CGS INTERNATIONAL, INC. - Quarter Report: 2017 January (Form 10-Q)

 

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LINE UP ADVERTISEMENT, INC.

QUARTERLY REPORT

TABLE OF CONTENTS

 

 

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LINE UP ADVERTISEMENT, INC.

CONDENSED FINANCIAL STATEMENTS

January 31, 2017

Unaudited

 

CONDENSED BALANCE SHEETS

CONDENSED STATEMENTS OF OPERATIONS

CONDENSED STATEMENTS OF CASH FLOWS

NOTES TO UNAUDITED CONDENSED INTERIM AUDITED FINANCIAL STATEMENTS

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LINE UP ADVERTISEMENT, INC.

CONDENSED BALANCE SHEETS

Unaudited

		January 31, 2017		April 30, 2016
ASSETS
CURRENT ASSETS
Cash	$	-	$	-
TOTAL CURRENT ASSETS	$	-	$	-
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	11,884	$	10,358
Due to related party		100,697		82,318
TOTAL CURRENT LIABILITIES	$	112,581	$	92,676
STOCKHOLDERS' EQUITY (DEFICIT)
Capital stock
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
760,000 shares at January 31, 2017 & at April 30, 2016	$	760	$	760
Additional Paid in Capital		26,655		26,655
Accumulated deficit		(139,996)		(120,091)
TOTAL STOCKHOLDERS' EQUITY/(DEFICIT)	$	(112,581)	$	(92,676)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)	$	-	$	-

The accompanying notes are an integral part of these financial statements

 

 

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LINE UP ADVERTISEMENT, INC.

CONDENSED STATEMENTS OF OPERATIONS

Unaudited

The accompanying notes are an integral part of these financial statements

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LINE UP ADVERTISEMENT, INC.

CONDENSED STATEMENTS OF CASH FLOWS

Unaudited

The accompanying notes are an integral part of these financial statements

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LINE UP ADVERTISEMENT, INC.

NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

January 31, 2017

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

The Company was incorporated in the State of Nevada as a for-profit Company on April 17, 2012 and established a fiscal year end of April 30.

In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flows, and stockholders’ equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

Interim results are not necessarily indicative of results for a full year.  The information included in this Form 10-Q should be read in conjunction with information included in the Form 10-K.

NOTE 2 – GOING CONCERN

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern.  This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has a working capital deficit of $112,581, an accumulated deficit of $139,996. The Company does not have a source of revenue sufficient to cover its operation costs giving substantial doubt for it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company.  There can be no assurance that the Company will be successful in either situation in order to continue as a going concern.  The Company is funding its initial operations by way of issuing Founder’s shares.

The officers and directors have committed to advancing certain operating costs of the Company, including Legal, Audit, Transfer Agency and Edgarizing costs.

NOTE 3 - CAPITAL STOCK

The Company’s capitalization is 75,000,000 common shares with a par value of $0.001 per share.  No preferred shares have been authorized or issued.

On April 25, 2012, the Company issued 7,500,000 Founder's shares for cash at $0.001 per share. In September 2012 the Company issued 260,000 common shares for cash at $0.02 per share.

On December 13, 2014 7,000,000 common shares were retired.

 

On January 31, 2017 and on April 30, 2016, the Company had 760,000 common shares issued and outstanding.

As of January 31, 2017, the Company has not granted any stock options and has not recorded any stock-based compensation.

 

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LINE UP ADVERTISEMENT, INC.

NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

January 31, 2017

 

NOTE 4 - RELATED PARTY TRANSACTIONS

As of January 31, 2017 and April 30, 2016, the Company has received $100,697 and $82,318 respectively, in loans and payment of expenses from a related party. The loans are payable on demand and without interest.

NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

The company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the company’s financial statement.

NOTE 6 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no further events to disclose.

 

 

 

 

 

 

 

 

 

 

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ITEM 2. MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance.  Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions or words which, by their nature, refer to future events.  You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report.  These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Summary Information

On April 17, 2012, Mr. Vagner Gomes Tome, our former executive officer and former director, incorporated the Company in the State of Nevada and established a fiscal year end of April 30th. On May 23, 2013 the Company accepted the resignation of Vagner Gomes Tome as the sole director and officer of the Company and accepted the appointment of Joelyn Alcantara to serve in his stead. The objective of the company remains to introduce advertisement in nightclub line-ups.

We are a company that intends to provide TV streaming advertisements for customers lining up on the outside of the nightclubs. The idea is to showcase pictures of that particular club scene, special events, deals on drink specials and advertisements from local businesses and other companies. We plan on providing the TV at no cost to the club and to generate revenue through the sale of advertisements from local restaurants, cigarette companies, alcohol companies, clothing companies, ads for sports and entertainment events, etc.

On December 13, 2013, Mr. Vagner Gomes Tome, surrendered for cancellation 7,000,000 shares of common stock of the Company.  On March 10, 2014, Ms. Alcantara, our current sole executive officer and director, acquired the remaining 500,000 shares of common stock of the Company formerly owned by Mr. Tome for a purchase price of $0.05 per share. Ms. Alcantara is currently the holder of 65.7% of the issued and outstanding shares of common stock of the Company and is the majority shareholder of the Company

As of the date of this quarterly report, we have not yet contacted any potential clients. Furthermore, we have not yet developed our systems and services. The Company has not yet implemented its business model and to date has generated no revenues.

