Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2017 | May 22, 2017 | |
Document and Entity Information: | ||
Entity Registrant Name | HEAVENSTONE CORP | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Trading Symbol | hvsc | |
Amendment Flag | false | |
Entity Central Index Key | 1,624,025 | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 71,159,423 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Current assets | ||
Cash and cash equivalents | $ 14,337 | $ 52,592 |
Prepaid and other current assets | 16,850 | 156,340 |
Total current assets | 31,187 | 208,932 |
Fixed assets | ||
Land and land development cost | 6,045,703 | 3,888,846 |
Office furniture and equipment | 14,047 | 14,047 |
Accumulated depreciation | (6,555) | (4,448) |
Total fixed assets | 6,053,195 | 3,898,445 |
Total assets | 6,084,382 | 4,107,377 |
Current liabilities | ||
Accounts payable | 186,592 | 155,538 |
Interest payable | 319,438 | 185,509 |
Short-term notes payable | 0 | 38,846 |
Short-term related party debt | 2,100,000 | 2,100,000 |
Total current liabilities | 2,606,030 | 2,479,893 |
Non-current liabilities | ||
Long-term related party debt | 2,019,940 | 929,975 |
Long-term notes payable | 1,500,000 | 750,000 |
Total non-current liabilities | 3,519,940 | 1,679,975 |
Total liabilities | 6,125,970 | 4,159,868 |
Stockholders' deficit | ||
Preferred stock, $.0001 par value: 50,000,000 shares authorized; zero and zero shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively | 0 | 0 |
Common stock, $.0001 par value: 200,000,000 shares authorized; 71,159,423 shares and 71,159,423 shares issued and outstanding at March 31, 2017, and June 30, 2016, respectively | 7,116 | 7,116 |
Additional paid-in capital | 394,386 | 394,386 |
Accumulated deficit | (557,846) | (453,993) |
Total Heavenstone stockholders' deficit | (156,344) | (52,491) |
Non-controlling interest | 114,756 | 0 |
Total stockholders' deficit | (41,588) | (52,491) |
Total liabilities and stockholders' deficit | $ 6,084,382 | $ 4,107,377 |
CONSOLIDATED BALANCE SHEETS PAR
CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares | Mar. 31, 2017 | Jun. 30, 2016 |
Parentheticals | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 71,159,423 | 71,159,423 |
Common Stock, shares outstanding | 71,159,423 | 71,159,423 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||||
Operating expenses | $ 23,546 | $ 42,484 | $ 70,345 | $ 85,782 |
Operating loss | (23,546) | (42,484) | (70,345) | (85,782) |
Interest expense | (18,128) | (37,902) | (34,914) | (109,153) |
Net loss | (41,674) | (80,386) | (105,259) | (194,935) |
Less: Net loss attributable to non-controlling interest | 1,406 | 0 | 1,406 | 0 |
Net loss attributable to Heavenstone Corp. | $ (40,268) | $ (80,386) | $ (103,853) | $ (194,935) |
Net loss per common share | ||||
Basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding: | ||||
Basic and diluted | 71,159,423 | 71,159,423 | 71,159,423 | 71,159,423 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (105,259) | $ (194,935) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation expense | 2,107 | 2,107 |
Changes in operating assets and liabilities: | ||
Prepaid and other current assets | (139,490) | (105,504) |
Accounts payable | (112,364) | (56,301) |
Interest payable | (461) | 81,027 |
Net cash used in operating activities | (76,487) | (273,606) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for land development costs | (1,021,887) | (337,988) |
Net cash used in investing activities | (1,021,887) | (337,988) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings on loans from related parties | 1,089,965 | 300,000 |
Borrowings on loans from third parties | 0 | 150,000 |
Repayments on loans to third parties | (38,846) | 0 |
Net cash provided by financing activities | 1,051,119 | 450,000 |
NET DECREASE IN CASH | (38,255) | (161,594) |
Cash, beginning of period | 52,592 | 271,101 |
Cash, end of period | 14,337 | 109,507 |
Non-cash investing the financing activities | ||
Land development costs incurred on credit | 143,418 | 0 |
Capitalized interest to land development cost | 134,390 | 0 |
Third-party notes issued for land purchase | 750,000 | 0 |
Purchase of land acquisition costs directly by non-controlling interest | 116,162 | 0 |
Supplemental disclosure of cash flow information | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | $ 35,375 | $ 28,126 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2017 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 1. BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements of Heavenstone Corp. (Heavenstone or the Company), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys Annual Report on Form 10-K for the year ended June 30, 2016, filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the Financial Statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2016 as reported in the Companys Annual Report on Form 10-K have been omitted. Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation. Basis of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Mar. 31, 2017 | |
GOING CONCERN | |
GOING CONCERN | NOTE 2. GOING CONCERN These unaudited interim consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. For the nine months ended March 31, 2017, the Company had an accumulated deficit of $557,846 and revenue of $0. The continuation of the Company as a going concern is dependent upon the Company's continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company intends to fund operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending June 30, 2017. |
LAND AND LAND DEVELOPMENT COSTS
LAND AND LAND DEVELOPMENT COSTS | 9 Months Ended |
Mar. 31, 2017 | |
LAND AND LAND DEVELOPMENT COSTS | |
