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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K


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


For the fiscal year ended May 31, 2015


or

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


For the transition period from ___________ to ___________

Commission File No. 333-182956

INTERUPS INC.

(Exact Name of Registrant as specified in its Charter)


 

 

 

Nevada

7311

48-1308920

(State or other jurisdiction of
incorporation or organization)

(Primary Standard Industrial

Classification Number)

(I.R.S. Employer
Identification Number)


645 Fifth Avenue, Suite 400

New York, NY 10022

 (Address of Principal Executive Office)(Zip Code)


(212) 371-7799

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act: None


Securities registered pursuant to Section 12(g) of the Act: None


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨  No þ


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨  No þ


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 shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨  No þ


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 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 ¨  No þ


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes ¨  No þ


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


Large accelerated filer

¨

Accelerated filed

¨

Non-accelerated filer

¨

Smaller reporting company

þ


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


As of January 18, 2016, the registrant had 6,900,000 shares of common stock issued and outstanding.


No market value has been computed based upon the fact that no active trading market has been established as of January 18, 2016.


 

 





 


TABLE OF CONTENTS

 

PART I

 

 

ITEM 1.

BUSINESS

1

ITEM 1A.

RISK FACTORS

 

ITEM 1B.

UNRESOLVED STAFF COMMENTS

1

ITEM 2.

PROPERTIES

1

ITEM 3.

LEGAL PROCEEDINGS

2

ITEM 4.

MINE SAFETY DISCLOSURES

2

 

 

 

PART II

 

 

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

3

ITEM 6.

SELECTED FINANCIAL DATA

3

ITEM 7.

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

4

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

6

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

6

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

15

ITEM 9A.

CONTROLS AND PROCEDURES

15

ITEM 9B.

OTHER INFORMATION

16

 

 

PART III

 

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

17

ITEM 11.

EXECUTIVE COMPENSATION

18

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

18

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

19

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

19

 

 

 

PART IV

 

 

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

20

 

 

SIGNATURES

21

 










PART I


ITEM 1.  BUSINESS.


FORWARD-LOOKING STATEMENTS


This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.


GENERAL

We, the Company, were incorporated in the state of Nevada on April 11, 2012. Until the change of control which took place as reported in a Form 8-K Report, filed with the Securities and Exchange Commission on November 24, 2014, we were in the business of developing an internet based group buying site. As reported in that Form 8-K, the then-principal shareholder, Romanas Bagdonas, sold all of his 4,000,000 shares of our Company, representing 57.97% of our issued and outstanding shares, to Laxmi Prasad, who is now our principal shareholder. As part of that transaction, Mr. Bagdonas resigned as the sole officer and director, and designated Likhitha Palaypu, Laxmi Prasad’s daughter, as the sole officer and director. Also, we sold all of our then-existing assets and business back to Mr. Bagdonas for $1.


Since the change of control, we have not acquired any assets or a business, and we have no assets. Therefore, we are deemed a “shell,” as that term is defined in Section 12b-2 of the Securities Exchange Act of 1934.


 At present, we are in the process of trying to raise capital, for the purpose of having capital available if and when we find a suitable candidate to acquire or invest in. Our principal shareholder is assuming the responsibility to find, raise any required capital, and complete the acquisition of assets or a business, so that we will no longer be a “shell.” We are contemplating raising capital from non-US investors pursuant to the Regulation S exemption from registration under the Securities Act of 1933. However, no final decision to offer our securities pursuant to Regulation S has been made, nor have we entered into any agreements with any potential target.


At present, we have no employees other than our sole officer and director, who is unpaid. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officer, director or employee.


Our principal office address is located at 645 Fifth Avenue, Suite 400, New York, NY 10022. Our phone number is (212) 371-7799.


ITEM 1A.  RISK FACTORS


Not applicable to smaller reporting companies.


ITEM 1B.  UNRESOLVED STAFF COMMENTS.

 

None.


ITEM 2.  PROPERTIES.


We do not own any real estate or other properties.




