SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2016
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-55389
RANDOLPH ACQUISITIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 47-3152749
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Hurt Plaza, Suite 806
Atlanta, Georgia 30303
(Address of principal executive offices) (zip code)
404-267-7093
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of
the Exchange Act.
Large accelerated filer Accelerated Filer
Non-accelerated filer Smaller reporting company X
(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.
Class Outstanding at
August 26, 2016
Common Stock, par value $0.0001 5,500,000
Documents incorporated by reference: None
______________________________________________________________
UNAUDITED CONDENSED FINANCIAL STATEMENTS
Unaudited Condensed Financial Statements 2-4
Notes to Unaudited Condensed Financial Statements 5-7
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RANDOLPH ACQUISITIONS, INC.
UNAUDITED CONDENSED BALANCE SHEET
March 31, December 31,
2016 2015
---------- ------------
ASSETS
Total assets $ - $ -
========== ==========
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities
Due to principal stockholder 10,550 -
---------- ----------
Total current liabilities 10,550 -
---------- ----------
Total liabilities 10,550 -
Net capital deficiency
Common Stock, $0.0001 par value,
100,000,000 shares authorized;
5,500,000 shares issued and
outstanding as of March 31, 2016
and December 31, 2015 550 550
Discount on Common Stock (550) (550)
Additional paid-in capital 1,166 1,166
Accumulated deficit (11,716) (1,166)
---------- ----------
Net capital deficiency (10,550) -
---------- ----------
Total liabilities and net
capital deficiency $ - $ -
========== ==========
The accompanying notes are an integral part of these unaudited
condensed financial statements.
2
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RANDOLPH ACQUISITIONS, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the period from
For the three January 12, 2015
months ended (Inception) to
March 31, 2016 March 31, 2015
----------------- -----------------
Revenue $ - $ -
Cost of revenue - -
----------------- -----------------
Gross profit - -
Operating expenses 10,550 -
----------------- -----------------
Operating loss (10,550) -
----------------- -----------------
Loss before income taxes (10,550) -
Income tax expense - -
----------------- -----------------
Net loss $ (10,550) $ -
================== ==================
Loss per share -
basic and diluted $ (0.00) $ -
================== ==================
Weighted average shares-
basic and diluted 5,500,000 17,555,556
------------------ ------------------
The accompanying notes are an integral part of these unaudited condensed
financial statements.
3
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RANDOLPH ACQUISITIONS, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the period
For the three from January 12,
months ended 2015 (Inception)
March 31, 2016 to March 31, 2015
-------------- ---------------
OPERATING ACTIVITIES
Net loss $ (10,550) $ -
-------------- ---------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Due to shareholder 10,550 -
-------------- ---------------
Net cash used in operating activities - -
-------------- ---------------
Net increase in cash - -
Cash, beginning of period - -
-------------- ---------------
Cash, end of period $ - $ -
============== ===============
Supplemental cash information
Interest paid $ - $ -
============== ===============
Income taxes paid $ - $ -
============== ===============
The accompanying notes are an integral part of these unaudited condensed
financial statements.
4
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RANDOLPH ACQUISITIONS, INC.
Notes to Unaudited Condensed Financial Statements
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Randolph Acquisitions, Inc. (formerly "Purple Grotto Acquisition Corporation")
("Randolph" or the "Company") was incorporated on January 12, 2015 under the
laws of the state of Delaware to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions. The Company
has been in the development stage since inception and its operations to date
have been limited to issuing shares to its original shareholders and effecting
a change in control of the Company described in Note 4.
The Company will attempt to locate and negotiate with a business entity for
the combination of that target company with the Company. The combination
will normally take the form of a merger, stock-for-stock exchange or stock-
for-assets exchange. In most instances, the target company will wish to
structure the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue Code
of 1986, as amended. No assurances can be given that the Company will be
successful in locating or negotiating with any target company. The Company
has been formed to provide a method for a foreign or domestic private company
to become a reporting company with a class of securities registered under the
Securities Exchange Act of 1934.
