Attached files
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2015
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to ______________
Commission File No. 333-197692
ASTERIKO CORP.
(Exact name of registrant as specified in its charter)
Nevada 2590 37-1757067
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Number) Identification Number)
Ilia Tomski
President/Secretary
616 Corporate Way, Suite 2-6834
Valley Cottage, NY 10989
Telephone: (845) 512-5020
Fax: (647) 795-8676
E-mail: asteriko.corp@gmail.com
Web Site: http://www.asteriko.com
(Address and telephone number of principal executive offices)
Indicate by checkmark whether the issuer: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filed, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the
Preceding Five Years. N/A
Indicate by checkmark whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act
of 1934 after the distribution of securities under a plan confirmed by a court.
Yes[ ] No [X]
Applicable Only to Corporate Registrants
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the most practicable date:
Class Outstanding as of March 31, 2015
----- --------------------------------
Common Stock: $0.001 7,080,000
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 17
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 20
Item 4. Controls and Procedures. 20
PART II - OTHER INFORMATION
Item 1. Legal Proceeding. 21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 21
Item 3. Default Upon Senior Securities. 21
Item 4. Mine Safety Disclosures. 21
Item 5. Other Information. 21
Item 6. Exhibits. 21
Signatures 21
2
PART I - FINANCIAL INFORMATION
ITEM1. FINANCIAL STATEMENTS
Asteriko Corp.
March 31, 2015
Index to the Financial Statements
Contents Page(s)
-------- -------
Balance Sheets as of March 31, 2015 (Unaudited) and June 30, 2014...... 4
Statements of Operations for the Nine Months and Three Months Ended
March 31, 2015 (Unaudited).............................................. 5
Statement of Changes in Stockholders' Equity for the period ended
March 31, 2015 (Unaudited).............................................. 6
Statement of Cash Flows for the Nine Months Ended March 31, 2015
(Unaudited)............................................................. 7
Notes to the Financial Statements (Unaudited)........................... 8
3
ASTERIKO CORP.
Balance Sheets
March 31, 2015 June 30, 2014
-------------- -------------
(unaudited)
ASSETS
Current Assets
Cash $ 18,765 $ 10,000
Accounts Receivable -- 713
-------- --------
Total Current Assets 18,765 10,713
-------- --------
Tools and Equipment
Tools and Equipment 688 688
Accumulated Depreciation (115) (11)
-------- --------
Tools and Equipment, Net 573 677
-------- --------
Computer Equipment 787 --
Accumulated Depreciation (26) --
-------- --------
Computer Equipment, Net 761 --
-------- --------
Total Assets $ 20,099 $ 11,390
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable -- 2,500
Advances from Stockholder 6,604 6,484
-------- --------
Total Current Liabilities 6,604 8,984
-------- --------
Stockholders' Equity
Common Stock, $0.001 par value, 75,000,000 shares authorized;
7,080,000 and 5,000,000 shares issued and outstanding, respectively 7,080 5,000
Additional paid-in capital 18,720 --
Accumulated Deficit (12,305) (2,594)
-------- --------
Total Stockholders' Equity 13,495 2,406
-------- --------
Total Liabilities and Stockholders' Equity $ 20,099 $ 11,390
======== ========
See accompanying notes to the financial statements.
4
ASTERIKO CORP.
Statements of Operations
For the For the
Nine Months Three Months
Ended Ended
March 31, 2015 March 31, 2015
-------------- --------------
(Unaudited) (Unaudited)
Revenue $ 569 $ --
Operating Expenses
Professional Fees 9,588 3,740
General and Administrative Expenses 692 350
---------- ----------
Total Operating Expenses 10,280 4,090
---------- ----------
Loss before Income Tax Provision (9,711) (4,090)
Income Tax Provision -- --
---------- ----------
Net Loss $ (9,711) $ (4,090)
========== ==========
Net Loss per Common Share
Basic and Diluted $ (0.00) $ (0.00)
========== ==========
Weighted average common shares outstanding
Basic and Diluted 5,621,320 6,706,644
See accompanying notes to the financial statements.
5
ASTERIKO CORP.
Statement of Changes in Stockholders' Equity
For the Period ended March 31, 2015
(Unaudited)
Common stock
par value $0.001 Total
----------------------- Additional Stockholders'
Number of Paid-in Accumulated Equity
Shares Amount Capital Deficit (Deficit)
------ ------ ------- ------- ---------
April 17, 2014
(inception) -- $ -- $ -- $ -- $ --
Issuance of common shares
for cash at $0.001 upon
formation 5,000,000 5,000 5,000
Net Loss (2,594) (2,594)
---------- -------- -------- --------- --------
Balance June 30, 2014 5,000,000 5,000 -- (2,594) 2,406
Issuance of common shares
for cash at $0.01 per
share in December 2014 880,000 880 7,920 8,800
Issuance of common shares
for cash at $0.01 per
share in January and
February, 2015 1,200,000 1,200 10,800 12,000
Net Loss (9,711) (9,711)
---------- -------- -------- --------- --------
Balance, March 31, 2015 7,080,000 $ 7,080 $ 18,720 $ (12,305) $ 13,495
========== ======== ======== ========= ========
See accompanying notes to the financial statements.
6
ASTERIKO CORP.
Statement of Cash Flows
For the
Nine Months
Ended
March 31, 2015
--------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,711)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense 130
Changes in operating assets and liabilities:
Accounts receivable 713
Accounts payable (2,500)
--------
NET CASH USED IN OPERATING ACTIVITIES (11,368)
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of computer equipment (787)
--------
NET CASH USED IN INVESTING ACTIVITIES (787)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from stockholder 120
Proceeds from sale of common shares 20,800
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 20,920
--------
NET CHANGE IN CASH 8,765
Cash - beginning of reporting period 10,000
--------
Cash - end of reporting period $ 18,765
========
Supplemental disclosures of cash flow information
Cash paid for:
Interest $ --
Income Taxes $ --
See accompanying notes to the financial statements.
7
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - ORGANIZATION AND OPERATIONS
ASTERIKO CORP.
Asteriko Corp. (the "Company") was incorporated on April 17, 2014 under the laws
of the State of Nevada. The Company provides customers with unique and
innovative solutions for their decorative needs. The company's initial product
is lattice panels designed for suspended ceilings.
NOTE 2 - SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES
The Management of the Company is responsible for the selection and use of
appropriate accounting policies and the appropriateness of accounting policies
and their application. Critical accounting policies and practices are those that
are both most important to the portrayal of the Company's financial condition
and results and require management's most difficult, subjective, or complex
judgments, often as a result of the need to make estimates about the effects of
matters that are inherently uncertain. The Company's significant and critical
accounting policies and practices are disclosed below as required by generally
accepted accounting principles.
BASIS OF PRESENTATION - UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited interim financial statements and related notes have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP") for the interim financial information,
and with the rules and regulations of the United States Securities and Exchange
Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP
for complete financial statements. The unaudited interim financial statements
furnished reflect all adjustments (consisting of normal recurring accruals)
which are, in the opinion of management, necessary to a fair statement of the
results for the interim period presented. Unaudited interim results are not
necessarily indicative of the results for the full fiscal year. These financial
statements should be read in conjunction with the audited financial statements
of the Company for the reporting period ended June 30, 2014 and notes thereto
contained in the Company's Registration Statement on Form S-1, which was
declared effective on December 11, 2014.
FISCAL YEAR-END
The Company elected June 30 as its fiscal year ending date.
USE OF ESTIMATES AND ASSUMPTIONS AND CRITICAL ACCOUNTING ESTIMATES AND
ASSUMPTIONS
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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(s)
of the financial statements and the reported amounts of revenues and expenses
during the reporting period(s).
Critical accounting estimates are estimates for which (a) the nature of the
estimate is material due to the levels of subjectivity and judgment necessary to
account for highly uncertain matters or the susceptibility of such matters to
change and (b) the impact of the estimate on financial condition or operating
performance is material. The Company's critical accounting estimates and
assumptions affecting the financial statements were as follows:
(i) ASSUMPTION AS A GOING CONCERN: Management assumes that the Company
will continue as a going concern, which contemplates continuity of
operations, realization of assets, and liquidation of liabilities in
the normal course of business.
(ii) FAIR VALUE OF LONG-LIVED ASSETS: Fair value is generally determined
using the asset's expected future discounted cash flows or market
value, if readily determinable. If long-lived assets are determined to
be recoverable, but the newly determined remaining estimated useful
lives are shorter than originally estimated, the net book values of
8
the long-lived assets are depreciated over the newly determined
remaining estimated useful lives. The Company considers the following
to be some examples of important indicators that may trigger an
impairment review: (i) significant under-performance or losses of
assets relative to expected historical or projected future operating
results; (ii) significant changes in the manner or use of assets or in
the Company's overall strategy with respect to the manner or use of
the acquired assets or changes in the Company's overall business
strategy; (iii) significant negative industry or economic trends; (iv)
increased competitive pressures; (v) a significant decline in the
Company's stock price for a sustained period of time; and (vi)
regulatory changes. The Company evaluates acquired assets for
potential impairment indicators at least annually and more frequently
upon the occurrence of such events.
(iii) VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS: Management assumes that
the realization of the Company's net deferred tax assets resulting
from its net operating loss ("NOL") carry-forwards for Federal income
tax purposes that may be offset against future taxable income was not
considered more likely than not and accordingly, the potential tax
benefits of the net loss carry-forwards are offset by a full valuation
allowance. Management made this assumption based on (a) the Company
has incurred recurring losses, (b) general economic conditions, and
(c) its ability to raise additional funds to support its daily
operations by way of a public or private offering, among other
factors.
These significant accounting estimates or assumptions bear the risk of change
due to the fact that there are uncertainties attached to these estimates or
assumptions, and certain estimates or assumptions are difficult to measure or
value.
Management bases its estimates on historical experience and on various
assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop
the estimates utilizing currently available information, changes in facts and
circumstances, historical experience and reasonable assumptions. After such
evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph
820-10-35-37") to measure the fair value of its financial instruments. Paragraph
820-10-35-37 establishes a framework for measuring fair value in generally
accepted accounting principles ("GAAP"), and expands disclosures about fair
value measurements. To increase consistency and comparability in fair value
measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair
value hierarchy which prioritizes the inputs to valuation techniques used to
measure fair value into three (3) broad levels. The fair value hierarchy gives
the highest priority to quoted prices (unadjusted) in active markets for
identical assets or liabilities and the lowest priority to unobservable inputs.
The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37
are described below:
Level 1 Quoted market prices available in active markets for identical assets or
liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3 Pricing inputs that are generally observable inputs and not corroborated
by market data.
9
Financial assets are considered Level 3 when their fair values are determined
using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices
(unadjusted) in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. If the inputs used to measure the
financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant
to the fair value measurement of the instrument.
The carrying amounts of the Company's financial assets and liabilities, such as
cash and accounts payable approximate their fair values because of the short
maturity of these instruments.
Transactions involving related parties cannot be presumed to be carried out on
an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties,
if made, shall not imply that the related party transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions unless such
representations can be substantiated.
CARRYING VALUE, RECOVERABILITY AND IMPAIRMENT OF LONG-LIVED ASSETS
The Company has adopted Section 360-10-35 of the FASB Accounting Standards
Codification for its long-lived assets. Pursuant to ASC Paragraph 360-10-35-17
an impairment loss shall be recognized only if the carrying amount of a
long-lived asset (asset group) is not recoverable and exceeds its fair value.
The carrying amount of a long-lived asset (asset group) is not recoverable if it
exceeds the sum of the undiscounted cash flows expected to result from the use
and eventual disposition of the asset (asset group). That assessment shall be
based on the carrying amount of the asset (asset group) at the date it is tested
for recoverability. An impairment loss shall be measured as the amount by which
the carrying amount of a long-lived asset (asset group) exceeds its fair value.
Pursuant to ASC Paragraph 360-10-35-20 if an impairment loss is recognized, the
adjusted carrying amount of a long-lived asset shall be its new cost basis. For
a depreciable long-lived asset, the new cost basis shall be depreciated
(amortized) over the remaining useful life of that asset. Restoration of a
previously recognized impairment loss is prohibited.
Pursuant to ASC Paragraph 360-10-35-21 the Company's long-lived asset (asset
group) is tested for recoverability whenever events or changes in circumstances
indicate that its carrying amount may not be recoverable. The Company considers
the following to be some examples of such events or changes in circumstances
that may trigger an impairment review: (a) significant decrease in the market
price of a long-lived asset (asset group); (b) A significant adverse change in
the extent or manner in which a long-lived asset (asset group) is being used or
in its physical condition; (c) A significant adverse change in legal factors or
in the business climate that could affect the value of a long-lived asset (asset
group), including an adverse action or assessment by a regulator; (d) An
accumulation of costs significantly in excess of the amount originally expected
for the acquisition or construction of a long-lived asset (asset group); (e) A
current-period operating or cash flow loss combined with a history of operating
or cash flow losses or a projection or forecast that demonstrates continuing
losses associated with the use of a long-lived asset (asset group); and (f) A
current expectation that, more likely than not, a long-lived asset (asset group)
will be sold or otherwise disposed of significantly before the end of its
previously estimated useful life. The Company tests its long-lived assets for
potential impairment indicators at least annually and more frequently upon the
occurrence of such events.
Pursuant to ASC Paragraphs 360-10-45-4 and 360-10-45-5 an impairment loss
recognized for a long-lived asset (asset group) to be held and used shall be
included in income from continuing operations before income taxes in the income
statement of a business entity. If a subtotal such as income from operations is
presented, it shall include the amount of that loss. A gain or loss recognized
on the sale of a long-lived asset (disposal group) that is not a component of an
entity shall be included in income from continuing operations before income
taxes in the income statement of a business entity. If a subtotal such as income
from operations is presented, it shall include the amounts of those gains or
losses.
10
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
TOOLS AND EQUIPMENT
Tools and equipment are recorded at cost. Expenditures for major additions and
betterments are capitalized. Maintenance and repairs are charged to operations
as incurred. Depreciation of property and equipment is computed by the
straight-line method (after taking into account their respective estimated
residual values) over the assets estimated useful life of five (5) to seven (7)
years. Upon sale or retirement of property and equipment, the related cost and
accumulated depreciation are removed from the accounts and any gain or loss is
reflected in the statements of operations.
RELATED PARTIES
The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to Section 850-10-20 the related parties include (a) affiliates of the
Company ("Affiliate" means, with respect to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person, as such
terms are used in and construed under Rule 405 under the Securities Act); (b)
entities for which investments in their equity securities would be required,
absent the election of the fair value option under the Fair Value Option
Subsection of Section 825-10-15, to be accounted for by the equity method by the
investing entity; (c) trusts for the benefit of employees, such as pension and
profit-sharing trusts that are managed by or under the trusteeship of
management; (d) principal owners of the Company; (e) management of the Company;
(f) other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and (g) other parties that can
significantly influence the management or operating policies of the transacting
parties or that have an ownership interest in one of the transacting parties and
can significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.
The financial statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of
transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall
include: (a) the nature of the relationship(s) involved; (b) a description of
the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are
presented, and such other information deemed necessary to an understanding of
the effects of the transactions on the financial statements; (c) the dollar
amounts of transactions for each of the periods for which income statements are
presented and the effects of any change in the method of establishing the terms
from that used in the preceding period; and (d) amounts due from or to related
parties as of the date of each balance sheet presented and, if not otherwise
apparent, the terms and manner of settlement.
COMMITMENT AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain conditions may
exist as of the date the financial statements are issued, which may result in a
11
loss to the Company but which will only be resolved when one or more future
events occur or fail to occur. The Company assesses such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the
Company or un-asserted claims that may result in such proceedings, the Company
evaluates the perceived merits of any legal proceedings or un-asserted claims as
well as the perceived merits of the amount of relief sought or expected to be
sought therein.
If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company's financial statements.
If the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of
possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the guarantees would be disclosed.
REVENUE RECOGNITION
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or
realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the
services have been rendered to the customer, (iii) the sales price is fixed or
determinable and (iv) collectability is reasonably assured.
DEFERRED TAX ASSETS AND INCOME TAX PROVISION
The Company accounts for income taxes under Section 740-10-30 of the FASB
Accounting Standards Codification. Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be
realized. 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. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards
Codification ("Section 740-10-25"). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
fifty percent (50%) likelihood of being realized upon ultimate settlement.
Section 740-10-25 also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis
of assets and liabilities are reported in the accompanying balance sheets, as
well as tax credit carry-backs and carry-forwards. The Company periodically
reviews the recoverability of deferred tax assets recorded on its balance sheets
and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might
be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing
12
jurisdictions and is subject to audit in these jurisdictions. In management's
opinion, adequate provisions for income taxes have been made for all years. If
actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
TAX YEARS THAT REMAIN SUBJECT TO EXAMINATION BY MAJOR TAX JURISDICTIONS
The Company discloses tax years that remain subject to examination by major tax
jurisdictions pursuant to the ASC Paragraph 740-10-50-15.
EARNINGS PER SHARE
Earnings per share ("EPS") is the amount of earnings attributable to each share
of common stock. For convenience, the term is used to refer to either earnings
or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10
through 260-10-45-16 Basic EPS shall be computed by dividing income available to
common stockholders (the numerator) by the weighted-average number of common
shares outstanding (the denominator) during the period. Income available to
common stockholders shall be computed by deducting both the dividends declared
in the period on preferred stock (whether or not paid) and the dividends
accumulated for the period on cumulative preferred stock (whether or not earned)
from income from continuing operations (if that amount appears in the income
statement) and also from net income. The computation of diluted EPS is similar
to the computation of basic EPS except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if the dilutive potential common shares had been issued during the period to
reflect the potential dilution that could occur from common shares issuable
through contingent shares issuance arrangement, stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS
shall be based on the most advantageous conversion rate or exercise price from
the standpoint of the security holder. The dilutive effect of outstanding call
options and warrants (and their equivalents) issued by the reporting entity
shall be reflected in diluted EPS by application of the treasury stock method
unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8
through 55-11 require that another method be applied. Equivalents of options and
warrants include non-vested stock granted to employees, stock purchase
contracts, and partially paid stock subscriptions (see paragraph 260-10-55-23).
