NOTES TO FINANCIAL STATEMENTS
MAY 31, 2022
NOTE 1 – ORGANIZATION AND DESCRIPTION
OF BUSINESS
Perk International Inc. (“the Company”
or “Perk”) was incorporated under the laws of the State of Nevada on April 10, 2013. The Company is an acquisition, sales
management company for early stage, high growth businesses and technologies in the health care industry. The Company has developed specific
criteria and standards that must be met by each acquisition candidate. Once identified, the Company will engage its highly seasoned and
well-trained team of industry professionals to perform thorough due diligence on the potential acquisition partner. Following successful
due diligence, Perk will send in its M & A team to structure and present an attractive proposal to the selling entity.
On February 22, 2019, Marcus Southworth became,
President, Secretary, Treasurer and Director of Perk International Inc.
On April 27, 2020, Certification and Notice of
Termination of Registration Under Section 12(g) of The Securities Exchange Act of 1934 of Duty to File Reports Under Sections 13 and 15
(d) of the Securities Exchange Act of 1934.
On April 30, 2020 Marcus resigned from, President,
Secretary, Treasurer and Director of Perk International Inc. Mr. Southworth no longer holds any officer position with Perk International
Inc.
On April 30, 2020, Nelson Grist became the sole
director of Perk International Inc.
On April 13, 2021, the Company filed its Form
10 (Amendment No. 7).
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of presentation
The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates
The preparation of financial statements in
conformity with generally accepted accounting principles 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 of revenues and expenses during the reporting period. Significant estimates include the
estimated useful lives of property and equipment. Actual results could differ from those estimates.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts,
the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently
have not experienced any losses in our accounts. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation
insurable amount (“FDIC”).
Cash equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years ended May
31, 2022 or 2021.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of
the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States
of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair
value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to
valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted
prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3)
levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1: Quoted market prices available in active markets for identical
assets or liabilities as of the reporting date.
Level 2: 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.
Level 3: Pricing inputs that are generally unobservable inputs and
not corroborated by market data.
The carrying amount of the Company’s financial
assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity
of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s
best estimate of interest rates that would be available to the Company for similar financial arrangements at May 31, 2022 and 2021.
Basic and Diluted Earnings Per Share
Net income (loss) per common share is computed
pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per
common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding
shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common
shares assumes that the Company incorporated as of the beginning of the first period presented. There were no dilutive shares as of May
31, 2022 and 2021.
Stock-based compensation
We account for equity-based transactions with
employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation”
(Topic 718), which establishes that equity-based payments to employees and non-employees are recorded at the grant date the fair value
of the equity instruments the entity is obligated to issue when the employees and non-employees have rendered the requisite service and
satisfied any other conditions necessary to earn the right to benefit from the instruments. Topic 718 also states that observable market
prices of identical or similar equity or liability instruments in active markets are the best evidence of fair value and, if available,
should be used as the basis for the measurement for equity and liability instruments awarded in these share-based payment transactions.
However, if observable market prices of identical or similar equity or liability instruments are not available, the fair value shall be
estimated by using a valuation technique or model that complies with the measurement objective, as described in FASB ASC Topic 718.
Recently Adopted Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt—Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity
(Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06
reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible
instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and
Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no
longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the
derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own
Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance
related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU
2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer,
excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15,
2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years
beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier
than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that
an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company has chosen the early adoption of ASU
2020-06. The adoption of ASU 2020-06, had a material effect on the Company’s financial statements. If the standard was not
early adopted the Company would have recognized the full OID on its convertible notes.
The Company has implemented all new accounting
pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise
disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have
a material impact on its financial position or results of operations.
NOTE 3 – GOING CONCERN
The Company’s financial statements are prepared
using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization
of assets and liquidation of liabilities in the normal course of business. The Company has not established any source of revenue to cover
its operating costs. The Company has an accumulated deficit of $1,347,778 and a working capital deficit of $146,650 as of May 31, 2022.
The Company had an accumulated deficit of $1,174,883 and a working capital deficit of $123,755 as of May 31, 2021. The Company will engage
in limited activities without incurring significant liabilities that must be satisfied in cash until a source of funding is secured. The
Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain
revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it
may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances,
acquisitions or other arrangements that may dilute the interests of existing stockholders.
NOTE 4 – ACCOUNTS PAYABLE
During the year ended May 31, 2021, accounts payable
of $339,549 have been written off as time barred debt per the applicable statute of limitations and are included in other income –
gain on extinguishment of debt.
NOTE 5 – NOTES PAYABLE
On November 3, 2016,
the Company received a $25,000 loan from Securities Compliance Group, Ltd. The note is unsecured, bears interest at 25% and was due
upon the final order of dismissal of the custodianship. On October 20, 2022, the note was assigned to Kim Southworth. As of May 31, 2022
and 2021, there is $24,452 and $18,202 of interest accrued on this loan, respectively. This note is in default.
On May 2, 2019, the Company
executed a promissory note with Kim Southworth in the amount of $14,749. The loan is due either on demand or within five years and carries
an interest rate of 6%, compounded annually. As of May 31, 2022 and 2021, there is $2,904 and $1,905 of interest accrued on
this loan, respectively.
