What changed in this filing

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Item 1. Financial Statements

2019-05-20 compared with 2019-02-19 · 143 added, 105 removed, 593 unchanged (29% of the section changed)

FINANCIAL STATEMENTS

CAPITAL CORPORATION

of December 31, 2018 (Unaudited) and June 30, 2018

of March 31, 2019 (Unaudited) and June 30, 2018

March 31, 2019

June 30, 2018

December 31, 2018

LIABILITIES & EQUITY

Current Liabilities

Current Liabilitites

Accounts Payable

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Total Liabilities

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

Common Stock par value $1.00, 10,000,000 shared authorized,

1,915,548 shares issued and outstanding

Additional Paid-In Capital

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OF OPERATIONS

the Three and Six Months Ended December 31, 2018 and 2017

Three Months Periods Ended

Six Months Periods Ended

Interest - Other

the Three and Nine Months Ended March 31, 2019 and 2018

Three Month Periods Ended

Nine Month Periods Ended

Administrative Expenses

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CAPITAL CORPORATION

STATEMENTS OF STOCKHOLDERS’

the Nine Months Ended March 31, 2019 and 2018 (Unaudited)

($1 Par Value)

6/30/2017 Balance

$ (27,970,097 )

$ (10,574,869 )

Beneficial conversion feature

Net loss for the period

3/31/2018 Balance

$ (28,053,854 )

$ (10,615,160 )

($1 Par Value)

7/1/2018 Balance

$ (28,110,948 )

$ (10,655,587.00 )

Beneficial conversion feature

Net Loss for the period

3/31/2019 Balance

$ (28,245,337 )

$ (10,753,309 )

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

CAPITAL CORPORATION

OF CASH FLOWS

the Six Months Ended December 31, 2018 and 2017

the Nine Months Ended March 31, 2019 and 2018

Nine Month Periods Ended

OPERATING ACTIVITIES

Adjustments to reconcile Net Loss to net cash used in operations to net cash provided by operations:

Adjustments to reconcile Net Loss to net cash used in

Amortization of interest

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Supplemental Non-Cash Investing and Financing Activities

Intrinsic value of embedded beneficial conversion feature on convertible note payable

Intrinsic value of embedded beneficial conversion feature on convertible note

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

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As of the date

of this Quarterly Statement, the Company has not received any response from the SEC in regard to the Second Amended Application.

of this Quarterly Statement, the Company has not received any formal response from the SEC in regard to the Second Amended Application.

unaudited financial statements herein have been prepared by the Company pursuant to the rules and regulations of the United States

Securities and Exchange Commission (“SEC”).

The accompanying interim unaudited financial statements have been prepared

under the presumption that users of the interim financial information have either read or have access to the audited financial

statements for the latest year ended June 30, 2018.

Accordingly, note disclosures which would substantially duplicate the disclosures

contained in the June 30, 2018 audited financial statements have been omitted from these interim unaudited financial statements.

The Company evaluated all subsequent events and transactions through the date of filing this report.

information and note disclosures normally included in financial statements prepared in accordance with United States generally

accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

the opinion of management, all adjustments considered necessary for a fair presentation have been included.

Operating results

for the three and nine months ended March 31, 2019, are not necessarily indicative of the results that may be expected for the

year ending June 30, 2019.

For further information, refer to the audited financial statements and notes for the year ended June

30, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on September 5, 2018.

accompanying financial statements of our Company have been prepared in accordance with accounting principles generally accepted

in the United States.

The Company effectively ceased operations and it continues to have net losses through the date of these

financial statements.

Our financial statements have been presented on the basis that our business is a going concern, which contemplates

the realization of assets and the satisfaction of liabilities in the normal course of business.

We are subject to the risks and

uncertainties associated with a business with no operating business or assets and no revenue, as well as limitations on our operating

capital resources.

We have incurred operating losses and negative operating cash flows since the Receivership, and we expect to

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

Roran, which is a related

party to the Company, has agreed to advance our Company a limited amount of funding in order to partially meet our most

critical cash requirements.

