INTERWEST TRANSFER COMPANY, INC
FINANCIAL STATEMENTS
WITH
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 2016 AND 2015
INTERWEST TRANSFER COMPANY, INC
TABLE OF CONTENTS
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| Report of Independent Registered Public Accounting Firm | 1 |
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| Financial Statements: | |
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| Balance Sheets | 2 |
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| Statements of Operations | 3 |
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| Statements of Stockholders' Equity | 4 |
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| Statements of Cash Flows | 5 |
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| Notes to Financial Statements | 6-8 |
1981 East Murray-Holladay Road
Suite 245 Salt Lake City, Utah 84117
Phone (801) 272-0111 Fax (801) 272-0125
| | A Professional Corporation Officers:
Lonnie K. Burnham, C.P.A. Ted Schumm, C.P.A.
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
of Interwest Transfer Company, Inc.
We have audited the accompanying balance sheets of Interwest Transfer Company, Inc. (a Utah corporation) as of December 31, 2016 and 2015, and the related statements of operations, stockholders' equity and cash flows for year ended December 31, 2016 and the twelve-month period ending December 31, 2015. Interwest Transfer Company, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Interwest Transfer Company, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for the year ended December 31, 2016 and the twelve-month period ending December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.
Salt Lake City, Utah
July 21, 2017
INTERWEST TRANSFER COMPANY, INC.
BALANCE SHEETS
DECEMBER 31, 2016 AND 2015
| Assets | | |
| | | |
| Current Assets | | |
| Cash | $838,132 | $50,837 |
| Accounts receivable, net of allowance of $200,000 and $200,000 | 124,258 | 117,454 |
| Prepaid expenses | 23,823 | 110,208 |
| | | |
| Total Current Assets | 986,213 | 278,499 |
| | | |
| Property and equipment, net | 17,272 | 28,500 |
| | | |
| Total Assets | $1,003,485 | $306,999 |
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| Liabilities and Stockholders’ Equity | | |
| | | |
| Current Liabilities: | | |
| Accounts payable | $10,053 | $1,829 |
| Accrued payroll | 2,655 | 1,262 |
| Income taxes payable | -- | 8,267 |
| | | |
| Total current liabilities | 12,708 | 11,358 |
| | | |
| Stockholders' Equity: | | |
| Common stock, $1.00 par value 50,000 shares authorized, 27 issued and outstanding | 27 | 27 |
| Additional paid-in capital | 5,728 | 5,728 |
| Retained earnings | 985,022 | 289,886 |
| | | |
| Total Stockholders' Equity | 990,777 | 295,641 |
| | | |
| Total Liabilities and Stockholders' Equity Equity | $1,003,485 | $306,999 |
The accompanying notes are an integral part of the financial statements.
INTERWEST TRANSFER COMPANY, INC.
STATEMENTS OF OPERATIONS
YEAR ENEDED DECEMBER 31, 2016 AND THE TWELVE-MONTH
PERIOD ENDING DECEMBER 31, 2015
| | Year Ended December 31, 2016 | Twelve-Month Period Ending December 31, 2015 |
| | | |
| Revenues, net | $1,646,856 | $1,673,134 |
| | | |
| Operating Expenses: | | |
| Bank and credit card fees | 16,110 | 16,213 |
| Computer expenses | 26,736 | 19,164 |
| Delivery and postage | 40,887 | 45,798 |
| Depreciation expense | 11,228 | 15,569 |
| Insurance | 43,613 | 33,852 |
| Outside services | 16,909 | 38,240 |
| Printing | 113,480 | 134,372 |
| Professional fees | 50,800 | 101,622 |
| Rent, related party | 102,000 | 114,000 |
| Salaries, wages and related benefits | 366,487 | 390,015 |
| Salaries, officer and stockholder | 105,000 | 946,923 |
| Telephone | 12,500 | 16,654 |
| Vehicle expenses | 17,131 | 21,998 |
| Other operating expenses | 28,846 | 33,665 |
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| Total operating expenses | 951,727 | 1,928,085 |
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| Operating income (loss) | 695,129 | (254,951) |
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Other income, interest | 7 | 4 |
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| Income (loss) before provision for income taxes | 695,136 | (254,947) |
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| Provision (benefit) for income taxes | -- | (18,984) |
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| Net income (loss) | $695,136 | $(235,963) |
| | | |
| Net income (loss) per share | $25,746
| $( 8,739) |
The accompanying notes are an integral part of the financial statements.
INTERWEST TRANSFER COMPANY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 2016 AND THE TWELVE-MONTH
PERIOD ENDING DECEMBER 31, 2015
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| Balance, December 31, 2014 | 27 | $27 | $5,728 | $525,849 |
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| Net loss for the twelve-month Period ending December 31, 2015 | -- | -- | -- | (235,963) |
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| Balance, December 31, 2015 | 27 | 27 | 5,728 | 289,886 |
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| Net income for the year ended December 31, 2016 | -- | -- | -- | 695,136 |
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| Balance, December 31, 2016 | 27 | $27 | $5,728 | $985,022 |
The accompanying notes are an integral part of the financial statements.
