UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark(Mark One)
[X]☒QUARTERLY REPORT
UNDERPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the
quarterly period ended September 30, 2016Quarterly Period Ended March 31, 2020OR
[ ]☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission
file numberFile No.000-55670LARK STREET ACQUISITION CORPORATION (ExactMonetiva Inc.
(Exact name of
registrantsmall business issuer as specified in its charter)Delaware 81-3495101 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9545 Wilshire Boulevard, #612 Beverly Hills,
| DELAWARE | 81-3495101 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
5000 Birch Street, West Tower, Suite 3000
Newport Beach, CA 90212
(Address92660
(Address of principal executive offices) (zip code)
310-888-1870
(Registrant's
(949) 260-2085
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X☒ No☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes ☒ No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large“large accelerated filer,"
"accelerated filer"” “accelerated filer,” “smaller reporting company,” and "smaller reporting company"“emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ | ||
If an emerging growth company, X
(doindicate by check mark if the registrant has elected not check if a smaller reporting company)
to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes X☒ No Indicate the number of shares outstanding of each☐
Securities registered pursuant to Section 12(b) of the issuer's
classes of stock, as of the latest practicable date.
Class Outstanding at
November 11, 2016
Common Stock, par value $0.0001 20,000,000
Documents incorporated by reference: None
__________________________________________________________________________
FINANCIAL STATEMENTS
Balance Sheet as of September 30, 2016 (unaudited) 2
Statement of Operations for the period from July 22,
2016 (Inception) to September 30, 2016 (unaudited) 3
Statement of Cash Flows for the period from July 22,
2016 (Inception) to September 30, 2016 (unaudited) 4
Notes to Financial Statements (unaudited) 5-8
______________________________________________________________________
LARK STREET ACQUISITION CORPORATION
BALANCE SHEET
Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, $0.0001 par value |
The number of shares of Common Stock, $0.0001 par value, of the registrant outstanding at May 7, 2020 was 26,944,598.
TABLE OF CONTENTS
i
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Form 10-Q”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “desire,” “goal,” “should,” “objective,” “seek,” “plan,” “strive” or “anticipate,” as well as variations of such words or similar expressions, or the negatives of these words. These forward-looking statements present our estimates and assumptions only as of the date of this Form 10-Q. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. We caution readers not to place undue reliance on any such forward-looking statements.
2
______________________________________________________________________
LARK STREET ACQUISITION CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
For the period from
July 22, 2016 (Inception)
to September 30, 2016
-------------------
Revenue $ -
Cost of revenues -
-----------------
Gross profit -
-----------------
Operating expenses 3,562
-----------------
Operating loss (3,562)
-----------------
Loss before income taxes (3,562)
Income tax expense -
----------------
Net loss $ (3,562)
=================
Loss per share - basic and diluted $ (0.00)
=================
Weighted average shares - 20,000,000
basic and diluted =================
The accompanying notes are an integral part of these unauditedOur future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.
3
______________________________________________________________________
LARK STREET ACQUISITION CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the period
from July 22,
2016 (Inception) to
September 30, 2016
-----------------
OPERATING ACTIVITIES
Net loss $ (3,562)
Non-cash adjustments to reconcile net loss to net cash:
Expenses paid for by stockholder and contributed
as capital 312
Common stock issued for service 2,000
Changes in Operating Assets and Liabilities:
Accrued liability 1,250
----------------
Net cash provided by (used in) operating activities -
----------------
Net increase in cash -
Cash, beginning of period -
----------------
Cash, end of period $ -
===============
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Income tax $ -
===============
Interest $ -
===============
The accompanying notes are an integral part of these unaudited
financial statements.
4
______________________________________________________________________
LARK STREET ACQUISITION CORPORATION
Notes to Unaudited CondensedShould one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes will likely vary materially from those indicated.
ii
Item 1. Financial Statements
Statements.
CONDENSED BALANCE SHEETS
| March 31, 2020 | December 31, 2019 | |||||||
| (UNAUDITED) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 285,692 | $ | 253,100 | ||||
| Prepaid expenses | 1,127,780 | 1,017,280 | ||||||
| Rent deposits | 25,000 | 25,000 | ||||||
| Total Current Assets | 1,438,472 | 1,295,380 | ||||||
| Total Assets | $ | 1,438,472 | $ | 1,295,380 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accrued liabilities | $ | 93,416 | $ | 77,474 | ||||
| Accrued payroll - officer | 351,255 | 291,360 | ||||||
| Total Current Liabilities | 444,671 | 368,834 | ||||||
| Total Liabilities | 444,671 | 368,834 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $0.0001 par value, 20,000,000 shares authorized; none issued and outstanding at March 31, 2020 and December 31, 2019, respectively | - | - | ||||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized; 26,644,598 shares and 26,611,264 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 2,664 | 2,661 | ||||||
| Additional paid-in capital | 2,495,899 | 2,425,902 | ||||||
| Stock subscriptions received in advance | 200,000 | - | ||||||
| Stock subscriptions receivable | (130,000 | ) | (130,000 | ) | ||||
| Accumulated deficit | (1,574,762 | ) | (1,372,017 | ) | ||||
| Total Stockholders’ Equity | 993,801 | 926,546 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 1,438,472 | $ | 1,295,380 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended | ||||||||
| March 31, 2020 | March 31, 2019 | |||||||
| (UNAUDITED) | (UNAUDITED) | |||||||
| Revenue | $ | - | $ | - | ||||
| Cost of Revenue | - | - | ||||||
| Gross Profit | - | - | ||||||
| Operating Expenses | ||||||||
| General and administrative | 202,745 | 138,693 | ||||||
| Total Operating Expenses | (202,745 | ) | (138,693 | ) | ||||
| Other Income | ||||||||
| Rental income | - | 12,385 | ||||||
| Total Other Income | - | 12,385 | ||||||
| Loss before Income Taxes | (202,745 | ) | (126,308 | ) | ||||
| Provision for Income Tax | - | - | ||||||
| Net Loss | $ | (202,745 | ) | $ | (126,308 | ) | ||
| Loss per Share - Basic and Diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Weighted Average Shares Outstanding - Basic and Diluted | 26,615,293 | 20,361,289 | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
(UNAUDITED)
| Common Stock | Additional Paid-in | Stock Subscriptions Received in | Subscriptions | Accumulated | Total Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Capital | Advance | Receivable | Deficit | Equity | ||||||||||||||||||||||
| Balance - January 1, 2020 | 26,611,264 | $ | 2,661 | $ | 2,425,902 | $ | - | $ | (130,000 | ) | $ | (1,372,017 | ) | $ | 926,546 | |||||||||||||
| Common stock issued for stock subscriptions | 33,334 | 3 | 69,997 | - | - | - | 70,000 | |||||||||||||||||||||
