UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark(Mark One)
[X]☒ QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2017 OR [ ] TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2018
☐TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission
file numberFile Number 000-55807
AEDAN FINANCIAL CORP. |
(Exact name of registrant as specified in its charter) |
TULIP GROVE ACQUISITION CORPORATION
(Exact
(Former name of registrant as specified in its charter)
Delaware 82-1613709
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9454 Wilshire Blvd. #612
Beverly Hills, CA 90212
(Address of principal executive offices) (zip code)
310-888-1870
(Registrant's
Delaware | 82-1613709 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
1390 Market Street, Suite 200 San Francisco, California | 94102 | |
(Address of principal executive offices) | (Zip Code) |
(866) 601-7727
(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
☒ YES ☐ NO
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☐ YES ☒ 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 filer Accelerated Filer
Non-accelerated filer
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ (Do not check if a smaller reporting company) | 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
Act. ☒ YES ☐ NO
Indicate the number of shares outstanding of each of the issuer'sissuer’s classes of common stock, as of the latest practicable date.
Class Outstanding at
November 14, 2017
Common Stock, par value $0.0001 20,000,000
Documents incorporated by reference: None
__________________________________________________________________________
CONDENSED FINANCIAL STATEMENTS
Balance Sheetdate, 39,618,400 common shares issued and outstanding as of September 30, 2017
(unaudited) 2
StatementNovember 5, 2018.
Aedan Financial Corp.
Table of Contents
PART I – FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | 1 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 2 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 3 |
Item 4. | Controls and Procedures | 4 |
PART II – OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 5 |
Item 1A. | Risk Factors | 5 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 5 |
Item 3. | Defaults upon Senior Securities | 5 |
Item 4. | Mine Safety Disclosures | 5 |
Item 5. | Other Information | 5 |
Item 6. | Exhibits |
i
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon our current assumptions, expectations and beliefs concerning future developments and their potential effect on our business. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although the absence of these words does not necessarily mean that a statement is not forward-looking. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements.
Factors that may cause or contribute actual results to differ from these forward-looking statements include, but are not limited to, for example:
● | adverse economic conditions; |
● | the Company’s ability to raise capital to fund a portion of its operations |
● | industry competition |
● | the Company’s ability to integrate its acquisitions |
● | the inability to attract and retain qualified senior management and technical personnel; and |
● | other risks and uncertainties |
All forward-looking statements speak only as of the perioddate of this Report. We undertake no obligation to update any forward-looking statements or other information contained herein. Stockholders and potential investors should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this report are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from May 17,
2017 (inception)the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to September 30, 2017 (unaudited) 3
Statementa different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
ii
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Our unaudited financial statements included in this Form 10-Q are as follows:
F-1 | Balance Sheets as of and September 30,2018 and December 31, 2017 |
F-2 | Interim Unaudited Statements of Operations (Loss) for the Three and Nine Months Ended September 30, 2018 and 2017 |
F-3 | Interim Unaudited Statements of Cash Flows for the Nine Months Ended September, 2018 and 2017 |
F-4 | Notes to Interim Unaudited Financial Statements |
1
Aedan Financial Corporation
Balance Sheets
September 30, | December 31, | |||||||
2018 | 2017 | |||||||
(unaudited) | audited | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | - | - | ||||||
Total current assets | - | - | ||||||
Total assets | $ | - | - | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Cash overdraft | 249 | |||||||
Accrued liabilities | 1,250 | 2,000 | ||||||
Accounts payable | 21,881 | - | ||||||
Related party payables | - | 40,771 | ||||||
Total current liabilities | 23,131 | 43,021 | ||||||
Total liabilities | 23,131 | 43,021 | ||||||
Stockholders’ Equity: | ||||||||
Preferred stock, $0.0001 par value 20,000,000 shares authorized; -0- and -0- shares issued and outstanding as of September 30, 2018 and December 31 2017, respectively | ||||||||
Common stock, $0.0001 par value 100,000,000 shares authorized; 39,480,000 and 20,00,000 shares issued and outstanding as of September 30, 2018 and December 31 2017, respectively | 3,948 | 2,000 | ||||||
Paid in Capital | 136,388 | 25,312 | ||||||
Retained earnings deficit | (163,465 | ) | (70,333 | ) | ||||
Total stockholders’ equity | (23,131 | ) | (43,021 | ) | ||||
Total liabilities and equity | $ | - | $ | - |
The accompanying notes are an integral part of the financial statements.
