Migom Global Corp. - Quarter Report: 2018 June (Form 10-Q)

UNITED STATES

Nevada		7812		61-1787148
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

Item1.  Financial Statements

 

Alfacourse Inc.

 

Quarter Ended June 30, 2018

 

Index to the Financial Statements

 

 

Alfacourse Inc.

Balance Sheets

As of June 30, 2018 and December 31, 2017

The accompanying notes are an integral part of these financial statements.

 

Alfacourse Inc.

Statements of Operations

For the Three Months Ended June 30, 2018 and 2017

(Unaudited)

The accompanying notes are an integral part of these financial statements.

 

Alfacourse Inc.

Statements of Operations

For the Six Months Ended June 30, 2018 and 2017

(Unaudited)

The accompanying notes are an integral part of these financial statements.

 

Alfacourse Inc.

Statements of Cash Flows

For the Six Months Ended June 30, 2018 and 2017

(Unaudited)

The accompanying notes are an integral part of these financial statements.

 

Alfacourse Inc.

Notes to the Financial Statements

(Unaudited)

 

Note 1 - Organization and Operations

Alfacourse Inc. (the “Company”) was incorporated on February 29, 2016 under the laws of the State of Nevada.  The Company provides video editing services.

Note 2 - Summary of Significant Accounting Policies

The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application.  Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

 

The Company is a development stage company as defined in ASC 915 “Development Stage Entities.”. The Company is 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.

 

The Company has elected to adopt application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. Upon adoption, the Company no longer presents or discloses inception-to-date information and other remaining disclosure requirements of Topic 915.

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(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

The Company has no assets or liabilities valued at fair value on a recurring basis.

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation on property, plant and equipment is calculated on the straight-line method after taking into account their respective estimated residual values over the estimated useful lives of the assets as follows:

Tools and equipment 2 years

Maintenance and repair costs are expensed as incurred, whereas significant renewals and betterments are capitalized.

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 (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (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.

 

In 2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company has concluded that the new guidance did not require any significant change to its revenue recognition processes.

 

 

The Company’s video-editing services are considered to be one performance obligation; therefore, revenue is recognized when services have been provided as each performance obligation is satisfied.

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 dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants.

There were no potentially dilutive common shares outstanding for the period ended June 30, 2018.

 Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

  

 

The Company has adopted ASC No. 260, “Earnings Per Share” which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. Basic net loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.

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.

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.

 

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 retained loss of ($22,997) since inception with limited operations with reported loss of ($24,371) for the six months ended June 30, 2018.  These factors raise doubt about the Company’s ability to continue as a going concern.

Although the Company has recognized some nominal amount of revenues since inception, the Company is devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced.  The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations.  While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue 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 its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

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– Property, Plant and Equipment

Property, Plant and Equipment as follows:

Depreciation expense were $810 and $0 for the six months ended June 30 2018 and 2017, respectively

Note 5– Stockholders’ Equity

Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is Seventy-Five Million (75,000,000) shares of which Seventy-Five Million (75,000,000) shares shall be Common Stock, par value $0.001 per share.

As of June 30, 2018, there were 7,315,000 total shares issued and outstanding.

On December 8, 2016, the Company has issued 5,000,000 shares of common stock to Oleg Jitov, President of the Company at $0.001 per share for aggregate proceeds of $5,000.

During the year ended December 31, 2017, the Company has issued 2,315,000 shares to 29 investors at a price of $0.01 per share for aggregate proceeds of $23,150.

Note 6– Related Party Transactions

The Company has been provided office space by its President at no cost. Management determined that such cost is nominal and did not recognize the rent expense in its financial statement.

 

 

From time to time, the President of the Company advances funds to the Company for working capital purposes.  These advances are unsecured, non-interest bearing and due on demand.  The outstanding balance was $3,224 as of June 30, 2018.

