Notes to Financial Statements
Note 1: Organization
QMIS Finance Services Corporation f/k/a Lightman Grant, Inc. was incorporated in the State of Delaware on October 23, 2007 under the laws of the State of Delaware. When used in these notes, the term Company means QMIS Finance Services Corporation. The Company is a shell company having no operations or assets. The Company is seeking a merger with another company. Management anticipates that it may be able to participate in only one potential merger discussion because the Company has limited financial resources. As a result, investment in the Company carries substantial risk.
On November 13, 2012, Corporate Services International, Inc. / Michael Anthony (Seller), who was the controlling shareholder of the Company, sold 380,000 shares of common stock, $0.001 par value and 5,000,000 shares of Series B Preferred Stock, $0.001 par value, to Chin Yung Kong (Purchaser) for an aggregated price of $170,000.00. The sold 380,000 shares of common stock represented approximately 77% of the total issued and outstanding common stock of the Company and the sold 5,000,000 shares of Series B Preferred Stock represent 100% of the total issued and outstanding preferred stock of the Company. As result of this share purchase transaction, Chin Yung Kong became the controlling shareholder of the Company. Chin Yung Kong used personal funds for the transaction.
Note 2: Significant Accounting Policies
Basis of Presentation
: The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP).
Revenues:
The former sole officer of the Company recorded $24,000 as FMV of his compensation and rent. These funds were recorded as an expense on the prior financial statements submitted to the SEC. The prior financial statements recorded these transactions from May 2007 through April 30, 2012 as expenses and contribution to paid-in-capital. According to ASC 958-605-25-2 such nonreciprocal transactions are recognized as revenue in the period the contribution is received. This departure from GAAP on the prior financial statements has been corrected on the restated financial statements. There was no provision for the FMV of the officer services in the statement of revenues and expenses for the period ended July 31, 2013.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.
Cash and Cash Equivalents
:
For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There was no cash in the bank at July 31, 2013. There were no cash equivalents. The new majority shareholder, Chin Yung Kong has used his personal funds to pay the Company liabilities. At the date of this report there was still no operating checking account.
Receivable Other:
On November 8, 2012 Michael Anthony stated that Lightman Grant, Inc. did not have any liability owing to any vendor. During the course of the audit it was determined that there was $13,739 due to vendors. The financial statements reflect this liability in accounts payable, offset by a receivable amount due from Michael Anthony.
Property and Equipment
The Company does not have any property and equipment at both July 31, 2013 and 2012.
Valuation of Long-Lived Assets
:
The Company does not have any long lived assets, including Goodwill on July 31, 2013 and 2012.
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Stock Based Compensation:
The Company does not have any stock based Compensation or pension plan.
Accounting for Obligations and Instruments Potentially to Be Settled in the Companys Own Stock
: There are no reportable transactions.
Fair Value of Financial Instruments
: There are no financial instruments to be disclosed under FASB ASC 825.
Earnings per Common Share
:
We compute net income (loss) per share in accordance with ASC 260,
Earning per Share
. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
Income Taxes:
We have adopted ASC 740,
Accounting for Income Taxes.
Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.
Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carry forwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially our entire net deferred tax asset. Management will continue to evaluate the quality of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.
In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.
ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.
Uncertain Tax Positions
The Financial Accounting Standards Board issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109, Accounting for Income Taxes (FIN No. 48) which was
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effective for the Company on January 1, 2007. FIN No. 48 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 FIN No. 48, 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 position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.
Our federal and state income tax returns are open for fiscal years ending on or after April 30, 2007. We are not under examination by any jurisdiction for any tax year. At July 31, 2013 we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN 48.
Note 3: Income Taxes
We have adopted ASC 740,
Income Taxes,
which provides for the recognition of a deferred tax asset based upon the value the loss carry-forwards will have to reduce future income taxes and management's estimate of the probability of the realization of these tax benefits. Our net operating loss carryovers incurred prior to 2008 considered available to reduce future income taxes were reduced or eliminated through our recent change of control (I.R.C. Section 382(a)) and the continuity of business limitation of I.R.C. Section 382(c).
W e have recorded current operating loss carry-forward. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all our net deferred tax asset.
Future utilization of currently generated federal and state NOL and tax credit carry forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The annual limitation may result in the expiration of NOL and tax credit carry-forwards before full utilization.
Note 4: Commitments
The Company is not a party to any leases and does not have any commitments
Note 5: Stockholders' Equity
Common Stock
We are currently authorized to issue up to 300,000,000 shares of $ 0.001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis.
November 19, 2007, in exchange for approximately $19,000 of capital investments by Century Capital Partners we issued 380,000 shares of restricted $.001 par value common stock. Mr. Anthony is the managing member of CCP and has sole voting and dispositive control.
Preferred Stock
We are currently authorized to issue up to 20,000,000 shares of $ 0.001 preferred stock. Effective April 30, 2007 the board of directors approved the cancellation of all previously issued preferred shares and approved the cancellation and extinguishment of all common and preferred share conversion rights of any kind, including without limitation, warrants, options, convertible debt instruments and convertible preferred stock of every series and accompanying conversion rights of any kind.
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On January 29 2009 we designated 5,000,000 shares of Series B preferred stock. The Series B allows voting rights in a ratio of 1:10 over the common. Each share of the Series A is convertible in to 10 shares of common at the discretion of the holder.
On February 18, 2009, Corporate Services International, Inc. agreed to contribute $25,000 in exchange for 5,000,000 shares of the Series B preferred stock. We have agreed to use these funds to pay the costs and expenses necessary to revive our business and implement the Companys business plan. Such expenses include, fees to re-domicile the Company to the state of Delaware; payment of state filing fees; transfer agent fees; calling and holding a shareholders meeting; accounting and legal fees; and costs associated with preparing and filing this Registration Statement, etc.
Corporate Services International, Inc. is a business consulting company of which Michael Anthony is the sole shareholder, officer and director.
Stock Options
Note 6: Related Party Transactions not Disclosed Elsewhere
Fair value of services:
The principal stockholder provided, services to the Company valued at $1,800 per month, $21,600 per year) for the fiscal years ended April 30, 2008 through April 30, 2012. The principal stockholder also provided office space to the Company valued at $200 per month, a total of $2,400 for the years ending April 30, 2012 and 2011.In accordance with ASC 958-605-25-2, the total of these expenses ($24,000 per year) were charged to general and administrative expenses with a corresponding credit to Revenue Donation.
Note 7: Going Concern
As stated in our report, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company, however, has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. The Companys financial viability depends on its near-term ability to find a suitable merger partner. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 8: Subsequent Events
On September 12, 2013, Chin Yung Kong converted 5,000,000 shares of common stock from the 5,000,000 shares of preferred stock he owned. On September 12, 2013, the Company issued 500,000 shares of common stock to Yishan Lu for the price of $0.001 per share.
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