Aedan Financial Corporation
Statements of Operations
3 months ended | 3 months ended | 9 months ended | 9 months ended | |||||||||||||
September 30, | September 30, | September 30, | June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Sales | $ | - | $ | - | $ | - | ||||||||||
Operating expenses: | ||||||||||||||||
Rent | 705 | 1,321 | 1,175 | 3,963 | ||||||||||||
Administrative expense | 4,042 | 250 | 4,179 | 250 | ||||||||||||
Marketing expense | 5,000 | 5,000 | ||||||||||||||
Computer expense | 4,062 | 8,537 | ||||||||||||||
Compensation expense | - | 508 | ||||||||||||||
Professional fees | 39,303 | 73,732 | 3,312 | |||||||||||||
Total operating expenses | 53,112 | 1,571 | 93,131 | 7,525 | ||||||||||||
Income (loss) from operations | (53,112 | ) | (1,571 | ) | (93,131 | ) | (7,525 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Total other income (expense) | - | - | - | - | ||||||||||||
Income (loss) before income taxes | - | - | - | - | ||||||||||||
Provision for income taxes (benefit) | - | - | - | - | ||||||||||||
Net loss | $ | (53,112 | ) | $ | (1,571 | ) | $ | (93,131 | ) | $ | (7,525 | ) | ||||
Basic and diluted earnings (loss) per common share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted-average number of common shares outstanding: | ||||||||||||||||
Basic and diluted | 39,480,000 | 20,025,000 | 24,018,864 | 20,025,000 |
The accompanying notes are an integral part of the financial statements.
Aedan Financial Corporation
Statements of Cash Flows for
September 30, | September 30, | |||||||
2018 | 2017 | |||||||
(unaudited) | ||||||||
Cash flows from operating activities of continuing operations: | ||||||||
Net income (loss) | $ | (93,131 | ) | $ | (7,525 | ) | ||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
Accounts payable | 134,901 | |||||||
Expenses paid from contributed capital | 562 | |||||||
Stock based compensation | 2,000 | |||||||
Common stock issued for services | ||||||||
Cash overdraft | (249 | ) | ||||||
Accrued liabilities | (750 | ) | 1,000 | |||||
Related party notes payable | (40,771 | ) | 3,929 | |||||
Net cash provided by (used in) operating activities | $ | (0 | ) | (34 | ) | |||
Cash flows from investing activities: | ||||||||
Net cash provided by (used in) financing activities | - | - | ||||||
Cash flows from financing activities: | ||||||||
Net cash provided by (used in) financing activities | - | - | ||||||
Net increase (decrease) in cash and cash equivalents | - | (34 | ) | |||||
Cash and cash equivalents at beginning of period | - | 34 | ||||||
Cash and cash equivalents at end of period | $ | - | $ | - | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | - | $ | - | ||||
Cash paid for income taxes | $ | - | $ | - | ||||
Non-cash investing and financing transactions | ||||||||
Forgiveness of advances from chief executive officer/director | $ | 112,513 | $ | - |
The accompanying notes are an integral part of the period from May 17,
2017 (inception) to September 30, 2017 (unaudited) 4
Notes to Financial Statements (unaudited) 5-8
______________________________________________________________________
TULIP GROVE ACQUISITIONfinancial statements.
F-3
AEDAN FINANCIAL CORPORATION
BALANCE SHEET
ASSETS
September 30,
2017
------------
(Unaudited)
Current assets
Cash $ -
------------
Total assets $ -
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued liabilities $ 1,250
------------
Total liabilities 1,250
------------
Stockholders' Equity
Preferred stock, $0.0001 par value
20,000,000 shares authorized;
none issued and outstanding at
September 30, 2017 -
Common Stock, $0.0001 par value,
100,000,000 shares authorized;
20,000,000 shares issued and
outstanding at September 30, 2017 2,000
Additional paid-in capital 312
Accumulated deficit (3,562)
------------
Total stockholders' deficit (1,250)
------------
Total liabilities and
stockholders' deficit $ -
============
The accompanying notes are an integral part of these unaudited
financial statements.