1





ITEM 3.  LEGAL PROCEEDINGS.


We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.

 

ITEM 4.  MINE SAFETY DISCLOSURES.


Not applicable.





2





PART II

 

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.


Market Information


Our common shares are quoted on OTC Markets at this time (symbol: ITUP) at this time; however, there has been no trading activity. Trading in stocks quoted on OTC Markets is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.

 

OTC Markets securities are not listed or traded on the floor of an organized national or regional stock exchange. OTC Markets issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange. As of May 31, 2015, and as of the date of filing of this Form 10-K Annual Report, although we have a valid trading symbol, no shares of our common stock have traded.


Number of Holders


As of January 18, 2016, the 6,900,000 issued and outstanding shares of common stock were held by a total of 31 shareholders of record.


Dividends

 

No cash dividends were paid on our shares of common stock during the fiscal years ended May 31, 2014 and May 31, 2015. We have not paid any cash dividends since our inception and do not foresee declaring any cash dividends on our common stock in the foreseeable future.


Recent Sales of Unregistered Securities


None.


Purchase of our Equity Securities by Officers and Directors


None.


Other Stockholder Matters


None.


ITEM 6.  SELECTED FINANCIAL DATA


Not applicable.




3





ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs if we proceed with our current business plan. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.


Working Capital


  

 

May 31,

2015

$

 

 

May 31,

2014

$

 

Current Assets

 

 

-

 

 

 

1,910

 

Current Liabilities

 

 

60,137

 

 

 

10,037

 

Working Capital (Deficit)

 

 

(60,137

)

 

 

(8,127

)


Cash Flows


  

 

Year ended

May 31,

2015

$

 

 

Year ended

May 31,

2014

$

 

Cash Flows used in Operating Activities

 

 

(1,910

)

 

 

(20,914

)

Cash Flows provided by Investing Activities

 

 

-

 

 

 

-

 

Cash Flows provided by Financing Activities

 

 

-

 

 

 

5,000

 

Net decrease in Cash During Period

 

 

(1,910

)

 

 

(15,914

)


Operating Revenues


During the years ended May 31, 2015 and 2014, the Company did not earn any revenues.


Operating Expenses and Net Loss


During the year ended May 31, 2015, the Company incurred operating expenses and a net loss of $66,347 compared with $20,914 during the year ended May 31, 2014. The increase in operating expenses and net loss is due to an increase in legal, accounting, and consulting fees related to the Company’s overall operations.


For the year ended May 31, 2015, the Company incurred a net loss of $66,347 or $0.01 loss per share compared to a net loss of $20,914 and a loss per share of $0.00 for the year ended May 31, 2014.


Liquidity and Capital Resources


As at May 31, 2015, the Company had cash and total assets of $nil compared to $1,910 as at May 31, 2014. The decrease in cash and total assets were due to the use of cash for operating activities as the Company did not raise any new funding from financing or investing activities.


At May 31, 2015, the Company had total liabilities of $60,137 compared to liabilities of $10,037 as at May 31, 2014. The increase in liabilities was due to accounts payable and accrued liabilities relating to professional services incurred that were not paid due to lack of sufficient cash flow in the Company.


During the year ended May 31, 2015, the Company did not have any equity transactions. During the year ended May 31, 2014, the Company issued 500,000 common shares at $0.01 per share for proceeds of $5,000.


Cashflow from Operating Activities


During the year ended May 31, 2015, the Company used cash of $1,910 for operating activities compared to $20,914 during the year ended May 31, 2014. The decrease in the use of cash for operating activities was due to the fact that the Company had minimal operating transactions and cash and did not raise any new financings during the period.



4






Cashflow from Investing Activities


During the years ended May 31, 2015 and 2014, the Company did not have any investing activities.


Cashflow from Financing Activities


During the year ended May 31, 2015, the Company did not have any financing activities. During the year ended May 31, 2014, the Company received $5,000 from the issuance of common shares.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements, as at and for the years ended May 31, 2015 and 2014, that they have substantial doubt that we will be able to continue as a going concern without further financing.


