UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

For the quarterly period ended: June 30, 2015

 

Commission file number: 333-192060

 

TabacaleraYsidron, Inc.

(Exact name of Registrant as specified in its Charter)

 

Nevada	43-3797537
(State or other Jurisdiction of Incorporation)	(I.R.S. Employer Identification Number)

 

100 Europa Drive, Ste. 455, Chapel Hill, NC	27517
(Address of Principal Executive Offices)	(Zip Code)

 

919-933-2720

(Issuer’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of the Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes       x   No        ¨

 

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

 

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Act of 1934) (check one) Yes       ¨  No       x

 

The number of shares of the Registrant’s Common Stock outstanding as of July 22, 2015, 2015 was 44,533,750, all of one class, $0.0001 par value per share.

 

TABACALERAYSIDRON, INC.

 

Table of Contents

 

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	F-2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5
Item 4:	Control and Procedures	5
PART II - OTHER INFORMATION
Item 1	Legal Proceedings	5
Item 1A	Risk Factors	5
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	5
Item 3	Defaults upon Senior Securities	6
Item 4	Mine Safety Disclosures	6
Item 5	Other Information	6
Item 6	Exhibits	6

 

 

TABACALERAYSIDRON, INC.

 

PART I- FINANCIAL INFORMATION

 

TABLE OF CONTENTS

 

		Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2015 (Unaudited) and March 31, 2015		F-3
Condensed Consolidated Statements of Operations for the three months ended June 30, 2015 and 2014 (Unaudited)		F-4
Condensed Consolidated Statement of Stockholder’s Deficit for the three months ended June 30, 2015		F-5
Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2015and 2014 (Unaudited)		F-6
Notes to the Condensed Consolidated Financial Statements (Unaudited)		F-7

 

 

TABACALERAYSIDRON, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

 

		June 30, 2015				March 31, 2015
		(Unaudited)
ASSETS
Current Assets
Cash		$	5,608			$	2,675
Inventory, net of allowance of $4,912 and $4,912 respectively			-				-
Total Current Assets			5,608				2,675
Total Assets		$	5,608			$	2,675
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	178,327			$	169,966
Deferred revenue			15,000				-
Notes payable			17,500				17,500
Total Current Liabilities			210,827				187,466
Total Liabilities			210,827				187,466
Commitments and Contingencies (See Note 4)
Stockholders' Deficit
Preferred stock, $0.0001 par value; 5,000,000 shares authorized, none issued and outstanding			-				-
Common stock, $0.0001 par value; 100,000,000 shares authorized, 44,533,750 issued and outstanding at June 30, 2015 and March 31, 2015, respectively			4,453				4,453
Additional paid-in capital			772,355				771,010
Accumulated deficit			(982,027	)			(960,254	)
Total Stockholders' Deficit			(205,219	)			(184,791	)
Total Liabilities and Stockholders' Deficit		$	5,608			$	2,675

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

TABACALERAYSIDRON, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)

 

		For the Three Months Ended
		June 30, 2015				June 30, 2014
Revenue		$	-			$	546
Cost of Revenue			-				(5,182	)
Gross Loss			-				(4,636	)
Operating Expenses
Professional fees			1,485				8,400
General and administrative			19,271				18,862
Total Operating Expenses			20,756				27,262
Loss from Operations			(20,756	)			(31,898	)
Other Expenses
Interest Expense			(1,017	)			-
LOSS FROM OPERATIONS BEFORE INCOME TAXES			(21,773	)			(31,898	)
Provision for Income Taxes			-				-
NET LOSS		$	(21,773	)		$	(31,898	)
Net Loss Per Share - Basic and Diluted		$	(0.00	)		$	(0.00	)
Weighted average number of shares outstanding during the year - Basic and Diluted			44,533,750				44,533,750

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

TABACALERAYSIDRON, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Stockholders' Deficit

For the three months ended June 30, 2015

(Unaudited)

 

		Preferred Stock								Common stock								Additional								Total
																		paid-in				Accumulated				Stockholders'
		Shares				Amount				Shares				Amount				capital				Deficit				Deficit
Balance, March 31, 2015			-			$	-				44,533,750			$	4,453			$	771,010			$	(960,254	)		$	(184,791	)
In kind contribution of services and interest			-				-				-				-				1,345				-				1,345
Net loss for the three months ended June 30, 2015			-				-				-				-				-				(21,773	)			(21,773	)
Balance, June 30, 2015			-			$	-				44,533,750			$	4,453			$	772,355			$	(982,027	)		$	(205,219	)

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

TABACALERAYSIDRON, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

		For the Three Months Ended
		June 30, 2015				June 30, 2014
Cash Flows From Operating Activities:
Net Loss		$	(21,773	)		$	(31,898	)
Adjustments to reconcile net loss to net cash provided by ( used in) operations
In-kind contribution of services and interest			1,345				1,300
Impairment on inventory			-				4,912
Changes in operating assets and liabilities:
Decrease in inventory			-				270
(Increase) in deferred revenue			15,000				-
Increase in accounts payable			8,361				21,075
Net Cash provided by( Used In) Operating Activities			2,933				(4,341	)
Net Increase(Decrease) in Cash			2,933				(4,341	)
Cash at Beginning of Period			2,675				21,491
Cash at End of Period		$	5,608			$	17,150
Supplemental disclosure of cash flow information:
Cash paid for interest		$	-			$	-
Cash paid for taxes		$	-			$	-

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

TABACALERAYSIDRON, INC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

 

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A) Basis of Presentation

 

The accompanying condensed consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

 

It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements presentation.  The results for the interim period are not necessarily indicative of the results to be expected for the year.

 

TabacaleraYsidron, Inc. (the "Company") was incorporated under the laws of the State of Nevada on November 8, 2011 to purchase and distribute premium cigars. Premium cigars are defined as those that are hand-rolled from the highest grade whole-leaf tobacco and sell for more than $5 per cigar at retail.

 

Epicurean Cigars, Inc. was incorporated under the laws of the State of Nevada on November 15, 2011.

 

(B) Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of TabacaleraYsidron, Inc. and its wholly owned subsidiary, Epicurean Cigars, Inc. (collectively, the “Company”).  All intercompany accounts have been eliminated upon consolidation.

 

(C) Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Significant estimates include impairment of inventory, valuation of in kind contribution of services and valuation of deferred tax assets. Actual results could differ from those estimates.

 

(D) Cash and Cash Equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At June 30, 2015 and March 31, 2015, the Company had no cash equivalents.

 

(E) Inventories

 

Inventory consists primarily of finished goods and is valued at the lower of cost or market. Cost is determined using the weighted average method and average cost is recomputed after each inventory purchase or sale. Inventory is periodically reviewed in order to identify obsolete or damaged inventory and impaired values. During the year ended March 31, 2015, the Company recorded an impairment on inventory of $4,912.

 

(F) Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.” As of June 30, 2015 and 2014, there were no common share equivalents outstanding.

 

 

TABACALERAYSIDRON, INC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

 

(G) Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

(H) Revenue Recognition

 

The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company generates revenue from the sale of cigars upon delivery of cigars to the customer.

 

As of June 30, 2015, the Company has recorded of $15,000 in deferred revenue. As of June 30, 2015 the cigars were not shipped and all payments have been received. The revenue will be recognized upon delivery of cigars to the customer.

 

(I) Concentration of Credit Risk

 

For the three months ended June 30, 2015 there were no revenues. For the three months ended June 30, 2014 the cigar sales to one customer accounted for 100% of revenues.

 

(J) Fair Value of Financial Instruments and Fair Value Measurements

 

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.

 

We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

 

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

 

TABACALERAYSIDRON, INC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

 

(K) Recent Accounting Pronouncements

 

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.  We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in 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 are intended to 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). The amendments in this update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

 

(L) Business Segments

 

The Company operates in one segment and therefore segment information is not presented.

 

(M) Reclassification

 

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

 

NOTE 2

GOING CONCERN

 

As reflected in the accompanying condensed consolidated unaudited financial statements, the Company has minimal operations, has negative working capital and stockholders’ deficit of $205,219 and has a net loss of $21,773 for three months ended June 30, 2015. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern

 

NOTE 3

NOTES PAYABLE

 

During the year ended March 31, 2015, the Company issued an unsecured promissory note in the amount of $15,000 to an unrelated party. Pursuant to the terms of the note, the note is interest bearing at 3.5% and is due on demand. For the three months ended June 30, 2015, the Company recorded $132 in accrued interest.

 

 

TABACALERAYSIDRON, INC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

 

During the year ended March 31, 2015, the Company issued an unsecured promissory note in the amount of $2,500 to an unrelated party. Pursuant to the terms of the note, the note is non-interest bearing and is due on demand. For the three months ended June 30, 2015, the Company recorded $45 as an in kind contribution of interest.

 

NOTE 4

COMMITMENTS

 

(A) Consulting Agreements

 

On November 8, 2011 the Company entered into a consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $5,000 a month. The agreement is to remain in effect unless either party desires to cancel the agreement.

 

NOTE 5

STOCKHOLDERS’ DEFICIT

 

(A) Preferred Stock

 

The Company was incorporated on November 8, 2011. The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.0001 per share. Preferred stock may be issued in one or more series with rights and preferences are to be determined by the board of directors.

 

(B) In-Kind Contribution of Services

 

For the three months ended June 30, 2015 and 2014, Ramon Tejeda, the President of the Company contributed services having a fair value of $1,300 and $1,300, respectively (See Note 6).

 

For the three months ended June 30, 2015, the Company recorded in kind contribution of interest having a fair value of $45 (See Note 3).

 

(C) Stock Split

 

On June 19, 2015, a forward stock split on a basis of 1 for 5.75 was approved by the Company and declared effective on July 10, 2015 for stockholders of record as of June 30, 2015. Per share and weighted average amounts have been retroactively restated in the accompanying consolidated financial statements and related notes to reflect this stock split.

 

NOTE 6

RELATED PARTY TRANSACTIONS

 

For the three months ended June 30, 2015 and 2014, Ramon Tejeda, the President of the Company contributed services having a fair value of $1,300 and $1,300, respectively (See Note 5 (B)).

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Note Regarding Forward-Looking Statements

 

Except for the historical information contained herein, the matters addressed in this Item 2 constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are subject to a variety of risks and uncertainties, including those discussed below under the headings “Risk Factors” and elsewhere in this Quarterly Report on Form 10Q, that could cause actual results to differ materially from those anticipated by the Company’s management. The Private Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements in this Quarterly Report on Form 10Q are made pursuant to the Act. The Company undertakes no obligation to publicly release the results of any revisions to its forward-looking statements be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected results. The Company cautions readers that important factors may affect the Company’s actual results and could cause such results to differ materially from forward-looking statements made by or on behalf of the Company. These factors include the Company’s lack of historically profitable operations, dependence on key personnel, the success of the Company’s business, ability to manage anticipated growth and other factors identified in the Company’s filings with the Securities and Exchange Commission, press releases, and /or other public communications. Unless the context otherwise requires, the words “Tabacalera” the “Company”, “we”, “us”, and “our”, refer to TabacaleraYsidron, Inc.

 

Plan of Operations

 

TabacaleraYsidron was established in November 2011 to introduce premium cigars to the United States as a cigar broker. Beginning in early 2007, the Company’s founders sought to develop a cigar that would appeal to aficionados of high-quality, hand-rolled, premium cigars. Through TabacaleraYsidron, the Company intends to introduce premium cigars to build sales of private label cigars as a cigar broker. The Company conducts its business principally through one operating subsidiary: Epicurean Cigars, Inc. which is the Company’s U.S. sales and marketing organization. Epicurean Cigars, Inc. is a wholly owned subsidiary of TabacaleraYsidron, Inc.

 

The Company has a relationship with Plasencia, a cigar manufacturer in Esteli, Nicaragua. Plasencia will produce Epicurean Cigars rolled with tobacco grown in northern Nicaragua, where the country’s best tobacco is grown. Nicaragua is recognized internationally by the quality of its cigars. Plasencia is particularly skilled at marrying Nicaragua tobacco with the Cuban tradition and expertise in the manufacturing process.

