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 September 30, 2018
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 000-55736
EMAGINOS, INC.
(Exact name of registrant as specified in its charter)
FOREST SOUND ACQUISITION CORPORATION
(Former name of registrant as specified in its charter)
Delaware 81-4664656
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13428 Maxella Avenue, #144
Marina Del Rey, California 90292
(Address of principal executive offices) (zip code)
571-921-4200
(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
Emerging Growth Company
(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
December 1, 2018
Common Stock, par value $0.0001 77,294,308
Documents incorporated by reference: None
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FINANCIAL STATEMENTS
Condensed Balance Sheets as of June 30, 2018 (unaudited)
and December 31, 2017 2
Condensed Statements of Operations for the Three Months and
Six Months Ended June 30, 2018 and 2017 (unaudited) 3
Condensed Statements of Cash Flows for the Six Months
Ended June 30, 2018 and 2017 (unaudited) 4
Notes to Condensed Financial Statements (unaudited) 5-8
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EMAGINOS, INC.
(formerly Forest Sound Acquisition Corporation)
CONDENSED BALANCE SHEETS
ASSETS
Sept. 30, December 31,
2018 2017
------------ ------------
(Unaudited)
Current assets
Cash $ - $ -
------------ ------------
Total assets $ - $ -
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued liabilities $ 750 $ 1,000
------------ ------------
Total liabilities 750 1,000
------------ ------------
Stockholders' Equity
Preferred stock, $0.0001 par value
20,000,000 shares authorized;
none issued and outstanding at
June 30, 2018 and December 31,
2017, respectively - -
Common Stock, $0.0001 par value,
100,000,000 shares authorized;
20,000,000 shares issued and
outstanding at June 30, 2018 and
December 31, 2017, respectively 2,000 2,000
Additional paid-in capital 3,709 1,851
Accumulated deficit (6,459) (4,851)
------------ ------------
Total stockholders' deficit (750) (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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EMAGINOS, INC.
(formerly Forest Sound Acquisition Corporation)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three For the three For the nine For the nine
months ended months ended months ended months ended
Sept 30, 2018 Sept 30, 2017 Sept 30, 2018 Sept 30, 2017
------------- ------------- -------------- -------------
Revenue $ - $ - $ - $ -
Cost of revenues - - - -
------------- ------------- -------------- -------------
Gross profit - - - -
------------- ------------- -------------- -------------
Operating expenses 164 250 1,108 1,289
------------- ------------- -------------- -------------
Operating loss (164) (250) (1,108) (1,289)
Loss before income
taxes (164) (250) (1,108) (1,289)
Income tax expense - - - -
------------ ------------- -------------- -------------
Net loss $ (164) $ (250) $ (1,108) $ (1,289)
============ ============ ============== =============
Loss per share -
basic and diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============== =============
Weighted average
shares - basic
and diluted 20,000,000 20,000,000 20,000,000 20,000,000
============ ============ ============== =============
The accompanying notes are an integral part of these unaudited
condensed financial statements.
3
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EMAGINOS, INC.
(formerly Forest Sound Acquisition Corporation)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine For the None
Months Ended Months Ended
Sept 30, 2018 Sept 30, 2017
------------- -------------
OPERATING ACTIVITIES
Net loss $ (1,108) $ (1,289)
Expenses paid by stockholder and
contributed as capital 1,858 1,539
Changes in Operating Assets and
Liabilities:
Increase in accrued liabilities (750) (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 unaudited
condensed financial statements.
4
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EMAGINOS, INC.
(formerly Forest Sound Acquisition Corporation)
Notes to Unaudited Condensed Financial Statements
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Emaginos, Inc. (formerly Forest 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 shareholders and effecting a change in control. The Company
anticipated effecting a business combination with an operating
private company in order to develop its business plan. Howver, subsequently
management of the Company determined not to proceed with the combination
and not to proceed with the use of a public shell and to file a Form 15 to
deregister the class of securities of the Company previously registered with
the SEC.
In May 2018, in anticipation of the subsequent change in control, the
Company filed a Form 8-K announcing the change in its name to Emaginos, Inc.
On July 10, the Company effected a change of its control. The
Company cancelled an aggregate of 19,500,000 shares of the then 20,000,000
shares of outstanding stock valued at par. The then officers and directors
resigned as the Company's president, vice president, secretary and directors.
The new officers and directors of the Company are:
Scott Taub Chief Executive Officer, director
Allan C. Jones President, Chief Financial Officer,
director
On July 11, 2018, the Company issued 66,882,308 shares of its
common stock valued at par as a result of the change in
control to:
Scott Taub 60,000,000
Allan C. Jones 6,000,000
Keith Larik 440,000
Robert James 400,000
Paula Mandel 19,231
Daniel Cynamon 23,077
On September 23, 2018, Emaginos, Inc., entered into a merger
agreement (the "Merger Agreement") with Emaginos, Inc. (Emaginos
Virginia), a private company organized under the laws of the Commonwealth
of Virginia. The Company filed a Form 8-K regarding the merger. The
merger transaction was never effected and the action rescinded. The
number of outstanding shares reported herein does not include the shares
anticipated to be issue on the effective closing date of the merger as
such shares were not issued.
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
nine months ended September 30, 2018 are not necessarily indicative of
the results to be expected for the year ending December 31, 2018.
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 September 30, 2018 and December 31, 2017, 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 September
30, 2018 and December 31, 2017, respectively.
5
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EMAGINOS, INC.
