Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2016 | Feb. 08, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | First Priority Tax Solutions Inc. | |
Entity Central Index Key | 1,622,408 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,740,000 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Current Assets | ||
Cash | $ 6,701 | $ 8,675 |
Accounts receivable | 850 | 441 |
Deferred rent asset | 26,984 | 17,422 |
Prepaid expenses | 100 | |
Total current assets | 34,635 | 26,538 |
Real Estate | ||
Land | 15,000 | 15,000 |
Building | 60,000 | 60,000 |
Accumulated depreciation | (5,000) | (4,000) |
Real estate, net | 70,000 | 71,000 |
Total Assets | 104,634 | 97,538 |
Current Liabilities | ||
Accrued expenses | 26,941 | 42,461 |
Note payable | 85,000 | 85,000 |
Note payable - related party | 10,000 | |
Total current liabilities | 121,941 | 127,461 |
Non-current Liabilities | ||
Note payable, related party | 10,000 | |
Lease deposits from customers | 4,500 | 4,500 |
Total non-current liabilities | 4,500 | 14,500 |
Total liabilities | 126,441 | 141,961 |
Stockholders' Deficit | ||
Preferred stock par value $0.000001: 8,000,000 shares authorized; none issued or outstanding | ||
Common stock par value $0.000001: 92,000,000 shares authorized; 5,740,000 shares issued and outstanding | 6 | 6 |
Additional paid-in capital | 59,849 | 59,849 |
Accumulated deficit | (81,662) | (104,278) |
Total Stockholders' Deficit | (21,807) | (44,423) |
Total Liabilities and Stockholders' Deficit | $ 104,634 | $ 97,538 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Jun. 30, 2016 |
Stockholders' Equity | ||
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 8,000,000 | 8,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 92,000,000 | 92,000,000 |
Common stock, shares issued | 5,740,000 | 5,740,000 |
Common stock, shares outstanding | 5,740,000 | 5,740,000 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Statements Of Operations | ||||
Revenue | $ 17,260 | $ 34,520 | ||
Cost of revenue | ||||
Gross margin | 17,260 | 34,520 | ||
Operating Expenses | ||||
Depreciation expense | 500 | 500 | 1,000 | 1,000 |
Professional fees | 11,833 | 7,220 | 17,601 | 10,019 |
General and administrative | 379 | 300 | 778 | 2,297 |
Total operating expenses | 12,712 | 8,020 | 19,379 | 13,316 |
Income (Loss) from Operations | 4,548 | (8,020) | 15,141 | (13,316) |
Other (Income) Expense | ||||
Other income | (3,094) | (9,189) | (600) | |
Interest expense | 857 | 857 | 1,714 | 1,714 |
Other (income) expense, net | (2,237) | 857 | (7,475) | 1,114 |
Income (Loss) before Income Tax Provision | 6,785 | (8,877) | 22,616 | (14,430) |
Income Tax Provision | ||||
Net Income (Loss) | $ 6,785 | $ (8,877) | $ 22,616 | $ (14,430) |
Earnings per share | ||||
Basic and Diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average common shares outstanding | ||||
Basic and Diluted | 5,740,000 | 5,740,000 | 5,740,000 | 5,740,000 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ 22,616 | $ (14,430) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,000 | 1,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (409) | |
Prepaid expenses | (100) | |
Deferred rent asset | (9,562) | |
Accrued expenses | (17,233) | |
Accrued interest | 1,714 | 1,714 |
Net Cash Used in Operating Activities | (1,974) | (11,716) |
Cash Flows from Financing Activities | ||
Proceeds from note payable | 10,000 | |
Net Cash Provided by Financing Activities | 10,000 | |
Net Change in Cash | (1,974) | (1,715) |
Cash - beginning of reporting period | 8,675 | 7,275 |
Cash - end of reporting period | 6,701 | 5,560 |
Supplemental disclosure of cash flow information: | ||
Interest paid | ||
Income tax paid |
Organization and Operations
Organization and Operations | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 1 - Organization and Operations | First Priority Tax Solutions, Inc. (First Priority or the Company) was incorporated on March 31, 2014 under the laws of the State of Delaware. The Company engages in the business of acquiring, developing and managing residential and commercial income-producing properties in the Cincinnati and Dayton, Ohio metropolitan areas. Revenue is generated primarily from rental income. |
Significant and Critical Accoun
Significant and Critical Accounting Policies and Practices | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 2 - Significant and Critical Accounting Policies and Practices | The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Companys financial condition and results and require managements most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Companys significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. Basis of Presentation Unaudited Interim Financial Information The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (SEC) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the reporting period ended June 30, 2016 and notes thereto contained in the Companys Annual Report on Form 10-K filed with the SEC on October 21, 2016. Fiscal Year End The Company elected June 30 th Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Companys critical accounting estimates and