Notes to Unaudited Condensed Financial Statements
June 30, 2016
NOTE 1 – NATURE OF BUSINESS
Overview of Organization
International Metals Streaming Corp. (the "Company") was incorporated in the state of Nevada on November 17, 2011, under the name "GS Valet, Inc." On December 1, 2011, the Company entered into an agreement with Garden State Valet, LLC, a New Jersey limited liability company ("Garden State Valet"), and the unit-holders of Garden State Valet (the "Unit-holders") to purchase all of the outstanding units of Garden State Valet. Garden State Valet was formed on June 15, 2011.
Change in Control
On August 9, 2013, six accredited investors (the "Purchasers") acquired 12,500,000 shares of the Company's common stock in the aggregate then held by its former sole officer and director who, prior to such acquisition, held approximately 77.22% of the then issued and outstanding shares of common stock. Immediately thereafter, the Company caused 4,093,746 shares of its common stock that one of the Purchasers purchased to be cancelled pursuant to a Cancellation Agreement that the Company entered into with such Purchaser on August 9, 2013. As a result, the former sole officer and director relinquished his control of the Company and resigned, and a new sole officer and director was appointed in his place.
In connection with the change of control transaction, effective September 26, 2013, the Company changed its name from "GS Valet, Inc." to "International Metals Streaming Corp."
Effective September 26, 2013, the Company's board of directors approved a change in its fiscal year end from September 30 to December 31. The Company filed a Transition Report on Form 10-Q for the three months ended December 31, 2012 with the Securities and Exchange Commission (the "SEC") in connection therewith.
Until October 1, 2013, the Company, through Garden State Valet, provided valet parking management services for hotels, restaurants, country clubs, retail centers and private events in New Jersey. The operations of Garden State Valet ceased on October 1, 2013. The Company then planned to pursue a metals streaming business by acquiring and managing precious metals streams, royalties and other similar interests. As of December 31, 2013, however, the Company had not entered into any definitive agreement in connection with such business. In March 2014, the Company determined that the metals streaming business was no longer desirable, and have ceased pursuing such business. As of June 30, 2016, the Company currently has nominal operations and minimal assets. As such, the Company is considered to be a shell company under the Securities Exchange Act of 1934, as amended.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements as of June 30, 2016 and for the three and six months ended June 30, 2016 and 2015 have been prepared by the Company pursuant to the rules and regulation of the Securities Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are in the opinion of management, necessary to fairly present the operating results for the respective periods. 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 have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading.
The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016. These unaudited condensed financial statements should be read in conjunction with our audited condensed financial statements and explanatory notes for the year ended December 31, 2015 as disclosed in the Company’s Form 10-K for that year as filed with the Securities and Exchange Commission on March 30, 2016.
Significant accounting policies are as follows:
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.
INTERNATIONAL METALS STREAMING CORP.
Notes to Unaudited Condensed Financial Statements
June 30, 2016
Cash
The Company presently maintains any cash in an attorney trust account until such time that the Company establishes a bank account
Income (Loss) Per Share
The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260,
Earnings per Share.
Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. During the six months ended June 30, 2016 and year ended December 31, 2015, there were no potentially dilutive debt or equity instruments outstanding.
Financial Instruments
ASC 820,
Fair Value Measurements
requires disclosure of the fair value of financial instruments. The Company's balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
Reclassification
Certain prior year amounts have been reclassified to conform to the current year presentation.
Recently Issued Standards
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The purpose is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. This ASU is effective for the Company in the first quarter of 2018. Early adoption is not permitted except for limited provisions. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. This is part of FASB's simplification initiative. The amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This ASU is effective for the Company in the first quarter of 2017. Early adoption is permitted. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments which allows entities to recognize adjustments to provisional amounts in the period adjustment is identified rather than retrospectively. In-period adjustments must be disclosed. This ASU is effective for the Company in the first quarter of 2016. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this ASU. Early adoption is permitted for financial statements that have not been issued. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-15, "Interest - Imputation of Interest (Subtopic 835-30)." ASU 2015-15 provides guidance as to the presentation and subsequent measurement of debt issuance costs associated with line of credit arrangements. We do not expect the adoption of ASU 2015-15 to have a material effect on our financial position, results of operations or cash flows. We do not expect the adoption of ASU 2015-15 to have a material effect on our financial position, results of operations or cash flows.
