Attached files
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
September 23, 2018
Date of Report
(Date of Earliest Event Reported)
EMAGINOS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 000-55736 81-4664656
State or other (Commission File Number) (IRS Employer
jurisdiction Identification No.)
of incorporation)
13428 Maxella Avenue, #144
Marina Del Rey, California 90292
(Address of principal executive offices) (zip code)
571-921-4200
(Registrant's telephone number, including area code
Special Note Regarding Forward-Looking Statements
571-921-4200
(Registrant's telephone number, including area code
Special Note Regarding Forward-Looking Statements
This report contains forward-looking statements. These statements
involve known and unknown risks, uncertainties, and other factors that
may cause our actual results, performance, or achievements to be
materially different from any future results, performances, or
achievements expressed or implied by the forward-looking statements.
In some cases, forward-looking statements are identified by terms such
as "anticipates," "believes," "could," "estimates," "expects," "intends,"
"may," "plans," "potential," "predicts," "projects," "should," "would,"
and similar expressions intended to identify forward-looking statements.
Forward-looking statements reflect the Company's current views
respecting future events and are based on assumptions and subject to
risks and uncertainties.
Also, forward-looking statements represent the Company's estimates and
assumptions only as of the date of this report. You should read this
report and the documents that the Company references and files as
exhibits to this report in their entirety and with the understanding
that actual future results may be materially different from what the
Company expects. Except as required by law, the Company assumes no
obligation to update any forward-looking statements publicly, or to
update the reasons actual results could differ materially from those
anticipated in any forward-looking statements, even if new information
becomes available or other events occur in the future.
ITEM 1.01 Entry into a Material Definitive Agreement
On September 23, 2018, Emaginos, Inc., a Delaware corporation
(the "Company"), entered into a merger agreement (the "Merger
Agreement") with Emaginos, Inc. (Emaginos Virginia), a private
company organized under the laws of the Commonwealth of Virginia.
For the purposes of disclosure throughout this Form 8-K when
the "Company" is used, it refers to Emaginos, Inc. on a Pro Forma basis
with Emaginos Delaware as the continuing corporation of the Merger.
Mr. Scott Taub, who is Chief Executive Officer, a director and
majority shareholder of the Company, was the Chief Executive Officer
and Chief Financial Officer of Emaginos Virginia and Mr. Allan Jones,
who is the President, a director and a shareholder of the Company, was
the President of Emaginos Virginia prior to the Merger.
ITEM 2.01 Completion of Acquisition or Disposition of Assets
On September 23, 2018, Emaginos, Inc., a Delaware corporation
(the "Company"), entered into a merger agreement (the "Merger
Agreement") with Emaginos Virginia.
The shareholders unanimously adopted the Plan of Merger and the
Merger was effected by the Company through the exchange of all the
outstanding shares of stock of Emaginos Virginia at an exchange ratio of
10 shares of Emaginos Virginia for 4 shares of the Company's common stock.
Emaginos Virginia was merged with and into the Company and all the assets,
debts, operations and business plan have become those of the Company and
Emaginos Virginia has ceased to exist.
Emaginos Virginia had developed an innovative system of providing
K-12 education for local schools and school districts. It identified
a comprehensive set of proven, teacher-empowered, student-centered, and
administrative best practices, and integrated these practices into a
cohesive model. The Company has adopted the Emaginos Virginia business
plan and anticipates that it can deliver a higher quality education to
every child for the same amount of money currently spent per child by
school districts. The Company's program will transform and improve
the local neighborhood public school, not replace the neighborhood
school with charter schools. The Company believes that it has created
a system that can fix a major problem in America-- i.e. the public
school system while making a profit.
BUSINESS AND BUSINESS PLAN
Prior to the Merger, the Company had no business or operations.
Pursuant to the Merger, the Company has acquired the business plan
of Emaginos Virginia.
Business Operations
The Company is a development stage company and has no operations
or revenues. Although Emaginos Virginia had no operations, it spent
considerable time investigating and analyzing the K-12 education
currently provided by American public schools. As so many others have
stated, it found that the education offered by the majority of the
public schools does not meet the potential or expectations of the
students. Indeed, Emaginos Virginia found that most public schools
are failing at preparing students for the job market and electronic
society facing them. With that, Emaginos Virginia developed its
model designed to transform the education paradigm while providing
positive revenue for the Company.
History of Emaginos Virginia
Emaginos Virginia was incorporated in 2008 in the Commonwealth
of Virginia. At the time of the merger of Emaginos Virginia with the
Company, Scott Taub and Allan Jones served as its directors and
executive officers. Emaginos Virginia was started by Jack Taub, father
of Scott Taub, the current CEO of the Company. Mr. Taub had early
success with the sale to Readers Digest of a business he created, The
Source, which was one of the first online social media services. He
determined to utilize some of the profit from the sale by finding a
system to improve the quality of K-12 education in the United States,
an area in which he had an ongoing interest. He worked with experts
and sought advice of experienced administrators and educators eventually
the Emaginos system a student information system, project-based,
textbook-free curriculum began to develop. With the death of Jack
Taub, the Company's current CEO started running the Company and
worked to further refine the Emaginos system.
Identification of Problem in Education
For years, a steady stream of commissions and panels has made
the case that public education in the United States has suffered a
serious decline. A 1983 report from the National Commission on
Excellence in Education identified this decline which theme was
echoed by the Twentieth Century Fund, the Educational Commission
of the States, and the Carnegie Foundation for the Advancement of
Teaching, among others. The conclusions were generally the same:
that the educational performance in America today is mediocre at
best and does not keep pace with other countries worldwide. Repeated
attempts have been introduced and applied but with no real
success.
School boards require teachers to teach to a standardized
multiple choice test so that the performance record of the school
meets state and local expectations. Memorization is boring and
often targets the high-stakes tests and not the curriculum. In
addition, reading, writing, comprehension and thinking skills taught
in the context of multiple-choice test-taking turn out graduates
with little comprehension and often very low reading and writing
ability.
The Company believes that local school districts are looking for
ways to provide better public education at a good price and Emaginos
intends to become the answer to such needs.
Business and Education Goals
The Company's goal, as stated in its mission statement, is to
provide the platform that supports the transformation of every K-12
school in the country, to become a trusted provider that assists public
schools to transform into and then operate as high-performing schools
of discovery and innovation, to transform America's public schools to
a proven effective model. The Company does not seek to create more
charter schools nor to displace teachers and school boards nor take
over and operate schools. The Company anticipates working with the
school boards and teachers to transform local existing neighborhood
public schools into high quality learning environments and to restore
such local school to its role as the neighborhood center.
The Company anticipates developing its education system to
deliver a cost effective and profitable suite of educational support
services that enable schools and districts to transform and operate
effectively and efficiently while providing customized education for
every student. Some measures of success might include:
1. Increased graduation rate.
2. Increased participation in post-secondary education or training
programs.