2
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TULIP GROVE ACQUISITION CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
For the period from
May 17, 2017 (Inception)
to September 30, 2017
-------------------
Revenue $ -
Cost of revenues -
-------------------
Gross profit -
-------------------
Operating expenses 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 unaudited
financial statements.
3
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TULIP GROVE ACQUISITION CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the period from
May 17, 2017 (Inception)
to September 30, 2017
-------------------
OPERATING ACTIVITIES
Net loss $ (3,562)
Expenses paid by stockholder and contributed
as capital 312
Common stock issued for services 2,000
Changes in Operating Assets and Liabilities:
Accrued liability 1,250
----------------
Net cash (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
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TULIP GROVE ACQUISITION CORPORATION
Notes to Unaudited Interim Consolidated Financial Statements
NOTE 1
September 30, 2018
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Aedan Financial Corp. (formerly Tulip Grove Acquisition Corporation ("Tulip Grove"Corporation) ( “AFC” or "the Company"the “Company”) was incorporated on May 17, 2017 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
On April 18, 2018, in the
developmental stage since inception and its operations to date have been
limited to issuing shares to its original shareholders. The Company will
attempt to locate and negotiate with a business entity for the combination
of that target company with Tulip Grove. The combination will normally take
the formanticipation of a merger, stock-for-stock exchange or stock-for-assets exchange.
In most instanceschange in control, the targetCompany filed a Form 8-K announcing the change in its name to Aedan Financial Corp. Simultaneously, the Company cancelled an aggregate of 19,500,000 shares of the then 20,000,000 shares of outstanding stock valued at par. James M. Cassidy resigned as the Company’s president, secretary and director and James McKillop resigned as the Company’s vice president and director.
On April 19, 2018 the issued 5,080,000 shares of its common stock for no consideration. Of these shares, 5,000,000 shares were issued to Eric Fitzgerald, the new appointed Chief Executive Officer.
On June 20, 2018, the Company entered into an acquisition agreement (the “Acquisition”) with Aedan, Inc. (“AI”), a private company will wishorganized under the laws of Delaware. The transaction is intended to structure the business
combination to be within the definition ofqualify as a tax-free reorganization under Section 351 or Section 368§368(a)(1)(B) 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. The Company has been
formedamended; and was consummated to provide a method for a foreign or domestic private companyAFC to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.
BASIS
The Acquisition was effected by the Company through the exchange of all the issued and outstanding capital stock of AI for a total amount of 33,900,000 shares of its common stock, at an aggregate cost basis of $25,000. At the time of the Acquisition, there were four shareholders of the Company who were also officers, directors and shareholders of Aedan, Inc. prior to the Acquisition and are related parties. AI has become a wholly owned subsidiary of the Company and the Company has taken over the operations and business plan of AI. Prior to the Acquisition, the Company was a shell and had no ongoing business or operations.
AI is a Cloud Application Developer based in San Francisco, CA with its primary focus being Secured Cloud-Based Software Development and Secured Application Streaming for Computing Devices, with an emphasis on remotely emulated application hosting, true cloud computing and “HaaS hardware as a service”.
The Company’s accounting year end is December 31st.
2. SUMMARY OF PRESENTATION
SIGNIFICANT ACCOUNTING POLICIES
Going concern
The summaryCompany has not yet generated any revenue since inception to date and has sustained an operating loss of significant accounting policies presented below$(93,132) for the nine months ended September 30, 2018. The Company had a working capital deficit of ($23,131) and an accumulated deficit of ($163,465) as of September 30, 2018; and a working capital deficit of ($43,021) and an accumulated deficit of ($70,333) as of December 31, 2017. The Company’s continuation as a going concern is designeddependent on its ability to assist in understanding the Company's financial statements. Suchgenerate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its officers and directors or other sources, as may be required.
The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The unaudited consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations.