INTERWEST TRANSFER COMPANY, INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2016 AND THE TWELVE-MONTH
PERIOD ENDING DECEMBER 31, 2015
| | Year Ended December 31, 2016 | Twelve-Month Period Ending December 31, 2015 |
| Cash flows from operating activities: | | |
| Net income (loss) | $695,136 | $(235,963) |
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| Adjustments to reconcile net income (loss) to Net cash provided by operating activities: | | |
| Depreciation | 11,228 | 15,569 |
| Deferred income taxes | -- | (39,780) |
| (Increase) decrease in: | | |
| Accounts receivable | (6,804) | 10,485 |
| Prepaid expenses | 86,385 | (90,841) |
| Increase (decrease) in: | | |
| Accounts payable | 8,224 | (4,519) |
| Accrued payroll | 1,393 | (8,348) |
| Income taxes payable | (8,267) | (196,867) |
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| Net cash provided (used) by operating activities | 787,295 | (550,264) |
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| Cash flows from investing activities, Acquisition of equipment | -- | (10,959) |
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| Cash flows from financing activities | -- | -- |
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| Net increase (decrease) in cash | 787,295 | (561,223) |
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| Cash, beginning of period | 50,837 | 612,060 |
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| Cash, end of period | $838,132 | $50,837 |
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| Supplemental disclosures: | | |
| Interest paid | $-- | $-- |
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| Income taxes paid | $12,529 | $8,267 |
The accompanying notes are an integral part of the financial statements.
INTERWEST TRANSFER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
1.
Summary of Business and Significant Accounting Policies
The Company was incorporated under the laws of the State of Utah on May 13, 1971. The Company is in the business of maintaining corporate shareholder records for publicly traded and private companies. On January 1, 2016 the company changed its year end from May 31 to December 31.
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents.
Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectable amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge of valuation allowance and credit to trade accounts receivable. Changes in the valuation allowance have not been material to the financial statements.
e.
Property and Equipment
Property and equipment is valued at cost. The company’s property and equipment are depreciated using primarily the straight-line method.
Notes to Financial Statements – Continued:
Effective January 1, 2016 the Company with the consent of its shareholder has elected under the Internal Revenue Code to be an S corporation. In lieu of corporate income taxes, the shareholders of an S corporation are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal or state income taxes has been included in the 2016 financial statements.
Due to electing S corporation status the Company changed its year end from May 31 to December 31. At December 31, 2015 a seven-month coprorate short period return was filed.
The Company’s income tax returns were filed using the cash basis of accounting, therefore, deferred income taxes have been recorded. As of January 1, 2016 the deferred income taxes are no longer applicable and have been eliminated through the 2015 statement of operations.
g.
Net Income (Loss) per Share
The net income (loss) per share calculation is based on the weighted average number of shares outstanding during the period.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
The Company has cash deposits totaling $1,089,674 and $1,240,832 at various banks at December 31, 2016 and 2015, respectively. This exceeds the $250,000 covered by federal depository insurance by $581,639 and $755,962, respectively.
3.
Property and Equipment
Property and equipment consist of the following:
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| | | |
| Furniture and Fixtures | $115,886 | $115,886 |
| Office Equipment | 146,435 | 146,435 |
| Vehicles | 86,580 | 86,580 |
| Leasehold Improvements | 40,931 | 40,931 |
| | 389,832 | 389,832 |
| Accumulated Depreciation | (372,560) | (361,332) |
| | $17,272 | $28,500 |
Notes to Financial Statements – Continued:
Depreciation expense for period ended December 31, 2016 and 2015 is $11,228 and $15,569, respectively.
The Company leases a postage machine for $303 a month. The lease terminates on July 20, 2017. The lease expense for 2016 and 2015 was $3,641 each year. The 2017 minimum lease commitment is $2,124.
The Company leases office space from its president and stockholder on a month to month basis. The lease can be canceled with a 30 day notice from either party. Rent expense for the periods ended December 31, 2016 and 2015 was $102,000 and $114,000, respectively.
The Company has a 401K plan covering substantially all of its employees. The Company contributed during 2016 and 2015 $4,699 and $4,923, respectively.
The provision (benefit) for income taxes consist of the following components:
| | | |
| | | |
| Current | $-- | $20,796 |
| Deferred | -- | (39,780) |
| | | |
| | $-- | $(18,984) |
The Company was an S corporation effective January 1, 2016. The 2015 income tax provision differs from the expense (benefit) that would result from applying federal statutory rates to income (loss) before income taxes because the cash basis method is used for tax purposes.
7.
Date of Management Evaluation
Management has evaluated subsequent events through July 26, 2017 the date on which the financial statements were available to be issued.
