U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended September 30, 2015 |
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 000-55205
T.A.G. Acquisitions Ltd.
(Exact name of registrant as specified in its charter)
| Delaware | 47-1363493 | |
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
| 130 East Route 59 Suite #6 | ||
| Spring Valley, NY | 10977 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: 845-517-3673
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| Large accelerated filer | ¨ | Accelerated filer | ¨ |
| Non-accelerated filer | ¨ | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of November 13, 2015, the issuer had 6,300,000 shares of its common stock issued and outstanding.
EXPLANATORY NOTE
The Form 10-Q Amendment is being filed to incorporate the XBRL exhibits, no other changes have been made to this document.
TABLE OF CONTENTS
| Page | ||
| PART I | ||
| Item 1. | Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 14 |
| Item 4. | Controls and Procedures | 15 |
| PART II | ||
| Item 1. | Legal Proceedings | 15 |
| Item 1A. | Risk Factors | 15 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 15 |
| Item 3. | Defaults Upon Senior Securities | 16 |
| Item 4. | Mine Safety Disclosures | 16 |
| Item 5. | Other Information | 16 |
| Item 6. | Exhibits | 16 |
| Signatures | 16 |
| 2 |
PART I - FINANCIAL INFORMATION
T.A.G. Acquisitions Ltd.
Financial Statements
(Unaudited)
Contents
| 3 |
Condensed Consolidated Balance Sheet
(Unaudited)
| September 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 3,186 | $ | - | ||||
| Total current assets | 3,186 | - | ||||||
| Investments in real estate | 158,825 | |||||||
| TOTAL ASSETS | $ | 162,011 | $ | - | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 45,819 | $ | - | ||||
| Accrued expenses | 6,402 | - | ||||||
| Accrued payroll | 26,132 | - | ||||||
| Accrued payroll to stockholder | 104,029 | - | ||||||
| Notes payable | 54,600 | - | ||||||
| Advances from stockholder | 184,300 | - | ||||||
| Total current liabilities | 421,282 | - | ||||||
| Notes payable, net of current portion | 21,500 | - | ||||||
| TOTAL LIABILITIES | 442,782 | - | ||||||
| STOCKHOLDERS' DEFICIT: | ||||||||
| Preferred stock, $0.0001 par value, 20,000,000 shares authorized, 0 shares issued and outstanding | - | - | ||||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized, 6,300,000 and 3,500,000 shares issued and outstanding | 630 | 350 | ||||||
| Additional paid-in capital | 230,460 | 357 | ||||||
| Accumulated deficit | (511,861 | ) | (707 | ) | ||||
| Total stockholders' deficit | (280,771 | ) | - | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 162,011 | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
Condensed Consolidated Statements of Operations
(Unaudited)
| For the Period from | ||||||||||||||||
| Three | Three | Nine | May 20, 2014 | |||||||||||||
| Months Ended | Months Ended | Months Ended | (Inception) to | |||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenue | $ | — | $ | — | $ | — | $ | — | ||||||||
| Cost of revenue | — | — | — | — | ||||||||||||
| Gross profit | — | — | — | — | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative expenses | 158,720 | — | 510,439 | 707 | ||||||||||||
| Loss from operations | (158,720 | ) | — | (510,439 | ) | (707 | ) | |||||||||
| Other expense | ||||||||||||||||
| Interest expense | (715 | ) | — | (715 | ) | — | ||||||||||
| Loss before income taxes | (159,435 | ) | — | (511,154 | ) | (707 | ) | |||||||||
| Income taxes | — | — | — | — | ||||||||||||
| Net loss | $ | (159,435 | ) | $ | — | $ | (511,154 | ) | $ | (707 | ) | |||||
| Weighted average shares outstanding : | ||||||||||||||||
| Basic | 6,156,522 | 20,000,000 | 5,045,421 | 20,000,000 | ||||||||||||
| Diluted | 6,156,522 | 20,000,000 | 5,045,421 | 20,000,000 | ||||||||||||
| Loss per share | ||||||||||||||||
| Basic | $ | (0.03 | ) | $ | — | $ | (0.10 | ) | $ | (0.00 | ) | |||||
| Diluted | $ | (0.03 | ) | $ | — | $ | (0.10 | ) | $ | (0.00 | ) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
Condensed Consolidated Statement of Cash flows
(Unaudited)
| For the Period from | ||||||||
| Nine | May 20, 2014 | |||||||
| Months Ended | (Inception) to | |||||||