assumptions affecting the financial statements were: (i) Assumption as a going concern: (ii) Fair value of long-lived assets (iii) Valuation allowance for deferred tax assets: These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Cash Equivalents For the purpose of the accompanying financial statements, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. Real Estate Real Estate is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Estimated Useful Life (Years) Building 30 Land N/A Upon sale or retirement, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include a. affiliates (Affiliate means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act) of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. The disclosures shall include: a. the nature of the relationship(s) involved b. description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitment and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Revenue Recognition The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. In addition to the aforementioned general policy, the following are the specific revenue recognition policies for each major category of revenue: Residential property leases will be for terms of generally one year or more. Rental income is recognized on a straight-line basis over the term of the lease. Rent concessions, including free rent if incurred in connection with residential property leases, will be amortized on a straight-line basis over the terms of the related leases and will be charged as a reduction of rental revenue. Deferred Tax Assets and Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the current enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In managements opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Tax years that remain subject to examination by major tax jurisdictions The Company discloses tax years that remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15. Earnings per Share Earnings per share ("EPS") are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260105523). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation. There were no potentially dilutive common shares outstanding for the reporting periods ending September 30, 2016 and 2015. Cash Flows Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (Indirect method) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. Subsequent Events The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. Recently Issued Accounting Pronouncements The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements. |
Going Concern
Going Concern | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 3 - Going Concern | The Company has elected to adopt early application of Accounting Standards Update No. 2014-15, Presentation of Financial StatementsGoing Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15) The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has incurred recurring losses and generated negative cash flows from operating activities since inception. As of December 31, 2016 and June 30, 2016, the Company had an accumulated deficit of $81,662 and $104,278, respectively. The Company has a working capital deficit (total current liabilities exceeded total current assets) of $77,306 and $100,923, respectively. The Companys cash balance and revenues generated are not currently sufficient and cannot be projected to cover its operating expenses for the next twelve months from the filing date of this report. These factors among others raise substantial doubt about the Companys ability to continue as a going concern for a reasonable period of time. The Companys existence is dependent upon managements ability to develop profitable operations. Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the Companys efforts will be successful. No assurance can be given that managements actions will result in profitable operations or the resolution of its liquidity problems. The accompanying consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern. In order to improve the Companys liquidity, the Companys management is actively pursuing additional equity financing through discussions with investment bankers and private investors. There can be no assurance that the Company will be successful in its effort to secure additional equity financing. |
Real Estate
Real Estate | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 4 - Real Estate | As of December 31, 2016, real estate investment consisted of one commercial property located at 1784 Stanley Avenue, Dayton, Ohio, which was leased in February 2016. Depreciation expense for the six months ended December 31, 2016 and 2015 totaled $1,000 each, respectively. |
Revenue from Rental Income
Revenue from Rental Income | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 5 - Revenue from rental income | On February 1, 2016, the Company entered into an agreement with GSH, LLC. to lease the commercial property it owns at 1784 Stanley Avenue, Dayton, OH. The lease is for the initial term of 24 months. Rental income is recognized on a straight-line basis over the term of the lease. On November 1, 2015, the Company entered into an agreement with Key-Ads, Inc. to lease the track of land to erect one 672 sq ft back to back digital advertising sign. The lease term is through October 31, 2114. This lease was contingent upon lessee securing all required governmental permits and licenses to allow the erection, maintenance and use of its sign for outdoor advertising purposes within 18 months of the execution date of the agreement. Rental income is recognized on a straight-line basis over the term of the lease. |
Note Payable
Note Payable | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 6 - Note Payable | On June 1, 2014, the Company entered into a note payable with a third-party in the amount of $85,000. The note bears interest at 4% per annum with interest and principal due on June 1, 2016. Accrued interest totaled $7,946 and $4,536 for the reporting period ended September 30, 2016 and 2015, respectively. This note was extended through January 1, 2017 and further extended through December 31, 2017. |
Equity Transactions
Equity Transactions | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 7 - Equity Transactions | Shares Authorized Upon formation, the total number of shares of all classes of stock which the Company is authorized to issue is Ninety Two Million (92,000,000) shares of Common Stock, par value $0.000001 per share, and Eight Million (8,000,000) shares of Preferred Stock, par value $0.000001 per share. Common Stock On March 31, 2014, upon formation, the Company issued an aggregate of 4,000,000 shares of the newly formed corporations common stock to its Chief Executive Officer at the par value of $0.000001 per share or $4 for compensation. From March 31, 2014 through June 30, 2014, the Company authorized the issuance of 1,740,000 shares of its common stock for cash at $0.02 per share for a total of $36,951. In June 2014, the Companys president paid $14,000 in legal expenses for the Company which has been treated as a contribution to capital. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 8 - Related Party Transactions | On October 19, 2015, the Company entered into a related party note payable in the amount of $10,000. The note bears no interest, and principal is due on October 19, 2017. A Director of the Company is also the real estate agent for the Company's rental property. |
Concentration
Concentration | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 9 - Concentration | The Company operates in the Real Estate industry and owns one property in Dayton, Ohio. |
Deferred Tax Assets and Income
Deferred Tax Assets and Income Tax Provision | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 10 - Deferred Tax Assets and Income Tax Provision | Deferred Tax Assets At December 31, 2016 and June 30, 2016, the Company had net operating loss (NOL) carryforwards for Federal income tax purposes of $81,662 and $104,278 that may be offset against future taxable income through 2036. No tax benefit has been recorded with respect to these net operating loss carry-forwards in the accompanying financial statements as the management of the Company believes that the realization of the Companys net deferred tax assets of approximately $27,765 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by the full valuation allowance. Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization. The valuation allowance decreased approximately $7,689 for the six months ended December 31, 2016 and increased approximately $10,025 for the fiscal year ended June 30, 2016. Components of deferred tax assets are as follows: December 31, 2016 June 30, 2016 Net deferred tax assets Non-current: Expected income tax benefit from NOL carry-forwards $ 27,765 $ 35,454 Less valuation allowance (27,765 ) (35,454 ) Deferred tax assets, net of valuation allowance $ - $ - Income Tax Provision in the Statement of Operations A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: For the six months ended December 31, 2016 For the fiscal year ended June 30, 2016 Federal statutory income tax rate 34.0 % 34.0 % Increase (reduction) in income tax provision resulting from: Net operating loss (NOL) carry-forwards (34.0 ) (34.0 ) Effective income tax rate 0.0 % 0.0 % Tax Returns Remaining subject to IRS Audits The Company has not yet filed its corporation income tax return for the reporting period ended June 30, 2016. The Company's corporation income tax returns for the reporting periods ended June 30, 2016 and 2015 will remain subject to audit under the statute of limitations by the Internal Revenue Service for a period of three (3) years from the date they are filed. Ohio - Commercial Activity Tax (CAT) The Commercial Activity Tax (CAT) is an annual tax imposed on the privilege of doing business in Ohio, measured by gross receipts from business activities in Ohio. Businesses with Ohio taxable gross receipts of $150,000.00 per calendar year are subject to the CAT tax. Such "taxable gross receipts", include 1) gross rents and royalties from real property located in Ohio, and 2) gross receipts from the sale of real property located in Ohio. For calendar years 2006 and thereafter, the first $1 million in taxable gross receipts are taxed at $150, thereafter at a rate of 0.2600%. For tax years prior to December 31, 2013, there is an annual minimum tax (AMT) of $150.00. Since the Company has not had gross receipts for the periods ended June 30, 2016 and 2015, the CAT tax is not applicable to the Company for the periods indicated. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 11 - Subsequent Events | The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed, other than: · On January 23, 2017, the Company and Holly 1 LLC, a third-party, agreed to further extend a note payable in the amount of $85,000 to December 31, 2017. See Note 6 Note Payable. |
