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 March 31, 2018 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 000-55807AEDAN FINANCIAL CORP (Exact
| AEDAN FINANCIAL CORP. |
| (Exact name of registrant as specified in its charter) |
TULIP GROVE ACQUISITION CORPORATION
(Former name of registrant as specified in its charter)
TULIP GROVE ACQUISITION CORPORATION
(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.)
1390 Market Street, Suite 200
San Francisco, California 94102
(Address of principal executive offices) (zip code)
866-601-7727
(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
May 11, 2018
Common Stock, par value $0.0001 5,580,000
Documents incorporated by reference: None
__________________________________________________________________________
FINANCIAL STATEMENTS
Condensed Balance Sheetsdate, 39,618,400 common shares issued and outstanding as of March 31, 2018 (unaudited)November 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 December 31, 2017 2
Statementbeliefs 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 Operationsthese 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 Three Months
Ended March 31, 2018 (unaudited) 3
Statementdate 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 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 a 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 Three Months
Ended March 31, 2018 (unaudited) 4
financial statements.
F-3
AEDAN FINANCIAL CORPORATION
Notes to CondensedUnaudited Interim Consolidated Financial Statements (unaudited) 5-8
______________________________________________________________________
AEDAN FINANCIAL CORP
September 30, 2018
1. NATURE OF OPERATIONS
Aedan Financial Corp. (formerly Tulip Grove Acquisition Corporation) CONDENSED BALANCE SHEETS
On April 18, 2018, in anticipation of the subsequenta change in control, the Company filed a Form 8-K announcing the change in its name to Aedan Financial Corp. BASISSimultaneously, 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 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 $25,000. At the time of the Acquisition, there were four shareholders of the Company who were also officers, directors and shareholders of Aedan, Inc. prior to the Acquisition and are related parties. AI has become a wholly owned subsidiary of the Company and the Company has taken over the operations and business plan of AI. Prior to the Acquisition, the Company was a shell and had no ongoing business or operations.
AI is a Cloud Application Developer based in San Francisco, CA with its primary focus being Secured Cloud-Based Software Development and Secured Application Streaming for Computing Devices, with an emphasis on remotely emulated application hosting, true cloud computing and “HaaS hardware as a service”.
The Company’s accounting year end is December 31st.
2. SUMMARY OF PRESENTATION
SIGNIFICANT ACCOUNTING POLICIES
Going concern
The summaryCompany has not yet generated any revenue since inception to date and has sustained an operating loss of significant accounting policies presented below$(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'sgenerate 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 condensed financial
statements. Such unaudited condensedconsolidated 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's management, who are responsible
for their integritySecurities and objectivity. These accounting policies conform toExchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America
("GAAP"(“GAAP”) in all material respects, and have been consistently appliedcondensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in preparing the accompanying unaudited condensedopinion of management are necessary to a fair presentation of financial statements.
position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a 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 Aedan 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 ("(“U.S. GAAP"GAAP”) were omitted pursuant to such rules and regulations. The results for the threenine months ended March 31,September 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018.
USE OF ESTIMATES
All intercompany accounts and transactions are eliminated in consolidation.
Use of estimates
The preparation of unaudited condensed 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 condensed 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
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. The Company did not haveless to be cash equivalents as of March 31,equivalents. At September 30, 2018 and December 31, 2017, respectively.
CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash. cash equivalents totaled $-0- and $-0- respectively.
Income taxes
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 March 31,
2018 and December 31, 2017, respectively.
5
______________________________________________________________________
AEDAN FINANCIAL CORP
(formerly Tulip Grove Acquisition Corporation)
Notes to Unaudited Condensed 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 March 31, 2018 and December 31, 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 March 31, 2018 and December 31, 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 condensedconsolidated 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 condensedconsolidated 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.
RECENT ACCOUNTING PRONOUNCEMENTS
In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations
(Topic 805): Clarifying the Definition of a Business". The amendments
in this ASU clarify the definition of a business with the objective of
adding guidance to assist entities with evaluating whether transactions
should be accounted for as acquisitions (or disposals) of assets or
businesses. Basically these amendments provide a screen to determine
when a set is not a business. If the screen is not met, the amendments
in this ASU first, require that to be considered a business, a set
must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create output and
second, remove the evaluation of whether a market participant could
replace missing elements. These amendments take effect for public
businesses for fiscal years beginning after December 15, 2017 and
interim periods within those periods, and all other entities should
apply these amendments for fiscal years beginning after December 15,
2018, and interim periods within annual periods beginning after
December 15, 2019.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not expectbelieve that the adoption of
this guidance willthere are any other new pronouncements that have been issued that might have a material impact on its condensed
financial statements.
