UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 20172019
or
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
New Leap, Inc. |
(Exact name of registrant issuer as specified in its charter) |
Delaware | 37-1863750 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
8 Derech Hameshi St., Ganne Tiqwa, Israel, 5591179 |
(Address of principal executive offices, including zip code) |
Registrant’s phone number, including area code +972-50-7844477 |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES x NO ¨
Indicate by check mark whether the registrant 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 (section (§232.405 of this chapter) during the preceding twelve12 months (or for such shorter period that the registrant was required to submit and post such files).
YES ¨x NO x¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer"filer," "smaller reporting company" and "smaller reporting"emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer |
| Smaller reporting company | x |
Emerging growth company | x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES x NO ¨
Securities registered pursuant to Section 12(b) of the Act: None
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class | Outstanding at November | |
Common Stock, $.0001 par value |
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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Table of Contents |
PART I - FINANCIAL INFORMATION
New Leap, Inc.
(Expressed in USD, Except Share and Par Value Data)except for the number of shares)
September 30, June 30, 2017 2017 (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents Total Current assets Total assets $ - $ - $ - $ - $ - $ -
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| December 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
| $ | 1,548 |
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| $ | 21,007 |
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Total Current assets |
| $ | 1,548 |
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| $ | 21,007 |
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Total assets |
| $ | 1,548 |
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| $ | 21,007 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities: |
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Account payable to related party |
| $ | 25,000 |
| $ | 25,000 |
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| $ | 25,000 |
| $ | 25,000 |
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Other accounts payable |
| 2,068 |
| - |
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| 1,860 |
| 5,230 |
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Promissory note from shareholder |
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| 5,077 |
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| 305 |
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Promissory note payable to shareholder |
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| 36,381 |
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| 19,943 |
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Total current liabilities |
| $ | 32,145 |
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| $ | 25,305 |
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| $ | 63,541 |
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| $ | 50,173 |
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Total Liabilities |
| $ | 32,145 |
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| $ | 25,305 |
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| $ | 63,541 |
| $ | 50,173 |
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Commitments and contingencies (Note 7) |
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Stockholders’ Deficit: |
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Preferred stock; $.0001 par value, 5,000,000 shares authorized, none issued and outstanding |
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Common stock; $.0001 par value, 50,000,000 shares authorized, 9,000,000 shares issued and outstanding as of September 30, 2017 |
| $ | 9,000 |
| $ | 9,000 |
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Preferred stock; $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding |
| - |
| - |
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Common stock; $0.0001 par value, 50,000,000 shares authorized, 10,204,000 shares issued and outstanding respectively |
| $ | 10,204 |
| $ | 10,204 |
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Addition paid-in capital |
| 12,600 |
| 3,150 |
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| 117,025 |
| 88,675 |
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Accumulated deficit |
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| (53,745 | ) |
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| (37,455 | ) |
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| (189,222 | ) |
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| (128,045 | ) |
Total stockholder’s deficit |
| $ | (32,145 | ) |
| $ | (25,305 | ) |
| $ | (61,993 | ) |
| $ | (29,166 | ) |
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Total liabilities and stockholders’ deficit |
| $ | - |
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| $ | - |
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| $ | 1,548 |
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| $ | 21,007 |
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The accompanying notes are an integral part of the financial statements.
3 |
Table of Contents |
New Leap, Inc.
UNAUDITED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
(Expressed in USD, except for the number of shares)
STATEMENTS OF OPERATIONS
(USD, Except Share and Earnings Per Share Data)
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| Nine months ended September 30, |
| Three months ended September 30, |
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| Inception (June 1, 2017) to September 30, 2017 |
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Revenues |
| $ | - |
| $ | - |
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| $ | - |
| $ | - |
| $ | - |
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Cost of revenues |
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| - |
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| - |
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| - |
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Gross profit |
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| - |
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| - |
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| - |
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| - |
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| - |
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Selling, General and Administrative expenses |
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| 16,290 |
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| 53,745 |
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| 61,177 |
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| 39,002 |
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| 22,099 |
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| 12,468 |
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Loss from operations |
| (16,290 | ) |
| (53,745 | ) |
| (61,177 | ) |
| (39,002 | ) |
| (22,099 | ) |
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Other income, net |
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| - |
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| - |
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| - |
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| - |
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Loss before provision for income taxes |
| (16,290 | ) |
| (53,745 | ) |
| (61,177 | ) |
| (39,002 | ) |
| (22,099 | ) |
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Income tax expense |
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| - |
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Net Loss |
| $ | (16,290 | ) |
| $ | (53,745 | ) |
| $ | (61,177 | ) |
| $ | (39,002 | ) |
| $ | (22,099 | ) |
| $ | (12,468 | ) |
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Loss per share |
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Other Comprehensive loss |
| $ | (61,177 | ) |
| $ | (39,002 | ) |
| $ | (22,099 | ) |
| $ | (12,468 | ) | ||||||||
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Loss per share (Note 4) |
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Basic and diluted |
| $ | (0.00 | ) |
| $ | (0.01 | ) |
| $ | (0.01 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
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Weighted average common shares outstanding: |
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Basic and diluted |
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| 9,000,000 |
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| 9,000,000 |
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| 10,204,000 |
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| 10,204,000 |
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| 10,204,000 |
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| 10,204,000 |
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The accompanying notes are an integral part of the financial statements.
