Attached files

file filename
EX-32 - Essense Water, Inc.exh32.txt
EX-31 - Essense Water, Inc.exh31.txt

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2017

                        Commission file number 333-180978

                                SATUSA CORPORATION
             (Exact name of registrant as specified in its charter)

                                      Nevada
         (State or other jurisdiction of incorporation or organization)

                                  5348 Vegas Dr.
                              Las Vegas, NV  89108
          (Address of principal executive offices, including zip code)

                                  (509)995-2433
                     (Telephone number, including area code)

                             Mr. Jeffrey Nichols, Esq.
                                  811 6th Avenue
                               Lewiston, ID  83501
                                  (415)314-9088
                     (Name and Address of Agent for Service)

Check whether the issuer (1) 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 last 90 days.
YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer, "accelerated
filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-
2 of the Exchange Act.

Large accelerated filer [ ]               Accelerated filer [ ]
Non-accelerated filer [ ]                 Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). YES [X] NO [ ]

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 12,400,000 shares as of
April 15, 2017




                                      -1-

ITEM 1. FINANCIAL STATEMENTS. The financial statements for the quarter ended February 28, 2017 immediately follow. SATUSA Corporation Unaudited Interim Condensed Balance Sheets As of February 28, 2017 ---------------------------------------------------------------------------- February 28, August 31, 2017 2016 ------- -------- Current Assets Cash $ 38 $ 752 Accounts Receivable 4,475 4,650 ------- -------- Total Current Assets 4,513 5,402 ------- -------- LIABILITIES Current Liabilities Accrued Liabilities 1,620 5,250 Related Party Payable 25,689 34,498 ------- -------- Total Current Liabilities 27,309 40,248 ------- -------- Total Liabilities 27,309 40,248 ------- -------- STOCKHOLDERS' EQUITY(DEFICIT) Common Stock: Paid-In Capital, Par Value $0.0001 per Share, 75,000,000 Shares Authorized, 12,400,000 Shares Outstanding as of February 28, 2017 and August 31, 2016 1,240 1,240 Additional Paid In Capital 10,760 10,760 Accumulated Deficit (34,796) (46,836) ------- -------- Total Shareholders' Equity (22,796) (34,846) ------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 4,513 $ 5,402 ------- -------- The accompanying notes are an integral part of these financial statements. -2-
SATUSA Corporation Unaudited Interim Condensed Statements of Operations Three Three Six Six Months Months Months Months Ended Ended Ended Ended February February February February 28,2017 29,2016 28,2017 29,2016 ------- ------- ------- ------- Operating Revenue $ 12,710 $ 0 $ 20,875 $ 0 ------ ---- ------ ---- Total Revenue 12,170 0 20,875 0 Cost of Services 984 0 1,535 0 ------ ---- ------ ---- Gross Profit 11,186 0 19,340 0 ------ ---- ------ ---- Expenses: General & Administrative 4,517 2,727 7,290 4,504 ------ ---- ------ ---- Total Expenses 4,517 2,727 7,290 4,504 ------ ---- ------ ---- Provision for Income Taxes 0 0 0 0 ------ ---- ------ ---- Net Income (Loss) $ 7,209 $(2,727) $ 12,050 $ (4,504) ------ ---- ------ ---- Net Loss per Common Share - Basic and Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00) ==== ==== ==== ==== Weighted Average Number of Shares Outstanding - Basic and Diluted 12,400,000 12,400,000 12,400,000 12,400,000 ========== ========== ========== ========== The accompanying notes are an integral part of these financial statements. -3-
SATUSA Corporation Unaudited Interim Condensed Statements of Cash Flows Six Months Six Months Ended Ended February February 28,2017 29,2016 ------- ------- Cash Flows from Operating Activities: Net Income(Loss) $ 12,050 $ (4,504) Net Change in A/R 175 1,000 Net Change in A/P (4,130) 0 ----- ----- Net Cash Provided By (Used In) Operating Activities 8,095 (3,504) ----- ----- Cash Flows from Financing Activities: (Repayments to) Advances from Affiliate (8,809) 3,550 ----- ----- Net Cash Flows Provided by Financing Activities (8,809) 3,550 ----- ----- Net Increase (Decrease) in Cash (714) 46 ----- ----- Cash - Beginning of Period 752 37 Cash - End of Period $ 38 $ 83 ===== === Supplemental Disclosure of Cash Flow Information: Cash Paid For: Interest $ - $ - Income Taxes $ - $ - The accompanying notes are an integral part of these financial statements. -4-
SATUSA Corporation Unaudited Interim Condensed Statements of Shareholders' Equity For the Period From August 31, 2013 Through February 29, 2016 ----------------------------------------------------------------------------- Deficit Accumulated Common Additional During Common Stock Paid In Development Stock Amount Capital Stage Total ----------------------------------------------------- BALANCE, AUGUST 31, 2013 12,400,000 $ 1,240 $10,760 $ (46,018) $(34,018) ----------------------------------------------------- Deficit - Year Ended August 31, 2014 (9,960) (9,960) ----------------------------------------------------- BALANCE, AUGUST 31, 2014 12,400,000 $ 1,240 $10,760 $ (55,979) $(43,979) ----------------------------------------------------- Deficit - Year Ended August 31, 2015 (10,504) (10,504) ----------------------------------------------------- BALANCE, AUGUST 31, 2015 12,400,000 $ 1,240 $10,760 $ (66,483) $(54,483) ----------------------------------------------------- Net Income - Year Ended August 31, 2016 19,636 19,636 ----------------------------------------------------- BALANCE, AUGUST 31, 2016 12,400,000 $ 1,240 $10,760 $ (46,847) $(34,847) ----------------------------------------------------- Net Income - Six Months Ended February 28, 2017 12,050 12,050 ----------------------------------------------------- BALANCE, FEBRUARY 28, 2017 12,400,000 $ 1,240 $10,760 $ (34,796) $(22,796) ==================================================== The accompanying notes are an integral part of these financial statements. -5-
SATUSA Corporation Unaudited Interim Condensed Notes to the Financial Statements ----------------------------------------------------------------------------- NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying financial statements have been prepared by SATUSA Corporation (the "Company") without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at February 28, 2017, and for all periods presented herein, have been made. During its 3rd quarter of fiscal 2016, the Company adopted a new business plan of offering an SAT exam preparatory course. In doing so, it also changed the Company's name from Essense Water, Inc. to SATUSA Corporation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's August 31, 2016 audited financial statements. The results of operations for the period ended February 28, 2017 are not necessarily indicative of the operating results for the full year. NOTE 2 - SUBSEQUENT EVENTS Company has evaluated subsequent events through the date that the financial statements were issued. There were no significant subsequent events that need to be disclosed. Note 3 - RECENT ACCOUNTING PRONOUNCEMENTS There are several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of February 28, 2017, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company -6-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. FORWARD LOOKING STATEMENTS This report contains forward-looking statements that involve risk and uncertainties. We use words such as "anticipate", "believe", "plan", "expect", "future", "intend", and similar expressions to identify such forward-looking statements. Investors should be aware that all forward- looking statements contained within this filing are good faith estimates of management as of the date of this report and actual results may differ materially from historical results or our predictions of future results. RESULTS OF OPERATIONS During the 3rd quarter of fiscal 2016, the Company chose to forego its previous business of a water-based flavored drink and adopt a new business plan. This plan is to provide an SAT Preparatory program that will be designed to be taken out on a regional and possibly national basis to help train high-school students for the rigorous and extremely important college entrance exams. In doing so, the Company has begun to generate revenues. During the three months ended February 28, 2017, the Company's revenues totaled $12,710, versus no revenues during the period in the prior year. These revenues were derived from class fees for students attending the SAT prep class. With our new classes, the Company incurred Cost of Services during the most recent quarter of $984 for books, copying, supplies and other class-related expenses. We also incurred $4,517 in General and Administrative costs for most recent quarter, consisting of $1,920 in accounting/professional services and $1,096 for insurance and $1,501 in miscellaneous expenses. For the same period in the prior year, expenses totaled $2,727, consisting of $1,900 in accounting/professional services and $827 in miscellaneous expenses. Since our most recent fiscal year end of August 31, 2016, our cash balance has decreased, from a balance of $752 to $38. Although our cash flow from operations totaled $8,095 for the quarter ended February 28, 2017, Net Repayments to Related Party totaled $8,809 for the same period. Accounts Receivable decreased slightly to $4,475 at February 28, 2017, from $4,650 at year end, as the Company reflected the billings for classes incurred in February, but not yet fully received. -7-
