UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO.1
| [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016
OR
| [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
COMMISSION FILE NUMBER: 000-55583
Stemcell Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 36-4827622 | ||
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | ||
|
C/O Stemcell Co., Ltd., 5-9-15-3F, Minamiaoyama Minato-ku, Tokyo, Japan |
107-0062 (Zip Code) |
||
| (Address of Principal Executive Offices) |
Issuer's telephone number: +81-3-3400-0077
Fax number: +81-3-3403-2181
Email: stemcellholdings@gmail.com
C/O Omotesando Helene Clinic, 3-18-17-6F, Minamiaoyama
Minato-ku, Tokyo, Japan
(Former address)
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 preceding 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. [X] Yes [ ] 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 (Section 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). [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a small reporting company. See definition of large accelerated filer, accelerated filer and small reporting company in Rule 12b-2 of the Securities Exchange Act of 1934.
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 [X] No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of November 14, 2016, there were approximately 27,596,000 shares of common stock and none of preferred stock issued and outstanding.
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Note: This amendment to Form 10-Q has been filed to include the extensible business reporting language (XBRL) that was not previously included due to a clerical error. With the exception of this note, and the inclusion of the XBRL, this Form 10-Q (and related exhibits) is/are identical to the previous filed on November 14, 2016.
INDEX
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PART I - FINANCIAL INFORMATION
| ITEM 1 | FINANCIAL STATEMENTS |
(*) On October 29, 2016, the Company performed the forward stock split, whereby every one (1) share of the common stock was automatically reclassified and changed into two thousand (2000) shares (the “2000-for-1 Forward Stock Split”). The authorized number of shares and par value per share were not be affected by the 2000-for-1 Forward Stock Split. The Company had 20,000,000 shares of common stock outstanding as of September 30, 2016 and December 31, 2015, which were retroactively stated as 40,000,000,000 shares due to the 2000-for-1 Forward Stock Split.
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(*) On October 29, 2016, the Company performed the forward stock split, whereby every one (1) share of the common stock was automatically reclassified and changed into two thousand (2000) shares (the “2000-for-1 Forward Stock Split”). The authorized number of shares and par value per share were not be affected by the 2000-for-1 Forward Stock Split. . The Company had 20,000,000 shares of common stock outstanding as of September 30, 2016 and December 31, 2015, which were retroactively stated as 40,000,000,000 shares due to the 2000-for-1 Forward Stock Split.
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STEMCELL HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2016
(UNAUDITED)
NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS, AND BASIS OF PRESENTATION
Stemcell Holdings, Inc., formerly known as Perfect Acquisition, Inc. (the “Company”), a growth company, was incorporated under the laws of the State of Delaware on December 31, 2015, with an objective to acquire, or merge with, an operating business. On March 24, 2016, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Takaaki Matsuoka, our President, CEO and Director. Pursuant to this Agreement, on March 24, 2016 Takaaki Matsuoka transferred to the Company, 500 shares of the common stock of Stemcell Co., Ltd., a Japan corporation (“Stemcell”), which represented all of its issued and outstanding shares, in consideration of 5,000,000 JPY ($44,476). Following the effective date of the share purchase transaction above on March 24, 2016, Stemcell Holdings, Inc. gained a 100% interest in the issued and outstanding shares of Stemcell’s common stock and Stemcell became a wholly owned subsidiary of the Company. The Company conducts a regenerative medicine-related business which includes but is not limited to the culturing, storing and delivery of stem cells through Stemcell.
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three month period, have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Company”, “we”, “us” or “our” mean the Company. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America has been omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended December 31, 2015.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Stemcell Co., Ltd. Intercompany accounts and transactions are eliminated.
ACCOUNTS RECEIVABLE
Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (“PPE”) is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our PPE are generally as follows: computer software developed or acquired for internal use, 2 to 3 years; computer equipment, 2 to 3 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years. Land is not depreciated.
FOREIGN CURRENCY TRANSLATION
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.
Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:
| September 30, 2016 | |
| Current JPY: US$1 exchange rate | 101.33 |
| Average JPY: US$1 exchange rate | 108.48 |
RELATED PARTY TRANSACTION
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
COMPREHENSIVE INCOME OR LOSS
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Accumulated comprehensive income, as presented in the accompanying statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income or loss is not included in the computation of income tax expense or benefit.
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REVENUE RECOGNITION
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company provides the warranty for the delivery of its service. If the Company cannot deliver its service to customers successfully, the Company retry its operation until the delivery is completed.
Income taxes
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification ("Section 740-10-25"). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
As of September 30, 2016, the Company did not have any significant unrecognized uncertain tax positions.
The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority.