For further discussion of the advances made by Roran, see Notes 3 and 5.

The Company effectively ceased operations, has no significant liquid assets, and continues to have net losses

through the date of these financial statements.

Our financial statements have been presented on the basis that our business is

a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

We are subject to the risks and uncertainties associated with a business with no operating business or assets and no revenue,

as well as limitations on our operating capital resources.

We have incurred operating losses and negative operating cash flows

since the Receivership, and we expect to continue to incur operating losses and negative operating cash flows at least through

the near future.

Roran, which is a related party to the Company, has agreed to advance our Company a limited amount of funding

in order to partially meet our most critical cash requirements.

For further discussion of the advances made by Roran, see Notes

CAPITAL CORPORATION

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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 a non-seperated 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).

The BCF is amortized

into interest expense over the life of the related debt.

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 a non-seperated 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).

The BCF is amortized into interest

expense over the life of the related debt.

Company follows subtopic 850-10 of the FASB Accounting Standards Codification (“ASC”) for the identification of related

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The Company has

accrued $161,645 in interest on the judgment payable as of December 31, 2018.

accrued $163,991 in interest on the judgment payable as of March 31, 2019.

On May 16, 2019, Roran forgave the entire principal

amount and interest due thereon of $10,609,635.

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

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As a result of the advances made pursuant to the Loan Agreement, the Company has incurred total obligations of

$139,338 as of December 31, 2018.

The Company recorded a BCF due the conversion option of $86,800, and the unamortized balance

at December 31, 2018 is $25,517.

The amount is netted against the note payable balance as a debt discount with the corresponding

entry to additional paid-in capital.

$154,338 as of March 31, 2019.

The Company recorded a BCF due the conversion option of $96,800, which has been fully amortized

as of March 31, 2019.

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

The Company is currently negotiating with Roran to extend the due date and provide additional funding.

is currently negotiating with Roran to extend the maturity date of the note which expired in March 2019 and provide additional

4 - INVESTMENTS AND NOTES RECEIVABLE

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

December 31, 2018

March 31, 2019

Judgment Payable (acquired by Roran from SBA)

4 unchanged sentences

Company has evaluated all events that occurred after the balance sheet date through the date of the filing of this Quarterly Report

on Form 10-Q to determine if they must be reported, and there are no subsequent events to be reported.

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

on Form 10-Q to determine if they must be reported, and there are no subsequent events to be reported except that on May 16, 2019,

Roran forgave the entire amount due on its judgment for both principal and interest of $10,609,635.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking

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except as required by law.

following discussion of the results of operations for the three and six months ended December 31, 2018 and 2017, 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, 2018,

filed with the SEC on September 5, 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 nine months ended March 31, 2019 and 2018, 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, 2018, filed

with the SEC on September 5, 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

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as a Going Concern

assumes 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.

However, given our current financial position and lack of liquidity,

there is substantial doubt about our ability to continue as a going concern.

prepares the Company’s financial statements on the basis 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.

However, given

our current financial position and lack of liquidity, there is substantial doubt about our ability to continue as a going concern.

Financial Instruments

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The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

market prices available in active markets for identical assets or liabilities as of the reporting date.

inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable

as of the reporting date.

inputs that are generally unobservable inputs and not corroborated by market data.

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

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.

Pricing inputs that are generally unobservable inputs and not corroborated by market data.

assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or

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of a public or private offering, among other factors.

of Three Months Ended December 31, 2018 And 2017

the three months ended December 31, 2018 and December 31, 2017, respectively, the Company did not have any operations and therefore

there were no revenues.

Expenses were limited to maintaining the Company in good standing and staying and becoming current, respectively,

in its filing obligations with the SEC.

of Three Months Ended March 31, 2019 And 2018

the three month periods ended March 31, 2019 and 2018, the Company did not have any operations and therefore there were no revenues.

Expenses were limited to maintaining the Company in good standing and staying current, respectively, in its filing obligations

with the SEC.