Significant and Critical Acco17
Significant and Critical Accounting Policies and Practices (Policies) | 6 Months Ended |
Dec. 31, 2016 | |
Significant And Critical Accounting Policies And Practices Policies | |
Basis of Presentation – Unaudited Interim Financial Information | The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (SEC) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the reporting period ended June 30, 2016 and notes thereto contained in the Companys Annual Report on Form 10-K filed with the SEC on October 21, 2016. |
Fiscal Year End | The Company elected June 30th as its fiscal year end date upon its formation. |
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Companys critical accounting estimates and assumptions affecting the financial statements were: (i) Assumption as a going concern: (ii) Fair value of long-lived assets (iii) Valuation allowance for deferred tax assets: These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. |
Cash Equivalents | For the purpose of the accompanying financial statements, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. |
Real Estate | Real Estate is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Estimated Useful Life (Years) Building 30 Land N/A Upon sale or retirement, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. |
Related Parties | The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include a. affiliates (Affiliate means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act) of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. The disclosures shall include: a. the nature of the relationship(s) involved b. description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Commitment and Contingencies | The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. |
Revenue Recognition | The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. In addition to the aforementioned general policy, the following are the specific revenue recognition policies for each major category of revenue: Residential property leases will be for terms of generally one year or more. Rental income is recognized on a straight-line basis over the term of the lease. Rent concessions, including free rent if incurred in connection with residential property leases, will be amortized on a straight-line basis over the terms of the related leases and will be charged as a reduction of rental revenue. |
Deferred Tax Assets and Income Tax Provision | The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the current enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In managements opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. |
Tax years that remain subject to examination by major tax jurisdictions | The Company discloses tax years that remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15. |
Earnings per Share | Earnings per share ("EPS") are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260105523). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation. There were no potentially dilutive common shares outstanding for the reporting periods ending September 30, 2016 and 2015. |
Cash Flows Reporting | The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (Indirect method) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. |
Subsequent Events | The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. |
Recently Issued Accounting Pronouncements | The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements. |
Significant and Critical Acco18
Significant and Critical Accounting Policies and Practices (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Significant And Critical Accounting Policies And Practices Tables | |
Real Estate | Estimated Useful Life (Years) Building 30 Land N/A |
Deferred Tax Assets and Incom19
Deferred Tax Assets and Income Tax Provision (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Deferred Tax Assets And Income Tax Provision Tables | |
Schedule of Deferred Tax Assets | December 31, 2016 June 30, 2016 Net deferred tax assets Non-current: Expected income tax benefit from NOL carry-forwards $ 27,765 $ 35,454 Less valuation allowance (27,765 ) (35,454 ) Deferred tax assets, net of valuation allowance $ - $ - |
Income Tax Provision in the Statement of Operations | For the six months ended December 31, 2016 For the fiscal year ended June 30, 2016 Federal statutory income tax rate 34.0 % 34.0 % Increase (reduction) in income tax provision resulting from: Net operating loss (NOL) carry-forwards (34.0 ) (34.0 ) Effective income tax rate 0.0 % 0.0 % |