| September 30, | September 30, | |||||||
| 2015 | 2014 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (511,154 | ) | $ | (707 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Change in current assets and liabilities: | ||||||||
| Accounts payable | 45,819 | - | ||||||
| Accrued expenses | 6,402 | 400 | ||||||
| Accrued payroll | 26,132 | - | ||||||
| Accrued payroll to stockholder | 104,029 | - | ||||||
| Net cash used in operating activities | (328,772 | ) | (307 | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Payments for investments in real estate | (8,825 | ) | - | |||||
| Net cash used in investing activities | (8,825 | ) | - | |||||
| FINANCING ACTIVITIES: | ||||||||
| Advances from stockholder | 184,300 | - | ||||||
| Proceeds from issuance of notes payable | 77,600 | - | ||||||
| Payments on notes payable | (1,500 | ) | - | |||||
| Proceeds from issuance of common stock | - | 2,000 | ||||||
| Capital contribution by stockholder | 80,383 | 307 | ||||||
| Net cash provided by financing activities | 340,783 | 2,307 | ||||||
| NET INCREASE IN CASH | 3,186 | 2,000 | ||||||
| CASH, BEGINNING BALANCE | - | - | ||||||
| CASH, ENDING BALANCE | $ | 3,186 | $ | 2,000 | ||||
| CASH PAID FOR: | ||||||||
| Interest | $ | - | $ | - | ||||
| Income taxes | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Issuance of common stock for real estate | $ | 150,000 | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
Notes to Condensed Consolidated Financial Statements
September 30, 2015 and 2014
(Unaudited)
Note 1 – Organization and Basis of Presentation
The unaudited condensed consolidated financial statements were prepared by T.A.G. Acquisitions Ltd. (the “Company”), pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). 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 (“U.S. GAAP”) were omitted pursuant to such rules and regulations. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on April 14, 2015. The results for the nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the year ending December 31, 2015.
Description of Business
The Company (formerly Surprise Valley Acquisition Corporation) was incorporated on May 20, 2014 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On November 17, 2014, the Company changed its name to T.A.G. Acquisitions, LTD and filed the amendment with the State of Delaware.
The Company is in the business of seeking out exceptional conversion opportunities, large multi-family and commercial office properties (as opposed to hospitality, retail, or industrial investment properties), for which significant value and profitability can be realized through the carefully managed aesthetic improvements, strategic marketing, and restructured management. The Company calls this “repositioning.” The Company’s sales and marketing strategies are also focusing on ways in which “pricing concepts are marketed” to its customers. Perks, privileges, tie-ins to strategic marketing partners, packages, discounts, and loyalty rewards for longer-term lessees are all under consideration as techniques to acquire new lessees and drive revenue. The Company is involved in multiple real estate investment opportunities throughout the United States, but it is initially focusing on areas in and around New York City and in Houston, Texas. In the New York City area, its initial, and first target is Newark, New Jersey. The Company is seeking to acquire and develop three multi-family complexes in a high quality residential zone in Newark, New Jersey, in an area close to Penn Station. The Company is actively seeking other opportunities in the area as well, with its main geographic criterion being properties within a 30-minute commute of New York City. Subsequently, the Company will seek similar “repositioning” targets in Houston, Texas.
Note 2 - Summary of Significant Accounting Policies
Basis of presentation
The summary of significant accounting policies presented below is designed to assist in understanding the Company's unaudited condensed consolidated financial statements. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America ("GAAP") in all material respects, and have been consistently applied in preparing the accompanying unaudited condensed consolidated financial statements.