4 |
Table of Contents |
UNAUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
STATEMENTS OF CASH FLOWS(Expressed in USD, except for the number of shares)
(USD)
Nine months ended September 30, 2019 and 2018
Three months ended September 30, 2017 Inception (June 1, 2017) to September 30, 2017 Cash flow from operating activities: Net loss Adjustments to reconcile net loss to net cash used in operating activities: Contributed services Changes in operating assets and liabilities: Increase in account payables Net cash used in operating activities Changes in investment activities Cash flow from financing activities: Promissory note from shareholder Net cash provided by financing activities NET CASH DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD Common shares Additional paid-in Accumulated Total shareholders' Number Amount capital deficit deficit Balance as of December 31, 2017 Issued shares Shareholder contribution Net loss Balance as of September 30, 2018 $ (16,290 ) $ (53,745 ) 9,450 21,600 2,068 27,068 $ (4,772 ) $ (5,077 ) - - $ 4,772 $ 5,077 $ 4,772 $ 5,077 - - - - $ - $ - 9,000,000 $ 9,000 $ 22,050 $ (73,271 ) $ (42,221 ) 1,204,000 1,204 28,825 - 30,029 - - 28,350 - 28,350 - - - (39,002 ) (39,002 ) 10,204,000 $ 10,204 $ 79,225 $ (112,273 ) $ (22,844 )
Common shares Additional paid-in Accumulated Total shareholders' Number Amount capital deficit deficit Balance as of December 31, 2018 Shareholder contribution Net loss Balance as of September 30, 2019 10,204,000 $ 10,204 $ 88,675 $ (128,045 ) $ (29,166 ) - - 28,350 - 28,350 - - - (61,177 ) (61,177 ) 10,204,000 $ 10,204 $ 117,025 $ (189,222 ) $ (61,993 )
The accompanying notes are an integral part of the financial statements.
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Table of Contents |
UNAUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
(Expressed in USD, except for the number of shares)
Three months ended September 30, 2019 and 2018
Common shares Additional paid-in Accumulated Total shareholders' Number Amount capital deficit deficit Balance as of June 30, 2018 Shareholder contribution Net loss Balance as of September 30, 2018 10,204,000 $ 10,204 $ 69,775 $ (99,805 ) $ (19,826 ) - - 9,450 - 9,450 - - - (12,468 ) (12,468 ) 10,204,000 $ 10,204 $ 79,225 $ (112,273 ) $ (22,844 )
Common shares Additional paid-in Accumulated Total shareholders' Number Amount capital deficit deficit Balance as of June 30, 2019 Shareholder contribution Net loss Balance as of September 30, 2019 10,204,000 $ 10,204 $ 107,575 $ (167,123 ) $ (49,344 ) - - 9,450 - 9,450 - - - (22,099 ) (22,099 ) 10,204,000 $ 10,204 $ 117,025 $ (189,222 ) $ (61,993 )
The accompanying notes are an integral part of the financial statements.
6 |
Table of Contents |
New Leap, Inc.
UNAUDITED STATEMENTS OF CASH FLOWS
(Expressed in USD, except for the number of shares)
Nine months ended September 30, 2019 2018 Cash flow from operating activities: Net loss Adjustments to reconcile net loss to net cash used in operating activities: Contributed services Changes in operating assets and liabilities: Increase (decrease) in account payables Net cash used in operating activities Changes in investment activities Cash flow from financing activities: Common Stock Issued for cash Promissory note from shareholder Net cash provided by financing activities NET CASH DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD $ (61,177 ) $ (39,002 ) 28,350 28,350 (3,370 ) (5,312 ) $ (36,197 ) $ (15,964 ) $ - $ - $ - $ 30,029 16,738 1,591 $ 16,738 $ 31,620 (19,459 ) 15,656 21,007 7,954 $ 1,548 $ 23,610
The accompanying notes are an integral part of the financial statements.
7 |
Table of Contents |
New Leap, Inc.
(USD, In Thousands, Except Shares and Per Share Values)
(Unaudited)except number of shares)
NOTE 1 – ORGANIZATIONAL AND GOING CONCERN:
New Leap, Inc. (the "Company") was formed on June 1, 2017 as a Delaware corporation.
