What changed in this filing

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Item 1. Financial Statements

2018-05-11 compared with 2018-04-26 · 183 added, 113 removed, 494 unchanged (37% of the section changed)

CAPITAL CORPORATION

of September 30, 2017 (Unaudited) and June 30, 2017

Interest Payable –

Interest Payable - Other

Current Liabilities

Note Payable - Roran, net of debt discount

Stock, par value $1.00, 10,000,000 shares authorized, 1,915,548 shares issued and outstanding

Paid-In Capital

(27,970,097 )

(27,995,459 )

(10,574,869 )

(10,585,620 )

of December 31, 2017 (Unaudited) and June 30, 2017

June 30, 2017

LIABILITIES & EQUITY

Current Liabilities

Accounts Payable

Accrued Interest Payable

Judgment Payable

Accrued Interest Payable –

Total Current Liabilities

Convertible Note Payable - Roran, net of debt discount

Total Liabilities

Common Stock, par value $1.00, 10,000,000 shares authorized, 1,915,548 shares issued and outstanding

Additional Paid-In Capital

Accumulated Deficit

TOTAL LIABILITIES & EQUITY

the accompanying Notes, which are an integral part of these unaudited Financial Statements

1 unchanged sentence

OF OPERATIONS

the Three Months Ended September 30, 2017 and 2016

and Unrealized Loss on Investments

Administrative

the Three and Six Months Ended December 31, 2017 and 2016

Three Month Periods Ended

Six Month Periods Ended

Interest - Other

Realized and Unrealized Loss on Investments

Administrative Expenses

Interest Expense

Total Expense

Average Number of Common Shares Outstanding –

Basic and Diluted

Loss Per Share-Basic and Diluted

Net Loss Per Share - Basic and Diluted

the accompanying Notes, which are an integral part of these unaudited Financial Statements

1 unchanged sentence

OF CASH FLOWS

the Three Months Ended September 30, 2017 and 2016

to reconcile Net Loss to net cash used in operations:

on investments

Interest Payable

cash used by Operating Activities

from sale of investments

cash provided by investing activities

from convertible note payable- Roran

cash provided by Financing Activities

cash change for period

at beginning of period

at end of period

Non-Cash Investing and Financing Activities

value of embedded beneficial conversion option on convertible note payable

For the Six Months Ended December 31, 2017

OPERATING ACTIVITIES

Adjustments to reconcile Net Loss

to net cash used by operations:

Loss on investments

Amortization of interest

Changes in assets and liabilities

Accounts Payable

Accrued Interest Payable

Net cash Used by Operating Activities

INVESTING ACTIVITIES

Proceeds from sale of investments

Net cash provided by investing

FINANCING ACTIVITIES

Proceeds from note payable from Roran Capital

Net cash provided by Financing

Net cash increase(decrease) for period

Cash at beginning of period

Cash at end of period

Supplemental Non-Cash Investing and Financing Activities

Intrinsic value of embedded beneficial conversion

option on convertible note payable

the accompanying Notes, which are an integral part of these unaudited Financial Statements

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Our unaudited financial statements as of and for the three

months ended September 30, 2017 do not contain any adjustments for this uncertainty.

In response to our Company’s cash needs,

we raised funding as described in our notes that follow.

Any additional amounts raised will be used for our future investing and

operating cash flow needs.

However, there can be no assurance that we will be successful in raising additional amounts of financing.

and six months ended December 31, 2017 do not contain any adjustments for this uncertainty.

In response to our Company’s

cash needs, we raised funding as described in our notes that follow.

Any additional amounts raised will be used for our future

investing and operating cash flow needs.

However, there can be no assurance that we will be successful in raising additional amounts

of financing.

CAPITAL CORPORATION

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results could differ from those estimates.

Financial Instruments

Company bifurcates conversion options from their host instruments and accounts for them as free standing derivative financial

instruments if certain criteria are met.