Principles of Consolidation
The accompanying consolidated financial statements represent the consolidated financial position and results of operations of the Company and include the accounts and results of operations of the Company and Waydell 32-38 LLC (“Waydell”). The results of operations for Waydell have only been included since the date of acquisition of August 13, 2015. All intercompany transactions and balances have been eliminated in consolidation.
| 7 |
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, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash
Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of September 30, 2015 and December 31, 2014.
Concentration of risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of September 30, 2015 and December 31, 2014.
Earnings (loss) per share
Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. There were no potentially dilutive securities outstanding during the periods presented.
Income taxes
The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives.
The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance.
Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.
| 8 |
Fair value of financial instruments
The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
| · | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. |
| · | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. |
| · | Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments. |
The Company had no such financial instruments outstanding as of September 30, 2015 and December 31, 2014.
Recent accounting pronouncements
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard beginning January 1, 2017.
In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income Statement – Extraordinary and Unusual items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (ASU 2015-01). The amendment eliminates from U.S. GAAP the concept of extraordinary items. This guidance is effective for the Company in the first quarter of fiscal 2017. Early adoption is permitted and allows the Company to apply the amendment prospectively or retrospectively. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.
In February, 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.
| 9 |
On April 30, 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2015-06—Earnings Per Share (Topic 260): Effects on Historical Earnings per Units of Master Limited Partnership Dropdown Transactions. Under Topic 260, Earnings Per Share, master limited partnerships (MLPs) apply the two-class method to calculate earnings per unit (EPU) because the general partner, limited partners, and incentive distribution rights holders each participate differently in the distribution of available cash. When a general partner transfers (or “drops down”) net assets to a master limited partnership and that transaction is accounted for as a transaction between entities under common control, the statements of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as if it occurred on the earliest date during which the entities were under common control. The amendments in this Update specify that for purposes of calculating historical EPU under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner interest, and previously reported EPU of the limited partners would not change as a result of a dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs also are required. This Accounting Standards Update is the final version of Proposed Accounting Standards Update EITF-14A—Earnings Per Share—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions (Topic 260), which has been deleted. Effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The amendments in this Update should be applied retrospectively for all financial statements presented. Management is in the process of assessing the impact of this ASU on the Company's financial statements.
In August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans 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 31, 2016, including interim reporting periods with that reporting period. Management is in the process of assessing the impact of this ASU on the Company's financial statements.
In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements
Note 3 – Going Concern
The Company has not yet generated any revenue since inception to date and has sustained operating losses during the nine months ended September 30, 2015 of $511,154. As of September 30, 2015, the Company had an accumulated a deficit of $511,861. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its majority stockholder or other sources, as may be required.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company's ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
| 10 |
In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. The Company has entered into agreements to purchase two properties in Georgia and is currently seeking to raise capital through the sale of its equity securities. However, there can be no assurances that the Company will be successful raising capital through the sale of its equity securities. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations.
Note 4 – Investments in Real Estate
On August 13, 2015, the Company entered into a securities purchase agreement with Waydell whereby the Company purchased a 100% interest in Waydell for 300,000 shares of the Company’s common stock. Waydell is a real estate holding company that owns and manages the real estate property located at 32-38 Waydell Street, Newark, New Jersey. On June 25, 2015, Waydell purchased the property in Newark, New Jersey for $150,000. Waydell currently has no results of operations and as a result no pro forma financial disclosures are required. The 300,000 shares issued in connection with this acquisition were valued at $150,000 which is the amount paid for the only asset owned by Waydell that was recently purchased on June 25, 2015 — real property located at 32-38 Waydell Street, Newark, New Jersey. Waydell had no liabilities. In addition to the acquisition of this property, the Company also incurred $8,825 in connection with the development of this property. The carrying value of this property at September 30, 2005 is $158,825.