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 September 30, 2018 and December 31, 2017,
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 September 30, 2018 and December 31, 2017, 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 January 2017, the FASB issued ASU No. 2017-01, "Business Combinations
(Topic 805): Clarifying the Definition of a Business". The amendments
in this ASU clarify the definition of a business with the objective of
adding guidance to assist entities with evaluating whether transactions
should be accounted for as acquisitions (or disposals) of assets or
businesses. Basically these amendments provide a screen to determine
when a set is not a business. If the screen is not met, the amendments
in this ASU first, require that to be considered a business, a set
must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create output and
second, remove the evaluation of whether a market participant could
replace missing elements. These amendments take effect for public
businesses for fiscal years beginning after December 15, 2017 and
interim periods within those periods, and all other entities should
apply these amendments for fiscal years beginning after December 15,
2018, and interim periods within annual periods beginning after
December 15, 2019. The Company does not expect that the adoption of
this guidance will have a material impact on its condensed financial
statements.
6
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EMAGINOS, INC.
Notes to Unaudited Condensed Financial Statements
In May 2017, the FASB issued ASU 2017-09, "Scope of Modification
Accounting", which amends the scope of modification accounting for
share-based payment arrangements, provides guidance on the types of
changes to the terms or conditions of share-based payment awards to
which an entity would be required to apply modification accounting
under ASC 718. For all entities, the ASU is effective for annual
reporting periods, including interim periods within those annual
reporting periods, beginning after December 15, 2017. Early adoption
is permitted, including adoption in any interim period. The Company
adopted this guidance on January 1, 2018 with no material impact on
its condensed financial statements.
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 adopted this
guidance on January 1, 2018 with no material impact on its condensed
financial statements.
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
adopted this guidance on January 1, 2018 with no material impact on
its condensed financial statements.
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 $1,108 for the nine months ended
September 30, 2018. The Company had a working capital deficit of $750
and an accumulated deficit of $6,459 as of September 30, 2018 and a
working captial deficit of $1,000 and an accumulated deficit of
$4,851 as of December 31, 2017. 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 members 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 September 30, 2018 and December 31, 2017, the Company had accrued
professional fees of $750 and $1,000, respectively.
NOTE 4 - STOCKHOLDERS' DEFICIT
On July 22, 2016, the Company issued 20,000,000 founders common
stock to two directors and officers 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 September 30, 2018,
20,000,000 shares of common stock and no preferred stock were issued and
outstanding.
NOTE 5 - SUBSEQUENT EVENT
The Company filed a Form 8-K noticing that the Merger Agreement entered
into by the Company was not effected and the shares in exchange were not
issued.
Management has evaluated subsequent events through November 15, 2018,
the date which the financial statements were available to be issued.
Except for the events disclosed above, all subsequent events requiring
recognition have been incorporated into these financial statements
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
Emaginos, Inc. (formerly Forest 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.
The Company filed 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 effected a change in control
on July 11, 2018.
On July 10, 2018, the then officers and directors of the Company
resigned. Scott Taub was named Chief Executive Officer and a Director
and Allan C. Jones was named President, Chief Financial Officer, and a
Director
On September 23, 2018, Emaginos, Inc., entered into a merger
agreement (the "Merger Agreement") with Emaginos, Inc. (Emaginos
Virginia), a private company organized under the laws of the Commonwealth
of Virginia. The Company filed a Form 8-K regarding the merger. The
merger transaction was never effected and the action rescinded. The
number of outstanding shares reported herein does not include the shares
anticipated to be issued on the effective closing date of the merger as
such shares were not issued.
The Company has no operations nor does it engage in any business
activities generating revenues.
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 it.
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 was also the principal financial officer).
Management is responsible for maintaining a system of internal
control over financial reporting ("ICFR") that provides reasonable
assurance regarding the reliability of such reporting and the
accuracy and reliability of the preparation of financial statements
of such. Management is responsible to maintain records accurately and
fairly to reflect transactions and transactions are recorded as
necessary. The controls should provide reasonable assurance regarding
the prevention of unauthorized acquisition or use of assets.
In the present case of the Company, management at the period
covered by this report, consisted solely of two executive officers.
As such, management maintained sole control of all financial
transactions and all assets. Since the president of the Company was
in sole control of the financial transactions and assets management
believes that its control reasonably and adequately addresses the
risk of a misstatement in the financial reporting. Based upon that
evaluation, the principal officer at that time believes that the
Company's disclosure controls and procedures were 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, summarized and processed timely. The principal
executive officer was directly involved in the day-to-day operations
of the Company. Since the change in control, management consists of
two officers and two directors who are in control of the day-to-day
operations of the Company and its financial reporting.
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 Control Over Financial Reporting
The change in control resulted in a change in the management
and in control of the financial reporting methodology but the
Company anticipates that the change in control would not materially
effect internal control by executive management of financial
reporting and tht the change in the sole two officers and directors
has not materially affected, and is not 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.
Former management of the Company received subpoenas
from the Securities and Exchange Commission in regard to certain of
the transactions and filings for the past five years of certain of
its blank check companies. Former management believes that the SEC has
determined that a change in control transaction is considered a
sale of a security and that a broker needs to be used to effect
the transaction. Therefore former management determined that any
future transactions engaged in by them will be conducted through
a member firm of Finra.
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(a)(2) of the Securities Act of 1933
at par as follows:
On December 7, 2016 the Company issued the following shares of
its common stock for services rendered to the Company:
Name Number of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
On July 10, 2018, 19,500,000 of those shares were redeemed by the
two shareholders pro rata.
On July 11, 2018, the Company issued the following shares of
common stock valued at par:
Scott Taub 60,000,000
Allan C. Jones 6,000,000
Keith Larik 440,000
Robert James 400,000
Paula Mandel 19,231
Daniel Cynamon 23,077
In September, 2018, the Company issued 9,912,000 shares at par
to three shareholders.
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.
EMAGINOS, INC.
By: /s/ Allan C. Jones
President, Chief Financial Officer
Dated: December 12, 2018