Off-Balance Sheet Arrangements


We have no significant 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 are material to stockholders.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


Our company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and our company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


Plan of Operation and Funding


Our principal shareholder is looking for suitable companies or projects which we can acquire or invest in, or provide strategic advice in exchange for consulting fees. The search is not limited to the United States, and we might acquire, or invest in, or provide strategic advice to non-US companies, particularly those located in Southeast Asia. As of the date of filing this Annual Report on Form 8-K, we have not signed any agreements with any company to acquire it, or invest in it, or provide strategic advice.


The sectors in which we will attempt to focus include, but are not limited to: agriculture, education, financial services and investment banking, food retailing and processing, healthcare, hospitality, infrastructure, mining, real estate, shipping, trading, transportation & logistics. We may acquire or invest either directly or through specific purpose vehicles (SPVs) or Investment Trusts to be created for the specific purpose of each transaction.


We intend that working capital requirements will continue to be funded through a combination of loans from the principal shareholder, as to which there can be no assurance, and further issuances of securities, also as to which there can also be no assurance. Our working capital requirements are expected to increase, if and when we acquire assets or a business.



5






We have no lines of credit or other bank financing arrangements. Additional issuances of equity or convertible debt securities, if any, will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of any new prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.


Material Commitments


As of May 31, 2015, and as of the date of filing this Annual Report on Form 10-K, we did not have any material commitments.


Purchase of Significant Equipment


We do not intend to purchase any significant equipment unless and until we acquire assets or a business.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


Not applicable to smaller reporting companies.


ITEM 8.  FINANCIAL AND SUPPLEMENTARY DATA.


INTERUPS INC.


Financial Statements


For the Years Ended May 31, 2015 and 2014


Report of Independent Registered Public Accounting Firm

 

7

Balance Sheets

 

8

Statements of Operations

 

9

Statement of Stockholders’ Equity (Deficit)

 

10

Statements of Cash Flows

 

11

Notes to the Financial Statements

 

12




6






[itup_10k001.jpg]


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of

Interups, Inc.


We have audited the accompanying balance sheets of Interups, Inc. as of May 31, 2015 and 2014, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended. Interups, Inc.’s management is responsible for these financial statements. 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 audit 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 Interups, Inc. as of May 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended, 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 1 to the financial statements, the Company currently has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time as of May 31, 2015 which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/ Sadler, Gibb & Associates, LLC


Salt Lake City, UT

January 20, 2015  




[itup_10k002.jpg]



7





INTERUPS INC.

BALANCE SHEETS

 

 

 

May 31,

2015

$

 

 

May 31,

2014

$

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

 

 

 

1,910

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

 

 

1,910

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

57,137

 

 

 

 

Due to related parties

 

 

3,000

 

 

 

10,037

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

60,137

 

 

 

10,037

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ DEFICIT 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock
Authorized: 75,000,000 common shares with a par value of $0.001 per share
Issued and outstanding: 6,900,000 common shares

 

 

6,900

 

 

 

6,900

 

 

 

 

 

 

 

 

 

 

Additional paid-in capital

 

 

40,437

 

 

 

26,100

 

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

 

(107,474

)

 

 

(41,127

)

 

 

 

 

 

 

 

 

 

Total Stockholders’ Deficit

 

 

(60,137

)

 

 

(8,127

)

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Deficit

 

 

 

 

 

1,910

 



The accompanying notes are an integral part of these financial statements.





8





INTERUPS INC.

STATEMENTS OF OPERATIONS

 

 

 

Year ended

May 31,

2015

$

 

 

Year ended

May 31,

2014

$

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

66,347

 

 

 

20,914

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

 

66,347

 

 

 

20,914

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

(66,347

)

 

 

(20,914

)

 

 

 

 

 

 

 

 

 

Net Loss per Share – Basic and Diluted

 

 

(0.01

)

 

 

(0.00

)

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding – Basic and Diluted

 

 

6,900,000

 

 

 

6,843,014

 



The accompanying notes are an integral part of these financial statements.