Note 5 – Notes Payable
Notes payable consist of the following:
| September 30, | ||||
| 2015 | ||||
| Note payable dated June 5, 2015; unsecured; interest at 0% per annum; due June 5, 2016 | $ | 20,000 | ||
| Note payable dated April 15, 2015; unsecured; interest at 0% per annum; monthly payments of $500; due April 15,2020 | 27,500 | |||
| Note payable dated July 15, 2015; unsecured; interest at1 0% per annum; due July 1, 2016 | 28,600 | |||
| Total | 76,100 | |||
| Less current portion | (54,600 | ) | ||
| Long-term portion | $ | 21,500 | ||
| 11 |
Aggregate future maturities of notes payable at September 30, 2015 are as follows:
| Year ending September 30, | ||||
| 2016 | $ | 54,600 | ||
| 2017 | 6,000 | |||
| 2018 | 6,000 | |||
| 2019 | 6,000 | |||
| 2020 | 3,500 | |||
| $ | 76,100 | |||
Note 6 – Advances from stockholder
At September 30, 2015 the Company had advances from its majority stockholder of $184,300. These advances are non-interest bearing and payable upon demand.
Note 7 – Stockholders’ Equity
On May 20, 2014, the Company issued 20,000,000 common shares to two directors and officers at a discount of $2,000.
On November 17, 2014 the Company redeemed an aggregate of 19,500,000 of the then 20,000,000 shares of common stock. Also, the Company issued 3,000,000 shares of its common stock to a director and officer.
On April 20, 2015, the Company issued 2,500,000 founder shares to its Chief Executive officer.
On August 13, 2015, the Company issued 300,000 shares of common stock in connection with the acquisition of Waydell. The shares were valued at $150,000 which is the amount paid for the only asset owned by Waydell that was recently purchased on June 25, 2015 — real property located at 32-38 Waydell Street, Newark, New Jersey.
The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of September 30, 2015, 6,300,000 shares of common stock and no preferred stock were issued and outstanding.
During the nine months ended September 30, 2015, the Company’s majority stockholder and Chief Executive Officer made capital contributions totaling $80,383.
Note 8 – Agreements to Purchase Real Estate
On September 25, 2015, the Company entered into an agreement to purchase certain tract or parcel of land, including all improvements, located at 3200 Cushman Circle, Atlanta, Georgia for $450,000. The transaction is expected to close on or before November 30, 2015.
In addition, on September 25, 2015, the Company entered into an agreement to purchase certain tract or parcel of land, including all improvements, located at 3000 Ember Drive, Decatur, Georgia for $1,800,000. The transaction is expected to close on or before November 30, 2015.
Note 9 – Subsequent Events
On October 7, 2015, the Company’s majority stockholder advanced the Company $112,500 that was used to pay the security deposits on the 3200 Cushman Circle of $90,000 and 3000 Ember Drive properties of $22,500.
On October 15, 2015 the Company entered into an amendment to the agreement to purchase the property located at 3200 Cushman Circle. The seller agreed to extend the closing date from October 29, 2015 to November 30, 2015 for in consideration for an additional security deposit of $25,000 and an increase in the purchase price by $7,500 for each week the closing extends beyond October 29, 2015.
On October 15, 2015 the Company entered into an amendment to the agreement to purchase the property located at 3000 Ember Drive. The seller agreed to extend the closing date from October 29, 2015 to November 30, 2015 for in consideration for an additional security deposit of $25,000 and an increase in the purchase price by $7,500 for each week the closing extends beyond October 29, 2015.
| 12 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
There are statements in this Report that are not historical facts. These “forward-looking statements” can be identified by use of terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Report carefully, especially the risks discussed under “Risk Factors.” Although management believes that the assumptions underlying the forward looking statements included in this Report are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Report will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We expressly disclaim any obligation to update or revise any forward-looking statements.
Overview and Highlights
Company Background
T.A.G Acquisitions Ltd. (formerly Surprise Valley Acquisition Corporation) was incorporated on May 20, 2014 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On November 17, 2014, we changed our name to T.A.G. Acquisitions, LTD and filed the amendment with the State of Delaware.
