NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2018
Note 1
ORGANIZATION AND BASIS OF PREPARATION
Quest Management Inc. (the “Company”)
is a for profit corporation established under the corporate laws of the State of Nevada on October 12, 2014 for the purpose of
the development of marketing channels to distribute fitness equipment to the wholesale market in the US.
The Company has a year end of October 31st.
The Company is a development stage company
as defined by the Financial Accounting Standards Board's Accounting Standards Codification Topic 915 related to Development Stage
Entities. The Company qualifies as a development stage company as it has not generated significant revenues from operations.
Note 2
SIGNIFICANT ACCOUNT POLICIES
2.1 Interim Financial Statements
The accompanying unaudited financial statements
have been prepared in accordance with the instructions from Regulation S-X and do not include all of the information and disclosures
required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion
of management, necessary for a fair presentation of the results of operations for the interim period(s), and to make the financial
statements not misleading, have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations
for such interim period(s) are not necessarily indicative of operations for a full year.
2.2 Use of Estimates and Assumptions
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 revenues and expenses during the period. Actual results could differ from those estimates.
Due to the limited level of operations, the
Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.
2.3 Fair Value of Financial Instruments
ASC 825, “Disclosures about Fair Value
of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair
Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain
market assumptions and pertinent information available to management as of July 31, 2018.
The respective carrying values of certain on-balance-sheet
financial instruments approximate their fair values. These financial instruments include cash, accounts payable and related party
loan payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term
in nature and their carrying amounts approximate fair value.
2.4 Cash & Cash Equivalents
The Company considers all highly liquid investments
with an original maturity of three months or less when purchased to be cash equivalents.
4
QUEST MANAGEMENT INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2018
2.5 Revenue Recognition
The Company recognizes revenues and the related
costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred, the price is fixed or determinable,
and collection of any resulting receivable is reasonably assured. Costs and expenses are recognized during the period in which
they are incurred. Any revenues earned include sales of our exercise equipment. The Company recognizes these sales once delivery
time is confirmed by the customer.
2.6 Cost of Sales
Amounts that will be recorded as cost of sales
relate to direct expenses incurred in order to fulfill orders of our products. Such costs are recorded and allocated as incurred.
Our cost of sales will consist primarily of the cost of product, packaging/labeling costs and shipping expenses.
2.7 Basic and Diluted Loss Per Share
The Company computes earnings (loss) per share
in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted earnings
per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss)
available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings
(loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per
share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments,
and therefore, basic and diluted earnings (loss) per share are equal.
2.8 Income Taxes
The Company follows the guidance of the Financial
Accounting Standards Board's Accounting Standards Codification Topic 740 related to Income Taxes. According to Topic 740, deferred
income taxes are recorded to reflect the tax consequences in future years of temporary differences between the tax basis of the
assets and liabilities and their financial amounts at year-end.
For federal income tax purposes, substantially
all expenses incurred prior to the commencement of operations must be deferred and then they may be written off over a 180-month
period. Tax deductible losses can be carried forward for 20 years until utilized for federal tax purposes. The Company will provide
a valuation allowance in the full amount of the deferred tax assets since there is no assurance of future taxable income.
The Company utilizes the Financial Accounting
Standards Board's Accounting Standards Codification Topic 740 related to Income Taxes to account for the uncertainty in income
taxes. Topic 740 for Income Taxes clarifies the accounting for uncertainty in income taxes by prescribing rules for recognition,
measurement and classification in financial statements of tax positions taken or expected to be in a tax return. Further, it prescribes
a two-step process for the financial statement measurement and recognition of a tax position. The first step involves the determination
of whether it is more likely than not (greater than 50 percent likelihood) that a tax position will be sustained upon examination,
based on the technical merits of the position. The second step requires that any tax position that meets the more likely than not
recognition threshold be measured and recognized in the financial statements at the largest amount of benefit that is a greater
than 50 percent likelihood of being realized upon ultimate settlement. This topic also provides guidance on the accounting for
related interest and penalties, financial statement classification and disclosure. The Company's policy is that any interest or
penalties related to uncertain tax positions are recognized in income tax expense when incurred. The Company has no uncertain tax
positions or related interest or penalties requiring accrual at July 31, 2018.
5
QUEST MANAGEMENT INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2018
Note 3
RECENT ACCOUNTING PRONOUNCEMENT
The Company has adopted all recent accounting
pronouncements as applicable and will continue to review and adopt those applicable as released within the timeframe required.
Note 4
CONCENTRATIONS
Initial sales are concentrated with one client.