In May 2017, the FASB issued ASU 2017-09, "Scope of Modification
Accounting", which amends the scope of modification accounting for
share-based payment arrangements, provides guidance on the types of
changes to the termsposition or conditions of share-based payment awards to
which an entity would be required to apply modification accounting
under ASC 718. For all entities, the ASU is effective for annual
reporting periods, including interim periods within those annual
reporting periods, beginning after December 15, 2017. Early adoption
is permitted, including adoption in any interim period. The Company
does not expect that adoption of this guidance will have a material
impact on its condensed financial statements and related
disclosures.
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. Managementbelieves that this
ASU will only impact the Company if it has restricted cash in the future.
In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic
230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-
15"). ASU 2016-15 will make eight targeted changes to how cash receipts and
cash payments are presented and classified in the statement of cash flows.
ASU 2016-15 is effective for fiscal years beginning after December 15, 2017.
The new standard will require adoption on a retrospective basis unless it
is impracticable to apply, in which case it would be required to apply the
amendments prospectively as of the earliest date practicable. Management
believes that the impact of this ASU to the Company's condensed 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 to have a material
impact on the Company's present or future financial statements.
NOTE 2 - GOING CONCERN
The Company has not yet generated any revenue since inception to date
and has sustained operating loss of $650 for the three months ended
March 31, 2018. The Company had a working capital deficit of $1,250
and an accumulated deficit of $4,962 as of March 31, 2018 and a working
captial deficit of $2,000 and an accumulated deficit of $4,312 as of
December 31, 2017. The Company's continuation as a going concern
is dependent on its ability to generate sufficient cash flows from
operations to meet its obligations and/or obtaining additional financing
from its members or other sources, as may be required.
The accompanying unaudited condensed 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 condensed 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 levelresults of operations.
NOTE 3 - ACCRUED LIABILITIES
As of March 31,September 30, 2018 and December 31, 2017, the Company had accrued professional fees of $1,250$23,131, and $2,000, respectively.
NOTE 4 - STOCKHOLDERS' DEFICIT
On May 17, 2017,– RELATED PARTY PAYABLES AND TRANSACTIONS
In order to fund its operations, the Company issued 20,000,000 founders common
stock to two directorshas relied on interest free demand loans from its founder and officers for legal services provided toCEO, 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 is authorized to issue 100,000,000 sharesrecorded 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 stockshares granted to Eric Fitzgerald and 20,000,000 shares of preferred stock. As of March 31, 2018,
20,000,000 shares of common stock and no preferred stock were issued and
outstanding.
the officers are considered related party transactions.
NOTE 5 - SUBSEQUENT EVENT
STOCKHOLDERS’ DEFICIT
On April 18, 2018, subsequent to the balance sheet date covered by
this Report, the Company effected a change of its control. The Company
cancelled an aggregate ofon 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.
The following persons were named to the offices of the Registrant
appearing next to their names:
Eric Fitzgerald Chief Executive Officer, director
Sammy Yu Chief Financial Officer
Gary Griffes Chief Information Officer
Brian Hettrick Chief Compliance Officer
Victor Citron Secretary of the Company
Neil Cresswell Chief Cloud Architect
Guy Conner Chief Datacenter Architect
Nicholas Alaniz Chief technology officer
Dawnte Bailey Chief of security
On April 19, 2018 the Company issued 5,080,000 shares of its common stock for no consideration as a resultconsideration. At the time of the change in control to:
Eric Fitzgerald 5,000,000
Sammy Yu 10,000
Gary Griffes 10,000
Brian Hettrick 10,000
Victor Citron 10,000
Neil Cresswell 10,000
Guy Conner 10,000
Nicholas Alaniz 10,000
Dawnte Bailey 10,000
On April 26, 2018, The Company filed a Form D in anticipation of
effecting a private offering of its securities pursuant to Rule 506(b)
of Regulation D of the Securities Act of 1933.
Management has evaluated subsequent events through May 11, 2018,
the date which the financial statements were available to be issued.
Except for the events disclosed above, all subsequent events requiring
recognition have been incorporated into these financial statements
in accordance with FASB ASC Topic 855, "Subsequent Events."
7
______________________________________________________________________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Aedan Financial Corp (formerly Tulip Grove Acquisition Corporation)
(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 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 Companys operations to date of the period covered
by this report were 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. Subsequent to the balance sheet date covered by this report the
Company effected a change in control.
Prior to the change in control,issuance the Company had no operations nor does
it engage in anyor business activities generating revenues.
Subsequent to the balance sheet date covered by this report, and pursuant
to the change in control,activity. As such, the Company anticipates effectingrecorded compensation expense on the issuance of these shares calculated at the par value of $0.0001 per share, or $508 in compensation expense.
On June 20, 2018, the Company entered into an acquisition ofagreement (the “Acquisition”) with Aedan, Inc. (“AI”), a private Delaware company, focused on bringing cloud
based desktops, gaming systems,related company.
The Acquisition was effected by the Company through the exchange of all the issued and applicationsoutstanding capital stock (25,000 shares) of AI for a total amount of 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 the world on any
internet connected device.
issue 100,000,000 shares of common stock at a par value of $0.0001 and 20,000,000 shares of preferred stock at a par value of $0.0001.