Organization and Operations (De
Organization and Operations (Details Narrative) | 6 Months Ended |
Dec. 31, 2016 | |
Organization And Operations Details Narrative | |
State of incorporation | Delaware |
Date of incorporation | Mar. 31, 2014 |
Significant and Critical Acco21
Significant and Critical Accounting Policies and Practices (Details) | 6 Months Ended |
Dec. 31, 2016 | |
Building [Member] | |
Estimated Useful Life (Years) | 30 years |
Significant and Critical Acco22
Significant and Critical Accounting Policies and Practices (Details Narrative) | 6 Months Ended |
Dec. 31, 2016 | |
Significant And Critical Accounting Policies And Practices Details Narrative | |
Deferred tax benefit percentage | The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Going Concern Details Narrative | ||
Accumulated deficit | $ (81,662) | $ (104,278) |
Working capital deficit | $ 77,306 | $ 100,923 |
Real Estate (Details Narrative)
Real Estate (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Real Estate Details Narrative | ||||
Depreciation expense | $ 500 | $ 500 | $ 1,000 | $ 1,000 |
Revenue from rental income (Det
Revenue from rental income (Details Narrative) | 6 Months Ended |
Dec. 31, 2016 | |
GSH, LLC [Member] | |
Company lease agreement date | Feb. 1, 2016 |
Initial lease term | 24 months |
Key-Ads, Inc [Member] | |
Company lease agreement date | Nov. 1, 2015 |
Initial lease term | 1200 months |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | 6 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Jun. 01, 2014 | |
Note Payable Details Narrative | ||||
Accrued interest | $ 7,946 | $ 4,536 | ||
Note payable | $ 85,000 | $ 85,000 | $ 85,000 | |
Note interest rate | 4.00% | |||
Interest and principal due date | Jun. 1, 2016 | |||
Note extended period | This note was extended through January 1, 2017 and further extended through December 31, 2017 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | 1 Months Ended | |||
Jun. 30, 2014 | Dec. 31, 2016 | Jun. 30, 2016 | Mar. 31, 2014 | |
Common stock, shares authorized | 92,000,000 | 92,000,000 | ||
Common stock, par value | $ 0.000001 | $ 0.000001 | ||
Preferred stock, par value | $ 0.000001 | $ 0.000001 | ||
Preferred stock, shares authorized | 8,000,000 | 8,000,000 | ||
Common stock, shares issued | 5,740,000 | 5,740,000 | ||
Common Stock [Member] | ||||
Common stock compensation | $ 36,951 | |||
Authorized issuance of shares | 1,740,000 | |||
Common stock per share | $ 0.02 | |||
Chief Executive Officer [Member] | ||||
Common stock, par value | $ 0.000001 | |||
Common stock, shares issued | 4,000,000 | |||
Common stock compensation | $ 4 | |||
President [Member] | Common Stock [Member] | ||||
Legal expenses | $ 14,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2016 | Jun. 30, 2016 | Oct. 19, 2015 | |
Note payable - related party | $ 10,000 | $ 10,000 | |
Interest and principal due date | Jun. 1, 2016 | ||
Related Party [Member] | |||
Interest and principal due date | Oct. 19, 2017 |
Deferred Tax Assets and Incom29
Deferred Tax Assets and Income Tax Provision (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Net deferred tax assets – Non-current: | ||
Expected income tax benefit from NOL carry-forwards | $ 27,765 | $ 35,454 |
Less valuation allowance | (27,765) | (35,454) |
Deferred tax assets, net of valuation allowance |
Deferred Tax Assets and Incom30
Deferred Tax Assets and Income Tax Provision (Details 1) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Jun. 30, 2016 | |
Deferred Tax Assets And Income Tax Provision Details 1 | ||
Federal statutory income tax rate | 34.00% | 34.00% |
Increase (reduction) in income tax provision resulting from: | ||
Net operating loss (“NOL”) carry-forwards | (34.00%) | (34.00%) |
Effective income tax rate | 0.00% | 0.00% |
Deferred Tax Assets and Incom31
Deferred Tax Assets and Income Tax Provision (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Jun. 30, 2016 | |
Net operating loss ("NOL") carry-forwards for Federal income tax | $ 81,662 | $ 104,278 |
Valuation allowance | $ 7,689 | $ 10,025 |
Net operating loss carry-forwards expire | 2,036 | |
Net deferred tax asset | $ 27,765 | |
Internal Revenue Service statute of limitations period | 3 years | |
Ohio - CAT [Member] | ||
Gross receipt | $ 150,000 | |
Commercial Activity Tax description | For calendar years 2006 and thereafter, the first $1 million in taxable gross receipts are taxed at $150, thereafter at a rate of 0.2600%. For tax years prior to December 31, 2013, there is an annual minimum tax (AMT) of $150.00. Since the Company has not had gross receipts for the periods ended June 30, 2016 and 2015, the CAT tax is not applicable to the Company for the periods indicated. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 6 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2017 | Jan. 23, 2017 | Jun. 30, 2016 | Jun. 01, 2014 | |
Note payable | $ 85,000 | $ 85,000 | $ 85,000 | ||
Note extended period | This note was extended through January 1, 2017 and further extended through December 31, 2017 | ||||
Subsequent Event [Member] | Holly 1 LLC [Member] | |||||
Note payable | $ 85,000 | $ 85,000 |