Management’s Representation of Interim Financial Statements
The accompanying notes areunaudited consolidated financial statements have been prepared by the representationsCompany without audit pursuant to the rules and regulations of the Company'sSecurities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management whobelieves that the disclosures are responsibleadequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for their integritya full year. These consolidated financial statements should be read in conjunction with the audited financial statements at December 31, 2017 on the Company’s Form 10-K filed on April 4, 2018 with the SEC.
Basis of presentation
As described above, Aedan Corporation and objectivity. These
accounting policies conformAedan Inc. were under the common control of the CEO, and its officers before and after the date of transfer. As a result, the Company adopted the guidance in ASC 805-50-05-5 for the transfer of net assets between entities under common control to apply a method similar to the pooling-of-interests method. Under this method, the financial statements of the Company shall report results of operations for the period in which the transfer occurs as though the transfer of net assets had occurred at the beginning of the period. Results of operations for that period will thus comprise both those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period. Similarly, the Company shall present the statements of financial position and other financial information as of the beginning of the period as though the assets and liabilities had been transferred at that date. Financial statements and financial information presented for prior years also shall be retrospectively adjusted to furnish comparative information.
The consolidated financial statements of the Company have been prepared in accordance with GAAP and are expressed in United States dollars. For the nine-month period ended September 30, 2018, the consolidated financial statements include the accounts of the Company; and its wholly-owned subsidiary Aedan Inc. which was acquired on June 20, 2018.
Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"(“U.S. GAAP”) in all material respects,were omitted pursuant to such rules and have
been consistently applied in preparingregulations. The results for the accompanying financial statements.
The Company hasnine months ended September 30, 2018 are not earned any revenue from operations since inception.
Accordingly, the Company's activities have been accounted for as those of
a "Development Stage Enterprise" as set forth in ASC 915, "Development
Stage Entities." Among the disclosures required by ASC 915, are that the
Company's financial statements be identified as those of a development stage
company, and that the statements of operations, stockholders' equity and cash
flows disclose activity since the datenecessarily indicative of the Company's inception. The Company
choseresults to be expected for the year ending December 31, as its fiscal year end.
USE OF ESTIMATES
2018.
All intercompany accounts and transactions are eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with US 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 periods.period. The most significant estimates relate to revenue recognition, valuation of accounts receivable and inventories, purchase price allocation of acquired businesses, impairment of long lived assets and goodwill, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from thosethese estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand and on deposit at banking
institutions as well as
The Company considers all highly liquid short-termtemporary cash investments with an original maturitiesmaturity of 90 daysthree months or less. less to be cash equivalents. At September 30, 2018 and December 31, 2017, the Company cash equivalents totaled $-0- and $-0- respectively.
Income taxes
The Company did not have cash equivalents as
of September 30, 2017.
CONCENTRATION OF RISK
Financial instruments that potentially subject 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 excess of the Federal Deposit Insurance Corporation limit as of September 30,
2017.
6
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TULIP GROVE ACQUISITION CORPORATION
Notes to Financial Statements
INCOME TAXES
Underaccounts for income taxes under FASB ASC 740, "Income Taxes,"“Accounting for Income Taxes”. Under FASB ASC 740, 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 to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is
more likely than not that some or all ofUnder FASB ASC 740, the effect on deferred tax assets will notand liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be realized. Astaken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest amount of September 30, 2017 there were no deferred taxes duebenefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions on a quarterly basis to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the uncertaintylikelihood of a tax position’s sustainability under audit.
Stock-based Compensation
We account for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the realizationFASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of net operating loss or carry forward prioremployee 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 expiration.
LOSS PER COMMON SHARE
Basicprovide 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. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Net Loss per Share
Net 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 lossperiod as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share reflect(“EPS”) calculations are determined by dividing net income by the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuanceweighted average number of shares of common stock that then shared inoutstanding during the lossyear. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of the entity. Ascommon shares and dilutive common share equivalents outstanding.
Fair value of September 30, 2017, there are no outstanding dilutive securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
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 items that are recognized or disclosed at fair value in the unaudited consolidated 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 consolidated financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes 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 of the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability 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.
