NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED AUGUST
31, 2021
(UNAUDITED)
Note 1 – Organization
and Basis of Presentation
Organization and Basis
of Presentation
Gabbit
Corp. (the “Company”) is a corporation incorporated under the laws of the State of Nevada on August 16, 2015 and ceased
operations in early 2018. On November 20, 2019, the Company filed a Certificate of Reinstatement
with the State of Nevada.
The
Company plans to develop a technology-enabled, diversified commercial finance platform serving a wide range of small-to-medium businesses
who require access to working or growth capital, for whom traditional banking and finance channels are unworkable or unavailable, due
to; time constraints, credit-worthiness, seasonality, lack of operating history and or the business’ owners are generally unbanked
individuals.
The accompanying financial statements are prepared on the basis of accounting principles generally accepted in the United
States of America (“GAAP”) and have been prepared assuming the continuation of the Company as a going concern. The Company
has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing
to fund its operations. Management of the Company is making efforts to raise additional funding until a registration statement relating
to an equity funding facility is in effect. While management of the Company believes that it will be successful in its capital formation
and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful
in the development and commercialization of the products it develops or initiates collaboration agreements thereon. The accompanying
financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going
concern.
Note 2 – Summary of
significant accounting policies
Cash and Cash Equivalents
The Company doesn’t maintain
any bank accounts and does not have any cash in hand. For day-to-day business activities, the Company depends upon the directors’
personal accounts.
For purposes of reporting within
the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties,
and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Loss per Common Share
Net
loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. As
a result, diluted loss per common share is the same as basic loss per common share for the three and six months ended August 31, 2021
and 2020.
Income Taxes
The Company accounts for income
taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined
based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The
deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating
the differences.
The Company maintains a valuation
allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing
the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current
period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward
period under the Federal tax laws.
Changes in circumstances, such
as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any
change in the valuation allowance will be included in income in the year of the change in estimate.
Recent Accounting Pronouncements
The Company reviewed all the
recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material
impact on the Company.
Note
3 – Going Concern
For the six months ended August
31, 2021 and 2020 we incurred net losses of approximately $9,728 and $1,350 respectively. As of August 31, 2021, we had no cash on hand
and current liabilities of $21,933. As of February 28, 2021, we had no cash on hand and current liabilities of $12,205. These losses combined
with our current liabilities cast significant doubt on the company’s ability to operate under the going concern. The Company filed
a Registration Statement; Form-10 which became effective on September 22, 2021. Management believes that this plan provides an opportunity
for the Company to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable
operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due. Management intends to finance operating costs over the next twelve months with loans from directors
and/or private placement of common stock. The failure to achieve the necessary levels of profitability or obtaining additional funding
would be detrimental to the Company.
Note 4 – Related party
transactions
The
Company’s Co-CEO has provided office space at no cost to the Company. Our Co-CEO and CFO incurred expenses on behalf of the Company
amounting to $9,728 and $1,350 during the six months ending August 31, 2021 and 2020 respectively. As of August 31, 2021 and February
28, 2021, total amounts due to our Co-CEO and CFO are $17,194 and $7,466 respectively. Such amounts do not bear any interest and due upon
demand.
Note 5 – Shareholders’
Equity
The
Company has 75,000,000 shares of common stock authorized with a par value of $0.001 per share. As of August 31, 2021 and February
28, 2021, the Company had 11,490,000 shares issued and outstanding.
Note 6 – Income Taxes
The Company accounts for income
taxes under FASB ASC Topic 740, which requires use of the liability method. FASB ASC Topic 740 provides that deferred tax assets and liabilities
are recorded based on the differences the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes,
referred to as temporary differences.
As of August 31, 2021, the Company
incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes
has been recorded due to the uncertainty of the realization of any tax assets. The Company has approximately $56,000 and $46,000 of federal
net operating loss carry forwards at August 31, 2021 and February 28, 2021, respectively. In addition, the Company had gross deferred
tax assets of approximately $12,000 and $10,000 as of August 31, 2021 and February 28, 2021 for which a full valuation allowance has provided.
Based on the available objective
evidence, including the Company's history of losses, management believes it is more likely than not, the net deferred tax assets will
not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at August
31, 2021 and February 28, 2021. The Company had no uncertain tax positions as of August 31, 2021 and February 28, 2021.
Note
7 – Other Liabilities
As of August 31, 2021 and February 28 2021, the
Company has Other Liabilities of $4,739 payable to its former CEO.