NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Unique Underwriters, Inc. (the
“Company”) is a national, independent, mortgage protection insurance sales and marketing company located in the Dallas,
Texas area. The Company was incorporated in the State of Texas on July 28, 2009.
Unique Underwriters, Inc. offers the
following forms of insurance sales:
Mortgage life insurance is a form of
life insurance that will cover the cost of the mortgage in the event of policy holder’s death, so that his/her family doesn’t
have to worry about paying it off without the aid of primary income. Life insurance can be used for a variety of purposes, such
as: providing for your spouse and children, paying off a mortgage and other debts, transferring wealth or business interests, accumulating
cash on a tax advantaged basis, achieving estate tax liquidity, saving money for college expenses or retirement or other life events.
Disability Insurance pays the insured a monthly benefit if he/she becomes disabled, as a result of an accident or disease, and
cannot perform the duties of their own job.
Funeral expense insurance is an insurance
policy used to pay for funeral services and a burial when the named insured dies. Such a policy helps ease the financial burden
placed on a family when a loved one dies. It is no different than a traditional life insurance policy with a small monetary value.
Funeral expense insurance allows the named insured to feel safe knowing that funeral-related expenses are covered regardless of
the status of their estate at the time of death.
Annuities provide tax-deferred growth,
liquidity, and income options, plus a death benefit that may bypass the costs and delays of probate. An annuity could be right
if: a) prefer to delay taxes to a later date; b) are already contributing all you can to your IRA or qualified plan; c) are comfortable
that you won’t need extra money immediately; d) prefer a minimum guaranteed interest rate. The Company an array of products
that include fixed indexed annuities that are based on the performance of an Index, which provides you with all the upside potential
and none of the downside risk of the market.
Basis
of Presentation
The financial statements include
the accounts of Unique Underwriters, Inc. under the accrual basis of accounting.
Management’s Use of
Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
The financial statements above reflect all of the costs of doing business.
Reclassification
Certain amounts in the prior years'
consolidated financial statements have been reclassified to conform with the current year presentation
Deferred Taxes
The Company accounts for income taxes
under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined
based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted
tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation
allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in the statements of operations in the period that includes the enactment date.
Cash and Cash Equivalents
- For purposes of the Statements of Cash Flows, the Company considers highly liquid investments with an original maturity of three
months or less to be cash equivalents.
Revenue Recognition
–
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes
revenue when services are realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue
realized or realizable and earned when all of the following criteria are met:
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(i)
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persuasive evidence of an arrangement exists,
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(ii)
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the services have been rendered and all required milestones achieved,
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(iii)
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the sales price is fixed or determinable, and
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(iv)
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collectability is reasonably assured.
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The approval from the Company’s
insurance carriers, which occurs upon receipt of our commission check and the policy, is reviewed online, and related completion
of services to the client is an event that triggers revenue recognition.
No revenue is recognized prior to receipt
of the commission check.
The lead sales revenue
is recognized when one of our agents submits an order to rent leads and simultaneously their credit card is processed and the leads
are distributed to them. The Company recognizes revenue when the agent submits an order to rent the leads for 30 days. After thirty
days the leads become available for rental to another agent. Leads may be rented multiple times at decreasing rates due to the
lead’s age and number of times it has been rented.
Membership revenue
recognition occurs when an agent registers for one of the Company’s websites online and submits their payment information;
the agent must give 30 days notice of request to cancel their membership. The Company recognizes revenue related to our various
membership plans as income on a straight-line basis over the length of membership period.
The customer deposit is strictly
related to Executive Membership Package. After submitting a $500 deposit, an Executive Member can request that the Company directly
mail letters to new home owners and/or senior citizens to generate new direct mail response leads. The Company refunds these deposits
back to Executive Members when they no longer request that the Company directly mail letters to new home owners and/or senior
citizens to generate new direct mail response leads. However, the Executive Members may also apply these deposits towards the
leads sale or membership fees in the future. After the Executive Member cancels their direct mail service, they have the choice
to use these deposits for additional leads, request that the deposits be applied towards membership, or ask for refunds. If deposits
are used for additional leads, revenue is recognized when services are realized or realizable and earned. If deposits are used
for membership fees, revenue is recognized over the length of membership period. For the year ended June 30, 2010, the Company
refunded $1,000 to Executive Members, for the year ended June 30, 2011, the Company refunded $28,354 to Executive Members, for
the year ended June 30, 2012, the Company refunded $9,845 to Executive Members. For the nine months ended March 31, 2013, the
Company did not issue any refunds to Executive Members.