In August 2015, the FASB issued ASU No. 2015-14, Revenue From Contracts With Customers (Topic 606)." The amendments in this ASU defer the effective date of ASU 2014-09. Public business entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We do not expect adoption of ASU 2015-14 to have a material effect on our financial position, results of operations or cash flows.
In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory (Topic 330)." ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, first-out ("LIFO") method by prescribing that inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. We do not expect the adoption of ASU 2015-11 to have a material effect on our financial position, results of operations or cash flows. We do not expect adoption of ASU 2015-14 to have a material effect on our financial position, results of operations or cash flows
INTERNATIONAL METALS STREAMING CORP.
Notes to Unaudited Condensed Financial Statements
June 30, 2016
In April 2015, the FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)." ASU 2015-05 provides guidance regarding the accounting for a customer's fees paid in a cloud computing arrangement; specifically about whether a cloud computing arrangement includes a software license, and if so, how to account for the software license. ASU 2015-05 is effective for public companies' annual periods, including interim periods within those fiscal years, beginning after December 15, 2015 on either a prospective or retrospective basis. Early adoption is permitted. We do not expect the adoption of ASU 2015-05 to have a material effect on our financial position, results of operations or cash flows.
There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.
NOTE 3 – GOING CONCERN
The Company's financial statements are prepared using US GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had incurred net losses of $83,888 and $43,588 for the six months ended June 30, 2016 and 2015, respectively. As of June 30, 2016 and December 31, 2015, our accumulated deficit was $976,335 and $892,447, respectively. The Company has not established an ongoing source of revenues sufficient to cover its operating costs, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the sufficiency of its capital or obtaining additional capital to fund operating losses. If the Company requires or is unable to obtain additional capital, it could be forced to cease operations. These factors raise substantial doubt about the Company's ability to continue as a going concern.
NOTE 4 – NOTES PAYABLE, THIRD PARTY
On April 4, 2014, the Company issued a note payable to a third party in the amount of $57,039. The note was due and payable on April 4, 2015 and carries an interest rate of 8% per annum. A settlement agreement has been reached but not executed whereby, under certain conditions, the note would be paid at a significant discount. As of June 30, 2016 and December 31, 2015, there is $10,214 and $7,951, respectively in accrued interest related to the note payable included in accrued expenses.
On April 2, 2015, the Company issued a note payable to a third party in the amount of $2,500. The note is due and payable on April 2, 2016 and carries an interest rate of 8% per annum. As of June 30, 2016 and December 31, 2015, there is $249 and $150, respectively, in accrued interest related to the note payable included in accrued expenses.
On November 12, 2015, the Company issued a note payable to a third party in the amount of $2,948. The note is due and payable on November 11, 2016 and carries an interest rate of 8% per annum. As of June 30, 2016 and December 31, 2015, there is $149 and $32, respectively, in accrued interest related to the note payable included in accrued expenses.
On March 30, 2016, the Company issued a note payable to a third party in the amount of $18,290. The note is due and payable on March 29, 2017 and carries an interest rate of 8% per annum. As of June 30, 2016, there is $369 in accrued interest related to the note payable included in accrued expenses.
On June 30, 2016, the Company issued a note payable to a third party in the amount of $15,000. The note is due and payable on June 29, 2017 and carries an interest rate of 8% per annum. As of June 30, 2016, there was no accrued interest related to the note payable included in accrued expenses.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
The Company has no commitments or contingencies as of June 30, 2016 and December 31, 2015.
From time to time, the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company's financial position or results of operations.
NOTE 6 – RELATED PARTY TRANSACTIONS
During the six months ended June 30, 2016 and 2015, the Company incurred consulting fees of $2,000 and $4,000 provided by its current officer and director. During the three months ended June 30, 2016 and 2015, the Company incurred consulting fees of $1,000 and $2,000 provided by its current officer and director
NOTE 7 – EQUITY
Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share ("Preferred Stock"). No Preferred Stock has been issued to date.
INTERNATIONAL METALS STREAMING CORP.
