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EX-32 - CERTIFICATION - Blake Insomnia Therapeutics, Inc.bkit_ex32.htm
EX-31 - CERTIFICATION - Blake Insomnia Therapeutics, Inc.bkit_ex31.htm

 

U. S. SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, D.C. 20549

 

Form 10-K

 

(Mark One)

 

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the year ended August 31, 2014

 

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Book It Local, Inc.

(Name of small business issuer in its charter)

 

Nevada

 

3949

 

 46-0780380

(State or other Employer jurisdiction

of Identification incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Number)

 

Miguel Bustos Vergara 

244, 5th Avenue, Suite A-154 

New York, N.Y. 10001 

USA

 

Phone 1-646-513-2776

 

 (Address and telephone number of registrant's principal executive offices and principal place of business)

 

Miguel Bustos Vergara 

244, 5th Avenue, Suite A-154 

New York, N.Y. 10001 

USA

 

Phone 1-646-513-2776

 

 (Name, address, and telephone number of agent for service)

 

Please send a copy of all correspondence to: 

Jillian Ivey Sidoti, Esq 

PHONE 323-799-1342 

jillian@jilliansidoti.com

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ¨

 

Accelerated filer ¨

 

Non-accelerated filer ¨

 

Smaller reporting company x

       

(Do not check if a smaller reporting company)

   

  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

 

At December 12, 2014, there were 31,597,572 shares outstanding of the registrant’s common stock.

 

 

 

 

PART I

 

FORWARD-LOOKING STATEMENTS

 

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Registrant to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Registrant’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Registrant. Although the Registrant believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Registrant or any other person that the objectives and plans of the Registrant will be achieved.

 

 
2

 

Item 1. Description of Business

 

Book it Local, Inc. was originally incorporated in order to develop its online booking system to help consumers find and hire live entertainment for weddings, corporate events, private parties, nightclubs, fraternity functions, Bar Mitzvahs, grand openings, and other events. However, due to a lack of financing, the Company’s shareholders elected to sell their shares in private to transaction to new shareholders. On January 27, 2014, certain shareholders, via a seller’s representative (the “Unrestricted Sellers”), entered into various Stock Purchase Agreements under which the Sellers sold all of their shares of the Company’s stock. Certain of those Stock Purchase Agreements are described below.

 

The Seller entered into a Stock Purchase Agreement (the “Calima Purchase Agreement”) with Calima Associates Ltd. (“Calima”), pursuant to which the Sellers agreed to sell to Calima 997,500 shares of Common Stock of the Company for a total purchase price of $25,000. The affiliate shareholders of the Company, G9 Holdings, LLC, GW Grace, LLC, Winchester Investments, LLC, and Joseph McMurry (our CEO) (“Affiliate Sellers”) also entered into a Stock Purchase Agreement with Glenbarry Holdings, Inc, Karada Ltd, Inc., Laurag Associates S.A. Barrow Associates Ltd., Canto Affiliates, Inc., Syrroco Holdings Ltd, and Euro Ventures S.A. (“Affiliate Purchasers”), pursuant to which the Affiliate Sellers agreed to sell to Affiliate Purchasers 9,600,072 shares of Common Stock of the Company for a total purchase price of $250,000. The Stock Purchase Agreement with Affiliate Purchasers and Calima Purchase Agreement are each referred to herein as a “Purchase Agreement.”

 

Under each Purchase Agreement, the Seller agreed to indemnify and hold the purchaser and the Company harmless from the breach by the Seller of any representations made by the Seller in that Purchase Agreement and certain liabilities and obligations of the Company related to the period prior to the closing of the purchase of the shares under that Purchase Agreement.

 

In connection with each Purchase Agreement, on January 28, 2014, Joseph McMurry, our Chief Executive Officer, Financial Officer, Secretary, and sole director, submitted his resignation from his positions with the Company. Mr. McMurry’s resignation as an officer of the Company is effective upon the consummation of each Purchase Agreement (the “Closing”), which is expected to take place on January 29, 2014 after the filing of this Information Statement with the SEC. Mr. McMurry’s resignation as a director of the Company will be effective ten days after the mailing of this Information Statement to stockholders of the Company (the “Effective Date”).

 

Also effective as of the Closing, Miguel Bustos Vergara was appointed as the President, Chief Executive Officer, Chief Financial Officer, Secretary, and director.

 

As of August 31, 2014, the authorized common stock of the Company consisted of 100,000,000 shares of Common Stock, of which 31,597,572 shares were outstanding. Each share of Common Stock is entitled to one vote with respect to all matters to be acted on by the stockholders.