Accrued liabilities are down from $5,250 at year end to $1,620 at present due to the more expensive year-end "audit" reflected at the August 31 year end date versus the less expensive accounting "review" done on the Company's quarterly operations. The balance of Related Party Payable has been reduced from $34,498 at year end to a present balance of $25,689 as the founder received much of the net cash flow proceeds for the quarter. Reflecting the positive operating results of the new business plan, Shareholders' Equity increased from $(34,846) at year end to $(22,796) as of February 28, 2017. In May 2009, a total of 12,000,000 shares of common stock were issued in exchange for $2,000, or $.0017 per share. These securities were issued to Kevin Nichols, the sole officer and director of the Company. During the year ended August 31, 2013, the Company sold a total of 400,000 shares of common stock at $0.025 per share for total proceeds of $10,000. The following table provides selected financial data about our Company for the period ended February 28, 2017. Balance Sheet Data: 2/28/17 ------------------- -------- Cash $ 38 Total Assets $ 4,913 Total Liabilities $ 27,309 Shareholders' Equity $ (22,796) LIQUIDITY AND CAPITAL RESOURCES Our cash balance at February 28, 2017 was $38. With its new business plan, the Company is now generating operating income and positive cash flow. Net cash from operating activities for the most recent quarter was $2,779 is not reflected in the cash balance as most of it was used to repay the Related Party for prior advances. Funds may continue to be provided by the Company's sole officer/director, if needed. He has agreed to advance funds until such time as the Company receives sufficient funds from other source(s). However, we have no formal commitment, arrangement(s), or legal obligation with our founder to advance or loan funds to us. As of February 28, 2017 our officer/director has loaned and paid expenses (net of repayments) directly on the Company's behalf totaling $25,689. These funds are payable upon demand and bear no interest. -8-
PLAN OF OPERATION Our plan of operation for the next 12 to 24 months consists of the following steps/stages: 1. Continue with the local operation of the SAT preparatory program. 2. Continue to design and create the training materials and overall program so that it may be duplicated and provided/leveraged in other locations. 3. Design and establish website and marketing/promotion materials. 4. Meet with prospective instructors locally and regionally to expand the program. 5. Study the regional and national markets to help define the "niche" in which to best set up the program to succeed. OFF-BALANCE SHEET ARRANGEMENTS 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 is material to investors. ITEM 4. CONTROLS AND PROCEDURES. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: - Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; - Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and -9-
- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. As of February 28, 2017 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"), 2013 version, and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of February 28, 2017. Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. -10-
MANAGEMENT'S REMEDIATION INITIATIVES In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures: We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2017. Additionally, we plan to test our updated controls and remediate our deficiencies by December 31, 2017. CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. -11-
PART II. OTHER INFORMATION ITEM 6. EXHIBITS. Incorporated by Reference Exhibit No. Exhibit or Filed Herewith ---------- ------- ----------------------------- 3.1 Articles of Incorporation Incorporated by reference to the Registration Statement on Form S-1 filed with the SEC on May 20, 2010 File No. 333-162824 3.2 Bylaws Incorporated by reference to the Registration Statement on Form S-1 filed with the SEC on May 20, 2010 File No. 333-162824 31.1 Section 302 Certification of Filed herewith Chief Executive Officer 31.2 Section 302 Certification of Filed herewith Chief Financial Officer 32 Section 906 Certification of Filed herewith Chief Executive Officer and Chief Financial Officer -12-
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. April 18, 2017 SATUSA Corporation /s/ Kevin Nichols ------------- By: Kevin Nichols (Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, President, Secretary, Treasurer & Sole Director) -13