Notes to Unaudited Condensed Financial Statements
June 30, 2016
Common Stock
The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share ("Common Stock"). On October 7, 2013, the Company's board of directors approved a 2.5 for 1 forward stock-split of its issued and outstanding shares of Common Stock (the "Stock Split"). The Stock Split affected all shares of Common Stock outstanding immediately prior to the record date of October 3, 2013, and each stockholder of one share of Common Stock as of such record date received 2.5 shares of Common Stock. The Stock Split did not affect the par value of the Common Stock. No fractional shares were issued. The Stock Split increased the number of issued and outstanding shares of Common Stock from 5,400,035 to 13,500,092. These notes and the accompanying financial statements give retroactive effect to the Stock Split. The Company had 12,093,754 shares of Common Stock issued and outstanding at June 30, 2016 and December 31, 2015.
On August 9, 2013, the Company sold 1,406,338 shares of Common Stock (the "Initial Shares") at $4.266 per share to two accredited investors (the "Initial Investors"). The closing thereof occurred on August 9, 2013 with gross proceeds to the Company of $6 million in connection thereof, comprised of $1 million in cash and $5 million in promissory notes issued by Preciosa Streaming Company Inc., a Barbados company ("Preciosa"). Preciosa issued the promissory notes to the Initial Investors, who, in turn, assigned them to the Company at the Closing pursuant to a Note Assignment Agreement entered into by and between Company and each Initial Investor on August 9, 2013. Preciosa repaid these notes in full to the Company on September 20, 2013. Preciosa also reimbursed to the Company $28,263 in legal fees incurred by the Company. The cash proceeds from issuance of the Initial Shares were placed into a trust account maintained by the Company's counsel until such time that the Company could establish a bank account. However, on March 11, 2014, the proceeds, less the costs incurred in the pursuit of the metals streaming business, were returned to the investors.
On August 9, 2013, the Company caused 4,093,746 shares of Common Stock held by a stockholder to be cancelled pursuant to a Cancellation Agreement entered into by and between the Company and such stockholder on August 9, 2013. The Company recognized a loss of $164 on the cancellation of this stock.
On December 9, 2013, the Company sold 468,823 shares of Common Stock (with the Initial Shares, collectively the "Shares") at $4.266 per share to two accredited investors (with the Initial Investors, collectively the "Investors"). The closing thereof occurred on December 9, 2013, with gross proceeds to the Company of $2 million. The cash proceeds from issuance of these shares were placed into a trust account maintained by the Company's counsel until such time that the Company could establish a bank account. However, on March 11, 2014, the proceeds, less the costs incurred in the pursuit of the metals streaming business, were returned to the investors.
On December 9, 2013, the Company sold 1,533,166 shares of Common Stock at $0.0001 per share for gross proceeds of $153.
On March 10, 2014, due to its determination that the metals streaming business was no longer desirable, the Company and the Investors rescinded their transactions pertaining to the Shares. In connection with such rescission: (a) each Investor agreed to return that portion of the Shares issued to such Investor, (b) the Company agreed to return the proceeds from the sale of the Shares to the Investors, net of all payments therefrom by the Company as of the date of the rescission, and (c) the Company and the Investors each agreed to release all claims that each of them may have against the other.
On March 11, 2014, $7,389,184 of the $8 million proceeds from the sale of 1,875,161 shares of Common Stock, less costs of $610,816, was returned to the Investors. In connection therewith, the certificates representing such shares have been surrendered to the Company for cancellation.
On November 5, 2015, two shareholders surrendered an aggregate of 1,533,166 shares of Common Stock to the Company and cancelled for no consideration.
NOTE 8 – SUBSEQUENT EVENTS
On September 22, 2016, the former sole officer and director surrendered an aggregate of 1,125,000 shares of Common Stock to the Company which were cancelled resulting in 10,968,754 shares being outstanding. The Company has evaluated subsequent events through the date these unaudited condensed financial statements were available to be issued as of October 31, 2016 and determined that there are no additional reportable subsequent events.
Subsequent to June 30, 2016, the Company was able to secure release of obligations for accrued expenses in the amount of $7,500 from a former sole officer and director and $108,688 in notes payable and accrued interest.
The Company has evaluated subsequent events through the date these unaudited condensed financial statements were available to be issued as of November 8, 2016 and determined that there are no reportable subsequent events.