Enterprise income tax in Japan is generally charged at 29.97% of a company’s assessable profit. The Company’s subsidiaries incorporated in Japan are subject to Japanese enterprises income tax at the applicable tax rates on the taxable income as reported in their Japanese statutory accounts in accordance with the relevant enterprises income tax laws applicable to foreign enterprises.
The Company is governed by the Income Tax Law of Japan as well as Tokyo Local Income Tax Law (“the Income Tax Laws”). Under the Income Tax Laws, Corporations in Tokyo, Japan are generally subject to an income tax at an effective rate of 29.97% on income as reported in their statutory financial statements after appropriate tax adjustments unless the enterprise is located in specially designated regions of cities for which more favorable effective tax rates apply.
NOTE 3 - GOING CONCERN
The accompanying consolidated financial statements are prepared on a basis of accounting assuming that the Company is a going concern that contemplates realization of assets and satisfaction of liabilities in the normal course of business. The Company is considered a start-up company and has not yet generated continuous revenue. Additionally, 69% of the revenues of the Company were from the related party for the nine months ended September 30, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. 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 - RELATED-PARTY TRANSACTIONS
On January 27, 2016, Mr. Jeffrey DeNunzio, the former sole shareholder of the Company, consummated a sale of 40,000,000,000 shares of our common stock to Dr. Takaaki Matsuoka., for an aggregate purchase price of $30,000. Following the closing of the share purchase transaction, Dr. Matsuoka gained a 100% interest in the issued and outstanding shares of our common stock. Commensurate with the closing, the Company, filed with the Delaware Secretary of State, a Certificate of Amendment to change the name of Registrant to Stemcell Holdings, Inc.
On January 27, 2016, Mr. Jeffrey DeNunzio resigned as our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
On January 27, 2016, Dr. Takaaki Matsuoka was appointed as Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
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On March 24, 2016, the Company entered into a Stock Purchase Agreement with Takaaki Matsuoka. Pursuant to this Agreement, on March 24, 2016 Takaaki Matsuoka transferred to Stemcell Holdings, Inc. 500 shares of the common stock of Stemcell Co., Ltd., a Japan corporation (“Stemcell”), which represented all of its issued and outstanding shares, in consideration of 5,000,000 JPY (approximately $44,476). This is a merger of entities under common control and therefore all assets, liabilities and operations of Stemcell will be accounted for at their historical carryover basis and as if they had been combined since Stemcell’s inception. Further note the inception date of Stemcell is February 5, 2016 and from inception through the date of acquisition that Stemcell had no revenues and nominal assets.
The assets and liabilities of Stemcell at March 24, 2016 are as follows:
| As of | |||
| March 24, 2016 | |||
| ASSETS | |||
| Current Assets | |||
| Cash and cash equivalents | $ | 24,546 | |
| Account receivables | 2,021 | ||
| TOTAL CURRENT ASSETS | 26,567 | ||
| Property, plant and equipment | |||
| Equipment | 17,716 | ||
| TOTAL PROPERTY, PLANT AND EQUIPMENT | 17,716 | ||
| TOTAL ASSETS | $ | 44,283 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current Liabilities | |||
| Loan from director | $ | 2,060 | |
| TOTAL CURRENT LIABILITIES | 2,060 | ||
| TOTAL LIABILITIES | 2,060 | ||
| Shareholders’ Equity | |||
| Common stock (No par value, 10,000 shares authorized, | |||
| 500 shares issued and outstanding as of March 24, 2016 | 42,098 | ||
| Accumulated deficit | (2,033) | ||
| Accumulated other comprehensive income | 2,158 | ||
| TOTAL SHAREHOLDERS’ EQUITY | 42,223 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 44,283 | |
* As of March 24, 2016, 1 US Dollar converted to 112.89 JP Yen.
Following the effective date of the share purchase transaction above on March 24, 2016, The Company gained a 100% interest in the issued and outstanding shares of Stemcell’s common stock and Stemcell became a wholly owned subsidiary of the Company. The Company is now the controlling and sole shareholder of Stemcell.
On March 31, 2016, the Company wrote off the accrued expenses owed by the previous owner whose amount was $2,998. The accrued expense written off has been recorded as additional paid in capital.
On May 2, 2016, Takaaki Matsuoka entered into a Stock Purchase Agreement with Primavera Singa Pte Ltd, a Singapore corporation (“Primavera Singa”) with an address at 60 Paya Lebar Rd #09-25, Paya Lebar Square 409051, Singapore. Pursuant to the Agreement, Dr. Matsuoka transferred to Primavera Singa, 34,599,066,000 shares of our common stock in consideration of 3,000,000 JPY (approximately $27,272) which represents 86% of its issued and outstanding shares.