We are in the business of seeking out exceptional conversion opportunities, large multi-family and commercial office properties (as opposed to hospitality, retail, or industrial investment properties), for which significant value and profitability can be realized through the carefully managed aesthetic improvements, strategic marketing, and restructured management. We call this “repositioning.” Our sales and marketing strategies are also focusing on ways in which “pricing concepts are marketed” to our customers. Perks, privileges, tie-ins to strategic marketing partners, packages, discounts, and loyalty rewards for longer-term lessees are all under consideration as techniques to acquire new lessees and drive revenue. We are involved in multiple real estate investment opportunities throughout the United States, but we are initially focusing on areas in and around New York City and in Houston, Texas. In the New York City area, our initial, and first target is Newark, New Jersey. We are is seeking to acquire and develop three multi-family complexes in a high quality residential zone in Newark, New Jersey, in an area close to Penn Station. We are actively seeking other opportunities in the area as well, with our main geographic criterion being properties within a 30-minute commute of New York City. Subsequently, we will seek similar “repositioning” targets in Houston, Texas.
Recent Developments
On August 13, 2015, we entered into a securities purchase agreement with Waydell 32-38, LLC (“Waydell”) whereby we purchased a 100% interest in Waydell for 300,000 shares of our common stock. Waydell is a real estate holding company formed on June 15, 2015 to own and manage the real estate property located at 32-38 Waydell Street, Newark, New Jersey. On June 25, 2015, Waydell purchased the property in Newark, New Jersey for $150,000. Our plan is to develop eleven "upscale" 2-bedroom apartments on this property.
On September 25, 2015, we entered into an agreement to purchase certain tract or parcel of land, including all improvements, located at 3200 Cushman Circle, Atlanta, Georgia for $450,000. The transaction is expected to close on or before October 29, 2015.
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In addition, on September 25, 2015, we entered into an agreement to purchase certain tract or parcel of land, including all improvements, located at 3000 Ember Drive, Decatur, Georgia for $1,800,000. The transaction is expected to close on or before October 29, 2015.
Going Concern
We have not yet generated any revenue since inception to date and have sustained operating losses during the nine months ended September 30, 2015 of $511,154. As of September 30, 2015, we had an accumulated a deficit of $511,861. Our continuation as a going concern is dependent on our ability to generate sufficient cash flows from operations to meet our obligations and/or obtaining additional financing from our majority stockholder or other sources, as may be required.
The accompanying financial statements have been prepared assuming that we will continue as a going concern; however, the above condition raises substantial doubt about our ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern.
In order to maintain its current level of operations, we will require additional working capital from either cash flow from operations or from the sale of our equity. We have entered into agreements to purchase two properties in Georgia and are currently seeking to raise capital through the sale of our equity securities. However, there can be no assurances that we will be successful raising capital through the sale of our equity securities. If we are unable to acquire additional working capital, we will be required to significantly reduce our current level of operations.
Our independent auditors have issued a report on our December 31, 2014 audited financial statements raising substantial doubt about our ability to continue as a going concern.
Results of Operations
We have no operations nor does we currently engage in any business activities generating revenues.
During the three and nine months ended September 30, 2015 we incurred $158,720 and $510,439, respectively in general and administrative expenses. Our principal general and administrative expenses are payroll related costs, professional fees and rent. Our net loss for the three and nine months ended September 30, 2015 was $159,435 and $511,154, respectively
Liquidity and Capital Resources
We have financed our operations since inception from capital contributions and advances from our majority stockholder. During the nine months ended September 30, 2015, we received an advance and a capital contribution from our majority stockholder of $184,300 and $80,383, respectively. We also received issued three notes payable for aggregate proceeds of $77,600. During the nine months ended September 30, 2014, we received a capital contribution from a stockholder of $307 and received $2,000 from the sale of our common stock.
Off-Balance Sheet Arrangements
At September 30, 2015, we had not off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
None.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, September 30, 2015. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both U.S. GAAP and SEC guidelines.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q/A, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2015: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2015, that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
There are not presently any material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
Not required for Smaller Reporting Companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the quarter ended September 30, 2015, the Company issued 300,000 shares of its restricted common stock in connection with the acquisition of Waydell 32-38, LLC.