The criteria include circumstances in which (a) the economic characteristics and risks

of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured

at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings

as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative

An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under

applicable GAAP.

When the Company has determined that the

embedded conversion options should not be bifurcated from their host instruments, discounts are recorded for the intrinsic value

of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock

at the commitment date of the transaction and the effective conversion price embedded in the instrument.

Beneficial conversion feature –

The issuance of the convertible debt described in Note

3, generated a beneficial conversion feature (“BCF”), which arises when a debt or equity security is issued with an

embedded conversion option that is beneficial to the investor or in the money at inception because the conversion option has an

effective strike price that is less than the market price of the underlying stock at the commitment date.

The Company recognized

the BCF by allocating the intrinsic value of the conversion option, which is the number of shares of common stock available upon

conversion multiplied by the difference between the effective conversion price per share and the fair value of common stock per

share on the commitment date, resulting in a discount on the convertible debt (recorded as a component of additional paid in capital).

Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure

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might be prevented from fully pursuing its own separate interests.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense

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to be sought therein.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability

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taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

years that remain subject to examination by major tax jurisdictions are generally the prior three (3) years for federal purposes,

20 unchanged sentences

not yet effective will not have a material impact on our financial position or results of operations upon adoption.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

Financial Instruments

Company bifurcates conversion options from their host instruments and accounts for them as free standing derivative financial

instruments if certain criteria are met.

The criteria include circumstances in which (a) the economic characteristics and risks

of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured

at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings

as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative

An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under

applicable GAAP.

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, discounts

are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the

fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded

in the instrument.

conversion feature –

The issuance of the convertible debt described in Note 4, generated a beneficial conversion

feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option that is

beneficial to the investor or in the money at inception because the conversion option has an effective strike price that is less

than the market price of the underlying stock at the commitment date.

The Company recognized the BCF by allocating the intrinsic

value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by the difference

between the effective conversion price per share and the fair value of common stock per share on the commitment date, resulting

in a discount on the convertible debt (recorded as a component of additional paid in capital).

WATERSIDE CAPITAL CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS

December 31, 2017

NOTES PAYABLE

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June 28, 2017, the Receivership was terminated and a final order entered by the Court provided Roran with control of the Company.

As of September 30, 2017, the Company’s outstanding judgment payable totaled $10,427,300, and interest payable totaled $147,569.

As of December 31, 2017 and June 30, 2017, the Company’s outstanding judgment payable totaled $10,427,300, and interest

payable totaled $147,569.

Company’s outstanding judgment payable owed to the SBA was purchased by Roran from the SBA in July 2017.

1 unchanged sentence

due under the outstanding judgment payable are now owed to Roran rather than the SBA.

September 19, 2017, the Company entered into a Convertible Loan Agreement with Roran

(the “Loan Agreement”).

Pursuant to the Loan Agreement, Roran agreed to loan

to the Company an amount not to exceed a total of $150,000 in principal over 18-months.

Each advance under the Loan Agreement will be documented under a Convertible Promissory

Note issued by the Company in favor Roran (the “Note”).

The Note bears interest

at the rate of 12% per annum and is due in 18-months.

Roran has the right to convert

all or any portion of the Note into shares of the Company’s common stock at a conversion

price equal to 60% of the share price.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

September 19, 2017, the Company entered into a Convertible Loan Agreement with Roran (the “Loan Agreement”).

Pursuant to the Loan Agreement, Roran agreed to loan to the Company an amount not to exceed a total of $150,000 in principal over

Each advance under the Loan Agreement will be documented under a Convertible Promissory Note issued by the Company

in favor Roran (the “Note”).

The Note bears interest at the rate of 12% per annum and is due in 18-months.

the right to convert all or any portion of the Note into shares of the Company’s common stock at a conversion price equal

to 60% of the share price.

a result of the advance made pursuant to the Loan Agreement, the Company has incurred total obligations of $21,916 as of September

The Company recorded a BCF due the conversion option of $14,611.

