UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM - 10Q

 

[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2017

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 000-51975

 

Paracap Corporation

(Exact name of small business issuer as specified in its charter)

 

Nevada

(State or other jurisdiction of incorporation or

or organization)

 

N/A

(IRS Employer Number)

 

424 West Bakerview Rd, #105-268, Bellingham, WA, 98226

(Address of principal executive office)

 

949-419-6588

(Issuer's telephone number)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

 

 

 

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

[X]Yes [ ]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(§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 filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:

[ ] Large accelerated filer

[ ] Accelerated filer

[ ]Non-accelerated filer

[X] Smaller reporting company

 

SEC1296 (01-12) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[X]Yes [ ] No

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

[ ]Yes [X] No

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of the registrant's common stock, par value $0.001 per share, outstanding as of April 30, 2017 is 13,470,000.

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PARACAP CORPORATION

 

FORM 10-Q

For the Three Months Ended April 30, 2017

 

Table of Contents

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheet as of April 30, 2017

F-1

Statement of Operations for three and nine months ended April 30, 2017 and 2016

F-2

Statement of Cash Flows for three months ended April 30, 2017

F-3

Notes to Financial Statements

F-4

 

PART II - OTHER INFORMATION

 

PART I - FINANCIAL INFORMATION

 

 

Paracap Corporation
(A Development Stage Company)
Balance Sheets
								April 30,	July 31,
								2017	2016
							ASSETS
Current Assets
	Cash and Cash Equivalents
		TOTAL CURRENT ASSETS						-	-
	License - Note 3							6,000	6,000
	Accumulated Amortization							(6,000)	(6,000)
								0	0
TOTAL ASSETS								0	0
							LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
	Accounts Payable and Accrued Liabilities							51,859	50,572
	Loan from Shareholder							5,665	5,665
TOAL CURRENT LIABILITIES								57,524	56,237
Stockholders' Equity
	Capital Stock -Note 4 and 7
		Authorized:
			75,000,000 common shares at $0.001 par value
		Issued and fully paid:
			13,470,000 common shares at par value					13,470	13,470
		Additional paid-in capital						17,730	17,730
	(Deficit) accumulated during the development stage							(88,724)	(87,437)
TOTAL STOCKHOLDERS' EQUITY								(57,524)	(56,237)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY								0	0

 

 

 

 

 

Paracap Corporation
(A Development Stage Company)
Statements of Operations
For the Three and Nine Months ended at April 30, 2017 and 2016
and period from April 1, 2005 (Inception) to April 30, 2017
											April 1, 2005
							For the Three Months Ended		For the Nine Months Ended		(Inception) to
							`April 30, 2017	`April 30, 2016	`April 30, 2017	`April 30, 2016	`April 30, 2017
General and Administration Expenses
	Professional Fees						297	1,590	1,287	2,523	25,440
	Amortization Expense						-	-	-	-	6,000
	Bank Charges						-	-	-	-	153
	Consulting Fees						-	-	-	-	31,307
	Management Fees						-	-	-	-	8,500
	Office and Rent						-	-	-	-	13,000
	Regulatory and Transfer Agent Fees						-	-	-	-	4,324
Net (loss) for the period							$(297)	$(1,590)	$(1,287)	$(2,523)	$(88,724)
	Basic and diluted loss per share						(0.00)	(0.00)	(0.00)	(0.00)
	Weighted Average Number of Common Shares Outstanding						13,470,000	13,470,000	13,470,000	13,470,000
The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

