The accompanying notes are an integral
part of these consolidated condensed financial statements.
The accompanying notes are an integral
part of these consolidated condensed financial statements.
The accompanying notes are an integral
part of these consolidated condensed financial statements.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
DECEMBER 31, 2016
(UNAUDITED)
NOTE 1 – ORGANIZATION
Current Operations and Background
Smartag International, Inc., a Nevada corporation
(“Smartag,” “Company,” “we,” “us,” or “our”), was formed as Theca Corporation
on March 24, 1999 in Colorado. The Company is in the development stage as defined in Financial Accounting Standards
Board Statement No. 7. On November 29, 2004, we merged with Art4Love, Inc., a Delaware corporation, into Art4Love, Inc. a Nevada
corporation. On February 109, 2009, Art4Love changed its name to Smartag International, Inc.
In November 2015, Smartag signed an agreement
with Bobby Tang Siu Ki and Yang Ye Cai, the co-owners and founders of Shenzhen Shen Nan Shun Technology Co. Ltd (“SSNST”),
a company based in Shenzhen, China which is involved in e-commerce trading on e-Bay, Amazon and Alipay platforms. Using the expertise
of SSNST, Smartag will develop the business of e-Commerce trading, procurement, collection and distribution through a new joint
venture company in Hong Kong.
NOTE 2 – Basis of Presentation
and Significant of Accounting Policies
Basis of Presentation
and Principles of Consolidation
— The unaudited consolidated condensed interim financial statements have
been prepared have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of Smartag
International, Inc. and its subsidiary, Essential Beverage Corporation. The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present
the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial
statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted
pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements
and notes for the year ended September 30, 2016 included in our Annual Report on Form 10-K. The results of the three month periods
ended December 31, 2016 are not necessarily indicative of the results to be expected for the full year ending September 30, 2017.
Going Concern
-
The accompanying
consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate
continuation of the company as a going concern. However, we have an accumulated deficit of $3,161,223 as of December 31, 2016.
Our total liabilities exceeded its total assets as of December 31, 2016. In view of the matters described above, recoverability
of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon our continued operations,
which in turn is dependent upon our ability to raise additional capital, and obtain financing. The consolidated 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 be necessary should we be unable to continue as a going concern.
Use of Estimates
—
The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United
States of America 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 consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
— The Company considers investments with original maturities of 90 days or less to be cash equivalents.
Accounts Receivable -
Accounts
receivable are carried at their estimated collectible amounts. Trade accounts receivable are periodically evaluated for collectability
based on past credit history with customers and their current financial condition. The Company has no allowance for doubtful accounts
as of December 31, 2016 and September 30, 2016.
Revenue Recognition
-
The Company recognizes revenue in accordance with ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must
be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery of product has met the
criteria established in the arrangement or services rendered; (3) the fee is fixed and determinable; and (4) collectability is
reasonably assured. This occurs when the products or services are completed in accordance with the contracts we have with clients.
In connection with our products and services arrangements, when we are paid in advance, these amounts are classified as deferred
revenue and amortized over the term of the agreement. The Company currently receives its revenue from commissions on selling
products for Vander, a related party.
The Company evaluates the Emerging Issue Task Force (EITF) number 99-19, "Reporting
Revenue Gross as a Principal Versus Net as an Agent,” which sets forth a number of guidelines for the correct treatment of
revenue. We currently treat the related party revenue on a net basis.
Income Taxes
— The
Company records income taxes in accordance with the provisions of the Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” The standard requires,
among other provisions, an asset and liability approach to recognize deferred tax liabilities and assets for the expected future
tax consequences of temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities. Valuation
allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.
Stock-Based Compensation
— The Company records transactions under share based payment arrangements in accordance with the provisions of the FASB ASC
Topic 718, “Share Based Payment Arrangements”. The standard requires recognition of the cost of employee
services received in exchange for an award of equity instruments in the consolidated financial statements over the period the employee
is required to perform the services in exchange for the award. The standard also requires measurement of the cost of employee services
received in exchange for an award. The Company is using the modified prospective method allowed under this standard. Accordingly,
upon adoption, prior period amounts have not been restated. Under this application, the Company recorded the cumulative effect
of compensation expense for the unvested portion of previously granted awards that remain outstanding at the date of adoption and
recorded compensation expense for all awards granted after the date of adoption.
The standard provides that income tax
effects of share-based payments are recognized in the consolidated financial statements for those awards that will normally result
in tax deduction under existing law. Under current U.S. federal tax law, the Company would receive a compensation expense deduction
related to non-qualified stock options only when those options are exercised and vested shares are received. Accordingly, the financial
statement recognition of compensation cost for non-qualified stock options creates a deductible temporary difference which results
in a deferred tax asset and a corresponding deferred tax benefit in the income statement. The Company does not recognize a tax
benefit for compensation expense related to incentive stock options unless the underlying shares are disposed in a disqualifying
disposition.