NOTE 2 - GOING CONCERN
Recent Accounting Pronouncements
The Company has not yet generated any revenue since inception to dateimplemented all new accounting pronouncements that are in effect and
has sustained operating loss of $3,562 during the period ended September 30,
2017. The Company had a working capital deficit of $1,250 and an accumulated
deficit of $3,562 as of September 30, 2017. The Company's continuation as
a going concern is dependent on its ability to generate sufficient cash
flows from operations to meet its obligations and/or obtaining additional
financing from its members or other sources, as may be required.
7
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TULIP GROVE ACQUISITION CORPORATION
Notes to Financial Statements
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern; however, the above condition
raises substantial doubt about the Company's ability to do so. The financial
statements do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts and
classifications of liabilities that may result should the Company be unable
to continue as a going concern.
In order to maintain its current level of operations, the Company will require
additional working capital from either cash flow from operations or from the
sale of its equity. However, the Company currently has no commitments
from any third parties for the purchase of its equity. If the Company is unable
to acquire additional working capital, it will be required to significantly
reduce its current level of operations.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
In November 2016, the FASB issued Accounting Standards Update No. 2016-18,
"Statement of Cash Flows (Topic 230): Restricted Cash" ("ASU 2016-18"). The
new guidance is intended to reduce diversity in practice by adding or
clarifying guidance on classification and presentation of changes in
restricted cash on the statement of cash flows. ASU 2016-18 is effective
for annual and interim periods beginning after December 15, 2017. Early
adoption is permitted. The amendments in this update should be applied
retrospectively to all periods presented. The Company is currently
evaluating the impact of adopting ASU 2016-18, which will only impact
the Company to the extent it has restricted cash in the future.
In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows
(Topic 230): Classification of Certain Cash Receipts and Cash Payments,
to address diversity in how certain cash receipts and cash payments are
presented and classified in the statement of cash flows". The amendments
provide guidance on the following eight specific cash flow issues: (1) Debt
Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt
Instruments or Other Debt Instruments with Coupon Interest Rates That Are
Insignificant in Relation to the Effective Interest Rate of the Borrowing;
(3) Contingent Consideration Payments Made after a Business Combination;
(4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the
Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned;
(6) Life Insurance Policies; (7) Distributions Received from Equity Method
Investees; (8) Beneficial Interests in Securitization Transactions; and
Separately Identifiable Cash Flows and Application of the Predominance
Principle. The amendments are effective for public business entities for
fiscal years beginning after December 15, 2017, and interim periods within
those fiscal years. Early adoption is permitted, including adoption in an
interim period. The amendments should be applied using a retrospective
transition method to each period presented. If it is impracticable to apply
the amendments retrospectively for some of the issues, the amendments for
those issues would be applied prospectively as of the earliest date
practicable. The Company is currently evaluating the impact of this new
standard on its financial statements and related disclosures.
In August 2014, the FASBdoes not believe that there are any other new pronouncements that have been issued ASU No. 2014-15, "Presentation of Financial
Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties
about an Entity's Ability to Continue as a Going Concern". This standard is
intended to define management's responsibility to evaluate whether there is
substantial doubt about an organization's ability to continue as a going
concern and to provide related footnote disclosures. Under U.S. GAAP,
financial statements are prepared under the presumption that the reporting
organization will continue to operate as a going concern, except in limited
circumstances. Financial reporting under this presumption is commonly
referred to as the going concern basis of accounting. The going concern
basis of accounting is critical to financial reporting because it establishes
the fundamental basis for measuring and classifying assets and liabilities.
Currently, U.S. GAAP lacks guidance about management's responsibility to
evaluate whether there is substantial doubt about the organization's ability
to continue as a going concern or to provide related footnote disclosures.
This ASU provides guidance to an organization's management, with principles
and definitions that are intended to reduce diversity in the timing and
content of disclosures that are commonly provided by organizations today
in the financial statement footnotes. The amendments are effective for
annual periods ending after December 15, 2016, and interim periods within
annual periods beginning after December 15, 2016. Early application is
permitted for annual or interim reporting periods for which the financial
statements have not previously been issued. Management believes that the
impact of this ASU to the Company's financial statements would be
insignificant.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force) and the United States Securities and Exchange
Commission did not or are not believed by management tomight have a material impact on the Company's presentits financial position or future financial statements.
results of operations.
