NOTES
TO RESTATED FINANCIAL STATEMENTS
MARCH
31, 2017
NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Lotus
Bio-Technology Development Corp. (formerly Starflick.Com) (“we”, “our”, the “Company”) was
formed on March 24, 2011. The company is actively seeking out new opportunities in the Organic and Bio-technology space.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
accompanying restated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”).
Use
of estimates
The
preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Significant
estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Property
and equipment
Property
and equipment are stated at cost less accumulated depreciation and amortization. When property and equipment is retired or otherwise
disposed of, the net carrying amount is eliminated with any gain or loss on disposition recognized in earnings at that time. Maintenance
and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives
of the assets. As of March 31, 2017, the Company deemed its software that had been previously capitalized was fully impaired and
recognized a $5,458 loss on impairment. Depreciation expense for the years ended March 31, 2017 and 2016, was $0 and $1,092, respectively.
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 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 establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (U.S. 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
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 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 unobservable inputs and not corroborated by market data.
The
carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate
their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the
fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company
for similar financial arrangements at March 31, 2017 and 2016.
Income
taxes
The
Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax
returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected
to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than
not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period
that includes the enactment date.
The
Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards
to uncertainty income taxes. Section 740-10-25 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 Section 740-10-25, 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. Section 740-10-25 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 Section 740-10-25.
Stock-based
Compensation
We
account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments
to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees
shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever
is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price
on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option
valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize
the cost over the term of the contract.
We
account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock
Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation
expense and credited to additional paid-in capital over the period during which services are rendered.
Net
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.
The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company
incorporated as of the beginning of the first period presented.
The
Company’s diluted loss per share is the same as the basic loss per share for the years ended March 31, 2017 and 2016, as
the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.
Recently
issued accounting pronouncements
In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets
and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective
for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018,
with early adoption permitted. The Company has adopted this accounting standard update.
On
June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock
Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost
and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external
legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently
from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC718 and forgo
revaluing the award after this date. The guidance is effective for interim and annual periods beginning after December 15,
2018.
In
November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic
815, and Leases (Topic 841). This new guidance will be effective for annual reporting periods beginning after December 15, 2019,
including interim periods within those annual reporting periods. While the Company is continuing to assess the potential impacts
of ASU 2019-10, it does not expect ASU 2019-10 to have a material effect on its financial statements.
The
Company has implemented all new accounting pronouncements that are in effect and applicable. These pronouncements did not have
any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any
other new accounting pronouncements that have been issued that might have a material impact on its financial position or results
of operations.
NOTE
3 - GOING CONCERN
The
Company’s financial statements are prepared using accounting principles generally accepted in the United States of America
applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course
of business. The Company has not established any source of revenue to cover its operating costs and has an accumulated deficit
of $948,949, ($765,00 of which is from non-cash stock compensation expense). The Company’s existence is dependent upon management’s
ability to develop profitable operations. These conditions raise substantial doubt that the Company will be able to continue as
a going concern. These restated financial statements do not include any adjustments that might result from this uncertainty. Activities
to date have been supported by equity financing and demand loans from the Company’s major shareholder. Management continues
to seek funding from its shareholders and other qualified investors to pursue its business plan and new course of action.
NOTE
4 – LOAN PAYABLE
As
of March 31, 2017, the Company owed the former CEO $6,450 for cash advances used to pay certain administrative expenses. The advance
is unsecured, non-interest bearing and due on demand.
NOTE
5 – RELATED PARTY TRANSACTIONS
During
the year ended March 31, 2016, the majority shareholder, on behalf of the Company, purchased $6,550 of software from a third party.
Further, the Company borrowed $17,025 from the majority shareholder and repaid $3,537.
During
the years ended March 31, 2017 and 2016, the majority shareholder of the Company paid $11,301 and $8,438 of its operating expenses,
respectively.
As
of March 31, 2017 and 2016, the balance due to the former CEO was $6,450 and $0, respectively. The balance due is unsecured, non-interest
bearing and due on demand.
As
of March 31, 2017 and 2016, the balance due to the CEO is $62,759 and $51,458, respectively. The balance due is unsecured, non-interest
bearing and due on demand.
NOTE
6 – COMMON STOCK TRANSACTIONS
On
March 30, 2016, the board of directors of the Company, agreed to cancel 100,000,000 of Mr. Nagy’s, the former officer of
the Company, previously issued shares for no consideration.
On
November 24, 2015, the Company issued to a third-party consultant 1,500,000 common shares for services rendered. The fair value
of the common shares issued was $765,000 and was recorded by the Company as stock-based compensation.
NOTE
7 – PREFERRED STOCK
The
Company has 100,000,000 shares of preferred stock authorized. The preferred stock may be divided into and issued in series and
designated at the authorization of the Board when deemed necessary.
NOTE
8 – INCOME TAXES
At
March 31, 2017, the Company had net operating loss carry forwards of approximately $64,383 that may be offset against future taxable
income. No tax benefit has been reported in the March 31, 2017 or 2016 financial statements since the potential tax
benefit is offset by a valuation allowance of the same amount.