Net Loss Per Share
—
The Company computes net loss per share in accordance with FASB ASC Topic 260, “Earnings per Share,” Under the provisions
of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of shares of common stock outstanding during the period. Common equivalent shares
related to stock options and warrants have been excluded from the computation of basic and diluted earnings per share because their
effect is anti-dilutive.
Concentration of Credit Risk
— Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash. The
Company maintains its cash with high credit quality financial institutions; at times, such balances with any one financial institution
may exceed FDIC insured limits.
Financial Instruments
— Our financial instruments consist of cash, accounts payable, and notes payable. The carrying values of cash,
accounts payable, and notes payable are representative of their fair values due to their short-term maturities.
Marketable Securities
—
The Company classifies its marketable equity securities as available-for-sale and carries them at fair market value, with the unrealized
gains and losses included in the determination of comprehensive income and reported in stockholders’ equity. Losses that
the Company believes are other-than-temporary are realized in the period that the determination is made. As of December 31, 2016
and September 30, 2016, the Company had $25,000 in unrealized losses. None of the investments have been hedged in any manner.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting
Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending revenue recognition guidance
and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty
of revenue and cash flows arising from contracts with customers. In August 2015, the FASB deferred the effective date of the revenue
recognition guidance to reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods
beginning after December 15, 2016. We have adopted guidance and believe it has not had a material impact on the Company’s
financial statements.
In August 2014, the FASB issued
ASU No. 2014-15, “Presentation of Financial Statements— Going Concern (Subtopic 205-40), Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going Concern”. Continuation of a reporting entity as a going concern is
presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation
of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Currently, there
is no guidance under U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an
entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update
provide that guidance. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The
amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding
upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of
the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles
for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated
as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial
doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are
issued (or available to be issued). For the period ended December 31, 2015, management evaluated the Company’s ability to
continue as a going concern and concluded that substantial doubt has not been alleviated about the Company’s ability to continue
as a going concern. While the Company continues to explore further significant sources of financing, management’s assessment
was based on the uncertainty related to the amount and nature of such financing over the next twelve months. We have adopted guidance
and believe it has not had a material impact on the Company’s financial statements.
In November 2015, the FASB issued
an ASU amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current
on the consolidated balance sheet. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption
permitted. The ASU may be adopted either prospectively or retrospectively. We have adopted guidance and believe it has not had
a material impact on the Company’s financial statements.
In January 2016, the FASB issued
a new standard to amend certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most
prominent among the amendments is the requirement for changes in the fair value of our equity investments, with certain exceptions,
to be recognized through net income rather than other comprehensive income (“OCI”). The new standard will be effective
for us beginning July 1, 2018. The application of the amendments will result in a cumulative-effect adjustment to our consolidated
balance sheets as of the effective date. We are currently evaluating the impact of this standard on our consolidated financial
statements.
In February 2016, the FASB issued
a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of
lease assets and lease liabilities on the balance sheet. Most prominent among the amendments is the recognition of assets and liabilities
by lessees for those leases classified as operating leases under previous U.S. GAAP. Under the new standard, disclosures are required
to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising
from leases. We will be required to recognize and measure leases at the beginning of the earliest period presented using a modified
retrospective approach. The new standard will be effective for us beginning July 1, 2019, with early adoption permitted. We
are currently evaluating the impact of this standard on our consolidated financial statements.
In February 2016, the FASB issued
ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires
lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU
are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application
is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into
after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating
the impact of this new standard on its consolidated financial statements.
In June 2016, the Financial Accounting
Standards Board (“FASB”) issued a new standard to replace the incurred loss impairment methodology in current U.S.
GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable
information to inform credit loss estimates. For trade and other receivables, loans, and other financial instruments, we will be
required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects
losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance
for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard will be effective
for us beginning July 1, 2020, with early adoption permitted beginning July 1, 2019. Application of the amendments is
through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of
this standard on our consolidated financial statements.
NOTE 3 –Related Party
During the year ended September 30,
2015, the Company received $810,000 advances from related. $730,000 was from a related entity to a former director and $80,000
was received from Chee Song Yap, the Director of the Company. The two parties entered into 0% interest notes which are to be repaid
by September 30, 2017.
During the year ended September 30,
2016, the Company is $3,900 owed from SSNST, a related party, which was a temporary overpayment and expected to be repaid as soon
as practical. Additionally, the Company received $75,000 from Lock Sen Yow under a 0% interest notes which are to be repaid by
September 30, 2017.