As of MarchSeptember 30, 2018 and December 31, 20182017 the Company had not generated revenues39,480,000 and had20,000,000 shares, respectively, of common stock outstanding; and no incomepreferred stock was issued or cash flows from operations since inception. outstanding during the same period.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Company
had sustained net loss of $650 and an accumulated deficit of $4,962
for the three months ended and as of March 31, 2018, respectively.
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.
Subsequent Event
In April, 2018, the Company changed its name to
Results of Operations
Aedan Financial Corp (formerly Tulip Grove Acquisition Corporation) (“AFC” or 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.
On April 18, 2018, in anticipation of a change in control.
On April 18, 2018,control, the following events occurred which resultedCompany filed a Form 8-K announcing the change in a changeits name to Aedan Financial Corp. Simultaneously, the Company cancelled an aggregate of control19,500,000 shares of the Company:then 20,000,000 shares of outstanding stock valued at par. James M. Cassidy resigned as the Company'sCompany’s president, secretary and director.director and James McKillop resigned as the Company'sCompany’s vice president and director.
The following persons were named to
On April 19, 2018 the officesissued 5,080,000 shares of its common stock for no consideration. At the Registrant
appearing next to their names:
Eric Fitzgerald Chief Executive Officer, director
Sammy Yu Chief Financial Officer
Gary Griffes Chief Information Officer
Brian Hettrick Chief Compliance Officer
Victor Citron Secretarytime of issuance the Company Neil Cresswell Chief Cloud Architect
Guy Conner Chief Datacenter Architect
Nicholas Alaniz Chief technology officer
Dawnte Bailey Chief of security
On April 26, 2018 the Company filed a Form D in anticipation of
effecting a private offering of its securities pursuant to Rule 506(b)
of Regulation D of the Securities Act of 1933.
The former president of the Company is the sole officer and
director of Tiber Creek Corporation. Tiber Creek Corporation
assists companies in becoming public companies and assists
companies with introductions to the financial community. The
services provided by Tiber Creek include using companies such
as the Company as vehicles for becoming public.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 changetotal 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 control.
ITEMSan 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).
Management is responsible for maintaining a system of internal
control over financial reporting ("ICFR")our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, our CEO and CFO have concluded that provides reasonable
assurance regarding the reliability of such reporting and the
accuracy and reliability of the preparation of financial statements
of such. Management is responsible to maintain records accurately and
fairly to reflect transactions and transactions are recorded as
necessary. The controls should provide reasonable assurance regarding
the prevention of unauthorized
acquisition or use of assets.
In the present case of the Company, management at the period
covered by this report, consisted solely of the president and vice
president. As such, management maintained sole control of all financial
transactions and all assets. Since the president of the Company was in
sole control of the financial transactions and assets management
believes that its control reasonably and adequately addresses the
risk of a misstatement in the financial reporting. Based upon that
evaluation, the principal officer at that time 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 met. 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, summarized and processed timely. The principal
executive officer was directly involved in the day-to-day operationserroneous reporting of the Company. Since the change in control, management consists of
two officers who also serve as its directors and who control the
day-to-day operations of the Company and its financial reporting.
This Quarterly Report does not include an attestation report of
the Company's registered public accounting firm regarding internal
control overdata.
We believe that our 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 Control Overover 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 officers and directors during the period covered by this report, were the former officers and directors have received subpoenas for documents in regard to an inquiry by the Securities and Exchange Commission requesting documentation regarding the transactions and filings for the past five years and former share ownership of certain blank check companies.
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.
ITEM
Item 1A. Risk Factors
Not applicable
Trends, Risks and Uncertainties
We have sought to identify what we believe to be the 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
During the past three years,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(a)(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 in exchange for services renderedan aggregate of $19,200, or $0.50 per share, to 6 investors in reliance on the Company:
Name Numberexemptions from registration under Section 4(a)(2) and Rule 506(b) of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
On April 18, 2018, 19,500,000 of those shares were redeemed byRegulation D as promulgated under the two shareholders pro rata.
On April 19, 2018, the Company issued 5,080,000 shares of its common
stock for no consideration as a result of the change in control to:
Eric Fitzgerald 5,000,000
Sammy Yu 10,000
Gary Griffes 10,000
Brian Hettrick 10,000
Victor Citron 10,000
Neil Cresswell 10,000
Guy Conner 10,000
Nicholas Alaniz 10,000
Dawnte Bailey 10,000
ITEMSecurities 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.
AEDAN FINANCIAL CORP
By: /s/ Eric Fitzgerald
Chief Executive Officer
By: /s/ Smmy Yu
Chief Financial Officer
Dated: May 15, 2018
| Aedan Financial Corp | |
| (Registrant) | |
| Dated: November 19, 2018 | /s/ Eric Fitzgerald |
| Chief Executive Officer | |
| /s/ Sammy Yu | |
| Chief Financial Officer |