9





INTERUPS INC.

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)


 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Total

 

 

 

#

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – May 31, 2013

 

 

6,400,000

 

 

 

6,400

 

 

 

21,600

 

 

 

(20,213

)

 

 

7,787

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash

 

 

500,000

 

 

 

500

 

 

 

4,500

 

 

 

 

 

 

5,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

 

 

 

 

 

 

 

 

(20,914

)

 

 

(20,914

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – May 31, 2014

 

 

6,900,000

 

 

 

6,900

 

 

 

26,100

 

 

 

(41,127

)

 

 

(8,127

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forgiveness of related party debt

 

 

 

 

 

 

 

 

14,337

 

 

 

 

 

 

14,337

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

 

 

 

 

 

 

 

 

(66,347

)

 

 

(66,347

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – May 31, 2015

 

 

6,900,000

 

 

 

6,900

 

 

 

40,437

 

 

 

(107,474

)

 

 

(60,137

)



The accompanying notes are an integral part of these financial statements.





10





INTERUPS INC.

STATEMENT OF CASH FLOWS

 

 

 

Year ended

May 31,

2015

$

 

 

Year ended

May 31,

2014

$

 

 

 

 

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

(66,347

)

 

 

(20,914

)

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

57,137

 

 

 

 

Due to related party

 

 

7,300

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used In Operating Activities

 

 

(1,910

)

 

 

(20,914

)

 

 

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

 

 

 

 

5,000

 

 

 

 

 

 

 

 

 

 

Net Cash Provided By Financing Activities

 

 

 

 

 

5,000

 

 

 

 

 

 

 

 

 

 

Decrease in Cash

 

 

(1,910

)

 

 

(15,914

)

 

 

 

 

 

 

 

 

 

Cash – Beginning of Period

 

 

1,910

 

 

 

17,824

 

 

 

 

 

 

 

 

 

 

Cash – End of Period

 

 

 

 

 

1,910

 

 

 

 

 

 

 

 

 

 

Non Cash Investing and Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forgiveness of related party debt

 

 

14,337

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid

 

 

 

 

 

 

Income tax paid

 

 

 

 

 

 



The accompanying notes are an integral part of these financial statements.





11





INTERUPS INC.

Notes to the Financial Statements


1.  Organization and Nature of Operations


The Company was incorporated in the state of Nevada on April 11, 2012. Until the change of control which took place as reported in a Form 8-K Report, filed with the Securities and Exchange Commission on November 24, 2014, the Company was in the business of developing an internet based group buying site. As reported in that Form 8-K, the then-principal shareholder, Romanas Bagdonas, sold all of his 4,000,000 shares of the Company, representing 57.97% of our issued and outstanding shares, to Laxmi Prasad, who is now the principal shareholder. As part of that transaction, Mr. Bagdonas resigned as the sole officer and director, and designated Likhitha Palaypu, Laxmi Prasad’s daughter, as the sole officer and director. Also, the Company sold all of its then-existing assets and business back to Mr. Bagdonas for $1.


Since the change of control, the Company has not acquired any assets or a business, and has no assets. Therefore, the Company is deemed a “shell,” as that term is defined in Section 12b-2 of the Securities Exchange Act of 1934.


Going Concern


These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at May 31, 2015, the Company has not earned revenue, has a working capital deficit of $60,137 and an accumulated deficit of $107,474. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.


2. Summary of Significant Accounting Policies


a) Basis of Presentation


The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is May 31.


b) Use of Estimates


The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


c) Cash and Cash Equivalents


The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As of May 31, 2015 and 2014, there were no cash equivalents.


d) Basic and Diluted Net Loss per Share


The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.




12



INTERUPS INC.

Notes to the Financial Statements



2.  Summary of Significant Accounting Policies (continued)


e) Financial Instruments


Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:


Level 1


Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.


Level 2


Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3


Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, and amounts due to related party. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.


f) Income Taxes


The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.


g) Comprehensive Loss


ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 2015 and 2014, the Company has no items representing comprehensive income or loss.


h)  Recent Accounting Pronouncements


The Company has limited operations and is considered to be in the development stage. During the period ended August 31, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.




13



INTERUPS INC.

Notes to the Financial Statements



2.  Summary of Significant Accounting Policies (continued)


h) Recent Accounting Pronouncements (continued)


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


3. Related Party Transactions


a) During the year ended May 31, 2015, the former President and Director of the Company forgave $14,337 of amounts paid on behalf of the Company, which has been recorded against additional paid-in capital. At May 31, 2015, the Company owed $nil (2014 - $10,037) to the former President and Director of the Company.


b) As at May 31, 2015, the Company owed $3,000 (2014 - $nil) to an entity owned by a related party for day-to-day expenditures. The amounts owing are unsecured, non-interest bearing, and due on demand.


4. Common Shares


a) In July 2013, the Company issued 500,000 shares of common stock for proceeds of $5,000.


5. Income Taxes


The Company has $107,474 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2032. The income tax benefit differs from the amount computed by applying the US federal income tax rate of 34% to net loss before income taxes for the year ended May 31, 2015 and 2014 as a result of the following:


 

 

2015

$

 

 

2014

$

 

 

 

 

 

 

 

 

Net loss before taxes

 

 

(66,347

)

 

 

(20,914

)

Statutory rate

 

 

34

%

 

 

34

%

 

 

 

 

 

 

 

 

 

Computed expected tax recovery

 

 

(22,558

)

 

 

(7,111

)

Change in valuation allowance

 

 

22,558

 

 

 

7,111

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

 

 

 

 


The significant components of deferred income tax assets and liabilities as at May 31, 2015 and 2014 after applying enacted corporate income tax rates are as follows:


 

 

2015

$

 

 

2014

$

 

 

 

 

 

 

 

 

Net operating losses carried forward

 

 

36,541

 

 

 

13,983

 

Valuation allowance

 

 

(36,541

)

 

 

(13,983

)

 

 

 

 

 

 

 

 

 

Net deferred tax asset

 

 

 

 

 

 


Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have been offset by a valuation allowance. As at May 31, 2015, the Company has no uncertain tax positions.




14





ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

None.


ITEM 9A. CONTROLS AND PROCEDURES


Management’ s Report on Disclosure Controls and Procedures

 

The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

The Company’s Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this annual report (the “Evaluation Date”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer noted the deficiencies in internal controls identified in this Item 9A. Accordingly, the Company’s Chief Executive Officer and Chief Financial Officer has concluded that, as of the Evaluation Date, such controls and procedures were not effective.

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of May 31, 2015 using the criteria established in “ Internal Control - Integrated Framework ” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of May 31, 2015, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

 

1.

 

We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the single-member Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management ’ s activities.

 

2.

 

We did not maintain appropriate cash controls – As of May 31, 2015, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company ’ s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.

 

3.

 

We did not implement appropriate information technology controls – As at May 31, 2015, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.

 



15





Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.

 

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of May 31, 2015 based on criteria established in Internal Control — Integrated Framework issued by COSO.

 

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of May 31, 2015, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management ’ s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.


ITEM 9B. OTHER INFORMATION


None.



16





PART III

 

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

DIRECTORS AND EXECUTIVE OFFICERS


 

The name, address and position of our present officers and directors are set forth below:


Name and Address of Executive

Officer and/or Director

 

Age

 

Position

 

 

 

 

 

Likhitha Palaypu

123 TOWN SQUARE PLACE

UNIT 453 JERSEY CITY NJ 07310

 

22

 

President, Chief Executive Officer, Secretary, Chief Financial Officer and Chief Accounting Officer 


Biographical Information and Background of officer and director


Likhitha Palaypu, 22, is an honors graduate at the University of St Andrews in Scotland, where she studied International Relations with special interest in conflict theory and environmental politics. In the frame of her studies, she has worked as a political analyst for Frontier Horizons, a securities and political risk analysis firm based in London and written articles for the Foreign Affairs Review, a rapidly growing online journal for international affairs. Prior to her undergraduate career, she studied in Groton School, where she was recognized with the Tronic Award for especially strong use of research resources and also where she served as Editor-in-Chief of the Grotonian, the literary magazine of the School.