Paracap Corporation
(A Development Stage Company)
Statements of Operations
For the Three and Six Months ended at April 30, 2017 and 2016
and period from April 1, 2005 (Inception) to April 30, 2017
								April 1, 2005
				For the Three Months Ended		For the Nine Months Ended		(Inception) to
				`April 30, 2017	`April 30, 2016	`April 30, 2017	`April 30, 2016	`April 30, 2017
Operating Activities
	Net (loss) for the period			(297)	(1,590)	(1,287)	(2,523)	(88,724)
	Amortization Expenses			-	-			6,000
	Accounts Payable and Accrued Liabilities			297	1,590	1,287	2,358	51,859
Cash used in operating activities				-	-		(165)	(30,865)
Financing Activities
	Issuance of common shares			-	-			25,200
	Shareholder Loan			-	-		165	5,665
Net cash provided by financing activities				-	-	-	165	30,865
Cash increase (decrease) during the Period				-	-	-	-	-
Cash, Beginning of Period				-	-			-
Cash,  End of Period				-	-			-
Supplemental Information
Interest Paid				-	-			-
Income Taxes Paid				-	-			-

 

 

 

 

 

 

PARACAP CORPORATION

(A Development Stage Company) 

Notes to Financial Statements 

For the Three Months Ended April 30, 2017

 

 

Note 1: Organization and Basis of Presentation

 

Paracap Corporation (the “Company”) is a for profit corporation established under laws in the State of Nevada, United States of America on April 1, 2005.

 

The Company intends to commence operations as a beer and wine store retailer and an online retailer of goods and services. The Company is a development stage company and has not yet realized any revenues from its planned or any other operations. As such, the Company is subject to all risks inherent to the establishment of a start-up business enterprise.

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Unless the context otherwise requires, all references to “Paracap Corporation,” “we,” “us,” “our” or the “company” are to Paracap Corporation and any subsidiaries.

 

The Company’s fiscal year ends July 31.

 

Foreign Currency Translation

 

The Company is located and operating outside of the United States of America. It maintains its accounting records in U.S. Dollars, as follows:

 

At the transaction date, each asset, liability, revenue, and expense is translated into U.S. dollars by the use of exchange rates in effect on that date. At the period end, monetary assets and liabilities are revalued by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations.

 

The Company's currency exposure is insignificant and immaterial and there is no use of derivative instruments to reduce potential exposure to foreign currency risk.

 

Note 2: Significant Accounting Policies and Recent Accounting Pronouncements

 

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

 

Due to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

 

Fair Value of Financial Instruments

 

ASC 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of April 30, 2017.

 

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities and notes payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value.

 

Basic and Diluted Loss Per Share

 

The Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share give effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share exclude all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.

 

Recent Accounting Pronouncements

 

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

 

Note 3: License

 

By a management license agreement dated June 29, 2005, the Company acquired the right and license to manage and operate a liquor retail establishment in the municipality of Maple Ridge, Canada. The agreement is for five years with an option to renew for an additional five years with the same terms and conditions except for the consideration, which will be negotiated between the parties, failing which an arbitrator would be appointed to determine the consideration. The agreement also provides the Company with the right of first refusal to negotiate terms over the right to manage and operate other of the licensor's establishments in the Lower Mainland of British Columbia, Canada.

 

The consideration given for the license was 600,000 common shares of the Company at fair market value of $6,000. In addition, 30% of the monthly net profits (net operating income), as defined by accounting principles generally accepted in the United States of America, earned by the store managed by the Company will be remitted to the licensor each month. If there is a net loss, the Company will not be obligated to pay any percentage.

 

The Company has adopted the provisions of ASC 350, "Amortization of Intangible Assets" and will amortize the license costs over five years on a straight-line basis.

 

Note 4: Commitments and Contingencies

 

An officer has provided office services without charge. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officer and director are involved in other business activities and most likely will become involved in other business activities in the future.

 

Note 5: Legal Matters

 

The Company has no known legal issues pending.

 

Note 6: Debt

 

Loans have been made by an unrelated third party equal to the operating deficits as they are incurred. A balance of $57,524 is outstanding as of April 30, 2017. The loans are without interest or a fixed term of repayment. The loans are due on demand.

 

Note 7: Related Party Transactions

 

During the period ended July 31, 2006 the Company received shareholder loans totaling $5,500. A balance of $5,665 is outstanding as of October 31, 2016, without interest or a fixed term of repayment. The loans are due on demand.

 

Note 8: Capital Stock

 

During the period ended July 31, 2005, the Company issued 11,500,000 common shares at $0.001 per share of the Company for total proceeds of $11,500.