During 2017 the Company issued 9,000,000 shares of its common stock in consideration for a business plan at $0.001 per share. The Company has yet to start operational or research and development activities. The Company plans to operate in the field of crowdfunding and to run an online platform for investments in private U.S. companies and companies which are publicly traded in the U.S. (both domestic and foreign).
In January and February, 2018 the Company issued a total of 1,204,000 shares of its common stock to various investors at a price of $0.025 per share. The shares were issued pursuant to the Company’s registration statement on Form S-1 which was declared effective by the SEC on October 20, 2017.
The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered cumulative losses and negative cash flows from operations since inception. Until the Company will achieve profitability and revenues, which is uncertain, it intends to finance its operation through the issuance of its shares. These conditions give rise to substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of this uncertainty.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited interim financial statements have been prepared in accordance with GAAP.accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission. Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring adjustments) to present the financial position of the Company as of September 30, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results for the full fiscal year. These financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s fiscal year-end isAnnual Report on Form 10-K for the year ended December 31.31, 2018.
Use of Estimates
The preparation of the financial statements in conformity with 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Recent Accounting Pronouncements
From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCsAccounting Standards Codifications ("ASC") are communicated through issuance of an Accounting Standards Update. Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our financial statements upon adoption. Further, the new lease standard had no effect on the Company since the Company leases its office space from its sole officer and director at no charge.
Table of Contents |
Fair Value Measurement
The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
NOTE 3 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash, demand deposits and highly liquid investments with original maturities of three months or less. Cash and cash equivalents are carried at cost which approximates fair value.
NOTE 4 – EARNINGS (LOSS) PER SHARE
The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company and the fact that the company has a loss.
NOTE 5 – OTHER ACCOUNTS PAYABLE
At September 30, 2019 the Company had "other accounts payable" at the amount of $1,860. That amount reflects payments due to service providers.
NOTE 6 – PROMISSORY NOTE FROMPAYABLE TO SHAREHOLDER
The Company has an outstanding note payable provided by the solemajor shareholder and sole officer and director which is unsecured and bears no interest. The note is payable upon demand. The outstanding balance under the note was $5,077 as of September 30, 2017.
NOTE 47 – COMMITMENTS AND CONTINGENCIES
In June 2017, the Company engaged a legal counsel in order to receive legal services concerning the registration statement to be filed with the Securities and Exchange Commission ("SEC"). According to the agreement, the fees will be paid if and only upon receiving the first $25,000 from external investors following the effectiveness of the registration statement. Since this expense was probable it was recorded as a provision and as expenses amounting to $25,000 outstanding at September 30, 2017.2019. The legal counsel is considered to be a related party - see also note 5.Note 9. The legal counsel has agreed to postpone this payment for the time being given the financial condition of the Company.
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Table of Contents |
NOTE 58 – COMMON STOCK
Common Stock confers upon its holders the rights to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends if declared. At September 30, 2019 and December 31, 2018 the Company had 10,204,000 common shares outstanding. The Company has 50,000,000 authorized common shares. During the fiscal year ended December 31, 2018 the Company issued 1,204,000 common shares at $0.025 per share to various shareholders pursuant to its S-1 registration statement that became effective on October 20, 2017. The expense incurred by the CEO and major shareholder on behalf and for the benefit of the Company for the nine months ended September 30, 2019 and 2018 amounted to $28,350 in each period and to $37,800 in the year ended December 31, 2018 and was recorded as contribution to equity.
NOTE 9 –– TRANSACTION WITH RELATED PARTY
| A. | During the period from inception (June 1, 2017) and up to the balance sheet date the CEO and |
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| B. | The services described in |
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| C. | The Company leases its office space from its sole officer and director at no charge. |
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NOTE 10 – SUBSEQUENT EVENTS
In October, 2019 the Company became subject to a "success fee" at the amount of $15,000 pursuant to the terms of a consulting agreement. In accordance with ASC 855-10 we have analyzed our operations subsequent to September 30, 2019 to the date these financial statements were issued, and have determined that, except for the above event, we do not have any material subsequent events to disclose in these financial statements.
Table of Contents |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
Operations
New Leap, Inc., a Delaware corporation, (“New Leap” “Company” “we,” “us,” or “our”) was incorporated on June 1, 2017. Most of the activity through September 30, 2017 involved efforts in connection with the Company’s registration on Form S-1.
We are a development stage company and have extremely limited financial resources. We have not established a source of equity or debt financing. Our financial statements include a note emphasizing the uncertainty of our ability to remain a going concern.
