Item 1. Description of Business
Paracap Corporation was incorporated in the state of Nevada on April 1, 2005. The Company is planning to begin operations as an online e-commerce website that promotes daily deals for business-to-business transactions. We anticipate that in order for us to continue development of this online operation and retail sale of our product, we will need to raise additional capital. We currently do not have any specific plans to raise these funds.
Principal Products or Services and Their Markets
We intend to commence operations as an online website that promotes daily deals for business-to-business transactions.
The Company’s technology is developed in-house and we intend to be a leading provider of advertising and marketing services. A factor that is proprietary to the Company, is our option to allow users to suggest deals and vote on deals already suggested. This key differentiator is our user-friendly website which will allow business owners to buy and sell products and services at considerable discounts between the members of our business to business online community.
The initial market we plan to introduce our software to is the worldwide market.
Competition
The current market for daily deal websites is competitive. Our Company differentiates itself from other daily deal websites in that it allows the customers to suggest what deals they want.
Insurance
Currently, we have no insurance coverage.
Government Regulation
We are currently not subject to any government regulations.
Offices
The Company's headquarters and executive address is located at 424 West Bakerview Rd, #105-268, Bellingham, WA, 98226.
Our telephone number is 949-419-6588.
Employees
We currently do not have any employees.
Subsidiaries
We do not have any subsidiaries
Bankruptcy, Receivership, or Similar Proceedings
There has been no bankruptcy, receivership, or similar proceedings
Patents and Trademarks
We do not have any patents or trademarks
Legal Proceedings
We are not a party to any material legal proceeding, nor are any of our officers, director or affiliates' a party adverse to us in any legal proceeding.
Item 1A:
Item 1A: Risk Factors
In addition to the other information in this report and our other filings with the SEC, you should carefully consider the risks described below. These risks are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. If any of the following risks occur, our business, financial condition or operating results could be materially and adversely affected.
Risks associated with Paracap Corporation:
1. Our auditors have issued a going concern opinion. This means we may not be able to achieve our objectives and may have to suspend or cease operations. Our auditors have issued a going concern opinion as at July 31, 2011. This means that there is substantial doubt that we can continue as an ongoing business without additional financing and/or generating profits. If we are unable to do so, we will have to cease operations and you will lose your investment.
2.Because we have not yet commenced operations we face a high risk of business failure. We were incorporated on April 1, 2005 and to date have been involved primarily in organizational activities. As of July 31, 2011, we have not earned any revenues. Accordingly, you can evaluate our business, and therefore our future prospects, based only on a limited operating history. Potential investors should be aware of the difficulties normally encountered by development stage companies and the high rate of failure for such enterprises.
3. If we are not able to effectively respond to competition, our business may fail. There are many companies in the daily deals business that will compete with us. Most of these competitors have established businesses with returning customers. We will attempt to compete against these groups by offering a higher quality of products and services to our customers. However, we cannot assure you that such a strategy will be successful, or that competitors will not copy our business strategy. Our inability to achieve sales and revenues due to competition will have an adverse effect on our business operations and financial condition.
4. Because we have only one director who is responsible for our managerial and organizational structure, in the future, there may not be effective disclosure and accounting controls to comply with applicable laws and regulations which could result in fines, penalties and assessments against us. Presently, we have only one officer/director. He is responsible for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When theses controls are implemented, he will be responsible for the administration of the controls. Should he not have sufficient experience, he may be incapable of creating and implementing the controls which may cause us to be subject to sanctions and fines by the SEC which ultimately could cause you to lose your investment.
5. Because our sole executive officer will only be devoting limited time to our operations, our operations could be sporadic which may result in periodic interruptions or suspensions of operations and a lack of revenues which may cause us to cease operations. Xing Cheng Yao, our sole executive officer will only be devoting limited time to our operations. Because Mr.Yao will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to Mr. Yao. As a result, operations may be periodically interrupted or suspended which could result in a lack of revenues and a possible cessation of operations.