Sales are made without collateral, and the credit-related losses are insignificant or non-existent. Accordingly, there is no provision
made to include an allowance for doubtful accounts.
Note 5
FIXED ASSETS
Fixed assets are stated at cost, net of
accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs, if capitalization
criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any subsidy/reimbursement/contribution
received for installation and acquisition of any fixed assets is shown as deduction in the year of receipt. Capital work- in progress
is stated at cost.
Subsequent expenditure related to an item of
fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously
assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repairs and maintenance expenditure
and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.
Gains or losses arising from de-recognition
of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets derecognized.
We purchased our principal executive offices
at 1 Kalnu iela, Malta, LV-4630 Latvia, on October 30, 2014 for $7,915.
The Company depreciates its property using
straight-line depreciation over the estimated useful life of 40 years.
For the three months ended July 31, 2018 the
company recorded $49 in depreciation expense. From inception (October 12, 2014) through July 31, 2018 the company has recorded
a total of $742 in depreciation expense.
Note 6
LOAN PAYABLE - RELATED PARTY
The Director and President of the Company has
loaned the company for operations from time to time on need basis. The balance as of July 31, 2018 of $4,066 is being carried as
a loan payable. The loan is non-interest bearing, unsecured and payable upon demand.
6
QUEST MANAGEMENT INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2018
Note 7
PROMISSORY NOTE PAYABLE
On May 31, 2016, the Company issued a Convertible
Promissory Note in the principal amount of $16,605 to Peak Marine Holdings LLC, a Florida limited liability company (“Peak”).
This Convertible Promissory Note (the “Note”) was issued in consideration of advances and loans made by Peak to the
Company.
Pursuant to the terms of the Note, the
holder has the right to convert any portion of the principal amount thereof at the par value of the Company’s common
stock. The holder also has the right to assign any portion of the Note, or assign the shares to be issued upon any conversion
of the Notes, to other parties. During the month of December 2016, Peak sold all its interest in the Note to five (5)
independent third parties (the “Holders”).
During the month of January 2017,
the Holders provided notices of election to convert a total of $15,000 of the
Note into shares, which totaled 15,000,000 shares
of common stock. The remaining balance on the Note is $1,605.
To date the Company has recorded
$373 in accrued interest payable on the Note.
Note 8
COMMON STOCK AND ISSUANCE
The Company has authorized 750,000,000 common
shares at $0.001 par value, of which 61,055,120 shares are issued and outstanding as of July 31, 2018.
4,000,000 shares were issued to our sole director
for $4,000 on October 17, 2014.
The Company’s Registration Statement
on Form S-1 with the U.S. Securities and Exchange Commission to register 2,000,000 shares of common stock was declared effective
on February 25, 2015. During March 2015, the company sold a total of 1,000,000 shares of common stock to 30 independent shareholders,
pursuant to the Registration Statement, at a price of $.04 per share for total proceeds of $40,000.
500,000 shares were issued to our sole director
for services on February 1, 2016.
On February 2, 2016, Quest Management Inc.
(the "Company") filed Articles of Amendment with the Nevada SOS whereby it authorized a forward split at a ratio of ten-for-one
share (10:1) of the Company's issued and outstanding shares of Common Stock. The Company also increased the authorized number of
shares of Common Stock from 75,000,000 shares to 750,000,000 at a par value of $0.001.
On February 10, 2016, the Company filed an
Issuer Company-Related Action Notification Form with FINRA requesting the forward split at a ratio of ten-for-one share be effected
in the market on February 22, 2016.
On October 7, 2016, the Company filed Articles
of Amendment to its Articles of Incorporation with the Nevada Secretary of State whereby it amended its Articles of Incorporation
by decreasing the Company’s total issued and outstanding shares of common stock by conducting a reverse split of such shares
at the rate of one (1) share for every one thousand (1,000) shares issued and outstanding. The reverse split resulted in the balance
of 55,120 shares of issued and outstanding shares, including 120 shares issued in lieu of fractional shares.
46,000,000 shares were issued to our sole director
for services on December 8, 2016.
During the month of January 2017, the Holders
of a Promissory Note (see Note 7) provided notices of election to convert a total of $15,000 of the Note into shares, which totaled
15,000,000 shares.
7
QUEST MANAGEMENT INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2018
Note 9
INCOME TAXES
We use the asset and liability method of accounting
for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized
for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences
resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to
reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely
than not some portion or all of the deferred tax assets will not be realized.
ASC Topic 740.10.30 clarifies the accounting
for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken
in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.