The amount was netted against the note payable

balance as a debt discount with the corresponding entry to additional paid-in capital.

The debt discount has been amortized

as interest expense through the maturity date in March 2019.

As a result of the advance made pursuant to

the Loan Agreement, the Company has incurred total obligations of $49,338 as of December 31, 2017.

The Company recorded

a BCF due the conversion option of $26,799, and the unamortized balance at December 31, 2017 is $23,605.

The amount is

netted against the note payable balance as a debt discount with the corresponding entry to additional paid-in capital.

debt discount has been amortized as interest expense through the maturity date in March 2019.

4 - INVESTMENTS AND NOTES RECEIVABLE

4 unchanged sentences

During the period ended September 30, 2016, the Receiver liquidated the remaining investment assets and recognized a loss

part of a settlement on an investment, during the year ended June 30, 2016, the Receiver exchanged part of an investment

for two $75,000 notes receivable with consecutive 1 year terms.

part of a settlement on an investment, during the year ended June 30, 2016, the Receiver exchanged part of an investment for two

$75,000 notes receivable with consecutive 1 year terms.

The first note receivable was repaid during the period ended September

4 unchanged sentences

of the Board:

Zelamanovitch

Yitzhak Zelmanovitch

following amounts were owed to related parties, affiliated with the CEO and Chairman of the Board, at the dates indicated:

December 31, 2017

Convertible Note Payable (Note 3)

Accrued Interest

MANAGEMENT’S

58 unchanged sentences

except as required by law.

following discussion of the results of operations for the three months ended September 30, 2017 and 2016, respectively, should

be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in

this Quarterly Report on Form 10-Q.

Our discussion includes forward-looking statements based upon current expectations that involve

risks and uncertainties, such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could

differ materially from those anticipated in these forward-looking statements because of a number of factors.

An investment in

our common stock involves a high degree of risk.

Readers of this Quarterly Report on Form 10-Q should carefully consider the risks

set forth in the Risk Factors and Business sections of our Annual Report on Form 10-K for the year ended June 30, 2017, filed

with the SEC on April 12, 2018.

The forward-looking statements specified in the following information have been compiled by our

management on the basis of assumptions made by management and considered by management to be reasonable.

following discussion of the results of operations for the three and six months ended December 31, 2017 and 2016, respectively,

should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere

in this Quarterly Report on Form 10-Q.

Our discussion includes forward-looking statements based upon current expectations that

involve risks and uncertainties, such as our plans, objectives, expectations and intentions.

Actual results and the timing of

events could differ materially from those anticipated in these forward-looking statements because of a number of factors.

An investment

in our common stock involves a high degree of risk.

Readers of this Quarterly Report on Form 10-Q should carefully consider the

risks set forth in the Risk Factors and Business sections of our Annual Report on Form 10-K for the year ended June 30, 2017,

filed with the SEC on April 12, 2018.

The forward-looking statements specified in the following information have been compiled

by our management on the basis of assumptions made by management and considered by management to be reasonable.

Our future operating

92 unchanged sentences

Recognition”, which includes the guidelines of Staff Accounting Bulletin No.

Financial Instruments

Company bifurcates conversion options from their host instruments and accounts for them as free standing derivative financial

instruments if certain criteria are met.

The criteria include circumstances in which (a) the economic characteristics and risks

of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured

at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings

as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative

An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under

applicable GAAP.

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, discounts

are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the

fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded

in the instrument.

Conversion Feature

issuance of the convertible debt issued by the Company (described in Note 3 to the Financial Statements) generated a beneficial

conversion feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option

that is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that

is less than the market price of the underlying stock at the commitment date.

The Company recognized the BCF by allocating the

intrinsic value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by

the difference between the effective conversion price per share and the fair value of common stock per share on the commitment

date, resulting in a discount on the convertible debt (recorded as a component of additional paid in capital).