BASIS OF PRESENTATION
The summary of significant accounting policies presented below is designed
to assist in understanding the Company's financial statements. Such financial
statements and accompanying notes are the representations of the Company's
management, who are responsible for their integrity and objectivity. These
accounting policies conform to accounting principles generally accepted in
the United States of America ("U.S. GAAP") in all material respects, and have
been consistently applied in preparing the accompanying financial statements.
The accompanying balance sheet as of December 31, 2015, has been derived from
audited financial statements. All adjustments, normal and recurring in nature,
considered necessary for a fair presentation have been included in the
accompanying unaudited interim condensed financial statements. The results of
operations for the three months ended March 31, 2016 are not necessarily
indicative of the results of operations that may be expected for the full
year.
USE OF ESTIMATES
The preparation of financial statements in conformity with 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 periods.
Actual results could differ from those estimates.
5
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RANDOLPH ACQUISITIONS, INC.
Notes to Unaudited Condensed Financial Statements
INCOME TAXES
Under Accounting Standards Codification 740, "Income Taxes," deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to temporary differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Valuation
allowances are established when it is more likely than not that some or
all of the deferred tax assets will not be realized. As of March 31,
2016, there were no deferred taxes due to the uncertainty of the realization
of net operating loss or carry forward prior to expiration.
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by dividing
net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflect the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the loss of the entity. As
of March 31, 2016, there are no outstanding dilutive securities.
NOTE 2 - GOING CONCERN
The Company has not yet generated any revenue since inception and has
sustained operating losses of $11,716 from inception (January 12, 2015)
to March 31, 2016. The Company had a working capital deficiency of
$10,550 and a net capital deficiency of $10,550 as of March 31, 2016.
The Company's continuation as a going concern is dependent on its ability
to generate sufficient cash flows from operations to meet its obligations
and/or obtaining additional financing from its shareholders or other
sources, as may be required.
6
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RANDOLPH ACQUISITIONS, INC.
Notes to Unaudited Condensed Financial Statements
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern; however, the above condition
raises substantial doubt about the Company's ability to do so. The
financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification
of assets or the amounts and classifications of liabilities that may
result should the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the Company will
require additional working capital from either cash flow from operations
or from the sale of its equity. However, the Company currently has no
commitments from any third parties for the purchase of its equity. If
the Company is unable to acquire additional working capital, it will be
required to significantly reduce its current level of operations.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
Changes to U.S. GAAP are made by the Financial Accounting Standards Board
("FASB") in the form of accounting standards updates (ASU's) to the FASB's
Accounting Standards Codification. The Company considers the applicability
and impact of all ASU's. ASU's not noted herein were assessed and determined
to be not applicable.
NOTE 4 - NET CAPITAL DEFICIENCY
On January 22, 2015, the Company issued 20,000,000 founders common
stock to two directors and officers at no cost. The Company is authorized
to issue 100,000,000 shares of common stock and 20,000,000 shares of
preferred stock.
On October 28, 2015, the Company redeemed 9,750,000 shares from each
of the then two shareholders at no cost resulting in 500,000 shares of
common stock outstanding.
On October 30, 2015, the Company issued 5,000,000 shares of common stock
at no cost to Richard J. Randolph, the new sole officer and director of
the Company, as part of a change in control of the Company.
Former management of the Company paid all expenses incurred by the Company
until the change in control described above. There is no expectation of
reimbursement of such expenses.
An affiliate of the Company has entered into an agreement with Tiber Creek
Corporation of which the former president of the Company is the president
and controlling shareholder. Tiber Creek Corporation assists companies to
become public reporting companies and in the preparation and filing of a
registration statement pursuant to the Securities Act of 1933, and
introduction to brokers and market makers. Fees paid to Tiber Creek
Corporation by the Company's principal shareholder and sole officer and
director, who is also the sole shareholder and officer of the affiliate,
have not been reflected in the Company's financial statements as there is
no intention for such fees to be reimbursed by the Company.
Certain expenses paid by the Company's sole officer and director, principally
audit and accounting fees and office expenses have been reflected in the
Company's financial statements, along with a corresponding payable to the
stockholder for amounts due him.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Randolph Acquisitions, Inc. (formerly Purple Grotto Acquisition
Corporation) was incorporated on January 12, 2015 under the laws of
the State of Delaware to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions.
