Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2015 | Feb. 10, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | BMB MUNAI INC | |
Entity Central Index Key | 924,805 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
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 | 280,339,467 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Mar. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 102,019 | $ 402,718 |
Restricted cash | 8,533,566 | 0 |
Employee receivables | 0 | 1,300 |
Prepaid expenses | 7 | 483 |
Total current assets | 8,635,592 | 404,501 |
NON-CURRENT ASSETS | ||
Fixed assets, net | 6,270 | 8,537 |
Total non-current assets | 6,270 | 8,537 |
TOTAL ASSETS | 8,641,862 | 413,038 |
CURRENT LIABILITIES | ||
Accounts payable | 177,267 | 46,632 |
Accrued payroll and other liabilities | 0 | 4,700 |
State taxes payable | 100 | 100 |
Deferred tax liabilities, net | 953 | 180 |
Deferred distribution payments | 8,533,566 | 0 |
Total current liabilities | 8,711,886 | 51,612 |
LONG-TERM LIABILITIES | ||
Long-term deferred tax liabilities | 2,580 | 60 |
Total long-term liabilities | 2,580 | 60 |
SHAREHOLDERS' DEFICIT | ||
Common stock - $0.001 par value; 500,000,000 shares authorized; 280,339,467 and 224,551,913 shares outstanding, respectively | 280,340 | 224,552 |
Preferred stock - $0.001 par value; 20,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Additional paid in capital | 174,924 | 275,448 |
Accumulated deficit | (527,868) | (138,634) |
Total shareholders' deficit | (72,604) | 361,366 |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 8,641,862 | $ 413,038 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Mar. 31, 2015 |
SHAREHOLDERS' EQUITY | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized shares | 20,000,000 | 20,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 500,000,000 | 500,000,000 |
Common stock, issued shares | 280,339,467 | 224,551,913 |
Common stock, outstanding shares | 280,339,467 | 224,551,913 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||||
REVENUES | $ 0 | $ 0 | $ 0 | $ 0 |
OPERATING EXPENSES | ||||
Professional fees | 40,360 | 75,115 | 75,115 | 195,405 |
General and administrative | 61,449 | 2,707 | 2,707 | 188,688 |
Depreciation | 786 | 0 | 0 | 2,465 |
Total operating expenses | 102,595 | 77,822 | 77,822 | 386,558 |
LOSS FROM OPERATIONS | (102,595) | (77,822) | (77,822) | (386,558) |
OTHER INCOME | ||||
Interest income, net | 575 | 0 | 0 | 618 |
Total other income | 575 | 0 | 0 | 618 |
LOSS BEFORE INCOME TAX | (102,020) | (77,822) | (77,822) | (385,940) |
Income tax expense | (2,888) | 0 | 0 | (3,293) |
NET LOSS | $ (104,908) | $ (77,822) | $ (77,822) | $ (389,233) |
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average shares outstanding | 247,594,598 | 0 | 0 | 232,260,739 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 4 Months Ended | 9 Months Ended |
Dec. 31, 2014 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (77,822) | $ (389,233) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation expense | 0 | 2,465 |
Deferred tax liabilities | 0 | 3,293 |
Changes in operating assets and liabilities: | ||
Employee receivables | 0 | 1,300 |
Prepaid expenses | 0 | 476 |
Accounts payable | 77,822 | (17,358) |
Accrued payroll and other liabilities | 0 | (4,700) |
Net cash used in operating activities | 0 | (403,757) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of fixed assets | 0 | (198) |
Cash resulting from acquisition of BMB Munai, Inc. | 0 | 8,586,822 |
Net cash used in investing activities | 0 | 8,586,624 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Capital contributions | 0 | 50,000 |
Net cash from financing activities | 0 | 50,000 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 0 | 8,232,867 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 402,718 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 0 | 8,635,585 |
Supplemental disclosure of Cash Flows for: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash Investing and Financing: | ||
Assumption of liabilities in connection with acquisition | $ 0 | $ 8,675,580 |
1. DESCRIPTION OF BUSINESS
1. DESCRIPTION OF BUSINESS | 9 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
DESCRIPTION OF BUSINESS | BMB Munai, Inc. (BMBM) is a Nevada corporation that originally incorporated in the State of Utah in 1981. From 2003 to 2011, BMBMs business activities focused on oil and natural gas exploration and production in the Republic of Kazakhstan through its then wholly-owned subsidiary Emir Oil LLP (Emir Oil). In September 2011 BMBM sold all of its interest in Emir Oil, including its right, title, and interest in and to the oil and gas licenses and licensed territory owned by Emir Oil, to an independent third party for cash of about $170 million. The proceeds of the sale were used to, among other things, repay outstanding obligations, satisfy certain post-closing undertakings, meet ongoing expenses, and make two separate cash distributions totaling approximately $74,750,000 to its stockholders. Since the sale of its oil and gas operations and assets in September 2011, BMBM has investigated possibly acquiring other assets