Shiho Matsuoka, the wife of our sole officer and director Takaaki Matsuoka, owns and controls 100% of Primavera Singa Pte., Ltd. Following the closing of the share purchase transaction, Primavera Singa became the controlling shareholder of the Company.
During the nine months ended September 30, 2016, the Company borrowed $69,047 from the sole director, for payment of the Company’s expenses. The balance due as of September 30, 2016 is $69,047, which is unsecured, due on demand and bears no interest.
For the nine months ended September 30, 2016, the Company provided the stem cells culturing services in the amount of $1,181,776 to Omotesando Helene Clinic which Dr. Matsuoka, the sole director of the Company, is the majority owner and also serves as a director. For the three months ended September 30, 2016, the Company provided the stem cells culturing services in the amount of $784,531 to Omotesando Helene Clinic. As of September 30, 2016, the Company had accounts receivable balance from Omotesando Helene Clinic for the cell culturing service in the amount of $611,251.
For the nine months ended September 30, 2016, the Company provided the operation technical support services in the amount of $69,194 to seven clinics which Dr. Matsuoka is the majority owner. These services were considered to be other related party income. For the three months ended September 30, 2016, the Company provided the operation technical support services in the amount of $54,192 to these seven clinics.
As of September 30, 2016, the Company owed the account payables for the doctor’s fee in the amount of $826,306 to Omotesando Helene Clinic.
On March 4, 2016 Stemcell purchased the equipment unit for stem cells culturing and storing from Omotesando Helene Clinic in consideration of 2,000,000 JPY (approximately $19,737).
During the three months ended September 30, 2016, Stemcell purchased accessory equipment from Omotesando Helene Clinic in consideration of 37,837,000 JPY (approximately $373,404).
NOTE 5 - MAJOR CUSTOMERS AND ACCOUNTS RECEIVABLE
The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:
Concentration of Revenue
For the nine months ended September 30, 2016, the Company provided the stem cells culturing services in the amount of $1,181,776 to Omotesando Helene Clinic which Dr. Matsuoka is the majority owner and serves as the director which accounts for 69% of total revenue.
Concentration of Accounts Receivable
As of September 30, 2016, Omotesando Helene Clinic accounted for 82% of the total balance of accounts receivable including accounts receivable from a related party.
NOTE 6 – SUBSEQUENT EVENTS
On October 26, 2016, 19,986,202 (39,972,404,000 post - split) shares of the Company’s common stock owned by seven shareholders were cancelled (the “Stock Cancellation”).
On October 29, 2016, the Company performed the forward stock split, whereby every one (1) share of the common stock was automatically reclassified and changed into two thousand (2000) shares (the “2000-for-1 Forward Stock Split”). The authorized number of shares and par value per share were not be affected by the 2000-for-1 Forward Stock Split. The 2000-for-1 Forward Stock Split was executed subsequent to the Stock Cancellation. On October 29, 2016, we filed a Certificate of Amendment with the Delaware Secretary of State. These interim consolidated financial statements give retroactive effect to such forward split and have been adjusted accordingly.
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| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Company Overview
Corporate History
The Company was originally incorporated with the name Perfect Acquisition, Inc., under the laws of the State of Delaware on December 31, 2015, with an objective to acquire, or merge with, an operating business.
On January 27, 2016, Jeffrey DeNunzio of 780 Reservoir Avenue, #123, Cranston, RI 02910, the sole shareholder of the Company, entered into a Share Purchase Agreement with Takaaki Matsuoka with an address at 3-18-17-6F, Minamiaoyama, Minato-ku, Tokyo, 107-0062, Japan. Pursuant to the Agreement, Mr. DeNunzio transferred to Dr. Matsuoka., 20,000,000 shares of our common stock which represents all of our issued and outstanding shares.
Following the closing of the share purchase transaction, Dr. Matsuoka gained a 100% interest in the issued and outstanding shares of our common stock and became the controlling shareholder of the Company.
The sale of shares between Jeffrey DeNunzio and Takaaki Matsuoka was made pursuant to Regulation S of the Securities Act of 1933, as amended ("Regulation S"). No directed selling efforts were made in the United States. Dr. Matsuoka is a Japanese Citizen.
On January 27, 2016, the Company changed its name to Stemcell Holdings, Inc. and filed with the Delaware Secretary of State, a Certificate of Amendment.
On January 27, 2016, Jeffrey DeNunzio resigned as our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer. The resignation was not the result of any disagreement with us on any matter relating to our operations, policies or practices.