Item 1B:
Item 1B: Unresolved Staff Comments
None
Item 2:
Item 2: Description of Property
The Company's headquarters and executive offices are located at 424 West Bakerview Rd, #105-268, Bellingham, WA, 98226.
Our telephone number is 949-419-6588.
Item 3:
Item 3: Legal Proceedings
There are no existing, pending or threatened legal proceedings involving Paracap Corporation or against any of our officers or directors as a result of their involvement with the Company.
As of July 31, 2010 the Company does not retain a legal counsel.
Item 4:
Item 4: Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fiscal period ended July 31, 2011.
Item 5:
Item 5: Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
The Company's Common stock is not presently listed under any exchange. There is currently no active trading in our common stock and there has been no active trading.
As of July 31, 2011, there were approximately 30 stockholders of record of the Company's Common Stock.
The Company has not paid any cash dividends to date, and it has no intention of paying any cash dividends on its common stock in the foreseeable future. The declaration and payment of dividends is subject to the discretion of its Board of Directors. The timing, amount and form of dividends, if any, will depend on, among other things, results of operations, financial condition, cash requirements and other factors deemed relevant by the Board of Directors.
There are no outstanding options or warrants or convertible securities to purchase our common equity.
The Company has never issued securities under and does not have any equity compensation plan.
Item 6:
Item 6: Selected Financial Data
As of As of
July 31, 2011 July 31, 2010
Balance Sheet
Total Assets $ - $ -
Total Liabilities $39,589 $38,839
Stockholders Equity (Deficit) $(39,589) $(38,839)
For the For the
Year ended Year Ended
July 31, 2011 July 31, 2010
Income Statement
Revenues $ - $ -
Total Expenses $750 $1,950
Net Loss $(750) $(1,950)
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Item 7:
Item 7: Management's Discussion and Analysis or Plan of Operation
The following discussion and analysis provides information which management of Paracap Corporation (the "Company") believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this report.
Overview
Paracap Corporation was incorporated in the state of Nevada on April 1, 2005. The Company plans to begin operations as an online website that promotes daily deals for business-to-business transactions. We anticipate that in order for us to continue development of the website we will need to raise additional capital. We currently do not have any specific plans to raise these funds.
Results of Operations
Revenues
There were no revenues generated for the fiscal period ended July 31, 2011 and no revenues have been earned by the Company since it's inception.
General & Administrative Expenses
General and administrative expenses totaled $750 for the fiscal year ended July 31, 2011. This is compared to general and administrative expenses totaling $1,950 for the fiscal year ended July 31, 2010. This decrease in general and administrative expenses is largely attributed to the decreases in amortization expenses.
We experienced a net loss of $750 for the fiscal year ended July 31, 2011 compared to a net loss of $1,950 for the fiscal year ended July 31, 2010.
Liquidity and Capital Resources
As of July 31, 2011, the Company had cash of $0. Management does not expect that the current level of cash on hand will be sufficient to fund our operation for the next twelve month period. In the event that additional funds are required to maintain operations, our officers and directors have agreed to advance us sufficient capital to allow us to continue operations. We may also be able to obtain loans from our shareholders, but there are no agreements or understandings in place currently.
We believe that we will require additional funding to expand our business and ensure its future profitability. We anticipate that any additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any agreements in place for any future equity financing. In the event we are not successful in selling our common stock, we may also seek to obtain short-term loans from our director.
Item 7A:
Item 7A: Quantitative and Qualitative Disclosures about Market Risk
Please see Item 1A above, "Risk Factors," for a discussion of these and other risks and uncertainties we face in our business.
Item 8:
Item 8: Financial Statements
The Company's consolidated financial statements, together with the report thereon of/edited by David L. Hillary, Jr., CPA, CITP, MBA for the fiscal year ending July 31, 2011 are included elsewhere herein, beginning on Page. Please refer to Page of this report for a list of Financial Statements.
Item 9A: Controls and Procedures
1. Evaluation of Disclosure Controls and Procedures:
Based on an evaluation of the Company's disclosure controls and procedures (as defined in Rules 13 (a) - 15 (e) under the Securities Exchange Act of 1943, as amended (the "Exchange Act") as of July 31, 2011, the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"), conducted under the supervision of and with the participation of the Company's executive, have concluded that the Company's disclosure controls and procedures, which are designed to ensure that information required to be disclosed by the Company in the report 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 designed to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the chief executive and financial officer as appropriate to allow timely decisions regarding required disclosures are effective as of the Evaluation Date.
Xing Cheng Yao, our Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based on that evaluation, taking into account our limited resources and current business operations, they concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this annual report has been made known to them in a timely fashion. There have been no significant changes in internal controls, or in other factors that could significantly affect internal controls, subsequent to the date they completed their evaluation
2. Management's Report on Internal Control over Financial Reporting:
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting’s such terms is defined in Rules 13(a) - 15 (f) under the Exchange Act. The Company's internal control systems has been designed to provide reasonable assurance to management and the Board of Directors regarding the preparation and fair presentation of published financial statements in accordance with U.S. generally accepted accounting principles.
A company's internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and director of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material affect on the financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentations. Because of inherent limitations due to, for example, the potential for human error or circumvention of controls, internal controls 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.
The Company’s management, under the supervision of the chief executive and financial officer, assessed the effectiveness of the Company's internal control over financial reporting as of July 31, 2011. Based on its assessment, management believes that as of July 31, 2011, the Company's internal control over financial reporting was effective.
3. Changes in Internal Controls over Financial Reporting:
During the Company's last fiscal quarter of 2011 (the fourth fiscal quarter), there were no changes in the Company's internal control over financial reporting (as defined in Rules 13 (a) - 15 (f) that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B: Other Information
None
Item 10: Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act
Officers and Directors
Each of our directors serves until his or her successor is elected and qualified. Each of our officers is elected by the board of directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. The board of directors has no nominating, auditing or compensation committees.
The name, age, and position of our present officers and directors are set forth below:
Name Age Position Held
Xing Cheng Yao President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Treasurer, Secretary, and Director
Each director serves until our next annual meeting of the stockholders or unless they resign earlier. The Board of Directors elects officers and their terms of office are at the discretion of the Board of Directors.
Background of officers and directors
Mr. Yao has been Paracap Corporation's president, principal executive officer, principal financial officer, principal accounting officer, treasurer and a director since August 8, 2006. Mr. Yao is a experienced Senior Mobile Application Engineer at Beijing Li Da Zhi Info Technology Co., Ltd.. He has his bachelor of Computer Science Degree from Capital Normal University (Beijing, China) and his Master’s Degree in Software Science from the Beijing Institute of Technology.
Audit Committee Financial Expert
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 are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted.
Conflicts of Interest
The only conflict that we foresee is that our officers and directors devote time to projects that do not involve us.
SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires that the Company's directors, executive officers, and persons who own more than 10% of registered class of the Company's equity securities, or file with the Securities and Exchange Commission (SEC), initial reports of ownership and report of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. As of the fiscal year ending July 31, 2011, Form 3 reports were not timely filed by Xing Cheng Yao, the Company's President.
Code of Ethics
The Company has adopted code of ethics for all of the employees, directors and officers which is attached to this Annual Report as Exhibit 14.1.
Item 11: Executive Compensation
The following table sets forth information with respect to compensation paid by us to our officers and directors during the three most recent fiscal years. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.
[1]All compensation received by the officers and directors has been disclosed.
Option/SAR Grants
There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans.
Compensation of Directors
We do not have any plans to pay our directors any money.