Tax Assets and Income Taxes Provision

28 unchanged sentences

of a public or private offering, among other factors.

of Three Months Ended September 30, 2017 And 2016

the three months ended September 30, 2017 and September 30, 2016, respectively, the Company did not have any operations and therefore

of the Three Months Ended December 31, 2017 and 2016

the three months ended December 31, 2017 and December 31, 2016, respectively, the Company did not have any operations and therefore

there were no revenues.

1 unchanged sentence

with the SEC.

and Unrealized Loss on Investments

the current period ended September 30, 2017, the Company had no remaining investment assets and therefore did not have any gain

or loss activity.

For the comparable prior period ended September 20, 2016, the Company liquidated its remaining investment assets

under the Receivership and recognized losses of $100,425.

Administrative

fees totaled $24,761 for the three months ended September 30, 2017 compared to approximately $42,711 for the three months ended

September 30, 2016.

The decrease of $17,950 was primarily due to less activity in the current period as the prior comparable period

was under the control of the Receiver and the Company was still in the process of liquidating its investments.

reported a net loss of $25,362 during the three months ended September 30, 2017 compared to a net loss of $143,136

in the comparable period of 2016.

Professional fees totaled

$18,990 for the three months ended December 31, 2017 compared to approximately $53,921 for the three months ended

December 31, 2016.

The decrease of $34,931 was primarily due to less activity in the current period as the prior comparable

period was under the control of the Receiver and the Company was still in the process of liquidating its investments.

We reported a net loss

of $23,037 during the three months ended December 31, 2017 compared to a net loss of $53,921 in the comparable period

The decrease was due to no investment activity.

of the Six Months Ended December 31, 2017 and 2016

the six months ended December 31, 2017 and December 31, 2016, respectively, the Company did not have any operations and therefore

there were no revenues.

Expenses during the six months ended December 31, 2016 were limited to the Company liquidating its assets

through the Receivership.

Expenses during the same period ended December 31, were limited to maintaining the Company in good standing

and becoming current in its filing obligations with the SEC.

and Unrealized Loss on Investments

During the six months

ended December 31, 2017, the Company had no remaining investment assets and therefore did not have any gain or loss activity.

For the comparable prior period ended December 31, 2016, the Company liquidated its remaining investment assets under the Receivership

and recognized losses of $100,425.

Administrative Expense

Professional fees totaled $43,751 for

the six months ended December 31, 2017 compared to $96,632 for the six months ended December 31, 2016.

The decrease of

$52,881 was primarily due to less activity in the current period as the prior comparable period was under the control of

the Receiver and the Company was still in the process of liquidating its investments.

We reported a net loss of $48,399 during

the six months ended December 31, 2017 compared to a net loss of $197,057 in the comparable period of 2016.

was primarily due to no investment activity in the current period.

and Capital Resources

have incurred recurring operating losses and negative operating cash flows in 2017 and through September 30, 2017, and we expect

have incurred recurring operating losses and negative operating cash flows in 2017 and through December 31, 2017, and we expect

to continue to incur operating losses and negative operating cash flows at least through the near future.

6 unchanged sentences

Our financial statements as of and for the three months ended

September 30, 2017 do not contain any adjustments for this uncertainty.

December 31, 2017 do not contain any adjustments for this uncertainty.

In response to our Company’s cash needs, we raised

funding as described in our financial statements.

Any additional amounts raised will be used for our future investing and

operating cash flow needs.

Any additional amounts raised will be used for our future investing and operating

cash flow needs.

However, there can be no assurance that we will be successful in raising additional amounts of financing.

28 unchanged sentences

as long as we are seeking and evaluating Business Targets.

September 30, 2017, we had zero (-0-) cash on hand.

Since we have no revenue or plans to generate any revenue, we will be dependent

upon loans to fund losses incurred in excess of our cash.

At December 31, 2017,

we had only $8,065 cash on hand.

Since we have no revenue or plans to generate any revenue, we will be dependent upon loans

to fund losses incurred in excess of our cash.

Sheet Arrangements

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements