The accompanying notes
are an integral part of these financial statements.
The accompanying
notes are an integral part of these financial statements.
The accompanying notes
are an integral part of these financial statements.
Notes to the Financial Statements
December 31, 2016 and 2015
NOTE 1 – ORGANIZATION
Prestige Capital Corporation (the “Company”) was organized
under the laws of the State of Utah on February 7, 1986 under the name of Hood Ventures, Inc. On December 31, 1998, the name was
changed to Prestige Capital Corporation. On December 31, 1998, Hood Ventures, Inc. of Utah merged with Prestige Capital Corporation,
a Nevada Corporation, leaving the Nevada Corporation as the surviving company. After a period of dormancy, the Company experienced
a significant change in shareholder ownership on June 21, 2006 and is considered to be reactivated as of that date and is currently
seeking business opportunities or potential business acquisitions. The Company currently has no revenue-generating activities.
The Company does not intend to pay dividends in the foreseeable future.
NOTE 2 – GOING CONCERN
The Company's financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as
a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and
to allow it to continue as a going concern. The Company has realized net losses since reactivation on June 21, 2006 totaling $454,748.
The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating
losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need,
among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital
from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing.
However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources
of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are prepared on the basis
of accounting principles generally accepted in the United States of America.
Use of Estimates
The preparation of consolidated 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 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 all highly liquid instruments with maturity
of three months or less at the time of issuance to be cash equivalents.
Prestige Capital Corporation
Notes to the Financial Statements
December 31, 2016 and 2015
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –
continued
Concentration of Credit Risk
Financial instruments, which potentially subject us to concentrations
of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial
institutions located in the United States. The Company does not maintain amounts on deposit with a financial institution
that are in excess of the federally insured limit of $250,000. The Company had $0 of cash balances in excess of federally insured
limits at December 31, 2016 and 2015.
Fair Value of Financial Instruments
The carrying amounts reported on the balance sheets for accounts
payable and accrued interest approximate fair value because of the immediate or short-term maturity of these financial instruments.
The carrying amounts reported for notes payable approximate fair value because the underlying instruments are at interest
rates, which approximate current market rates.
Stock-Based Compensation
The Company follows the provisions of ASC 718 which requires all
share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on
their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock based compensation.
Equity instruments issued to non-employees for goods or services
are accounted for at fair value and are marked to market until service is completed or a performance commitment date is reached,
whichever is earlier.
Income Taxes
The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of
assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
In July, 2006, the FASB issued ASC 740, Accounting for Uncertainty
in Income Taxes, which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a return. ASC
740 provides guidance on the measurement, recognition, classification and disclosure of tax positions, along with accounting for
the related interest and penalties. ASC 740 became effective as of January 1, 2007 and had no impact on the Company’s financial
statements.
The charge for taxation is based on the results for the year as
adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Basic and Diluted Net income (Loss) per Share
The Company computes net income (loss) per share in accordance with
ASC 260 which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic
EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during
the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise
of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
Prestige Capital Corporation
Notes to the Financial Statements
December 31, 2016 and 2015
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –
continued
For the years ended December 31, 2016 and 2015, all of the Company’s
potentially dilutive securities (warrants, options, and convertible preferred stock) were excluded from the computation of diluted
earnings per share as they were anti-dilutive.
NOTE 4 – RELATED PARTY TRANSACTIONS
Shareholder Loans – A shareholder and prior officer of the
Company has covered corporate expenses and loaned cash to the Company to $93,962 as of December 31, 2016 and December 31, 2015.
These loans were sold to third parties in 2011. No amounts were repaid to the note holders. As of December 31,
2016 and December 31, 2015, the amount due to the shareholders for accrued interest was $57,700 and $50,183. The interest expense
on the loans for the year ended December 31, 2016 was $7,517. The above-mentioned shareholder loans are due on demand and had interest
imputed at an annual rate of 8%.
In prior years the Company borrowed $35,500 from a related party.
The notes are unsecured, due on demand, and bear interest at 8% per annum. Accrued interest through December 31, 2016 and December
31, 2015 was $13,752 and $10,912, respectively. No payments on principle or interest have been made to date. Interest expense for
the year ended December 31, 2016 was $2,840.
As of the year ended December 31, 2016 and 2015, the Company incurred
$6,900 and $8,200, respectively in professional expenses to a related party.
NOTE 5 – EQUITY
On March 4, 2011, the Company issued 30,000 shares of common stock
valued at $15,600 to three board members for services provided. The shares were valued based on the market price of the stock on
the date of issuance.
On August 5, 2011, the Company issued 100,000 shares of common stock
valued at $20,000 as payment to an unrelated party for investment banking services rendered. The shares were valued based on the
market price of the stock on the date of issuance.
On August 15, 2011, the Company issued 100,000 shares of common
stock valued at $20,000 as payment to an unrelated party for investor relations and management services rendered. The shares were
valued based on the market price of the stock on the date of issuance.
NOTE 6 – INCOME TAXES
At December 31, 2016, the Company has available unused net operating
loss carryforwards of approximately $299,148, which may be applied against future taxable income and which expire in various years
from 2023 through 2035. Due to a substantial change in the Company’s ownership during June 2006, there will be an annual
limitation on the amount of previous net operating loss carryforwards that can be utilized.
The amount of and ultimate realization of the benefits from the
net operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings
of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the
realization of the net operating loss carryforwards, the Company has established a valuation allowance equal to the tax effect
of the net operating loss carryforwards and, therefore, no deferred tax asset has been recognized for the net operating loss
Prestige Capital Corporation
Notes to the Financial Statements
December 31, 2016 and 2015
NOTE 6 – INCOME TAXES – continued
carryforwards. The net deferred tax assets are approximately $44,782
and $40,857 as of December 31, 2016 and 2015, respectively, with an offsetting valuation allowance of the same amount resulting
in a change in the valuation allowance of approximately $4,015 during the year ended December 31, 2016.
Reconciliation between income taxes at the statutory rate and the
actual income tax provision for continuing operations is as follows:
|
|
2016
|
|
2015
|
Statutory rate (expense)
|
|
|
(15%)
|
|
|
|
(15%)
|
|
Tax effects of:
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
15%
|
|
|
|
15%
|
|
Reported provision for income taxes
|
|
|
0%
|
|
|
|
0%
|
|
NOTE 7 – RECENT PRONOUNCEMENT
On June 10, 2014, the Financial
Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic
915). Amongst other things, the amendments in this update removed the definition of development stage entity
from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US
GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present
inception-to-date information on the statements of income, cash flows and shareholders equity, (2) label the financial
statements as those of a development stage entity; (3) disclose a description of the development stage activities in
which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity
that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning
after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to
early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The
Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a
development stage entity and have not presented inception-to-date information on the respective financial statements.
NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS
On January 1, 2008 the Company adopted FASB ASC 820-10-50,
“Fair
Value Measurements”
. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures
of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted)
for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices
for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly
or indirectly, for substantially the full term of the financial instrument.
Level 3 inputs to the valuation methodology are unobservable and
significant to the fair measurement.
Prestige Capital Corporation
Notes to the Financial Statements
December 31, 2016 and 2015
NOTE 9 – SUBSEQUENT EVENTS
The Company has evaluated events occurring after the date of the
accompanying balance sheets through the date the financial statements were available to be issued and did not identify any material
subsequent events requiring adjustment to the accompanying financial statements.