all of the convertible debt is in default and the Company is renegotiating to extend the maturity date of the convertible promissory notes.
As of March 31, 2019, the balance of accrued interest was $5,737. The interest expense for the nine months ended March 31, 2019 was $1,442.
NOTE 8 - STOCKHOLDERS’ DEFICIT
The Company is authorized to issue 475,000,000 shares of its $0.0001 par value common stock and 25,000,000 shares of its $0.0001 par value preferred stock. The Series A convertible preferred stock have a liquidation preference of $0.10 per share, have super voting rights of 100 votes per share, and each share of Series A may be converted into 100 shares of common stock.
Preferred stock
During the nine months ended March 31, 2019 there have been no other issuances of preferred stock.
Common stock
During the nine months ended March 31, 2019, there have been no other issuances of common stock.
NOTE 9 - WARRANTS AND OPTIONS
As of March 31, 2019, there were no warrants or options outstanding to acquire any additional shares of common stock.
F-10
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 10 - REVENUE
During the three months ended March 31, 2019, we recorded $4,360 of costs that were charged by a supplier, which exceeded the amount of our revenue recognized during the period. The costs are related to the hotel fees related to a customer stay in December 2018. As a result, the revenue for the three months ended March 31, 2019 was ($892). There is no material impact on the nine months ended March 31, 2019.
NOTE 11 - RELATED PARTY TRANSACTIONS
On July 1, 2017, the Company executed a consulting agreement with a company owned and controlled with a former officer and director and current shareholder at a rate of $3,000 per month. The Company or entity may terminate with 30 days written notice. During the nine months ended March 31, 2019 and 2018, the Company had professional fees - related party totaling $27,000 and $27,000, respectively. As of March 31, 2019, there was prepaid expense - related party of $0 and accounts payable - related party balance was $17,500.
As of March 31, 2019, the Company owed a former officer and director and current shareholder a total of $19,556.
NOTE 12 - SUBSEQUENT EVENTS
On April 4, 2019, a noteholder of our company elected to convert its convertible promissory notes, dated May 22, 2015 and August 14, 2016 in the principal amounts of $4,000 and $5,000, respectively, into an aggregate of 2,380,389 shares of our common stock.
F-11