Anti-dilutive contracts, such as purchased put options and purchased call
options, shall be excluded from diluted EPS. Under the treasury stock method: a.
Exercise of options and warrants shall be assumed at the beginning of the period
(or at time of issuance, if later) and common shares shall be assumed to be
issued. b. The proceeds from exercise shall be assumed to be used to purchase
common stock at the average market price during the period. (See paragraphs
260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the
difference between the number of shares assumed issued and the number of shares
assumed purchased) shall be included in the denominator of the diluted EPS
computation.
There were no contingent shares issuance arrangement, stock options or warrants
which were issuable and could have potential dilutive effect to the earnings per
share at March 31, 2015.
CASH FLOWS REPORTING
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
13
income that do not affect operating cash receipts and payments. The Company
reports the reporting currency equivalent of foreign currency cash flows, using
the current exchange rate at the time of the cash flows and the effect of
exchange rate changes on cash held in foreign currencies is reported as a
separate item in the reconciliation of beginning and ending balances of cash and
cash equivalents and separately provides information about investing and
financing activities not resulting in cash receipts or payments in the period
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
SUBSEQUENT EVENTS
The Company follows the guidance in Section 855-10-50 of the FASB Accounting
Standards Codification for the disclosure of subsequent events. The Company will
evaluate subsequent events through the date when the financial statements were
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,
the Company as an SEC filer considers its financial statements issued when they
are widely distributed to users, such as through filing them on EDGAR.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In August 2014, the FASB issued the FASB Accounting Standards Update 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 ("ASU 2014-15").
In connection with preparing financial statements for each annual and interim
reporting period, an entity's management should evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt
about the entity's ability to continue as a going concern within one year after
the date that the FINANCIAL STATEMENTS ARE ISSUED (or within one year after the
date that the FINANCIAL STATEMENTS ARE AVAILABLE TO BE ISSUED when applicable).
Management's evaluation should be based on relevant conditions and events that
are known and reasonably knowable at the date that the FINANCIAL STATEMENTS ARE
ISSUED (or at the date that the FINANCIAL STATEMENTS ARE AVAILABLE TO BE ISSUED
when applicable). Substantial doubt about an entity's ability to continue as a
going concern exists when relevant conditions and events, considered in the
aggregate, indicate that it is probable that the entity will be unable to meet
its obligations as they become due within one year after the date that the
financial statements are issued (or available to be issued). The term PROBABLE
is used consistently with its use in Topic 450, Contingencies.
When management identifies conditions or events that raise substantial doubt
about an entity's ability to continue as a going concern, management should
consider whether its plans that are intended to mitigate those relevant
conditions or events will alleviate the substantial doubt. The mitigating effect
of management's plans should be considered only to the extent that (1) it is
probable that the plans will be effectively implemented and, if so, (2) it is
probable that the plans will mitigate the conditions or events that raise
substantial doubt about the entity's ability to continue as a going concern.
If conditions or events raise substantial doubt about an entity's ability to
continue as a going concern, but the substantial doubt is alleviated as a result
of consideration of management's plans, the entity should disclose information
that enables users of the financial statements to understand all of the
following (or refer to similar information disclosed elsewhere in the
footnotes):
a. Principal conditions or events that raised substantial doubt about the
entity's ability to continue as a going concern (before consideration
of management's plans)
b. Management's evaluation of the significance of those conditions or
events in relation to the entity's ability to meet its obligations
c. Management's plans that alleviated substantial doubt about the
entity's ability to continue as a going concern.
If conditions or events raise substantial doubt about an entity's ability to
continue as a going concern, and substantial doubt is not alleviated after
14
consideration of management's plans, an entity should include a statement in the
footnotes indicating that there is SUBSTANTIAL DOUBT ABOUT THE ENTITY'S ABILITY
TO CONTINUE AS A GOING CONCERN within one year after the date that the financial
statements are issued (or available to be issued). Additionally, the entity
should disclose information that enables users of the financial statements to
understand all of the following:
a. Principal conditions or events that raise substantial doubt about the
entity's ability to continue as a going concern
b. Management's evaluation of the significance of those conditions or
events in relation to the entity's ability to meet its obligations
c. Management's plans that are intended to mitigate the conditions or
events that raise substantial doubt about the entity's ability to
continue as a going concern.