 

Future Business

 

It is the intention of the officers, directors, and majority shareholders to change the plan of business of the Company from an online booking agency to an insomnia remedy provider. The Company has not completed the transition and is in the process of drafting a super 8-k detailing the plans of the Company, changing the name of the Company, the relevant risk factors, and other material information.

 

 
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Item 1A. Risk Factors

 

RISK FACTORS

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 1B. Unresolved Staff Comments

 

Not applicable.

 

Item 2. Description of Properties

 

We currently maintain an office at 244, 5th Avenue, Suite A-154, New York, N.Y. 10001. We have no monthly rent, nor do we accrue any expense for monthly rent. Mr. Vergara, our primary officer and director, and our employee provides us a facility in which we conduct business on our behalf. Mr. Vergara does not receive any remuneration for the use of this facility or time spent on behalf of us. We do not believe that we will need to obtain additional office space at any time in the foreseeable future, approximately 12 months, until our business plan is more fully implemented.

 

As a result of our method of operations and business plan we do not currently require personnel other than Mr. Vergara to conduct our business. In the future we anticipate requiring additional office space and additional personnel; however, it is unknown at this time how much space or how many individuals will be required.

 

Item 3. Legal Proceedings

 

We are not currently a party to any legal proceedings, nor do we have knowledge of any pending or threatened legal claims.

 

Item 4. Submission of Matters to a Vote of Security Holders

 

None.

 

 
4

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

Although our stock has a stock symbol on the OTCBB of BKIT, it is not currently trading. Since our incorporation, we have raised capital through private sales of our common equity. As of August 31, 2014, we have issued 31,597,572 shares of our common stock to various shareholders, in exchange for cash and services. Specifically, Mr. Vergara was issued 3,000,000 shares of common stock for his services as CEO. Mr. Vergara is currently working with Mr. Birger Jan Olsen, the principal of Zleepax ApS on the development of the Company’s new business plan. In exchange for the assignment of his patent for an over the counter sleep remedy, Zleepax ApS was issued 18,000,000 shares of common stock of the Company. Mr. Olsen is not an officer or board member of the Company. Mr. Olsen acts in an advisory capacity.

 

We have never paid any dividends to stockholders and presently do not intend to pay cash dividends on our common stock in the foreseeable future. We intend to retain any future earnings to fund the development and growth of our business.

 

Recent Sales of Unregistered Securities

 

None.

 

There is no active market for our common stock.

 

Currently, there is a very limited trading market for our common stock. Any trading market that may develop in the future for our common stock will most likely be very volatile and numerous factors beyond our control may have a significant effect on the market. Only companies that report their current financial information to the SEC may have their securities included on the OTCQB. Therefore, only upon the filing of our 10-K and 10-Q reports will our common stock become eligible to be quoted on the OTCQB. In the event that we lose our status as a "reporting issuer," any future quotation of our common stock on the OTCB may be jeopardized.

 

Item 6. Selected Financial Data

 

N/A

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Our actual results and the timing of events could differ materially from those anticipated as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10-K. The following discussion of our financial condition and results of operations should be read with our consolidated financial statements and the related notes included elsewhere in this annual report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

 

 
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Company Overview

 

Book It Local, Inc. is a development stage company incorporated in the State of Nevada in August 2012. We were formed to engage in the business of booking entertainment for events through an online system that connects those running events and entertainers that may perform at such events. In August 2012, we commenced our planned principal operations, and therefore have no significant assets. The Company, since the sale of stock by certain shareholders in January, 2014, intends to change its name and change its business plan from an online booking agency to a insomnia remedy provider. The Company is still in the process of developing its plan.

 

Since our inception on August 11, 2012 to August 31, 2014, we have not generated any revenues. During this time, we incurred operating expenses of $228,381 resulting in a cumulative loss of $228,381. To this point, our only business activity has been the formation of our corporate entity, creation and development of our business model, and analyzing the viability of our business. We believe that sales revenue, loans from our officer, and small amounts of equity will be sufficient to support the limited costs associated with our initial ongoing operations for the next twelve months. We may sell additional shares in a private offering or other offering if we are unable to obtain funds from another source such as a shareholder loan. If sufficient funds cannot be raised, none of the Company’s plans may be implemented. There can be no assurance that the actual expenses incurred will not materially exceed our estimates or that cash flows from listing fees will be adequate to maintain our business. As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors’ report to the financial statements included in the registration statement.

 

Results of Operations

 

For the period ended August 31, 2014

 

There were no revenues for the period from inception to August 31, 2014.

 

The company did not pay nor recognize any interest expense for the periods ended August 31, 2014.