and operations to provide potential value to its stockholders. On November 23, 2015, BMBM entered into a Share Exchange and Acquisition Agreement with Timur Turlov (the Acquisition Agreement) with the intent to build an international, broadly based brokerage and financial service firm to meet the growing demand from an increasing number of investors in Russia and Kazakhstan for access to the financial opportunities, relative stability, and comprehensive regulatory reputation of the U.S. securities markets. Pursuant to the Acquisition Agreement, BMBM acquired all of the issued and outstanding common stock of FFIN Securities, Inc., a Nevada corporation (FFIN) from Mr. Turlov in exchange for 224,551,913 shares of BMBM common stock, which constituted approximately 80.1% of BMBMs outstanding, stock after giving effect to the transaction. BMBM and its wholly-owned subsidiary FFIN are collectively referred to herein as the Company unless otherwise specifically indicated or as is otherwise contextually required. In December 2015, FFIN submitted applications to become a member to the Financial Industry Regulatory Authority, Inc. (FINRA) and a licensed securities broker-dealer with the United States Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, as amended (the Exchange Act). The Acquisition Agreement also provides, subject to the satisfaction of various closing conditions, for the possible acquisition by the Company of Mr. Turlovs 100% equity interests in Investment Company Freedom Finance LLC, a Russian limited company (Freedom RU), and the securities brokerage and financial services business conducted by it in Russia, and its wholly owned subsidiary, Freedom Finance JSC, a Kazakhstan joint stock company (Freedom KZ), and the securities brokerage and financial services business conducted by it in Kazakhstan, and FFINEU Investments Limited, a Cyprus limited company (Freedom CY) and the securities brokerage and financial services business conducted by Freedom CY. Freedom RU, Freedom KZ, and Freedom CY and the securities brokerage and investment services businesses conducted by each of them, in each case, are collectively referred to herein as the Freedom Companies unless otherwise specifically indicated or as is otherwise contextually required. The ability of the Company to continue as a going concern is dependent upon, among other things, its ability to generate revenues. The Company is currently generating net losses and does not anticipate generating revenue until (i) FFIN satisfies regulatory requirements to operate as a securities broker-dealer in the United States and commences business operations, or (ii) the closing conditions necessary to complete some or all of the acquisitions of the Freedom Companies are satisfied, and the acquisitions are completed. The Company cannot assure that FFIN will satisfy regulatory requirements and commence broker-dealer activities in the United States or that the closing conditions necessary to complete some or all of the acquisitions of the Freedom Companies will be satisfied and the acquisitions completed. Uncertainty as to the outcome of these factors raises substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As a result of the closing of the acquisition of FFIN, Mr. Turlov was issued approximately 80.1% of the outstanding common stock of BMBM after giving effect to the transaction. He was also appointed as the Companys Chief Executive Officer and Chairman of the board of directors. The Company has determined to treat the acquisition of FFIN as a reverse merger and recapitalization, with FFIN as the acquirer for accounting purposes. Consequently, the assets and liabilities and the historical operations that are reflected in the Company's financial statements are those of FFIN. These financial statements are presented as a continuation of FFIN. The equity of FFIN is presented as the equity of the combined company and the capital stock account of FFIN is adjusted to reflect the par value of the issued and outstanding common stock of the Company, being the legal acquirer, after giving effect to the number of shares issued in connection with the acquisition of FFIN. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The Companys unaudited condensed consolidated financial statements present the consolidated results of FFIN Securities, Inc., including the results of its parent, BMB Munai, Inc., starting November 24, 2015. All significant inter-company balances and transactions have been eliminated from the unaudited condensed consolidated financial statements. Accounting Principles The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they are condensed and do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature. The accompanying financial statements should be read in conjunction with BMBMs most recent audited annual, unaudited interim and pro forma financial statements included in its Current Report on Form 8-K filed with the SEC on November 23, 2015. Operating results for the three and nine-month period ended December 31, 2015, are not necessarily indicative of the results that may be expected for the year ending March 31, 2016. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from those estimates. Revenue and Expense Recognition Subject to compliance with regulatory requirements and the commencement of securities broker-dealer activities, revenues and expenses from all securities transactions will be recorded on the trade date of the transaction. The Company does not participate in any proprietary securities transactions. For the three and nine months ended December 31, 2015, the Company has not yet established an ongoing source of revenue sufficient to cover its operating costs as it pursues the FINRA application and licensure process to become a registered broker-dealer in the United States. Cash and Cash Equivalents Cash equivalents are generally comprised of certain highly liquid investments with maturities of three months or less at the date of purchase. Fixed Assets Fixed assets are carried at cost, net of accumulated depreciation. Maintenance, repairs, and minor renewals are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range between three and seven years. Advertising Expense For the three and nine months ended December 31, 2015, the Company has had no expenses related to advertising. The Company does not anticipate engaging in any advertising activities until after regulatory approval is received. At that point all costs associated with advertising will be expensed in the period incurred. Impairment of Long Lived Assets In accordance with the accounting guidance for the impairment or disposal of long-lived assets, the Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. As of December 31, 2015 and March 31, 2015, the Company had not recorded any charges for impairment of long-lived assets. Income Taxes The Company recognizes deferred tax liabilities and assets based on the difference between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. Income tax expense differs from amounts that would be calculated by applying the federal statutory rate because of the federal surtax, state income tax rates, certain nondeductible expenses and net operating loss carrybacks, if any. The Company will include interest and penalties arising from the underpayment of income taxes in the statement of operations in the provision for income taxes. As of December 31, 2015 and March 31, 2015, the Company had no accrued interest or penalties related to uncertain tax positions. Tax years that remain subject to examination are years 2012 through 2015. Financial Instruments Financial instruments include employee receivables, prepaid expenses, accounts payable, and accrued expenses. Management estimates that the carrying amount of these financial instruments represents their fair values, which were determined by their near term nature or by comparable financial instruments market value. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. Revenue is an important number to users of financial statements in assessing an entitys financial performance and position. Previous revenue recognition guidance in US GAAP comprised broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. Accordingly, the FASB and the International Accounting Standards Board (IASB) initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for US GAAP and International Financial Reporting Standards (IFRS) that would: 1. Remove inconsistencies and weaknesses in revenue requirements. 2. Provide a more robust framework for addressing revenue issues. 3. Improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. 4. Provide more useful information to users of financial statements through improved disclosure requirements. 5. Simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. To meet these objectives, the FASB is amending the FASB Accounting Standards Codification (ASC) and creating a new Topic 606, Revenue from Contracts with Customers. The Company will be evaluating the impact of ASU 2014-09 as it pertains to the Companys financial statements and other required disclosures on an ongoing basis until its eventual adoption and incorporation. In June 2014, the FASB issued ASU 2014-10, Development Stage Entities. The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to: (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged; and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company has elected early adoption of ASU 2014-10. As a result, the Company has not included any references to the development stage. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. The amendments in this update define managements responsibility to evaluate whether there is substantial doubt about an organizations ability to continue as a going concern and provides related footnote disclosure requirements. Under US GAAP, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting establishes the fundamental basis for measuring and classifying assets and liabilities. This update provides guidance on when there is substantial doubt about an organizations ability to continue as a going concern and how the underlying conditions and events should be disclosed in the footnotes. It is intended to reduce diversity that existed in footnote disclosures because of the lack of guidance about when substantial doubt existed. The amendments in this update are effective for the Company beginning in the first quarter of 2017. Early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the new guidance. The new guidance is effective for the Company on April 1, 2017, with early adoption permitted as of the beginning of an interim or annual reporting period. The new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company is evaluating the impact that the new guidance will have on its consolidated financial statements and related disclosures. |
