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, 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