| Stock subscriptions received in advance | - | - | - | 200,000 | - | - | 200,000 | |||||||||||||||||||||
| Net loss | - | - | - | - | (202,745 | ) | (202,745 | ) | ||||||||||||||||||||
| Balance - March 31, 2020 | 26,644,598 | $ | 2,664 | $ | 2,495,899 | $ | 200,000 | $ | (130,000 | ) | $ | (1,574,762 | ) | $ | 993,801 | |||||||||||||
| Common Stock | Additional Paid-in | Stock Subscriptions Received in | Subscriptions | Accumulated | Total Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Capital | Advance | Receivable | Deficit | Equity | ||||||||||||||||||||||
| Balance - January 1, 2019 | 8,000,000 | $ | 800 | $ | 4,312 | $ | 690,500 | $ | - | $ | (589,186 | ) | $ | 106,426 | ||||||||||||||
| Common stock issued as compensation to officer | 12,000,000 | 1,200 | - | - | - | - | 1,200 | |||||||||||||||||||||
| Common stock issued for stock subscriptions | 1,666,000 | 167 | 550,333 | (690,500 | ) | - | - | (140,000 | ) | |||||||||||||||||||
| Stock subscriptions received in advance | - | - | - | 360,002 | - | - | 360,002 | |||||||||||||||||||||
| Stock subscriptions receivable | 1,000,000 | 100 | 499,900 | - | (200,000 | ) | - | 300,000 | ||||||||||||||||||||
| Net loss | - | - | - | - | (126,308 | ) | (126,308 | ) | ||||||||||||||||||||
| Balance - March 31, 2019 | 22,666,000 | $ | 2,267 | $ | 1,054,545 | $ | 360,002 | $ | (200,000 | ) | $ | (715,494 | ) | $ | 501,320 | |||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
CONDENSED STATEMENTS OF CASH FLOWS
| For the Three Months Ended | ||||||||
| March 31, 2020 | March 31, 2019 | |||||||
| (UNAUDITED) | (UNAUDITED) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (202,745 | ) | $ | (126,308 | ) | ||
| Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||
| Common stock issued for services | - | 1,200 | ||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| (Increase) in prepaid expense | (110,500 | ) | (123,800 | ) | ||||
| (Increase) in other current assets | - | (6,385 | ) | |||||
| Increase in accrued liabilities | 15,942 | - | ||||||
| Increase in accrued payroll of officer | 59,895 | 53,250 | ||||||
| (Decrease) in deferred rent | - | (1,638 | ) | |||||
| Net Cash Used in Operating Activities | (237,408 | ) | (203,681 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Cash payments on loan payable | - | (55,000 | ) | |||||
| Cash payment to officer for short term advances | - | (400 | ) | |||||
| Cash proceeds from sale of common stock | 70,000 | - | ||||||
| Cash proceeds from common stock subscriptions received in advance | 200,000 | 360,002 | ||||||
| Cash proceeds from common stock subscriptions receivable | - | 160,000 | ||||||
| Net Cash Provided by Financing Activities | 270,000 | 464,602 | ||||||
| Net Increase in Cash | 32,592 | 260,921 | ||||||
| Cash - Beginning of the Period | 253,100 | 10,039 | ||||||
| Cash - End of the Period | $ | 285,692 | $ | 270,960 | ||||
| Supplemental Disclosures of Cash Flows | ||||||||
| Cash paid for Interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Supplemental Disclosures of Non-Cash Investing and Financing Activities | ||||||||
| Common stock subscriptions receivable | $ | - | $ | 360,000 | ||||
| Common stock issued for stock subscriptions received in advance | $ | - | $ | 690,500 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(UNAUDITED)
NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONSGOING CONCERN
Monetiva Inc. (formerly known as American Standard Wallet, Inc. and Lark Street Acquisition Corporation, (the "Company"or “Monetiva” or the “Company”), a Delaware corporation, was incorporated on July 22, 2016 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company has been in the developmental stage since inception and its operations to date have been limited to issuing shares to its original shareholders. shareholders and investors.
As of May 7, 2020, the Company has a total of 26,944,598 shares of common stock of the Company issued and outstanding. Of all shares issued and outstanding, a total of 20,000,000 common shares have been issued to the Company’s Board of Director and Founder of the Company, representing approximately 74.23% of the total shares issued and outstanding as of the date of this Report.
Basis of Presentation
The accompanying interim condensed financial statements are unaudited, but in the opinion of management of the Company, contain all adjustments, which include normal recurring adjustments necessary to present fairly the financial position at March 31, 2020, and the results of operations and cash flows for the three months ended March 31, 2020. The balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements.
Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), although management of the Company believes that the disclosures contained in these interim condensed financial statements are adequate to make the information presented therein not misleading. For further information, refer to the financial statements and the notes thereto contained in the Company’s 2019 Annual Report filed with the Securities and Exchange Commission on Form 10-K on March 25, 2020.
Going Concern
The Company will
attemptdemonstrates adverse conditions that raise substantial doubt about the Company’s ability to locate and negotiate withcontinue as a business entity for the combination
of that target company with Lark Street. The combination will normally take
the form of a merger, stock-for-stock exchange or stock-for-assets exchange.
In most instances the target company will wish to structure the business
combination to be within the definition of a tax-free reorganization under
Section 351 or Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that the Company will be successful
in locating or negotiating with any target company.going concern. The Company has been
formednot yet generated any revenue and has suffered operating losses since July 22, 2016 (Inception Date) to providedate and allow it to continue as a methodgoing concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $202,745 for the three months ended March 31, 2020, used net cash flows in operating activities of $237,408, and has an accumulated deficit of $1,574,762 as of March 31, 2020. These factors, among others raise a foreign or domestic private companysubstantial doubt regarding the Company’s ability to becomecontinue as a reporting company withgoing concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a class of securities registered under the
Securities Exchange Act of 1934.
BASISgoing concern.
NOTE 2 – SUMMARY OF PRESENTATION
SIGNIFICANT ACCOUNTING POLICIES
The following summary of significant accounting policies presented belowof the Company is designedpresented to assist in the understanding of the Company's unaudited condensedCompany’s financial statements. Such unaudited condensed financial statements and accompanying
notes are the representations of the Company's management, who are responsible
for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America
("GAAP")GAAP in all material respects and have been consistently applied in preparing the accompanying unaudited condensed financial statements.
Certain information and footnote disclosures normally present in annual
financial statements prepared in accordance with accounting principles
generally accepted in the United States
Use of America ("U.S. GAAP") were
omitted pursuant to such rules and regulations. The results for the
period from July 22, 2016 (Inception) to September 30, 2016, are not
necessarily indicative of the results to be expected for the year ending
December 31, 2016.
USE OF ESTIMATES
Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts payable, accrued liabilities and payable to related party. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company reported a cash balance of $285,692 and $253,100 as of March 31, 2020 and December 31, 2019, respectively.
Earnings (Loss) Per Common Share
The Company computes net earnings (loss) per share in accordance with Accounting Standards Codification (“ASC”) - ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted net earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At March 31, 2020 and December 31, 2019, there were no convertible notes, options or warrants available for conversion that if exercised, may dilute future earnings per share.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures”,requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, rent deposits and accrued liabilities. The Company believes that the recorded values of all the financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying condensed balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
Leases
The Company has operating leases for its offices. Management determines if an arrangement is a lease at inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company consider it to be, or contain, a lease. The Company records a right-of-use asset and a corresponding lease liability based on the present value of the minimum lease payments. The lease term used in the calculation of right-of-use assets and lease liabilities include renewal and termination options that are reasonably certain to be exercised. Leases with an initial term of twelve months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Our leases do not provide an implicit borrowing rate, and we estimate the Company’s incremental borrowing rate to discount the lease payments based on information available at lease commencement.
Concentration of Credit Risk
The Company maintains its cash in bank and financial institution deposits with balance in excess of federally insured limits of $250,000 insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts. The amount exceeding FDIC insured limits was $35,692 and $3,100 at March 31, 2020 and December 31, 2019, respectively.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.
NOTE 3 – PREPAID EXPENSES
The Company has made prepayments to Endless One Global (“E1G”) with regard to E1G’s service in providing data processing, transaction processing and related services for the prepaid debit accounts created for the Company’s customers. As of March 31, 2020 and December 31, 2019, the prepayments to E1G were $1,104,780 and 959,780, (See NOTE 7 - Service Agreement) and prepaid rent was $23,000 and $57,500, respectively. The Company expects to obtain BINs from the banks by September 30, 2020 and start its business operations within 30 to 45 days thereafter.
NOTE 4 – ACCRUED LIABILITIES
The Company recorded accrued liabilities primarily consisting of consulting and professional fees, payroll and franchise taxes of $93,416 and $77,474 as of March 31, 2020 and December 31, 2019, respectively.
NOTE 5 – ACCRUED PAYROLL - OFFICER
The Company has recorded accrued payroll to its Chief Executive Officer (“Officer”) of $351,255 and $291,360 as of March 31, 2020 and December 31, 2019, respectively.The Company has recorded Officer’s compensation expense of $59,895 and $54,450 for the three months ended March 31, 2020 and 2019, respectively (See NOTE 7).
NOTE 6 – LEASES
The Company adopted the new standard on January 1, 2019 using the modified retrospective approach. The Company has elected to apply the transition method that allows companies to continue applying the guidance under the lease standard in effect at that time in the comparative periods presented in the condensed financial statements and recognize a cumulative-effect adjustment to the opening balance of retained earnings on the date of adoption. The Company also elected the “package of practical expedients”, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.
Results for reporting periods beginning after January 1, 2019 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Upon adoption of the new lease standard, on January 1, 2019, the Company capitalized right-of-use (“ROU”) assets of $124,524 and $132,485 of lease liabilities, within the Company’s condensed balance sheets upon adoption. Additionally, the Company reversed its deferred rent liability of $7,960, which upon adoption became a component of the right-of-use asset. The adoption of this standard did not have an impact on the Company’s condensed statement of operations or cash flows and did not result in a cumulative catch-up adjustment to the opening balance of retained earnings.
On February 9, 2018, the Company executed a non-cancellable operating lease for its principal office with the lease commencing March 1, 2018 for a period of 21 months maturing on November 30, 2019. The Company paid a security deposit of $25,136. The base rent of the lease was $12,202 for the first twelve months, increasing to $12,568 from the month thirteen to month twenty-one. The lease had a provision for rent abatement for the monthly rent of April 2018. The lease terminated on November 30, 2019. The Company has recorded rent expense of $35,333 for the three months ended March 31, 2019.
On May 24, 2019, the Company executed a month-to-month rental agreement to lease furnished premises. The lease term commenced June 1, 2019 for a one-year term with a monthly rent of $11,500 per month and terminates on May 31, 2020. The landlord required a security deposit of $15,000 on the commencement date of the lease, and an additional $10,000 security deposit on November 1, 2019. On May 30, 2019, the Company paid to the landlord security deposit of $15,000 and prepaid the rent of $69,000 for the six months ended November 30, 2019. On October 1, 2019, pursuant to the terms of the lease agreement, the Company paid to the landlord an additional security deposit of $10,000 and prepaid rent of $69,000 for the six months term starting December 1, 2019 to May 31, 2020. The Company recorded a rent expense of $34,500 for the three months ended March 31, 2020. In addition, the Company recorded a rent deposit of $25,000 as of March 31, 2020 and December 31, 2019, and prepaid rent of $23,000 and $57,500 as of March 31, 2020 and December 31, 2019, respectively.
The Company executed a month-to-month cancellable operating lease, leasing office space in an executive suite, commencing on January 1, 2019 for $169 per month. The monthly rent increased to $203 effective October 1, 2019. The Company recorded rent expense of $609 and $507 for the three months ended March 31, 2020 and 2019, respectively.
The Company has recorded total rent expense of $35,109 and $35,840 for the three months ended March 31, 2020 and 2019, respectively.
8
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Employment Agreement with Officer
On November 1, 2017, the Company entered into an employment agreement with its Officer for a one-year term, which shall be automatically renewed for successive one-year periods unless either party gives ninety (90) calendar days written notice of nonrenewal prior to the expiration of the then-current term. The Company granted 12,000,000 shares of its common stock to the Officer as a sign-on bonus valued at $1,200, and agreed to pay an annual base salary of $180,000 provided that the Officer’s base salary may be reduced to the extent that Officer elects to defer any portion thereof under the terms of any deferred compensation or savings plan maintained by the Company. In addition to the eligibility for consideration of merit-based increases in the discretion of the Board of Directors, Officer’s base salary will be increased effective January 1, of each year during the term commencing January 1, 2018 by ten percent (10%) (See NOTE 5).
Service Agreement
On January 15, 2018, the Company entered into an agreement with E1G whereby, E1G agreed to provide data processing, transaction processing and related services for the prepaid debit accounts created for the customers of the Company, for a period of five years, with a one-time upfront fee of $250,000 for each of the three (3) countries of USA, Mexico and India, for a total fee of $750,000 to initiate the process to establish three (3) Business Identification Numbers (“BINs”). Thereafter, the term will automatically be renewed for one (1) year period unless terminated by either party upon providing a written notice.
On or about September 30, 2019, the Company entered into an oral agreement with E1G to provide data processing, transaction processing and related services for the prepaid debit accounts created for the Company’s customers in four additional countries China, Pakistan, Philippines and United Arab Emirates. All other terms and conditions to remain the same as per the January 15, 2018 agreement with E1G. The Company will pay E1G the processing fees as forth in the Agreement, any special fees, new products and technologies introduced by E1G (See NOTE 3).
Legal Costs and Contingencies
In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received.
If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable. The Company was not aware of any loss contingencies as of March 31, 2020 and December 31, 2019, respectively.
NOTE 8 – STOCKHOLDERS’ EQUITY
The Company’s capitalization at March 31, 2020 was 100,000,000 authorized common shares with a par value of $0.0001 per share, and 20,000,000 authorized preferred shares with a par value of $0.0001 per share.
Common Stock
On January 5, 2020, an investor executed a stock subscription agreement to purchase 10,000 shares of the Company’s common stock at $2.00 per share. The investor paid $20,000 to the Company in three installments between January 21, 2020 and February 20, 2020. The Company issued 10,000 shares of its common stock to the investor on March 20, 2020.
On January 20, 2020, an investor executed a stock subscription agreement to purchase 3,334 shares of the Company’s common stock at $3.00 per share. The investor paid $10,000 to the Company on February 18, 2020. The Company issued 3,334 shares of its common stock to the investor on March 20, 2020.
On February 20, 2020, an investor executed a stock subscription agreement to purchase 20,000 shares of the Company’s common stock at $2.00 per share. The investor paid $40,000 to the Company on February 20, 2020. The Company issued the 20,000 shares of its common stock to the investor on March 20, 2020.
On March 18, 2020, an investor executed a stock subscription agreement to purchase 200,000 shares of the Company’s common stock at $1.00 per share. The Company received the cash consideration of $200,000 from the investor on March 18, 2020. The Company did not issue the shares of its common stock as of March 31, 2020, and has recorded the $200,000 received, as stock subscriptions received in advance as of March 31, 2020.
As a result of all common stock issuances, the total issued and outstanding shares of common stock were 26,644,598 shares and 26,611,264 shares at March 31, 2020 and December 31, 2019, respectively.
Preferred stock
No preferred stock was issued and outstanding as of March 31, 2020 and December 31, 2019, respectively.
NOTE 9 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of this Form 10-Q, the date the financial statements were available to be issued, noting the following items would impact the accounting for events or transactions in the current period or require additional disclosure.
Equity Transactions
On April 17, 2020, the Company issued 200,000 shares of its common stock to an investor who subscribed to purchase these shares on March 18, 2020 and paid $200,000 to the Company on March 18, 2020.
On March 31, 2020, an investor executed a stock subscription agreement to purchase 100,000 shares of the Company’s common stock at $1.00 per share. The Company received cash consideration of $100,000 from the investor on April 2, 2020 and has issued the 100,000 shares of its common stock to the investor on April 17, 2020.
As a result of the offerings, a total of 26,944,598 shares of the Company’s common stock have been issued and outstanding as of the date of filing of this Form 10-Q.
Service Agreement with E1G
The Company has paid to E1G $20,000 as the processing fees to initiate and establish BINs for the Company since April 1, 2020 through the date of the filing of this quarterly statement.
Item 2. Management’s Discussion and Analysis or Plan of Operation
This Quarterly Report Form 10-Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.
We are a development stage enterprise and are incorporated in the State of Delaware in July 2016. As of the date of inception, to the date of this quarterly report, we did not generate any revenue and incurred expenses and operating losses, as part of our development stage activities. We have experienced a net loss of $202,745 for the three months ended March 31, 2020, net cash used in operating activities of $237,408, and have recorded an accumulated deficit of $1,574,762 at March 31, 2020.
We anticipate that we will need substantial working capital over the next 12 months to continue as a going concern and to expand our operations to distribute, sell and market products and solutions. Our independent auditors have expressed substantial doubt as to the ability of the Company to continue as a going concern. Unless we are able to generate sufficient cash flows from operations and/or obtain additional financing, there is a substantial doubt as to the ability of the Company to continue as a going concern. We intend to make an equity offering of our common stock for the acquisition and operation expenses. If we cannot raise the required cash, we will issue additional shares of our common stock in lieu of cash.
Our Current Business
Monetiva’s primary objective is to offer prepaid card and money remittance services to under-banked, underserved markets and foreign workers. We are supported by an experienced management team with extensive background and qualifications in our core business, including prepaid card issuance, program management, third party processing technology and banking regulatory and compliance. We are a startup Company in the developmental phase of the business cycle. We are building out a card and technology platform and remittance network, and are currently engaged with business partners in the United States and globally.
We intend to utilize Endless One Global (“E1G”) prepaid card services to provide prepaid cards to under-banked consumers, primarily targeting foreign workers. The primary services to be offered are centered on the issuance of MasterCard credit and debit cards to qualified consumers in the United States of America (“USA”). Business rollout is intended to be implemented in phases. Phase I of development included targeting and establishing relationships with partner companies in both USA, Mexico and India. Business relationships shall be secured to implement domestically issued prepaid cards and financial services in each of those markets. Our aim by this development phase is to enable a low cost, efficient solution to both the US accountholders and their respective family and friends in partner countries. Our accounts are designed to enable foreign workers to have their payroll deposited directly onto the MasterCard issued by us. Card recipients will then be able to pay bills, send money abroad and utilize the MasterCard to access Automated Teller Machines (“ATMs”) and make purchases at retail merchants. Services will also be provided to enable card loading of funds through retail merchant locations. We also intend to implement value added programs such as loyalty discounts that shall be provided as part of the card benefits.
After successful rollout of Phase I development programs, the Company intends to expand to additional countries and territories as part of its Phase II development plan. The Company shall provide the same services to these new territories. Phase II territories will include Europe, Philippines, United Arab Emirates, Pakistan and China.
Our Strategy
To successfully grow and expand our business, we intend to deploy the following primary marketing strategies:
| ● | Target those foreign market Immigrants in the US by metro area; |
| ● | Establish Ambassadors in high density metro areas – Sales & Marketing Representatives; |
| ● | Setup Internet Infrastructure to enable family\friend Issuance in each market, utilizing digital marketing to drive traffic to the Company’s domain; |
| ● | Utilize retail distribution partners; |
| ● | Utilize accountholder incentives to create a viral referral base to bring in new accountholders; and |
| ● | Add new products and services to existing accountholders to generate increased usage per accountholder; |
Once the Company has deployed these primary strategies in USA, cross marketing to the other countries will be implemented using the same strategy (e.g. USA to Philippines and Canada to Mexico).
Metro Area Marketing
The Company has identified several primary metropolitan areas and sub-market areas to focus its US-based marketing into the foreign worker concentrated markets. These areas include Los Angeles, San Francisco, San Diego, Houston, Dallas, New York, Chicago, Washington DC, Atlanta, Miami and the surrounding area sub-markets. The Company intends to secure representatives in each of these markets to setup distribution points with foreign market centric services including organizations related to religion, healthcare, community, and employment. The representatives will include direct employees and bank approved independent agents. Deeper expansion into other metropolitan markets will be evaluated and prioritized once the Company has met its initial primary business objectives.
Internet Access and Marketing
The Monetiva website will be developed to easily enable accountholder registration in the US and provide access to registration in each of the home markets through Monetiva’s issuing partners. This will allow effective communications to the consumers in each market while utilizing the Know Your Customer (“KYC”) verification and compliance process that has already been established through the existing systems.
Social Media and Digital Marketing will be used to target consumers. We also intend to affiliate with websites and brands that focus on the same consumer markets.
Retail Distribution Partners
We are in discussions with several retail chains to offer the Monetiva Card through their retail distribution network. The cards will be available for immediate activation and loading from the local stores. Once KYC is provided and verified, the cards will be converted from non-reloadable to reloadable and available for personalization if requested. Inventory control will be established with each retail partner.
Accountholder Incentives
The foreign worker communities generally provide a cohesive network that enables incentive programs for one accountholder to refer friends or family. We intend to provide the referring accountholder with valued incentives to bring others into the Monetiva program.
Value-added Services
We have developed a number of value-added services to increase the value of the service offering to accountholders including retail discounts, healthcare discounts, usage points, long distance telephone, bill-paying, etc. These services are intended to drive more transaction activity and new accountholder traffic.
Global Remittance Market
We are focused on select remittance corridors to enable Monetiva to specialize in the scope, value and quality of services. According to the migrationdataportal.org the volume of remittances from the USA to the target markets in 2019 was projected to be as follows:
| Receiving Country | USD in billions | |||
| Mexico | $ | 38.7 | ||
| India | $ | 82.2 | ||
| China | $ | 70.3 | ||
| Philippines | $ | 35.1 | ||
https://migrationdataportal.org/themes/remittances
Results of Operations
Our results of operations for the three months ended March 31, 2020 and 2019 included the operations of the Company. We reported a net loss of $202,745 and $126,308 applicable to the Company’s common stockholders for the three months ended March 31, 2020 and 2019, respectively. The increase in loss in 2020 resulted primarily due to the increase in officer’s compensation expense, professional and consulting expenses, and other general and administrative expenses.
Liquidity and Capital Resources
Our cash balance at March 31, 2020 was $285,692 as compared to $253,100 at December 31, 2019. As shown in the accompanying condensed financial statements, we recorded a net loss of $202,745 for the three months ended March 31, 2020. Our accumulated deficit at March 31, 2020 was $1,574,762 and net cash used in operating activities for the three months ended March 31, 2020 was $237,408. These factors and our ability to raise additional capital to accomplish our objectives, raises doubt about our ability to continue as a going concern. We expect our expenses will continue to increase during the foreseeable future as a result of increased operational expenses and the development of our current business operations. We anticipate generating only minimal revenues over the next twelve months. Consequently, we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.
From February 2, 2018 through May 6, 2020, we were engaged in private exempt offerings in reliance on Regulation D, Rule 506, whereby we raised a total amount of $2,662,252, which was immediately made available to us to cover our operating expenses and other development costs. We presently do not have any significant credit available, bank financing or other external sources of liquidity. Due to our operating losses, our operations have not been a source of liquidity. We will need to acquire other profitable entities or obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing shareholders. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing.
No assurance can be given that sources of financing will be available to us and/or that demand for our equity/debt instruments will be sufficient to meet our capital needs, or that financing will be available on terms favorable to us. If funding is insufficient at any time in the future, we may not be able to take advantage of business opportunities or respond to competitive pressures or may be required to reduce the scope of our planned service development and marketing efforts, any of which could have a negative impact on our business and operating results. In addition, insufficient funding may have a material adverse effect on our financial condition, which could require us to:
| ● | Curtail our operations significantly, or |
| ● | Seek arrangements with strategic partners or other parties that may require us to relinquish significant rights to technology platform and correlated services, or |
| ● | Explore other strategic alternatives including a merger or sale of our Company. |
Operating Activities
Net cash used in operating activities for the three months ended March 31, 2020 was $237,408 which resulted primarily from our net loss of $202,745, and net change in operating assets and liabilities of $34,663, attributable to increase in prepaid expenses of $110,500 due to prepaid deposits towards BIN, increase in accrued liabilities of $15,942, and increase in accrued payroll of officer of $59,895. Net cash used in operating activities for the three months ended March 31, 2019 was $203,681 which resulted primarily from our net loss of $126,308, and net change in operating assets and liabilities of $78,573, attributable to increase in prepaid expenses of $123,800 due to prepaid deposits towards BIN, increase in rent receivable of $6,385, increase in accrued liabilities of $53,250, and decrease in deferred rent of $1,638.
Investing Activities
Net cash provided by investing activities for the three months ended March 31, 2020 and 2019, was $0.
Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2020 was $270,000 primarily due to cash received from sale of common stock of $70,000 and cash proceeds of $200,000 received in advance from stock subscriptions. Net cash provided by financing activities for the three months ended March 31, 2019 was $464,602 primarily due to $360,002 of cash proceeds received in advance from stock subscriptions, $160,000 of cash proceeds from issuance of common stock, cash payments of $400 paid to the Officer, and cash payment of $55,000 for short term loans.
As a result of the above activities, we experienced a net increase in cash of $32,592 for the three months ended March 31, 2020. Our ability to continue as a going concern is still dependent on our success in obtaining additional financing from investors or from sale of our common shares.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with USGAAP. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. ActualWe have identified the following accounting policies that we believe require application of management’s most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results could differ from those estimates.
CASH
Cashthese estimates and cash equivalents include cashsuch differences could be material.
While our significant accounting policies are described in more details in Note 2 of our annual financial statements included in our 2019 Annual Report filed with the SEC on handMarch 25, 2020, we believe the following accounting policies to be critical to the judgments and on deposit at banking
institutionsestimates used in the preparation of our financial statements.
JOBS Act Accounting Election
We are an “emerging growth company,” as well as all highly liquid short-term investments with
original maturities of 90 daysdefined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or less. The Company did not have cash
equivalents as of September 30, 2016.
CONCENTRATION OF RISK
Financial instruments that potentially subjectrevised accounting standards issued subsequent to the Company to concentrations
of credit risk consist principally of cash. The Company places its cash with
high quality banking institutions. The Company did not have cash balances
in excessenactment of the Federal Deposit Insurance Corporation limitJOBS Act until such time as of September
30, 2016.
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LARK STREET ACQUISITION CORPORATION
Notes to Unaudited Condensed Financial Statements
INCOME TAXES
Under ASC 740, "Income Taxes," deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected tothose standards apply to taxable income in the years in which those temporary differences are
expectedprivate companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be recovered or settled. Valuation allowances are established
when it is more likely than not that some or all of the deferred tax
assets will not be realized. As of Sesptember 30, 2016 there were no deferred
taxes duesubject to the uncertainty of the realization of net operating losssame new or carry forward prior to expiration.
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by dividing
net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflect the potential
dilution that could occur if securities orrevised accounting standards as other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the loss of the entity. As
of September 30, 2016, there are no outstanding dilutive securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows guidance for accounting for fair value measurements
of financial assets and financial liabilities and for fair value
measurements of nonfinancial itemspublic companies that are recognized or disclosed atnot emerging growth companies.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “FairValue Measurements and Disclosures”,requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value in the unaudited condensed financial statements on a recurring
basis. Additionally, the Company adopted guidance for fair value
measurement related to nonfinancial items that are recognized and
disclosed at fair value in the unaudited condensed financial statements
on a nonrecurring basis. The guidancevalue. ASC 820 establishes a fair value hierarchy that prioritizesbased on the level of independent, objective evidence surrounding the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to measurements involving
significant unobservable inputs (Level 3 measurements). The three
levels ofA financial instrument’s categorization within the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilitiesis based upon the lowest level of input that is significant to the fair value measurement.
Development Stage and Capital Resources
The Company has devoted substantially all of its efforts to business planning since its inception on July 22, 2016. Accordingly, the Company has the abilityis considered to access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The carrying amounts of financial assets such as cash approximate their fair
values because of the short maturity of these instruments.
RECENT ACCOUNTING PRONOUNCEMENTS
On November 20, 2015, FASB issued ASU-2015-17-Income Taxes. The
Board is issuing this Update as part of its initiative to reduce complexity
in accounting standards (the Simplification Initiative). The objective of
the Simplification Initiative is to identify, evaluate, and improve areas
of generally accepted accounting principles (GAAP) for which cost and
complexity can be reduced while maintaining or improving the usefulness
of the information provided to users of financial statements. Current
GAAP requires an entity to separate deferred income tax liabilities and
assets into current and noncurrent amounts in a classified statement of
financial position. To simplify the presentation of deferred income taxes,
the amendments in this Update require that deferred tax liabilities and
assets be classified as noncurrent in a classified statement of financial
position. The amendments in this Update apply to all entities that present
a classified statement of financial position. The current requirement that
deferred tax liabilities and assets of a tax-paying component of an entity
be offset and presented as a single amount is not affected by the amendments
in this Update. For public business entities, the amendments in this Update
are effective for financial statements issued for annual periods beginning
after December 15, 2016, and interim periods within those annual periods.
Earlier application is permitted for all entities as of the beginning of an
interim or annual reporting period. The Company is still in the process of
evaluating future impact of adopting this standard.
On June 12, 2015, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update (ASU) No. 2015-10-Technical Corrections and
Improvements. The amendments in this Update cover a wide range of Topics
in the Codification. The amendments in this Update represent changes to make
minor corrections or minor improvements to the Codification that are not
expected to have a significant effect on current accounting practice or
create a significant administrative cost to most entities. This Accounting
Standards Update is the final version of Proposed Accounting Standards Update
2014-240-Technical Corrections and Improvements, which has been deleted.
Transition guidance varies based on the amendments in this Update. The
amendments in this Update that require transition guidance are effective
for all entities for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2015. Early adoption is permitted,
including adoption in an interim period. All other amendments will be
effective upon the issuance of this Update. Management is in the process
of assessing the impact of this ASU on the Company's financial statements.
6
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LARK STREET ACQUISITION CORPORATION
Notes to Unaudited Condensed Financial Statements
On April 30, 2015, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update (ASU) No. 2015-06 Earnings Per Share (Topic 260):
Effects on Historical Earnings per Units of Master Limited Partnership Dropdown
Transactions. Under Topic 260, Earnings Per Share, master limited partnerships
(MLPs) apply the two-class method to calculate earnings per unit (EPU) because
the general partner, limited partners, and incentive distribution rights
holders each participate differently in the distribution of available cash.
When a general partner transfers (or "drops down") net assets to a master
limited partnership and that transaction is accounted for as a transaction
between entities under common control, the statements of operations of the
master limited partnership are adjusted retrospectively to reflect the
dropdown transaction as if it occurred on the earliest date during which
the entities were under common control. The amendments in this Update
specify that for purposes of calculating historical EPU under the two-class
method, the earnings (losses) of a transferred business before the date
of a dropdown transaction should be allocated entirely to the general
partner interest, and previously reported EPU of the limited partners
would not change as a result of a dropdown transaction. Qualitative
disclosures about how the rights to the earnings (losses) differ
before and after the dropdown transaction occurs also are required.
This Accounting Standards Update is the final version of Proposed
Accounting Standards Update EITF-14A Earnings Per Share Effects on
Historical Earnings per Unit of Master Limited Partnership Dropdown
Transactions (Topic 260), which has been deleted. Effective for fiscal
years beginning after December 15, 2015, and interim periods within
those fiscal years. Earlier application is permitted. The amendments
in this Update should be applied retrospectively for all financial
statements presented. Management is in the process of assessing the
impact of this ASU on the Company's financial statements.
In January 2015, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update (ASU) No. 2015-01 Income
Statement Extraordinary and Unusual Items (Subtopic 225-20):
Simplifying Income Statement Presentation by Eliminating the
Concept of Extraordinary Items. The objective of this Update
is to simplify the income statement presentation requirements in
Subtopic 225-20 by eliminating the concept of extraordinary items.
Extraordinary items are events and transactions that are
distinguished by their unusual nature and by the infrequency
of their occurrence. Eliminating the extraordinary classification
simplifies income statement presentation by altogether removing
the concept of extraordinary items from consideration. This
Accounting Standards Update is the final version of Proposed
Accounting Standards Update 2014-220 Income Statement
Extraordinary Items (Subtopic 225-20), which has been deleted.
Effective for fiscal years, and interim periods within those
fiscal years, beginning after December 15, 2015. A reporting
entity may apply the amendments prospectively. A reporting entity
also may apply the amendments retrospectively to all prior periods
presented in the financial statements. Early adoption is permitted
provided that the guidance is applied from the beginning of the
fiscal year of adoption. The effective date is the same for both
public business entities and all other entities. Management is
in the process of assessing the impact of this ASU on the Company's
financial statements.
NOTE 2 - GOING CONCERNdevelopment stage. The Company has not yet generated any revenue since inception to daterevenues from its operations, and has sustained operating loss of $3,562it will not commence generating revenues until sometime during the period from
July 22, 2016 (Inception) to September 30, 2016. The Company had a
working capital deficitfourth quarter of $1,250 and an accumulated deficit2020.
Off-Balance Sheet Arrangements
We have not engaged in any off-balance sheet arrangements as defined in Item 303(c) of $3,562the SEC’s Regulation S-B. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special-purpose entities that would have been established for the purpose of September 30, 2016. 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 membersfacilitating off-balance sheet arrangements or other sources, as may be required.
The accompanying unaudited condensed financial statementscontractually narrow or limited purposes.
Recent Accounting Pronouncements
We have been prepared
assumingimplemented all new accounting pronouncements 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
unaudited condensed financial statements do not include any adjustments to
reflect the possible future effects on the recoverabilityare in effect 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.
NOTE 3 - ACCRUED LIABILITIES
As of September 30, 2016, the Company had an accrued professional fee
of $1,250.
NOTE 4 - STOCKHOLDERS' DEFICIT
On July 22, 2016, the Company issued 20,000,000 founders common
stock to two directors and officers. The Company is authorized to issue
100,000,000 shares of common stock and 20,000,000 shares of preferred
stock. As of September 30, 2016, 20,000,000 shares of common stock and
no preferred stock were issued and outstanding.
NOTE 5 - SUBSEQUENT EVENT
Management has evaluated subsequent events through November 14, 2016,
the date which the financial statements were available to be issued.
All subsequent events requiring recognition as of September 30, 2016
have been incorporated into theseimpact our financial statements and do not believe that there are no
subsequent eventsany other new accounting pronouncements that require disclosurehave been issued that might have a material impact on our financial position or results of operations which have not been adopted.
Impact of COVID-19
During the three months ended March 31, 2020, the effects of a new coronavirus (“COVID-19”) and related actions to attempt to control its spread began to impact our business. The impact of COVID-19 on our operating results for the three months ended March 31, 2020 was limited, in accordance with FASB
ASC Topic 855, "Subsequent Events."
7
______________________________________________________________________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Lark Street Acquisition Corporation was incorporatedall material respects, due to the government mandated numerous measures, including closures of businesses, limitations on July 22, 2016 undermovements of individuals and goods, and the lawsimposition of other restrictive measures, in its efforts to mitigate the spread of COVID-19 within the country.
On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic. Governments around the world have mandated, and continue to introduce, orders to slow the transmission of the State of Delaware to engage in
any lawful corporate undertaking,virus, including but not limited to selected mergers and acquisitions. Lark StreetAcquisition Corporation
("Lark Street" orshelter-in-place orders, quarantines, significant restrictions on travel, as well as work restrictions that prohibit many employees from going to work. Uncertainty with respect to the "Company") is a blank check company and qualifies
as an "emerging growth company" as definedeconomic effects of the pandemic has introduced significant volatility in the Jumpstart Our Business
Startups Act which became lawfinancial markets.
To the extent that COVID-19 continues or worsens, governments may impose additional restrictions or additional governments may impose restrictions. The result of COVID-19 and those restrictions could result in April, 2012.
Since inception Lark Street's operationsa number of adverse impacts to date of the period covered
by this report have beenour business, including but not limited to issuing shares of common stock to its
original shareholders and filing a registration statement on Form 10 on
August 9, 2016 with the Securities and Exchange Commission pursuantadditional disruption to the Securities Exchange Act of 1934 as amendedeconomy and consumers’ willingness and ability to register its class of common
stock.
Lark Street has no operations nor doesspend, temporary or permanent closures by businesses that will consume our credit and debit cards, additional work restrictions, and supply chains being interrupted, slowed, or rendered inoperable. As a result, it currently engage in any
business activities generating revenues. Lark Street's principal
business objective is to achieve a business combination with a target
company.
A combination will normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange. In most instances the target
company will wish to structure the business combination to be within the
definition of a tax-free reorganization under Section 351 or Section 368
of the Internal Revenue Code of 1986, as amended.
No assurances can be given that Lark Street will be successful in
locating or negotiating with any target company.
As of the date of this report, the Company is in discussions for
a possible change in control of the Company. No final documents have
been effected and no change of control has occurred although the Company
anticipates that such finalization may occur in the future.
Once, and if, such change in control occurs, the Company will file a
Form 8-K. Any such change in control anticipates a prO rata redemption
of shares and resignation of the current officers and directors,
appointment of new management and issuance of shares to new shareholders.
The most likely target companies are those seeking the perceived
benefits of a reporting corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock optionschallenging to obtain and process credit and debit card transactions and supply chains to support our business needs, and individuals could become ill, quarantined, or similar
benefitsotherwise unable to key employees, increasingwork and/or travel due to health reasons or governmental restrictions. Also, governments may impose other laws, regulations or taxes which could adversely impact our business, financial condition or results of operations. Further, if our customers’ businesses or incomes are similarly affected, they might delay or reduce usage by our cardholders. The potential effects of COVID-19 also could impact us in a number of other ways including, but not limited to, reductions to our profitability, laws and regulations affecting our business, the opportunity to use securities
for acquisitions, providing liquidity for shareholdersavailability of future borrowings, the cost of borrowings, and other factors.
Business opportunities may be available in many different industriescredit risks of our cardholders and at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities
difficult and complex.counterparties. The search for a target company will not be restricted to any specific
kind of business entities, but may acquire a venture which is in its
preliminary or development stage, which is already in operation, or in
essentially any stage of its business life. It is impossible to predict
at this time the status of any business in which the Company may become
engaged, whether such business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer.
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization,
joint venture, licensing agreement or other arrangement with another
corporation or entity. On the consummation of a transaction, it is likelydemonstrates adverse conditions that the present management and shareholders of the Company will no longer
be in control of the Company. In addition, it is likely that the officer
and director of the Company will, as part of the terms of the business
combination, resign and be replaced by one or more new officers and
directors.
As of September 30, 2016 Lark Street had not generated revenues and had
no income or cash flows from operations since inception. Lark Street
had sustained net loss of $3,562 and an accumulated deficit of $3,562 for
the period from July 22, 2016 (Inception) to September 30, 2016.