Results from Operations
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the period from June 1, 2017 (inception) to September 30, 2017nine and the three months ended September 30, 20172019 were $53,745$61,177 and $16,290,$22,099, respectively, comparing to $39,002 and $12,468 for the nine and three months ended September 30, 2018, respectively. The expenses were primarily consisted of contributed services by the CEO and professional services in connection with our registration on Form S-1.services.
Liquidity and Capital Resources
The following is a summary of the Company's cash flows used in operating activities for the threenine months ended September 30, 20172019 and the period from June 1, 2017 (inception) to September 30, 2017:2018:
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| Three months ended September 30, 2017 |
| June 1, 2017 (inception) to September 30, 2017 |
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| Nine months ended September 30, 2019 |
| Nine months ended September 30, 2018 |
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Net Loss |
| $ | (16,290 | ) |
| $ | (53,745 | ) |
| $ | (61,177 | ) |
| $ | (39,002 | ) |
Net cash used in operating activities |
| $ | (4,772 | ) |
| $ | (5,077 | ) |
| $ | (36,197 | ) |
| $ | (15,964 | ) |
Net cash provided by financing activities |
| $ | 16,738 |
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| $ | 31,620 |
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Most of our resources and work to date have been devoted to planning our business and completing our registration statement.
Table of Contents |
WeOur resources to date have embarked upon an effort to becomebeen funds paid on our behalf by our major shareholder and CEO and funds raised under our registration statement, which became effective on October 20, 2017.
As a public company and, by doing so, have incurred and will continue to incur additional significant expenses for legal, accounting and related services. Once we become a public entity subject to the reporting requirements of the Exchange Act of 1934, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate that these costs will range up to $25,000 per year over the next few years and may be significantly higher if our business volume and transactional activity increases.
The Company may offer, at its discretion, shares of its common stock to settle professional fees. There can be no assurances, and we cannot predict the likelihood, that we will be able to settle any professional fees by issuing shares of our common stock.
As of September 30, 20172019 we owed $32,145, $27,068$63,541, $26,860 of which were in connection with professional services related to our registration on Form S-1.services. The balance of $5,077$36,681 was owed to our solemajor shareholder and chief executive officer for expenses incurred on behalf of the Company. There are no other significant liabilities at September 30, 2017.2019.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and 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.
Critical Accounting Policies
The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.
Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2 to the financial statements, included elsewhere in this prospectus,report, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.
Going Concern
Our independent registered public accounting firm, which audited our financial statements as of June 30, 2017December 31, 2018 and for the period then ended and reviewed our financial statements as of September 30, 2017 and the period then ended has raised substantial doubt about our ability to continue as a going concern. Therefore, it is possible that even if we keep costs to a minimum we may not be able to continue operations for the next 12 months.
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Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Contractual Obligations
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K,S-K, the Company is not required to provide information required by this Item.Item
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term "disclosure controls and procedures", as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports 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. Disclosure controls and procedures also 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.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of September 30, 2017,2019, that our disclosure controls and procedures are not effective at a reasonable assurance level and are designed to provide reasonable assurance that the controls and procedures will meet their objectives due to the material weaknesses described below. However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The internal controls for the Company are provided by executive management's review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:
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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.
Management assessed the effectiveness of the Company's internal control over financial reporting as of September 30, 2017. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in Internal Control-Integrated Framework. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.
Based on this assessment, management has concluded that as of September 30, 2017, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles due to the existence of the following material weaknesses:
Although we are unable to meet the standards under COSO because of the limited resources available to a company of our size, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function (3) appoint one or more independent directors to our board of directors who shall be appointed to a Company audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and (4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this quarterly report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred since June 1, 2017 (inception)December 31, 2018 that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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To the best of our knowledge, the Company is not a party to any legal proceeding or litigation.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
There were no sales of unregistered equity securities during the period covered by this report on Form 10-Q. Our registration statement on Form S-1, file number 333-219776, became effective on October 20, 2017.2017 and then again on June 12, 2019 following the filing of a post-effective amendment to the registration statement. The offering has yetpursuant to commence asthis registration statement was terminated on April 20, 2018. Proceeds raised in the Company is still working on the list of potential investors it wishes to approach. offering are used for general expenses.
Item 3. Defaults upon Senior Securities.
None.
None.
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Certification of President pursuant to Exchange Act Rule 13a-14 and 15d-14. | |
101.INS ** | XBRL Instance Document |
101.SCH ** | XBRL Taxonomy Extension Schema Document |
101.CAL ** | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF ** | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB ** | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE ** | XBRL Taxonomy Extension Presentation Linkbase Document |
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** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements 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.
| NEW LEAP, INC. | |||
Date: November | By: | /s/ Itzhak Ostashinsky | ||
| Itzhak Ostashinsky | |||
| Chief Executive Officer, President and Chief Financial Officer |
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