NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 will provide services for oversea 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 is offering marketing materials and other products for the tradeshows.
Year end
The Companys 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 June 30, 2019 and 2018, 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, whichever is shorter. Depreciation periods are as follows:
Computer equipment
|
3 years
|
Website
The Company capitalizes the costs associated with the development of the Companys website pursuant to Financial Accounting Standard Boards (FASB) Accounting Standards Codification (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.
Revenue recognition
The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in 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.
F-7
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue recognition (continued)
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 probable.
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 on a gross basis until the stayed night occurs, at which point the Company recognizes the revenue, net of amounts paid to suppliers, as this is when our performance obligation is satisfied. As the Company arranges for the service to be provided by the various hotels and does not control the hotel rooms at any time, the Company recognizes the revenue on a net basis. We adopted ASC 606 effective July 1, 2018.
Advertising costs
Advertising costs are anticipated to be expensed as incurred; however there were no advertising costs included in general and administrative expenses for the years ended June 30, 2019 and 2018.
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2019 and 2018. 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.
As of June 30, 2018 and 2018, there are no level 2 or level 3 inputs.
F-8
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
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 June 30, 2019 and 2018, 274,950,806 and 274,563,239 dilutive shares were excluded from the calculation of diluted loss per common share.
Income taxes
The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of June 30, 2019 and 2018, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material affect on the Company.
The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.
The Company classifies tax-related penalties and net interest as income tax expense. As of June 30, 2019 and 2018, no income tax expense has been incurred.
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.
Concentration of credit risk
The Company maintains its cash accounts with banks located in Nevada. The total cash balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank. The Company had cash balances on deposit at June 30, 2019 and 2018 did not exceed the balance insured by the FDIC. Accounts receivable are typically unsecured and are derived from revenue earned from customers primarily located in North America and Asia.
F-9
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.
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 early 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 any 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. As noted above, the Company is in its early stages and, accordingly, has generated slight revenues from operations. 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 June 30, 2019 of $316,774. In addition, the Companys development activities since inception have been financially sustained through debt and equity financing. These factors raise substantial doubt about the Companys ability to continue as a going concern. The Company plans to raise capital though 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.
NOTE 3 - PREPAID EXPENSES
As of June 30, 2019, the Company had prepaid transfer agent expenses totaling $1,750. The prepaid professional fees will be expensed on a straight-line basis over the remaining life of the service period.
As of June 30, 2018, the Company had prepaid transfer agent expenses totaling $375 and prepaid consulting fees of $3,500 to a related party. The prepaid professional fees will be expensed on a straight-line basis over the remaining life of the service period.
F-10
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - FIXED ASSETS
The following is a summary of fixed asset costs:
|
|
June 30,
2019
|
|
June 30,
2018
|
Fixed asset
|
|
$
|
1,176
|
|
$
|
1,176
|
Less: accumulated amortization
|
|
|
(686)
|
|
|
(294)
|
Fixed asset, net
|
|
$
|
490
|
|
$
|
882
|
Depreciation expense for the years ended June 30, 2019 and 2018, was $392 and $294, respectively.
NOTE 5 - WEBSITE
The following is a summary of website costs:
|
|
June 30,
2019
|
|
June 30,
2018
|
Website
|
|
$
|
3,500
|
|
$
|
1,500
|
Less: Accumulated amortization
|
|
|
(3,132)
|
|
|
(2,299)
|
Website, net
|
|
$
|
368
|
|
$
|
1,201
|
Amortization expense for the years ended June 30, 2019 and 2018 was $833 and $1,000, respectively.
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 June 30, 2019, the principal balance is $150,000 and accrued interest is $15,822. As of June 30, 2018, the principal balance is $150,000 and accrued interest is $658. Interest expense for the years ended June 30, 2019 and 2018 was $15,164 and $658, respectively.
NOTE 7 - CONVERTIBLE DEBT
On December 23, 2015, the Company executed a promissory note with a related party for $5,000. The unsecured note bears interest at 10% per annum and is due upon demand. During July 2017, the terms of the loan were negotiated and accrued interest was added to the principal balance. The interest rate is 20% per annum starting August 1, 2017 and is convertible at a fixed conversion rate equal to $0.005 per share. The Company recorded a beneficial conversion feature of $5,789. The loan has a prepayment penalty. 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. During the year ended June 30, 2018, this loan was paid in full and settled.
On February 26, 2016, the Company executed a promissory note with a related party for $1,000. The unsecured note bears interest at 10% per annum and is due upon demand. During July 2017, the terms of the loan were negotiated and accrued interest was added to the principal balance. The interest rate is 20% per annum starting August 1, 2017 and is convertible at a fixed conversion rate equal to $0.005 per share. The Company recorded a beneficial conversion feature of $1,161. The loan is due on July 31, 2018. The loan has a prepayment penalty. 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. During the year ended June 30, 2018, this loan was paid in full and settled.
F-11
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - CONVERTIBLE DEBT (CONTINUED)
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 partied 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. During the year ended June 30, 2019, the noteholder requested to convert the entire balance of principal and accrued interest into 1,114,000 shares of common stock. Since the shares were not issued as of June 30, 2019, the Company record stock payable of $5,570. The shares were issued in August 2019.