On January 27, 2016, Mr. Takaaki Matsuoka was appointed as our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
On March 23, 2016, Stemcell Holdings, Inc., a Delaware corporation (the “Company”), entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Takaaki Matsuoka, our President, CEO and Director. Pursuant to this Agreement, on March 24, 2016 Takaaki Matsuoka transferred to Stemcell Holdings, Inc., 500 shares of the common stock of Stemcell Co., Ltd., a Japan corporation (“Stemcell”), which represents 86% of its issued and outstanding shares, in consideration of 5,000,000 JPY ($44,476 USD). Following the effective date of the share purchase transaction above on March 24, 2016, Stemcell Holdings, Inc. gained a 100% interest in the issued and outstanding shares of Stemcell’s common stock and Stemcell became a wholly owned subsidiary of the Company. The Company is now the controlling and sole shareholder of Stemcell.
On May 2, 2016, Takaaki Matsuoka entered into a Stock Purchase Agreement with Primavera Singa Pte Ltd, a Singapore corporation (“Primavera Singa”) with an address at 60 Paya Lebar Rd #09-25, Paya Lebar Square 409051, Singapore. Pursuant to the Agreement, Dr. Matsuoka transferred to Primavera Singa, 34,599,066,000 shares of our common stock in consideration of 3,000,000 JPY ($27,272 USD) which represents all of our issued and outstanding shares. Shiho Matsuoka, the wife of our sole officer and director Takaaki Matsuoka, owns and controls 100% of Primavera Singa Pte., Ltd.
Following the closing of the share purchase transaction, Primavera Singa Pte., Ltd. became the controlling shareholder of the Company.
On October 26, 2016, 7 shareholders approved to cancel 39,972,404,000 of their shares of the Company’s common stock (the “Stock Cancellation”).
On October 29, 2016, the Company performed the forward stock split, whereby every one (1) share of the common stock was automatically reclassified and changed into two thousand (2000) shares (the “2000-for-1 Forward Stock Split”). The authorized number of shares and par value per share were not be affected by the 2000-for-1 Forward Stock Split. The 2000-for-1 Forward Stock Split was executed subsequent to the Stock Cancellation. On October 29, 2016, we filed a Certificate of Amendment with the Delaware Secretary of State.
Business Information of Stemcell
The Company is a start-up stage company and concentrates on the regenerative medicine-related business which includes but is not limited to the culturing, storing and delivery of stem cells through Stemcell CO., LTD., a Japan Corporation (“Stemcell”), which is our wholly owned subsidiary.
Our principal executive offices are located at C/O Stemcell Co., Ltd., 5-9-15-3F, Minamiaoyama, Minato-ku, Tokyo, Japan. Our phone number is +81-3-3400-0077.
On March 4, 2016, Stemcell purchased the equipment unit for stem cells culturing and storing from 4 constructors in aggregate consideration of 2,000,000 JPY ($19,737), which included the Liquid Nitrogen Freezers, Centrifugal Separator, Biological Safety Cabinet and Carbon Oxide Incubator. As of September 30, 2016, the book value of the equipment was $17,434.
In August and September 2016, Stemcell purchased accessory equipment in consideration of 37,837,000 JPY ($373,404), which included the clean room, air conditioning, electric work and interior. As of September 30, 2016, the net book value of the equipment was $369,491.
Liquidity and Capital Resources
As of September 30, 2016, our cash balance was $1,459,930 and working capital was $788,494. For the nine months ended September 30, 2016, the Company generated the operating cash flow in the amount of $1,711,943. Our cash balance is currently sufficient to fund our operations. However, if our revenue cannot cover our operating funds, we need to utilize funds from Takaaki Matsuoka, our sole Director who has informally agreed to advance funds to allow us to pay for operating expenses. Takaaki Matsuoka, however, has no formal commitment, arrangement or legal obligation to advance or loan funds to the company.
If we need additional cash and cannot raise it, we will either have to suspend operations until we do raise the cash we need, or cease operations entirely.
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
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| ITEM 4 | CONTROLS AND PROCEDURES |
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer (who is acting as our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
As of September 30, 2016, the end of the fiscal period covered by this report, we carried out an evaluation, under the supervision of our chief executive officer, with the participation of our chief financial officer, of the effectiveness of the design and the operation of our disclosure controls and procedures. The officers concluded that the disclosure controls and procedures were not effective as of the end of the period covered by this report due to material weaknesses identified below.
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that have occurred during our fiscal year end December 31, 2015 and for the interim period ending September 30, 2016, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II - OTHER INFORMATION
| ITEM 1 | LEGAL PROCEEDINGS |
There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.
| ITEM 1A | RISK FACTORS |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
On January 27, 2016, Mr. Jeffrey DeNunzio, the sole shareholder of Perfect Acquisition, Inc., consummated a sale of 40,000,000,000 shares of our common stock to Takaaki Matsuoka. Following the closing of the share purchase transaction, Takaaki Matsuoka., gained a 100% interest in the issued and outstanding shares of our common stock.
Following the closing of the share purchase transaction above, Takaaki Matsuoka gained a 100% interest in the issued and outstanding shares of our common stock and became the controlling shareholder of the Company.
On May 2, 2016, Takaaki Matsuoka entered into a Stock Purchase Agreement with Primavera Singa Pte Ltd, a Singapore corporation (“Primavera Singa”) with an address at 60 Paya Lebar Rd #09-25, Paya Lebar Square 409051, Singapore. Pursuant to the Agreement, Dr. Matsuoka transferred to Primavera Singa, 34,599,066,000 shares of our common stock which represents 86% of our issued and outstanding shares, in consideration of 3,000,000 JPY ($27,272 USD).
Following the closing of the share purchase transaction, Primavera Singa gained 86.5% interest in the issued and outstanding shares of our common stock and became the controlling shareholder of the Company. Shiho Matsuoka, the wife of our sole officer and director Takaaki Matsuoka, owns and controls 100% of Primavera Singa Pte., Ltd.
On May 6, 2016, Takaaki Matsuoka entered into stock purchase agreements with 67 Japanese shareholders. Pursuant to these agreements, Takaaki Matsuoka sold 5,000,934,000 shares of common stock in total to these individuals and received 2,514,700 JPY ($22,861 USD) as aggregate consideration.
The aforementioned sale of shares was exempt from registration in accordance with Regulation S of the Securities Act of 1933, as amended ("Regulation S") because the above sales of the stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.
| ITEM 3 | DEFAULTS UPON SENIOR SECURITIES |
None
| ITEM 4 | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5 | OTHER INFORMATION |
None
| ITEM 6 | EXHIBITS |
|
Exhibit No. |
Description | |
| 3.1 | Certificate of Incorporation (1) | |
| 3.2 | By-laws (1) | |
| 3.3 | Articles of Incorporation of Stemcell - translated (2) | |
| 10.1 | Stock Purchase Agreement (2) | |
| 31 | Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s report on Form 10-Q for the period ended September 30, 2016 (4) | |
| 32 | Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (4) | |
| 99.1 | Resolutions Approving Acquisition (2) | |
| 101.INS | XBRL Instance Document (3) | |
| 101.SCH | XBRL Taxonomy Extension Schema (3) | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase (3) | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase (3) | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase (3) | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase (3) | |
(1) Filed as an exhibit to the Company's Registration Statement on Form 10, as filed with the SEC on February 12, 2015, and incorporated herein by this reference.
(2) Filed as an exhibit to the Company's Form 8-K, as filed with the SEC on March 28, 2016, and incorporated herein by this reference.
(3) Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or Annual Report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.
(4) Filed herewith.
-5-
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
Stemcell Holdings, Inc.
(Registrant)
By: /s/ Takaaki Matsuoka
Name: Takaaki Matsuoka
CEO, President, Director
Dated: November 14, 2016
-6-
EXHIBIT 31.1
Stemcell Holdings, INC.
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Takaaki Matsuoka, the Principal Executive Officer of Stemcell Holdings, Inc., certify that:
1. I have reviewed this report on Form 10-Q of Stemcell Holdings, Inc.;
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 small business issuer as of, and for, the periods presented in this report;
4. The small business issuer’s other certifying officer and I are 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 13a-15(f) and 15d-15(f)) for the small business issuer 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 small business issuer, 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 small business issuer'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 small business owner’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small issuer'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 small business issuer'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 small business issuer's internal control over financial reporting.
Dated: November 14, 2016
By: /s/ Takaaki Matsuoka
Takaaki Matsuoka,
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
Stemcell Holdings, INC.
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Takaaki Matsuoka, the Principal Financial Officer of Stemcell Holdings, Inc., certify that:
1. I have reviewed this report on Form 10-Q of Stemcell Holdings, Inc.;
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 small business issuer as of, and for, the periods presented in this report;
4. The small business issuer’s other certifying officer and I are 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 13a-15(f) and 15d-15(f)) for the small business issuer 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 small business issuer, 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 small business issuer'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 small business owner’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small issuer'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 small business issuer'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 small business issuer's internal control over financial reporting.
Dated: November 14, 2016
By: /s/ Takaaki Matsuoka
Takaaki Matsuoka,
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
Stemcell Holdings, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with Quarterly Report of Stemcell Holdings, Inc. (the Company) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Takaaki Matsuoka, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.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) 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.
A signed original of this written statement required by Section 906 has been provided to Takaaki Matsuoka and will be retained by Stemcell Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: November 14, 2016
By: /s/ Takaaki Matsuoka
Takaaki Matsuoka,
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 32.2
Stemcell Holdings, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with Quarterly Report of Stemcell Holdings, Inc. (the Company) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Takaaki Matsuoka, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.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) 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.
A signed original of this written statement required by Section 906 has been provided to Takaaki Matsuoka and will be retained by Stemcell Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: November 14, 2016
By: /s/ Takaaki Matsuoka
Takaaki Matsuoka,
Chief Financial Officer
(Principal Financial Officer)
Document and Entity Information - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2016 |
Nov. 14, 2016 |
|
| Document And Entity Information | ||
| Entity Registrant Name | Stemcell Holdings, Inc. | |
| Entity Central Index Key | 0001666487 | |
| Document Type | 10-Q | |
| Document Period End Date | Sep. 30, 2016 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Well Known Seasoned Issuer | No | |
| Entity Voluntary Filer Status | No | |
| Entity Current Reporting Status | Yes | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Common Stock Shares Outstanding | 27,596,000 | |
| Document Fiscal Period Focus | Q3 | |
| Document Fiscal Year Focus | 2016 |
BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
|---|---|---|
| StockholdersEquity | ||
| Preferred Stock Par Or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
| Preferred Stock Shares Authorized | 20,000,000 | 20,000,000 |
| Preferred Stock Shares Issued | 0 | 0 |
| Preferred Stock Shares Outstanding | 0 | 0 |
| Common Stock Par Or Stated Value Per Share | $ 0.0001 | $ .0001 |
| Common Stock Shares Authorized | 500,000,000 | 500,000,000 |
| Common Stock Shares Issued | 40,000,000,000 | 40,000,000,000 |
| Common Stock Shares Outstanding | 40,000,000,000 | 40,000,000,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
3 Months Ended | 9 Months Ended |
|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
|
| Revenues | ||
| Services revenue from related party | $ 784,531 | $ 1,181,776 |
| Service revenue | 459,340 | 529,778 |
| Total revenues | 1,243,871 | 1,711,554 |
| Cost of revenues | 126,396 | 126,396 |
| Gross profit | 1,117,475 | 1,585,158 |
| General and administrative expenses | 71,099 | 122,111 |
| Total Operating Expenses | 71,099 | 122,111 |
| Other Income | ||
| Other service income - related parties | 54,192 | 69,194 |
| Interest income | 1 | 1 |
| Total other income | 54,193 | 69,195 |
| Net income before taxes | 1,100,569 | 1,532,242 |
| Income tax expenses | 384,514 | 487,578 |
| Net income | 716,055 | 1,044,664 |
| Foreign currency translation adjustment | 56,310 | 72,081 |
| Total comprehensive income | $ 772,365 | $ 1,116,745 |
| Basic and Diluted net loss per share of common stock | $ 0.00 | $ 0.00 |
| Weighted Average Number of Common Shares Outstanding-Basic and Diluted (*) | 20,000,000 | 40,000,000,000 |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization and Description of Business | NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS, AND BASIS OF PRESENTATION
Stemcell Holdings, Inc., formerly known as Perfect Acquisition, Inc. (the “Company”), a growth company, was incorporated under the laws of the State of Delaware on December 31, 2015, with an objective to acquire, or merge with, an operating business. On March 24, 2016, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Takaaki Matsuoka, our President, CEO and Director. Pursuant to this Agreement, on March 24, 2016 Takaaki Matsuoka transferred to the Company, 500 shares of the common stock of Stemcell Co., Ltd., a Japan corporation (“Stemcell”), which represented all of its issued and outstanding shares, in consideration of 5,000,000 JPY ($44,476). Following the effective date of the share purchase transaction above on March 24, 2016, Stemcell Holdings, Inc. gained a 100% interest in the issued and outstanding shares of Stemcell’s common stock and Stemcell became a wholly owned subsidiary of the Company. The Company conducts a regenerative medicine-related business which includes but is not limited to the culturing, storing and delivery of stem cells through Stemcell.
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three month period, have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Company”, “we”, “us” or “our” mean the Company. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America has been omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended December 31, 2015.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Accounting Policies [Abstract] | |
| Significant Accounting Policies |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Stemcell Co., Ltd. Intercompany accounts and transactions are eliminated.
ACCOUNTS RECEIVABLE
Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (“PPE”) is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our PPE are generally as follows: computer software developed or acquired for internal use, 2 to 3 years; computer equipment, 2 to 3 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years. Land is not depreciated.
FOREIGN CURRENCY TRANSLATION
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.
Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:
September 30, 2016 Current JPY: US$1 exchange rate 101.33 Average JPY: US$1 exchange rate 108.48
RELATED PARTY TRANSACTION
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
COMPREHENSIVE INCOME OR LOSS
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Accumulated comprehensive income, as presented in the accompanying statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income or loss is not included in the computation of income tax expense or benefit.
REVENUE RECOGNITION
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company provides the warranty for the delivery of its service. If the Company cannot deliver its service to customers successfully, the Company retry its operation until the delivery is completed.
Income taxes
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification ("Section 740-10-25"). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
As of September 30, 2016, the Company did not have any significant unrecognized uncertain tax positions.
The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority.
Enterprise income tax in Japan is generally charged at 29.97% of a company’s assessable profit. The Company’s subsidiaries incorporated in Japan are subject to Japanese enterprises income tax at the applicable tax rates on the taxable income as reported in their Japanese statutory accounts in accordance with the relevant enterprises income tax laws applicable to foreign enterprises.
The Company is governed by the Income Tax Law of Japan as well as Tokyo Local Income Tax Law (“the Income Tax Laws”). Under the Income Tax Laws, Corporations in Tokyo, Japan are generally subject to an income tax at an effective rate of 29.97% on income as reported in their statutory financial statements after appropriate tax adjustments unless the enterprise is located in specially designated regions of cities for which more favorable effective tax rates apply.
|
GOING CONCERN |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Going Concern | |
| Going Concern |
NOTE 3 - GOING CONCERN The accompanying consolidated financial statements are prepared on a basis of accounting assuming that the Company is a going concern that contemplates realization of assets and satisfaction of liabilities in the normal course of business. The Company is considered a start-up company and has not yet generated continuous revenue. Additionally, 69% of the revenues of the Company were from the related party for the nine months ended September 30, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. 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.
|
RELATED PARTIES DISCLOSURE |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions |
NOTE 4 - RELATED-PARTY TRANSACTIONS
On January 27, 2016, Mr. Jeffrey DeNunzio, the former sole shareholder of the Company, consummated a sale of 40,000,000,000 shares of our common stock to Dr. Takaaki Matsuoka., for an aggregate purchase price of $30,000. Following the closing of the share purchase transaction, Dr. Matsuoka gained a 100% interest in the issued and outstanding shares of our common stock. Commensurate with the closing, the Company, filed with the Delaware Secretary of State, a Certificate of Amendment to change the name of Registrant to Stemcell Holdings, Inc.
On January 27, 2016, Mr. Jeffrey DeNunzio resigned as our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
On January 27, 2016, Dr. Takaaki Matsuoka was appointed as Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
On March 24, 2016, the Company entered into a Stock Purchase Agreement with Takaaki Matsuoka. Pursuant to this Agreement, on March 24, 2016 Takaaki Matsuoka transferred to Stemcell Holdings, Inc. 500 shares of the common stock of Stemcell Co., Ltd., a Japan corporation (“Stemcell”), which represented all of its issued and outstanding shares, in consideration of 5,000,000 JPY (approximately $44,476). This is a merger of entities under common control and therefore all assets, liabilities and operations of Stemcell will be accounted for at their historical carryover basis and as if they had been combined since Stemcell’s inception. Further note the inception date of Stemcell is February 5, 2016 and from inception through the date of acquisition that Stemcell had no revenues and nominal assets.
The assets and liabilities of Stemcell at March 24, 2016 are as follows:
* As of March 24, 2016, 1 US Dollar converted to 112.89 JP Yen.
Following the effective date of the share purchase transaction above on March 24, 2016, The Company gained a 100% interest in the issued and outstanding shares of Stemcell’s common stock and Stemcell became a wholly owned subsidiary of the Company. The Company is now the controlling and sole shareholder of Stemcell.
On March 31, 2016, the Company wrote off the accrued expenses owed by the previous owner whose amount was $2,998. The accrued expense written off has been recorded as additional paid in capital.
On May 2, 2016, Takaaki Matsuoka entered into a Stock Purchase Agreement with Primavera Singa Pte Ltd, a Singapore corporation (“Primavera Singa”) with an address at 60 Paya Lebar Rd #09-25, Paya Lebar Square 409051, Singapore. Pursuant to the Agreement, Dr. Matsuoka transferred to Primavera Singa, 34,599,066,000 shares of our common stock in consideration of 3,000,000 JPY (approximately $27,272) which represents 86% of its issued and outstanding shares.
Shiho Matsuoka, the wife of our sole officer and director Takaaki Matsuoka, owns and controls 100% of Primavera Singa Pte., Ltd. Following the closing of the share purchase transaction, Primavera Singa became the controlling shareholder of the Company.
During the nine months ended September 30, 2016, the Company borrowed $69,047 from the sole director, for payment of the Company’s expenses. The balance due as of September 30, 2016 is $69,047, which is unsecured, due on demand and bears no interest.
For the nine months ended September 30, 2016, the Company provided the stem cells culturing services in the amount of $1,181,776 to Omotesando Helene Clinic which Dr. Matsuoka, the sole director of the Company, is the majority owner and also serves as a director. For the three months ended September 30, 2016, the Company provided the stem cells culturing services in the amount of $784,531 to Omotesando Helene Clinic. As of September 30, 2016, the Company had accounts receivable balance from Omotesando Helene Clinic for the cell culturing service in the amount of $611,251.
