Attached files
Exhibit 99.2
INTERWEST
TRANSFER COMPANY, INC
Condensed
Financial Statements
September
30, 2017 and 2016 (Unaudited)
INTERWEST
TRANSFER COMPANY, INC
TABLE
OF CONTENTS
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Page
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Condensed
Financial Statements:
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Unaudited Condensed
Balance Sheet
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1
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Unaudited Condensed
Statements of Operations
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2
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Unaudited Condensed
Statements of Stockholders' Equity
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3
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Unaudited Condensed
Statements of Cash Flows
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4
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Notes
to Financial Statements
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5-7
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INTERWEST
TRANSFER COMPANY, INC.
UNAUDITED
CONDENSED BALANCE SHEET
SEPTEMBER
30, 2017
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Assets
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SEPTEMBER
30,
2017
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Current
Assets:
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Cash
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$62,672
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Accounts
receivable, net of allowance of $4,456
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84,671
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Prepaid
expenses
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17,060
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Total
Current Assets
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164,403
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Property and
equipment, net
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11,768
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Total
Assets
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$176,171
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Liabilities and
Stockholders’ Equity
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Current
Liabilities:
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Accounts
payable
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$3,075
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Accrued
payroll
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8,598
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Deferred
revenue
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21,138
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Total
current liabilities
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32,811
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Stockholders'
Equity:
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Common
stock, $1.00 par value 50,000 shares authorized, 27 issued and
outstanding
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27
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Additional
paid-in capital
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5,728
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Retained
earnings
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137,605
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Total Stockholders'
Equity
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143,360
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Total Liabilities
and Stockholders' Equity
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$176,171
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-1-
INTERWEST TRANSFER
COMPANY, INC.
UNAUDITED CONDENSED
STATEMENTS OF OPERATIONS
NINE
MONTHS ENDED SEPTEMBER 30, 2017 AND 2016
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Nine
Months Ended
September 30,
2017
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Nine
Months Ended
September 30,
2016
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Revenues,
net
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$1,222,745
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$1,248,641
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Operating
Expenses:
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Bank
and credit card fees
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12,083
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13,261
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Computer
expenses
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17,229
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19,222
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Delivery
and postage
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20,389
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25,011
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Depreciation
expense
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5,504
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8,421
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Insurance
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51,680
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42,195
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Outside
services
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21,654
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9,711
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Printing
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44,790
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67,485
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Professional
fees
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115,190
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27,931
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Rent,
related party
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54,000
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76,500
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Salaries,
wages and related benefits
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422,194
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297,802
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Salaries,
officer and stockholder
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38,462
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93,077
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Telephone
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9,947
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8,695
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Vehicle
expenses
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22,047
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9,997
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Other
operating expenses
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17,007
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20,980
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Total
operating expenses
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852,176
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720,288
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Operating income
(loss)
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370,569
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528,353
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Other income,
interest
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17
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3
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Income (loss)
before provision for income taxes
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370,586
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528,356
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Provision
(benefit) for income taxes
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--
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--
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Net
income (loss)
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$370,586
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$528,356
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Net
income (loss) per share
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$13,725
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$19,569
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The
accompanying notes are an integral part of the financial
statements.
-2-
INTERWEST
TRANSFER COMPANY, INC.
UNAUDITED
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE
MONTH PERIOD ENDING SEPTEMBER 30, 2017
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Additional
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Common
Stock
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Paid-In
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Retained
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Shares
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Amount
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Capital
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Earnings
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Balance, December
31, 2016
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27
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$27
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$5,728
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$985,022
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Net income for the
nine-month period ended September 30, 2017
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--
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--
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--
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370,586
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Distributions to
shareholder
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--
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--
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--
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(1,218,003)
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Balance, September
30, 2017
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27
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$27
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$5,728
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$137,605
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The
accompanying notes are an integral part of the financial
statements.
-3-
INTERWEST
TRANSFER COMPANY, INC.