The amendments in this Update are effective for the annual period ending after
December 15, 2016, and for annual periods and interim periods thereafter. Early
application is permitted.
In January 2015, the FASB issued the FASB Accounting Standards Update No.
2015-01 "INCOME STATEMENT--EXTRAORDINARY AND UNUSUAL ITEMS (SUBTOPIC 225-20):
SIMPLIFYING INCOME STATEMENT PRESENTATION BY ELIMINATING THE CONCEPT OF
EXTRAORDINARY ITEMS" ("ASU 2015-01").
This Update eliminates from GAAP the concept of extraordinary items and the
requirements in Subtopic 225-20 for reporting entities to separately classify,
present, and disclose extraordinary events and transactions.
The amendments in this Update are effective for fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2015. Early
adoption is permitted provided that the guidance is applied from the beginning
of the fiscal year of adoption.
Management does not believe that any recently issued, but not yet effective
accounting pronouncements, when adopted, will have a material effect on the
accompanying financial statements.
NOTE 3 - GOING CONCERN
The Company has elected to adopt early application of Accounting Standards
Update 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 ("ASU 2014-15").
The Company's financial statements have been prepared assuming that it will
continue as a going concern, which contemplates continuity of operations,
realization of assets, and liquidation of liabilities in the normal course of
business.
As reflected in the financial statements, the Company had an accumulated deficit
at March 31, 2015, a net loss and net cash used in operating activities for the
reporting period then ended. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
The Company is attempting to commence operations and generate sufficient
revenue; however, the Company's cash position may not be sufficient to support
the Company's daily operations. Management intends to raise additional funds by
way of a private or public offering. While the Company believes in the viability
of its strategy to commence operations and generate sufficient revenue and in
its ability to raise additional funds, there can be no assurances to that
effect. The ability of the Company to continue as a going concern is dependent
upon the Company's ability to further implement its business plan and generate
sufficient revenue and its ability to raise additional funds by way of a public
or private offering.
15
The financial statements do not include any adjustments related to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
NOTE 4 - TOOLS AND EQUIPMENT
(I) IMPAIRMENT
The Company completed its annual impairment testing at its fiscal year end and
determined that there was no impairment as the fair value of tools and
equipment, exceeded their carrying values at June 30, 2014.
(II) DEPRECIATION EXPENSE
The Company acquired tools and equipment on May 25, 2014 and started to
depreciate as of June 1, 2014. Depreciation expense was $104 for the reporting
period ended March 31, 2015.
The Company acquired computer equipment in January 04, 2015 and started to
depreciate as of February 1, 2015. Depreciation expense was $26 for the
reporting period ended March 31, 2015.
NOTE 5 - STOCKHOLDERS' EQUITY
SHARES AUTHORIZED
Upon formation the total number of shares of all classes of stock which the
Company is authorized to issue is Seventy-Five Million (75,000,000) shares of
Common Stock, par value $0.001 per share.
COMMON STOCK
Upon formation the Company sold 5,000,000 shares of common stock to the officer
and director of the Company at $0.001 per share, or $5,000 in aggregate for
cash.
In December 2014, the Company sold 880,000 shares of common stock to 11
stockholders at $0.01 per share, or $8,800 in aggregate for cash.
In January and February 2015, the Company sold 1,200,000 shares of common stock
to 26 stockholders at $0.01 per share, or $12,000 in aggregate for cash.
NOTE 6 - RELATED PARTY TRANSACTIONS
RELATED PARTIES
Related parties with whom the Company had transactions are:
Related Parties Relationship
--------------- ------------
Ilia Tomski President and Director
FREE OFFICE SPACE
The Company has been provided office space by its President at no cost.
Management determined that such cost is nominal and did not recognize the rent
expense in its financial statement.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated all events that occur after the balance sheet date
through the date when the financial statements were issued to determine if they
must be reported. The Management of the Company determined that there were no
reportable subsequent events to be disclosed.
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
We are a development stage company with limited earnings to date and nominal
operations and assets with a focus on early-stage business activities such as
proof of concept development, small batch manufacturing and promoting our new
technology. Since incorporation, management has developed a detailed business
plan to provide customers with unique and innovative solution for their
decorative needs. Our initial product is lattice panels designed for suspended
ceiling. These panels will dynamically change the color of their surface with
the change of the viewing angle and / or the type of illumination. Our aim is to
develop Asteriko Corp. in phases. The first phase of development will focus on
design solutions. The second phase will be manufacturing. We have identified our
target market and obtained initial funding of $10,000 from Mr. Tomski (our
President and Director). We will require additional funding in order to pursue
our business objectives; there is no guarantee that we will be successful in
this regard.
