Notes to Financial Statements
March 31, 2020
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE OF
BUSINESS
Judo Capital Corp. (“Judo”) was
incorporated in the State of Delaware on November 16, 2005 under the name Blue Ribbon Pyrocool, Inc. (“Blue Ribbon”).
Blue Ribbon changed its name to Classic Rules Judo Championships, Inc. on July 15, 2008 then to Judo Capital Corp on February 15,
2017. the Company formed a subsidiary in the State of Connecticut on August 13, 2008 named Classic Rules World Judo Championships,
Inc. to develop an annual judo championship tournament. Collectively the entities are referred to as “the Company”.
On June 2, 2014, the Company ceased its principal activities of hosting and sponsoring judo tournaments and dissolved Classic Rules
World Judo Championships, Inc.. The Company had planned to operate in real estate investment activities focused in the New York
City metropolitan area. On February 28, 2018, the Company ceased its plans to operate in the real estate investment activities.
The Company is seeking to consummate a merger or acquisition.
NOTE 2 – GOING CONCERN
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As of March 31, 2020, the Company had a working capital deficit of $86,590 and
accumulated deficit of $437,737. These circumstances raise substantial doubt about the Company’s ability to continue as a
going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
The Company needs to raise additional capital
in order to fully develop its business plan. Failure to raise adequate capital and generate adequate revenues could result in the
Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating
expenses and generate adequate revenues, there can be no assurance that the revenue will be sufficient to enable it to develop
business to a level where it will generate profits and adequate cash flows from operations.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited interim financial
statements as of the three months ended March 31, 2020 and March 31, 2019 have been prepared in accordance with accounting principles
generally accepted for interim financial statement presentation and in accordance with the instructions to Form 10-Q. Accordingly,
they do not include all the information and footnotes required by accounting principles generally accepted in the United States
of America for complete financial statement presentation. They should be read in conjunction with the Company’s annual report
on Form 10-K for the year ended December 31, 2019. In the opinion of management, the financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to fairly present the financial position as of March 31, 2020 and the
results of operations for the three months ended March 31, 2020 and 2019 and cash flows for the three months ended March 31, 2020
and 2019. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to
be expected for the full year.
Estimates
The preparation of financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes
may differ materially from the estimates as additional information becomes known.
Reclassifications
Certain reclassifications have been made to
the presentation for the three months ended March 31, 2019 to make them comparable to the current years presentation.
Cash and Cash Equivalents
Cash and cash equivalents includes highly liquid
investments with original maturities of three months or less. On occasion, the Company has amounts deposited with financial
institutions in excess of federally insured limits.
Judo Capital Corp.
Notes to Financial Statements
March 31, 2020
(Unaudited)
Fair Value of Financial Instruments
The Company measures certain financial assets
and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.
The carrying value of cash and cash equivalents and accounts payable approximate their fair value because of the short-term nature
of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest
or credit risks arising from these financial instruments.
Income Taxes
Deferred income tax assets and liabilities
are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences
between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted
tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than
not that these deferred income tax assets will be realized.
The Company recognizes a tax benefit from an
uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities,
based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are
measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of
the previous years ended December 31, 2019 and 2018, the Company has not recorded any unrecognized tax benefits.
Segment Reporting
The Company’s business currently operates
in one segment.
Net Loss per Share
The computation of basic net loss per common
share is based on the weighted average number of shares that were outstanding during the year. The computation of diluted net loss
per common share is based on the weighted average number of shares used in the basic net loss per share calculation plus the number
of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury
stock method. See Note 4. Net Loss Per Share.
Recently Issued Accounting Pronouncements
The Company reviews new accounting standards
as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal
year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company
does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position,
results of operations, or cash flows.
Related Parties
The Company follows subtopic 850-10 of the
FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the related parties
include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent
the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted
for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts
that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company;
(f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate
interests; and (g) Other parties that can significantly influence the management or operating policies of the transacting parties
or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
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Judo Capital Corp.
Notes to Financial Statements
March 31, 2020
(Unaudited)
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Related Parties (Continued)
The financial statements include disclosures
of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the
ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements
is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description
of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which
income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions
on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented
and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due
from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner
of settlement.
NOTE 4 – STOCKHOLDERS’ DEFICIT
Preferred Stock
The Company is authorized to issue 50,000,000
shares of preferred stock with a par value of $0.001 per share. There were no shares of preferred stock issued or outstanding at
March 31, 2020 or December 31, 2019.
Common Stock
The Company is authorized to issue 100,000,000
shares of common stock with a par value of $0.001 per share. There were 69,322,426 shares issued and outstanding at December 31,
2019 and March 31, 2020.
NOTE 5 – RELATED PARTY TRANSACTIONS AND NOTE PAYABLE
In 2017, the Company received loans from a
related party totaling $30,000. The loans payable bear interest at an annual rate of 10% interest and are due on demand. There
was $30,000 due as principal and $8,156 in interest for these notes due to a related party as of December 31, 2019. There was $30,000
due as principal and $8,904 in interest for these notes due to a related party as of March 31, 2020.
In 2018, the Company received loans from a
related party totaling $9,000. In 2019, the Company received loans from a related party totaling 7,050. These loans are non-interest
bearing and due on demand. There was $16,050 due as non-interest bearing loans to a related party as of December 31, 2019 and March
31, 2020, respectively.
In 2019, the Company received advances from
a related party totaling $16,885. The advances are non-interest bearing and due on demand. In the three months ended March 31,
2020, the Company received advances from a related party totaling $1,500. The advances are non-interest bearing and due on demand.
There was $16,885 in accounts payable - related party as of December 31, 2019 and $18,385 in accounts payable - related party as
of March 31, 2020.
The Company currently operates out of an office
of a related party free of rent.
NOTE 6 – SUBSEQUENT EVENTS
The Company had evaluated all events occurring
subsequent to the balance sheet date and determined there are no additional events to disclose.
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