Exhibit 99.1 Pure Guar India Private Limited (A Development Stage Company) May 31, 2013 Index to the Financial Statements Contents Page(s) ------- Report of Independent Registered Public Accounting Firm................. F-2 Balance Sheet at May 31, 2013........................................... F-3 Statement of Operations for the Period from February 19, 2013 (Inception) through May 31, 2013 ................................................... F-4 Statement of Stockholders' Equity (Deficit) for the Period from February 19, 2013 (Inception) through May 31, 2013 ..................... F-5 Statement of Cash Flows for the Period from February 19, 2013 (Inception) through May 31, 2013.................................................... F-6 Notes to the Financial Statements....................................... F-7 F-1 <PAGE> REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Pure Guar India Private Limited (A Development Stage Company) New Delhi, India We have audited the accompanying balance sheet of Pure Guar India Private Limited, a development stage company, (the "Company") as of May 31, 2013 and the related statements of operations, stockholders' equity (deficit) and cash flows for the period from February 19, 2013 (inception) through May 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 31, 2013 and the results of its operations and its cash flows for the period from February 19, 2013 (inception) through May 31, 2013 in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had a deficit accumulated during the development stage at May 31, 2013, a net loss and net cash used in operating activities for the period from February 19, 2013 (inception) through May 31, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Li and Company, PC ----------------------------------- Li and Company, PC Skillman, New Jersey July 17, 2013 F-2 <PAGE> Pure Guar India Private Limited (A Development Stage Company) Balance Sheet May 31, 2013 ------------ ASSETS Current assets Cash $ 1,915 Prepaid agricultural costs 11,453 Prepaid harvest 32,030 Prepaid land lease 68,634 Cultivation 1,125 ---------- Total current assets 115,157 ---------- TOTAL ASSETS $ 115,157 ========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accrued expenses $ 1,125 Advances payable 132,675 ---------- Total current liabilities 133,800 ---------- Total Liabilities 133,800 ---------- Stockholders' deficit Common stock: par value $0.1826: 50,000 shares authorized; 10,000 shares issued and outstanding 1,826 Deficit accumulated during the development stage (20,469) ---------- Total stockholders' deficit (18,643) ---------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 115,157 ========== See accompanying notes to the financial statements. F-3 <PAGE> Pure Guar India Private Limited (A Development Stage Company) Statement of Operations For the Period from February 19, 2013 (inception) through May 31, 2013 ------------ Revenues $ -- ---------- Operating expenses Salaries 4,718 Land lease expense 13,727 General and administrative 2,024 ---------- Total operating expenses 20,469 ---------- Loss before income tax provision (20,469) Income tax provision -- ---------- Net loss $ (20,469) ========== Net loss per common share: - Basic and diluted $ (2.05) ========== Weighted average common shares outstanding - basic and diluted 10,000 ========== See accompanying notes to the financial statements. F-4 <PAGE> Pure Guar India Private Limited (A Development Stage Company) Statement of Stockholders' Equity (Deficit) For the Period from February 19, 2013 (Inception) through May 31, 2013 Common Stock, Deficit Par Value $0.1826 Accumulated Total ---------------------- during the Stockholders' Number of Development Equity Shares Amount Stage (Deficit) ------ ------ ----- --------- Balance, February 19, 2013 (inception) -- $ -- $ -- $ -- Shares issued for cash at par on February 19, 2013 10,000 1,826 -- 1,826 Net loss (20,469) (20,469) -------- -------- -------- -------- Balance, May 31, 2013 10,000 $ 1,826 $(20,469) $(18,643) ======== ======== ======== ======== See accompanying notes to the financial statements. F-5 <PAGE> Pure Guar India Private Limited (A Development Stage Company) Statement of Cash Flows For the Period from February 19, 2013 (inception) through May 31, 2013 ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (20,469) Adjustments to reconcile net loss to net cash used in operating activities: Changes in operating assets and liabilities: Prepaid agricultural costs (11,453) Prepaid harvest (32,030) Prepaid land lease (68,634) Cultivation (1,125) Accounts payable 1,125 ---------- Net cash used in operating activities (132,586) ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Advances 132,675 Proceeds from sale of common stock 1,826 ---------- Net cash provided by financing activities 134,501 ---------- Net change in