Cost of Sales
- The
Company’s policy is to recognize cost of sales in the same manner in conjunction with revenue recognition, when the costs
are incurred. Cost of sales includes the costs directly attributable to revenue recognition and include marketing and leads generation
costs, leads purchased costs and agent expenses. Selling, general and administrative expenses are charged to expense as incurred.
Comprehensive Income (Loss)
- The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting
Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in
the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the periods covered
in the financial statements.
Loss Per Share
-
Net
loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per
share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially
outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of March 31, 2013
and June 30, 2012.
Risk and Uncertainties
- The
Company is subject to risks common to companies in the service industry, including, but not limited to, litigation, development
of new technological innovations and dependence on key personnel.
Stock-Based Compensation
- The
Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of
the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity
to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value
of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide
service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized
for equity instruments for which employees do not render the requisite service.
Fair Value for Financial Assets
and Financial Liabilities-
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures
about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph
820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for
measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures
about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph
820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value
into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for
identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined
by Paragraph 820-10-35-37 are described below:
Level 1
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Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
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Level 2
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Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
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Level 3
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Pricing inputs that are generally observable inputs and not corroborated by market data.
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The carrying amounts of the Company’s
financial assets and liabilities, such as cash, accounts receivable, rent deposit, accounts payable, customer deposits and notes
payable approximate their fair values because of the short maturity of these instruments.
The Company does not have any assets
or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair
value adjustments for assets and liabilities measured at fair value at March 31, 2013 and June 30, 2012 nor gains or losses are
reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets
and liabilities still held at the reporting date for the for the nine months ended March 31, 2013 and 2012.
Recent Accounting Pronouncements
The Company has reviewed all recently
issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may
be expected to cause a material impact on its consolidated financial condition or the consolidated results of its operations.
In May 2011, FASB issued Accounting
Standards Update No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”). ASU 2011-04 changes the
wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about
fair value measurements to ensure consistency between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair
value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied
prospectively. The Company anticipates that the adoption of this standard will not materially expand its financial statement
note disclosures.
In June 2011, FASB issued ASU
No. 2011-05, “Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income” (“ASU 2011-05”),
which amends current comprehensive income guidance. This accounting update eliminates the option to present the components
of other comprehensive income as part of the statement of shareholders’ equity. Instead, the Company must report comprehensive
income in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive
income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the
interim and annual periods beginning after December 15, 2011, with early adoption permitted. The Company is reviewing
ASU 2011-05 to ascertain its impact on the Company’s financial position, results of operations or cash flows as it only requires
a change in the format of the current presentation.
In September 2011, the FASB issued
ASU 2011-08, “Testing Goodwill for Impairment”, which allows, but does not require, an entity when performing its annual
goodwill impairment test the option to first do an initial assessment of qualitative factors to determine whether it is more likely
than not that the fair value of a reporting unit is less than its carrying amount for purposes of determining whether it is even
necessary to perform the first step of the two-step goodwill impairment test. Accordingly, based on the option created in ASU 2011-08,
the calculation of a reporting unit’s fair value is not required unless, as a result of the qualitative assessment, it is
more likely than not that fair value of the reporting unit is less than its carrying amount. If it is less, the quantitative impairment
test is then required. ASU 2011-08 also provides for new qualitative indicators to replace those currently used. Prior to ASU 2011-08,
entities were required to test goodwill for impairment on at least an annual basis, by first comparing the fair value of a reporting
unit with its carrying amount. If the fair value of a reporting unit is less than its carrying amount, then the second step of
the test is performed to measure the amount of impairment loss, if any. ASU 2011-08 is effective for annual and interim goodwill
impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The Company
adopted ASU 2011-08 during the first quarter of fiscal 2013. The adoption of ASU 2011-08 did not impact the Company’s results
of operations or financial condition.
In December 2011, FASB issued Accounting
Standards Update 2011-11, “Balance Sheet - Disclosures about Offsetting Assets and Liabilities” to enhance disclosure
requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures
regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset
exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update
are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires
additional disclosures, as such, the Company does not expect that the adoption of this standard will have a material impact on
its results of operations, cash flows or financial condition.
In July 2012, the FASB issued ASU No. 2012-02,
“Testing Indefinite-Lived Intangible Assets for Impairment”. The guidance allows companies to perform a “qualitative”
assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach
to the goodwill impairment test.
ASU 2012-02 allows companies the option
to first assess qualitatively whether it is more likely than not that an indefinite-lived intangible asset is impaired, before
determining whether it is necessary to perform the quantitative impairment test. An entity is not required to calculate the fair
value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it
is more likely than not that the asset is impaired. Companies can choose to perform the qualitative assessment on none, some, or
all of its indefinite-lived intangible assets or choose to only perform the quantitative impairment test for any indefinite-lived
intangible in any period.
ASU 2012-02 is effective for annual
and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted.
The Company is in the process of evaluating the guidance and the impact ASU 2012-02 will have on its consolidated financial statements.
In August 2012, the FASB issued ASU
2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting
Bulletin (SAB) No. 114. , Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting
Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs
pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial
position or results of operations.
In October 2012, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in
Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards
Codification.
These amendments include technical
corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements.
The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04
is not expected to have a material impact on our financial position or results of operations.
NOTE 2 -
INCOME
TAXES
At March 31, 2013, the Company
had federal and state net operating loss carry forwards of approximately $1,063,000 that expire in various years through the year
2032.
Due to operating losses, there
is no provision for current federal or state income taxes for the nine months ended March 31, 2013 and 2012.
Deferred income taxes reflect
the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amount used for federal and state income tax purposes.
The Company’s deferred tax
asset at March 31, 2013 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating
to approximately $372,000 less a valuation allowance in the amount of approximately $372,000. Because of the Company’s lack
of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by
approximately $19,000 and $85,000 for the nine months ended March 31, 2013 and 2012, respectively.
The Company’s
total deferred tax asset as of March 31, 2013 and June 30, 2012 are as follows:
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2013
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2012
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Total deferred tax asset
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$
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372,000
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$
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351,000
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Valuation allowance
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(372,000)
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(351,000)
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Net deferred tax asset
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$
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—
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$
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—
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The reconciliation of income taxes computed at the
federal and state statutory income tax rate to total income taxes for the nine months ended March 31, 2013 and 2012 are as follows:
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2013
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2012
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Income tax computed at the federal statutory rate
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35%
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35%
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Valuation allowance
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(35%)
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(35%)
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Total deferred tax asset
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0%
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0%
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NOTE 3 -
CAPITAL
STOCK
The Company is currently authorized
to issue 1,000,000,000 common shares at $.001 par value per share.
The Company is currently authorized
to issue 100,000,000 Class A preferred shares at $.001 par value per share with 10:1 conversion and voting rights.
The Company is currently authorized
to issue 50,000,000 Class B preferred shares at $.001 par value per share with 1:1 conversion and voting rights.
No
stock has been issued for the nine months ended
March 31, 2013
.
NOTE 4 -
LEASE AND EMPLOYMENT
COMMITMENTS AND RELATED PARTY TRANSACTION
The Company has a three year lease
at $5,330 per month with an unrelated party. The lease expires on April 30, 2014.
The Company assumed and renewed a shopping
center lease from a party related through common ownership. The lease is for five years at $840 per month and expires on May 31,
2016.
Future minimum rental payments under
the leases for the next five years are as follows:
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2013
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74,040
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2014
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63,380
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2015
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10,080
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2016
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9,240
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2017
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0
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$
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156,740
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As of December 31, 2012, there were four (4)
full-time employees, including Samuel Wolfe, President and CEO. The remaining officers and staff of the Company at that time
were all full time consultants with Consulting Agreements. At the present time, Mr. Wolfe, Ralph Simpson, who is our Chairman and
COO, and all of our officers and directors are all full time consultants. Effective March 5, 2013, Mr. Wolfe and Mr. Simpson
signed new Consulting Agreements with the Company, wherein their Consulting Firms, R. Simpson & Associates, Inc. and S. Wolfe
& Associates, Inc., became full time consultants for the Company. In addition to retaining their current positions in the Company,
their Consulting Agreements each contain the following pertinent provisions:
1)
Compensation
.
As total compensation for Consultant’s services rendered hereunder, the Consulting Firm shall be entitled to receive from
Company the following:
a.
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annual compensation of $130,000.00, payable to the Consulting Firm on a weekly basis; and
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b.
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an amount equal to 5% of Total Monthly Revenue received by the Company, determined on a cash basis during each calendar month within the Company’s fiscal year, provided and on the condition that this Agreement is not terminated by the Company pursuant to Article IV hereof. “
Total Monthly Revenue
” shall be defined herein the total revenue received by the Company during each calendar month within the Company’s fiscal year from all sources, including but not limited to, insurance commissions, leads and sales of membership packages. All payments due under this Section 3.1b shall be paid within seven calendar (7) days after determination of the Total Monthly Revenue by the Company; and
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2)
Events Causing
Termination
. This Agreement shall immediately terminate, without liability to Company, upon the occurrence of any one of the
following events:
b.
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Consultant’s permanent disability as determined by the Company;
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c.
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Consultant is convicted by a court of competent jurisdiction of fraud, misappropriation, embezzlement, dishonesty, or other similar act; or
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d.
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if the Consulting Firm should voluntarily terminate the Agreement.
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NOTE
5 -
ACCOUNTS
RECEIVABLE
Accounts receivable was comprised
of the following amounts as of March 31, 2013 and 2012:
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2013
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2012
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Gross accounts receivable from customers
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$
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4,243
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$
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-
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Allowance for doubtful customer accounts
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-
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-
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Accounts receivable, net
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$
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4,243
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$
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-
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There was no bad debt expense
recognized during the nine months ended March 31, 2013 and 2013, respectively.
NOTE
6 - FIXED ASSETS
Fixed assets were comprised of
the following as of March 31, 2013 and 2012:
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2013
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2012
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Cost:
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Furniture
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$
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3,371
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$
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-
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Total cost
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3,371
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-
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Less: Accumulated depreciation
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159
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-
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Property and equipment, net
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$
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3,212
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$
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-
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NOTE 7 -
LOSS PER SHARE
Loss per share is computed by
dividing the net loss by the weighted average number of common shares outstanding during the periods. Basic and diluted loss per
share was the same for the nine months ended March 31, 2013 and 2012.
NOTE 8 -
SUPPLEMENTAL CASH FLOW
INFORMATION
Supplemental disclosures of cash
flow information for
the nine months ended
March 31, 2013 and 2012 are summarized as follows:
Cash paid during the period for
interest and income taxes:
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2013
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2012
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Income Taxes
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$ -0-
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$ -0-
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Interest
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$ -0-
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$ -0-
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NOTE 9 -
GOING CONCERN AND
UNCERTAINTY
The Company has suffered recurring
losses from operations since inception and has a negative working capital. In addition, the Company has yet to generate an internal
cash flow from its business operations. These factors raise substantial doubt as to the ability of the Company to continue as a
going concern.
Management’s plans with
regard to these matters encompass the following actions: 1) obtain funding from new investors to alleviate the Company’s
working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability
to resolve it liquidity problems and increase profitability in its current business operations. However, the outcome of management’s
plans cannot be ascertained with any degree of certainty. The accompanying financial statements do not include any adjustments
that might result from the outcome of these risks and uncertainties.
NOTE 10 -
UNSECURED DEMAND LOAN PAYABLE
As of March 31, 2013, the Company
had unsecured demand loan payable in amount of $250,000, which was borrowed from an unrelated party during the year ended June
30, 2012.There is no written agreement between the Company and the party. The loan is unsecured, interest free and repayable currently.
The effects of imputed interest are immaterial to the financial statements taken as a whole.
NOTE 11-
LOANS PAYABLE-RELATED PARTY
The Company has signed various
promissory notes with the Company's
related parties. The loans are unsecured, interest free and payable on demand. The total amount outstanding of these loans
is
$53,055 as of March 31, 2013. The effects of imputed interest are immaterial to the financial statements taken as a whole.
NOTE 12
SEGMENT REPORTING
The Company follows paragraph
280 of the FASB Accounting Standards Codification for disclosures about segment reporting. This Statement requires companies to
report information about operating segments in interim and annual financial statements. It also requires segment disclosures about
products and services, geographic areas, and major customers. The Company determined that it did not have any separately reportable
operating segments as of March 31,