NOTES TO
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – BASIS OF PRESENTATION
Financial Statement Preparation
The unaudited financial
statements of Sipup Corporation Inc. (referred to in this Quarterly Report on Form 10-Q as the “Company”, “we”,
“us”, or “our”), of which these notes are a part, have been prepared in accordance with generally accepted
accounting principles for interim financial information and pursuant to the instructions of Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles
for annual financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation of the financial information as of and for the periods presented have been included.
The results for the
interim periods presented are not necessarily indicative of the results that may be expected for any future period. The unaudited
financial statements should be read in conjunction with the audited financial statements and notes for the year ended November
30, 2017, included in our Annual Report on Form 10-K filed with the SEC on February 20, 2019, and all of our other periodic filings,
including Current Reports on Form 8-K, filed with the SEC after the end of our 2017 fiscal year and through the date of this Report
Sipup Corporation (the
“Company”) is a Nevada Corporation incorporated on October 31, 2012. The Company plans enter emerging technology businesses
and real estate industry.
Basis of Presentation
The Company maintains
its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of
America (“U.S. GAAP”).
These financial statements
are presented in US dollars.
Fiscal Year End
The Corporation has
adopted a fiscal year end of November 30.
Going concern
The accompanying financial
statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of business. As of August 31, 2018, the Company has an accumulated
deficit of $157,201 from operations and working capital of $57,867 has earned no revenues to cover its operating costs. The Company
intends to fund future operations through equity financing arrangements, which may be insufficient to fund its capital expenditures,
working capital and other cash requirements for the year ending November 30, 2018.
The ability of the
Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue
operations, and development of its business plan. In response to these problems, management intends to raise additional funds through
public or private placement offerings.
These factors, among
others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
Unaudited Interim Financial Statements
The interim financial
statements of the Company as of August 31, 2018, and for the periods then ended, are unaudited. However, in the opinion of management,
the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present
fairly the Company’s financial position as of August 31, 2018, and the results of its operations and its cash flows for the
periods ended August 31, 2018. These results are not necessarily indicative of the results expected for the calendar year ending
November 30, 2018. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting
principles generally accepted in the United States. Refer to the Company’s audited financial statements as of November 30,
2017, for additional information, including significant accounting policies.
Lease Commitments
The Company does not
own any property. We currently lease a virtual office at 30 Wall St. 8
th
floor, Manhattan, NY.
Legal proceedings
The Company is not
party to any legal proceedings, nor is there any known legal proceedings contemplated against the Company.
NOTE 2 – SIGNIFICANT ACCOUNTING
POLICIES
The principal accounting policies are
set out below, these policies have been consistently applied to the period presented, unless otherwise stated:
Use of Estimates
The preparation of
financial statements in conformity with accounting principles generally accepted in the United States 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 or revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Cash and cash equivalents
Cash and equivalents
include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial
institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of August 31,
2018, and November 30, 2017 the company has no cash.
Accounts Payable and Accrued Expenses
Accounts payable and
accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to
the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of
the purchase of these goods and services.
Earnings per Share
The Company computes
net loss per share in accordance with ASC 260, “Earnings 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 calculated by dividing the profit or loss
attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period.
Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of
common shares outstanding for the effects of all potential dilutive common shares, which comprise options granted to employees.
As August 31, 2018, the Company had no potentially dilutive shares.
Income Taxes
Income taxes are accounted
for in accordance with ASC Topic 740, “Income Taxes.” Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future consequences of differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases (temporary differences). Deferred tax assets and liabilities are measured
using tax rates expected to apply to taxable income in the years in which those temporary differences are recovered or settled.
Valuation allowances for deferred tax assets are established when it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
Stock based compensation
The Company accounts
for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all
share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing
model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures
differ from initial estimates.
Equity instruments
granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of
equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied
or there is a significant disincentive for non-performance.
Currently, the Company
does not have stock incentive plan
Fair Value of Financial Instruments
The Company measures
assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements,
which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be,
in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants
would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework
for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned
a hierarchical level.
The following are the
hierarchical levels of inputs to measure fair value:
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Level 1: Quoted prices in active markets for identical
instruments;
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Level 2: Other significant observable inputs (including
quoted prices in active markets for similar instruments);
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Level 3: Significant unobservable inputs (including assumptions
in determining the fair value of certain investments).
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Recently Adopted Accounting Pronouncements
During the year ended
November 30, 2015, the Company has elected to early adopt Accounting Standards Update (“ASU”) No. 2014-10, Development
Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company
to remove the inception to date information and all references to development stage.
We do not believe that
the adoption of any other recently issued accounting pronouncements in 2014 had a significant impact on our financial position,
results of operations, or cash flow.
NOTE 3 – LOAN FROM STOCKHOLDER
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As of,
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August 31,
2018
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November 30,
2017
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Loan from related party* in dollars
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$
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14,020
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$
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14,020
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*
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The above loan is unsecured, bears no interest and has
no repayment term. This loan is repayable on demand
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NOTE 4 – STOCKHOLDERS’ EQUITY
(DEFICIT)
Common stock
In October 2012, the
Company issued 3,000,000 shares of common stock at a price of $ 0.001 per share. In April 2013, pursuant to the terms of an offering
registered with the SEC, the Company issued 90,000 shares of common stock at $0.05 per share. In May 2013, pursuant to the terms
of an offering registered with the SEC, the Company issued 910,000 shares of common stock at $0.05 per share.
During December 2016,
the Company and Rosario Capital Ltd. (“Rosario”) having their principal places of business at Tel Aviv, Israel have
entered into service agreement, pursuant to which. Rosario is providing to the Company certain critical advisory and other services.
In consideration of any and all Rosario’s Services, the Company has issued to Rosario 500,000 restricted shares of common stock.
The fair value of the shares as of the date of issuance was $150,000 using the share price on the day of issuance.
NOTE 5 – INCOME TAXES
a.
Provision for income taxes
No
provision for income taxes was required for the three months ended
August 31, 2018
and
November 30, 2017 due to net losses in these periods.
b.
In accordance with ASC 740-10, the components of deferred income taxes are as follows:
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As of,
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August 31,
2018
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November 30,
2017
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Net operating losses carryforwards
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$
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33,012
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$
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31,206
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Less valuation allowance
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(33,012
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)
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(31,206
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)
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Net deferred tax assets
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$
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-
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$
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-
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The Company provided
a valuation allowance equal to the deferred income tax assets for period ended August 31, 2018 because it is not presently known
whether future taxable income will be sufficient to utilize the loss carryforwards
.
As of August 31, 2018,
the Company had approximately $157,201 in tax loss carryforwards that can be utilized future periods to reduce taxable income and
expire by the year 2038.
The Company did not
identify any material uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits.
The federal income tax returns of the Company are subject to examination by the IRS, generally for three years after they are filed
.
NOTE 6 – RELATED PARTY TRANSACTION
Parties are considered to be related if
one party has the ability to control or exercise significant influence over the other party in making financial and operating decisions.
A related party transaction is considered to be a transfer of resources or obligations between related parties, regardless of whether
or not a price is charged.
NOTE 7 – SUBSEQUENT EVENTS
In accordance with
ASC 855-10, Company management reviewed all material events through the date of this report and determined that there are no additional
material subsequent events to report.