NOTE 43 - ACCRUED LIABILITIES
As of September 30, 2018 and December 31, 2017, the Company had accrued professional fees of $1,250.
$23,131, and $2,000, respectively.
NOTE 4 – RELATED PARTY PAYABLES AND TRANSACTIONS
In order to fund its operations, the Company has relied on interest free demand loans from its founder and CEO, Mr. Eric Fitzgerald. During the three-month period ended March 31, 2018, Mr. Fitzgerald forgave his entire loan balance of $61,803 due from the Company. The Company recorded the forgiveness of $61,803 as a capital contribution with no impact on profit or loss. During the three-month ended June 30, 2018 Mr. Fitzgerald forgave an $17,799. For the three month period ended September 30, 2018, Mr. Fitzgerald forgave an additional $32,911. The total amount of his forgiveness as of September 30, 2018 was $112,513.
As of September 30, 2018, and December 31, 2017, the related party loan payable balances were $-0- and $40,771 respectively.
As described throughout this Report, the Company and Aedan Inc. are related parties. As such, the number of common shares granted to Eric Fitzgerald and the officers are considered related party transactions.
NOTE 5 STOCKHOLDERS'- STOCKHOLDERS’ DEFICIT
On May 17, 2017,April 18, 2018, on 19,500,000 shares of the then 20,000,000 shares of outstanding stock valued at par.
On April 19, 2018 the Company issued 20,000,000 founders5,080,000 shares of its common stock to two directors and officers pro rata as founder shares for services
rendered tono consideration. At the time of issuance the Company valuedhad no operations or business activity. As such, the Company recorded compensation expense on the issuance of these shares calculated at $0.0001the par value of $0.0001 per share, or $508 in compensation expense.
On June 20, 2018, the Company entered into an acquisition agreement (the “Acquisition”) with Aedan, Inc. (“AI”), a private related company.
The Acquisition was effected by the Company through the exchange of all the issued and outstanding capital stock (25,000 shares) of AI for a total amount of $2,000. 33,900,000 shares of its common stock, at an aggregate cost basis of $25,000. Since this is a related party transaction, the 25,000 shares were considered cancelled.
The Company is authorized to issue 100,000,000 shares of common stock at a par value of $0.0001 and 20,000,000 shares of preferred stock.
stock at a par value of $0.0001.
As of September 30, 2018 and December 31, 2017 the Company had 39,480,000 and 20,000,000 shares, respectively, of common stock outstanding; and no preferred stock werewas issued or outstanding during the same period.
Item 2. Management’s Discussion and outstanding.
NOTE 6
Management has evaluated subsequent events through November
14, 2017, the date which the financial statements were available to
be issued. All subsequent events requiring recognition have been
incorporated into these financial statementsAnalysis of Financial Condition and there are no subsequent
events that require disclosure in accordance with FASB ASC Topic 855,
"Subsequent Events".
______________________________________________________________________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Tulip Grove Acquisition Corporation (the "Company") was incorporated
on May 17, 2017 under the lawsResults of the State of Delaware to engage in
any lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. Operations
The Company is a blank check company
and qualifies as an "emerging growth company" as defined in the Jumpstart
Our Business Startups Act which became law in April, 2012.
Since inception the Company's operations to the date of the period
covered by this report have been limited to issuing shares of common stock
to its original shareholders and filing a registration statement on Form 10
on July 7, 2017 with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 as amended to register its class of common
stock.
The Company has no operations nor does it currently engage in any
business activities generating revenues. The Company'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.
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 options or similar
benefits to key employees, increasing the opportunity to use securities
for acquisitions, providing liquidity for shareholders and other factors.
Business opportunities may be available in many different industries 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.
As of September 30, 2017 the Company had not generated revenues and had
no income or cash flows from operations since inception. The Company had
sustained net loss of $3,562 and an accumulated deficit of $3,562 for the
period from May 17, 2017 (Inception) to September 30, 2017.
