See accompanying notes, which are an integral part of these financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2020
(Unaudited)
Note 1 ORGANIZATION AND NATURE OF BUSINESS
Trend Innovations Holding Inc. is a holding company for innovative websites and mobile apps which are aimed to provide customization and convenience for its users. The Company is constantly working on completing relevant tasks in IT consulting and introducing artificial intelligence to regular users. We make our customers' businesses more visual, manageable and predictable, which ultimately leads to increased profitability.
Our principal office address is located at 44A Gedimino avenue, Vilnius, 01110, Lithuania.
Sale and Purchase of Ownership Interest Agreement
On June 28, 2019 Trend Innovations Holding Inc. (formerly FreeCook) a Nevada corporation (Buyer, Company), entered into a Sale and Purchase of Ownership Interest Agreement with ThyNews Tech LLC, a Wyoming corporation, (Thynews Tech or the Seller), wherein Trend Innovations Holding Inc. (formerly FreeCook) purchased 100% of the ownership of Thynews Tech.
Upon completion of the Agreement, Trend Innovations Holding Inc. (formerly FreeCook) agrees to deliver to Thynews Techs owners a cumulative total of one hundred thousand (100,000) restricted shares of Trend Innovations Holding Inc. treasury valued at One Dollar ($1.00) per share. The shares will be delivered to Thynews Tech within 60 days following the execution of the agreement. Additionally, Trend Innovations Holding Inc. shall provide to Thynews Techs owners, as consideration, a Promissory Note in the amount of One Hundred Thousand United States Dollars ($100,000 US).
Trend Innovations Holding Inc. acquires 100% of the ownership of duly and validly issued, fully paid and non-assessable ownership interest of ThyNews Tech LLC, including ThyNews Application.
Prior to the transaction, Trend Innovations Holding Inc. had 5,014,080 shares of common stock issued and outstanding. Upon the transaction, the additional 100,000 of Trend Innovations Holding Inc. common stock will be issued and outstanding. Upon the issuance of shares to Thynews, there will be 5,014,080 shares of common stock issued and outstanding.
On March 30, 2020 Trend Innovations Holding Inc. (formerly FreeCook)., being represented by its President and Director, Natalija Tunevic, entered into Sale and Purchase of Ownership Interest Of 100% of Itnia Co. LLC, a Wyoming limited liability company which owns 100% of MB Lemalike Innovations, a Lithuanian IT consulting company with Mikhail Bukshpan. Upon completion of the Agreement, Trend Innovations Holding Inc. agrees to deliver to Itnia Co. LLCs owners a cumulative total of one hundred fifty thousand (150,000) restricted shares of Trend Innovations Holding Inc. treasury valued at One Dollar ($1.00) per share. The shares will be delivered to Mr. Bukshpan within the mutually agreed upon time frame following the execution of the agreement. Additionally, Trend Innovations Holding Inc. shall provide to Mr. Bukshpan, as consideration, a Promissory Note in the amount of One Hundred and Fifty Thousand United States Dollars ($150,000 US).
MB Lemalike Innovations
MB Lemalike Innovations, formerly known as MB Repia, was incorporated in Lithuania on October 9, 2017. The company was originally engaged in providing business and other consulting services for the companies intending to seek for new markets outside Lithuania. Recently the company has also been developing in the IT direction. In providing consultations, Lemalike Innovations helped enterprises in the Baltic countries looking for export opportunities. Lemalike Innovations is currently working to enter the area of implementing and consulting on the matter of Artificial Intelligence technologies.
On January 31, 2020, Mr. Mikhail Bukshpan became the director of the entity. On March 10, 2020, he decided to merge Lemalike Innovations into his limited liability company, Itnia Co. LLC. Upon that, on March 30, 2020, Itnia Co. LLC merged into Trend Innovations Holding Inc. and became a part of the holding.
The companys registered office is located at Sv. Stepono g. 27D-2, LT-01315 Vilnius, Lithuania.
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Note 2 GOING CONCERN
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States (GAAP), which contemplate continuation of the Company as a going concern. The Company has generated losses from November 6, 2017 (inception) through June 30, 2020. The Company currently has not completed its efforts to establish a stabilized source of revenue sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Companys ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of managements efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
Note 3 SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of presentation
The accompanying condensed financial statements have been prepared by Trend Innovations Holding Inc. in accordance with GAAP without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows as of June 30, 2020 and for the related periods presented.
The results for the three months ended June 30, 2020, are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the year ended March 31, 2019, filed with the Securities and Exchange Commission.
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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Application Development Costs
The Company follows the provisions of ASC 985, Software, which requires that all costs relating to the purchase or internal development and production of software products to be sold, leased or otherwise marketed, be expensed in the period incurred unless the requirements for technological feasibility have been established. The Company capitalizes all eligible software costs incurred once technological feasibility is established. The Company amortizes these costs using the straight-line method over a period of three years, which is the remaining estimated economic life of the costs. At the end of each reporting period, the Company writes down any excess of the unamortized balance over the net realizable value.
Depreciation, Amortization, and Capitalization
The Company records depreciation and amortization when appropriate using straight-line method over the estimated useful life of the assets. We estimate that the useful life of equipment is 5 years and website development is 1 year. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriate accounts and the resultant gain or loss is included in net income.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company had $12,825 of cash as of June 30, 2020.
Prepaid Expenses
Prepaid Expenses are recorded at fair market value.