 

The Company has a three part approach to building business over the next twelve months. The first will be to use our former CEO, Steve Ysidron and our current CEO, Ramon Tejeda’s contact base of over 1,200 retail customers to promote orders for cigars. We anticipate that this will require little upfront money on the part of the company. The primary contact will be made through fliers delivered by mail and email to the retail establishments. After these retailers have demonstrated an interest in our products, we will put them in contact with our wholesalers, who will complete the order.

 

The Company has budgeted $1,000 for the cost of this marketing approach to the business. The funds will cover the cost of designing a brochure that can be printed or emailed. The Company does not anticipate using glossy 4 color paper for the flier but instead a design that will be useable both as an email attachment and as a flier to send to potential customers. The company is continuing work on a brochure that it hopes to provide to the wholesaler to use in their marketing efforts.

 

The second approach of the Company is to contact every golf course in North Carolina initially with an opportunity to sell cigars in the golf shop. There is one golf resort in North Carolina that has already expressed an interest in selling cigars to guests. Mr. Tejeda is working through the details with this resort on pricing and display and restocking issues. All purchases of cigars will be made through our wholesalers.

 

The third approach is to establish relationships with wholesalers who are interested in carrying our products and marketing them to retailers. We will work with these wholesalers closely, in order to maximize sales. To date, we have a relationship with one wholesaler, LJ Zucca Enterprises. We do not have a written agreement with LJ Zucca Enterprises.

 

New Developments

 

Mount Tam

 

As of the date of this filing, the Company is currently in discussions with Mount TAM Biotechnologies, Inc., a Delaware corporation (“Mount TAM”) regarding a share exchange agreement (the “Agreement). In connection with the negotiations with Mount TAM should it become definitive, the Company’s subsidiary, Epicurean Cigars, Inc. would be spun off into a separate entity. 

 

At this time, the Company has not entered into the Agreement with Mount TAM, and there is no guarantee that the Company will ever enter into the Agreement. In the event that the Agreement does not go through, the Company will continue with its business plan as set forth above. However, at the time of this filing, it is anticipated by the Company that the Agreement will be finalized, executed and effectuated shortly after the filing of this Form 10-Q.

 

Forward Stock Split

 

On June 19, 2015, a forward stock split on a basis of 1 for 5.75 was approved by the Company and declared effective on July 10, 2015 for stockholders of record as of June 30, 2015. Per share and weighted average amounts have been retroactively restated in the accompanying consolidated financial statements and related notes to reflect this stock split. 

 

 

Results of Operations

 

For the three months ended June 30, 2015 and June 30, 2014

 

A summary of our operations for the three months ended June 30, 2015 and 2014 follows:

 

		2015				2014
Revenue		$	-			$	546
Cost of Revenue			-				(5,182	)
Professional Fees			1,485				8,400
General and administrative			19,271				18,862
Total Operating Expenses			20,756				27,262
Net Loss		$	(21,773	)		$	(31,898	)

 

Revenues

 

For the for the three months ended June 30, 2015 and June 30, 2014 the Company generated $0 in revenue and $546 respectively.

 

Total Operating Expenses

 

Total operating expenses for the three months ended June 30, 2015 and June 30, 2014 were $20,756 and $27,262 respectively, representing a decrease of $6,506. This decrease in total operating expenses is mostly attributable to a decrease in professional fees.

 

Net Loss

 

Net loss for the three months ended June 30, 2015 and June 30, 2014 were ($21,773) and ($31,898) respectively and had cost of revenue of $0 and $5,182 respectively, which included an inventory impairment charge of $4,912 during 2014. The decrease in net loss is mostly attributable to the decrease in operating expenses.  

  

Capital Resources and Liquidity

 

The Company has $5,608 of cash on hand as of June 30, 2015. We currently have very limited cash to continue operations for 12 months.

 

We intend to rely upon the issuance of common stock and loans and advances from shareholders to fund administrative expenses. However, our shareholders are under no obligation to provide such funding, and there can be no assurance, however, that any of the contemplated financing arrangements described herein will be available and, if available, can be obtained on terms favorable to the Company.