UNAUDITED
CONDENSED STATEMENTS OF CASH FLOWS
NINE
MONTHS ENDED SEPTEMBER 30, 2017 AND 2016
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Nine Months
Ended
September 30,
2017
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Nine Months
Ended
September 30,
2016
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Cash flows from
operating activities:
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Net
income (loss)
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$370,586
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$528,356
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Adjustments to
reconcile net income (loss) to Net cash provided by operating
activities:
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Depreciation
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5,504
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8,421
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(Increase)
decrease in:
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Accounts
receivable
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39,587
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(5,235)
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Prepaid
expenses
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6,763
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91,900
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Increase
(decrease) in:
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Accounts
payable
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(6,978)
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52,046
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Accrued
expenses
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5,943
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(2,188)
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Deferred
revenue
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21,138
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21,375
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Net cash provided
(used) by operating activities
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442,543
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694,675
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Cash flows from
investing activities, Acquisition of
equipment
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--
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--
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Cash flows from
financing activities, Distribution to
shareholder
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(1,218,003)
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--
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Net increase
(decrease) in cash
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(775,460)
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694,675
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Cash, beginning of
period
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838,132
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50,837
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Cash, end of
period
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$62,672
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$745,512
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Supplemental
disclosures:
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Interest
paid
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$--
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$--
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Income
taxes paid
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$--
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$12,529
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The
accompanying notes are an integral part of the financial
statements.
-4-
INTERWEST
TRANSFER COMPANY, INC.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
1.
Summary of Business and Significant Accounting
Policies
a.
Summary of Business
The
Company was incorporated under the laws of the State of Utah on May
13, 1971. The Company is in the business of maintaining corporate
shareholder records for publicly traded and private companies. On
January 1, 2016 the company changed its year end from May 31 to
December 31.
b.
Basis of Presentation
The
accompanying financial statements have been prepared in accordance
with generally accepted accounting principles (“GAAP”)
as promulgated in the United States of America.
c.
Cash Flows
For
purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with a maturity of three months
or less to be cash or cash equivalents.
d.
Accounts Receivable
Accounts receivable
are stated at the amount management expects to collect from
outstanding balances. Management provides for probable
uncollectable amounts through a charge to earnings and a credit to
a valuation allowance based on its assessment of the current status
of individual accounts. Balances that are still outstanding after
management has used reasonable collection efforts are written off
through a charge of valuation allowance and credit to trade
accounts receivable. Changes in the valuation allowance have not
been material to the financial statements.
e.
Property and Equipment
Property and
equipment is valued at cost. The company’s property and
equipment are depreciated using primarily the straight-line
method.
-5-
Notes to Financial Statements
– Continued:
f.
Income Taxes
Effective January
1, 2016 the Company with the consent of its shareholder has elected
under the Internal Revenue Code to be an S corporation. In lieu of
corporate income taxes, the shareholders of an S corporation are
taxed on their proportionate share of the Company’s taxable
income. Therefore, no provision or liability for federal or state
income taxes has been included in the 2016 financial
statements.
Due to
electing S corporation status the Company changed its year end from
May 31 to December 31.
g.
Net Income per Share
The net
income per share calculation is based on the weighted average
number of shares outstanding during the period.
h.
Use of Estimates
The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
2.
Cash – Credit Risk
The
Company has cash deposits totaling $613,640 at various banks at
September 30, 2017. This exceeds the $250,000 covered by federal
depository insurance by $95,910.
3.
Property and Equipment
Property and
equipment consist of the following as of September 30,
2017:
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September
30,
2017
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Furniture and
Fixtures
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$115,886
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Office
Equipment
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146,435
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262,321
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Accumulated
Depreciation
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(250,553)
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$11,768
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Depreciation
expense for the nine month period ended September 30, 2017 is
$5,504.
-6-
Notes to Financial Statements – Continued:
4.
Operating Leases
The
Company leases office space from its president and stockholder on a
month to month basis. The lease can be canceled with a 30-day
notice from either party. Rent expense for the nine month periods
ended September 30, 2017 and 2016 was $54,000 and $76,500,
respectively.
5.
Retirement Plan
The
Company has a 401K plan covering substantially all of its
employees. During the nine-month period ended September 30, 2017
and 2016, the Company contributed $6,786 and $3,443,
respectively.
6.
Subsequent Event
On
October 2, 2017, Issuer Direct Corporation acquired all of the
outstanding stock of Interwest Transfer Company, Inc. for
$1,935,000 in cash and 25,235 shares of common stock (equivalent
value of $333,000 at closing) paid at closing and $960,000 of cash
to be paid equally over three years, resulting in a total purchase
price of approximately $3,228,000 subject to a closing working
capital adjustment as outlined in the stock purchase
agreement.
-7-