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EX-32 - Star Alliance International Corp.ex32.txt
EX-31 - Star Alliance International Corp.ex31.txt

                     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, 2016

[ ] 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 [ ] No [X]

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 April 26, 2016
      -----                                     --------------------------------
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. 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 18 Item 4. Controls and Procedures. 18 PART II - OTHER INFORMATION Item 1. Legal Proceeding. 20 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 20 Item 3. Default Upon Senior Securities. 20 Item 4. Mine Safety Disclosures. 20 Item 5. Other Information. 20 Item 6. Exhibits. 20 Signatures 20 2
PART I - FINANCIAL INFORMATION ITEM1. FINANCIAL STATEMENTS Asteriko Corp. Balance Sheets At March 31, 2016 and June 30, 2015 March 31, 2016 June 30, 2015 -------------- ------------- (unaudited) ASSETS Current Assets Cash $ 343 $ 11,284 -------- -------- Total Current Assets 343 11,284 Property and Equipment, Net 1,113 1,334 -------- -------- Total Assets $ 1,456 12,618 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Accounts Payable $ 99 $ 279 Related party loans 997 1,604 Note payable - Related party 13,000 5,000 -------- -------- Total Liabilities 14,096 6,883 -------- -------- Stockholders' Equity (Deficit) Common Stock, $0.001 par value, 75,000,000 shares authorized; 7,080,000 shares issued and outstanding, respectively 7,080 7,080 Additional paid-in capital 19,667 19,120 Accumulated deficit (39,387) (20,465) -------- -------- Total Stockholders' Equity (Deficit) (12,640) 5,735 -------- -------- Total Liabilities and Stockholders' Equity (Deficit) $ 1,456 $ 12,618 ======== ======== The accompanying notes are an integral part of these condensed financial statements. 3
Asteriko Corp. Statements of Operations (unaudited) For the Three Months Ended For the Nine Months Ended March 31, March 31, 2016 2015 2016 2015 ---------- ---------- ---------- ---------- Revenues $ -- $ -- $ -- $ 569 ---------- ---------- ---------- ---------- Expenses General and Administrative 249 350 765 693 Imputed Interest Expense 260 -- 547 -- Professional Fees 4,682 3,740 17,610 9,588 ---------- ---------- ---------- ---------- Total Expense 5,191 4,090 18,922 10,281 ---------- ---------- ---------- ---------- LOSS FROM OPERATIONS (5,191) (4,090) (18,922) (9,712) ---------- ---------- ---------- ---------- INCOME TAX EXPENSE -- -- -- -- ---------- ---------- ---------- ---------- NET LOSS $ (5,191) $ (4,090) $ (18,922) $ (9,712) ========== ========== ========== ========== Basic and diluted net loss per common share $ (0.00) $ (0.00) $ (0.00) $ (0.00) ========== ========== ========== ========== Weighted-average number of common shares outstanding 7,080,000 6,322,667 7,080,000 5,341,699 The accompanying notes are an integral part of these condensed financial statements. 4
Asteriko Corp. Statements of Cash Flows (unaudited) For the Nine Months Ended March 31, 2016 2015 -------- -------- Cash flows from operating activities: Net loss $(18,922) $ (9,712) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 221 129 Imputed Interest Expense 547 -- Changes in operating assets and liabilities: Accounts receivable -- 714 Accounts payable (180) (2,500) Advances from shareholders (607) 121 Equipment purchases -- (787) -------- -------- Net cash provided by (used in) operating activities (18,941) (12,035) -------- -------- Cash flows from financing activities: Proceeds from notes payable - related party 8,000 -- Capital stock issued for cash -- 20,800 -------- -------- Net cash provided by financing activities 8,000 20,800 -------- -------- Net increase (decrease) in cash (10,941) 8,765 Cash, beginning of the period 11,284 10,000 -------- -------- Cash, end of the period $ 343 $ 18,765 ======== ======== Supplemental disclosures of cash flow information Cash paid for: Interest $ -- $ -- Income Taxes $ -- $ -- The accompanying notes are an integral part of these condensed financial statements. 5
Asteriko Corp. Statement of Stockholders Equity (unaudited) For the period from June 30, 2014 through March 31, 2016 Common stock par value $0.001 Total ----------------------- Additional Stockholders' Number of Paid-in Accumulated Equity Shares Amount Capital Deficit (Deficit) ------ ------ ------- ------- --------- Balance at June 30, 2014 5,000,000 $ 5,000 $ -- $ (2,594) $ 2,406 Issuance of common shares for cash at $0.01 in December 2014 880,000 880 7,920 -- 8,800 Issuance of common shares for cash at $0.01 per share in January 2015- April 2015 1,200,000 1,200 10,800 -- 12,000 Imputed Interest -- -- 400 -- 400 Net Loss -- -- -- (17,872) (17,871) --------- ------- -------- --------- --------- Balance June 30, 2015 7,080,000 7,080 19,120 (20,465) 5,735 Net Loss -- -- -- (18,922) (18,922) Imputed Interest -- -- 547 -- 547 --------- ------- -------- --------- --------- Balance, March 31, 2016 7,080,000 $ 7,080 $ 19,667 $ (39,387) $ (12,640) ========= ======= ======== ========= ========= The accompanying notes are an integral part of these condensed financial statements 6
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - ORGANIZATION AND OPERATIONS 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 The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). 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 estimate(s) and assumption(s) affecting the financial statements was (were): (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) 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 7
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. 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. Following table lists assets and liabilities measured and recognized at fair market value as of: Fair Value Measurement at March 31, 2016 -------------------------------------------- Level 1 Level 2 Level 3 --------- --------- --------- ASSETS Cash and Cash Equivalents $ 343 $ -- $ -- --------- --------- --------- TOTAL ASSETS 343 -- -- --------- --------- --------- LIABILITIES Note Payable - Related Party 13,000 -- -- --------- --------- --------- TOTAL LIABILITIES 13,000 -- -- --------- --------- --------- $ (12,657) $ -- $ -- ========= ========= ========= 8
Fair Value Measurement at June 30, 2015 -------------------------------------------- Level 1 Level 2 Level 3 --------- --------- --------- ASSETS Cash and Cash Equivalents $ 11,284 $ -- $ -- --------- --------- --------- TOTAL ASSETS 11,284 -- -- --------- --------- --------- LIABILITIES Note Payable - Related Party 5,000 -- -- --------- --------- --------- TOTAL LIABILITIES 5,000 -- -- --------- --------- --------- $ 6,284 $ -- $ -- ========= ========= ========= 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. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation on property, plant and equipment is calculated on the straight-line method after taking into account their respective estimated residual values over the estimated useful lives of the assets as follows: Office equipment 3 years Tools and equipment 5 years Maintenance and repair costs are expensed as incurred, whereas significant renewals and betterments are capitalized. Property, Plant and Equipment schedule as of March 31, 2016 and June 30, 2015, respectively: March 31, 2016 June 30, 2015 -------------- ------------- Office equipment * Cost $ 688 $ 688 * Depreciation (210) (115) -------- -------- * Net 478 573 -------- -------- Tools and equipment * Cost 787 787 * Depreciation (152) (26) -------- -------- * Net 635 761 -------- -------- TOTAL $ 1,113 $ 1,334 ======== ======== 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 9
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 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 unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted 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. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company's financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company's business, financial position, and results of operations or cash flows. The Company did not have any commitments or contingencies as of March 31, 2016 and June 30, 2015. 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. 10
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 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. UNCERTAIN TAX POSITIONS The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the period from April 17, 2014 (inception) through March 31, 2016. NET INCOME (LOSS) PER COMMON SHARE Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants. There were no potentially dilutive common shares outstanding for the periods ended March 31, 2016 or 2015. 11
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 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 On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements. NOTE 3 - GOING CONCERN The financial statements have been prepared assuming 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. As reflected in the financial statements, the Company had an accumulated deficit at March 31, 2016, a net loss and net cash used in operating activities for the period from April 17, 2014 (inception) through March 31, 2016. These factors raise substantial doubt about the Company's ability to continue as a going concern. 12
Although the Company has recognized some nominal amount of revenues since inception, the Company is devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. The Company is attempting to commence operations and generate sufficient revenue; however, the Company's cash position may not be sufficient to support its daily operations. 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 its 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. Due to the above company may consider sale or merger arrangement in the future. 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 - 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 which Seventy-Five Million (75,000,000) shares shall be Common Stock, par value $0.001 per share. COMMON STOCK On April 17, 2014, upon formation, the Company sold 5,000,000 shares of common stock to the founder of the Company at $0.001 per share, or $5,000 in cash. As of December 2014 Company issued additional 880,000 shares of common stock for cash for the price of $0.01 per share for the total consideration of $8,800. As of March 2014 Company issued additional 1,200,000 shares of common stock for the price of $0.01 each for the total consideration of $12,000. As of March 31, 2016, there were 7,080,000 total shares issued and outstanding for the total common stock sales of $25,800. NOTE 5 - RELATED PARTY TRANSACTIONS FREE OFFICE SPACE The Company has been provided office space by its Chief Executive Officer at no cost. Management determined that such cost is nominal and did not recognize the rent expense in its financial statement. ADVANCES FROM STOCKHOLDER From time to time, the Chairman, CEO and significant stockholder of the Company advances funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand. Current balance of such advance is $996. The Company repaid the amount of $607 to the CEO as of March 31, 2016. NOTE PAYABLE - CHIEF EXECUTIVE OFFICER Our President and Director provided $8,000 in additional loan to the company as compared with n/a same period last year. The loan is unsecured, non-interest bearing and due on demand. Current balance is $13,000. We recorded imputed interest $547 for the nine months ended March 31, 2016. 13
ISSUED SHARES TO RELATED PARTIES On April 17, 2014, upon formation, the Company sold 5,000,000 shares of common stock to Ilia Tomski, CEO of the Company at $0.001 per share, or $5,000 in cash. On February 19, 2015, the Company sold 80,000 shares of common stock to Ksenia Tomskaia, Treasurer of the Company at $0.001 per share, or $800 in cash. NOTE 6 - INCOME TAX PROVISION DEFERRED TAX ASSETS At end of March 31, 2016, the Company had cumulative net operating loss ("NOL") carry-forwards for Federal income tax purposes of $38,839 that may be offset against future taxable income through 2035. No tax benefit has been recorded with respect to these net operating loss carry-forwards in the accompanying consolidated financial statements as the management of the Company believes that the realization of the Company's net deferred tax assets of approximately $13,205 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by the full valuation allowance. Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization. The valuation allowance increased approximately $13,205 for the period from April 17, 2014 (inception) through March 31, 2016. Components of deferred tax assets are as follows: March 31, 2016 June 30, 2015 -------------- ------------- Net deferred tax assets - Non-current: Net operating loss carry forward $(39,387) $(20,465) Imputed Interest 547 -- -------- -------- Net Operating Losses Carryforward Cumulative (38,839) (20,465) -------- -------- Expected income tax benefit from NOL carry-forwards 13,205 6,958 -------- -------- Less valuation allowance (13,205) (6,958) -------- -------- Deferred tax assets, net of valuation allowance $ -- $ -- ======== ======== INCOME TAX PROVISION IN THE STATEMENT OF OPERATIONS A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: March 31, 2016 June 30, 2015 -------------- ------------- Federal statutory income tax rate 34.0% 34.0% Increase (reduction) in income tax provision resulting from: Net operating loss ("NOL") carry-forward (34.0) (34.0) Effective income tax rate 0.0% 0.0% -------- -------- Effective income tax rate 0.0% 0.0% ======== ======== 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. 14
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 $13,000 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. Second phase will be production and manufacturing. 15
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. 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. 16
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. 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 17
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, 2016 and 2015 our revenue was $0 and $569 respectively. For the nine months ended March 31, 2016, our operating expenses were comprised of professional fees of $17,610, imputed interest on note payable of $547 and general and administrative expenses of $765, compared to professional fees of $9,588 and general and administrative expenses of $693 for the nine months ended March 31, 2015. For the three months ended March 31, 2016 and 2015, our revenue was $0 and $0 respectively. For the three months ended March 31, 2016, our operating expenses were comprised of professional fees of $4,682, imputed interest on note payable of $260 and general and administrative expenses of $249, compared to professional fees of $3,740 and general and administrative expenses of $350 for the three months ended March 31, 2015. 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, 2015 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 18
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 has been 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, 2016. 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 months ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 19
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: April 26, 2016 By: /s/ Ilia Tomski ------------------------------------- President and Chief Executive Officer and Chief Financial Officer 2