3. Improved teacher recruiting and retention.
4. Improved economic development in the community.
5. Improved public safety by reducing crime in the community.
The Emaginos System
The Emaginos system incorporates a comprehensive set of teacher-
empowered, student-centered, and administrative best practices
integrated into a cohesive program. The Emaginos system will use
existing facilities, staff, students, and faculty and provide them
with a comprehensive transformational platform of services that will
enable the local schools to become engaging learning environments
producing entrepreneurial lifelong self-directed learners.
The students study the same academic content as they would
in a set of textbooks, but instead of learning in a discipline silo,
they learn in a multi-disciplinary context as will occur in real
life. By working in learning teams they use a set of learning,
working, and 21st century problem-solving skills that prepare them
to deal with real-life challenges that they will undoubtedly face.
Emaginos has a complete online K-12 curriculum built on these
principles.
The Emaginos solution provides for a comprehensive textbook-free,
multi-level, project-based, multi-disciplinary, small-group, student-
centered learning environment. In addition to mastering the academic
content standards, including all the Science, Technology, Engineering,
and Math (STEM) concepts, the students also acquire a set of 21st
century skills (teamwork, communications, problem solving,
researching, planning, time management, analysis, synthesis,
reliability, critical thinking, accountability, creativity, etc.).
The student-centered small-group setting enables the teachers to
customize the education for every student.
The Emaginos system envisions longer school days and longer
school years to enable the students to complete the mandatory 200
hours of community service, take college courses, complete
internships, and engage in a broad selection of elective and
enrichment courses.
To achieve the Emaginos system vision, the Company provides
a wide range of resources from technology infrastructure and
curriculum to training and other services that enable the local
school district to transform and operate its schools in the
proven model. The transformed schools operate for the same cost
as the previous model. The result is a much better education for
the same cost.
Emaginos will provide its services as a subscription service.
This enables the Company to control and manage the quality of
implementation at every participating district. Unlike hardware or
software sales that produce a one-time revenue hit, the
subscription model creates a continuing annual revenue stream.
Emaginos will be providing the district's complete technology
infrastructure, hardware and software. Included in that digital
infrastructure, it envisions that it will be providing the
administrative and academic applications the district uses for
daily operations. The Company plans to have a service contract
that the district can simply renew annually without having to
go out to bid each year.
As technology becomes more essential, schools must ensure that
students and teachers are comfortable using current technology. The
Emaginos system relies on students, teachers, and district employees
having access to appropriate technology and the Company intends to
replace, operate, upgrade, and maintain the district's entire
telecommunications and computing hardware and software
infrastructure to ensure the system stays current.
Steps of Implementation
Emaginos is a company dedicated to transforming K-12 public
schools to a model composed of integrated proven best practices. The
Company believe in restoring the concept of the neighborhood schools
as the center of the community. To achieve this vision, the Company
intends to begin by transforming an initial school in a specific
school district to a charter school to use as a model for the
Emaginos system. After the charter school model is successful it
will be used to as the model to adapt the Emaginos system to
some or all of the other schools in the district.
As a first step implementation of the Emaginos system is to get
agreement with all the constituents school board, administration,
teachers, unions, community, businesses, and the local press.
Emaginos uses its proven Unanimity Planning Process to build a broad,
firm base of community support for transforming the schools. The
Company envisions the Unanimity Planning Process as a process of
bringing together all constituents that may or will be affected
by implementation of the Emaginos system in a neutral location
and environment, constituencies that seldom have opportunities to
meet and understand shared values. By meeting together,
effective resolution of issues can be achieved by the involvement
of the total community.
After the successful meeting of the various groups, Emaginos
will implement its educational model that includes installing the
processes at a selected school or schools.
Initially, the Company believes it can take put the Emaginos
curriculum and structure into the client's school. As it establishes
its programs in its initial client schools, the Company will be
working to further develop software interface and repository for the
materials and processes. The Company will also be giving the
system and process a comprehensive evaluation and upgrade for both
content and look-and-feel. This approach allows will allow the
Company to get to market faster and to begin to generate cash flow
even is it perfects the Emaginos system.
The Emaginos system is basically delivered in two phases.
The first phase is the transformation phase. During that phase Emaginos
will:
Upgrade the technology in the schools, then operate, maintain,
and repair the complete IT and telecommunications
infrastructure.
Train the teachers how to thrive in the Emaginos Discovery
Learning System environment.
Work with the staff in each school to adapt and tailor the
curriculum to meet the local demographic, cultural,
and economic development needs.
Install and implement a comprehensive Administrative and
Operational IT and telecommunications infrastructure.
Develop a set of report templates to provide information
supporting academic and administrative decision making.
(These would be in addition to a set of report templates
available for meeting local, state, and federal
reporting requirements.)
Build a community support program for each school.
Phase two moves from transformation to support and continuous
improvement.
During phase two, Emaginos will:
Provide 24/7 professional development and mentoring services
to faculty and staff.
Upgrade the technology every three years.
Use the information gathered from the schools and the community
to continuously improve the Emaginos products and
services.
In order to ensure the desired impact, the program must be
implemented as a comprehensive integrated system. As a result, the
system is composed of a wide range of elements, many of which are
mandatory and some of which are optional. To encourage the fullest
implementation possible, there is no charge for the optional elements
of the program. Some of the elements can be adapted to local conditions,
but adopters are not permitted to pick and choose just a selected list
of the mandatory elements. A partial implementation cannot ensure that
the desired overall impact will meet the expectations of the adopter.
Within this framework, Emaginos anticipates that it will have three
possible products or services.
1. The first is the comprehensive transformed school model. In this
case, Emaginos either transforms an existing school or establishes a
new one based upon its system.
2. The second is in response to a demand for a textbook-free
curriculum. Emaginos will sell its proven student-centered, small-group,
multi-disciplinary, project-based, textbook-free curriculum.
3. The third is an administrative and operational Informational
Technology SW package using the Company's custom educational analytics
platform that includes a student information system and back-office SW.
The products and services are priced to include a robust training
and support program to ensure a successful implementation and ongoing
customer satisfaction.
Emaginos R&D Center
The Company's philosophy includes Emaginos' operating profitably
enough to support a world-class education R&D Center for continuously
improving the system. The Company envisions that the R&D Center will
be open to all education/technology vendors and researchers. Emaginos
plans to work with these vendors to integrate their resources into the
learning environment. At the same time, the R&D Center will provide the
vendors insights into what next-generation products will be needed.
Potential Revenue
The Company envisions that its products and services will have a
one-time cost to develop with very low incremental costs for each new
application: that is, the first school district will break even and each
subsequent school or district will provide the same revenue, but with
progressively less cost to transform and support. This growing profit
margin will enable Emaginos to improve products and services and
develop the business.
The Company anticipates that it will create a group of model
public/charter schools. The Company will generate revenue from each
of these schools with the sale of the curriculum, administrative, and
operational software that supports the operation the Emaginos system.
The national average per-pupil annual cost is about $11,000.