On December 8, 2016, the Company sold 5,000,000 shares of common stock to Oleg Jitov, President of the Company at $0.001 per share, or $5,000 in cash.

Note 7– Income Taxes

The reconciliation of income tax benefit (expenses) at the U.S. statutory rate of 21% and 34% for the period ended as follows:

The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets are as follows:

The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets are as follows:

 

The Company has accumulated $24,337 of net operating losses (“NOL”) carried forward to offset future taxable income up to 20 years, if any, in future years which begin to expire in year 2038. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

Note 8 – Subsequent Events

The Company has evaluated all events that occur 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.

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Alfacourse Inc. (the “Company”) was incorporated on February 29, 2016 under the laws of the State of Nevada.  The Company provides video editing services.

Alfacourse Inc. is a new company specializing in providing video editing services to professional video production companies and end consumers.

The company is using the latest technology to achieve a level of quality previously reserved for only the most expensive video production companies and private consumers.  Our President has extensive industry experience and technical and creative expertise.

Our plans are to provide video-editing services using new UHD (Ultra-High Definition) 4K and 8K technologies as the market demand for UHD video continues to grow.  This will improve our position in the video production and editing market.  To secure a market segment, the company is working to determine trends in the industry, the needs of the customer, and come up with new creative ways to address those needs.  Our services geared towards several work streams, including television stations, animation and multimedia companies.

Our primary business is video editing services.  Every video project divided into three parts: pre-production, production, and post-production.  During pre-production, customer describes the business need and the purpose. We plan, design, and develop the process of video editing. Production is the part of the project in which we collect and create all of the raw material that we will need to produce your multi-media project. This might include videotaping material in a one, two, or three camera shoot, producing 2-D or 3-D motion graphics. Post-production is where everything is pulled together into a rough-cut of the product.  We make changes to accommodate customer preferences and desires during the post-production stage of the project.

Below is a list of services the company will provide:

1.	Postproduction video editing

2.	Inserts for live shows

3.	Web videos

4.	Corporate videos

5.	Presentation videos

6.	Promotional Video Production and Video Marketing

7.	Full range of post-production services

Alfacourse Inc. will provide video editing and full range of post-production services to its target markets.

 

The target markets have been identified as:

1.

Media & Entertainment companies

a.

TV commercials

b.

Broadcast programs

c.

Music videos

d.

Documentaries

e.

TV drama

f.

Short films

g.

Feature films

2.

Video production companies

3.

Animation and Multimedia companies

4.

Corporate customers

5.

YouTube commercial publishers

6.

Private consumers

We have identified three main marketing client groups associated with the various streams of revenue:

Source #1 – The End Client

Our main source of revenue is the end client.

The end client is the company or individual that requires direct services of Alfacourse.

The End Client scenario expected to make up 75% of our total revenue.

Source #2 – Creative Agencies

In this scenario, the End Client hires the agency who in turn hires us to provide video services for a larger project.

The money flows from the End Client to the Creative Agency and then to Alfacourse.

In the corporate video arena, there are marketing, PR, advertising, interactive and website design agencies that develop projects for End Clients that will need to outsource professional video services.

In the wedding video arena, an agency might be a chapel or large wedding coordination company that provides turn-key services to brides and their families.

Creative agencies should make up about 18% of the revenues we generate for your video business.

Source #3 – Other Videographers and/or Producers

The Company plans to form strategic alliances with clients who require a freelancer to cover various events for them.  We will also develop strategic alliances with video production companies and work with them as a sub-contractor.

The other videographers and producers segment is expected to generate 7% of the total revenue.

 

There are many video production and editing companies in the market.

We expect to compete as a freelance video production company in the Media & Entertainment industry.

Currently, our competitive position within the industry is negligible in light of the fact that we have just recently started our operations.