We have been unable to raise additional funds to implement our operations, and we do not believe that we currently have sufficient resources to do so without additional funding. As a result, our Board of Directors has begun to analyze strategic alternatives available to our Company to continue as a going concern. Such alternatives include raising additional debt or equity financing or consummating a merger or acquisition with a partner that may involve a change in our business plan.

Although our Board of Directors' preference would be to obtain additional funding to implement our business plan, the Board believes that it must consider all viable strategic alternatives that are in the best interests of our shareholders. Such strategic alternatives include a merger, acquisition, share exchange, asset purchase, or similar transaction in which our present management will no longer be in control of our Company and our business operations will be replaced by that of our transaction partner. We believe we would be an attractive candidate for such a business combination due to the perceived benefits of being a publicly registered company, thereby providing a transaction partner access to the public marketplace to raise capital.

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We have had preliminary discussions with other potential business combination partners, but have not signed a definitive agreement to engage in a strategic transaction. Any such business combination and the selection of a partner for such a business combination involves certain risks, including analyzing and selecting a business partner that is compatible to engage in a transaction with us or has business operations that are or will prove to be profitable. In the event we select a partner for a strategic transaction and sign a definitive agreement to consummate such a transaction, we will report this event on a Form 8-K to be filed with the Securities and Exchange Commission. If we are unable to locate a suitable business combination partner and are otherwise unable to raise additional funding, we will likely be forced to cease business operations.

Results of Operations

Revenue

We did not generate any revenue during the three and nine month periods ending January 31, 2017 and 2016.  

Expenses

We incurred expenses in the amount of $5,308 during the three month period ending January 31, 2017 and $6,092 during the three month period ending January 31, 2016. The decrease in expenses have been to decreased costs related to legal and accounting cost associated with filing quarterly and annual reports.

We incurred expenses in the amount of $19,905 during the nine month period ending January 31, 2017 and $23,994 during the nine month period ending January 31, 2016. The decrease in expenses was caused by decreased legal and accounting costs in connection with the filing of quarterly and annual reports.

Net Loss

We incurred a net loss of $5,308 and $6,092 during the three month periods ending January 31, 2017 and 2016, respectively. We incurred a net loss of $19,905 and $23,994 during the nine month periods ending January 31, 2017 and 2016, respectively.

Liquidity and Capital Resources

As of January 31, 2017, we had $0 in cash, with liabilities of $112,581, as compared to $0 in cash and $92,676 in liabilities at April 30, 2016. Our current cash holdings will not satisfy our liquidity requirements and we will require additional financing to pursue our planned business activities.  

Net cash used in operating activities for the three month and nine month periods ending January 31, 2017 and 2016 was $0 and $0, respectively. We had $0 net cash provided by financing activities for the three month and nine month periods ending January 31, 2017 and 2016.

 

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As of January 31, 2017 and April 30, 2016, the Company has received $100,697 and $82,318, respectively, in loans and payment of expenses from a related party. The loans are payable on demand and without interest. The funds provided to the Company by the former President and current President have no interest and no fixed repayment date.

Our officer and director has committed to advancing funds (up to $25,000) for the next twelve months to cover expenses to maintain the reporting status current with the SEC. Ms. Joelyn Alcantara is willing to lend the full amount of these funds to the Company as the expenses are incurred, if necessary or if no other proceeds are obtained by the Company. However, there is no contract in place or written agreement with Ms. Alcantara and the funds expressed in the above president’s verbal commitment, would be in the form of a non-secured loan and would have no interest and no fixed repayment date.

Additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements. The failure to secure additional equity financing would result in need to seek capital from other resources such as debt financing, which may not be available to the Company. However, if such financing were available, because we are a company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing. If the Company cannot raise additional proceeds via a private placement of its common stock or secure debt financing, it would be required to cease business operations. As a result, investors may lose all of their investment.

Off-balance sheet arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (who is our Principal Executive Officer) and our Chief Financial Officer (who is our Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of October 31, 2016, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of October 31, 2016 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.

 

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In performing the above-referenced assessment, our management identified the following material weaknesses:

 

1.           Lack of formal policies and procedures necessary to adequately review significant accounting transactions.   The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.

2.            Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.

Our management feels the weaknesses identified above have not had any material affect on our financial results. However, we are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the near term, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.

Our management team will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the quarterly period ended October 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

 

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

        None.

 

Item 3. Defaults Upon Senior Securities

        None

Item 4. (Removed and Reserved)

Item 5. Other Information

None

Item 6. Exhibits

Exhibit No.	Document Description
3.1(a)	Articles of Incorporation of Line Up Advertisement, Inc. (incorporated by reference from our Registration Statement on Form S-1 filed on July 06, 2012)
3.1(b)	Amendment to Articles of Incorporation of Line Up Advertisement, Inc. (incorporated by reference from our Current Report on Form 8-K filed on November 11, 2013).
3.2	Bylaws of Line Up Advertisement, Inc. (incorporated by reference from our Registration Statement on Form S-1 filed on July 06, 2012)
31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer
31.2	Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer *
32.1	Section 1350 Certification of Chief Financial Officer
32.2	Section 1350 Certification of Chief Financial Officer **
101	Interactive Data Files

*     Included in Exhibit 31.1

**    Included in Exhibit 32.1

                                   

SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                        

Line Up Advertisement, Inc.

/s/ Joelyn Alcantara  

Joelyn Alcantara  

President, Secretary, Treasurer, Chief Financial Officer and Director

(Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer)

Dated: March 10, 2017