 

We expect to incur the normal expenses related to being a public company such as accounting and legal costs. We may drain all available financial resources to pay for such costs depending on our operations and costs. To date, our attorney has provided services in exchange for a nominal fee, but there is no guarantee that this will continue and thus, we may be financial distressed because of the costs associated with being a public company. We will also incur fees for audits and reviews so that we can file the proper 10q’s and 10k’s. As we begin to generate revenues, realize expenses, and acquire assets, it is possible that the costs related with being a public company will increase.

 

Liquidity and Capital Resources

 

The Company has $1,759 in cash. The investigation of prospective financing candidates involves the expenditure of capital. The Company will likely have to look to Mr. Vergara, Mr. Olsen, or to third parties for additional capital. There can be no assurance that the Company will be able to secure additional financing or that the amount of any additional financing will be sufficient to conclude its business objectives or to pay ongoing operating expenses.

 

 
6

 

If Mr. Vergara or Mr. Olsen are unable to lend additional funds to the Company in the event that Company needs additional funds, we may need to deploy a plan to sell additional shares or look to a third party to lend funds to the Company. If the Company is to borrow funds from a third party, the terms and conditions of such a loan may not be on favorable terms. If we are unable to address our liquidity issues, there is a great chance that the Company will not have adequate funding to continue its business plan and will thus, fail.

 

We will require as much as $100,000 in order to build our market our new business plan for insomnia remedies. We currently only have $1,759. Therefore, the cash currently available to us will not enable us to develop the business to the state in which it will optimally be able to generate revenues. If we are to generate revenues prior to needing any additional funding, we will immediately reinvest such revenues into further development our business and deployment of our business plan. We believe that the cash we have available will sustain us for approximately three (3) more months so long as we continuing operating in the manner that we are currently operating.

 

Equity Distribution to Management

 

Since our incorporation, we have raised capital through private sales of our common equity. As of August 31, 2014, we have issued 31,597,572 shares of our common stock to various shareholders in exchange for cash and services. Specifically, 3,000,000 shares to our CEO, Miguel Bustos Vergara and 18,000,000 shares to Zleepax ApS of which a consultant of the Company, Mr. Birger Jan Olsen, is a stakeholder. Please see our “Stockholder Table” for more information on distributions of stock in exchange for services.

 

Off-Balance Sheet Arrangements

 

We do not have 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 that is material to investors.

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses of $228,381 since its inception and requires capital for its contemplated operation and marketing activities to take place. The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Critical Accounting Policies

 

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates, including those related to bad debts, inventory obsolescence, intangible assets, payroll tax obligations, and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

 

 
7

 

We have identified below the accounting policies, revenue recognition and software costs, related to what we believe are most critical to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.

 

Quantitative and Qualitative Disclosures about Market Risks

 

Pursuant to Item 305(e) of Regulation S-K (229.305(e)), we are not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

Off-Balance Sheet Arrangements

 

During fiscal 2014, we did not engage in any material off-balance sheet activities or have any relationships or arrangements with unconsolidated entities for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities.

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 

N/A 

 

Item 8. Financial Statements and Supplementary Data

 

Our financial statements are contained on pages F-1 through F-7, which appear at the end of this Annual Report.

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

 

None.

 

Item 9A. Controls and Procedures

 

(a) Evaluation of Disclosure and Control Procedures

 

The Company’s disclosure controls and procedures are designed to ensure (i) that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (ii) that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Our principal executive officer and principal financial officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2014, and concluded that the disclosure controls and procedures were effective as a whole.

 

 
8

 

(b) Management’s Report on Internal Control over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”).

 

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance of such reliability and may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is 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 has conducted, with the participation of our Chief Executive Officer and our Principal Accounting Officer, an assessment of the effectiveness of our internal control over financial reporting as of August 31, 2014. Management’s assessment of internal control over financial reporting used the criteria set forth in SEC Release 33-8810 based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control over Financial Reporting – Guidance for Smaller Public Companies . Based on this evaluation, Management concluded that our system of internal control over financial reporting was effective as of August 31, 2014, based on these criteria.

 

(c) Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information

 

None.

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

The following table and biographical summaries set forth information, including principal occupation and business experience, about our directors and officers at August 31, 2014:

 

The members of our Board of Directors serve, without compensation, until the next annual meeting of stockholders, or until their successors have been elected. The officers serve at the pleasure of the Board of Directors. Information as to the director and executive officer is as follows:

 

Name

 

Age

 

Title

Miguel Bustos Vergara   51   President, Chief Executive Officer, Chief Financial Officer, Secretary and director

 

 
9

 

Duties, Responsibilities and Experience

 

Miguel Bustos Vergara is a seasoned entrepreneur with a strong medical, commercial and financial background. His expertise is within most therapeutic areas, including medicinal drugs, devices and diagnostics. Mr. Vergara’s commercial experiences are highly diversified in scope, focusing on sales through partners, affiliates, direct to patients, hospitals and other end-users. He has also worked extensively in business development projects securing licensing and corporate deals. Mr. Vergara obtained his MD (Licentiate of Medicina) in 1986 from Facultad de Medicina Occidente, Chile and a B.A. in Psychology in 1991 from Faculté de Psychology et des Sciénces de l'Éducation, Chile. Since January 2003, Mr. Vergara has operated as an independent consultant focusing on Management, marketing planning, social media marketing management, international public relations, cross channel marketing and usability evaluation.

 

Mr. Vergara is the promoter of the Company.

 

Board of Directors

 

Directors are elected at our annual meeting of shareholders and serve for one year until the next annual meeting of shareholders or until their successors are elected and qualified. For the year ended August 31, 2014.

 

 Legal Proceedings

 

None of the members of the board of directors or other executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).

 

Code of Ethics

 

The Company has adopted a Code of Ethics for adherence by its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Controller to ensure honest and ethical conduct; full, fair and proper disclosure of financial information in the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934; and compliance with applicable laws, rules and regulations. Any person may obtain a copy of our Code of Ethics by mailing a request to the Company at the address appearing on the front page of this Annual Report on Form 10-K.

 

Executive Compensation

 

The following table sets forth compensation information for services rendered by certain of our executive officers in all capacities during the last two completed fiscal years. The following information includes the dollar value of base salaries and certain other compensation, if any, whether paid or deferred.

 

The following table sets forth the cash compensation of our initial officer and director, Joseph McMurry from inception (August 11, 2012) to January 28, 2014 (his date of resignation) and our current officer and director Miguel Bustos Vergara from his date of appointment (January 28, 2014) to December 12, 2014.

 

 
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Summary Compensation Table

 

     

Annual Compensation

   

Long Term Compensation

 

Name and Principal Position

YTD

 

Salary

   

Bonus

   

Other Annual

Compensation

   

Restricted

Stock(1)

   

Options

 
                                 

Miguel Bustos Vergara CEO, Director

2014

 

$

-0-

     

-0-

     

-0-

   

$

30,000

     

-0-

 

Joseph McMurry CEO, Director

2014

 

$

-0-

     

-0-

     

-0-

   

$

-0-

     

-0-

 

Joseph McMurry CEO, Director

2013

 

$

-0-

     

-0-

     

-0-

   

$

-0-

     

-0-

 

Joseph McMurry CEO, Director

2012

 

$

-0-

     

-0-

     

-0-

   

$

-0-

     

-0-

 

_________________

 

(1) The stock granted to Mr. McMurry or Mr. Vergara are not freely tradable as it is unregistered stock granted by the Company for services rendered.

 

Mr. McMurry has not received any monetary compensation or salary since the inception of the Company. Mr. McMurry has agreed to not receive any compensation or enter into any employment agreements until the Company begins operations.

 

Mr. Vergara has not received any monetary compensation or salary since the inception of the Company. Mr. Vergara has agreed to not receive any compensation or enter into any employment agreement until the Company changes, further developments, and implements its business plan. Upon appointment, Mr. Vergara, for his services to the Company, was granted 3,000,000 shares of stock.

 

Directors’ Compensation

 

Directors are not entitled to receive compensation for services rendered to Book it Local, or for each meeting attended except for reimbursement of out-of-pocket expenses. There are no formal or informal arrangements or agreements to compensate directors for services provided as a director.

 

Stock Option Grants

 

Book it Local did not grant any stock options to the executive officer during the most recent fiscal period ended August 31, 2014. Book it Local has also not granted any stock options to the Executive Officers since incorporation.

 

Employment Agreements

 

There are no current employment agreements or current intentions to enter into any employment agreements.

 

Future Compensation

 

Mr. Vergara has agreed to provide services to us without compensation until such time as either we have earnings from our revenue.

 

Item 11. Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information as of the date of this prospectus, and as adjusted giving effect to the sale of 10,597,572 shares of common stock in this offering, relating to the beneficial ownership of our common stock by those persons known to us to beneficially own more than 5% of our capital stock, by our director and executive officer, and by all of our directors, proposed directors and executive officers as a group.