Administrative

fees totaled $21,876 for the three months ended December 31, 2018 compared to $18,990 for the three months ended December 31,

The increase was primarily due to more activity in the current period as the prior comparable period required less work

to bring the Company current in its SEC filings.

expense totaled $28,412 for the three months ended December 31, 2018 compared to $4,047 for the three months ended December 31,

fees totaled $12,265 for the three months ended March 31, 2019 compared to $25,842 for the three months ended March 31, 2018.

The decrease was primarily due to less activity in the current period as the prior comparable period required more expenditures

for professional services to bring the Company current in its SEC filings.

expense totaled $42,447 for the three months ended March 31, 2019 compared to $9,516 for the three months ended March 31, 2018.

The increase was primarily due to an increase in borrowing under the convertible loan facility.

reported a net loss of $50,288 during the three months ended December 31, 2018 compared to a net loss of $23,037 in the comparable

reported a net loss of $54,712 during the three months ended March 31, 2019 compared to a net loss of $35,358 in the comparable

period of 2018.

The increase was due to higher interest expenses.

of Six Months Ended December 31, 2018 And 2017

the six months ended December 31, 2018 and December 31, 2017, respectively, the Company did not have any operations and therefore

there were no revenues.

Expenses were limited to maintaining the Company in good standing and staying and becoming current, respectively,

in its filing obligations with the SEC.

of Nine Months Ended March 31, 2019 And 2018

the nine month periods ended March 31, 2019 and 2018, the Company did not have any operations and therefore there were no revenues.

Expenses were limited to maintaining the Company in good standing and staying current, respectively, in its filing obligations

with the SEC.

Administrative

fees totaled $30,100 for the six months ended December 31, 2018 compared to $43,751 for the six months ended December 31, 2017.

The decrease was primarily due to less activity in the current period as the prior comparable period required more work

to bring the Company current in its SEC filings.

expense totaled $49,577 for the six months ended December 31, 2018 compared to $4,648 for the six months ended December 31, 2017.

fees totaled $42,365 for the nine months ended March 31, 2019 compared to $69,593 for the nine months ended March 31, 2018.

decrease was primarily due to less activity in the current period as the prior comparable period required more expenditures for

professional services to bring the Company current in its SEC filings.

expense totaled $92,024 for the nine months ended March 31, 2019 compared to $14,164 for the nine months ended March 31, 2018.

The increase was primarily due to an increase in borrowing under the convertible loan facility.

reported a net loss of $79,677 during the six months ended December 31, 2018 compared to a net loss of $48,399 in the comparable

reported a net loss of $134,389 during the nine months ended March 31, 2019 compared to a net loss of $83,757 in the comparable

period of 2018.

1 unchanged sentence

and Capital Resources

have incurred recurring operating losses and negative operating cash flows in fiscal 2018 and through December 31, 2018,

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

obtained funding through a convertible loan facility of up to $150,000 in order to partially meet our most critical cash requirements,

and of this amount, we have drawn approximately $139,338 as of December 31, 2018.

Amounts due under the loan facility are payable

have incurred recurring operating losses and negative operating cash flows in fiscal 2018 and through March 31, 2019, and we expect

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

We have obtained funding

through a convertible loan facility of up to $150,000 in order to partially meet our most critical cash requirements, and of this

amount, we have drawn approximately $154,338 as of March 31, 2019.

Amounts due under the loan facility are were due and payable

in March 2019.

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as a going concern.

Our independent registered public accounting firm, in its report on our 2018 financial statements, raised

substantial doubt about our ability to continue as a going concern.

Our financial statements as of and for the three and six months

ended December 31, 2018 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.

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

Our independent registered public accounting firm, in its report on our fiscal 2018 financial statements,

raised substantial doubt about our ability to continue as a going concern.

Our financial statements as of and for the three and

nine months ended March 31, 2019 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.

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

Management’s

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Business Targets.

December 31, 2018, we had only $10,744 cash on hand.

March 31, 2019, we had only $13,509 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.

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

Sheet Arrangements

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that are material to investors.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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