 

During the period ended July 31. 2005, the Company issued 1,370,000 common shares at $0.01 per share of the Company for total proceeds of $13,700.

 

During the period ended July 31. 2005, the Company issued 600,000 common shares at $0.01 per share of the Company for total proceeds of $6,000 in consideration for a new license acquisition.

 

As of April 30, 2017 there were no outstanding stock options or warrants.

 

Note 9: Income Taxes

 

The Company uses the assets and liability method of accounting for income taxes in accordance with FASB Topic 740 “Income Taxes". Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The company has not commenced operations, has not generated any revenue, and has not made a provision for income taxes.

 

The Company’s statutory tax rate is 35%.

 

The Company does not have any material uncertainties with respect to its provisions for income taxes.

 

Note 10: Going Concern

 

The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.

 

For the three months period ended April 30, 2017, the Company had an accumulated deficit of $88,724.

 

The Company’s ability to continue as a going concern is dependent upon the Company’s ability to generate sufficient revenues to operate profitably or raise additional capital through debt financing and/or through sales of common stock.

 

Management has no formal plan in place to address these concerns, but believes that the Company will be able to obtain additional funds through equity financing and/or related party advances.

 

The failure to achieve the necessary levels of profitability or obtain the additional funding would be detrimental to the Company.

 

 

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This 10-Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. Refer also to "Cautionary Note Regarding Forward Looking Statements" and "Risk Factors" below.

The following discussion and analysis provides information which management of Paracap Corporation (the "Company") believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this report.

CAUTION ABOUT FORWARD-LOOKING STATEMENTS

This management's discussion and analysis or plan of operation should be read in conjunction with the financial statements and notes thereto of the Company for the quarter ended October 31, 2016. Because of the nature of a relatively new and growing company the reported results will not necessarily reflect the future.

This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

COMPANY OVERVIEW

Paracap Corporation was incorporated in the state of Nevada on April 1, 2005. The Company is planning to begin operations as an online e-commerce website that promotes daily deals for business-to-business transactions.

The Company’s technology is developed in-house and we intend to be a leading provider of advertising and marketing services. A factor that is proprietary to the Company, is our option to allow users to suggest deals and vote on deals already suggested. This key differentiator is our user-friendly website which will allow business owners to buy and sell products and services at considerable discounts between the members of our business to business online community.

 

RESULTS OF OPERATIONS

For the three months period ended April 30, 2017, the net loss of the Company is $297.

LIQUIDITY AND CAPITAL RESOURCES

During the three months period ended April 30, 2017, the Company had no working capital needs. As of April 30, 2017, the Company has cash on hand in the amount of $nil. Management does not expect that the current level of cash on hand will be sufficient to fund our operations for the next twelve month period. In the event that additional funds are required to maintain operations, our officers and directors have agreed to advance us sufficient capital to allow us to continue operations. We may also be able to obtain loans from our shareholders, but there are no agreements or understandings in place currently.

 

We believe we will require additional funding to expand our business and ensure its future profitability. We anticipate that any additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any arrangements in place for any future equity financing. In the event we are not successful in selling our common stock, we may also seek to obtain short-term loans from our director.

ITEM 3: QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

Not applicable

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act (defined below)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

In addition, our management with the participation of our Principal Executive Officer and Principal Financial Officer have determined that no change in our internal control over financial reporting occurred during or subsequent to the quarter ended April 30, 2017 that has materially affected, or is (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) reasonably likely to materially affect, our internal control over financial reporting.

 

PART II: OTHER INFORMATION

Items 1, 2, 3, 4, and 5 are inapplicable.

 

Item 6: Exhibits

 

(a) The following exhibit is filed as part of this report:

 

31.1 Certification of Chief Executive Officer and Chief Financial Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a).

 

32.1 Certification of Chief Financial Officer and Chief Executive Officer of pursuant of Section 1350.

 

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.

 

 

June 19, 2017

 

/s/ "Xing Cheng Yao"

Mr. Xing Cheng Yao,

President