 

 
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Directors and Executive Officers

  Amount     Percentage  

Miguel Bustos Vergara

 

3,000,000

   

9.5

%

 

Name and Address of 5% Shareholders (other than as reported directly above):

 

Affiliate Shareholder

  Amount     Percentage  

Zleepax VpS (1)

 

18,000,000

   

57

%

 

1. Mr. Birger Jan Olsen, a consultant to the Company, is the principal of Zleepax VpS

 

“Beneficial ownership” means the sole or shared power to vote or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days from the date of this prospectus.

 

Description of Securities

 

Common Stock

 

General

 

Our authorized capital stock consists of 100,000,000 Shares of common stock, $0.0001 par value per Share Common Stock.

 

We are authorized to issue 100,000,000 shares of common stock, $0.0001 par value per share. Currently we have 31,597,572 common shares issued and outstanding. We do not have any holding period requirements for our common stock.

 

The holders of our common stock have equal ratable rights to dividends from funds legally available if and when declared by our board of directors and are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs. Our common stock does not provide the right to a preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Our common stock holders are entitled to one non-cumulative vote per share on all matters on which shareholders may vote.

 

We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the state of Nevada for a more complete description of the rights and liabilities of holders of our securities. All material terms of our common stock have been addressed in this section.

 

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.

 

 
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Preferred Stock

 

We are authorized to issue up to 10,000,000 shares of Preferred Stock, $.0001 par value per share. Currently we have 0 preferred shares issued and outstanding.

 

Dividends

 

We have not paid any cash dividends to shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

 

Warrants

 

There are no outstanding warrants to purchase our securities.

 

Options

 

There are no options to purchase our securities outstanding.

 

Penny Stock Reform Act of 1990

 

The Securities Enforcement and Penny Stock Reform Act of 1990 require additional disclosure for trades in any stock defined as a penny stock. The Securities and Exchange Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to exceptions. Under this rule, broker/dealers who recommend these securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction before sale. Our shares will probably be subject to the Penny Stock Reform Act, thus potentially decreasing the ability to easily transfer our shares.

 

Item 12. Certain Relationships and Related Transactions

 

Related Party Noted and Accounts Due

 

Director Independence

 

The common stock of the Company is currently quoted on the OTC Pink market, an exchange which currently does not have director independence requirements. On an annual basis, each director and executive officer will be obligated to disclose any transactions with the Company in which a director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest in accordance with Item 407(a) of Regulation S-K. Following completion of these disclosures, the Board will make an annual determination as to the independence of each director using the current standards for “independence” that satisfy both the criteria for the Nasdaq and the NYSE MKT.

 

As of August 31, 2014, the Company had no independent board members.

 

 
13

 

Item 13. Principal Accountant Fees and Services

 

The following table sets forth fees billed to the Company by the Company’s independent auditors for (i) services rendered for the audit of the Company’s annual financial statements and the review of the Company’s quarterly financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of the Company’s financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.

 

(1)  Audit Fees

 

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

 

2012

$

2,500

 

Stan J.H. Lee

2012

$

2,500

 

Bongiovanni and Associates

2013

$

2,500

 

Bongiovanni and Associates

2014

$

3,500

 

Bongiovanni and Associates

 

(2)  Audit-Related Fees

 

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

 

2012

$

Nil

 

Stan J.H. Lee

2013

$

Nil

 

Bongiovanni and Associates

2014

$

Nil

 

Bongiovanni and Associates

 

 
14

 

(3)  Tax Fees

 

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

 

2012

$

Nil

 

Stan J. H. Lee

2013

$

Nil

 

Bongiovanni and Associates

2014

$

Nil

 

Bongiovanni and Associates

 

(4)  All Other Fees

 

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:

 

2012

$

Nil

 

Stan J. H. Lee

2013

$

Nil

 

Bongiovanni and Associates

2014

$

Nil

 

Bongiovanni and Associates

 

(5)  We do not currently have an audit committee.

 

(6)  The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full time, permanent employees was 0%.

 

 
15

 

Item 14. Exhibits

 

The following Exhibits are incorporated herein by reference from the Registrant's S-11 Registration Statement filed with the Securities and Exchange Commission, SEC file # 333-183983 on June 10, 2013. Such exhibits are incorporated herein by reference pursuant to Rule 12b-32:

 

Exhibit No.

 

Document Description

3.1

 

Articles of Incorporation.

3.2

 

Bylaws.

 

The following documents are included herein:

 

Exhibit No.

 

Document Description

23.1

 

Consent of Independent Registered Public Accounting Firm.

31.1

 

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.

32.1

 

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer).