More significantly, the local per-pupil cost in the local school
district is about $7,500. Based upon current similar models to the
Emaginos system, the Company anticipates a per-pupil cost of less than
$7,000 per year. Put simply, the Emaginos system will provide a far
superior education for slightly less than currently spent on education
in a local district.
Along with revenue from establishing and operating a group of
schools, Emaginos will have two companion products; the textbook free
curriculum and the back-office software and associated hosting services.
There are many successful examples of schools and districts that have
made or are making the transition from traditional textbooks to digital
content.
Selling, supporting, and maintaining the online, textbook-free
curriculum is one of the Emaginos potential revenue streams.
Emaginos will sell the Curriculum and SIS as a subscription service
or as a licensed use model:
Subscription Service - The Company's solution is a subscription service
and for a reasonable fee, the Company will provide a
comprehensive suite of services that empowers and enables the
school district to transform itself into an engaging learning
environment. They still control their schools. For the
same money they were spending on a defective program, the
Emaginos program will enable them to deliver a high quality
education.
The advantages of a subscription service include:
Reduction in demand on purchasing. The Company will provide
all the technology.
Unlimited 24/7 professional development. Textbooks are virtually
eliminated.
Technology Upgrades. Complete replacement upgrades of all
technology every three years.
Penalty for dropping service.
The Company will own and provide their entire installed IT
infrastructure. If a client decides to exit the
program, it will need to purchase the software.
Continuous Improvement Continuously adding valuable features
to existing suite of services.
The Market
The Company believes its market consists of not only all of the
country's public schools but that the Emaginos program can be utilized
by independent private and Parochial schools. Any one of these segments
provides a huge market for the Company's services,
o There are 98,328 K-12 public schools in the US
o Total public school enrollment: 50,094,00
o Total public school teachers: 3,109,101
o Total public school expenditures: $607.8 billion
o Total funding of public education: $597,485,869,000
o Federal: $75.99 billion (12.7% of total)
o State: $259.8 billion (43.5% of total)
o Local: $261.7 billion (43.8% of total)
While there are some excellent charter school models in place, the
Company is focused on transforming public schools and supporting their
operation as efficient and effective public schools. Because the model
empowers teachers, and pays them accordingly, the national leadership
of the major teachers unions (AFT and NEA) has endorsed the model.
Pricing and Profitability
In setting the pricing models, the Company considered what pricing
for somewhat similar services or products. It then considered a price
point about 20% below that number and determined that it could afford to
sell at that level and still be very profitable. This pricing makes the
Company's message fairly simple: better outcomes for less money. The
Company believes that continuous improvement of the system and full
customer support program will ensure that customers remain loyal
because they will always have the best services at the best prices.
On the financial side of the equation, the Emaginos system's
products and services have a one-time cost to develop, but once they
are developed, can be sold many times at very low incremental cost.
The first school will break even. Each subsequent school or district
will provide the same revenue, but cost progressively less to
transform and support. This profit will enable Emaginos to
continue to improve its products and services, and expand the
business.
Customers
The initial sales and marketing program will be focused on
implementing the Emaginos program in up to 25 schools; and selling
the curriculum and operational software to a similar number of
schools. The political and economic climate supports these as
initial targets. The Company will target a small select number
of geographical locations.
Competition
The Company does not intend to replace the management structure
and people in a school as a takeover. Instead it will provide a
suite of products and services that enables the people running a
school to be empowered to operate the school more effectively.
This approach provides Emaginos a Competitive Advantage in the
following ways:
o Union Support: because the system empowers teachers and
pays them more for their additional responsibility and efforts,
the Company believes that unions will support the Emaginos
model.
o Unanimity Planning: This planning process enables communities
to build local support for taking on major challenges, like
transforming K-12 schools across the district.
o Not a Takeover Model: The district retains local control of its
schools.
o More for Less: By starting with a clean slate, selecting a
comprehensive but not conflicting or redundant set of proven
best practices and designing them as a cohesive system, the
program can be operated within most existing budgets.
Emaginos has taken a unique approach to transforming K-12 education.
As a result, there is no direct competitor. However, certain charter
school companies like KIPP, Camelot, or National Heritage Academies
(formerly known as Education Development Corporation), or some private
schools that deliver customized education, or an education management
organization that takes over and operates a school for the district
are certainly indirect competitors vying for the acceptance of their
system by local school boards and school districts. The Company believes
that in those models the district gives up some or all of its control
of the impacted school.
THE COMPANY
Background
The Company, formerly known as Forest Sound Acquisition
Corporation ("Emaginos" or the "Company"), was incorporated in Delaware
on December 7, 2016. The Company filed a registration statement on
Form 10 with the Securities and Exchange Commission ("SEC") on
January 18, 2017 registering its common stock by which it
became a public reporting company sixty days thereafter.
On May 23, 2018, Forest Sound Acquisition Corporation filed
a Form 8-K noticing the filing with the State of Delaware of an
amendment to its Certificate of Incorporation to change its name
to Emaginos, Inc. in expectation of a change in control. On July
10, 2018 the Company effected a change in control with the resignation
of the then officers and directors, contribution to the Company of
19,500,000 shares of the 20,000,000 outstanding shares of its
common stock, the appointment of new officers and directors, and
the issuance of shares of common stock of the Company.
As a public reporting company pursuant to the Securities
Exchange Act, the Company files with the Securities and Exchange
Commission quarterly and annual reports and management shareholding
information. The Company intends to deliver a copy of its annual
report to its security holders, and will voluntarily send a copy
of the annual report, including audited financial statements, to
any registered shareholder who requests the same.
The Company's documents filed with the Securities and
Exchange Commission may be inspected at the Commission's principal
office in Washington, D.C. Copies of all filings may be obtained
from the Public Reference Section of the Securities and Exchange
Commission, 100 F Street N.E., Washington, D.C. 20549. Call the
Commission at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. The Securities and
Exchange Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy statements
and information regarding registrants that file electronically
with the Commission.
Employees
The Company has only two executive officers and no employees.
Subsidiaries
The Company has no subsidiaries.
Property
The Company has its headquarters at 13428 Maxella Avenue,
#144, Marina Del Rey, California 90292.
The Company's email address is and its website is www.Emaginos.com.
The Company's telephone number is 571-921-4200.
Revenue
The Company does not have current operations.
Legal Proceedings
There are no pending, threatened or actual legal proceedings in
which the Company is a party.
Emerging Growth Company
The Company qualifies as an "emerging growth company" as
defined in the Jumpstart Our Business Startups Act which became law
in April, 2012. The definition of an "emerging growth company" is
a company with an initial public offering of common equity securities
which occurred after December 8, 2011 and has less than $1 billion of
total annual gross revenues during last completed fiscal year. The
disclosure regarding the company and The Jumpstart Our Business
Startups Act is incorporated herein by reference from the Form 10-12g
filed on January 18, 2017.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
References to the financial condition and performance of the
Company below in this section "Management's Discussion and Analysis
of Financial Condition and Results of Operations" are the Pro
Forma results after the effect of the Merger.