Asteriko Corp. was incorporated in the State of Nevada on April 17, 2014. Our
offices are located at 616 Corporate Way, Suite 2-6834, Valley Cottage, NY
10989.
PRODUCT
Our initial product will be color changing lattice panels designed for suspended
ceiling.
The idea of color changing surfaces is not new. Color decomposition of reflected
light also known as refraction combined with light interference is a known
effect and is used in automotive industry for development of special paints.
Our approach is to achieve similar results using different and more cost
effective technology. This approach is based on ability of an average human eye
to blend reflected lights and view them as a single color. The type of color
depends on combination of base colors (red, blue, and green) in the reflection.
All color TVs use similar principle to achieve multicolor effect. The main
difference with our proposal is that TV generates light whereas we use the
surface reflection. Only select material can be used to achieve this effect the
surface of the material should have special geometrical figures on a small level
and each painted with at least 3 different colors.
Prior to creating Asteriko Corp. our President has done many experiments and
discovered that simple 3D transparent rectangular grid structure could act as a
color changing decorative element by simply applying different colors to
different faces of the 3D grid. Viewed from different angles, such structure
appears to have not only different but also dynamically changing color depending
of the viewpoint of the observer.
The grid density and the height of each individual rectangular cell defines the
light transparency of the element, if back lit, as well as the sensitivity of
the color shifting to a different viewing angle. Desired color changing effects
can also be achieved through the application of directional spray painting to
randomly oriented micro-surfaces.
We are beginning to experiment with rigid and soft foam. It is our understanding
that foam sheets of 0.5" to 1.0" thick, rigid or soft, could be made as 3D
lattices of adjacent polygons, much like certain types of packing foam. Having
painted each face of the polygon into different color will create desired color
changing illusion if viewed from different directions.
Our plan is to carry out a phased approach in establishing and developing
Asteriko Corp. The first phase will focus on developing and refining design
solutions and producing samples The second phase will be production and
manufacturing.
17
Phase one:
a) select the most effective way to make a given surface to change its
color
b) identify the materials to be used
c) manufacture and sell small batches of different materials such as
ceiling panels as a proof of concept to see if our products generate
interest
d) enhance directional spray painting process to achieve better quality
e) document the technological process and our "know how"
Phase two:
a) advertise our product and technology
b) negotiate with suppliers and manufacturers of the foam panels of
desired geometry. Currently suppliers such as Clark Foam Products
Corp. and several others all capable of manufacturing an initial
monochromatic 3D foam lattices
c) establish distribution network
d) expand our technology to other materials used for surface decorations
capitalizing the basic working principle of the 3D rectangular color
changing grid
In case of successful growth of our business, necessary funds will be available
through operating profits to further optimize present technique for making color
changing rectangular lattices and foam panels as well as establishing proper
manufacturing. It will also be possible to start producing samples of color
changing ceramic or stamped metal tiles.
TARGET MARKET AND CLIENTS
The main target market for our products and services will include retail and
commercial establishments where unique and original appearance is an integral
part of their success. We will also provide design solutions and materials to
the residential sector.
Our potential customers will be in the following potential sectors:
First Phase:
* Building contractors and industrial design and architecture companies
* Home owners for new builds or renovations
Future phases:
* Retail establishments e.g. boutique and specialty stores
* Commercial establishments including restaurants, night clubs,
theaters, hotels and fitness clubs
* Geographically at the initial stage of our development we'll target
the North American markets
SOURCE OF REVENUE
Our main source of revenue will initially be the sales of design solutions to
the house and building designers and constructors i.e.:
1. Design of color-shifting suspended ceiling panels to customer-provided
specifications
2. Consulting on application and integration of our panels into customer
interior or exterior design.
18
Additional revenue stream expected to come from manufacturing of color-shifting
suspended ceiling surfaces for home owners as well as retail and commercial
establishments in the future.
COMPETITION AND COMPETITIVE STRATEGY
There is a small number of potential competitors that provide some elements of
what Asteriko Corp., will offer to its customers. However, no direct competition
exists since the product that our company develops is unique to design and
construction industry. It uses innovative technological solution that is low
cost and economical.
Several differences in application arise when comparing our technology to color
changing paint technology as well as some colored light arrangements. The main
difference in application is simplicity as one can imagine the installation of a
ceiling panel or wall panel compared to painting or running electricity. No
major surface preparation is required. Another significant difference is
flexibility of installation in terms of design and final appearance. Taking
rectangular grid ceiling panel as example, not only various ornamental
combinations could be applied right at the customer site but also customer is
left with the ability to adjust and even entirely change the appearance of the
ceiling by rotating and relocating individual panels.