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The shares of common stock were issued without registration under the 1933 Act in reliance on Section 4(a)(2) of the 1933 Act and the rules and regulations promulgated thereunder.
| Item 3. | Defaults Upon Senior Securities |
None.
| Item 4. | Mining Safety Disclosures |
Not applicable.
| Item 5. | Other Information. |
None.
| Item 6. | Exhibits. |
| 31 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.INS* | XBRL Instance Document |
| 101.SCH* | XBRL Taxonomy Extension Schema Document |
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Definition |
In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| T.A.G. Acquisitions Ltd. | |||
| Dated: November 19, 2015 | |||
| By: | /s/ Chester Meisels | ||
| Chester Meisels | |||
|
President, Secretary and Treasurer (Principal Executive Officer, Principal Financial Officer) | |||
| 16 |
Exhibit 31
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Chester Meisels, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q/A of T.A.G. Acquisitions Ltd. (the “registrant”):
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures; and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: November 19, 2015 | /s/ Chester Meisels |
| Chester Meisels | |
Chief Executive Officer & Chief Financial Officer |
Exhibit 32
CERTIFICATION OF
PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
1. I have reviewed this Quarterly Report on Form 10-Q/A of T.A.G. Acquisitions Ltd. (the “registrant”):
In connection with the Quarterly Report of T.A.G. Acquisitions Ltd. (the “Company”) on Form 10-Q/A for the period ended September 30, 2015 (the “Report”), I, Chester Meisels, Chief Executive Officer and Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: November 19, 2015 | /s/ Chester Meisels |
| Chester Meisels | |
Chief Executive Officer & Chief Financial Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed from within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Subsequent Events (Details Narrative) - USD ($) |
Oct. 15, 2015 |
Oct. 07, 2015 |
Sep. 30, 2015 |
Dec. 31, 2014 |
|---|---|---|---|---|
| Stockholder equity | $ (280,771) | |||
| Subsequent Event [Member] | ||||
| Stockholder equity | $ 112,500 | |||
| Subsequent Event [Member] | 3200 Cushman Circle, Atlanta, Georgia [Member] | ||||
| Additional security deposits | $ 25,000 | 90,000 | ||
| Increase in purchase price security deposit | 7,500 | |||
| Subsequent Event [Member] | 3000 Ember Drive, Decatur, Georgia [Member] | ||||
| Additional security deposits | 25,000 | $ 22,500 | ||
| Increase in purchase price security deposit | $ 7,500 |
Investments in Real Estate |
9 Months Ended |
|---|---|
Sep. 30, 2015 | |
| Investments In Real Estate | |
| Investments in Real Estate | Note 4 – Investments in Real Estate
On August 13, 2015, the Company entered into a securities purchase agreement with Waydell whereby the Company purchased a 100% interest in Waydell for 300,000 shares of the Company’s common stock. Waydell is a real estate holding company that owns and manages the real estate property located at 32-38 Waydell Street, Newark, New Jersey. On June 25, 2015, Waydell purchased the property in Newark, New Jersey for $150,000. Waydell currently has no results of operations and as a result no pro forma financial disclosures are required. The 300,000 shares issued in connection with this acquisition were valued at $150,000 which is the amount paid for the only asset owned by Waydell that was recently purchased on June 25, 2015 — real property located at 32-38 Waydell Street, Newark, New Jersey. Waydell had no liabilities. In addition to the acquisition of this property, the Company also incurred $8,825 in connection with the development of this property. The carrying value of this property at September 30, 2005 is $158,825. |
Going Concern |
9 Months Ended |
|---|---|
Sep. 30, 2015 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Going Concern | Note 3 – Going Concern
The Company has not yet generated any revenue since inception to date and has sustained operating losses during the nine months ended September 30, 2015 of $511,154. As of September 30, 2015, the Company had an accumulated a deficit of $511,861. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its majority stockholder or other sources, as may be required.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company's ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. The Company has entered into agreements to purchase two properties in Georgia and is currently seeking to raise capital through the sale of its equity securities. However, there can be no assurances that the Company will be successful raising capital through the sale of its equity securities. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations. |
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) |
Sep. 30, 2015 |
Dec. 31, 2014 |
|---|---|---|
| Current Assets: | ||
| Cash | $ 3,186 | |