3. CASH
3. CASH | 9 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
CASH | As of December 31, 2015 and March 31, 2015, the cash balance totaled $8,635,585 and $402,718, respectively. The Company is exposed to concentrations of credit risk related to cash deposits. The Company maintains cash at a financial institution where the total cash balance is insured by the Federal Deposit Insurance Corporation (FDIC) up to its limit. At any given time, the Companys cash balance may exceed the balance insured by the FDIC. As of December 31, 2015 and March 31, 2015, $8,385,585 and $152,718, respectively, of the Companys cash was in excess of FDIC limits. As of December 31, 2015, the cash balance included restricted cash in the amount of $8,533,566, which corresponds to the deferred distribution payments liability. |
4. SHAREHOLDER'S EQUITY
4. SHAREHOLDER'S EQUITY | 9 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
SHAREHOLDER'S EQUITY | Acquisition of FFIN On November 23, 2015, BMBM and Mr. Turlov entered into the Acquisition Agreement, pursuant to which BMBM acquired FFIN in exchange for 224,551,913 shares of BMBMs common stock, which constituted approximately 80.1% of its 280,339,467 shares of common stock issued and outstanding after giving effect to such acquisition. Shareholder Distributions Following the sale for cash in September 2011 of BMBMs oil and gas assets in operations in Kazakhstan, BMBM distributed the net proceeds to its shareholders. Distributions aggregating $8,533,566 have not been completed to certain shareholders pending the completion of necessary documentation of such shareholders' ownership of the stock on which the distribution is based. |
5. RELATED PARTY TRANSACTIONS
5. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | During the quarter ended December 31, 2015, Mr. Turlov made a capital contribution of $50,000 to the Company. At the time such contribution was made, Mr. Turlov was the Chief Executive Officer, Chairman of the board, and majority shareholder of the Company. During the three and nine months ended December 31, 2015, FFIN recorded legal expenses in amount of $56,098 from a legal firm, where one member of FFINs board of directors was employed. On June 9, 2015, this individual resigned from the FFIN board of directors. |
6. LEASE COMMITMENTS
6. LEASE COMMITMENTS | 9 Months Ended |
Dec. 31, 2015 | |
Lease Commitments | |
LEASE COMMITMENTS | FFIN entered into a lease agreement on January 1, 2015, for office space that expires in 30 months. At December 31, 2015, the future minimum lease payments under the lease are as follows: Lease commitments Fiscal year ended March 31, 2016 $ 6,975 Fiscal year ended March 31, 2017 27,902 Fiscal year ended March 31, 2018 6,975 Total $ 41,852 BMBM leases office space on a month-to-month basis for $1,000 per month. The Companys rent expense for its office space was $7,975 and $21,925 for the three and nine months ended December 31, 2015, respectively. |
7. COMMITMENTS AND CONTINGENT L
7. COMMITMENTS AND CONTINGENT LIABILITIES | 9 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingent Liabilities | |
COMMITMENTS AND CONTINGENT LIABILITIES | The Company had the following significant commitments and contingencies as of December 31, 2015: Payments Due By Period Contractual obligations Total Less than 1 year 2-3 years 4-5 years After 5 years Initial cash distribution payable(1) $ 6,620,623 $ 6,620,623 (2) $ $ $ Second cash distribution payable(1) 1,912,943 1,912,943 (2) Office lease(3) 41,852 27,902 13,950 TOTAL $ 8,575,418 $ 8,561,468 $ 13,950 $ $ (1) See Note 4 Shareholders Equity (2) These distributions are currently payable, subject to the entitled shareholder completing and submitting to the Company the necessary documentation to claim his, her or its distribution payments. The Company has no control over when, or if, an entitled shareholder will submit the necessary documentation to claim his, her, or its distribution payment. (3) FFIN entered into a lease agreement on January 1, 2015 for office space that expires in June 2017. |
8. SUBSEQUENT EVENTS
8. SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company evaluated all material events and transactions that occurred after December 31, 2015 through February 16, 2016, the date these financial statements were available to be issued. During this period, except as disclosed herein, the Company did not have any material recognizable subsequent events. Subsequent to the quarter end, during January 2016, Mr. Turlov made a $60,000 capital contribution to the Company. |
2. SIGNIFICANT ACCOUNTING POLIC
2. SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies Policies | |
Basis of presentation | The Companys unaudited condensed consolidated financial statements present the consolidated results of FFIN Securities, Inc., including the results of its parent, BMB Munai, Inc., starting November 24, 2015. All significant inter-company balances and transactions have been eliminated from the unaudited condensed consolidated financial statements. |
Accounting principles | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they are condensed and do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature. The accompanying financial statements should be read in conjunction with BMBMs most recent audited annual, unaudited interim and pro forma financial statements included in its Current Report on Form 8-K filed with the SEC on November 23, 2015. Operating results for the three and nine-month period ended December 31, 2015, are not necessarily indicative of the results that may be expected for the year ending March 31, 2016. |
Use of estimates | The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from those estimates. |
Revenue and expense recognition | Subject to compliance with regulatory requirements and the commencement of securities broker-dealer activities, revenues and expenses from all securities transactions will be recorded on the trade date of the transaction. The Company does not participate in any proprietary securities transactions. For the three and nine months ended December 31, 2015, the Company has not yet established an ongoing source of revenue sufficient to cover its operating costs as it pursues the FINRA application and licensure process to become a registered broker-dealer in the United States. |
Cash and cash equivalents | Cash equivalents are generally comprised of certain highly liquid investments with maturities of three months or less at the date of purchase. |
Fixed assets | Fixed assets are carried at cost, net of accumulated depreciation. Maintenance, repairs, and minor renewals are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range between three and seven years. |
Advertising expense | For the three and nine months ended December 31, 2015, the Company has had no expenses related to advertising. The Company does not anticipate engaging in any advertising activities until after regulatory approval is received. At that point all costs associated with advertising will be expensed in the period incurred. |
Impairment of long lived assets | In accordance with the accounting guidance for the impairment or disposal of long-lived assets, the Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. As of December 31, 2015 and March 31, 2015, the Company had not recorded any charges for impairment of long-lived assets. |
Income Taxes | The Company recognizes deferred tax liabilities and assets based on the difference between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. Income tax expense differs from amounts that would be calculated by applying the federal statutory rate because of the federal surtax, state income tax rates, certain nondeductible expenses and net operating loss carrybacks, if any. The Company will include interest and penalties arising from the underpayment of income taxes in the statement of operations in the provision for income taxes. As of December 31, 2015 and March 31, 2015, the Company had no accrued interest or penalties related to uncertain tax positions. Tax years that remain subject to examination are years 2012 through 2015. |
Financial instruments | Financial instruments include employee receivables, prepaid expenses, accounts payable, and accrued expenses. Management estimates that the carrying amount of these financial instruments represents their fair values, which were determined by their near term nature or by comparable financial instruments market value. |
Recent accounting pronouncements | In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. Revenue is an important number to users of financial statements in assessing an entitys financial performance and position. Previous revenue recognition guidance in US GAAP comprised broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. Accordingly, the FASB and the International Accounting Standards Board (IASB) initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for US GAAP and International Financial Reporting Standards (IFRS) that would: 1. Remove inconsistencies and weaknesses in revenue requirements. 2. Provide a more robust framework for addressing revenue issues. 3. Improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. 4. Provide more useful information to users of financial statements through improved disclosure requirements. 5. Simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. To meet these objectives, the FASB is amending the FASB Accounting Standards Codification (ASC) and creating a new Topic 606, Revenue from Contracts with Customers. The Company will be evaluating the impact of ASU 2014-09 as it pertains to the Companys financial statements and other required disclosures on an ongoing basis until its eventual adoption and incorporation. In June 2014, the FASB issued ASU 2014-10, Development Stage Entities. The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to: (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged; and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company has elected early adoption of ASU 2014-10. As a result, the Company has not included any references to the development stage. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. The amendments in this update define managements responsibility to evaluate whether there is substantial doubt about an organizations ability to continue as a going concern and provides related footnote disclosure requirements. Under US GAAP, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting establishes the fundamental basis for measuring and classifying assets and liabilities. This update provides guidance on when there is substantial doubt about an organizations ability to continue as a going concern and how the underlying conditions and events should be disclosed in the footnotes. It is intended to reduce diversity that existed in footnote disclosures because of the lack of guidance about when substantial doubt existed. The amendments in this update are effective for the Company beginning in the first quarter of 2017. Early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the new guidance. The new guidance is effective for the Company on April 1, 2017, with early adoption permitted as of the beginning of an interim or annual reporting period. The new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company is evaluating the impact that the new guidance will have on its consolidated financial statements and related disclosures. |
6. LEASE COMMITMENTS (Tables)
6. LEASE COMMITMENTS (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Lease Commitments Tables | |
Future minimum lease payments | Lease commitments Fiscal year ended March 31, 2016 $ 6,975 Fiscal year ended March 31, 2017 27,902 Fiscal year ended March 31, 2018 6,975 Total $ 41,852 |
7. COMMITMENTS AND CONTINGENT16
7. COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingent Liabilities Tables | |
Commitments and contingencies | Payments Due By Period Contractual obligations Total Less than 1 year 2-3 years 4-5 years After 5 years Initial cash distribution payable(1) $ 6,620,623 $ 6,620,623 (2) $ $ $ Second cash distribution payable(1) 1,912,943 1,912,943 (2) Office lease(3) 41,852 27,902 13,950 TOTAL $ 8,575,418 $ 8,561,468 $ 13,950 $ $ (1) See Note 4 Shareholders Equity (2) These distributions are currently payable, subject to the entitled shareholder completing and submitting to the Company the necessary documentation to claim his, her or its distribution payments. The Company has no control over when, or if, an entitled shareholder will submit the necessary documentation to claim his, her, or its distribution payment. (3) FFIN entered into a lease agreement on January 1, 2015 for office space that expires in June 2017. |
3. CASH (Details Narrative)
3. CASH (Details Narrative) - USD ($) | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Aug. 24, 2014 |
Cash Details Narrative | ||||
Cash | $ 8,635,585 | $ 402,718 | $ 0 | $ 0 |
5. RELATED PARTY TRANSACTIONS (
5. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015 | |
Related Party Transactions Details Narrative | ||
Legal expenses | $ 56,098 | $ 56,098 |
6. LEASE COMMITMENTS (Details)
6. LEASE COMMITMENTS (Details) | Dec. 31, 2015USD ($) |
Lease Commitments Details | |
Fiscal year ended March 31, 2016 | $ 6,975 |
Fiscal year ended March 31, 2017 | 27,902 |
Fiscal year ended March 31, 2018 | 6,975 |
Total | $ 41,852 |
6. LEASE COMMITMENTS (Details N
6. LEASE COMMITMENTS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015 | |
Lease Commitments Details Narrative | ||
Rent expense | $ 7,975 | $ 21,925 |
7. COMMITMENTS AND CONTINGENT21
7. COMMITMENTS AND CONTINGENT LIABILITIES (Details) | Dec. 31, 2015USD ($) | |
Total | $ 8,575,418 | |
Less than 1 year | 8,561,468 | |
2 - 3 years | 13,950 | |
4 - 5 years | 0 | |
After 5 years | 0 | |
Initial Cash Distribution Payable | ||
Total | 6,620,623 | [1] |
Less than 1 year | 6,620,623 | [2] |
2 - 3 years | 0 | |
4 - 5 years | 0 | |
After 5 years | 0 | |
Second Cash Distribution Payable | ||
Total | 1,912,943 | [1] |
Less than 1 year | 1,912,943 | [2] |
2 - 3 years | 0 | |
4 - 5 years | 0 | |
After 5 years | 0 | |
Office Lease | ||
Total | 41,852 | [3] |
Less than 1 year | 27,902 | |
2 - 3 years | 13,950 | |
4 - 5 years | 0 | |
After 5 years | $ 0 | |
[1] | See Note 4 - Shareholders' Equity for additional information regarding the initial cash distribution payable and the second cash distribution payable. | |
[2] | These distributions are currently payable, subject to the entitled shareholder completing and submitting to the Company the necessary documentation to claim his, her or its distribution payments. The Company has no control over when, or if, an entitled shareholder will submit the necessary documentation to claim his, her, or its distribution payment. | |
[3] | FFIN entered into a lease agreement on January 1, 2015 for office space that expires in June 2017. |