cash 1,915 Cash, beginning of period -- ---------- Cash, end of period $ 1,915 ========== Supplemental disclosure of cash flows information: Interest paid $ -- ========== Income tax paid $ -- ========== See accompanying notes to the financial statements. F-6 <PAGE> Pure Guar India Private Limited (A Development Stage Company) May 31, 2013 Notes to the Financial Statements NOTE 1 - ORGANIZATION AND OPERATIONS PURE GUAR INDIA PRIVATE LIMITED Pure Guar India Private Limited ("Pure"), a development stage company, was incorporated on February 19, 2013 under the laws of India to engage in any lawful business or activity for which corporations may be organized under the laws of India. Pure intends to engage in the cultivation and sale of the guar bean in India. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). DEVELOPMENT STAGE COMPANY The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with U.S. 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 reporting amounts of revenues and expenses during the reporting period. The Company's significant estimates and assumptions include the fair value of financial instruments; income tax rate, income tax provision, deferred tax assets and valuation allowance of deferred tax assets; the carrying value and recoverability of long-lived assets, including the values assigned to an estimated useful lives of website development costs and the assumption that the Company will be a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph 820-10-35-37") to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally F-7 <PAGE> accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of advances from stockholders, if any, due to their related party nature. FISCAL YEAR-END The Company elected May 31 as its fiscal year ending date. CASH EQUIVALENTS The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. LEASES Lease agreements are evaluated to determine whether they are capital leases or operating leases in accordance with paragraph 840-10-25-1 of the FASB Accounting Standards Codification ("Paragraph 840-10-25-1"). When substantially all of the risks and benefits of property ownership have been transferred to the Company, as determined by the test criteria in Paragraph 840-10-25-1, the lease then qualifies as a capital lease. Capital lease assets are depreciated on a straight line method, over the capital lease assets estimated useful lives consistent F-8 <PAGE> with the Company's normal depreciation policy for tangible fixed assets. Interest charges are expensed over the period of the lease in relation to the carrying value of the capital lease obligation. Rent expense for operating leases, which may include free rent or fixed escalation amounts in addition to minimum lease payments, is recognized on a straight-line basis over the duration of each lease term. RELATED PARTIES The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. COMMITMENTS AND CONTINGENCIES The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's consolidated financial statements. If the assessment indicates that a potentially material loss F-9 <PAGE> contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company's business, financial position, and results of operations or cash flows. REVENUE RECOGNITION The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. INCOME TAX PROVISION The Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13.addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management's opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. UNCERTAIN TAX POSITIONS The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the period from February 19, 2013 (inception) through May 31, 2013. F-10 <PAGE> NET INCOME (LOSS) PER COMMON SHARE Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. There were no potentially outstanding dilutive shares for the period from February 19, 2013 (inception) through May 31, 2013. CASH FLOWS REPORTING The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. SUBSEQUENT EVENTS The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In January 2013, the FASB issued ASU No. 2013-01, "BALANCE SHEET (TOPIC 210): CLARIFYING THE SCOPE OF DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES". This ASU clarifies that the scope of ASU No. 2011-11, "BALANCE SHEET (TOPIC 210): DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES." applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. In February 2013, the FASB issued ASU No. 2013-02, "COMPREHENSIVE INCOME (TOPIC 220): REPORTING OF AMOUNTS RECLASSIFIED OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME." The ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013. F-11 <PAGE> In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, "LIABILITIES (TOPIC 405): OBLIGATIONS RESULTING FROM JOINT AND SEVERAL LIABILITY ARRANGEMENTS FOR WHICH THE TOTAL AMOUNT OF THE OBLIGATION IS FIXED AT THE REPORTING DATE." This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. In March 2013, the FASB issued ASU No. 2013-05, "FOREIGN CURRENCY MATTERS (TOPIC 830): PARENT'S ACCOUNTING FOR THE CUMULATIVE TRANSLATION ADJUSTMENT UPON DERECOGNITION OF CERTAIN SUBSIDIARIES OR GROUPS OF ASSETS WITHIN A FOREIGN ENTITY OR OF AN INVESTMENT IN A FOREIGN ENTITY." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. In March 2013, the FASB issued ASU 2013-07, "PRESENTATION OF FINANCIAL STATEMENTS (TOPIC 205): LIQUIDATION BASIS OF ACCOUNTING." The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity's governing documents from the entity's inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity's inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity's expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. NOTE 3 - GOING CONCERN The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the financial statements, the Company had a deficit accumulated during the development stage at May 31, 2013, a net loss and net cash used in operating activities for the period from February 19, 2013 (inception) through May 31, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern. F-12 <PAGE> While the Company is attempting to commence operations and generate revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. NOTE 4 - PREPAID EXPENSES Prepaid expenses consisted of the following: May 31, 2013 ------------ Prepaid agricultural costs $ 11,453 Prepaid harvest (a) 32,030 Prepaid land lease (b) 68,634 ---------- $ 168,874 ========== (a) The Company has paid in advance the seller's estimated portion of the harvest revenue. The harvest will occur in October or November 2013 at which time an exact amount will be determined. (b) The Company has prepaid a land lease that commenced April 13, 2013 and ends on April 12, 2014. The Company is amortizing this amount over the term of the lease. Land lease expense was $13,727 for the period from February 19, 2013 (inception) through May 31, 2013. NOTE 5 - STOCKHOLDERS' EQUITY (DEFICIT) SHARES AUTHORIZED Upon formation the total number of shares of common stock which the Company is authorized to issue is Fifty Thousand (50,000) shares, par value $0.1826 per share. COMMON STOCK Upon formation, the Company issued 10,000 shares of its common stock to two directors for cash proceeds of $1,826. NOTE 6 - ADVANCES PAYABLE For the period from February 19, 2013 (inception) to May 31, 2013, an unrelated third party advanced funds to the Company and paid certain bills for the company for an aggregate advance of $132,675. These advances are unsecured, non-interest bearing and due on demand. NOTE 7 - INCOME TAX PROVISION DEFERRED TAX ASSETS At May 31, 2013, the Company had net operating loss ("NOL") carry-forwards for Indian income tax purposes of $20,469 that may be offset against future taxable income. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company F-13 <PAGE> believes that the realization of the Company's net deferred tax assets of approximately $6,642 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a full valuation allowance. Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The valuation allowance increased approximately $6,642 for the period from February 19, 2013 (inception) through May 31, 2013. Components of deferred tax assets are as follows: May 31, 2013 ------------ Net deferred tax assets - Non-current: Expected income tax benefit from NOL carry-forwards $ 6,642 Less: Valuation allowance (6,642) ---------- Deferred tax assets, net of valuation allowance $ -- ========== INCOME TAX PROVISION IN THE STATEMENTS OF OPERATIONS A reconciliation of the Indian statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: For the Period from February 19, 2013 (inception) through May 31, 2013 ------------ Indian statutory income tax rate 32.45% Change in valuation allowance on net operating loss carry-forwards (32.45) -------- Effective income tax rate 0.0% ======== NOTE 8 - FOREIGN OPERATIONS FOREIGN CURRENCY EXCHANGE RATE RISK The exchange rate between the Indian Rupee and the U.S. dollar has fluctuated substantially both historically and in recent years, and could continue to fluctuate substantially in the future. The operations of the Company are recorded in US Dollars for reporting purposes at rates of exchange in effect at the date of the transaction published by the Reserve Bank of India. Any significant revaluation of Indian Rupee may materially and adversely affect the cash flows, revenues, earnings and financial position reported in U.S. Dollar. The Company had no foreign currency hedges in place for the period from February 19, 2013 (inception) through May 31, 2013 to reduce such exposure. NOTE 9 - SUBSEQUENT EVENTS The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed. F-14
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