| Total current assets | 3,186 | |
| Investments in real estate | 158,825 | |
| TOTAL ASSETS | 162,011 | |
| Current Liabilities: | ||
| Accounts payable | 45,819 | |
| Accrued expenses | 6,402 | |
| Accrued payroll | 26,132 | |
| Accrued payroll to stockholder | 104,029 | |
| Notes payable | 54,600 | |
| Advances from stockholder | 184,300 | |
| Total current liabilities | 421,282 | |
| Notes payable, net of current portion | 21,500 | |
| TOTAL LIABILITIES | 442,782 | |
| STOCKHOLDERS' DEFICIT: | ||
| Common stock, $0.0001 par value, 100,000,000 shares authorized, 6,300,000 and 3,500,000 shares issued and outstanding | 630 | $ 350 |
| Additional paid-in capital | 230,460 | 357 |
| Accumulated deficit | (511,861) | $ (707) |
| Total stockholders' deficit | (280,771) | |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 162,011 |
Organization and Basis of Presentation |
9 Months Ended |
|---|---|
Sep. 30, 2015 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization and Basis of Presentation | Note 1 – Organization and Basis of Presentation
The unaudited condensed consolidated financial statements were prepared by T.A.G. Acquisitions Ltd. (the “Company”), pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). 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 (“U.S. GAAP”) were omitted pursuant to such rules and regulations. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on April 14, 2015. The results for the nine months ended September 30, 2015, are not necessarily indicative of the results to be expected for the year ending December 31, 2015.
Description of Business
The Company (formerly Surprise Valley Acquisition Corporation) was incorporated on May 20, 2014 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On November 17, 2014, the Company changed its name to T.A.G. Acquisitions, LTD and filed the amendment with the State of Delaware.
The Company is in the business of seeking out exceptional conversion opportunities, large multi-family and commercial office properties (as opposed to hospitality, retail, or industrial investment properties), for which significant value and profitability can be realized through the carefully managed aesthetic improvements, strategic marketing, and restructured management. The Company calls this “repositioning.” The Company’s sales and marketing strategies are also focusing on ways in which “pricing concepts are marketed” to its customers. Perks, privileges, tie-ins to strategic marketing partners, packages, discounts, and loyalty rewards for longer-term lessees are all under consideration as techniques to acquire new lessees and drive revenue. The Company is involved in multiple real estate investment opportunities throughout the United States, but it is initially focusing on areas in and around New York City and in Houston, Texas. In the New York City area, its initial, and first target is Newark, New Jersey. The Company is seeking to acquire and develop three multi-family complexes in a high quality residential zone in Newark, New Jersey, in an area close to Penn Station. The Company is actively seeking other opportunities in the area as well, with its main geographic criterion being properties within a 30-minute commute of New York City. Subsequently, the Company will seek similar “repositioning” targets in Houston, Texas. |
Advances from stockholder (Details narrative) - USD ($) |
Sep. 30, 2015 |
Dec. 31, 2014 |
|---|---|---|
| Related Party Transactions [Abstract] | ||
| Advances from majority stockholder | $ 184,300 |
Agreements to Purchase Real Estate (Details Narrative) |
Sep. 25, 2015
USD ($)
|
|---|---|
| 3200 Cushman Circle, Atlanta, Georgia [Member] | |
| Purchase of parcel of land, including all improvements | $ 450,000 |
| 3000 Ember Drive, Decatur, Georgia [Member] | |
| Purchase of parcel of land, including all improvements | $ 1,800,000 |
Summary of Significant Accounting Policies |
9 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2015 | ||||||||||
| Accounting Policies [Abstract] | ||||||||||
| Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies
Basis of presentation
The summary of significant accounting policies presented below is designed to assist in understanding the Company's unaudited condensed consolidated financial statements. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America ("GAAP") in all material respects, and have been consistently applied in preparing the accompanying unaudited condensed consolidated financial statements.
Principles of Consolidation
The accompanying consolidated financial statements represent the consolidated financial position and results of operations of the Company and include the accounts and results of operations of the Company and Waydell 32-38 LLC (“Waydell”). The results of operations for Waydell have only been included since the date of acquisition of August 13, 2015. All intercompany transactions and balances have been eliminated in consolidation.