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of the date of this prospectus, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The table also reflects what their ownership will be assuming completion of the sale of all shares in this offering. The stockholders listed below have direct ownership of his/her shares and possess sole voting and dispositive power with respect to the shares. The address for each person is our address at 424 West Bakerview Rd, #105-268, Bellingham, WA, 98226.
Name of Beneficial Owner Direct Amount of Beneficial Owner Position Percent of Class
Eric Lung 5,000,000
37.12%
All officers and directors as a Group (1 person)
37.12%
Securities authorized for issuance under equity compensation plans.
We have no equity compensation plans.
Item 12: Certain Relationships and Related Transactions
We have no certain relationships or related transactions to report in this period.
Item 13: Exhibits
Exhibit No. Description
3.1* Articles of Incorporation of the Company (incorporated by reference to the Form SB-2 filed with the Securities and Exchange Commission on July 19, 2007)
3.2* Bylaws of the Company (incorporated by reference to the Form SB-2 filed with the Securities and Exchange Commission on July 19, 2007)
10.1* Website Design Contract (incorporated by reference to the Form SB-2 filed with the Securities and Exchange Commission on July 19, 2007)
Code of Ethics
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Item 14: Principal Accountant Fees and Services
1) Audit Fees
The aggregate fees billed for the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company's annual financial statements and review of financial statements included in the Company's Form 10-QSBs or services that are normally provided by the accountant in connection with statutory and regulatory engagements for those fiscal years was:
2011 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2) Audit - Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported in the preceding paragraph:
2011 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $0 David L. Hillary, Jr., CPA, CITP, MBA
3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
2011 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $0 David L. Hillary, Jr., CPA, CITP, MBA
4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
2011 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $0 David L. Hillary, Jr., CPA, CITP, MBA
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 on October 27, 2014.
Paracap Corporation
(Registrant)
By: /s/ Xing Cheng Yao
Xing Cheng Yao
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/ Xing Cheng Yao President, CEO, Secretary, Treasurer and Director October 27, 2014
Xing Cheng Yao
Report of Independent Registered Public Accounting Firm for fiscal year ended July 31, 2011
Balance Sheets for the fiscal year ended July 31, 2011 and July 31, 2010
Statements of Operations for the fiscal year ended July 31, 2011 and period ended July 31, 2010
Statements of Cash Flows for the fiscal year ended July 31, 2011 and period ended July 31, 2010
Statements of Shareholder's Equity (Deficit)
Notes to Financial Statements
PARACAP CORPORATION
(A Development Stage Company)
REPORT AND FINANCIAL STATEMENTS
July 31, 2011
(Stated in US Dollars)
Hillary CPA Group
Certified Public Accountants
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders Paracap Corporation
Nevada, USA
We have audited the accompanying statements of financial position of Paracap Corporation (a Nevada corporation) as of July 31, 2011 and 2010 the related statements of income, retained earnings, and cash flows for the year then ended. All information included in these financial statements is the representation of the management of Paracap Corporation Our responsibility is to express an opinion on these financial statements based on our audit.
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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 Paracap Corporation as of July 31, 2011 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Respectfully,
/s/ “ David L. Hillary, Jr.”
CPA, CITP
Hillary CPA Group,
LLC Noblesville, Indiana
September 29, 2014
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
PARACAP CORPORATION
( A Development Stage Company)
Notes to Financial Statements
July 31,
Note 1: Organization and Basis of Presentation
Paracap Corporation (the “Company”) is a for profit corporation established under the corporation laws in the State of Nevada, United States of America on April 1, 2005.
The Company intends to commence operations as a beer and wine store retailer and an online retailer of goods and services. The Company is a development stage company and has not yet realized any revenues from its planned or any other operations. As such, the Company is subject to all risks inherent to the establishment of a start-up business enterprise.
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. The Financial Statements and related disclosures as of July 31, 2011 and 2010 are audited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Unless the context otherwise requires, all references to “Paracap Corporation,” “we,” “us,” “our” or the “company” are to Paracap Corporation and any subsidiaries.