For the nine months ended September 30, 2016, the Company provided the operation technical support services in the amount of $69,194 to seven clinics which Dr. Matsuoka is the majority owner. These services were considered to be other related party income. For the three months ended September 30, 2016, the Company provided the operation technical support services in the amount of $54,192 to these seven clinics.
As of September 30, 2016, the Company owed the account payables for the doctor’s fee in the amount of $826,306 to Omotesando Helene Clinic.
On March 4, 2016 Stemcell purchased the equipment unit for stem cells culturing and storing from Omotesando Helene Clinic in consideration of 2,000,000 JPY (approximately $19,737).
During the three months ended September 30, 2016, Stemcell purchased accessory equipment from Omotesando Helene Clinic in consideration of 37,837,000 JPY (approximately $373,404). |
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MAJOR CUSTOMERS AND ACCOUNTS RECEIVABLE |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Accounting Policies [Abstract] | |
| MAJOR CUSTOMERS AND ACCOUNTS RECEIVABLE |
NOTE 5 - MAJOR CUSTOMERS AND ACCOUNTS RECEIVABLE
The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:
Concentration of Revenue For the nine months ended September 30, 2016, the Company provided the stem cells culturing services in the amount of $1,181,776 to Omotesando Helene Clinic which Dr. Matsuoka is the majority owner and serves as the director which accounts for 69% of total revenue.
Concentration of Accounts Receivable As of September 30, 2016, Omotesando Helene Clinic accounted for 82% of the total balance of accounts receivable including accounts receivable from a related party. |
SUBSEQUENT EVENTS |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Accounting Policies [Abstract] | |
| SUBSEQUENT EVENTS |
NOTE 6 – SUBSEQUENT EVENTS
On October 26, 2016, 19,986,202 (39,972,404,000 post - split) shares of the Company’s common stock owned by seven shareholders were cancelled (the “Stock Cancellation”).
On October 29, 2016, the Company performed the forward stock split, whereby every one (1) share of the common stock was automatically reclassified and changed into two thousand (2000) shares (the “2000-for-1 Forward Stock Split”). The authorized number of shares and par value per share were not be affected by the 2000-for-1 Forward Stock Split. The 2000-for-1 Forward Stock Split was executed subsequent to the Stock Cancellation. On October 29, 2016, we filed a Certificate of Amendment with the Delaware Secretary of State. These interim consolidated financial statements give retroactive effect to such forward split and have been adjusted accordingly.
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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Accounting Policies [Abstract] | |
| Principals of Consolidation | PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Stemcell Co., Ltd. Intercompany accounts and transactions are eliminated. |
| Accounts Receivable | ACCOUNTS RECEIVABLE
Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. |
| Property, plant, and equipment | PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (“PPE”) is stated at cost and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our PPE are generally as follows: computer software developed or acquired for internal use, 2 to 3 years; computer equipment, 2 to 3 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years. Land is not depreciated. |
| Foreign Currency Translation | FOREIGN CURRENCY TRANSLATION The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.
Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:
September 30, 2016 Current JPY: US$1 exchange rate 101.33 Average JPY: US$1 exchange rate 108.48
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| Related Party Transactions | RELATED PARTY TRANSACTION
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. |
| Comprehensive Income or Loss | COMPREHENSIVE INCOME OR LOSS ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Accumulated comprehensive income, as presented in the accompanying statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income or loss is not included in the computation of income tax expense or benefit. |
| Revenue Recognition | REVENUE RECOGNITION
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company provides the warranty for the delivery of its service. If the Company cannot deliver its service to customers successfully, the Company retry its operation until the delivery is completed. |
| Income Taxes | Income taxes
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification ("Section 740-10-25"). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
As of September 30, 2016, the Company did not have any significant unrecognized uncertain tax positions.
The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority.
Enterprise income tax in Japan is generally charged at 29.97% of a company’s assessable profit. The Company’s subsidiaries incorporated in Japan are subject to Japanese enterprises income tax at the applicable tax rates on the taxable income as reported in their Japanese statutory accounts in accordance with the relevant enterprises income tax laws applicable to foreign enterprises.
The Company is governed by the Income Tax Law of Japan as well as Tokyo Local Income Tax Law (“the Income Tax Laws”). Under the Income Tax Laws, Corporations in Tokyo, Japan are generally subject to an income tax at an effective rate of 29.97% on income as reported in their statutory financial statements after appropriate tax adjustments unless the enterprise is located in specially designated regions of cities for which more favorable effective tax rates apply. |
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