The Company's independent auditors have issued a report raisingraise substantial doubt about the Company'sCompany’s ability to continue as a going concern. At present,The continuation of the Company has no operations and the continuation of Lark
Street as a going concern, in conjunction with COVID-19 impact, is dependent upon the continued financial support from its stockholders, itsshareholders, the ability of the Company to obtain necessary equity financing to continue operations, and/orand the attainment of profitable operations. Given the evolving health, economic, social, and governmental environments, the potential impact that COVID-19 could have on our business remains uncertain. If the Company is unable to successfully locate and negotiate with a business entity
for the combination of that target company with Lark Street.
Management will pay all expenses incurred by Lark Street until a
change in control is effected. There is no expectation of repayment
for such expenses.
The president of Lark Street is the president, director and
shareholder of Tiber Creek Corporation. Tiber Creek Corporation assists
companies in becoming public reporting companies and with introductionsobtain adequate capital, it could be forced to the financial community.
ITEMcease operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Information not required to be filed by Smaller reporting companies.
ITEMRisks.
Not Applicable.
Item 4. Controls and Procedures.
Disclosures
Evaluation of Disclosure Controls and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission,
the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to
Exchange Act Rules. This evaluation was done as
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the Company's principal executiveeffectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Currently, there is only one officer (whoand director of the Company, and as such is alsosolely responsible for evaluating the principal financial officer).Company’s disclosure controls and procedures. Based upon that evaluation, hethe principal executive officer believes that the Company'sCompany’s disclosure controls and procedures are not effective as of March 31, 2020 due to the following material weaknesses. We lacked the ability to have adequate segregation of duties in the financial statement preparation process. Further the Company did not maintain adequate documentation for review and supporting matters impacting financial reporting in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, processed, summarized and reported, within the time periods
specifiedprocessed timely. The principal executive officer is directly involved in the Commission's rules and forms. Disclosureday-to-day operations of the Company.
Plan for Remediation of Material Weaknesses
Since these entity level controls have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. We believe that, since the date that we were made aware of our material weakness, we are continuing to improve our internal control over financial reporting by taking certain corrective steps that we believe minimize the likelihood of a recurrence. We have designed a disclosure controls and procedures include, without limitation, controlsregime pursuant to which our management has, among other things:
(a) identified the definition, objectives, application and procedures designed
to ensure that information required to be disclosed by an issuer inscope of our internal control over financial reporting;
(b) delineated the reports that it files or submits under the Act is accumulated and
communicated to the issuer's management, including its principal executive
and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
This Quarterly Report does not include an attestation reportduties of each member of the Company's registered public accounting firm regardinggroup responsible for maintaining the adequacy of our internal control over financial reporting. Management's reportThis group consists of:
(i) our Chief Executive Officer; and
(ii) an independent consultant who was notengaged to prepare and assure compliance with both our internal control over financial reporting as well as our disclosure controls and procedures and review our disclosure controls and procedures on a regular basis, subject to attestationour management’s supervision.
We continue to work with our structure in which we have an independent consultant, in order to continue implementation of required key controls, the necessary steps required for procedures to ensure the appropriate communication and review of inputs necessary for the financial statement closing process, as well as for the appropriate presentation of disclosures within the financial statements. The remediation steps taken are subject to the Chief Executive Officer’s oversight. While management believes there have been significant improvements of internal controls over financial reporting during the quarter ended March 31, 2020, management anticipates that further continuing efforts will be needed to effectively remediate the material deficiencies relating to segregation of duties and maintaining adequate supporting documentation to substantiate the information reported in the financial statements which existed as of March 31, 2020, and to assure that complex transactions are properly recorded as the business continues to grow. Our management has been actively engaged in planning for, designing and implementing the corrective steps described above to enhance the effectiveness of our disclosure controls and procedures as well as our internal control over financial reporting. Our management is committed to achieving and maintaining a strong control environment, high ethical standards, and financial reporting integrity, and will take further steps to ensure that personnel are adequate in terms of sophistication and quantity to adequately assure that the financial reporting process is efficient and operated with the sufficient level of integrity to meet and surpass all regulatory standards.
While management is implementing corrective steps to remediate its internal control deficiencies, we cannot assure you that they will be sufficient enough to be free of a material weakness. If we should in the future conclude that our internal control over financial reporting suffers from a material weakness, we will be required to expend additional resources to improve it. Any additional instances of material deficiencies could require a restatement of our financial statements. If such restatements are required, there could be a material adverse effect on our investors’ confidence that our financial statements fairly present our financial condition and results of operations, which in turn could materially and adversely affect the market price of our common stock.
Changes in Internal Control over Financial Reporting
Other than the remediation activities undertaken by us as disclosed above, there have been no changes in our internal control over financial reporting during the quarter ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
We are not a party to any legal proceedings.
Not Applicable
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
None
On August 22, 2019, the Company became aware of an Securities and Exchange Commission Order Instituting Administrative Proceedings and Notice of Hearing alleging that the Company is delinquent in certain of its periodic filings with the Commission and indicating that administrative proceedings are intended to be held (i) to determine all delinquent filings and any defenses of the Company for any such delinquent filings, and (ii) to make a decision as whether it may be appropriate to take any action to suspend or revoke the Company’s registration of its securities. The date of the Commission Order was August 14, 2019. The Company filed an answer in response to the assertions made by the Company's registered public accounting firm
pursuant to temporary rulesCommission.
On September 18, 2019, the Division of Enforcement of the Securities and Exchange Commission that permit(“SEC”) filed with the Office of the Secretary a Motion for Ruling on the Pleadings Against the Company seeking an order to provide only management's
report in this Quarterly Report.
Changes in Internal Controls
There was no change in the Company's internal control over
financial reporting that was identified in connection with such
evaluation that occurred during the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings againstrevoke each class of securities of the Company andregistered with the Company
is unaware of such proceedings contemplated against it.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the past three years, the Company has issued 20,000,000
common sharesCommission pursuant to Section 4(2) of the Securities Act of 1933
at par as follows:
On July 22, 2016. the Company issued the following shares of
its common stock:
Name Number of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) Item 407(c)(3) of Regulation S-K:
During the quarter covered by this Report, there have not been
any material changes to the procedures by which security holders
may recommend nominees to the Board of Directors.
ITEM 6. EXHIBITS
(a) Exhibits
31 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements12(j) of the Securities Exchange Act of 1934,1934. The Company has filed all of its delinquent filings and is current with its filings in an effort to possibly avoid such revocation. The Company has not received any further communications from the SEC on this matter as to whether it will continue to seek revocation.
| (a) | Exhibits. |
| Exhibit | Item | |
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
LARK STREET ACQUISITION CORPORATION
By: /s/ James M. Cassidy
President, Chief Financial Officer
Dated: November 14, 2016
| Monetiva Inc. | |
| Date: May 7, 2020 | /s/ Pierre Sawaya |
Pierre Sawaya, President (Principal Executive Officer and |
| Exhibit | Item | |
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
21