LAND AND LAND DEVELOPMENT COSTS | NOTE 3. LAND AND LAND DEVELOPMENT COSTS Land and land development costs are carried at cost. Land development costs capitalized include costs associated with the development of the purchased land, including inspection fees and engineering fees. For the nine months ended March 31, 2017, the Company had incurred $2,156,857 in land and land development costs, of which $1,012,887 was paid in cash, $141,162 was incurred on credit, $750,000 was settled with note payable and $116,162 was assumed by non-controlling interest (see further discussion in Note 6). Also, the Company capitalized the interest costs of $134,390 incurred for the real estate projects under ASC 835-20, during the nine months ended March 31, 2017. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2017 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | NOTE 4. RELATED-PARTY TRANSACTIONS Loans from Officer's Family During the nine months ended March 31, 2017, the Company obtained two separate loans from the family of one of its officers, as follows: July 2016 $170,000 August 2016 $100,000 Loans from Related Party During the nine months ended March 31, 2017, the Company obtained two separate loans from a related party, as follows: September 2016 $270,000 January 2017 $100,000 January 2017 - $449,965 As of March 31, 2017, and June 30, 2016, the total outstanding short-term related party debt was $2,100,000. As of March 31, 2017, and June 30, 2016, the total outstanding long-term related party debt was $2,019,940 and $929,975, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Mar. 31, 2017 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 5. NOTES PAYABLE In February 2016, the Company delivered a promissory note, face amount $76,587, in payment of certain insurance premiums associated with an officers' and directors' insurance policy obtained by the Company. Unpaid principal on such loan bears interest at 6.95% per annum. Repayment of this promissory note is to be made in ten equal monthly payments of $7,904, beginning in March 2016. During the nine months ended March 31, 2017, the Company repaid a total of $38,846 in principal. The outstanding principal as of March 31, 2017, and June 30, 2016, are $-0- and $38,846, respectively. As of March 31, 2017, and June 30, 2016, the total outstanding long-term notes payable was $1,500,000 and $750,000, respectively. |
REAL ESTATE DEVELOPMENT PROJECT
REAL ESTATE DEVELOPMENT PROJECT | 9 Months Ended |
Mar. 31, 2017 | |
REAL ESTATE DEVELOPMENT PROJECT: | |
REAL ESTATE DEVELOPMENT PROJECT | NOTE 6. REAL ESTATE DEVELOPMENT PROJECT In January 2017, the Company and a third party formed Temecula QK Holdings, LLC, a California limited liability company (TQKH), for the purpose of acquiring and developing approximately 40 acres of land located in Temecula, California, for $1,318,383. The Company owns 75% of TQKH. In connection with TQKHs purchase of such land, TQKH issued a $750,000 face amount promissory note to the third-party seller of the land. The principal balance is due in March 2019. The unpaid principal balance of such promissory note bears interest at 4.5% per annum, with interest-only payments due monthly until the due date. This promissory note is secured by a deed of trust in favor of the selling party. For the three months ended March 31, 2017, TQKH received $116,162 from its non-controlling shareholder for the land acquisition costs. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 7. SUBSEQUENT EVENTS Loan from Related Party In April 2017, we obtained a loan in the amount of $140,000 pursuant to a loan agreement and delivered a promissory note, face amount $140,000, in consideration of such loan. Unpaid principal on such loan bears interest at 5% per annum, with principal and accrued interest due in April 2019. |
GOING CONCERN (Details)
GOING CONCERN (Details) | 9 Months Ended |
Mar. 31, 2017USD ($) | |
GOING CONCERN DETAILS | |
Accumulated deficit | $ 557,846 |
Revenue | $ 0 |
LAND AND LAND DEVELOPMENT COS14
LAND AND LAND DEVELOPMENT COSTS (Details) | 9 Months Ended |
Mar. 31, 2017USD ($) | |
LAND AND LAND DEVELOPMENT COSTS DETAILS | |
Land and land development costs | $ 2,156,857 |
Land and land development costs paid in cash | 1,012,887 |
Land and land development costs on credit | 141,162 |
Note payable | 750,000 |
Non-controlling interest | 116,162 |
Capitalized interest costs for the real estate projects | $ 134,390 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) | Mar. 31, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Aug. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2016 |
Related Party Transactions Details | |||||||
Company obtained this loan pursuant to a loan agreement and delivered a promissory note, face amount | $ 449,965 | $ 100,000 | $ 270,000 | $ 100,000 | $ 170,000 | ||
Unpaid principal on such loan bears interest per annum | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | ||
Short-term related party debt | $ 2,100,000 | $ 2,100,000 | |||||
Long-term related party debt | $ 2,019,940 | $ 929,975 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 | Feb. 29, 2016 |
NOTES PAYABLE DETAILS | |||
Company delivered a promissory note, face amount | $ 76,587 | ||
loan bears interest per annum | 6.95% | ||
Repayment of promissory note | $ 7,904 | ||
Repaid a total in principal | $ 38,846 | ||
Short-term notes payable | 0 | $ 38,846 | |
Long-term notes payable | $ 1,500,000 | $ 750,000 |
REAL ESTATE DEVELOPMENT PROJE17
REAL ESTATE DEVELOPMENT PROJECT (Details) | Mar. 31, 2017USD ($) | Jan. 31, 2017USD ($) |
Real Estate Development Project Details | ||
Land acquired for development (in acres) | 40 | |
Temecula QK Holdings, LLC (TQKH) paid for land acquisition | $ 1,318,383 | |
TQKH issued promissory note | $ 750,000 | |
Promissory note bears interest | 4.50% | |
TQKH received from its non-controlling shareholder during the period | $ 116,162 |
SUBSEQUENT EVENTS TRANSACTIONS
SUBSEQUENT EVENTS TRANSACTIONS (Details) | Apr. 30, 2017USD ($) |
SUBSEQUENT EVENTS TRANSACTIONS | |
Loan from Related Party in amount | $ 140,000 |
Promissory note, face amount | $ 140,000 |
Interest rate on loan per annum | 5.00% |