Secured Note
On March 17, 2009, we entered into a Secured
Revolving Promissory Note (the “Secured Note”) with Smartag Solutions Bhd, a Malaysian corporation, the majority stockholder
of the Company. Under the terms of the Note, Smartag Solutions Bhd, agreed to advance to the Company, from time to time
and at the request of the Company, amounts up to an aggregate of $200,000 until September 30, 2014. All advances shall
be paid on or before September 30, 2017 and this advance has an interest rate of 0% per annum. On August 19, 2016, Smartag Solutions
Bhd transferred the balance of the Secured Note to Lock Sen Yow as severance employment package from Smartag Solutions Bhd. As
of December 31, 2016, the balance was $192,457.
Loan Agreement
On September 19, 2013, we entered into
a Loan Agreement (“Loan Agreement”) with SSB. Under the terms of the agreement, SSB loaned the Company $200,000 (“Loan”).
On August 15, 2014, the SSB increased the Loan to $300,000. The Loan shall be repaid on or before September 30, 2017 and this loan
has an interest rate of 0% interest per annum. During the nine months ended June 30, 2015, the Company repaid $100,000 of the Loan.
During the year ended September 30, 2016, the Company repaid $50,000 of the Loan. On August 19, 2016, Smartag Solutions Bhd transferred
the balance of the Loan to Lock Sen Yow.
The total amount owed as of December
31, 2106 and September 30, 2016, was $1,227,457. We recorded imputed interest of $37,560 for the year ended September 30, 2016
from all the aforementioned related party debt. During the quarter ended December 31, 2016, we recorded imputed interest of $7,763
from all the aforementioned related party debt.
NOTE 4 – Stockholder’s Deficit
As of September 30, 2016, there were
authorized 500,000,000 shares of common stock, par value $0.001 per share and 25,000,000 shares of preferred stock, par value $0.001
per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the
stockholder of the corporation is sought.
There are currently 31,637,151 shares
of common stock issued and outstanding and zero shares of preferred stock issued and outstanding.
ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this
Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended September 30, 2016
and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion
and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere
in this Form 10-Q.
The following discussion contains
certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future
performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking
statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We
strongly encourage investors to carefully read the factors described in our Annual Report on Form 10-K for the year ended September
30, 2016 in the section entitled “Risk Factors” for a description of certain risks that could, among other things,
cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking
statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited
Financial Statements and notes thereto that appear elsewhere in this report.
Overview
Smartag International,
Inc. plans to focus on leveraging existing established players in the e-Commerce business overseas to bring their expertise to
North America and add value with traceability to increase the overall efficiency and reduce logistics costs. Our tracking supply
chain and logistics system are in currently in place. Our next focus is to increase the volume of e-Commerce transactions.
In November 2015, Smartag signed an agreement
with Bobby Tang Siu Ki and Yang Ye Cai, the co-owners and founders of Shenzhen Shen Nan Shun Technology Co. Ltd (“SSNST”),
a company based in Shenzhen, China which is involved in e-commerce trading on e-Bay, Amazon and Alipay platforms. SSNST has been
in the business of e-Commerce for the past 5 years and have consistently been one of the top suppliers of a range of products
including electronic items and toys on eBay and Amazon. As a result of this agreement, Smartag will be able to use its inherent
technology and logistics presence in the United States to offer additional products such as LED lighting, outdoor sports equipment,
beauty products and cosmetics, vehicles accessories and bicycles on the well establish e-Commerce platforms. The agreement with
HongKong Vander Trade Limited, also controlled by Bobby Tang Siu Ki and Yang Ye Cai, shall enable Smartag to enter into the e-Commerce
business which eventually shall combine the usage of its own track & trace solutions to increase efficiency of the supply
chain for online purchases whilst at the same time enable SSNST to further increase its range of products.
Results of Operations
Comparison of the three months
ended December 31, 2016 and 2015
Revenues
For the three months ended December
31, 2016 and 2015, the Company recorded revenue of $1,694 and $0 of respectively.
Cost of Sales
Cost of sales was $0 for the three months
ended December 31, 2016 and 2015.
Selling, General and Administrative
Expenses
Selling, general and administrative
expenses were $13,859 and $10,325 for the three months ended December 31, 2016 and 2015, respectively. The increase of $3,534 was
due primarily to professional fees.
