Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 14, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Quarta-Rad, Inc. | |
Entity Central Index Key | 1,549,631 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 15,326,150 | |
Trading Symbol | QURT | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash | $ 107,188 | $ 77,879 |
Accounts receivable | 43,181 | 37,886 |
Inventory | 114,836 | 164,140 |
Total Current Assets | 265,205 | 279,905 |
TOTAL ASSETS | 265,205 | 279,905 |
Current Liabilities | ||
Accounts payable and accrued expenses | 14,695 | 24,963 |
Related party payables | 110,048 | 44,667 |
Total Current Liabilities | 124,743 | 69,630 |
Common Stock: authorized 50,000,000 common shares, $0.0001 par value 15,326,150 were issued and outstanding at June 30, 2018 and December 31, 2017 | 1,533 | 1,533 |
Additional Paid-in Capital | 65,197 | 65,197 |
Retained Earnings | 73,732 | 143,545 |
Total Stockholders' Equity | 140,462 | 210,275 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 265,205 | $ 279,905 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 15,326,150 | 15,326,150 |
Common stock, shares outstanding | 15,326,150 | 15,326,150 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales, net | $ 235,529 | $ 327,936 | $ 495,806 | $ 616,576 |
Cost of goods sold | 171,454 | 251,964 | 372,620 | 477,107 |
Gross profit | 64,075 | 75,972 | 123,186 | 139,469 |
Expenses: | ||||
General & administrative | 6,523 | 2,662 | 23,604 | 4,673 |
Advertising | 9,907 | 3,995 | 21,919 | 9,991 |
Professional and consulting fees | 43,527 | 34,896 | 77,852 | 68,946 |
Research and development | 23,770 | 47,539 | ||
Operating Expenses | 83,727 | 41,553 | 170,914 | 83,610 |
Net income/(loss) from operations | (19,652) | 34,419 | (47,728) | 55,859 |
Other income/(expense) | 3,483 | (22,085) | ||
Net income (loss) | $ (16,169) | $ 34,419 | $ (69,813) | $ 55,859 |
Income per share - basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average shares - basic and diluted | 15,326,150 | 15,326,150 | 15,326,150 | 15,326,150 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES: | ||
Net income /(loss) | $ (69,813) | $ 55,859 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,295) | 8,606 |
Inventory | 49,304 | (54,851) |
Accounts payable and accrued expenses | (10,270) | 9,573 |
Related party payable | 65,383 | 29,086 |
Net cashed provided by operating activities | 29,309 | 48,273 |
FINANCING ACTIVITIES: | ||
Proceeds from subscriptions receivable | 5,000 | |
Net cash provided by financing activities | 5,000 | |
Net change in cash | 29,309 | 53,273 |
Cash, beginning of period | 77,879 | 67,513 |
Cash, end of period | 107,188 | 120,786 |
Supplemental cash flow information: | ||
Cash paid for interest | ||
Cash paid for income taxes |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 1 - BASIS OF PRESENTATION The condensed balance sheet of Quarta-Rad, Inc. (the “Company”) as of June 30, 2018, and the condensed statements of operations for the three-month and six-month period ended June 30, 2018 and 2017, and the cash flows for the six months ended June 30, 2018 and 2017, have not been audited. However, in the opinion of management, such information includes all adjustments (consisting of normal recurring adjustments), which are necessary to properly reflect the financial position of the Company as of June 30, 2018, the results of operations and cash flows for the periods ended June 30, 2018 and 2017. The condensed balance sheet as of December 31, 2017 has been derived from audited financial statements. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Interim period results are not necessarily indicative of the results to be achieved for an entire year. These condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | NOTE 2 - NATURE OF BUSINESS The Company distributes detection devices, including but not limited to Geiger counters, to homeowners and interested customers in North America, Europe, and Asia. The Company targets homebuilders and home renovation contractors. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Advertising The Company expenses advertising costs, consisting primarily of placement in multiple publications, along with design and printing costs of sales materials, when incurred. Advertising expense for the three and six months ended June 30, 2018 and 2017, amounted to $9,907, $21,919, $3,995, and $9,991, respectively. Inventory Inventories are stated at the lower of cost or market (net realizable value). The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. The Company’s inventory consists of finished goods available for sale. Earnings per Share The Company’s basic earnings per share are calculated by dividing its net income available to common stockholders by the weighted average number of common shares outstanding for the period. The Company’s dilutive earnings per share is calculated by dividing its net income available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no potentially dilutive instruments outstanding at June 30, 2018. Fair Value of Financial Instruments The Company’s financial instruments as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, “Financial Instruments” FASB ASC 820 “Fair Value Measurements and Disclosures” ● Level 1.Observable inputs such as quoted prices in active markets; ● Level 2.Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3.Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. Revenue Recognition On January 1, 2018, we adopted FASB Accounting Standards Codification ASC Topic 606, Revenue from Contracts with Customers . We reviewed all contracts at the date of initial application and elected to use the modified retrospective transition method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. Therefore, comparative prior periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition Our principal activities from which we generate our revenue are product sales. Revenue is measured based on consideration specified in a contract with a customer. A contract with a customer exists when we enter into an enforceable contract with a customer. The contract is based on either the acceptance of standard terms and conditions on the websites for e-commerce customers and via telephone with our third-party call center for our print media and direct mail customers, or the execution of terms and conditions contracts with retailers and wholesalers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid prior to shipment via credit card or check when our products are sold direct to consumers or approximately 30 days from the time control is transferred when sold to wholesalers, distributors and retailers. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer. A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for us is transfer of over-the-counter drug and consumer care products to our customers. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. We have concluded the sale of bottled finished goods and related shipping and handling are accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer. We issue refunds to e-commerce and print media customers, upon request, within 30 days of delivery. We estimate the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For retailers, distributors and wholesalers, we do not offer a right of return or refund and revenue is recognized at the time products are shipped to customers. In all cases, judgment is required in estimating these reserves. Actual claims for returns could be materially different from the estimates. There was no reserve for sales returns and allowances, at June 30, 2018 and December 31, 2017, respectively. We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product is shipped. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales. Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07 Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement Reporting, Comprehensive Income (Topic 220) In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In February 2016, the FASB issued its new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842) Revenue from Contracts with Customers |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 4–RELATED PARTY TRANSACTIONS The Company sells radiation monitors and to date has purchased all of it inventory from a company in Russia, which is owned by a minority shareholder of the Company. Total inventory purchased was $227,745 and $765,725 for the six months ended June 30, 2018 and for the year ended December 31, 2017, respectively. During July 2017, the Company entered into an agreement with the Russian Affiliate to develop and update software for a new device for $180,000. The development contract goes through December 31, 2019. The amount due in connection with services performed through June 30, 2018 is $45,443. The Company owes the Russian affiliate $56,980 and $9,443 and such amount is included in related party payables in the accompanying balance sheet at June 30, 2018 and December 31, 2017, respectively. The related payable balance is related to research and development services including the July 2017 contract noted above. Since inception, the Company has not compensated its CEO, who is the majority shareholder, and, as of June 30, 2018 and December 31, 2017, is due $53,068 and $35,222, respectively, for expenses paid by the shareholder on behalf of the Company. |
Other Expenses
Other Expenses | 6 Months Ended |
Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Expenses | NOTE 5– OTHER EXPENSES During the first quarter of 2018, the Company evaluated its policies relating to sales tax collection in various states. The Company has reached a voluntary disclosure agreement with certain states and has estimated a potential liability of approximately $22,000. All amounts were paid in the second quarter and the Company has no outstanding balance at June 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 6– COMMITMENTS AND CONTINGENCIES Legal In the normal course of business, the Company may become involved in various legal proceedings. The Company knows of no pending or threatened legal proceeding to which the Company is or will be a party that, if successful, might result in material adverse change in the Company’s business, properties or financial condition. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 7–GOING CONCERN The Company’s financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. While the Company has established sources of capital to cover its operating costs, it incurred a loss the first and second quarter of 2018 and cannot support a salary for its CEO, which causes substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to implement its business plan. If the Company is unable to obtain adequate capital, it could be forced to cease operations. Management intends to focus on raising funds and potential acquisitions going forward. The Company cannot provide any assurance or guarantee that it will be able to raise funds. Potential investors must be aware if it is unable to raise funds through the sale of its common stock and generate sufficient revenues, any investment made into the Company could be lost in its entirety. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 8–SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to June 30, 2018 through August 14, 2018. Based on its evaluation, there is nothing to be disclosed herein. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Advertising | Advertising The Company expenses advertising costs, consisting primarily of placement in multiple publications, along with design and printing costs of sales materials, when incurred. Advertising expense for the three and six months ended June 30, 2018 and 2017, amounted to $9,907, $21,919, $3,995, and $9,991, respectively. |
Inventory | Inventory Inventories are stated at the lower of cost or market (net realizable value). The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. The Company’s inventory consists of finished goods available for sale. |
Earnings Per Share | Earnings per Share The Company’s basic earnings per share are calculated by dividing its net income available to common stockholders by the weighted average number of common shares outstanding for the period. The Company’s dilutive earnings per share is calculated by dividing its net income available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no potentially dilutive instruments outstanding at June 30, 2018. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, “Financial Instruments” FASB ASC 820 “Fair Value Measurements and Disclosures” ● Level 1.Observable inputs such as quoted prices in active markets; ● Level 2.Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3.Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. |
Revenue Recognition | Revenue Recognition On January 1, 2018, we adopted FASB Accounting Standards Codification ASC Topic 606, Revenue from Contracts with Customers . We reviewed all contracts at the date of initial application and elected to use the modified retrospective transition method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. Therefore, comparative prior periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition Our principal activities from which we generate our revenue are product sales. Revenue is measured based on consideration specified in a contract with a customer. A contract with a customer exists when we enter into an enforceable contract with a customer. The contract is based on either the acceptance of standard terms and conditions on the websites for e-commerce customers and via telephone with our third-party call center for our print media and direct mail customers, or the execution of terms and conditions contracts with retailers and wholesalers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid prior to shipment via credit card or check when our products are sold direct to consumers or approximately 30 days from the time control is transferred when sold to wholesalers, distributors and retailers. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer. A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for us is transfer of over-the-counter drug and consumer care products to our customers. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. We have concluded the sale of bottled finished goods and related shipping and handling are accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer. We issue refunds to e-commerce and print media customers, upon request, within 30 days of delivery. We estimate the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For retailers, distributors and wholesalers, we do not offer a right of return or refund and revenue is recognized at the time products are shipped to customers. In all cases, judgment is required in estimating these reserves. Actual claims for returns could be materially different from the estimates. There was no reserve for sales returns and allowances, at June 30, 2018 and December 31, 2017, respectively. We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product is shipped. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07 Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement Reporting, Comprehensive Income (Topic 220) In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In February 2016, the FASB issued its new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842) Revenue from Contracts with Customers |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Advertising expense | $ 9,907 | $ 3,995 | $ 21,919 | $ 9,991 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended |
Jul. 31, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | |
Inventory purchased | $ 227,745 | $ 765,725 | |
Due to majority shareholder | 53,068 | 35,222 | |
Russian Affiliate [Member] | |||
Related party payable | 56,980 | $ 9,443 | |
Russian Affiliate [Member] | Software Development [Member] | |||
Payment to develop and updated software for new device | $ 180,000 | ||
Related party payable | $ 45,443 |
Other Expenses (Details Narrati
Other Expenses (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Other Income and Expenses [Abstract] | |
Potential liability | $ 22,000 |