Out competitive advantages are:

·

Expertise

·	Performance

·	Flexibility

·

Price

 

For the three months ended June 30, 2018, our operating expenses were comprised of DTC Agent fees (Processing of low-volume tender) of $10,000, general and administrative expenses of $772 and professional fees of $5,171 as compared to $1,712 total expenses for the three months ended June 30, 2017. The increase in operating expenses of $14,231 primarily due to DTC agent fees $10,000  and higher professional fee paid (primarily audit).

For the six months ended June 30, 2018, our operating expenses were comprised of DTC agent fees of $10,000, general and administrative expenses of $2,023 and professional fees of $12,314 as compared to total expense of $3,010 for the six months ended June 30, 2017.  The increase of $21,327 in operating expenses was primarily due to registration fee and higher professional services fees (primarily audit).

We anticipate that our legal and accounting fees will be $12,000 over the next 12 months as a result of being a reporting company with the SEC.

A substantial portion of our activities to-date has been focused on developing a sound business plan. We have established the company's office.

Continue to work on Company website and presentation materials for prospective clients.

We sold 5,000,000 shares of common stock to our President for $5,000.

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

As of June 30, 2018, the Company reported the cash/cash equivalent balance of $8,566 and liabilities of $5,463.  The available capital of the Company is not sufficient for the Company to remain operational for the next twelve months.

Since inception, we have sold 5,000,000 shares of common stock to our President at a price of $0.001 per share, for aggregate proceeds of $5,000 and 2,315,000 shares to 29 investors at a price of $0.01 per share for aggregate proceeds of $23,150.Our President will provide additional capital via long-term note in order to complete the Offering and registration process if required.

We are attempting to raise funds to proceed with our plan of operation.  Our current cash balance will be used to pay the fees and expenses of this Offering.  We will have to obtain additional funding from our President.  However, he has no formal commitment, arrangement or legal obligation to loan funds to the Company.  To proceed with our operations for the next twelve months, we need a minimum of $25,000.  We cannot guarantee that we will be able to sell all the shares required to satisfy our 12 months financial requirement.  If we are successful, all funds raised will be applied to the items set forth in the Use of Proceeds section of this Prospectus.  In the long term we may need additional financing.  We do not currently have any arrangements for obtaining such additional financing.  Such additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations.  These factors may impact the timing, amount, terms and conditions of additional financing available.  There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.

For the six months ended June 30, 2018, we have cash flows used in operating activities of $(22,827) as compared to $(6,010) for the same period in 2017 as we have incurred and paid more expenses.

For the six months ended June 30, 2018, we have cash flows used in financing activities of $(250) as compared to $nil for the same period in 2017. We repaid $250 to our director for advances made to the Company.

 

Our auditors intend to issue a “going concern” opinion, meaning that there is substantial doubt for the company to continue as an on-going business for the next twelve months unless we obtain additional capital.  No substantial revenues are anticipated until we have completed the financing from this Offering and implemented our plan of operations.  Our only source for cash at this time is investments by others in this Offering.  We must raise cash to implement our strategy and stay in business.   The Company anticipates to incur approximately $15,000 in legal and registration cost over the next twelve months.

We have no historical financial information upon which to base an evaluation of our performance.  We are in a start-up operation stages and have generated revenues of $14,620 from four clients (inception to-date).  We cannot guarantee we will be successful in our business operations.  Our business is subject to risks inherent in the establishing a new business enterprise, including limited capital resources and possible overruns due to price and cost increases in services and products.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

No report required.

Item 4. Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation has been conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2018. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the six months ended June 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

Item 1. Legal Proceeding

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

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

No report required.

Item 3. Default Upon Senior Securities

No report required.

Item 4. Mine Safety Disclosures

No report required.

Item 5. Other Information

No report required.

Item 6. Exhibits

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Stepaside, Dublin 18, Ireland on August 9, 2018.

	Alfacourse  Inc.
	By:	/s/ Oleg Jitov
		Name: Oleg Jitov
		Title: President, Secretary and Director
		(Principal Executive, Financial and Accounting Officer)