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, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash
Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of September 30, 2015 and December 31, 2014.
Concentration of risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of September 30, 2015 and December 31, 2014.
Earnings (loss) per share
Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. There were no potentially dilutive securities outstanding during the periods presented.
Income taxes
The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives.
The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance.
Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.
Fair value of financial instruments
The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
The Company had no such financial instruments outstanding as of September 30, 2015 and December 31, 2014.
Recent accounting pronouncements
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard beginning January 1, 2017.
In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income Statement – Extraordinary and Unusual items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (ASU 2015-01). The amendment eliminates from U.S. GAAP the concept of extraordinary items. This guidance is effective for the Company in the first quarter of fiscal 2017. Early adoption is permitted and allows the Company to apply the amendment prospectively or retrospectively. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.
In February, 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.
On April 30, 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2015-06—Earnings Per Share (Topic 260): Effects on Historical Earnings per Units of Master Limited Partnership Dropdown Transactions. Under Topic 260, Earnings Per Share, master limited partnerships (MLPs) apply the two-class method to calculate earnings per unit (EPU) because the general partner, limited partners, and incentive distribution rights holders each participate differently in the distribution of available cash. When a general partner transfers (or “drops down”) net assets to a master limited partnership and that transaction is accounted for as a transaction between entities under common control, the statements of operations of the master limited partnership are adjusted retrospectively to reflect the dropdown transaction as if it occurred on the earliest date during which the entities were under common control. The amendments in this Update specify that for purposes of calculating historical EPU under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner interest, and previously reported EPU of the limited partners would not change as a result of a dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs also are required. This Accounting Standards Update is the final version of Proposed Accounting Standards Update EITF-14A—Earnings Per Share—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions (Topic 260), which has been deleted. Effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The amendments in this Update should be applied retrospectively for all financial statements presented. Management is in the process of assessing the impact of this ASU on the Company's financial statements.
In August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans 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 31, 2016, including interim reporting periods with that reporting period. Management is in the process of assessing the impact of this ASU on the Company's financial statements.
In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements |
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2015 |
Dec. 31, 2014 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
| Preferred stock, authorized | 20,000,000 | 20,000,000 |
| Preferred stock, issued | 0 | 0 |
| Preferred stock, outstanding | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
| Common stock, authorized | 100,000,000 | 100,000,000 |
| Common stock, issued | 6,300,000 | 3,500,000 |
| Common stock, outstanding | 6,300,000 | 3,500,000 |
Going Concern (Details Narrative) - USD ($) |
3 Months Ended | 4 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2014 |
Sep. 30, 2015 |
Dec. 31, 2014 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
| Operating losses | $ (159,435) | $ (707) | $ (511,154) | ||
| Accumulated deficit | $ (511,861) | $ (511,861) | $ (707) | ||
Document and Entity Information - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2015 |
Nov. 13, 2015 |
|
| Document And Entity Information | ||
| Entity Registrant Name | T.A.G. Acquisitions Ltd. | |
| Entity Central Index Key | 0001610785 | |
| Document Type | 10-Q | |
| Document Period End Date | Sep. 30, 2015 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-31 | |
| Entity a Well-known Seasoned Issuer | No | |
| Entity a Voluntary Filer | No | |
| Entity's Reporting Status Current | Yes | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Common Stock, Shares Outstanding | 6,300,000 | |
| Document Fiscal Period Focus | Q3 | |
| Document Fiscal Year Focus | 2015 |
Investments in Real Estate (Details Narrative) - Waydell 32-38 LLC [Member] - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Aug. 13, 2015 |
Jun. 25, 2015 |
Sep. 30, 2015 |
|
| Percentage of ownership interest | 100.00% | ||
| Number of shares issued through acquisition | 300,000 | ||
| Number of shares issued through acquisition, value | $ 150,000 | ||
| Real Property in Newark New Jersey [Member] | |||
| Purchase price of property | $ 150,000 | ||
| Payments for investments in real estate | $ 8,825 | ||
| Investments in real estate | $ 158,825 |
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