The Company'sCompany’s independent auditors have issued a report raising substantial doubt about the Company'sCompany’s ability to continue as a going concern. At present, the Company has no operations and the continuation of the Company as a going concern is dependent upon financial support from its stockholders, its ability to obtain necessary equity financing to continue operations and/or to successfully locate and negotiate with a business entity for the combination of that target company with it.
Results of Operations
Aedan Financial Corp (formerly Tulip Grove Acquisition Corporation) (“AFC” or the Company.
Management will pay all expenses incurred by“Company”) was incorporated on May 17, 2017 under the Company untillaws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.
On April 18, 2018, in anticipation of a change in control, is effected. There is no expectation of repayment
for such expenses.
The president of the Company is the president, director and
shareholder of Tiber Creek Corporation. Tiber Creek Corporation assists
companies in becoming public reporting companies and with introductions
to the financial community.
Tiber Creek is in discussions with many clients some of which may
elect to use a change in control of a Form 10 reporting company to effect
reincorporation in Delaware. Although no such discussions directly address
the Company, the Company may used for such a change in control. When, and
if, such change in control is effected, the Company will filefiled a Form 8-K announcing it.
ITEMthe change in its name to Aedan Financial Corp. Simultaneously, the Company cancelled an aggregate of 19,500,000 shares of the then 20,000,000 shares of outstanding stock valued at par. James M. Cassidy resigned as the Company’s president, secretary and director and James McKillop resigned as the Company’s vice president and director.
On April 19, 2018 the issued 5,080,000 shares of its common stock for no consideration. At the time of issuance the Company had no operations or business activity. As such, the Company recorded compensation expense on the issuance of these shares calculated at the par value of $0.0001 per share, or $508 in compensation expense. Of these shares 5,000,000 shares were issued to Eric Fitzgerald, the newly appointed Chief Executive Officer of the Company.
On June 20, 2018, the Company entered into an acquisition agreement (the “Acquisition”) with Aedan, Inc. (“AI”), a private company organized under the laws of Delaware. The transaction is intended to qualify as a reorganization under §368(a)(1)(B) of the Internal Revenue Code of 1986, as amended; and was consummated to provide a method for AFC to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.
The Acquisition was effected by the Company through the exchange of all the issued and outstanding capital stock of AI for a total amount of 33,900,000 shares of its common stock, at an aggregate cost basis of $25,000. At the time of the Acquisition, there were four shareholders of the Company who were also officers, directors and shareholders of Aedan, Inc. prior to the Acquisition and are related parties. AI has become a wholly owned subsidiary of the Company and the Company has taken over the operations and business plan of AI. Prior to the Acquisition, the Company was a shell and had no ongoing business or operations.
AI is a Cloud Application Developer based in San Francisco, CA with its primary focus being Secured Cloud-Based Software Development and Secured Application Streaming for Computing Devices, with an emphasis on remotely emulated application hosting, true cloud computing and “HaaS hardware as a service”.
2
Results of Operations for the Three and Nine Months Ended September 30, 2018 and 2017
Revenues
The Company has not recorded any revenue since inception.
Operating expenses
During the three and nine month periods ended September 30, 2018, operating expenses were $53,113 and $93,132 respectively; compared to $1,571 and $7,525, respectively during the same period in 2017. The increase in operating expenses in both the three and nine month periods in 2018 compared to the same periods in 2017, is primarily attributable to increased professional fees related to the acquisition of AI and due to the expenses associated with becoming a reporting company.
Liquidity and Financial Condition
As of September 30, 2018, we had no cash on hand. The Company’s independent auditors have issued a report raising substantial doubt about the Company’s ability to continue as a going concern. To date all of the Company’s funding since inception has come in the form of loans from the Company’s Chief Executive Officer, Mr. Fitzgerald. These loans were subsequently forgiven.
The Company believes that due to the acquisition of AI, it can raise capital through private placements to investors. There can be no assurances the Company will be successful or that the Company will receive additional loans from Mr. Fitzgerald.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Critical Accounting Estimates
Our financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. We continually evaluate the accounting policies and estimates used to prepare the financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in our Form 10-K for the year ended December 31, 2017, Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
InformationRisk
As a “smaller reporting company”, we are not required to be filedprovide the information required by Smaller reporting companies.
ITEMthis Item.