On January 26, 2018, the Company executed a convertible promissory note for $65,000. The unsecured note bears interest at 8% per annum and is due on October 30, 2018. This note cannot be converted for the initial 180-day period and is convertible at discount of 39% of the market price based on the previous ten days of trading. This note has prepayment penalties. During the year ended June 30, 2018, this loan was paid in full and settled. The Company recorded a loss on settlement in 2018 on this loan totaling $18,121.
On March 5, 2018, the Company executed a convertible promissory note for $43,000. The unsecured note bears interest at 8% per annum and is due on December 15, 2018. This note cannot be converted for the initial 180-day period and is convertible at discount of 39% of the market price based on the previous ten days of trading. This note has prepayment penalties. During the year ended June 30, 2018, this loan was paid in full and settled. The Company recorded a loss on settlement in 2018 on this loan totaling $12,080.
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 partied 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 partied 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. During the year ended June 30, 2019, the noteholder requested to convert the entire balance of principal and accrued interest into 1,266,389 shares of common stock. Since the shares were not issued as of June 30, 2019, the Company record stock payable of $6,332. The shares were issued in August 2019.
As of June 30, 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 June 30, 2019, the balance of accrued interest was $3,104. The interest expense for the year ended June 30, 2018 was $1,711 including amortization of debt discount of $0.
As of June 30, 2018, the balance of accrued interest was $4,295. The interest expense for the year ended June 30, 2018 was $21,964 including amortization of debt discount of $13,625. The amortization of the debt discount was related to beneficial conversion feature on some of the convertible notes.
F-12
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - COMMITMENTS AND CONTINGENCIES
As of June 30, 2019 and 2018, we did not have any known commitments or contingencies other than our notes payable and convertible debt.
Legal matter contingencies
The Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses are established in accordance with ASC 450, Contingencies when warranted. Once established, such provisions are adjusted when there is more information available of when an event occurs requiring a change.
NOTE 9 - STOCKHOLDERS EQUITY
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.
Common stock
During the year ended June 30, 2018, the Company recorded $6,950 to additional paid in capital for beneficial conversion feature on the convertible debt and $367 in donated capital.
During the year ended June 30, 2019, the Company recorded stock payable of $11,902 for the debt conversion. The shares were issued in August 2019.
NOTE 10 - WARRANTS AND OPTIONS
As of June 30, 2019 and 2018, there were no warrants or options outstanding to acquire any additional shares of common stock.
NOTE 11 - INCOME TAXES
At June 30, 2019 and 2018, the Company had a federal operating loss carryforward of approximately $317,000 and $260,000 which begins to expire in 2035.
Components of net deferred tax assets, including a valuation allowance, are as follows at June 30, 2019 and 2018:
Deferred tax assets:
|
2019
|
|
2018
|
Net operating loss carryforward
|
$
|
63,000
|
|
$
|
52,000
|
Total deferred tax assets
|
|
63,000
|
|
|
52,000
|
Less: Valuation allowance
|
|
(63,000)
|
|
|
(52,000)
|
Net deferred tax assets
|
$
|
-
|
|
$
|
-
|
The valuation allowance for deferred tax assets as of June 30, 2019 and 2018 was $63,000 and $52,000, respectively, which will begin to expire in 2035. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of June 30, 2019 and 2018 and maintained a full valuation allowance.
F-13
INTERLINK PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 11 - INCOME TAXES (CONTINUED)
Reconciliation between the statutory rate and the effective tax rate is as follows at June 30, 2019 and 2018:
|
2019
|
2018
|
Federal statutory rate
|
(21.0)%
|
(32.0)%
|
State taxes, net of federal benefit
|
(0.00)%
|
(0.00)%
|
Change in valuation allowance
|
21.0%
|
32.0%
|
Effective tax rate
|
0.0%
|
0.0%
|
NOTE 12 - RELATED PARTY TRANSACTIONS
On July 1, 2017, the Company executed a consulting agreement 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 years ended June 30, 2019 and 2018, the Company had professional fees - related party totaling $36,000 and $36,000, respectively. As of June 30, 2019, there was prepaid expense - related party of $0 and accounts payable - related party balance was $26,500. As of June 30, 2018, there was prepaid expense - related party of $3,500 and accounts payable - related party balance was $0.
On July 11, 2015, the Company executed a consulting agreement for a period of three years with a former officer and director and current shareholder at a rate of $3,000 per month. On July 1, 2017, the parties mutually agreed to terminate the agreement. The Company still has amounts outstanding related to this agreement, and as of June 30, 2019 and 2018, the accounts payable - related party balance was $19,555 and $14,729, respectively. The increase during the year ended June 30, 2019 was based on the individual taking back the responsibility over the credit card and paying for the balance totaling $4,826. The individual can choose her monthly compensation in the form of 300,000 shares of common stock or $3,000 payable at the Companys discretion.
NOTE 13 - SUBSEQUENT EVENTS
During August of 2019, the Company issued 2,380,389 shares of common stock and reduced the stock payable balance by $11,902 to $0.
F-14