 

 

We will need substantial additional capital to fund our operations in future periods. In the event that we are unable to obtain financing on acceptable terms, or at all, we will likely be required to cease our operations, pursue a plan to sell our operating assets, or otherwise modify our business strategy, which could materially harm our future business prospects. 

 

As reflected in the accompanying financial statements, the Company has minimal operations, has negative working capital and stockholders’ deficit of $205,219 as of June 30, 2015 and has a net loss of $21,773 for the three months ended June 30, 2015. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

Limited Operating History

 

We have generated no independent financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods.

 

Critical Accounting Policies and Estimates

 

While our significant accounting policies are more fully described in Note 1 to our financial statements for the three months ended June 30, 2015 we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

 

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. 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. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.

 

Revenue Recognition

 

The Company will recognize revenue on arrangement in accordance with FASB ASC No. 605, “Revenue Recognition.” In all cases, revenue is recognized when delivery of goods or completion of services has occurred, provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

  

Income Taxes

 

Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized.

 

The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Accounting for Income Taxes. It prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result, the Company has applied a more-likely-than-not recognition threshold for all tax uncertainties. The guidance only allows the recognition of those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the various taxing authorities. The Company is subject to taxation in the United States. All of the Company’s tax years since inception remain subject to examination by Federal and state jurisdictions.

 

 

Fair Value of Financial Instruments

 

The carrying amounts of the Company’s financial instruments including accounts payable and note payable, approximate fair value due to the relatively short period of maturity for these instruments.

  

Recent Accounting Pronouncements

 

In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation - Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.  We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

 In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. The update gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. The proposed ASU, which would apply to any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the update would supersede some cost guidance included in Subtopic 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts. The update removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition, the update improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in 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 are intended to 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). The amendments in this Update are effective for public and non-public entities for annual periods ending after December 15, 2016. Early adoption is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

 

 

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

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

 

ITEM 4

CONTROLS AND PROCEDURES

 

Disclosure controls and procedures are controls and other procedures that are designed to provide reasonable assurances that information required to be disclosed by the Company under the Exchange Act is recorded, processed, summarized and reported, within time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurances that information required to be disclosed by the Company in its periodic reports that are filed under the Exchange Act is accumulated and communicated to our Principal Executive Officer, as appropriate to allow timely decisions regarding financial disclosure.

 

Evaluation of disclosure controls and procedures

 

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of management including our Chief Executive Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures ( as defined in Rules 13a - 15(e) and 15d-15(e) under the Exchange Act ) Based on the evaluation, the Company’s Chief Executive Offer has concluded that the Company’s disclosure controls and procedures are designed to provide reasonable assurances that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and are operating in an effective manner.

 

Changes in internal controls over financial reporting

 

There were no changes in the Company’s internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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 rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this quarterly report.

 

PART II: OTHER INFORMATION

 

ITEM 1 - LEGAL PROCEEDINGS

 

No legal proceedings were initiated by or served upon the Company in the three months ended June 30, 2015.

 

From time to time, the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

 

ITEM I A - RISK FACTORS

 

Not required of smaller reporting companies.

 

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

 

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 - MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 - OTHER INFORMATION

 

On June 19, 2015, a forward stock split on a basis of 1 for 5.75 was approved by the Company and declared effective on July 10, 2015 for stockholders of record as of June 30, 2015. Per share and weighted average amounts have been retroactively restated in the accompanying consolidated financial statements and related notes to reflect this stock split. 

 

ITEM 6 - EXHIBITS

 

Exhibit Number		Description
31.1		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. Of 2002.
32.1*		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101. INS		XBRL Instance Document
101. SCH		XBRL Taxonomy Extension Schema Document
101. CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101. LAB		XBRL Taxonomy Extension Label Linkbase Document
101. PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101. DEF		XBRL Taxonomy Definitions Linkbase Document

  

* In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

 

 

Signature

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	TabacaleraYsidron, Inc.
	(Registrant)
	/s/ Ramon Tejeda
	Ramon Tejeda
	Title: President and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer)
	July 23, 2015