3
Item 4. Controls and Procedures.
DisclosuresProcedures
Evaluation of Disclosure Controls and Procedures
Pursuant to
As required by Rules adopted by13a-15(e) and 15d-15(e) under the Securities and Exchange Commission,
the CompanyAct of 1934, as amended (the “Exchange Act”), we have carried out an evaluation of the effectiveness of the design and operation of itsour disclosure controls and procedures pursuant to
Exchange Act Rules.as of September 30, 2018. This evaluation was done as of the end of the
period covered by this reportcarried out under the supervision and with the participation of the Company's principal executive officer (who is
also the principal financial officer).our Chief Executive Officer and Chief Financial Officer. Based uponon this evaluation, our CEO and CFO have concluded that evaluation, he believes that the Company'sour disclosure controls and procedures were effective as of September 30, 2018 at reasonable assurance levels.
Inherent Limitations – Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are effectivemet. The design of any system of controls is based in gathering, analyzingpart upon certain assumptions about the likelihood of future events, and disclosing information neededthere can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that the information
required to be disclosed by the Companyneither human error nor system weakness has resulted in its periodic reports is
recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed
to ensureerroneous reporting of financial data.
We believe that information required to be disclosed by an issuer in the
reports that it files or submits under the Act is accumulated and
communicated to the issuer's management, including its principal executive
and principalour financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
This Quarterly Report does not include an attestation report of
the Company's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management's
reportstatements presented in this Quarterly Report.
quarterly report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows for the period presented herein.
Changes in Internal Controls
Control over Financial Reporting
There washave been no changechanges in the Company'sour internal control over financial reporting that was identified in connection with such
evaluation that occurred during the last quarterly period covered by this report that hashave materially affected, or isare reasonably likely to materially
affect, the Company'sour internal control over financial reporting.
PART II --- OTHER INFORMATION
ITEM
Item 1. LEGAL PROCEEDINGS
Legal Proceedings
There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.
Management is aware that certain current and prior blank check companies of which Messrs. Cassidy and McKillop, the Company's current
officers and directors during the period covered by this report, were the former officers and directors have received subpoenas for documents in regard to a formal investigationan inquiry by the Securities and Exchange Commission requesting documentation regarding the transactions and filings for the past five years and former share ownership of thosecertain blank check companies. Management has no independent
knowledge or information regarding these subpoenas but believes it is part
of a wider review by the SEC.
Management
The former management of the Company has also received subpoenas from the Securities and Exchange Commission in regard to certain of the transactions and filings for the past five years of certain of its blank check companies. Management has no independent knowledge or information as to the intent or purpose of such subpoenas but believes the SEC is investigating whether the change in control transaction is considered a sale of a security and if so whether a broker needs to be used to effect the transaction. Management
disagrees strongly with any such assessment if it were
Item 1A. Risk Factors
Not applicable
Trends, Risks and Uncertainties
We have sought to identify what we believe to be so determined.
ITEMthe most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all such risk factors before making an investment decision with respect to our common shares.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Since May 17, 2017 (Inception),Unregistered Sales of Equity Securities and Use of Proceeds
In July 2018, the Company has issued 20,000,000
common shares pursuant to Section 4(2) of the Securities Act of 1933
at par as follows:
On May 17, 2017, the Company issued the followingsold 38,400 shares of its common stock:
Name Numberstock in exchange for an aggregate of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
ITEM$19,200, or $0.50 per share, to 6 investors in reliance on the exemptions from registration under Section 4(a)(2) and Rule 506(b) of Regulation D as promulgated under the Securities Act.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Defaults Upon Senior Securities
None.
Item 4.Mine Safety Disclosures.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM
Item 5. OTHER INFORMATION
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
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
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | |
32.1 | Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Chief Financial Officer Certification 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 Labels Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Documen |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TULIP GROVE ACQUISITION CORPORATION
By: /s/ James M. Cassidy
President, Chief Financial Officer
Dated: November 20, 2017
Aedan Financial Corp | |
(Registrant) | |
Dated: November 19, 2018 | /s/ Eric Fitzgerald |
Chief Executive Officer | |
/s/ Sammy Yu | |
Chief Financial Officer |