101.INS **

 

XBRL Instance Document

101.SCH **

 

XBRL Taxonomy Extension Schema Document

101.CAL **

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **

 

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE **

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 
16

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

Book it Local, Inc.

 
       

Dated: December 18, 2014

By:

/s/ Miguel Bustos Vergara

 
   

Miguel Bustos Vergara

 
   

Chief Executive Officer

(Principal Executive Officer)

Chief Financial Officer

(Principal Accounting Officer)

 
       

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Name

 

Position

 

Date

         

/s/ Miguel Bustos Vergara

 

Chairman, President, Chief Executive Officer and Chief Accounting Officer

 

December 18, 2014

Miguel Bustos Vergara

       

 

 
17

 

PART F/S 

INDEX TO FINANCIAL STATEMENTS 

AUDITED FINANCIAL STATEMENTS

 

   

Page(s)

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   

F-1

 
         

FINANCIAL STATEMENTS

     
         

Balance Sheets

   

F-2

 
         

Statements of Operations

   

F-3

 
         

Statements of Stockholders’ Deficit

   

F-4

 
         

Statements of Cash Flows

   

F-5

 
         

NOTES TO FINANCIAL STATEMENTS

   

F-6

 

 

 
18


FL Office

 7951 SW 6th St., Suite. 216

 Plantation, FL 33324

 Tel: 954-424-2345

 Fax:  954-424-2230

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders

Book It Local, Inc. (A Development Stage Company)

 

We have audited the accompanying balance sheets of Book It Local, Inc. as of August 31, 2014 and 2013 and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years ended August 31, 2014 and 2013 and for the period from inception (August 11, 2012) through August 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Book It Local, Inc. as of August 31, 2014 and 2013, and the results of its operations, changes in stockholders’ deficit and cash flows for the years ended August 31, 2014 and 2013 and for the period from inception (August11, 2012) through August 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note B to the financial statements, the Company has insufficient working capital, a stockholders’ deficit and recurring net losses, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Bongiovanni & Associates, PA

Bongiovanni & Associates, PA

Certified Public Accountants

Plantation, Florida

The United States of America

December 16, 2014

 


www.ba-cpa.net

 
F-1

 

Book it Local, Inc. 

(A Development Stage Company) 

Balance Sheets

 

As of August 31,     As of August 31,
 

2014

   

2013

 

ASSETS

Current Assets

               

Cash

 

$

1,759

   

$

2,140

 

Other current assets

   

-

     

-

 

Total Current Assets

   

1,759

     

2,140

 
               

TOTAL ASSETS

 

$

1,759

   

$

2,140

 
               

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

Current Liabilities

               

Notes payable

 

$

5,000

   

$

-

 

Accounts payable

   

4,205

         

Total Current Liabilities

   

9,205

     

-

 
               

Total Liabilities

   

9,205

     

-

 
               

Stockholders' Equity (Deficit)

               

Preferred stock ($0.0001 par value; 10,000,000 authorized; no shares issued and outstanding)

   

-

     

-

 

Common stock, ($0.0001 par value, 100,000,000 shares authorized; 31,597,572 and 10,597,572 shares issued and outstanding as of August 31, 2014 and 2013, respectively)

   

3,160

     

1,060

 

Additional paid-in capital

   

217,775

     

9,875

 

Deficit accumulated during the development stage

 

(228,381

)

 

(8,795

)

Total Stockholders' Equity (Deficit)

 

(7,446

)

   

2,140

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

 

$

1,759

   

$

2,140

 

 

The Report of Independent Registered Public Accounting Firm and accompanying notes are an integral part of these financial statements.

 

 
F-2

 

Book it Local, Inc. 

(A Development Stage Company) 

Statements of Operations

 

      Cumulative from  
  For the year   For the year   August 11, 2012  
  ended   ended   (inception) to  
  August 31, 2014   August 31, 2013   August 31, 2014  

Revenues

       

Revenues

 

-

 

-

 

-

 
                   

Total Revenues

                   
                   

Operating Costs

                   

Administrative Expenses

   

9,586

   

8,795

   

18,381

 

Stock Issued for Services

   

210,000

   

-

   

210,000

 
                   

Total Operating Costs

   

219,586

   

8,795

   

228,381

 
                   

Net Income (Loss)

 

(219,586

)

(8,795

)

(228,381

)

                   

Basic earnings per share

 

(0.01

)

 

**

 

(0.01

)

                   

Weighted average number of common shares outstanding

   

23,485,243

   

10,597,572

   

16,706,825

 

 

** Less than $0.01

 

The Report of Independent Registered Public Accounting Firm and accompanying notes are an integral part of these financial statements.

 

 
F-3

 

Book it Local, Inc.

(A Development Stage Company)

Statements of Changes in Stockholders' Equity

 

 

Common

Stock

 

Common

Stock

Amount

 

Additional

Paid-in

Capital

 

Deficit

Accumulated

During

Development

Stage

 

 

Total

 

 

 

 

 

 

 

 

 

 

Balances, August 11, 2012 (Inception)

  -    

$

-    

$

-    

$

-    

$

-  

Stock issued for cash on 8/21/2012 @ .0001

   

9,600,072

     

960

     

-

     

-

     

960

 

Stock issued for cash on 8/21/2012 @ .01

   

997,500

     

100

     

9,875

     

-

     

9,975

 

Net Loss for the period from

                                       

August 11, 2012 (Inception) to August 31, 2012

   

-

     

-

     

-

     

-

     

-

 

Balances, August 31, 2012

   

10,597,572

     

1,060

     

9,875

     

-

     

10,935

 

Net loss for year ended August 31, 2013

   

-

     

-

     

-

   

(8,795

)

 

(8,795

)

Balances, August 31, 2013

   

10,597,572

     

1,060

     

9,875

   

(8,795

)

   

2,140

 

Common stock issued for services

   

21,000,000

     

2,100

     

207,900

     

-

     

210,000

 

Net loss for year ended August 31, 2014

   

-

     

-

     

-

   

(219,586

)

 

(219,586

)

Balances, August 31, 2014

   

31,597,572

   

$

3,160

   

$

217,775

   

$

(228,381

)

 

$

(7,446

)

 

The Report of Independent Registered Public Accounting Firm and accompanying notes are an integral part of these financial statements.

 

 
F-4

 

Book it Local, Inc.

(A Development Stage Company)

Statements of Cash Flows

 

            Cumulative from  
    For the year     For the year     August 11, 2012  
    ended     ended     (inception) to  
    August 31, 2014     August 31, 2013     August 31, 2014  

CASH FLOWS FROM OPERATING ACTIVITIES

           

 

Net income (loss)

 

$

(219,586

)

 

$

(8,795

)

 

$

(228,381

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

                       

Stock issued for services

   

210,000

     

-

     

210,000

 

Changes in operating assets and liabilities:

                       

Increase (decrease) in accounts payable

   

4,205

     

-

     

4,205

 
                       

Net cash provided by (used in) operating activities

 

(5,381

)

 

(8,795

)

 

(14,176

)

                       

CASH FLOWS FROM INVESTING ACTIVITIES

                       
                       

Net cash provided by (used in) investing activities

   

-

     

-

     

-

 
                       

CASH FLOWS FROM FINANCING ACTIVITIES

                       
                       

Increase (decrease) in notes payable

   

5,000

     

-

     

5,000

 

Proceeds from issuance of common stock

   

-

     

-

     

10,935

 
                       

Net cash provided by (used in) financing activities

   

5,000

     

-

     

15,935

 
                       

Net increase (decrease) in cash

 

(381

)

 

(8,795

)

   

1,759

 
                       

Cash at beginning of period

   

2,140

     

10,935

     

-

 
                       

Cash at end of period

 

$

1,759

   

$

2,140

   

$

1,759

 
                       

Supplemental Disclosures of Cash Flow Information:

                       

Cash Paid For:

                       

Interest

 

$

-

   

$

-

   

$

-

 

Income Taxes

 

$

-

   

$

-

   

$

-

 

 

The Report of Independent Registered Public Accounting Firm and accompanying notes are an integral part of these financial statements.

 

 
F-5

 

Book It Local, Inc

NOTES TO FINANCIAL STATEMENTS

(A Development Stage Company)

August 31, 2014

 

1. NATURE OF OPERATIONS

 

Book It Local, Inc. (“The Company”) was incorporated in the State of Nevada on August 11, 2012 to develop its online booking system to help consumers find and hire live entertainment for weddings, corporate events, private parties, night clubs, grand openings, and other events. The Company is in the development stage with no revenues and a limited operating history.

 

In January of 2014 , the Board of Directors of the Company approved the issuance of 21,000,000 shares of common stock to two individuals for services rendered. The value of the shares in amount of $210,000 was determined by the trading price of the Company’s Common Stock on the grant dates. Accordingly, the Company calculated stock based compensation of $210,000 as its fair value and recognized the expense during the year ended August 31, 2014. Such issuance resulted in a change in control of the Company.

 

2. GOING CONCERN CONSIDERATION

 

These financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a cumulative net loss of $228,381 since its inception and requires capital for its contemplated operation and marketing activities to take place. The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to continue to finance its operations and continue as a going concern. The Company's present revenues are insufficient to meet operating expenses. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s year-end is August 31.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with original maturity of three months or less to be cash equivalents.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with generally accepted accounting principles requires that management makes 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.

 

 
F-6

 

Revenue Recognition

 

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met:

 

(i)  persuasive evidence of an arrangement exists, 

(ii)  the services have been rendered and all required milestones achieved, 

(iii)  the sales price is fixed or determinable, and 

(iv) collectability is reasonably assured.

 

Foreign Currency Translation

 

The financial statements are presented in United States dollars. In accordance with ASC 830, “Foreign Currency Matters”, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

 

Development Stage Company

 

The Company complies with Financial Accounting Standards Codification (“ASC”) 915 and Securities and Exchange Commission Act Guide 7 for its characterization of the Company as development stage enterprise.

 

 
F-7

 

Fair Value for Financial Assets and Financial Liabilities

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

   

Level 2

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

   

Level 3

Pricing inputs that are generally observable inputs and not corroborated by market data.

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash, approximate their fair values because of the short maturity of these instruments.

 

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at August 31, 2014, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the year ended August 31, 2014.

 

Income Taxes

 

The Company follows the accrual method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on the deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At August 31, 2014 a full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded.

 

Basic and Diluted Net Income (Loss) per Share

 

The Company computes net income (loss) per share in accordance with ASC 260, "Earnings per Share" 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 common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, 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 common shares if their effect is anti-dilutive.

 

 
F-8

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet effective, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

4. DEVELOPMENT STAGE COMPANY

The Company is in the development stage as of August 31, 2014 and to date has had no significant operations. Recovery of the Company’s assets is dependent on future events, the outcome of which is indeterminable. In addition, successful completion of the Company’s development program and its transition, ultimately, to attaining profitable operations is dependent upon obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure.

 

5. NOTE PAYABLE

 

On August 31, 2014 the Company issued a promissory note payable in the amount of $5,000. The note is due on August 31, 2015 and bears interest at 10% per annum.

 

6. RELATED PARTY TRANSACTIONS

 

The President of the Company provides management and office premises to the Company for no compensation.

 

7. STOCKHOLDERS’ EQUITY

  

In August, 2012, the Company authorized the issue of 100,000,000 common shares of the company at par value of $.0001and authorized the issue of 10,000,000 preferred shares at par value of $.0001.

 

In January of 2014, the Board of Directors of the Company approved the issuance of 21,000,000 shares of common stock to two individuals for services rendered. The value of the shares in amount of $210,000 was determined by the trading price of the Company’s Common Stock on the grant dates. Accordingly, the Company calculated stock based compensation of $210,000 as its fair value and recognized the expense during the year ended August 31, 2014. Such issuance resulted in a change in control of the Company.

 

At August 31, 2014 there are total of 31,597,572 common shares of the Company issued and outstanding.

 

8. INCOME TAXES

 

Due to the operating loss and the inability to recognize an income tax benefit, there is no provision for current or deferred federal or state income taxes for the period from inception through August 31, 2014.

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.

 

The Company’s total deferred tax asset, calculated using federal and state effective tax rates, as of August 31, is as follows:

 

 

2014

 

 

 

2013

 

Total Deferred Tax Asset

 

 

79,933

 

 

 

3,078

 

Valuation Allowance

 

 

(79,933

 

 

(3,078

Net Deferred Tax Asset

 

$

-

 

 

 

-

 

 

 
F-9

 

The reconciliation of income taxes computed at the federal statutory income tax rate to total income taxes for the year ended August 31, 2014 is as follows:

 

 

2014 

2013 

 

Income tax computed at the federal statutory rate

 

35.0

   

35.0

%

State income tax, net of federal tax benefit

   

0.0

     

0.0

%

Total

   

35.0

     

35.0

%

Valuation allowance

   

-35.0

     

-35.0

%

Total deferred tax asset

   

0.0

     

0.0

%

 

Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance.

 

As of August 31, 2014, the Company had a federal and state net operating loss carry forward in the amount of approximately $79,933 which expires in the year 2033.

 

9. SUPPLEMENTAL CASH FLOW INFORMATION

 

Supplemental disclosures of cash flow information for the nine months ended August 31, 2014 and 2013 is summarized as follows:

 

Cash paid during the year ended August 31, 2014 and 2013 for interest and income taxes is as follows:

 

    2014     2013  

Interest

 

$

-

   

$

-

 

Taxes

 

$

-

   

$

-

 

 

10. SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to August 31, 2014 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose. 

 

 

F-10