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 June 30, 2017
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 000-55737
PARK SOUND ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 81-4678915
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9454 Wilshire Blvd. #612
Beverly Hills, CA 90212
(Address of principal executive offices) (zip code)
310-888-1870
(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
July 28, 2017
Common Stock, par value $0.0001 20,000,000
Documents incorporated by reference: None
__________________________________________________________________________
CONDENSED FINANCIAL STATEMENTS
Condensed Balance Sheets as of June 30, 2017 (unaudited)
and December 31, 2016 2
Condensed Statements of Operations for the Three Months and Six
Months Ended June 30, 2017 (unaudited) 3
Condensed Statement of Cash Flows for the Six Months
Ended June 30, 2017 (unaudited) 4
Notes to Condensed Financial Statements (unaudited) 5-8
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PARK SOUND ACQUISITION CORPORATION
CONDENSED BALANCE SHEETS
ASSETS
June 30, December 31,
2017 2016
------------ ------------
(Unaudited)
Current assets
Cash $ - $ -
------------ ------------
Total assets $ - $ -
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued liabilities $ 500 $ 1,000
------------ ------------
Total liabilities 500 1,000
------------ ------------
Stockholders' Equity
Preferred stock, $0.0001 par value
20,000,000 shares authorized;
none issued and outstanding at
June 30, 2017 and December 31,
2016, respectively - -
Common Stock, $0.0001 par value,
100,000,000 shares authorized;
20,000,000 shares issued and
outstanding at June 30, 2017
and December 31, 2016, respectively 2,000 2,000
Additional paid-in capital 1,851 312
Accumulated deficit (4,351) (3,312)
------------ ------------
Total stockholders' deficit (500) (1,000)
------------ ------------
Total liabilities and
stockholders' deficit $ - $ -
============ ============
The accompanying notes are an integral part of these unaudited
condensed financial statements.
2
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PARK SOUND ACQUISITION CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months For the six months
ended June 30, 2017 ended June 30, 2017
------------------- -------------------
Revenue $ - $ -
Cost of revenues - -
----------------- -------------------
Gross profit - -
----------------- -------------------
Operating expenses 250 1,039
----------------- -------------------
Operating loss (250) (1,039)
----------------- -------------------
Loss before income taxes (250) (1,039)
Income tax expense - -
----------------- ------------------
Net loss $ (250) $ (1,039)
================= ==================
Loss per share - basic and diluted $ (0.00) $ (0.00)
================= ==================
Weighted average shares - 20,000,000 20,000,000
basic and diluted ================= ==================
The accompanying notes are an integral part of these unaudited
condensed financial statements.
3
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PARK SOUND ACQUISITION CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
For the six months
ended June 30, 2017
-------------------
OPERATING ACTIVITIES
Net loss $ (1,039)
Expenses paid by stockholder and contributed
as capital 1,539
Changes in Operating Assets and Liabilities:
Increase in accrued liability 500
----------------
Net cash provided by (used in) operating activities -
----------------
Net increase in cash -
Cash, beginning of period -
----------------
Cash, end of period $ -
===============
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Income tax $ -
===============
Interest $ -
===============
The accompanying notes are an integral part of these condensed
unaudited financial statements.
4
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PARK SOUND ACQUISITION CORPORATION
Notes to Unaudited Condensed Financial Statements
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Park Sound Acquisition Corporation (the "Company") was incorporated
on December 7, 2016 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
developmental stage since inception and its operations to date have been
limited to issuing shares to its original shareholders and filing a
registration statement on Form 10.
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 unaudited condensed financial
statements. Such unaudited condensed 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
("GAAP") in all material respects, and have been consistently applied in
preparing the accompanying unaudited condensed financial statements.
Certain information and footnote disclosures normally present in annual
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") were
omitted pursuant to such rules and regulations. The results for the
three months ended June 30, 2017 are not necessarily indicative of
the results to be expected for the year ending December 31, 2017.
USE OF ESTIMATES
The preparation of unaudited condensed 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 condensed financial statements,
and the reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
CASH
Cash and cash equivalents include cash on hand and on deposit at banking
institutions as well as all highly liquid short-term investments with original
maturities of 90 days or less. The Company did not have cash equivalents as
of June 30, 2017 and December 31, 2016, respectively.
CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash. The Company places its cash with
high quality banking institutions. The Company did not have cash balances
in excess of the Federal Deposit Insurance Corporation limit as of June 30,
2017 and December 31, 2016, respectively.
5
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PARK SOUND ACQUISITION CORPORATION
Notes to Unaudited Condensed Financial Statements
INCOME TAXES
Under ASC 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 June 30, 2017 and December 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 June 30, 2017 and December 31, 2016, there are no outstanding dilutive
securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows guidance for accounting for fair value measurements
of financial assets and financial liabilities and for fair value measurements
of nonfinancial items that are recognized or disclosed at fair value in the
unaudited condensed financial statements on a recurring basis. Additionally,
the Company adopted guidance for fair value measurement related to nonfinancial
items that are recognized and disclosed at fair value in the unaudited
condensed financial statements on a nonrecurring basis. The guidance
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to measurements
involving significant unobservable inputs (Level 3 measurements). The three
levels of the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities that the Company has the ability to
access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The carrying amounts of financial assets such as cash approximate their fair
values because of the short maturity of these instruments.
RECENT ACCOUNTING PRONOUNCEMENTS
In November 2016, the FASB issued Accounting Standards Update No. 2016-18,
"Statement of Cash Flows (Topic 230): Restricted Cash" ("ASU 2016-18").