As of June 30, 2018, the Company, prior to the Merger, had
shareholders' equity of $(250) and a cash balance of $0. During the
period from ended June 30, 2018, the company had a net loss of $(944)
and as of December 31, 2017 the company had shareholders' equity of $(1,000)
and a net loss of $(1,539).
Off-Balance Sheet Arrangements
The company has no off-balance sheet arrangements.
Equipment Financing
The company has no existing equipment financing arrangements.
Critical Accounting Policies
For the period ending December 31, 2017 the financial statements
have been prepared and audited in accordance with generally accepted
accounting principles (GAAP) in the United States.
Liquidity and Capital Resources
As of June 30, 2018, the Company had cash balance of $0.
MANAGEMENT
Officers and Directors of Emaginos, Inc. (the "Company")
Name Age Position
Scott Taub 53 Chief Executive Officer, Director
Allan C. Jones 74 President, Chief Financial Officer,
Director
Keith Larick 78 Chief Education Officer
Scott Taub serves as a director and the Chief Executive Officer
of the Company. Mr. Taub has experience as a technical consultant for
large companies. His services include assistance in establishing
policies and procedures, managing budgets and training employees in
the policies and procedures. Mr. Taub began his technical support
experience with his father's company, "The Source" which was ultimately
acquired by America Online. Mr. Taub's experience working with his
father at The Source and on other business endeavors has given him
experience and knowledge on working with startup companies. Mr.
Taub's father started developing Emaginos and upon his death, Mr.
Taub took over its development. Working with Emaginos, Mr.
Taub has been running the day-to-day operations of Emaginos.
Allan C. Jones serves as a director and the President and
Chief Financial Officer of the Company. Mr. Jones co-founded
"Intelligent Education" a company that provided virtual, online
high-school courses to students nationwide with faculty members
drawn from across the country. Mr. Jones taught high school
mathematics for seven years and computer courses for three years.
In addition, Mr. Jones ran the computer center for the Oxford,
Massachusetts School District. From 1983 to 1993, Mr. Jones worked
in corporate research at Digital Equipment Corporation.
Subsequently he worked as a senior researcher and planning
consultant for the Center for Educational Leadership and Technology
(CELT) where he assisted schools, districts and states with
technology planning. He also spent three years as Director of
Information Systems at The Westminster Schools (an independent
day school in Atlanta, Georgia).
He has designed and implemented education programs that have
received national recognition and validation by the U.S. Department
of Education including Project COFFEE, founded in the late 1970s
which became a national model for helping school dropouts to return
to school. The program continues in operation. For his service, he
received a letter of recognition from President Reagan. While at
Digital Equipment Corporation, he advised institutions such as MIT
and the National Science Foundation on developing and implementing
industry/university research relationships. Mr. Jones is a career
educator and his education experience ranges from the high school
classroom to elementary school computer vacation camps, teaching
college courses, and roles in administration and school boards. Mr.
Jones received a Bachelor of Science degree in Mechanical Engineering
from the United States Naval Academy in 1967, a Masters of Arts in
Education from Assumption College, Worcester, Massachusetts in
1978 and a certificate in computer learning from Central New
England College of Technology in 1981.
Keith Larick serves as Chief Education Officer of the Company:
Dr. Larick is known for his many education and technology innovations
and is a national leader in the integration of technology into
teaching and learning. For the past 30 years, Dr. Larick has
participated in trend analysis, forecasting and studies of the
future. As a renowned futurist and change agent he has served as
a consultant and presenter to more than 500 businesses and
educational organizations. Dr. Larick was appointed by the
California Senate to serve on the California Master Plan for K-12
Education and California Technology Commission. He has served on
the Executive Committee and Board of the Agency for Instructional
Technology; a consultant for IBM, Compaq, ACER, AT&T, Digital
Equipment Corporation, Global Digital Utilities Inc., and
Emaginos Inc. In addition, he has served as president and
CEO of Vistar Technologies software and consulting services
company.
Directors
The Company is authorized to have at least one director but
no more than five. Each of the Company's directors serves for
a term of one year or until a successor is elected and qualified.
Director Independence
The Board of Directors has determined that it does not have any
independent directors as that term is defined by NASDAQ Marketplace
Rule 5605(a)(2). In assessing the independence of the directors,
the Board considers any transactions, relationships and arrangements
between our Company and our independent directors or their affiliated
companies. This review is based primarily on responses of the directors
to questions in a director and officer questionnaire regarding
employment, business, familial, compensation and other relationships
with our Company or our management.
Committees of the Board
The Company currently does not have nominating, compensation or
audit committees or committees performing similar functions nor
does the Company have a written nominating, compensation or audit
committee charter. The current Directors believe that it is not
necessary to have such committees, at this time, because they can
adequately perform the functions of such committees.
EXECUTIVE COMPENSATION
Summary Compensation
To date, the Company has not paid compensation to any executive
officer or director. The Company may choose to pay a salary or fees
to its executive management in the future. There have been no changes
in the Company's compensation policy since the end of the Company's
last fiscal year, December 31, 2017.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the date hereof
regarding the beneficial ownership of the Company's common stock by
each of its executive officers and directors, individually and as
a group and by each person who beneficially owns in excess of
five percent of the common stock after giving effect to any
exercise of warrants or options held by that person.
Percent of
Name and Position Shares Owned Class(1)
Scott Taub
Chief Executive
Officer, Director 60,000,000 72.4%
Allan C. Jones
President, Chief
Financial Officer,
Director 6,000,000 7.2%
Keith Larick
Chief Education
Officer 440,000 *
Richard Gordon 10,000,000 12%
Shareholder
All Officers and
directors as 66,000,000 79.6%
a Group (2 persons)
(1) Based on 82,825,885shares of common stock outstanding.
* Less than 1%
MARKET PRICE OF AND DIVIDENDS AND RELATED STOCKHOLDER MATTERS
Dividends
The Company has not paid any dividends to date. The Company has
not made any determination about if and when it will pay dividends
on its common stock.
Preferred Stock
The Company has 20,000,000 authorized undesignated shares
of preferred stock. No preferred stock has been designated nor
issued.
Market Price
There is no public market for the Company's common stock and
there is no market price for the Company's common stock.
Disclosure of Commission Position on Indemnification for Securities Act
Liabilities
The Company's Certificate of Incorporation include an
indemnification provision that provides that the Company shall
indemnify directors against monetary damages to the Company or any
of its shareholders by reason of a breach of the director's
fiduciary except (i) for any breach of the director's duty of
loyalty to the Company or its shareholders or (ii) for acts or
omissions not in good faith or which involve intentional misconduct
of (iii) for unlawful payment of dividend or unlawful stock
purchase or redemption or (iv) for any transaction from which
the director derived an improper personal benefit.
The Bylaws of the Company provide that the Company shall, to
the fullest extent permitted by applicable law, as amended from
time to time, indemnify all directors of the Company, as well as any
officers or employees of the Company to whom the Company has agreed
to grant indemnification. Section 145 of the Delaware General
Corporation Law ("DCL") empowers a corporation to indemnify its
directors and officers and to purchase insurance with respect to
liability arising out of their capacity or status as directors and
officers provided that this provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) arising under
Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper
personal benefit. The Delaware General Corporation Law provides
further that the indemnification permitted thereunder shall not
be deemed exclusive of any other rights to which the directors and
officers may be entitled under the corporation's by-laws, any
agreement, vote of shareholders or otherwise.
The effect of the foregoing is to require the Company to
indemnify the officers and directors of the Company for any claim
arising against such persons in their official capacities if such
person acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct
was unlawful.
The Certificate of Incorporation does not specifically
indemnify the officers or directors or controlling persons against
liability under the Securities Act.
The Securities and Exchange Commission's position on
indemnification of officers, directors and control persons under the
Securities Act by the Company is as follows:
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER
THE SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS,
OFFICERS AND CONTROLLING PERSONS OF THE SMALL BUSINESS
ISSUER PURSUANT TO THE RULES OF THE COMMISSION, OR
OTHERWISE, THE SMALL BUSINESS ISSUER HAS BEEN ADVISED THAT
IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION
SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED
IN THE ACT AND IS, THEREFORE, UNENFORCEABLE.
ITEM 3.02 Recent Sales of Unregistered Securities
The Company has issued the following securities in the last three
(3) years. Such securities were issued pursuant to exemptions from
registration under Section 4(a)(2) of the Securities Act of 1933,
as amended, as transactions by an issuer not involving any public
offering, as noted below. Each of these transactions was issued as
part of a private placement of securities by the Company in which
(i) no general advertising or solicitation was used, and (ii) the
investors purchasing securities were acquiring the same for
investment purposes only, without a view to resale.
Since inception, the Company has issued shares of common stock
which were not registered as follows:
The Company (as Forest Sound Acquisition Corporation) issued
an aggregate of 20,000,000 shares on formation in December 2016,
pro rata (10,000,000 each), to James Cassidy and James McKillop,
at a purchase price valued at $0.0001 per share, of which 19,5000,000
shares were redeemed via contribution and cancelled in July
2018.
In July 2018, the Company issued 66,882,308 shares of its common
stock to six stockholders, at a purchase price equal to $0.0001 per
share, as part of a change in control.
On September 13, 2018, pursuant to the Merger, the Company issued
5,494,000 shares of its common stock, valued at $0.0001 per share, in
exchange for all the outstanding shares of Emaginos Virginia then held
by 12 shareholders.
ITEM 5.06 Change in Shell Company Status
The Company has acquired the business plan of Emaginos, Inc.
(Virginia) which was an operating company with a defined business
plan and accordingly, the Company has commenced operations and is
no longer deemed to be a shell company.
ITEM 9.01 Financial Statements and Exhibits
The audited financial statements of the Emaginos Virginia for
Decemer 31, 2017 and the unaudited financial statements for the
period ended June 30, 2018 are included herewith.
______________________________________________________________________
FINANCIAL STATEMENTS
Auditors Report 1
Financial Statement Summary 2
Income Statement 3
Balance Sheet 4
Statement of Cash Flows 5
Notes to the Financial Statements 6
______________________________________________________________________
JPizars
CPAmerica International
Crowe Horwath International
INDEPENDENT AUDITOR'S REPORT
To the Stockholders
Emaginos, Inc. (Private Company)
We have audited the accompanying financial statements of Emaginos,
Inc. which comprise the balance sheets as of December 31, 2016
and 2017, and the related statements of income and retained
earnings, and cash flows for the years then ended, and the
related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance
with accounting principles generally accepted in the United
States of America; this includes the design, implementation,
and maintenance of internal control relevant to the
preparation and fair presentation of financial statements
that are free from material misstatement, whether due to
fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits in
accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan
and perform the audits to Obtain reasonable assurance about
whether the financial statements are free from material
misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on
the auditor's judgment, including the assessment of the risks
of material misstatement of the financial statements, whether
due to fraud or error.
Auditor's Responsibility
In making those risk assessments, the auditor considers internal
control relevant to the Company's preparation and fair presentation
of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company's
internal control. Accordingly, we express no such opinion. An
audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Emaginos,
Inc. as of December 31, 2016 and 2017, and the results of its
operations and its cash flows for the years then ended in accordance
with accounting principles generally accepted in the United States
of America.
JPizars
CPACONNECT
An Independent Member of Crowe Horwath International
Hollywood, Florida
August 16, 2018
______________________________________________________________________
EMAGINOS, INC.
Income Statement Summary 2017 2016 Increase
--------------------------------------------------------------------
Net Income (Loss) (3,190) - (3,190)
--------------------------------------------------------------------
Total Liabilities and
Stockholders Equity 14 3,204 (3,190)
--------------------------------------------------------------------
Net increase (decrease in cash
and cash equivalents (3,190) 3,204 (6,394)
--------------------------------------------------------------------
______________________________________________________________________
EMAGINOS, INC.
INCOME STATEMENT
YEARS ENDED DECEMBER 31, 2017 AND 2016
Year Ended December 31 Increase (Decrease)
----------------------- -------------------
2017 2016
--------- ---------- --------------------
REVENUES
Education - - -
Advertising - - -
Other - - -
Other Revenue - - -
TOTAL REVENUES - - -
OPERATING EXPENSES
Advertising and Promotion - - -
TelemedicineAutomobile/
Transportation - - -
Bad Debts/Losses and Thefts - - -
Bank Service Charges - - -
Business Licenses and Permits - - -
Charitable Contributions - - -
Computer and Internet 340 - 340
Public Display Announcers
Continuing Education - - -
Depreciation-Indirect - - -
Dues and Subscriptions 2,450 - 2,450
Hosting Annual Conferences
Community ProgramsInsurance - - -
Meals and Entertainment 400 - 400
Merchant Account Fees - - -
Miscellaneous Expense - - -
Office Supplies - - -
Payroll Processing - - -
Postage and Delivery - - -
Printing and Reproduction - - -
Professional Services-
Legal, Accounting - - -
Research and Development
Occupancy - - -
Facilities Costs - - -
Salaries - - -
Payroll Taxes and Benefits-
Indirect - - -
Subcontractor - - -
Telephone - - -
TrainingTravel - - -
Utilities - - -
Website Development - - -
TOTAL OPERATING EXPENSES 3,190 - 3,190
-------- -------- -------
OPERATING PROFIT (LOSS) (3,190) - (3,190)
INTEREST (INCOME), EXPENSE
& TAXES
Interest (Income) - - -
Interest Expense - - -
Income Tax Expense - - -
-------- -------- -------
TOTAL INTEREST (INCOME),
EXPENSE & TAXES - - -
NET INCOME (LOSS) $ (3,190) $ - $ (3,190)
RETAINED EARNINGS, -
BEGINNING OF YEAR $ (3,190) $ - $ (3,190)
LESS: DIVIDENDS PAID - - -
RETAINED EARNINGS,
END OF YEAR(3,190.00) $ - $ - $ (3,190)
See independent accountants audit report and accompanying notes to
the financial statements.
______________________________________________________________________
EMAGINOS, INC.
BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
Year Ended December 31 Increase (Decrease)
----------------------- --------------------
2017 2016
--------- ---------- --------------------
Assets
Current assets:
Cash 14 - 14
Investments - 3,204 (3,204)
Inventories - - -
Accounts receivable - - -
Pre-paid expenses - - -
Other - - -
--------- ---------- --------------------
Total current assets 14 3,204 (3,190)
Fixed assets:
--------- ---------- --------------------
Property and equipment - - -
Leasehold improvements - - -
Equity and other investments - - -
Less accumulated depreciation - - -
Total fixed assets - - -
-
Other assets: -
Goodwill - - -
Total other assets - - -
-
Total assets 14 3,204 (3,190)
-
Liabilities and owner's equity-
Current liabilities: -
--------- ---------- --------------------
Accounts payable - - -
Accrued wages - - -
Accrued compensation - - -
Income taxes payable - - -
Unearned revenue - - -
Other - - -
--------- ---------- --------------------
Total current liabilities - - -
-
Long-term liabilities: -
--------- ---------- --------------------
Mortgage payable - - -
Total long-term liabilities - - -
--------- ---------- --------------------
Total Liabilities - - -
--------- ---------- --------------------
Owners Equity: -
--------- ---------- -------------------- -
Owners Investment 3,204 3,204 -
Common Stock, 250,000
Common Shares Authorized -
Capital in excess of par
value -
Retained earnings (3,190) - (3,190)
Accumulated other
comprehensive income - - -
--------- ---------- --------------------
Total Common Stockholders'
equity 14 3,204 (3,190)
-
-------------------------- --------------------
Total liabilities and
Stockholders' equity 14 3,204 (3,190)
========================== ===================
See Independent accountants audit report and accompanying notes to the
financial statements
______________________________________________________________________
EMAGINOS, INC.
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2017 AND 2016
Increase
Year Ended December 31 (Decrease)
----------------------- ------------
2017 2016
----------- ---------- ------------
Cash flows from operating activities:
Net income (3,190) - (3,190)
Adjustments to reconcile net income
to net cash provided by operating
activities: -
Depreciation and amortization - - -
Provision for losses on contract
receivables - - -
Gain on sale of equipment - - -
Increase (decrease) in deferred taxes - - -
Equity earnings from unconsolidated
joint venture - - -
Increase in long-term accrued liabilities - - -
Increase in contract receivables - - -
Net (decrease) increase in billings
related to costs and estimated
earnings on - - -
uncompleted contracts - - -
(Increase) decrease in prepaid charges
and other assets - - -
(Decrease) increase in accounts and
retentions payable - - -
Increase in accrued loss on uncompleted
contract - - -
(Decrease) increase in other accrued
liabilities - - -
-------------------------------------
Net cash provided by operating
activities (3,190) - (3,190)
------------------------------------- -
Cash flows from investing activities: -
Owners Investment 3,204 (3,204)
Proceeds of equipment sold - - -
Acquisition of equipment - - -
Advances to joint venture - - -
Advances to related company - - -
-------------------------------------
Net cash used in investing activities - 3,204 (3,204)
-------------------------------------
-
Cash flows from financing activities: -
Principal payments on notes payable - - -
Principal payments under capital lease
obligations - - -
Cash dividends paid - - -
-------------------------------------
Net cash used in financing activities - - -
-------------------------------------
-
Net increase (decrease) in cash and
cash equivalents (3,190) 3,204 (6,394)
Cash and cash equivalents at beginning
of year 3,204 - 3,204
-------------------------------------
Cash and cash equivalents at end of year 14 3,204 (3,190)
-------------------------------------
See Independent accountants audit report and accompanying notes to the
finanicial statementsYear Ended December 31
______________________________________________________________________
EMAGINOS, INC.
Notes to Financial Statements December 31, 2017
NOTE 1 - FUTURE NATURE OF OPERATIONS
The Company will be engaged in the transformation of the K through
12 education system in all 50 states. The Company's work will be
performed through subscription services. These subscriptions are
undertaken by the Company on an annual basis for updates.
The length of the Company's subscriptions will be one year.
The Company follows the practice of filing statutory liens on all
projects when collection problems are anticipated. The liens serve
as collateral for contracts receivable.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Future use of Estimates
No estimates and assumptions have been made for the period of these
financial statements. If estimates and assumptions are used they
will be in conformity with U.S. GAAP that affect the reported
amounts of assets and liabilities and the disclosure of contingent
assets and liabilities and the reported amounts of revenues and e
xpenses during the reporting period. Actual results could differ
from those estimates.
Balance Sheet Classification
The Company includes in current assets and liabilities retainage
amounts receivable and payable under client contracts, which may
extend beyond one year. A one-year time period is used as the
basis for classifying all other current assets and liabilities.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers
all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents. See
independent accountants' audit report
Future Contracts Receivable
Contracts receivable from performing education services are based
on a per student and teacher subscription rate of $3.50 per day.
The Company provides an allowance for doubtful collections, which
is based upon a review of outstanding receivables, historical
collection information, and existing economic conditions. Normal
contracts receivable is due 30 days after the issuance of the
invoice. Contract retentions are due 30 days after completion of
the project and acceptance by the owner. Receivables past due
more than 120 days are considered delinquent. Delinquent
receivables are written off based on individual credit evaluation
and specific circumstances of the customer.
See accompanying Independent Accountants' Audit Report
______________________________________________________________________
EMAGINOS, INC.
Notes to Financial Statements December 31, 2017 (continued)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Inventory
No inventory will be part of the Emaginos Incorporated business model
Future Property and Equipment
Property and equipment will be stated at cost. Depreciation will
be computed primarily using the straight-line method over the estimated
useful lives of the assets, which range from 5 to 39 years. Leasehold
improvements are amortized over the shorter of the useful life of the
related assets or the lease term. Expenditures for repairs and
maintenance are charged to expense as incurred. For assets sold or
otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts, and any related gain or loss is
reflected in income for the period.
Future Impairment of Long-Lived Assets
The Company will review long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount
of such assets may not be recoverable. Recoverability of these assets
is determined by comparing the forecasted undiscounted net cash flows
of the operation to which the assets relate to the carrying amount.
If the operation is determined to be unable to recover the carrying
amount of its assets, then assets are written down first, followed
by other long-lived assets of the operation to fair value. Fair
value is determined based on discounted cash flows or appraised
values, depending on the nature of the assets. As of December 31,
2017, and 2016, there were no impairment losses recognized for
long lived assets.
Revenue and Cost Recognition
The company has no revenues to date. To date, most of management's
time, and the Company's limited resources have been spent in
developing its business strategy, researching potential opportunities,
exploring marketing contacts, establishing operations and management
personnel and resources, preparing its business plan and model,
selecting professional advisors and consultants and seeking sources
of capital for the Company. Potential revenues from fixed price
subscription contracts are recognized on the accrual basis of
accounting. The accrual basis is used because management considers
it to be the best available measure of subscription revenue on the
future contracts. The most significant estimates related to costs
will be facilities costs to complete the subscription contracts.
These estimates may be adjusted as more current information
becomes available, and any adjustment could be significant.
Facilities costs include all national offices and regional
office cost along with furnishing of the schools.
See accompanying Independent Accountants' Audit Report
______________________________________________________________________
EMAGINOS, INC.
Notes to Financial Statements December 31, 2017 (continued)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue and Cost Recognition (Continued)
Selling, general, and administrative costs will be charged to expense
as incurred. Provisions for estimated losses on uncompleted subscription
contracts are made in the period in which such losses are determined.
Changes in job performance, job conditions, and estimated
profitability, to costs and income are recognized in the period in
which the revisions are determined. Profit incentives are included
in revenues when their realization is reasonably assured. An amount
equal to subscription costs is included in revenues when realization
is probable and the amount can be reliably estimated.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable
for the current year and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income
and between the tax bases of assets and liabilities and their
reported amounts in the financial statements. Deferred tax assets
and liabilities will be included in the financial statements at
enacted income tax rates applicable to the period in which the
deferred tax assets and liabilities are expected to be realized
or settled as prescribed in FASB ASC 740. As changes in tax laws
or rate are enacted, deferred tax assets and liabilities are
adjusted through the provision for income taxes. As of
December 31, 2017, the Company had no uncertain tax positions, or
interest and penalties, that qualify for either recognition or
disclosure in the financial statements.
NOTE 3 - EVALUATION OF SUBSEQUENT EVENTS
As of December 31,2017, Emaginos Virginia authorized capital stock
consisting of 250,000,000 shares of common stock, no par value.
Emaginos Delaware shares authorized will be at a total of
100,000,000 shares of common stock, par value $0.0001, of which
72,876,308 shares were outstanding at the effective date of the
merger and as of the date of this audit report. The company is
also authorized to issue 20,000,000 shares of non-designated
preferred stock of which none are outstanding.
See accompanying Independent Accountants' Audit Report
______________________________________________________________________
EMAGINOS, INC.
Notes to Financial Statements December 31, 2017 (continued)
NOTE 4 - TRANSACTIONS WITH RELATED PARTY
The officers and directors are subject to the restriction that all
opportunities contemplated by the business plan which come to their
attention, either in the performance of their duties or in any
other manner, will be considered opportunities of, and be made
available to the Company. A breach of this requirement will be
a breach of the fiduciary duties of the officer and director.
As of the financial reporting date and through July 31, 2018
which is the date of the audited financial statements, Emaginos
Virginia entered into promissory notes in exchange for stock
ownership. The parties involved in the promissory notes are
Paula Matveld and Daniel Cynamon in the amounts of $25,000
and $30,000. These have become the obligation of the
Company after the effectiveness of the Merger.
NOTE 5 - GOING CONCERN
The Company has not yet generated any revenue since inception to
date and has sustained operating loss of $3,190 for the year ended
December 31, 2017. The Company has zero working capital as of
December 31, 2017. The Company's continuation as a going concern
is dependent on its ability to generate sufficient cash flows
from operations to meet its obligations and/or obtaining
additional financing from its members or other sources,
as may be required.
The accompanying audited financial statements have been prepared
assuming that the company will continue as a going concern;
however, the above condition raises substantial doubt about
the Company's ability to do so. The audited financial statements
do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or
the amounts and classifications of liabilities that may result
should the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the
Company will require additional working capital from either
cash flow from operations or from the sale of its equity.
However, the Company currently has no commitments from any
third parties for the purchase of its equity. If the Company
is unable to acquire additional working capital, it will be
required to significantly reduce its current level of
operations.
See accompanying Independent Accountants' Audit Report
______________________________________________________________________
Mario Marcel of Celtax - Certified Public Accountants
6250 Canoga Ave
Suite 345
Woodland Hills, CA 91367
Phone (818) 330-3550
EMAGINOS, INC.
PERIOD: Q2 2018
Unaudited
______________________________________________________________________
EMAGINOS, INC.
Q2 2018 Financial Statement Summary
2018 2017
------------ ------------
Net Income - (3,190)
Total Liabilities and Equity 75,000 14
Net Increase in cash - 14
2
______________________________________________________________________
EMAGINOS, INC.
PROFIT AND LOSS
For the Quarter Ended June 30 2018
2018 2017
------------ ------------
Income
Education Services 0 0
------------ ------------
Total Income 0 0
------------ ------------
Gross Profit 0 0
Expenses 0 0
Domain 0 40
Software 0 300
Web Host 0 0
------------ ------------
Total Computer & Internet Costs 0 340
Dues & Subscriptions 0 2,450
Meals and Entertainment 0 400
------------ ------------
Total Expenses 0 3,190
-----------------------------
Net Operating Income 0 (3,190)
Other Income
Interest Earned 0 0
------------ ------------
Total Other Income 0 0
Other Expenses
Other Miscellaneous Expense 0 0
------------ ------------
Total Other Expenses 0 0
------------ ------------
Net Other Income 0 0
------------ ------------
Net Income 0 (3,190)
3
______________________________________________________________________
EMAGINOS, INC.
BALANCE SHEET
As of June 30 2018
------------ ------------
2018 2017
------------ ------------
ASSETS
Current Assets
Bank Accounts
WFB Acct -
Disbs/Main CHK (3928) 14 14
------------ ------------
Total Bank Accounts 14 14
------------ ------------
Other Current Assets
Total Current Assets 14 14
Other Assets
2018 Public Offering Costs-
Intangible 74,986 0
Security Deposits 0 0
------------ ------------
Total Other Assets 74,986 0
------------ ------------
TOTAL ASSETS 75,000 0
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
------------ ------------
Total Liabilities 0 0
------------ ------------
Shareholders' Equity
Common Stock, no par value,
250,000,000 shares authorized 0 0
Opening Balance Equity 14 0
Partner Contributions 0 0
Scott Taub - Investment 74,986 3,204
------------ ------------
Total Partner Contributions 75,000 3,204
Retained Earnings 0 0
Net Income 0 -3,190
------------ ------------
Total Equity 75,000 14
------------ ------------
TOTAL LIABILITIES AND EQUITY 75,000 14
4
_________________________________________________________________________
EMAGINOS, INC.
PROFIT AND LOSS
For the Quarter Ended June 30 2018
------------ ------------
2018 2017
------------ ------------
OPERATING ACTIVITIES
Net Income 0 3,190
Adjustments to reconcile Net
Income to Net Cash provided
by operations:
-
Cash paid for annual dues 0 2,450
Cash paid for email servers 0 -300
Cash paid for Domain Servers 0 -40
Cash paid for Meals and Entertainment 0 -386
Total Adjustments to reconcile Net
Income to Net Cash provided by
operations: 0 3,176
Net cash provided by operating
activities 0 14
INVESTING ACTIVITIES
Cash Investment Received 75,000 0
Public Offering Costs 75,000 0
Net cash provided by investing
activities 0 0
Net cash increase for period 0 14
Cash at beginning of period 0 0
Cash at end of period 0 0
5
______________________________________________________________________
EMAGINOS, INC.
Notes to Financial Statements Interim period June 30, 2018
NOTE 1 - Future Nature of Operations
The Company will be engaged in the transformation of the K through
12 education system in all 50 states. The Company's work will be
performed through subscription services. These subscriptions are
undertaken by the Company on an annual basis for updates. The length
of the Company's subscriptions will be one year. The Company will
follow the practice of filing statutory liens on all projects when
collection problems are anticipated. The liens will serve as
collateral for contracts receivable.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Future use of Estimates
No estimates and assumptions have been made for the period of
these financial statements. If estimates and assumptions are used
they will be in conformity with U.S. GAAP that affect the reported
amounts of assets and liabilities and the disclosure of contingent
assets and liabilities and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
Balance Sheet Classification
The Company includes in current assets and liabilities retainage
amounts receivable and payable under client contracts, which may
extend beyond one year. A one-year time period is used as the basis
for classifying all other current assets and liabilities.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers
all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
See independent accountants' audit report
6
______________________________________________________________________
EMAGINOS, INC.
Notes to Financial Statements Interim period June 30, 2018
Future Contracts Receivable
Contracts receivable from performing education services are based on
a per student and teacher subscription rate of $3.50 per day. The
Company provides an allowance for doubtful collections, which is
based upon a review of outstanding receivables, historical collection
information, and existing economic conditions. Normal contracts
receivable is due 30 days after the issuance of the invoice. Contract
retentions are due 30 days after completion of the project and
acceptance by the owner. Receivables past due more than 120 days
are considered delinquent. Delinquent receivables are written off
based on individual credit evaluation and specific circumstances
of the customer.
Inventory
No inventory will be part of the Emaginos Incorporated business
model
Future Property and Equipment
Property and equipment will be stated at cost. Depreciation will be
computed primarily using the straight-line method over the estimated
useful lives of the assets, which range from 5 to 39 years. Leasehold
improvements are amortized over the shorter of the useful life of the
related assets or the lease term. Expenditures for repairs and
maintenance are charged to expense as incurred. For assets sold or
otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts, and any related gain or loss is
reflected in income for the period.
Future Impairment of Long-Lived Assets
The Company will review long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount
of such assets may not be recoverable. Recoverability of these assets
is determined by comparing the forecasted undiscounted net cash flows
of the operation to which the assets relate to the carrying amount.
If the operation is determined to be unable to recover the carrying
amount of its assets, then assets are written down first, followed
by other long-lived assets of the operation to fair value. Fair value
is determined based on discounted cash flows or appraised values,
depending on the nature of the assets. As of June 30, 2018, there
were no impairment losses recognized for long lived assets.
Revenue and Cost Recognition
The company has no revenues to date. To date, most of
management's time, and the Company's limited resources have been
spent in developing its business strategy, researching potential
opportunities, exploring marketing contacts, establishing operations
and management personnel and resources, preparing its business plan
and model, selecting professional advisors and consultants and
seeking sources of capital for the Company.
Potential revenues from fixed price subscription contracts are
recognized on the accrual basis of accounting. The accrual basis is
used because management considers it to be the best available measure
of subscription revenue on the future contracts. The most significant
estimates related to costs will be facilities costs to complete the
subscription contracts. These estimates may be adjusted as more
current information becomes available, and any adjustment could be
significant. Facilities costs include all national offices and
regional office cost along with furnishing of the schools.
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EMAGINOS, INC.
Notes to Financial Statements Interim period June 30, 2018
Selling, general, and administrative costs will be charged to expense
as incurred. Provisions for estimated losses on uncompleted subscription
contracts are made in the period in which such losses are determined.
Changes in job performance, job conditions, and estimated
profitability, to costs and income are recognized in the period in
which the revisions are determined. Profit incentives are included
in revenues when their realization is reasonably assured. An amount
equal to subscription costs is included in revenues when realization
is probable and the amount can be reliably estimated.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable
for the current year and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income
and between the tax bases of assets and liabilities and their reported
amounts in the financial statements. Deferred tax assets and liabilities
will be included in the financial statements at enacted income tax
rates applicable to the period in which the deferred tax assets and
liabilities are expected to be realized or settled as prescribed in
FASB ASC 740. As changes in tax laws or rate are enacted, deferred
tax assets and liabilities are adjusted through the provision for
income taxes. As of June 30, 2018, the Company had no uncertain tax
positions, or interest and penalties, that qualify for either
recognition or disclosure in the financial statements.
NOTE 3 - Evaluation of Subsequent Events
As of June 30, 2018, the company's capital structure consisted of
250,000,000 shares of common stock, par value $0.0001. The new
company shares authorized will be at a total of 100,000,000 shares
of common stock, par value $0.0001, of which 82,827,385 shares were
outstanding as of the date of this audit report. The company is also
authorized to issue 20,000,000 share of preferred stock, par value
$0.0001 of which none are designated or outstanding.
NOTE 4 - TRANSACTIONS WITH RELATED PARTY
The officers and directors are subject to the restriction that all
opportunities contemplated by the business plan which come to their
attention, either in the performance of their duties or in any other
manner, will be considered opportunities of, and be made available
to the Company. A breach of this requirement will be a breach of
the fiduciary duties of the officer and director.
As of the financial reporting date and through August 20, 2018,
Emaginos Virginia entered into promissory notes in exchange for
stock ownership. The parties involved in the promissory notes
are Paula Matveld and Daniel Cynamon in the amounts of $25,000
and $30,000. These have become the obligation of the Company after
the effectiveness of the Merger.
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Exhibits
Certain exhibits listed below are incorporated by reference as so
marked with the date and filing with which such exhibits were filed
with the Securities and Exchange Commission).
2.1* Agreement and Plan of Reorganization between Emaginos, Inc.
(Virginia) and Emaginos, Inc. (Delaware)
3.1 Certificate of Incorporation (filed as exhibit to the Form
10-12G filed December 7, 2016)
3.2 By-laws (filed as exhibit to the Form 10-12G filed
December 7, 2017)
3.3 Sample stock certificate (filed as exhibit to the Form
10-12G filed December 7, 2017)
* Filed herewith
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 hereunder duly authorized.
EMAGINOS, INC.
/s/ Allan Jones
President
Date: September 26, 201