Liquidity and Capital Resources
The following is a summary of the Company's
cash flows provided by (used in) operating, investing, and financing activities for the three months ended December 31, 2016 and
2015:
|
|
Three Months Ended December 31,
|
|
|
2016
|
|
2015
|
Operating Activities
|
|
$
|
(14,276
|
)
|
|
$
|
(92,701
|
)
|
Investing Activities
|
|
|
—
|
|
|
|
—
|
|
Financing Activities
|
|
|
—
|
|
|
|
31,439
|
|
Net Effect on Cash
|
|
$
|
(14,276
|
)
|
|
$
|
(61,262
|
)
|
In the three months ending December
31, 2016, the Company incurred a net loss of $19,928, an increase in deposits of $2,311 and a increase in accounts payable of $200.
In the three months ending December
31, 2015, the Company incurred a net loss of $54,549, an increase in inventory of $11,284 and a decrease in accounts payable of
$26,868.
In the three months ending December
31, 2015, the Company repaid $50,000 of its note payable from a related party and received advances of $81,439 from related parties.
Going Concern Uncertainties
We have sufficient working capital currently
and may secure additional working capital through loans or sales of common stock. Nevertheless our auditor has issued a "going
concern" qualification as part of his opinion in the Audit Report for the year ended September 30, 2016, and our unaudited
financial statements for the quarter ended December 31, 2016 include a "going concern" footnote contingent on us to be
able to raise working capital to grow our operations.
Commitments and Contractual Obligations
During the year ended September 30,
2015, the Company received $810,000 advances from related parties. $730,000 was from a related entity to a former director and
$80,000 was received from Chee Song Yap, a Director of the Company. The two parties entered into 0% interest notes which are to
be repaid by September 30, 2017.
Off-Balance Sheet Arrangements
We have not entered into any off-balance
sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would
be considered material to investors.
Recently Issued Accounting Pronouncements
Refer to the notes to the financial
statements for a complete description of recent accounting standards which we have not yet been required to implement and may be
applicable to our operation, as well as those significant accounting standards that have been adopted during the current year.
Critical Accounting Policies
Our financial statements were prepared
in conformity with U.S. generally accepted accounting principles. As such, management is required to make certain estimates, judgments
and assumptions that they believe are reasonable based upon the information available. These estimates and assumptions
affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income
and expense during the periods presented. The significant accounting policies which management believes are the most critical to
aid in fully understanding and evaluating our reported financial results include the following:
Revenue Recognition -
The Company recognizes revenue in accordance
with ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1)
persuasive evidence of an arrangement exists; (2) delivery of product has met the criteria established in the arrangement or services
rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. This occurs when the products or
services are completed in accordance with the contracts we have with clients. In connection with our products and services arrangements,
when we are paid in advance, these amounts are classified as deferred revenue and amortized over the term of the agreement.
Item 3 Quantitative and Qualitative
Disclosures About Market Risk.
As a "smaller reporting company"
as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item
Item 4 Controls and Procedures.
Evaluation of Disclosure
Controls and Procedures
:
We conducted an evaluation under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. The term "disclosure controls and procedures", as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), means controls and other procedures of a
company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures also include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under
the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2016, that our disclosure
controls and procedures are effective to a reasonable assurance level of achieving such objectives. However, it should be
noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions,
regardless of how remote.
Management's Report on
Internal Control Over Financial Reporting
:
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The
internal controls for the Company are provided by executive management's review and approval of all transactions. Our
internal control over financial reporting also includes those policies and procedures that:
-
pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
-
provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and
expenditures are being made only in accordance with the authorization of our management; and
-
provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect
on the financial statements.
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness
of the Company's internal control over financial reporting as of December 31, 2016. In making this assessment, management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated
Framework. Management's assessment included an evaluation of the design of our internal control over financial reporting
and testing of the operational effectiveness of these controls.
Based on this assessment, management
has concluded that as of December 31, 2016, our internal control over financial reporting was effective to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with U.S. generally accepted accounting principles.
This quarterly report does not
include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
Changes in Internal Control over
Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ending
December 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
PART II -- OTHER INFORMATION
Item 1. Legal
Proceedings.
To the best knowledge of our sole officer
and director, the Company is not a party to any legal proceeding or litigation.
Item 1A. Risk
Factors.
As a "smaller reporting company"
as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item. See the Company's
Annual Report on Form 10-K for the period ending September 30, 2016 which identifies and discloses certain risks and uncertainties
including, without limitation, those "Risk Factors" included in Item 1A of the Annual Report.
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults
Upon Senior Securities.
None.
Item 5. Other
Information.
None.
ITEM 6.
|
|
Exhibits
|
|
|
31
|
Certification of President pursuant to Exchange Act Rule 13a-14 and 15d-14.
|
|
|
|
|
|
|
32
|
Certification of the Company’s Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|