The new guidance is intended to reduce diversity in practice by adding or
clarifying guidance on classification and presentation of changes in
restricted cash on the statement of cash flows. ASU 2016-18 is effective
for annual and interim periods beginning after December 15, 2017. Early
adoption is permitted. The amendments in this update should be applied
retrospectively to all periods presented. The Company is currently
evaluating the impact of adopting ASU 2016-18, which will only impact
the Company if it has restricted cash in the future.
In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic
230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-
15"). ASU 2016-15 will make eight targeted changes to how cash receipts and
cash payments are presented and classified in the statement of cash flows.
ASU 2016-15 is effective for fiscal years beginning after December 15, 2017.
The new standard will require adoption on a retrospective basis unless it
is impracticable to apply, in which case it would be required to apply the
amendments prospectively as of the earliest date practicable. The Company
is currently in the process of evaluating the impact of ASU 2016-15 on its
condensed financial statements.
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial
Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties
about an Entity's Ability to Continue as a Going Concern". This standard is
intended to define management's responsibility to evaluate whether there is
substantial doubt about an organization's ability to continue as a going
concern and to provide related footnote disclosures. Under U.S. 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 is critical to financial reporting because it
establishes the fundamental basis for measuring and classifying assets and
liabilities. Currently, U.S. GAAP lacks guidance about management's
responsibility to evaluate whether there is substantial doubt about the
organization's ability to continue as a going concern or to provide related
footnote disclosures. This ASU provides guidance to an organization's
management, with principles and definitions that are intended to reduce
diversity in the timing and content of disclosures that are commonly
provided by organizations today in the financial statement footnotes.
The amendments are effective for annual periods ending after December 15,
2016, and interim periods within annual periods beginning after December 15,
2016. Early application is permitted for annual or interim reporting periods
for which the financial statements have not previously been issued.
Management believes that the impact of this ASU to the Company's financial
statements would be insignificant.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force) and the United States Securities and Exchange
Commission did not or are not believed by management to have a material
impact on the Company's present or future financial statements.
NOTE 2 - GOING CONCERN
The Company has not yet generated any revenue since inception to date and
has sustained operating loss of $1,039 during the six months ended June 30,
2017. The Company had a working capital deficit of $500 and an accumulated
deficit of $4,351 as of June 30, 2017 and a working capital deficit of $1,000
and an accumulated deficit of $3,312 as of December 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.
The accompanying unaudited condensed 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
unaudited condensed 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 - ACCRUED LIABILITIES
As of June 30, 2017 and December 31, 2016, the Company had accrued
professional fees and other general and administrative expenses of
$500 and $1,000, respectively.
NOTE 4 - STOCKHOLDERS' DEFICIT
On December 7, 2016, the Company issued 20,000,000 founders common
stock to two directors and officers at par for legal services provided to the
Company. The Company is authorized to issue 100,000,000 shares of common
stock and 20,000,000 shares of preferred stock. As of June 30, 2017,
20,000,000 shares of common stock and no preferred stock were issued
and outstanding.
NOTE 5 - SUBSEQUENT EVENT
Management has evaluated subsequent events through July 31, 2017,
the date which the financial statements were available to be issued.
All subsequent events requiring recognition have been incorporated
into these financial statements and there are no subsequent events
that require disclosure in accordance with FASB ASC Topic 855,
"Subsequent Events."
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Park Sound Acquisition Corporation (the "Company") was incorporated
on December 7, 2016 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 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.
Since inception the Company's operations to the date of the period
covered by this report have been limited to issuing shares of common stock
to its original shareholders and filing a registration statement on Form 10
on January 18, 2017 with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 as amended to register its class of common
stock.
The Company has no operations nor does it currently engage in any
business activities generating revenues. The Company's principal
business objective is to achieve a business combination with a target
company.
A 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.
The most likely target companies are those seeking the perceived
benefits of a reporting corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use securities
for acquisitions, providing liquidity for shareholders and other factors.
Business opportunities may be available in many different industries and
at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities
difficult and complex.
As of June 30, 2017 the Company had not generated revenues and had
no income or cash flows from operations since inception. The Company had
sustained net loss of $1,039 and an accumulated deficit of $4,351 for the
the six months ended and as of June 30, 2017, respectively.
The Company's independent auditors have 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
stockholders, its ability to obtain necessary equity financing to continue
operations and/or to successfully locate and negotiate with a business
entity for the combination of that target company with the Company.
Management will pay all expenses incurred by the Company until a
change in control is effected. There is no expectation of repayment
for such expenses.
The president of the Company is the president, director and
shareholder of Tiber Creek Corporation. Tiber Creek Corporation assists
companies in becoming public reporting companies and with introductions
to the financial community.
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 such proceedings contemplated against it.
Management is aware that certain current and prior blank check
companies of which Messrs. Cassidy and McKillop, the Company's current
officers and directors, were the officers and directors have received
subpoenas for documents in regard to a formal investigation by the
Securities and Exchange Commission requesting documentation regarding
the share ownership of those companies. Management has no independent
knowledge or information regarding these subpoenas but believes it is part
of a wider review by the SEC. Management of the Company has also received
subpoenas in regard to certain of the transactions and filings for the past
five years of certain of its blank check companies. Management has no
independent knowledge or information as to the intent or purpose of such
subpoenas.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the past three years, the Company has issued 20,000,000
common shares pursuant to Section 4(2) of the Securities Act of 1933
at par as follows:
On December 7, the Company issued the following shares of
its common stock:
Name Number of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
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.
PARK SOUND ACQUISITION CORPORATION
By: /s/ James M. Cassidy
President, Chief Financial Officer
Dated: July 31, 2017