The accompanying notes are an integral part of these unaudited condensed financial statements
The accompanying notes are an integral part of these audited condensed financial statements
The accompanying notes are an integral part of these unaudited condensed financial statements
The accompanying notes are an integral part of these audited condensed financial statements
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
NOTE 1 – NATURE OF BUSINESS
Overview of Organization
Environmental Packaging Technologies Holdings, Inc. (the "Company", "we, "us", or "our") was incorporated in Nevada on November 17, 2011, under the name "GS Valet, Inc." On December 1, 2011, the Company entered into an agreement with Garden State Valet, LLC, a New Jersey limited liability company ("Garden State Valet"), and the unit-holders of Garden State Valet (the "Unit-holders") to purchase all of the outstanding units of Garden State Valet. Garden State Valet was formed on June 15, 2011.
Change in Control:
On August 9, 2013, six investors acquired 27,134,875 shares of our common stock then held by Neil Scheckter, who was our sole officer and director at the time. As a result, there was a change of control, as Mr. Scheckter relinquished his control of the Company and resigned from his positions. Immediately following their acquisition of the shares, one of the investors caused 8,886,663 shares that he acquired from Mr. Scheckter to be cancelled.
Also on August 9 and December 9, 2013, we sold a total of 4,070,581 shares of our common stock to four accredited investors (the "Investors") at $1.965 per share or gross proceeds of $8 million (the "Proceeds"), including $3 million in cash and $5 million in promissory notes issued by Preciosa Streaming Company Inc., a Barbados company ("Preciosa"). Preciosa issued the notes to two of the Investors, who in turn assigned them to us. Preciosa repaid the notes to us in full in September 2013.
On December 9, 2013, we further sold 3,328,181 shares of our common stock at $0.000046 per share for gross proceeds of $153.
We intended to use the Proceeds to pursue a metals streaming business by acquiring and managing precious metals streams, royalties and other similar interests. A stream is a non-operating interest in a mining project that provides the right to purchase metals produced from such project for a fixed price for a specified period of time in exchange for an upfront payment with such terms defined in the metals purchase agreement. Royalties are non-operating interests in mining projects that provide the right to revenue or metals produced from the project after deducting specified costs, if any.
In connection to our metals streaming plans:
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we changed our name from "GS Valet, Inc." to "International Metals Streaming Corp." on September 26, 2013;
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we changed our fiscal year end from September 30 to December 31, effective on September 26, 2013; and
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the operations of Garden State Valet ceased on October 1, 2013.
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On March 10, 2014, due to our determination that the metals streaming business was no longer desirable, we rescinded our transactions with the Investors whereby:
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each Investor agreed to return the shares of our common stock issued to such Investor;
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we remitted to each Investor a portion of the then remaining Proceeds pro rata to the shares of our common stock issued to such Investor; and
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we and the Investors agreed to release all claims we may have against one another.
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Accordingly, 4,070,581 shares in the aggregate were surrendered to us for cancellation. In addition, in November 2015, two additional shareholders surrendered an aggregate 3,328,181 shares of our common stock for cancellation and as thus as of December 31, 2015, there were 26,253,000 shares of our common stock outstanding. On September 22, 2016, the former sole officer and director surrendered an aggregate of 2,442,139 shares of our common which were cancelled for no consideration.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements as of March 31, 2017 and for the three months ended March 31, 2017 and 2016 have been prepared by the Company pursuant to the rules and regulation of the Securities Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading.
The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017. These unaudited condensed financial statements should be read in conjunction with our audited condensed financial statements and explanatory notes for the year ended December 31, 2016 as disclosed in the Company's Form 10-K for that year as filed with the Securities and Exchange Commission on February 17, 2017.
On December 28, 2016, the Company, EPT Acquisition Corporation, a newly-formed Delaware corporation and a direct wholly-owned subsidiary of the Company (“
Merger Sub
”), and Environmental Packaging Technologies, Inc., a Delaware corporation (“
EPT
”) entered into an Agreement of Merger and Plan of Reorganization (the “
Merger Agreement
”)
Pursuant to the Merger Agreement, subject to and upon the terms and conditions of the Merger Agreement, Merger Sub shall be merged with and into EPT (the “
Merger
”) and EPT shall be the surviving corporation of the Merger and EPT shall become, as a result of the Merger, a direct wholly-owned subsidiary of the Company.
Immediately following the Merger, the Company shall have approximately 52,000,000 shares issued and outstanding of which (a) 40,000,000 such shares will be owned by the former EPT Stockholders, and (b) approximately 12,000,000 shares will be owned by the Company’s shareholders. Upon completion of the Merger, the individuals designated by EPT shall be our sole directors and officers and our officer and director shall resign.
The Merger Agreement includes conditions, representations and warranties and covenants of the parties customary for a transaction of this nature. The Merger Agreement may be terminated after May 31, 2017 if the Merger has not closed by that date.
As of March 31, 2017, the conditions precedent to complete the merger transaction had not been satisfied.
Significant accounting policies are as follows:
Use of Estimates
The preparation of financial statements in conformity with GAAP 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. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.
Income Loss Per Share
The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260,
Earnings per Share.
Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. During the three months ended March 31, 2017 and 2016, there were no potentially dilutive debt or equity instruments outstanding.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
Cash
The Company presently maintains cash in an attorney trust account until such time that the Company establishes a bank account.
Financial Instruments
ASC 820,
Fair Value Measurements
requires disclosure of the fair value of financial instruments. The Company's unaudited condensed balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
Recently Issued Standards
In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-06, “'Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting.” Among other things, the amendments require a plan’s interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments also remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments. The amendments require all plans to disclose: (a) their master trust’s other asset and liability balances; and (b) the dollar amount of the plan’s interest in each of those balances. Lastly, the amendments eliminate redundant investment disclosures (e.g., those required by Topics 815 and 820) relating to 401(h) account assets. Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The amendments should be applied retrospectively to each period for which financial statements are presented. The Company does not anticipate the adoption of ASU 2017-06 will have a material impact on its unaudited condensed consolidated financial statements.
In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The amendments clarify that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments also define the term in substance nonfinancial asset. The amendments clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610-20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. Effective at the same time as the amendments in Update 2014-09, Revenue from Contracts with Customers (Topic 606). Therefore, public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the amendments in this Update to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the amendments in this Update to annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. All other entities may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance. An entity is required to apply the amendments in this Update at the same time that it applies the amendments in Update 2014-09. The Company does not anticipate the adoption of ASU 2017-05 will have a material impact on its unaudited condensed consolidated financial statements.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its unaudited condensed consolidated financial statements.
In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations
In October 2016, the FASB issued ASU No 2016-16 - Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 will require the tax effects of intercompany transactions, other than sales of inventory, to be recognized currently, eliminating an exception under current GAAP in which the tax effects of intra-entity asset transfers are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The guidance will be effective for the first interim period of our 2019 fiscal year, with early adoption permitted. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, in an effort to reduce the diversity of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In June 2016, the FASB Issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
On March 30, 2016, the FASB issued ASU No. 2016-09, Compensation- Stock Compensation Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
On March 15, 2016, the FASB issued ASU No. 2016-07, Investment—Equity Method and Joint ventures (Topic 323), To simplify the accounting for equity method investments, the amendments in the Update eliminate the requirement in Topic 323 that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investors previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
On March 3, 2016, the FASB issued ASU No. 2016-04, Liabilities —Extinguishments of Liabilities Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products, when an entity sells a prepaid stored-value product (such as gift cards, telecommunication cards, and traveler’s checks), it recognizes a financial liability for its obligation to provide the product holder with the ability to purchase goods or services at a third-party merchant. When a prepaid stored-value product goes unused wholly or partially for an indefinite time period, the amount that remains on the product is referred to as breakage. There currently is diversity in the methodology used to recognize breakage. Subtopic 405-20 includes derecognition guidance for both financial liabilities and nonfinancial liabilities, and Topic 606, Revenue from Contracts with Customers, includes authoritative breakage guidance but excludes financial liabilities. The amendments in this Update provide a narrow scope exception to the guidance in Subtopic 405-20 to require that breakage be accounted for consistent with the breakage guidance in Topic 606. The amendments in this Update are effective for public business entities, certain not-for-profit entities, and certain employee benefit plans for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted, including adoption in an interim period. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The updated standard is effective for us beginning in the first quarter of fiscal 2020. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The purpose is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. This ASU is effective for the Company in the first quarter of 2018. Early adoption is not permitted except for limited provisions. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. This is part of FASB's simplification initiative. The amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This ASU is effective for the Company in the first quarter of 2017. Early adoption is permitted. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments which allows entities to recognize adjustments to provisional amounts in the period adjustment is identified rather than retrospectively. In-period adjustments must be disclosed. This ASU is effective for the Company in the first quarter of 2016. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this ASU. Early adoption is permitted for financial statements that have not been issued. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-15, "Interest - Imputation of Interest (Subtopic 835-30)." ASU 2015-15 provides guidance as to the presentation and subsequent measurement of debt issuance costs associated with line of credit arrangements. We do not expect the adoption of ASU 2015-15 to have a material effect on our financial position, results of operations or cash flows. We do not expect the adoption of ASU 2015-15 to have a material effect on our financial position, results of operations or cash flows.
In August 2015, the FASB issued ASU No. 2015-14, Revenue From Contracts With Customers (Topic 606)." The amendments in this ASU defer the effective date of ASU 2014-09. Public business entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We do not expect adoption of ASU 2015-14 to have a material effect on our financial position, results of operations or cash flows.
In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory (Topic 330)." ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, first-out ("LIFO") method by prescribing that inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. We do not expect the adoption of ASU 2015-11 to have a material effect on our financial position, results of operations or cash flows. We do not expect adoption of ASU 2015-14 to have a material effect on our financial position, results of operations or cash flows
In April 2015, the FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)." ASU 2015-05 provides guidance regarding the accounting for a customer's fees paid in a cloud computing arrangement; specifically about whether a cloud computing arrangement includes a software license, and if so, how to account for the software license. ASU 2015-05 is effective for public companies' annual periods, including interim periods within those fiscal years, beginning after December 15, 2015 on either a prospective or retrospective basis. Early adoption is permitted. We do not expect the adoption of ASU 2015-05 to have a material effect on our financial position, results of operations or cash flows.
In June 2014, the FASB issued ASU 2014-10, "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". The guidance eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development or exploration stage entities, primarily presentation of inception to date financial information. The provisions of the amendments are effective for annual reporting periods beginning after December 15, 2014, and the interim periods therein. The Company has adopted this standard.
In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements – Going Concern (Topic 205-40)", which requires management to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company has adopted this new standard as of the fiscal year ended December 31, 2014 and the Company will continue to assess the impact on its financial statements.
There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
NOTE 3 – GOING CONCERN
The Company's unaudited condensed financial statements are prepared using US GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had incurred net losses of $15,034 and $72,803 for the three months ended March 31, 2017 and March 31, 2016, respectively. As of March 31, 2017 and December 31, 2016, our accumulated deficit was $892,587 and $877,553, respectively. The Company has not established an ongoing source of revenues sufficient to cover its operating costs, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the sufficiency of its capital or obtaining additional capital to fund operating losses. If the Company requires or is unable to obtain additional capital, it could be forced to cease operations. These factors raise substantial doubt about the Company's ability to continue as a going concern.
NOTE 4 - NOTES PAYABLE, THIRD PARTY
The Company had no notes payable to third parties as of March 31, 2017.
On April 4, 2014, the Company issued a note payable to a third party in the amount of $57,039. The note was due and payable on April 4, 2015 and carries an interest rate of 8% per annum.
On April 2, 2015, the Company issued a note payable to a third party in the amount of $2,500. The note is due and payable on April 2, 2016 and carries an interest rate of 8% per annum.
On November 12, 2015, the Company issued a note payable to a third party in the amount of $2,948. The note is due and payable on November 11, 2016 and carries an interest rate of 8% per annum.
On March 30, 2016, the Company issued a note payable to a third party in the amount of $18,290. The note is due and payable on March 29, 2017 and carries an interest rate of 8% per annum.
On September 30, 2016, the Company issued a note payable to a third party in the amount of $15,000. The note is due and payable on September 29, 2017 and carries an interest rate of 8% per annum.
Effective September 30, 2016, the Company was able to secure release of obligations of $108,688 with respect to the above notes payable and accrued interest which was recorded as gain on forgiveness of debt during the year ended December 31, 2016.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
The Company has no commitments or contingencies as of March 31, 2017 and December 31, 2016.
From time to time, the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company's financial position or results of operations.
NOTE 6 – RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2017 and 2016, the Company incurred consulting fees of $1,500 and $1,000, respectively, for services provided by its current officer and director.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
NOTE 7 – EQUITY
Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share ("Preferred Stock"). No Preferred Stock has been issued to date.
Common Stock
The Company is authorized to issue 108,539,500 shares of common stock with a par value of $0.0001 per share ("Common Stock"). On October 7, 2013, the Company's board of directors approved a 2.5 for 1 forward stock-split of its issued and outstanding shares of Common Stock (the "Stock Split"). The Stock Split affected all shares of Common Stock outstanding immediately prior to the record date of October 3, 2013, and each stockholder of one share of Common Stock as of such record date received 2.5 shares of Common Stock. The Stock Split did not affect the par value of the Common Stock. No fractional shares were issued. The Stock Split increased the number of issued and outstanding shares of Common Stock from 5,400,035 to 13,500,092. These notes and the accompanying unaudited condensed consolidated financial statements give retroactive effect to the Stock Split. The Company had 23,810,853 shares of Common Stock issued and outstanding at March 31, 2017 and December 31, 2016.
On August 9, 2013, the Company sold 3,052,864 shares of Common Stock (the "Initial Shares") at $1.965 per share to two accredited investors (the "Initial Investors"). The closing thereof occurred on August 9, 2013 with gross proceeds to the Company of $6 million in connection thereof, comprised of $1 million in cash and $5 million in promissory notes issued by Preciosa Streaming Company Inc., a Barbados company ("Preciosa"). Preciosa issued the promissory notes to the Initial Investors, who, in turn, assigned them to the Company at the Closing pursuant to a Note Assignment Agreement entered into by and between Company and each Initial Investor on August 9, 2013. Preciosa repaid these notes in full to the Company on September 20, 2013. Preciosa also reimbursed to the Company $28,263 in legal fees incurred by the Company. The cash proceeds from issuance of the Initial Shares were placed into a trust account maintained by the Company's counsel until such time that the Company could establish a bank account. However, on March 11, 2014, the proceeds, less the costs incurred in the pursuit of the metals streaming business, were returned to the investors.
On August 9, 2013, the Company caused 8,886,662 shares of Common Stock held by a stockholder to be cancelled pursuant to a Cancellation Agreement entered into by and between the Company and such stockholder on August 9, 2013. The Company recognized a loss of $164 on the cancellation of this stock.
On December 9, 2013, the Company sold 1,017,716 shares of Common Stock (with the Initial Shares, collectively the "Shares") at $1.965 per share to two accredited investors (with the Initial Investors, collectively the "Investors"). The closing thereof occurred on December 9, 2013, with gross proceeds to the Company of $2 million. The cash proceeds from issuance of these shares were placed into a trust account maintained by the Company's counsel until such time that the Company could establish a bank account. However, on March 11, 2014, the proceeds, less the costs incurred in the pursuit of the metals streaming business, were returned to the investors.
On December 9, 2013, the Company sold 3,328,181 shares of Common Stock at $0.0001 per share for gross proceeds of $153.
ENVIRONMENTAL PACKAGING TECHNOLOGIES HOLDINGS, INC.
(FORMERLY INTERNATIONAL METALS STREAMING CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2017
On March 10, 2014, due to its determination that the metals streaming business was no longer desirable, the Company and the Investors rescinded their transactions pertaining to the Shares. In connection with such rescission: (a) each Investor agreed to return that portion of the Shares issued to such Investor, (b) the Company agreed to return the proceeds from the sale of the Shares to the Investors, net of all payments therefrom by the Company as of the date of the rescission, and (c) the Company and the Investors each agreed to release all claims that each of them may have against the other.
On March 11, 2014, $7,389,184 of the $8 million proceeds from the sale of 4,070,581 shares of Common Stock, less costs of $610,816, was returned to the Investors. In connection therewith, the certificates representing such shares have been surrendered to the Company for cancellation.
On November 5, 2015, two shareholders surrendered an aggregate of 3,328,181 shares of Common Stock to the Company and cancelled for no consideration.
On September 22, 2016, the former sole officer and director surrendered an aggregate of 2,442,139 shares of Common Stock to the Company which were cancelled.
On February 1, 2017, a shareholder surrendered 24,999 shares of Common Stock to the Company which was immediately reissued to former legal counsel in connection with a settlement agreement regarding outstanding liabilities.
On February 1, 2017, the Company’s director and holders the majority of the Company’s outstanding stock by written consent approved a name change from International Metals Streaming Corp. to Environmental Packaging Technologies Holdings, Inc. Further, in February 2017, the Company’s director approved a forward split of the Company’s outstanding and authorized common stock at a ratio of 2.17079 to 1. The Company also requested that Financial Industry Regulatory Authority (“
FINRA
”) change the symbol from IMST to EPTI. The Company submitted an issuer company-related action notification form to FINRA requesting FINRA approve the name change, forward split and symbol change. The Company received FINRA’s approval on February 14, 2017 with an effective date of February 16, 2017. These notes and the accompanying unaudited condensed consolidated financial statements give retroactive effect to the Stock Split
NOTE 8 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date these unaudited condensed consolidated financial statements, and determined that there are no additional reportable subsequent events.