The Company’s fiscal year ends July 31.
Foreign Currency Translation
The Company is located and operating outside of the United States of America. It maintains its accounting records in U.S. Dollars, as follows:
At the transaction date, each asset, liability, revenue, and expense is translated into U.S. dollars by the use of exchange rates in effect on that date. At the period end, monetary assets and liabilities are revalued by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations.
The Company's currency exposure is insignificant and immaterial and there is no use of derivative instruments to reduce potential exposure to foreign currency risk.
Note 2: Significant Accounting Policies and Recent Accounting Pronouncements
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Fair Value of Financial Instruments
ASC 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2011.
The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities and notes payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value.
Basic and Diluted Loss Per Share
The Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
Note 3: License
By a management license agreement dated June 29, 2005, the Company acquired the right and license to manage and operate a liquor retail establishment in the municipality of Maple Ridge, Canada. The agreement is for five years with an option to renew for an additional five years with the same terms and conditions except for the consideration, which will be negotiated between the parties, failing which an arbitrator would be appointed to determine the consideration. The agreement also provides the Company with the right of first refusal to negotiate terms over the right to manage and operate other of the licensor's establishments in the Lower Mainland of British Columbia, Canada.
The consideration given for the license was 600,000 common shares of the Company at fair market value of $6,000. In addition, 30% of the monthly net profits (net operating income), as defined by accounting principles generally accepted in the United States of America, earned by the store managed by the Company will be remitted to the licensor each month. If there is a net loss, the Company will not be obligated to pay any percentage.
The Company has adopted the provisions of ASC 350, "Amortization of Intangible Assets" and will amortize the license costs over five years on a straight-line basis.
Note 4: Commitments and Contingencies
An officer has provided office services without charge. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officer and director are involved in other business activities and most likely will become involved in other business activities in the future.
Note 5: Legal Matters
The Company has no known legal issues pending.
Note 6: Debt
Loans have been made by an unrelated third party equal to the operating deficits as they are incurred. A balance of $34,089 is outstanding as of July 31, 2011. The loans are without interest or a fixed term of repayment. The loans are due on demand.
Note 7: Related Party Transactions
During the period ended July 31, 2006 the Company received shareholder loans totaling $5,500. A balance of $5,500 is outstanding as of July 31, 2011, without interest or a fixed term of repayment. The loans are due on demand.
Note 8: Capital Stock
During the period ended July 31, 2005, the Company issued 11,500,000 common shares at $0.001 per share of the Company for total proceeds of $11,500.
During the period ended July 31. 2005, the Company issued 1,370,000 common shares at $0.01 per share of the Company for total proceeds of $13,700.
During the period ended July 31. 2005, the Company issued 600,000 common shares at $0.01 per share of the Company for total proceeds of $6,000 in consideration for a new license acquisition.
As of July 31, 2011 there were no outstanding stock options or warrants.
Note 9: Income Taxes
The Company uses the assets and liability method of accounting for income taxes in accordance with FASB Topic 740 “Income Taxes". Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements 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.
The company has not commenced operations, has not generated any revenue, and has not made a provision for income taxes.
The Company’s statutory tax rate is 35%.
The Company does not have any material uncertainties with respect to its provisions for income taxes.
Note 10: Going Concern
The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.
For the period ended July 31, 2011, the Company had an accumulated deficit of $70,789.00.
The Company’s ability to continue as a going concern is dependent upon the Company’s ability to generate sufficient revenues to operate profitably or raise additional capital through debt financing and/or through sales of common stock.
Management has no formal plan in place to address these concerns, but believes that the Company will be able to obtain additional funds through equity financing and/or related party advances.
The failure to achieve the necessary levels of profitability or obtain the additional funding would be detrimental to the Company.
Item 9A: Controls and Procedures
1. Evaluation of Disclosure Controls and Procedures:
Based on an evaluation of the Company's disclosure controls and procedures (as defined in Rules 13 (a) - 15 (e) under the Securities Exchange Act of 1943, as amended (the "Exchange Act") as of July 31, 2011, the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"), conducted under the supervision of and with the participation of the Company's executive, have concluded that the Company's disclosure controls and procedures, which are designed to ensure that information required to be disclosed by the Company in the report 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 designed to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the chief executive and financial officer as appropriate to allow timely decisions regarding required disclosures are effective as of the Evaluation Date.
Xing Cheng Yao, our Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based on that evaluation, taking into account our limited resources and current business operations, they concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this annual report has been made known to them in a timely fashion. There have been no significant changes in internal controls, or in other factors that could significantly affect internal controls, subsequent to the date they completed their evaluation
2. Management's Report on Internal Control over Financial Reporting:
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting’s such terms is defined in Rules 13(a) - 15 (f) under the Exchange Act. The Company's internal control systems has been designed to provide reasonable assurance to management and the Board of Directors regarding the preparation and fair presentation of published financial statements in accordance with U.S. generally accepted accounting principles.
A company's internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and director of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material affect on the financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentations. Because of inherent limitations due to, for example, the potential for human error or circumvention of controls, internal controls 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.
The Company’s management, under the supervision of the chief executive and financial officer, assessed the effectiveness of the Company's internal control over financial reporting as of July 31, 2011. Based on its assessment, management believes that as of July 31, 2011, the Company's internal control over financial reporting was effective.
3. Changes in Internal Controls over Financial Reporting:
During the Company's last fiscal quarter of 2011 (the fourth fiscal quarter), there were no changes in the Company's internal control over financial reporting (as defined in Rules 13 (a) - 15 (f) that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B:
Item 9B: Other Information
None
Item 10:
Item 10: Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act
Officers and Directors
Each of our directors serves until his or her successor is elected and qualified. Each of our officers is elected by the board of directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. The board of directors has no nominating, auditing or compensation committees.
The name, age, and position of our present officers and directors are set forth below:
Name Age Position Held
Xing Cheng Yao President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Treasurer, Secretary, and Director
Each director serves until our next annual meeting of the stockholders or unless they resign earlier. The Board of Directors elects officers and their terms of office are at the discretion of the Board of Directors.
Background of officers and directors
Mr. Yao has been Paracap Corporation's president, principal executive officer, principal financial officer, principal accounting officer, treasurer and a director since August 8, 2006. Mr. Yao is a experienced Senior Mobile Application Engineer at Beijing Li Da Zhi Info Technology Co., Ltd.. He has his bachelor of Computer Science Degree from Capital Normal University (Beijing, China) and his Master’s Degree in Software Science from the Beijing Institute of Technology.
Audit Committee Financial Expert
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 are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted.
Conflicts of Interest
The only conflict that we foresee is that our officers and directors devote time to projects that do not involve us.
SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires that the Company's directors, executive officers, and persons who own more than 10% of registered class of the Company's equity securities, or file with the Securities and Exchange Commission (SEC), initial reports of ownership and report of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. As of the fiscal year ending July 31, 2011, Form 3 reports were not timely filed by Xing Cheng Yao, the Company's President.
Code of Ethics
The Company has adopted code of ethics for all of the employees, directors and officers which is attached to this Annual Report as Exhibit 14.1.
Item 11:
Item 11: Executive Compensation
The following table sets forth information with respect to compensation paid by us to our officers and directors during the three most recent fiscal years. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.
[1]All compensation received by the officers and directors has been disclosed.
Option/SAR Grants
There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans.
Compensation of Directors
We do not have any plans to pay our directors any money.
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
Item 12:
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of the date of this prospectus, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The table also reflects what their ownership will be assuming completion of the sale of all shares in this offering. The stockholders listed below have direct ownership of his/her shares and possess sole voting and dispositive power with respect to the shares. The address for each person is our address at 424 West Bakerview Rd, #105-268, Bellingham, WA, 98226.
Name of Beneficial Owner Direct Amount of Beneficial Owner Position Percent of Class
Eric Lung 5,000,000
37.12%
All officers and directors as a Group (1 person)
37.12%
Securities authorized for issuance under equity compensation plans.
We have no equity compensation plans.
Item 12: Certain Relationships and Related Transactions
We have no certain relationships or related transactions to report in this period.
Item 13:
Item 13: Exhibits
Exhibit No. Description
3.1* Articles of Incorporation of the Company (incorporated by reference to the Form SB-2 filed with the Securities and Exchange Commission on July 19, 2007)
3.2* Bylaws of the Company (incorporated by reference to the Form SB-2 filed with the Securities and Exchange Commission on July 19, 2007)
10.1* Website Design Contract (incorporated by reference to the Form SB-2 filed with the Securities and Exchange Commission on July 19, 2007)
Code of Ethics
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Item 14:
Item 14: Principal Accountant Fees and Services
1) Audit Fees
The aggregate fees billed for the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company's annual financial statements and review of financial statements included in the Company's Form 10-QSBs or services that are normally provided by the accountant in connection with statutory and regulatory engagements for those fiscal years was:
2011 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $ 750 David L. Hillary, Jr., CPA, CITP, MBA
2) Audit - Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported in the preceding paragraph:
2011 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $0 David L. Hillary, Jr., CPA, CITP, MBA
3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
2011 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $0 David L. Hillary, Jr., CPA, CITP, MBA
4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
2011 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2010 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2009 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2008 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2007 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2006 - $0 David L. Hillary, Jr., CPA, CITP, MBA
2005 - $0 David L. Hillary, Jr., CPA, CITP, MBA
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 on October 27, 2014.
Paracap Corporation
(Registrant)
By: /s/ Xing Cheng Yao
Xing Cheng Yao
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/ Xing Cheng Yao President, CEO, Secretary, Treasurer and Director October 27, 2014
Xing Cheng Yao
Report of Independent Registered Public Accounting Firm for fiscal year ended July 31, 2011
Balance Sheets for the fiscal year ended July 31, 2011 and July 31, 2010
Statements of Operations for the fiscal year ended July 31, 2011 and period ended July 31, 2010
Statements of Cash Flows for the fiscal year ended July 31, 2011 and period ended July 31, 2010
Statements of Shareholder's Equity (Deficit)
Notes to Financial Statements
PARACAP CORPORATION
(A Development Stage Company)
REPORT AND FINANCIAL STATEMENTS
July 31, 2011
(Stated in US Dollars)
Hillary CPA Group
Certified Public Accountants
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders Paracap Corporation
Nevada, USA
We have audited the accompanying statements of financial position of Paracap Corporation (a Nevada corporation) as of July 31, 2011 and 2010 the related statements of income, retained earnings, and cash flows for the year then ended. All information included in these financial statements is the representation of the management of Paracap Corporation Our responsibility is to express an opinion on these financial statements based on our audit.
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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 Paracap Corporation as of July 31, 2011 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Respectfully,
/s/ “ David L. Hillary, Jr.”
CPA, CITP
Hillary CPA Group,
LLC Noblesville, Indiana
September 29, 2014
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
PARACAP CORPORATION
( A Development Stage Company)
Notes to Financial Statements
July 31,
Note 1: Organization and Basis of Presentation
Paracap Corporation (the “Company”) is a for profit corporation established under the corporation laws in the State of Nevada, United States of America on April 1, 2005.
The Company intends to commence operations as a beer and wine store retailer and an online retailer of goods and services. The Company is a development stage company and has not yet realized any revenues from its planned or any other operations. As such, the Company is subject to all risks inherent to the establishment of a start-up business enterprise.
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. The Financial Statements and related disclosures as of July 31, 2011 and 2010 are audited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Unless the context otherwise requires, all references to “Paracap Corporation,” “we,” “us,” “our” or the “company” are to Paracap Corporation and any subsidiaries.
The Company’s fiscal year ends July 31.
Foreign Currency Translation
The Company is located and operating outside of the United States of America. It maintains its accounting records in U.S. Dollars, as follows:
At the transaction date, each asset, liability, revenue, and expense is translated into U.S. dollars by the use of exchange rates in effect on that date. At the period end, monetary assets and liabilities are revalued by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations.
The Company's currency exposure is insignificant and immaterial and there is no use of derivative instruments to reduce potential exposure to foreign currency risk.
Note 2: Significant Accounting Policies and Recent Accounting Pronouncements
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Fair Value of Financial Instruments
ASC 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2011.
The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities and notes payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value.
Basic and Diluted Loss Per Share
The Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
Note 3: License
By a management license agreement dated June 29, 2005, the Company acquired the right and license to manage and operate a liquor retail establishment in the municipality of Maple Ridge, Canada. The agreement is for five years with an option to renew for an additional five years with the same terms and conditions except for the consideration, which will be negotiated between the parties, failing which an arbitrator would be appointed to determine the consideration. The agreement also provides the Company with the right of first refusal to negotiate terms over the right to manage and operate other of the licensor's establishments in the Lower Mainland of British Columbia, Canada.
The consideration given for the license was 600,000 common shares of the Company at fair market value of $6,000. In addition, 30% of the monthly net profits (net operating income), as defined by accounting principles generally accepted in the United States of America, earned by the store managed by the Company will be remitted to the licensor each month. If there is a net loss, the Company will not be obligated to pay any percentage.
The Company has adopted the provisions of ASC 350, "Amortization of Intangible Assets" and will amortize the license costs over five years on a straight-line basis.
Note 4: Commitments and Contingencies
An officer has provided office services without charge. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officer and director are involved in other business activities and most likely will become involved in other business activities in the future.
Note 5: Legal Matters
The Company has no known legal issues pending.
Note 6: Debt
Loans have been made by an unrelated third party equal to the operating deficits as they are incurred. A balance of $34,089 is outstanding as of July 31, 2011. The loans are without interest or a fixed term of repayment. The loans are due on demand.
Note 7: Related Party Transactions
During the period ended July 31, 2006 the Company received shareholder loans totaling $5,500. A balance of $5,500 is outstanding as of July 31, 2011, without interest or a fixed term of repayment. The loans are due on demand.
Note 8: Capital Stock
During the period ended July 31, 2005, the Company issued 11,500,000 common shares at $0.001 per share of the Company for total proceeds of $11,500.
During the period ended July 31. 2005, the Company issued 1,370,000 common shares at $0.01 per share of the Company for total proceeds of $13,700.
During the period ended July 31. 2005, the Company issued 600,000 common shares at $0.01 per share of the Company for total proceeds of $6,000 in consideration for a new license acquisition.
As of July 31, 2011 there were no outstanding stock options or warrants.
Note 9: Income Taxes
The Company uses the assets and liability method of accounting for income taxes in accordance with FASB Topic 740 “Income Taxes". Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements 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.
The company has not commenced operations, has not generated any revenue, and has not made a provision for income taxes.
The Company’s statutory tax rate is 35%.
The Company does not have any material uncertainties with respect to its provisions for income taxes.
Note 10: Going Concern
The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.
For the period ended July 31, 2011, the Company had an accumulated deficit of $70,789.00.
The Company’s ability to continue as a going concern is dependent upon the Company’s ability to generate sufficient revenues to operate profitably or raise additional capital through debt financing and/or through sales of common stock.
Management has no formal plan in place to address these concerns, but believes that the Company will be able to obtain additional funds through equity financing and/or related party advances.
The failure to achieve the necessary levels of profitability or obtain the additional funding would be detrimental to the Company.