On December 16, 2020,
the Company received a $12,000 loan from GPL Ventures, LLC. The note is unsecured, bears interest at 10% and matures on December
16, 2021. As of May 31, 2022 and 2021, there is $1,746 and $546 of interest accrued
on this loan, respectively. This note is in default.
On March 17, 2021, the
Company received a $10,000 loan from GPL Ventures, LLC. The note is unsecured, bears interest at 10% and matures on March 17, 2022.
As of May 31, 2022 and 2021, there is $2,205 and $1,205 of interest accrued on
this loan ($1,000 of which is related to processing fees), respectively. This note is in default.
On May 11, 2021, the
Company received a $30,000 loan from GPL Ventures, LLC. The note is unsecured, bears interest at 10% and matures on May 11, 2022.
As of May 31, 2022 and 2021, there is $3,164 and $164 of interest accrued on this
loan, respectively. This note is in default.
On January 17, 2022,
the Company issued a Convertible Promissory Note to a third party in the amount of $100,000. The note bears interest at 10% per annum
and matures on February 3, 2025. The Note is convertible into shares of the Company’s common stock at $0.0001 per share. As of May
31, 2022, there is $3,671 of interest accrued on this loan.
On April 5, 2022, the
Company issued a Convertible Promissory Note to a third party in the amount of $50,000. The note bears interest at 30% per annum and matures
on September 5, 2022. The Note is convertible into shares of the Company’s common stock at $0.0001 per share. As of May 31, 2022
there is $2,342 of interest accrued on this loan.
NOTE 6 – COMMON STOCK
On March 17, 2021, the Company amended its Articles
of Incorporation increasing its authorized common stock from 250,000,000 to 950,000,000 shares.
NOTE 7 – RELATED PARTY TRANSACTIONS
During the year ended May 31, 2021, the payable to a former related
party of $22,790 was written off as time barred debt per the applicable statute of limitations and are included in other income –
gain on extinguishment of debt.
As of May 31, 2022 and 2021, the Company owed
the CEO $35,095 and $9,163 for cash advances to the Company. The advances were used to pay for certain operating expenses. They are unsecured,
non-interest bearing and due on demand.
NOTE 8 – INCOME TAXES
Deferred taxes are provided on a liability method
whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has evaluated Staff Accounting
Bulletin No. 118 regarding the impact of the decreased tax rates of the Tax Cuts & Jobs Act. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of 21% is being used.
Net deferred tax assets consist of the following
components as of May 31:
| Schedule of deferred tax assets | |
2022 | | |
2021 | |
| Deferred tax assets: | |
| | | |
| | |
| NOL Carryover | |
$ | (3,500 | ) | |
$ | 1,100 | |
| Related Party Accruals | |
| 9,100 | | |
| 2,400 | |
| Less: valuation allowance | |
| (5,600 | ) | |
| (3,500 | ) |
| Net deferred tax asset | |
$ | – | | |
$ | – | |
The income tax provision differs from the amount
of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended
May 31, due to the following:
| | |
2022 | | |
2021 | |
| Deferred Tax Assets: | |
| | | |
| | |
| Book (Loss) Income | |
$ | (36,300 | ) | |
$ | 77,300 | |
| Related Party Accruals | |
| 5,400 | | |
| (3,200 | ) |
| Meals | |
| 600 | | |
| – | |
| Other nondeductible expenses | |
| – | | |
| (91,100 | ) |
| Less valuation allowance | |
| 30,300 | | |
| 17,000 | |
| Income tax provision | |
$ | – | | |
$ | – | |
At May 31, 2022, the Company had net operating
loss carry forwards of approximately $9,000 that may be offset against future taxable income. NOLs from tax years up to 2017 can be carried
forward twenty years. Under the CARES Act, the Company carry forward NOLs indefinitely for NOLs generated in a tax year beginning after
2018, that remain after they are carried back to tax years in the five-year carryback period. No tax benefit has been reported in the
May 31, 2022 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the
Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations.
Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years. With few exceptions, the
Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2016.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management
has performed an evaluation of subsequent events through the date that the financial statements were issued and has determined that it
does not have any material subsequent events to disclose in these financial statements other than the following.
On May 31, 2022, the Company entered into a Sale
of LLC Interest Agreement in which it agreed to purchase 100% of the interest in Alexa Mar Wellness Retreat LLC for $90,000. The initial
payment of $50,000 was made on June 1, 2022, with the remaining $40,000 to be paid over the next five months per the terms of the agreement.
On May 27, 2022, the Company issued a Promissory
Note to Canadian Holdings, Inc, in the amount of $150,000. The Note was funded on June 1, 2022. The Note bears interest at 18% and is
due on December 31, 2022. In conjunction with the finding of the note the Company will issue 3,000,000 shares of common stock to the lender.
On June 2, 2022, the Company issued a Convertible
Promissory Note to Mechtech Industrial (Asia) Limited, in the amount of $56,250, with an OID of $6,250, receiving $50,000. The Note bears
interest at 10% and matures in one year. The balance and all accrued interest may be converted into shares of common stock at $0.0005
per share.