 

At present, bringing to light her more entrepreneurial inclinations, Ms. Palaypu is focusing to work on two ventures of her own--one in Real Estate to coordinate the service process of establishing School Infrastructure Investment Trust and the other one E-Tailor Project. Both are in their active stage of project firm up.


Ms. Palaypu is the daughter of Laxmi Prasad, our majority shareholder. Ms. Palaypu intends to serve as an interim CEO, pending the Registrant’s appointment of a CEO pursuant to an employment agreement. As of the date of filing this Annual Report on Form 10-K, we have not yet appointed or hired a permanent CEO.


AUDIT COMMITTEE


We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted.


SIGNIFICANT EMPLOYEES

 

We have no employees other than our sole officer and director, Likhitha Palaypu, who currently devotes very little time to company matters, and is not paid. We intend to hire employees on an as needed basis, and if and when we can afford to pay employees.




17





ITEM 11.  EXECUTIVE COMPENSATION.

 

The following tables set forth certain information about compensation paid, earned or accrued for services by our chief executive officer and all other executive officers (collectively, the “ Named Executive Officers ” ) from inception on April 11, 2012 until May 31, 2015.


SUMMARY COMPENSATION TABLE


Name and Principal Position

 

Year

 

 

Salary

(US$)

 

 

Bonus

(US$)

 

 

Stock

Awards

(US$)

 

 

Option

Awards

(US$)

 

 

Non-Equity

Incentive Plan

Compensation

(US$)

 

 

Nonqualified

Deferred

Compensation

Earnings

(US$)

 

 

All Other

Compensation

(US$)

 

 

Total

(US$)

 

Romanas Bagdonas

 

2012,
2013
and
2014

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

President

Likhitha Palaypu

 

2014
and
2015

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 


There are no current employment agreements between us and our sole officer. The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer. There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.


CHANGE OF CONTROL


As of May 31, 2015, we had no pension plans or compensatory plans or other arrangements that provide compensation in the event of a termination of employment or a change in our control.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.


The following table provides certain information regarding the ownership of our common stock, as of May 31, 2015 and as of the date of the filing of this annual report by:

 

 

·

 

each of our executive officers;

 

·

 

each director;

 

·

 

each person known to us to own more than 5% of our outstanding common stock; and

 

·

 

all of our executive officers and directors and as a group.


Title of Class

 

Name and Address of

Beneficial Owner

 

Amount and Nature of

Beneficial Ownership

 

Percentage

 

 

 

 

 

 

 

 

 

Common Stock, $.001 p.v.

 

Laxmi Prasad

123 Town Square, Unit 453, Jersey City, NJ 07310

 

4,000,000 shares of common stock

 

 

57.97

%

 

 

 

 

 

 

 

 

 

 

 

All officers and directors as a group (one person)

 

-0- shares

 

 

0

%


The percent of class is based on 6,900,000 shares of common stock issued and outstanding as of the date of this Form 10-K Annual Report.




18





ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.


During the year ended May 31, 2015, we had not entered into any transactions with our sole officer or director, or persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.

 

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

During fiscal years ended May 31 2015 and 2014, we incurred approximately $8,000 and $8,000 in fees to our principal independent accountants for professional services rendered in connection with the audit of our financial statements and for the reviews of our financial statements for the interim periods in the year ended May 31, 2015.







19





PART IV


ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES.


The following exhibits are filed as part of this Annual Report.


Exhibits:


31.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act


32.1

Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act


101

Interactive data files pursuant to Rule 405 of Regulation S-T.








20





SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

INTERUPS INC.

 

 

 

Dated: January 20, 2016

By:  

Likhitha Palaypu

 

 

Likhitha Palaypu, President and Chief Executive Officer and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 









21