There was no income tax expense for the years ended October 31, 2017 and 2016. The rate was as follow;
|
Federal
|
|
|
34
|
%
|
|
State
|
|
|
5
|
%
|
|
|
|
|
39
|
%
|
The significant components of deferred tax assets and liabilities
are as follows:
|
|
|
|
|
|
|
FROM INCEPTION
|
|
|
|
OCTOBER
|
|
OCTOBER
|
|
(OCTOBER 12, 2014)
|
|
|
|
31,
|
|
31,
|
|
TO
|
|
|
|
2017
|
|
2016
|
|
OCTOBER 31, 2017
|
|
Deferred tax assets
|
|
|
|
|
|
|
|
Net operating losses
|
|
$
|
—
|
|
|
$
|
(14,283
|
)
|
|
$
|
(56,034
|
)
|
|
Deferred tax liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
$
|
—
|
|
|
$
|
5,570
|
|
|
$
|
21,853
|
|
|
Less valuation allowance
|
|
$
|
—
|
|
|
$
|
(5,570
|
)
|
|
$
|
(21,853
|
)
|
|
Deferred tax asset - net valuation allowance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
8
QUEST MANAGEMENT INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2018
Note 10
RELATED PARTY TRANSACTIONS
On October 17, 2014, 4,000,000 shares of the
Company’s common stock were issued to our sole director for $4,000. On February 1, 2016, 500,000 shares were issued to our
sole director for services. On December 8, 2016, 46,000,000 shares were issued to our sole director for services. The director
currently holds 46,045,000 shares of our common stock.
The Director and President of the Company has
loaned the company operating funds from time to time. The balance as of July 31, 2018 of $4,066 is being carried as a loan payable.
The loan is non-interest bearing, unsecured and payable upon demand.
The Company's sole officer and director is
involved in other business activities and may in the future, become involved in other business opportunities as they become available.
Note 11
LEGAL MATTERS
On December 2, 2019, one of the Company’s
shareholders made a motion and application to be appointed as custodian of the Company based on prior management abandoning its
responsibilities to continue making filings at the Nevada Secretary of State’s office and for failing to hold a shareholders’
meeting in over 2 years and otherwise failing to keep current in its obligations to the Company. Upon motion and application
to the District Court, Clark County Nevada, the Court granted the shareholder’s request and the shareholder was appointed
as custodian for the Company (“Custodian”). As Custodian of the Company, the shareholder was ordered to file an amendment
to the Company’s articles of incorporation which was filed in conformity with N.R.S. 78.347(4) and the shareholder was ordered
to have the Company’s charter reinstated in Nevada, to notice and hold a shareholder meeting; to provide a report to the
Court of the actions taken at the shareholder meeting; to identify and name a new registered agent in the State of Nevada; to reinstate
the Company in the State of Nevada; and the Custodian. In addition to the aforementioned items set forth in the Order Appointing
the Custodian, the Custodian was given the power and authority to take any action it deemed reasonable and for the benefit of the
Company and its shareholders. The Custodian is now in the process of meeting all of the requirements set forth in the Court
Order and filing a motion to terminate its services. Upon granting the motion, the Court will issue an Order acknowledging
that the Custodian has performed all of the duties that had been required of it and the management of the Company will revert exclusively
to the officers and directors appointed by the Custodian.
9
QUEST MANAGEMENT INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2018
Note 12
GOING CONCERN
The accompanying financial statements and notes
have been prepared assuming that the Company will continue as a going concern.
The Company had limited operations during the
period from October 12, 2014 (date of inception) to July 31, 2018 with a net loss of $52,574. The Company’s ability to continue
as a going concern is dependent upon the Company’s ability to generate sufficient revenues to operate profitably or raise
additional capital through debt financing and/or through sales of common stock.
Management has funded operations of the Company
through the proceeds from its offering pursuant to a Registration Statement on Form S-1, private placements of restricted securities
or the issuance of stock in lieu of cash for payment of services until such a time as profitable operation are achieved. There
are no written agreements in place for such funding or issuance of securities and there can be no assurance that such will be available
in the future. Management believes that this plan provides an opportunity for the Company to continue as a going concern.
The failure to achieve the necessary levels
of profitability or obtaining additional funding would be detrimental to the Company.
Note 13
SUBSEQUENT EVENTS
The Company has evaluated events
subsequent through the date these financial statements have been issued on July 13, 2018 and the date of filing on February 7,
2020 to assess the need for potential recognition or disclosure in this report. Such events were evaluated through the date these
financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent event it was
determined that no subsequent events occurred that require recognition or disclosure in the financial statements.
10