The
provision for Federal income tax consists of the following for the years ended March 31, 2017 and 2016:
|
|
|
2017
|
|
|
2016
|
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
|
|
Current operations
|
|
$
|
(6,843
|
)
|
|
$
|
(5,637
|
)
|
|
Less: valuation allowance
|
|
|
6,843
|
|
|
|
5,637
|
|
|
Net provision for Federal income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
The
cumulative tax effect at the expected rate of 35% for the years ended March 31, 2017 and 2016, of significant items comprising
our net deferred tax amount is as follows as of March 31, 2017 and 2016:
|
|
|
2017
|
|
|
2016
|
|
|
Deferred Tax Assets:
|
|
|
|
|
|
|
|
|
|
NOL Carryover
|
|
$
|
64,383
|
|
|
$
|
57,540
|
|
|
Less valuation allowance
|
|
|
(64,383
|
)
|
|
|
(57,540
|
)
|
|
Net deferred tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax
reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards
may be limited as to use in future years.
ASC
Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements.
Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination
based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax
position to determine the amount to recognize in the financial statements.
The
Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision
for income taxes. As of March 31, 2017, the Company had no accrued interest or penalties related to uncertain tax positions.
NOTE
9 – RESTATEMENT
The
March 31, 2017 financial statements are being restated to correct errors in accounting for assets, accounts payable, operating
expenses and removing the accounting for stock for services.
The
following table summarizes changes made to the March 31, 2017 balance sheet.
|
|
|
March 31, 2017
|
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
|
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
5
|
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
Property & equipment
|
|
|
5,458
|
|
|
|
(5,458
|
)
|
|
|
-
|
|
|
Total assets
|
|
$
|
5,463
|
|
|
|
(5,462
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
15,313
|
|
|
$
|
(3,663
|
)
|
|
$
|
11,650
|
|
|
Loan payable
|
|
|
-
|
|
|
|
6,450
|
|
|
|
6,450
|
|
|
Due to related party
|
|
|
51,458
|
|
|
|
11,301
|
|
|
|
62,759
|
|
|
Total liabilities
|
|
|
66,771
|
|
|
|
14,088
|
|
|
|
80,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
828
|
|
|
|
-
|
|
|
|
828
|
|
|
Additional paid-in capital
|
|
|
867,263
|
|
|
|
-
|
|
|
|
867,263
|
|
|
Accumulated deficit
|
|
|
(929,399
|
)
|
|
|
(19,550
|
)
|
|
|
(948,949
|
)
|
|
Total Stockholders’ Deficit
|
|
|
(61,308
|
)
|
|
|
(19,550
|
)
|
|
|
(80,858
|
)
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
5,463
|
|
|
$
|
(5,462
|
)
|
|
$
|
1
|
|
The
following table summarizes changes made to the year ended March 31, 2017 Statement of Operations.
|
|
|
For the year ended March 31, 2017
|
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
|
Accounting and legal
|
|
$
|
11,519
|
|
|
$
|
(11,519
|
)
|
|
$
|
-
|
|
|
General and administrative
|
|
|
765,000
|
|
|
|
(745,450
|
)
|
|
|
19,550
|
|
|
Stock transfer management
|
|
|
3,494
|
|
|
|
(3,494
|
)
|
|
|
-
|
|
|
Amortization expense
|
|
|
1,092
|
|
|
|
(1,092
|
)
|
|
|
-
|
|
|
Net Loss
|
|
$
|
(781,105
|
)
|
|
$
|
761,555
|
|
|
$
|
(19,550
|
)
|
NOTE
10 - SUBSEQUENT EVENTS
In
accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial
statements were available to be issued and has determined that it does not have any material subsequent events to disclose in
these financial statements other than the following.
The
Company accepted the resignation of Zoltan Nagy on June 19, 2017, resigning his position on the Board of Directors, as well as
his positions as the sole officer, including principal executive officer and principal financial officer.
Effective
June 19, 2017 the Board of Directors appointed William Ko to the Board of Directors and as sole officer, including principal executive
officer and principal financial officer.
On
August 30, 2017, the Company issued 150,000,000 shares of common stock to Mr. Nagy for services rendered.
Effective November 21, 2017, the Company increased
its authorized common stock to 800,000,000 shares, par value $0.001, and decreased its preferred stock to 50,000,000 shares, par
value $0.001.
On December 1, 2017, the company issued 550,000,000
shares of common stock to friends and family for total cash proceeds of $55,000. The proceeds were used to make payments on the
related part debt of $50,000 and $5,000 on November 16, 2017 and November 24, 2017, respectively.
The
Company accepted the resignation of William Ko on December 18, 2018, resigning his position on the Board of Directors and his
positions as the sole officer, including principal executive officer and principal financial officer.
Effective
April 10, 2019, the Board of Directors appointed Zoltan Nagy to the Board of Directors and as sole officer, including principal
executive officer and principal financial officer. Mr. Nagy will serve on the board until the next annual shareholders meeting.