Randolph Acquisitions, Inc. ("Randolph" or the "Company") is
a blank check company and qualifies as an "emerging growth company"
as defined in the Jumpstart Our Business Startups Act which became
law in April, 2012.
On October 29, 2015 the Company effected a change in control
by the redemption of 19,500,000 shares of the then outstanding
20,000,000 shares of common stock. Messrs. James Cassidy and James
McKillop, the then officers and directors of the Company resigned
and Richard J. Randolph III was named its sole officer and director.
Pursuant to the change in control, the Company changed its name to
Randolph Acquisitions, Inc.
On October 30, 2015, the Company issued 5,000,000 shares of
common stock to Richard J. Randolph III.
The Company filed Forms 8-K noticing the change of control
and the change of name.
An affiliate of the Company has entered into an agreement with
Tiber Creek Corporation of which the former president of the Company
is the president and controlling shareholder. Tiber Creek Corporation
assists companies to become public reporting companies and for the
preparation and filing of a registration statement pursuant to the
Securities Act of 1933, and the introduction to brokers and market makers.
The Company has not entered into any definitive or binding agreements
and there are no assurances that such transactions will occur. It is
actively pursuing the following avenues of development.
The Company anticipates that it will combine with a private company,
or through other methods, to engage in corporate mergers and acquisition,
real estate acquisitions, debt market transactions and asset management.
No agreements have been executed and if the Company makes any
acquisitions,mergers or other business combination, it will file a
Form 8-K.
A combination will normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange. The Company may wish to structure
the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue
Code of 1986, as amended.
As of March 31, 2016, the Company had not generated revenues and
had no income or cash flows from operations since inception. At March
31, 2016, the Company had sustained net losses of $11,716 since
inception and had a net capital deficiency and working capital
deficiency of $10,550.
For the period from Inception (January 12, 2015) to December 31,
2015, the Company's independent auditors issued a report raising
substantial doubt about the Company's ability to continue as a going
concern. At present, the Company has no operations and the continuation
of the Company as a going concern is dependent upon financial support
from its principal stockholder, its ability to obtain necessary equity
financing to continue operations and/or to successfully locate and
negotiate with a business entity for a business combination that would
provide fpr possible operations.
The president of the Company is the director and principal
shareholder of the Company.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Information not required to be filed by Smaller reporting companies.
ITEM 4. Controls and Procedures.
Disclosures and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission,
the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to
Exchange Act Rules. This evaluation was done as of the end of the
period covered by this report under the supervision and with the
participation of the Company's principal executive officer (who is
also the principal financial officer).
Based upon that evaluation, he believes that the Company's
disclosure controls and procedures are effective in gathering, analyzing
and disclosing information needed to ensure that the information
required to be disclosed by the Company in its periodic reports is
recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Act is accumulated and
communicated to the issuer's management, including its principal executive
and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
This Quarterly Report does not include an attestation report of
the Company's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management's
report in this Quarterly Report.
Changes in Internal Controls
There was no change in the Company's internal control over
financial reporting that was identified in connection with such
evaluation that occurred during the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company
is unaware of any such proceedings contemplated against it.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the past three years, the Company has issued shares of
common stock pursuant to Section 4(2) of the Securities Act of 1933
as follows:
On January 22, 2015, the Company issued 10,000,000 shares
to each of James Cassidy and James McKillop of which an aggregate
of 19,500,000 shares were redeemed on October 28, 2015.
On October 30, 2015, the Company issued 5,000,000 shares to
Richard J. Randolph III.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) Item 407(c)(3) of Regulation S-K:
During the quarter covered by this Report, there have not been
any material changes to the procedures by which security holders
may recommend nominees to the Board of Directors.
ITEM 6. EXHIBITS
(a) Exhibits
31 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
RANDOLPH ACQUISITIONS, INC.
By: /s/ Richard J. Randolph III
President, Chief Financial Officer
Dated: August 26, 2016