There is also a difference in application of our innovative technology. Once we
fully launch operations we expect to compete successfully on a basis of price,
quality and novelty of our product.
Currently, our competitive position within the industry is negligible in light
of the fact that we have just recently started our operations.
SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES
We believe that our President's industry experience and connections will enable
us to develop the various aspects of the business. Mr. Tomski has experience
with design and engineering of products and creating promotion and marketing
packages. While working as Research Scientist and Industrial Post Doctoral
Fellow for Ionics Mass Spectrometry Group Inc., Mr. Tomski (in addition to his
main duties as research scientist) has been actively involved in promoting the
company products through installations, demonstrations and training provided to
existing and potential customers around the world. He also promoted company's
products through onsite and offsite presentations and industrial conferences.
Throughout his career Mr. Tomski has been involved in design and manufacturing
of hi-tech industrial equipment such as high vacuum systems for utilization in
particle accelerator applications in general and for Accelerator Mass
Spectrometry application in particular. Mr. Tomski has hands on experience in
design, manufacturing and operation of ion optical elements such as atmospheric
pressure to vacuum sampling interface, ion guides, ion collision cells that are
vital components of commercial mass spectrometers for bio-medical applications.
Mr. Tomski has also been involved in design and manufacturing of cryogenic
systems for commercial superconducting gravity gradiometer; this includes design
and manufacturing of superconducting electrical circuits and gradiometer sensor
components.
Currently he oversees design and manufacturing of superconducting gravity
gradiometer sensor in the start-up company targeting major land exploration and
natural resources surveying.
We believe there are no constraints on the sources or availability of products,
materials and supplies related to the production of suspended panels.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
At this stage we sell small number of panels as a proof of concept to test the
market reaction to our product.
We currently have 4 customers and plan to extend our offer in the near future.
Our products are applicable to a wide range of customers from individual home
owners to commercial construction companies.
We believe because of the potentially broad base of customers for our services,
we will not rely on one or few major customers.
19
Our initial contract with "Glik-Art" was created to attract new customer with
20% discount for a period of 6 months. Due to different needs of the clients we
cannot in advance include in the contract specific materials or design. For each
specific order we disclose the type of materials to be used, design
specifications and labor rates. Currently we don't have special relationships
with these customers, other than contract with "Glik-Art" offering 20% discount
for 6 month. Any customer may purchase our product based on their needs.
RESULTS OF OPERATION
For the Nine months ended March 31, 2015, we generated $569 in revenues; our
operating expenses were comprised of professional fees of $9,588 and general and
administrative expenses of $692.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do not have any off -balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.
GOING CONCERN
Our financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation. We expect we
will require additional capital to meet our long term operating requirements. We
expect to raise additional capital through, among other things, the sale of
equity or debt securities.
The independent auditors' audit report accompanying our June 30, 2014 financial
statements contained an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern. The financial statements have been
prepared "assuming that we will continue as a going concern," which contemplates
that we will realize our assets and satisfy our liabilities and commitments in
the ordinary course of business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No report required.
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act
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 Exchange Act is accumulated and communicated
to the issuer's management, including its principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
An evaluation was conducted under the supervision and with the participation of
our management of the effectiveness of the design and operation of our
disclosure controls and procedures as of March 31, 2015. Based on that
evaluation, our management concluded that our disclosure controls and procedures
were not effective as of such date to ensure that information required to be
disclosed in the reports that we file or submit under the Exchange Act, is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms. Such officer also confirmed that there was no change in
our internal control over financial reporting during the nine-month period ended
March 31, 2015 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
20
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDING
Management is not aware of any legal proceedings contemplated by any
governmental authority or any other party involving us or our properties. As of
the date of this Quarterly Report, no director, officer or affiliate is (i) a
party adverse to us in any legal proceeding, or (ii) has an adverse interest to
us in any legal proceedings. Management is not aware of any other legal
proceedings pending or that have been threatened against us or our properties.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
No report required.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
No report required.
ITEM 4. MINE SAFETY DISCLOSURES
No report required.
ITEM 5. OTHER INFORMATION
No report required.
ITEM 6. EXHIBITS
31 Certification of the Chief Executive and Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive and Financial Officer pursuant to
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
101 Interactive Data Files pursuant to Rule 405 of Regulation S-T.
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.
Asteriko Corp.
Dated: May 15, 2015 By: /s/ Ilia Tomski
-------------------------------------
President and Chief Executive Officer
and Chief Financial Officer
2