FreeCook terminated the lease agreement dated January 26, 2018 on April 24, 2018. The purpose of it was to decrease the company's expenses of office maintenance. Under the new Lease Agreement dated April 24, 2018, the Company will pay to the Landlord $80 every month for the rent term commencing on May 1, 2019, and ending December 31, 2020. The Company had $82 in prepaid rent as of June 30, 2020.
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The Companys subsidiary Itnia Co. LLC had $59,607 in prepaid goods for resale as of June 30, 2020.
Lease
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in the consolidated balance sheets.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, The Company generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Website Development Costs
The Company amortizes these costs using the straight-line method over a period of one years, which is the remaining estimated economic life of the costs. At the end of each reporting period, the Company writes down any excess of the unamortized balance over the net realizable value.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Revenue Recognition
The Company adopted Accounting Standards Codification (ASC) 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entitys contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.
The Company has assessed the impact of the guidance by performing the following five steps analysis:
Step 1: Identify the contract
Step 2: Identify the performance obligations
Step 3: Determine the transaction price
Step 4: Allocate the transaction price
Step 5: Recognize revenue
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.
Revenue from supplies of consulting services is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the services are collected by the customer at the Companys office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon managements best estimates and historical experience and are provided for in the same period as the related revenues are recorded. Based on limited operating history, management estimates that there was no sales return for the period reported.
The Company derives its revenue from direct sales to individuals and business companies. Generally, the Company recognizes revenue when services are sold and accepted by the customers and there are no continuing obligations to the customer.
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Basic Income (Loss) Per Share
The Company computes income (loss) per share in accordance with FASB ASC 260 Earnings per Share. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the period from November 6, 2017 (inception) through June 30, 2020, there were no potentially dilutive debt or equity instruments issued or outstanding.
Comprehensive Income
Comprehensive income is defined as all changes in stockholders equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. For the period from November 6, 2017 (inception) through June 30, 2020, were no differences between our comprehensive loss and net loss.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.
In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This guidance changes how companies account for certain aspects of share-based payments to employees. Among other things, under the new guidance, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in-capital (APIC), but will instead record such items as income tax expense or benefit in the income statement, and APIC pools will be eliminated. Companies will apply this guidance prospectively. Another component of the new guidance allows companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards, whereby forfeitures can be estimated, as required today, or recognized when they occur. If elected, the change to recognize forfeitures when they occur needs to be adopted using a modified retrospective approach. The amendment is effective for public entities for fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures.
Note 4 FIXED ASSETS
As of June 30, 2020, our fixed assets comprised of $1,500 in equipment and $32,268 in vehicles. Depreciation expense of equipment was $5,255 as of June 30, 2020.
Note 5 INTANGIBLE ASSETS
As of June 30, 2020, the total amount of website development was $8,361. Depreciation expense of website development was $8,361 as of June 30, 2020.
As of June 30, 2020, the unamortized balance of the costs related to the purchase or internal development and production of software to be sold, leased, or otherwise marketed was $97,400, which is deemed to be equal to the net realizable value, and is included within Application Development Costs in the balance sheet. Depreciation expense of application development was $32,467 as of June 30, 2020.
As of June 30, 2020, the total amount of Capitalized Application Development Costs was $64,933.
In December 2019 and March 2020 the Company purchased an RSS Database. As of June 30, 2020, the total amount of RSS Database was $149,000. Depreciation expense of RSS Database was $7,500 as of June 30, 2020.
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Note 6 RELATED PARTY TRANSACTIONS
During the period from November 6, 2017 (inception) through June 30, 2020, our sole director has loaned to the Company $108,313. This loan is unsecured, non-interest bearing and due on demand.
The Companys subsidiary Thynews Tech LLC received $124,590 as advances from related parties as of June 30, 2020. The advances are interest-free and due on demand.
As of June 30, 2020, the loan receivable from related parties of the Companys subsidiary Itnia Co. LLC was $(4,972). The advances are interest-free and due on demand.
Note 7 COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On December 27, 2017 the Company issued 2,000,000 shares of common stock to a director for cash proceeds of $2,000 at $0.001 per share and on January 16, 2018 the Company issued 2,000,000 shares of common stock to a director for cash proceeds of $2,000 at $0.001 per share.
In August 2018 the Company issued 1,014,080 shares of common stock for cash proceeds of $25,352.
On July 22, 2019, the Board of Directors resolved to perform a cancellation procedure of 3,950,000 restricted shares of the Company. As a result of the cancellation, the number of restricted shares of the Company shall be adjusted from 4,000,000 shares to 50,000 shares (fifty thousand shares).
On July 22, 2019, the Companys Board of Directors, along with the vote of the majority shareholder of the Company resolved to effect a forward split of the outstanding common stock, $0.001 par value, on a one (1) for twenty (20) basis (Forward Stock Split); the number of outstanding Common Stock will increase from 1,164,080 to 23,281,600 (Post Split Shares) of which 3,000,000 will be restricted/control shares.
There were 23,281,600 shares of common stock issued and outstanding as of June 30, 2020.
Note 8 COMMITMENTS AND CONTINGENCIES
The Company has entered into rental agreement from May 1, 2018, to August 31, 2019, and prolonged for 8 months from September 1, 2019 to April 30, 2020. The rental agreement was prolonged from May 1, 2020 to December 31, 2020.
As of June 30, 2020, the future minimum lease payments under this operating lease were: